An Apple Inc. logo is displayed on a screen during the Apple Worldwide Developers Conference (Photographer: David Paul Morris/Bloomberg)

Apple and Wal-Mart Are Helping China Crack Down on Polluters

(Bloomberg) -- Ma Jun’s years as an environmental activist taught him one lesson: if you want factories to clean up their act, shaming them in front of Apple Inc. and Wal-Mart Stores Inc. works better than government fines.

Ma’s strategy -- backed by Alibaba Group Holding Ltd. -- is to scrape real-time data off government websites that compile readings from effluent monitoring equipment at some 13,000 of the worst water polluters. The data is then aggregated on an app called Blue Map.

Apple and Wal-Mart Are Helping China Crack Down on Polluters

Factories caught cheating face repercussions. Ma’s non-profit organization has caused some to be banished from Apple’s supplier list, be denied a desired credit rating to issue bonds or even be deprived of bank loans. For Ma, that’s more effective than starting protests or lobbying local governments, which tend to raise the ire of authorities in China.

The app taps into an explosion of public concern about pollution in the country and may help solve one of the government’s biggest headaches -- the growing scarcity of clean water for its crops, industries and cities. Using smartphones and social media, millions of citizens have become the front line in the nation’s campaign to detect and punish polluters. The public engagement has contributed to a jump in the number of reported pollution violations.

Ma, author of the influential 1999 book “China’s Water Crisis,” said his database, which anyone can access and use for free, has identified more than 830,000 cases where factories were either pumping excessive quantities of waste or falsifying data by tampering with monitoring devices.

“Sometimes it’s hard to get local government agencies to enforce or fine these factories because they are huge sources of tax income,” said Ma, founder of the Institute of Public & Environmental Affairs (IPE) in Beijing. “It’s much more effective when these companies face the threat of being kicked off Apple’s supplier list. Economic interest matters.”

Apple and Wal-Mart Are Helping China Crack Down on Polluters

The database, updated every two hours, is becoming an important reference for Western companies sourcing from China. Apple said it used the information to identify and resolve 196 cases where suppliers violated environmental rules. With one click, brands including Levi’s and Gap can check their suppliers against IPE’s archive.

Protecting Reputations

The database saves them the cost of having to individually screen suppliers -- sometimes tens of thousands of them -- and prioritize which factories could tarnish their reputation.

“Companies like Apple are vulnerable to boycotts,” said Ethan Zuckerman, director of the Center for Civic Media at Massachusetts Institute of Technology. “It makes good sense that they would support these sorts of efforts.”

Paula Pyers, senior director of supplier responsibility at Apple, said IPE was a leader in driving greater transparency. "Protecting the environment and addressing impacts in our supply chain is one of Apple’s greatest priorities,” she said.

Alibaba billionaire co-founder Jack Ma has also taken a personal interest in the matter, saying that he wants to help make the nation’s “water clearer, skies bluer, and food more secure.”

Alibaba said in an emailed statement that it was happy to support the “Blue Map” project which is “a meaningful and innovative project that helps solve social problems."

The issue is a pressing one for China’s government. Nearly 9 percent of the country’s rivers and lakes were severely polluted by the end of last year, according to a June report from the government.

China’s laws state that tap water can only come directly from rivers that meet categories 1-3 on the nation’s six-level pollution scale. But most water utilities can’t find sources that meet those standards without extensive treatment, said Shen Liping, founder of Shanghai Daorong Nature Conservation and Sustainable Development Center.

Pollution Unrest

The steady poisoning of much of China’s water supply over the past three decades has become a major political issue for the ruling Communist Party. Chen Jiping, a former member of the Communist Party’s Committee of Political and Legislative Affairs, said in 2013 that concerns about the environment were the biggest source of unrest in China.

Apple and Wal-Mart Are Helping China Crack Down on Polluters

Water shortages, public discontent over health threats and pressure from a central government determined to rein in pollution have pushed officials to become more open to working with NGOs like IPE. China’s 2008 environment information disclosure laws made IPE’s database possible. The Blue Map app is at the heart of the battle against one of the central government’s biggest public enemies: “Stinky Black Waters.”

The term refers to China’s most polluted rivers, 2,059 of them as of March. Using Blue Map, citizens upload photos of polluted waterways or issue complaints to the government, who are then required to provide an initial response within seven days. Citizens can follow up on the app to see how the government is dealing with the complaint.

The Ministry of Environmental Protection said as of March it received 2,997 such complaints, of which more than half led to fruitful investigation.

“In the past such complaints would have just fallen through the cracks,” said Ma. “This is a breakthrough for China in terms of civil engagement and information disclosure."

Not all NGO anti-pollution efforts have been as successful. Danger Maps, a data site that was also backed by Alibaba, asked China’s public to chart water quality using $10 water kits and their smartphones. The project was never made public. Liu Chunlei, founder of Danger Maps, said he wasn’t given an explanation, but he suspected it might have been too sensitive.

IPE’s next goal is to enlist more companies -- property developers, banks, retailers -- to use its database, so more suppliers and factories can be monitored.

“With more public information disclosure, public participation, companies are finally starting to take initiative to care about the environment,” said Ma. “The risks of not doing so are too high.”

©2017 Bloomberg L.P.