Joaquin Sapien, a ProPublica reporter has been churning out really top flight in-depth stories on the Chinese Drywall situation almost since its inception. If you have any interest at all in Chinese drywall, you should be reading his stories. In fact, if you have any interest at all in learning how manufacturing (even business as a whole) is conducted in China, you should be reading his stories.
Joaquin just came out with another story on Chinese drywall, entitled, “China Plays Tug-of-War with U.S. Inspectors Over Drywall.” This article is one focused on how the Chinese government seems to be protecting Chinese drywall manufacturers from the U.S. government. This is one of those stories that is likely to split readers into two clear camps. Those who read it and say, “of course, none of this is a surprise” and those who read it and find it hard to believe things really go down like this in China.
The opening paragraphs nicely summarize the story:
A federal investigation into contaminated Chinese-made drywall has been a long, hard tug-of-war for U.S. investigators trying to pry information from Chinese government officials and manufacturers. When a team of investigators traveled to China last year, the tug-of-war became physical, with a Chinese official trying to wrest a piece of drywall from an American’s hands.
The federal probe is the largest defective-product investigation ever conducted by the Consumer Product Safety Commission. But almost two years after it began, the CPSC still hasn’t been able to figure out what materials in the Chinese drywall are triggering the release of sulfur gases. The gases have a chemical smell and have corroded wiring and appliances in thousands of U.S. homes. They’ve also been linked to respiratory ailments, nosebleeds and sinus problems.
The story then goes on to detail how Chinese government officials and Chinese drywall manufacturers have stonewalled and even physically interfered with the U.S. Consumer Product Safety Commission’s investigation. The investigators nonetheless saw ample evidence of bad product quality:
Most of the manufacturing companies the Amer icans visited refused to disclose even the most basic information about the chemicals they put into their drywall or the manufacturing processes they use. Despite these limitations, the Americans noticed serious quality-control problems at all the plants and mines they visited. The inspectors were so desperate to get samples that they slipped away from their government handlers twice to buy drywall directly from vendors. The vendors said at least one brand of drywall being sold in China smells so bad that contractors refuse to buy it.
I love the following paragraph, which if one were to replace the “CPSC” with “the American company” and replace “AQSIQ” with “the Chinese factory” would be pretty much spot on with how factory inspections so often go in China, especially the careful choreography:
The CPSC officials who spoke with ProPublica and the Herald-Tribune about the 2009 trip to China said their government hosts were cordial when they arrived but that the relationship quickly became tense.
The Americans shared a bus with officials from China’s General Administration of Quality Supervision, Inspection and Quarantine, known as AQSIQ, which employs more than 30,000 people throughout the country. More officials followed in black sedans, with a new group switching in each time they passed into a new province.
“It was very carefully choreographed,” one of the U.S. officials said. “We spent a lot of time with party officials and not as much time in the plants as we wanted to do.”
And what Quality Control inspector has not encountered something like this on their Chinese factory inspection:
As the bus approached a second mine in Shandong province, overpowering smells of sulfur and then livestock seeped inside. They were told the odor was from a nearby hog farm, but there was no farm in sight.
At the mouth of the mine the inspectors were shocked to see miners separating pieces of rock by hand—a process CPSC officials said is unheard-of in the United States and that the inspector described as “ludicrous.” Modern mines have tools and testing equipment on site to ensure that the rock they’re extracting is gypsum and that it is pure enough to be used in products such as drywall.
“They weren’t doing any kind of testing, they were just looking at it,” the CPSC inspector said. “They looked like they were straying” into areas of the formation that could contain sulfur or other contaminants “and then just trying to sort out the bad stuff by hand as it came out.”
Asked why the company wasn’t testing for contaminants, a company representative told the team the mine was fulfilling its contract with its customers and there was no government requirement to do so.
* * * *
“They wanted us in and out of that plant in 10 minutes,” the CPSC inspector said. “But we just took our time, which made them really upset.”
* * * *
The FGD gypsum came from five different power plants, and when it arrived it was dumped together in a big pile.“ I asked if there is some kind of conformity certificate that says where all the material is coming from. They said no,” the CPSC official said.
I then inject a bit more cynicism into the story:
Dan Harris, an attorney with Seattle-based Harris & Moore, which represents clients in both the United States and China, said he wasn’t surprised about the lack of documentation in China’s drywall industry.
“There are a lot of industries where the Chinese don’t track goods terribly well,” Harris said. “Until there is a reason to keep better records, they aren’t going to do it. Perhaps this will be the reason.”
* * * *
Harris … said China has little incentive to cooperate with the federal investigation.
“The Chinese government doesn’t care at all about homeowners in the U.S.,” Harris said. “Let’s face it. They care about protecting companies in China. If that means not sharing samples with the U.S., then that’s what they are going to do.”
What I like about this story is that the “tug-of-war” encountered by the U.S. government is the exact same tug-of-war foreign private companies encounter all the time with their Chinese manufacturers. What does it take to deal with these sorts of things? Patience, experience, Chinese language skills, and an on-site presence, among other things. If you want to learn more about what it is like to work with Chinese factories and more about how to deal with them, I suggest you read the following blogs:
I have to say though that my favorite line from the story is the one about how things were “carefully choreographed.” How many times have your “handlers” in China set up your schedule so that you have no time for anything but them? This is why I always make it a point when I go to China (Korea too) to be at least somewhat vague about my schedule and to virtually never give out my arrival or departure times to and from a city.
Is sourcing from China really this difficult? Is it getting better? What are your tips and tricks for handling this?
Tell us your stories….
