Environmental Performance of Foreign Direct Investment (FDI) Companies in the Pearl River Delta Region (PRDR): a case study of Dongguan City

Abstract

The environmental performance of foreign direct investment (FDI) companies in the Pearl River Delta Region (PRDR) is examined through a case study of Dongguan City. The influence of host governments, regional/international organisations and export markets is highlighted in the analysis of environmental management systems of the FDI companies. The majority of FDI companies in the region lack effective systems and measures for environmental management. The environmental governance of the host country, the environment-related legislation and policies of the main export markets, and the social responsibility of the company owners are major factors that influence the environmental performance of the FDI companies. A combination of the quality of host government decision making in relation to sustainable development and the high degree of social responsibility and environmental awareness of individual FDI companies is crucial not only to achieving better overall environmental performance but also to achieving better environmental quality in the PRDR.

Keywords:

• FDI
• environmental performance
• the PRDR
• China

Acknowledgements

We greatly appreciate the valuable comments and suggestions made in relation to this paper by Professor John Connell, University of Sydney, Dr Estelle Dryland, Macquarie University, Sydney, and the anonymous referees. Also, we would like to express our thanks to Mr Baihui Chen of the Environmental Protection Bureau, Dongguan City, Mr Loui Chan, Inoac Metal & Elastomer Co. Ltd, Dongguan City, and participants from all organisations including Mr Ka Wai Leung, Department of Geography, Hong Kong Baptist University for their support. This research was funded by the Hong Kong Baptist University (FRG/06–07/II-58) and Hong Kong Energy Studies Centre.

Notes

1. In the environmental quality standards for surface water (People's Republic of China, GB3838-2002), pollutant concentrations are classified into six classes. Class One is the lowest polluted level; Class Six signals the most polluted level.

2. According to the International Standards Organization (ISO), environmental performance (ISO 14031) refers to ‘measurable results of the environmental management system, related to an organization's control of its environmental aspects, based upon its environmental policy, objective and targets’ (Tibor & Feldman 1996).