June 29, 2018 / 4:09 AM / a year ago

China steelmaker Jiangsu Shagang ordered to probe pollution violations

SHANGHAI (Reuters) - Jiangsu Shagang Group, China’s third-biggest steelmaker, was ordered on Friday to hold a formal investigation into its operations after it was accused by the government a day earlier of failing to rectify breaches in pollution rules.

The Shenzhen Stock Exchange asked Shagang to look into its environmental protection record and fully disclose any violations made by the firm or its subsidiaries.

China completed a probe into thousands of environmental violations throughout its 31 provinces and regions last year, and in recent weeks it has been reviewing how the problems have been redressed.

The probe has already uncovered dozens of examples of “perfunctory”, “superficial” or “fraudulent” rectifications, with authorities also accused of responding too slowly to complaints and taking damaging “short cuts” in order to resolve problems.

The steel sector is one of the country’s biggest sources of smog and solid waste, but while standards in the industry are now among the world’s toughest, regulators have struggled to enforce them.

Last year, Shagang, China’s largest privately-owned steel producer, was found to have dumped millions of tonnes of untreated waste, including slag from steel production, in landfills near the banks of the Yangtze river, contaminating nearby soil and water.

The firm, which produced 38 million tonnes of steel last year, has also failed to rectify violations of emissions standards at its boilers and coking coal plant, despite being fined, the Ministry of Ecology and Environment said on Thursday.

“The Shagang Group is a listed company with.. annual sales exceeding 200 billion yuan ($30.14 billion), but it failed to take up responsibility for ecological protection,” the ministry said.

The slag dumped by Shagang and another steel firm in the city of Zhangjiagang in Jiangsu province was in excess of 2.3 million tonnes, it said, adding that it would conduct further investigations into potential lapses by local authorities.

Tian Weiyong, head of inspections at the environment ministry, told reporters on Friday that local residents are encouraged to file lawsuits against Shagang.

“If heavy metals and other serious pollution components are found, we will bring criminal charges,” he said.

Officials with Shagang did not respond to requests for comment, but in a statement to the official China Daily newspaper, the firm promised to invest 2.14 billion yuan to rectify its emissions control failures, and would also cut slag by half by the end of the year.

Reporting by David Stanway; additional reporting by Meng Meng in BEIJING and the Shanghai newsroom; editing by Richard Pullin and Christian Schmollinger

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