Last week, Kuokuang Petrochemical Technology Corp said that if the company’s planned naphtha cracker project to be built on coastal wetlands in Changhua County fails to pass an environmental impact assessment, several major shareholders would withdraw their investment and the company would scrap the project.
These remarks came after environmental activists last month applied to set up a trust fund to purchase the land in a bid to protect the endangered Indo-Pacific humpback dolphins that swim up and down the Changhua coast. This move also reflected growing public opposition to the project and its potential negative impact on public health and natural resources.
Naturally, the company’s ultimatum raised eyebrows in the government. Officials in the Ministry of Economic Affairs warned on Wednesday that losing the Kuokuang project would undermine the competitiveness of Taiwan’s petrochemical industry, particularly in light of an imminent challenge from Singapore, where Royal Dutch Shell PLC has already begun production at its new petrochemical complex and Exxon Mobil Corp is expected to open a new petrochemical complex next year.
As with similar cases in the past, the Kuokuang project has prompted people to ask whether the dichotomy of economic development or environmental protection might not be a false choice.
Although there is no correct answer to this dilemma, years of experience have shown that while the government pays lip-service to the idea that people should be able to choose what kind of environment and economy they want, it is also inclined to blame any potential decline in economic growth on environmental activists.
The government has been unsuccessful in persuading companies to install mechanisms that mitigate their economic, social and environmental impact, and which might go some way to changing popular anti-business sentiment. Instead, its blatantly pro-business attitude fans the flames of public anger further, creating bad publicity and inflicting long-term damage on company brands and reputations.
Although it may take some time to become mainstream, the idea of corporate social responsibility is slowly taking hold in Taiwan, and whilst it is undeniable that many local businesses have planned socially responsible operations with an eye on future profits rather than the development of a sustainable business model, such action at least demonstrates a recognition that good corporate citizenship is not necessarily anathema to long-term profitability.
The recent public backlash against Kuokuang and Hon Hai Group is regrettable, because what Taiwan needs now more than ever is to encourage businesses to adopt well-designed corporate citizenship programs and further build strong partnerships with the communities they are an integral part of.
For businesses, safeguarding investors’ rights, protecting the interests of shareholders and securing workers’ rights are all important objectives, but it is equally important that they see the writing on the wall and implement major changes in the way they operate. Companies need to recognize that their own self-interest demands that they start protecting the environment and engage in socially responsible operations on their own terms, before the government introduces legislation to force compliance.
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