Research On Environmental Risk Control Of OFDI Of China’s Resource-based Enterprises

As Chinese enterprises go global at a faster pace,the host country and even the international community are paying more and more attention to the environmental impact brought by China’s OFDI,especially resource-based enterprises.Social responsibility risk,especially environmental risk,has become one of the main risks for Chinese resource-based enterprises to operate overseas.Environmental problems make many enterprises miss opportunities and even suffer huge economic losses.Proper handling of environmental risks of China’s OFDI is an important factor in promoting the smooth implementation of China’s "going global" strategy,and it is also an urgent issue to be focused on and solved.At present,most of the studies on China’s OFDI environmental risk control focus on the government policy level,and there is a lack of practical countermeasures and suggestions on the internal control of environmental risk in enterprises.This paper mainly uses case analysis and comparative analysis to study the environmental risk control of resource-based enterprises.Firstly,this paper introduces the related concepts and the theoretical basis.Secondly,this paper describes the overall situation of environmental risks encountered by China’s resource-based enterprise in the process of OFDI.Thirdly,this paper analyzes the reasons why China’s resource-based enterprise encounters environmental risks in the process of OFDI from the enterprise level and the government level.Then,this paper selects Sinopec and Freeport as the cases to compare and analyze the situation,causes and countermeasures of environmental risks encountered by the two enterprises.Finally,this paper provides countermeasures and suggestions on how to control the environmental risks of OFDI of China’s resource-based enterprises from the perspective of enterprises and the government.The conclusions of this paper are as follows.First,environmental risks encountered by Chinese resource-based enterprises will not only damage their own interests and reputation,but also seriously affect the international image of their home country.Secondly,there are two main reasons why China’s resource-based enterprises frequently encounter environmental risks in the process of OFDI.One reason is that the internal control of environmental risks of enterprises is not perfect,and the other reason is that enterprises lack the external control system of environmental risks at the level of home government.The third conclusion is that the environmental risk control of China’s OFDI should be carried out from two aspects.Firstly,as the main body offoreign investment,enterprises should strengthen internal control and risk management.Secondly,the government should strengthen external control of environmental risk of China’s OFDI.The innovation of this paper lies in that it studies the environmental risk control system of resource-based enterprises based on the internal control theory,and provides countermeasures and suggestions for environmental risk control at the government level other than enterprises by applying the comprehensive control theory of 3C framework.