REPORTER: Bronwyn Adcock

Chongqing is one of China's new mega cities, home to 6 million people, with another 25 million in surrounding areas. Like elsewhere in China, though, this rapid industrialisation has come at a heavy price, many waterways are now polluted. I'm with local environmentalist Wu Deng Ming. A long-time activist here, he's faced threats for his campaigns against polluters.

WU DENG MING, ACTIVIST (Translation): Slow down, turn left up here.

Today he's helping his Beijing-based colleague Yonghchen Wang, she's using a GPS, a global positioning system, to locate polluting factories and put them on a map.

YONGHCHEN WANG, ACTIVIST(Translation): Can we take a photo in front of the factory sign?

Toxic discharge from factories is responsible for much of China's water pollution. This waste is from a battery factory.

WU DENG MING, (Translation): You can see the outlet is tainted yellow. The untreated waste is just pumped out. But they only do it secretly at night. As you can see, the rocks around the outlet are all tainted and are a kind of bronze colour.

China now allows non-government organisations to operate, but activists like Mr Wu and Ms Wang can still face harassment from the state and the factories.

REPORTER: Why do you need to be careful?

YONGHCHEN WANG: Some factories don't like it they put on the map.

WU DENG MING, (Translation): Go a bit further down to see the front gate. That is the front gate and the sign. Can you see it?

We pull up outside a chemical factory that is jointly owned by a Chinese and a Japanese company. We're outside for only seconds before we're spotted by a security guard. Mr Wu offers to show us where the waste water from this factory comes out.

WU DENG MING, (Translation): This is their waste. Waste from the factory. All the plants on both sides of the pipeline are dead. The water is polluted.

The factory makes strontium, often used in television sets. Untreated, the waste is highly toxic. The polluted water flows through a village and makes its way out here, at the local river.

WU DENG MING, (Translation): The river is very polluted and all the fish have died. The people who live nearby suffer a lot from it. The factory produces a lot of waste residues. They also contain hydrogen sulphide. This factory is notorious in Chongqing. People are very angry over the factory, especially the neighbouring villagers. They're against the factory, but the local government protects it.

The locals use this water for their crops, they say it's made many people sick.

VILLAGER, (Translation): For people who have been drinking the water for a long time, the experts from Chongqing did some tests. People living along the river have enlarged livers. Each person tested suffers from an enlarged liver.

REPORTER: Do many people get liver problems?

VILLAGER, (Translation): Yes, many.

YONGHCHEN WANG (Translation): What kind of diseases?

VILLAGER, (Translation): Loss of appetite. Or cancer. All sorts of terminal diseases.

Local villagers tell us the factory tries to hide its toxic waste. When inspectors from the Environmental Protection Agency come, the polluted water is dumped into the river here, a few hundred metres away from the other outlet.

VILLAGER, (Translation): When the inspectors come, the factory uses this pipeline for its waste. When they aren't here, it just dumps the waste into the river.

Somehow, the factory's management has heard we're here, and has come to find us. I take the opportunity to ask about the polluted water.

REPORTER: So is that water from the factory?

FACTORY MANAGER: No.

REPORTER: Where does that water come from?

MANAGER, (Translation): There's a residential area over there. It's domestic sewage from there.

YONGHCHEN WANG, (Translation): But why does it look so yellow?

MANAGER, (Translation): Well, domestic sewage... The local council hasn't set up its sewage treatment plant. So the domestic sewage comes out without being treated. Also, there are many small family businesses in the area.

YONGHCHEN WANG, (Translation): Can we have a look at your waste treatment?

They agree to take us into their factory. On the way, they are accosted by angry villagers.

VILLAGER 2, (Translation): We all have enlarged livers. How are we going to survive? We're so worried. It has definitely damaged our lives, it’s dreadful. How can we common people live?

On the factory grounds, we're shown a treatment plant for waste water. The company says it treats all its polluted water, and then re-uses it within the factory. But clearly visibly behind the treatment plant, on factory property, is the channel that comes out into the village.

MANAGER, (Translation): It's not from our factory. We treat our waste and pipe it out into this pond. This is the same sewage you just saw. It's from that residential area. You can go down and look.

YONGHCHEN WANG, (Translation): But it's as yellow as your waste.

WU DENG MING, (Translation): But the colour..

Mr Wu appears sceptical. It's a quick visit only, but on the way out a revealing admission is made. I ask how long has the waste-treatment plant been operating.

MANAGER, (Translation): Over a year. Before that, the waste was just pumped out. It wasn't treated. We set up the treatment plant last year. It's been in operation since then.

So by the company's own admission, it was polluting a year ago. Still, I decide to go and check out its claim that the source of the pollution now is domestic sewage. Just outside the factory gates I find the start of the channel that runs through the factory property, into the village. It is not connected to any domestic sewage, and only contains some stagnant rainwater.

REPORTER: Is there anything you can do to stop this?

VILLAGER, (Translation): No way. We're just peasants, we don't have any power. We can't simply remove the factory now that it's here. We tried before it was set up, but that didn't help.

YONGHCHEN WANG, (Translation): Go to the local officials or the village officials.

VILLAGER, (Translation): We went to the county officials. But they wouldn't do anything.

Ms Wang records the exact location of this factory with her GPS, and sends the information 2,000km away to Beijing. It's given to Ma Jun, one of China's foremost environmentalists, and the creator of the China Water Pollution Map.

MA JUN, ENVIROMENTALIST: With this map we can see the whole of China, we can enlarge that and see more details.

Ma Jun's national pollution map is publicly available online, it gives the names and exact locations of polluting factories.

MA JUN: And this is a very detailed map, people can see where exactly in those communities the companies are. If people don't have any idea of what is happening, how can they get involved?

The map shows 9,000 factories, including 200 run by multinationals. This figure is only the tip of the iceberg, though. Ma Jun only includes factories that have been fined by the authorities, and in some areas officials refuse to hand over this information.

MA JUN: One of the reasons is the lack of tradition for transparency, and this is rather a new issue in China, and I guess it will take some time. But we do think that some of the local officials give protection to polluters.

According to Ma Jun, water pollution is the most serious environmental issue facing China.

MA JUN: 60% of the waterways are quite contaminated.

That means 320 million people here don't have access to safe drinking water. The health consequences are devastating. These are the world averages for stomach cancer and liver cancer, both diseases associated with drinking polluted water. And these are the averages for rural China. Strong laws governing pollution do exist, but are regularly flouted. Ma Jun hopes his map can be part of the solution.

MA JUN: We have no rights to impose any fines on them or punish them, but we let people know that this company with such a popular brand, they are violating the waste water discharge standards.

REPORTER: So a new cost of pollution is bad publicity?

MA JUN: Yes. It's a kind of impact on your company's reputation.

WU DENG MING, (Translation): Can you smell it? It's from a pesticide factory. So you can smell it?

Back on the road in Chongqing, Mr Wu says part of the problem in China is that the fines for violation are too small to deter polluters.

WU DENG MING, (Translation): If they abide by the law, they have to treat the water, which is very expensive. But if they break the law and discharge the waste, the penalty is very small.

One company here was recently fined $1,500 for dumping waste with a concentration of chemicals 138 times the standard into the river. We're going to look at a factory owned by this company.

WU DENG MING, (Translation): If they get upset, they may smash your cameras, or take them off you. The reporters from CCTV were beaten up.

This factory makes chromium salt used in the production of electronic screens like televisions and computers. It's located right beside one of Chongqing's main rivers, where Mr Wu says much of its toxic waste ends up.

WU DENG MING, (Translation): This product used to be made in developed countries like America and Japan. Later, the production was opposed by people there. So they transferred the pollution to developing countries like China.

While the West may not produce it, they still import it. One economist estimates that 20% to 30% of China's pollution comes from the manufacturing of goods for export.

WU DENG MING, (Translation): So those countries benefit from the products, but people in Chongqing suffer from the pollution. That's not fair.

Just 50m away from the factory, we find a village. These people literally live in its shadows.

VILLAGER 3, (Translation): When the factory makes a noise it sounds like a scream, it’s terrible and non-stop, it drives you crazy.

A man who runs a local fishing business offers to show us where water comes out of the factory into the river. He says whenever the factory is operating a strong smell comes from this water. He catches fish from the river to eat and to sell, but stopped drinking the river water years ago.

YONGHCHEN WANG, (Translation): What water do you drink?

VILLAGER 3, (Translation): I drink the water from under the ground. It's said the water from under the ground is fine.

WU DENG MING, (Translation): But that water is polluted too.

VILLAGER 3, (Translation): That's true. It's polluted.

The villagers say many people here are sick.

YONGHCHEN WANG, (Translation): Why don't you move? You live so close to the factory.

VILLAGER 3, (Translation): I have to look after my fish farm and can't just leave. Those poor and elderly people still live here. But all the young people have left.

Back in Beijing, Ma Jun has been contacted by companies who want to get off his water pollution map. If they overhaul their practices and submit to an audit, he agrees. Some high-profile companies like Shanghai Panasonic Battery Company have done this, but not all are so obliging.

MA JUN: And we do have some companies which are coming to us saying "If you keep pushing for this, we will move to Vietnam, we're going to move to Indonesia." I said, "Why? Why do you want to move to Vietnam?" He said, "There we can still discharge more or less freely."

REPORTER: So these are multinational companies who said this to you?

MA JUN: Multinational company from Europe and it's quite a big one.

Environmental activists are not the only ones demanding an end to rampant pollution. China's central government is increasingly concerned about its toxic rivers.

I'm in the city of Harbin, on the banks of the Songhua River. Following intense pressure from the central government in Beijing, local authorities here say they're on a mission to clean up the Songhua, and a crackdown on polluters is under way. I've been given permission to spend several days with the Harbin Environmental Protection Authority. The clean-up of this river has been made a national priority by Beijing, and these local officials are under orders to do the job. Today they're taking samples to test if the water pollution has infiltrated the mud. The Songhua is polluted with industrial waste including ammonium nitrate, cyanide, arsenic, chromium and lead. These are pictures of what used to be an industrial area. The factories are gone, but the pollution remains, flowing directly into the Songhua. Those who live along the river say they feel the consequences of the pollution.

VILLAGER 4, (Translation): It has affected our eyesight. Our eyesight is deteriorating. Many people have developed kidney stones and gall bladder problems. It has also caused numbness in hands and feet.

This man has been fishing here for 30 years. For the last decade, the fish have been turning up diseased. He believes it's connected to pollution from factories.

VILLAGER 4, (Translation): How are they connected? The fish are sick. And their numbers are decreasing. Of course they're connected.

YONGHCHEN WANG, (Translation): Why do you still eat the fish, then?

VILLAGER 4, (Translation): We have to. We have no other choice. It's our only livelihood. If we stop fishing, we'll have nothing else to live on.

ZHOU LINBO, VICE DIRECTOR-GENERAL, (Translation): It is indeed a huge job. The state is very serious about environmental protection.

Zhou Linbo is Vice Director-General of the Harbin Environmental Protection Authority. He says under the new crackdown, companies who can't deal with their waste won't be allowed to build factories here. And those caught polluting could be shut down.

ZHOU LINBO, (Translation): The local EPA has stepped up law enforcement. We also set a time frame for improvement. If they fail to meet it, they will be shut down.

The EPA is taking me to visit one factory that faced being shut down. The Harbin Yeast Factory is part of AB Mauri, a division of Associated British Foods plc. Its regional headquarters are in Sydney, Australia. The yeast made here is sold locally, and also exported to Asia and Australia. Six months ago, during a secret visit by EPA inspectors from Beijing, it was discovered they were discharging waste into the local river with a concentration of chemicals 20 times the standard. Factory manager Ja Win says it happened because their waste water system was broken down and they were waiting for parts to arrive from Switzerland.

REPORTER: Did you know it was broken down?

JA WIN, FACTORY MANAGER,(Translation): Yes, I knew.

REPORTER: So did you know the result of that would be massive pollution pumping into the river?

JA WIN, (Translation): I knew we would exceed required levels.

REPORTER: So why didn't you shut down operations if you knew you were polluting?

JA WIN, (Translation): We reduced the output of our production, our waste treatment went well apart from that period. We didn’t think we would exceed the required level by too much.

REPORTER: So this is the waste water treatment?

JA WIN, (Translation): Yeah, all the ETP.

The factory was fined around $8,000 and required to set up a new system where the EPA can monitor their discharge online 24 hours a day, costing them around $100,000. The EPA and local government officials who accompany me praise the Harbin Yeast Factory for fully cooperating, and are keen to show this off as a successful outcome. The factory appears to have little choice but to cooperate.

JA WIN, (Translation): The local EPA comes regularly to get samples, do tests and spot checks. Sometimes they come to do an inspection every day. We feel they're more strict than before.

For Harbin Yeast Factory, it's been a costly experience, in terms of money and reputation. A sign perhaps that China is slowly becoming a tougher place for polluters.

REPORTER: Was it embarrassing for the company to be placed on this list by the state EPA?

JA WIN, (Translation): We will try our best to improve our waste treatment and to promote our factory.

ZHOU LINBO, (Translation): The public is increasingly aware and demands a quality environment. To build a comfortably-off society, we need to develop the economy but also improve quality of life.

Those who rely on the Songhua for their food and their livelihood are counting on these assurances.

VILLAGER 3, (Translation): I hope the government can make some policies to improve the environment.

But strong resistance to change still exists, as I discover at the end of a long day in Chongqing with environmentalists Mr Wu and Ms Wang.

MAN, (Translation): Who are you? Stop now. I want to talk to you.

Outside an American-owned factory that's listed as a polluter, a group of men surround our car and refuse to let us leave.

YONGHCHEN WANG, (Translation): Let's go.

MAN, (Translation): What are you doing? You took pictures of us. Why did you do that? Listen, give us the camera. Why did you take pictures?

I decide it's too risky to openly film. Two of the men are aggressive and intimidating.

YONGHCHEN WANG, (Translation): We're not in, but outside your factory. Let us close the door. Or we'll call the police. This is a public area.

MAN, (Translation): We don't care. Just show us your ID.

After a 10-minute stand-off, we manage to get away.

YONGHCHEN WANG, (Translation): Just close the door. What are you doing?

MAN, (Translation): We have to find out who you are first.

YONGHCHEN WANG, (Translation): Let us close the door! Xiao Luo, don't talk to them. Let's go.

Mr Wu is not surprised by the incident.

WU DENG MING,(Translation): Things like this happen to us very often. These polluting factories hire hooligans. But the hooligans are really thugs. They're hired to deal with any external personnel who they believe will damage their reputation. Especially outside people like us, or journalists.

REPORTER: Why do you keep doing this kind of environmental work when it's so risky for you?

WU DENG MING, (Translation): If I don't take any risks, if I don't make some sort of contribution, the work won't be rewarding. There is a Chinese poem which says that a divine view is beheld from a perilous peak.