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Hong Kong entrepreneurs who own factories in the Pearl River Delta Region are grappling with a new challenge: Care about pollution or perish.

These entrepreneurs have been told to pull up their socks and take a long-term approach to meeting the exacting environmental standards set by mainland authorities.

On January 17, the Hong Kong-based owner of a metal factory was asked to help authorities in Shenzhen investigate allegations that the factory was leaking water contaminated with cyanide.

And a Hong Kong-owned textile factory was fined 11.5 million yuan ($1.48 million) last August for failing to meet local environmental standards, causing concern among Hong Kong businessmen.

It has also been reported that some entrepreneurs have moved their factories to the mainland's vast central region, where environmental requirements are less stringent.

But John Chai, the managing director of the electronics maker Fook Tin Group Holdings, belongs to a different breed. He understands, well and truly, the urgent need for environment protection. He said industrialists should be proactive in dealing with environmental issues.

And his efforts have not gone unnoticed.

The Federation of Hong Kong Industries (FHKI) has recognized Tin Group Holdings with a Green Industrialist of the Year award.

Chai said his company was committed to corporate social responsibility. He also pointed out that environmental investment was necessary for company's growth.

The Group received the FHKI award after participating in all the seven of the federation's environmental initiatives, under which it invited factories to launch at least one "green" project per year. These could involve energy conservation, water management, waste reduction, recycling, air emissions, noise abatement and "green" management.

Chai said his company would demand that its suppliers notify the company if their goods contained any potentially harmful materials, such as radioactive substances.

"This is useful to remind us of whether we should take precautionary measures when handling the substances," he said.

The company will also check whether the suppliers have a return system, especially for containers used to ship chemicals.

"We would prefer the suppliers to take back such things for recycling," Chai said.

The company's suppliers also need to provide reports showing they had met environmental standards, and Tin Group Holdings would monitor their performance, he added

Chai added that all chemicals used in the production process would either be recycled or processed before being released.

Chai said concern for the environment is a key part of the group's staff training and performance evaluations.

The company also shares its experience with other factories, he added.

He said that sound environmental stewardship is more than just a matter of strategic capital investment. Sometimes a change of management mindset is necessary.

"It's a wrong perception to think that environmental initiatives will be successful just because a company is spending more money. What is important is building staff competency," he said.

Chai said environmental initiatives would add to operational costs, but that was unavoidable.

"This is a capital investment, without which we could not expand our business and achieve sustainable growth," he said. "Companies should be ready for future changes and take a long-term planning view, enabling them to meet the changing regulations."

Moving to the central region to escape the rules is not a lasting solution, Chai added.

To prepare Hong Kong entrepreneurs to meet ever-stricter environmental requirements, the FHKI would propose that the special administrative region's (SAR) government spend HK$210 million ($27 million) to help the factories upgrade their facilities.

Andrew Leung, FHKI honorary president, said earlier that the Hong Kong government had launched a pilot scheme through which it provided HK$1 million and assistance to 10 factories. He said the federation was also considering setting up pilot centers in Dongguan and Shenzhen to showcase environmental technology and certification work.

(China Daily 01/31/2007 page4)