China Plans Soil Survey to Map Pollution Levels Across the Country After Toxic Cadmium Rice Scare

June 12, 2013, 1:02 p.m. ET

China Plans Soil Survey After Rice Scare

By BRIAN SPEGELE

BEIJING—China said it will conduct nationwide sampling of soil in order to map pollution levels across the country following recent revelations that portions of the country’s rice supply were tainted with the toxic metal cadmium.

The official Xinhua news agency, citing China’s Ministry of Land and Resources, said late Wednesday that the government would conduct the survey, though it wasn’t clear when or whether results would be released to the public.The newly announced soil survey comes as the Ministry of Environmental Protection is locked in a battle with transparency advocates who are demanding that the government release the results of an earlier nationwide testing of soil. The ministry has so far refused to publish those results on the grounds that the data are a state secret.

“For the health of mankind, we must persist in increasing supervision and intensity of punishments toward polluting activity,” the Xinhua report quoted the ministry as saying.

While details of the ministry’s initiative remained sketchy, the timing of the announcement appeared to be in response to growing concern across China about the impact of soil pollution on food safety.

The presence of heavy metals, such as cadmium, in staple foods like rice has spurred rising anxiety in recent weeks. The results of a government test released last month, in the southern city of Guangzhou, suggested nearly half the rice sold in the city was tainted by cadmium. Two subsequent local-government surveys of broader southern Guangdong province, of which Guangzhou is the capital, showed tainted rice levels of 5.8% and 1.4% of provincial supplies.

Major factors causing soil contamination in China include improper dumping of industrial waste and overapplication of fertilizer, environmental scholars say.

Officials say contaminated rice discovered in Guangzhou was mainly shipped in from the nearby province of Hunan, among China’s most important agricultural regions. Among other efforts recommended in recent weeks, the Communist Party’s People’s Daily newspaper has advised people to diversify their diets to make sure they aren’t eating food from just one, potentially contaminated, region.

Food safety is particularly sensitive for China’s leaders. While Chinese in many cities have for decades lived with adverse health effects of stifling air pollution, the prospect of widespread health issues related to food contaminated by the soil is potentially even more destabilizing to the Communist Party.

However, party leaders face a balancing act in allowing the nation to come to grips with the severity of soil pollution. Among the likely challenges will be how to restore the livelihoods of farmers growing crops in areas deemed unsafe by the government. In addition to cadmium, other heavy metals believed to be contaminating China’s soil include lead and arsenic.

Identifying the gravity of China’s soil-pollution problem is one thing, but solving it is another challenge. Particularly in rural areas, where economic development remains the key goal for local leaders, incentives for regulators to push stringent environmental standards against industrial facilities are insufficient. Meanwhile, analysts say, environmental-protection bureaus tasked with enforcing policies aimed at curbing pollution are often lacking in both staffing and political power.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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