Wednesday, August 22, 2007

China just the latest in manufacturing scares

China continues to be the subject of criticism over sub-standard product manufacture. The most recent case to be highlighted is concern over high levels of formaldehyde found in clothing exported to New Zealand [BBC]. Formaldehyde is often used to reduce the formation of mildew in textile products. However, high levels can cause allergies, irritation and cancer.

China has reacted to the bad press, saying that many claims are exaggerated and that the reports represent isolated cases. Chinese officials have also said that the reports are politically motivated. Whilst some of the product recalls are indeed a cause for concern, specifically food, China is by no means the only exporter of shoddy or dangerous products. In recent years there has been countless product recalls which indicate the problem of substandard products is not confined to China.

In 2005, Sudan I, a red dye which is considered to be highly carcinogenic, was found in chilli powder. The powder which originated in India found its way into thousands of products resulting in a massive recall and a loss of millions of pounds [BBC]. The product recall was the biggest in British history and cost in excess of £100 million.

China has been criticized recently for producing dangerous tyres. But in 2001 a Japanese manufacturer in the US was in the spotlight after tyres became the subject of controversy. Dozens of crashes were blamed on Firestone tyres made by Bridgestone, and resulted in a multi billion dollar recall [BBC]. Another Japanese manufacture was also in the spotlight less than three years later after wheel hubs on lorries were found to be faulty [BBC].

In February 1990 the Perrier company was forced to recall all 160 million bottles on store shelves around the world after significant amounts of the carcinogen benzene were discovered in its water. The dirty filter that caused the problem was replaced but consumers outside France were without the product for about 10 weeks which is forever by marketing standards. Coca Cola were also forced to recall their purified water after it too was found to be contaminated in 2004. Coca Cola withdrew its Dasani brand of bottled water which was found to contain illegal levels of the chemical bromate. And when it comes to whether tap water is safe to drink, China is not the only country attempting to make its water clean. In the UK there are findings which point to rising oestrogen levels in river water, thought to derive from nitrates in fertilisers and residues from contraceptive pills, and the effect these might have on humans when water is recycled. There is evidence that some male fish are changing sex, perhaps because of this, and it might explain why average sperm counts among men have dropped significantly in a generation. In 2002, the Environment Agency said oestrogen in water did not present a risk to people as it was routinely treated with chemicals that removed pollutants, including oestrogens. But some continue to doubt the theory. "I'm not saying anything is certain here, but I'm not prepared to take chances," says Dr Carey, who advised the English rugby team on nutrition in 2005.

China’s pharmaceutical industry has been under scrutiny with the culmination of one official being executed after being found guilty of taking bribes to pass products. But European products have also been the subject of controversy. In 1982 the pharmaceutical giant Johnson & Johnson had a crisis on its hands. Its leading non-prescription painkiller Tylenol was laced with cyanide resulting in the deaths of seven people around Chicago. The company's adroit response to the tampering incident was a text book case study on corporate responsibility and crisis management. The capsules were removed from shop shelves, a $100,000 reward was offered for help in tracking down what seemed to be a random killer and a new tamper-proof container was introduced. Johnson & Johnson’s then-CEO James Burke visibly took responsibility for public safety and brought back consumer confidence.

Of course, it is food which is of most concern to consumers. But China is not alone when it comes to producing substandard food or introducing bad farming practices. The UK was the focus of several food scares in the 1980’s and into the early 21st century. The egg market was sent reeling in the 1980s when Edwina Currie, then Health Secretary, said that the majority of British eggs were infected with salmonella. In the face of plummeting sales the British Egg Industry Council introduced a new code of practice and chicken "passports" to protect the public against the bacteria [BBC]. The next major food scare was Bovine Spongiform Encephalopathy which resulted in exports bans of all British beef, a ban which lasted for more than two and a half years and cost the British meat industry in excess of £4 billion. Still reeling over the devastating effects of ‘mad cow disease’ as it was often referred to, the British beef industry was hit by another crisis; foot & mouth disease. And as the country was in lock-down to prevent the spread of this latest bovine infection, the first cases of Creutzfeldt-Jakob Disease began to be discovered. CJD, the human form of BSE, is contracted from the eating of meat infected with ‘mad cow disease’, and by 2001 clusters of the disease began to occur [BBC]. By the end of the year nearly 100 had died from CJD and it was feared the disease would be a medical time-bomb. However, to date there have only been around 170 cases worldwide.

China may be in the spot light now for its lack of quality control. But the focus may shift as other countries come under scrutiny. The ‘made in China’ label may be in jeopardy in the near future, and for authorities in the PROC it will be a struggle to quell the anger as hundreds of factory workers find themselves unemployed. One toy factory in southern China has already closed with all of its 5,000 workers now jobless. The Lee Der factory, in Foshan, was a major production base of Fischer Price toys and the massive recall prompted further tragedy when the factory CEO committed suicide. His co-workers were shocked and many learned of the recall and factory closure from the newspapers. Many are migrant workers who will have to find work elsewhere. "We're staying until the boss's funeral - he paid us everything we were due - then we'll go and find new work," said one former employee [BBC]. As is often the case, the workers are the innocent victims. Many work away from their homes for months at a time, and are often poorly paid. Few would have had any idea of the threat their toys may have posed to children half way around the planet. “We didn't know what was in the paint when we made the toys, we were shocked, we found out from the newspapers," one worker said. The fear is that other factories may close and with it increase the poverty which is still commonplace in this vast country. There are over 10,000 toy factories in China making 80% of the world’s toys. Toys are only one industry. China is also facing criticism for safety scares in everything from food and drug production to the manufacturing of tyres and toothpaste. In Beijing, the government is well aware that if it does not move quickly to shore up the reputation of goods made in China, then other workers, like those in Foshan, could be at risk of losing their jobs.

The best the Chinese authorities can hope for is that media reports begin to focus on another issue. The general public often have short memories. Few in Britain will remember the scare over Perrier and Dasani water. The chili powder risk is but a faint memory and long forgotten. BSE and foot & mouth disease still raise some concern, but fears over the risk of contracting CJD has all but vanished.

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