China-Vietnam pulp ventures: A risk that cannot be papered over

The Vietnam Pulp and Paper Association (VPPA) is worried about pollution risks involved in what it believes are joint venture invitations being extended to Vietnamese firms by Chinese paper recycling mills.

In a letter sent to the industry and trade ministry recently, the association said Chinese companies have started buying used paper and cardboard packaging in Vietnam since late last year.

It said it believes that some local firms and even foreign invested ones have expressed interest in setting up joint ventures with the Chinese companies to produce paper pulp.

Under this arrangement, the joint ventures will turn recycled paper into paper pulp and export the final product back to China, leaving all the toxic residues in Vietnam.

Chinese firms are being pushed to do this as China has tightened its controls over environmental pollution, especially in the industrial sector, including paper production, the VPPA noted.

According to China’s state news agency Xinhua, the Chinese government launched an environmental crackdown early last year and registered 233,000 environment pollution cases during the year, a 69 percent increase over 2016.

An Economist report in January also said China has taken a harder line and pressed on with pollution controls, hitting coalminers, cement-makers, paper mills, chemical factories, textile firms and more, and tens of thousands of companies have been forced to close.

Vietnam’s northern neighbor has also issued a ban on imports of 24 categories of solid waste, including certain types of plastics, paper and textiles.

"Large amounts of dirty... or even hazardous wastes are mixed in the solid waste that can be used as raw materials. This has polluted China's environment seriously," the Chinese environment ministry explained in a notice to the World Trade Organization.

The VPPA feels that this situation has prompted Chinese paper mills to seek a way out in Vietnam.

The association said once the joint ventures are established and start operations, they would “leave very bad impacts on and pose a lot of threats to Vietnamese paper producers,” because that will take away chances to export finished paper products from Vietnamese firms.

Even worse, “the fact that such joint ventures send the final product, which is paper pulp, back to China and leave all the trash behind will pose a big threat for the environment in Vietnam,” it said.

While no such joint ventures have officially taken shape, the association said it wants to report the situation to the ministry and prevent any possible threat to the environment as well as the business of local paper firms.

The association suggested that the ministry bans all projects that recycle paper to produce paper pulp for export as also operations of companies that export recycled paper pulp.