China Says May Sack Energy-Guzzling State Firms' CEOs

China Says May Sack Energy-Guzzling State Firms' CEOs

PlanetArk CHINA

30th August 2007

BEIJING - China's state asset watchdog pledged on Wednesday to crack down on state-owned firms that fail to meet energy efficiency targets, saying the bosses of non-compliant firms could lose their jobs.

Environmental deterioration has become a growing concern for policy makers, as the country's ravenous economy consumes ever larger amounts of resources and factories belch out pollution that fouls the air, land and water.

Falling in line behind central government targets to reduce energy intensity and pollution, several ministries have issued rules and new initiatives targeting companies that pollute and use too much energy.

On Wednesday, the State Asset Supervision and Administration Commission (SASAC) joined the list.

"Whether China can meet its targets for energy-saving and pollution cuts hinges on the performance of centrally controlled state enterprises in this regard," Li Rongrong, head of the commission, told a meeting of managers at state firms.

The firms' performance was especially important because many of them are involved in core industrial sectors including oil, coal, chemical and power, which are both big energy producers and consumers, he said.

Beijing is aiming to cut energy intensity -- the amount of energy used to produce each dollar of national income -- by an average of 4 percent a year through the end of this decade.

It has so far lagged behind this target; energy intensity fell only 2.78 percent in the first half of this year from a year earlier after decreasing just 1.33 percent in all of 2006.

Beijing is also aiming to reduce pollutant emissions by 10 percent between 2006 and 2010.

Although many state firms have been striving to boost energy efficiency, some still have little awareness of the issue, said Huang Shuhe, deputy head of SASAC.

Huang said that state firms under the agency's supervision in core sectors of petroleum, chemicals, power generation, metallurgy, coal, transportation and construction materials would have to reach their energy-cutting targets by the end of 2009, one year ahead of the national deadline.

Huang also set out specific quantitative targets for firms in different sectors, with varying timeframes.

Chief executives will be seriously punished or even sacked if their firms fail to meet the goals, Huang added.

China is expected to overtake the United States as the world's top emitter of carbon dioxide soon but has resisted calls for emissions caps, saying its efficiency targets help cut emissions without biting into growth.

Separately, Ma Kai, head of the National Development and Reform Commission, the economic planning agency, said that his office had penalised more than 8,000 firms for pollution offences so far this year.

By February, 12 projects that seriously violated environmental rules had been permanently shut down, Ma was quoted by the Xinhua news agency as telling the parliament.

Another 103 projects involving total investment of 330.9 billion yuan (US$43.8 billion) that were not up to environmental standards had been refused or delayed approval this year, he added. Ma also said that small coal-fired generation units with a total capacity of 5.5 million kilowatts had been closed in the first half.

Story by Eadie Chen

REUTERS NEWS SERVICE