Formosa Plastics Corp (FPC) in late June dismissed media reports that a Texas judge had labeled it “a serial polluter” in a case involving the discharge of plastic pellets and polyvinyl chloride powder into two Texas waterways, saying that the judge’s opinion was not the final ruling.
However, Texas RioGrande Legal Aid on Tuesday announced that the company had agreed to pay US$50 million over five years to settle the lawsuit filed by an environmentalist and a conservation group in March.
While the settlement still has to be approved by a judge, and is far less than the US$162 million the plaintiffs had sought, the legal aid group said that FPC had also agreed to clean up existing pollution and to a “zero discharge” of plastics from its Point Comfort plant.
The settlement shows that the threat of a massive lawsuit did more to get FPC to mend its ways than state-sanctioned penalties, as the Texas Commission on Environmental Quality in mid-January had fined the company US$121,875 for six incidents of pollution in April and May 2017.
While US$50 million sounds like a lot, even when added to the US$55 million FPC in July said that it would invest to build a detention basin at the plant to reduce the possibility of pellets being discharged, it is worth remembering that less than two weeks after US District Judge Kenneth Hoyt issued his June 27 decision, FPC reported a net profit of NT$18.5 billion (US$604.36 million) and cumulative revenue of NT$109.58 billion for the first half of this year.
While those figures were down 36.3 percent and 6.1 percent respectively compared with the first half of last year, and FPC’s third-quarter results announced on Tuesday last week followed suit with a 39.98 percent annual drop in net income, the company can easily afford the Texas settlement.
Environmentalists and the government in Taiwan should be taking notes, as industrial pollution continues to be a major scourge in the nation, yet the legal penalties available remain an insignificant “cost of doing business” for serial polluters, and that is only if the fines are upheld on appeal.
For example, the Environmental Protection Administration (EPA) in 2011 fined FPC’s plant in Kaohsiung’s Renwu Township (仁武) NT$80 million for years of groundwater pollution in a case stemming from 2009.
However, only NT$600,000 of the fine was for contravening the Water Pollution Control Act (水汙染防治法), the maximum allowed, so the EPA used the Administrative Penalty Act (行政罰法) to penalize FPC for the gains it had made from saving money by not paying for pollution control measures, as FPC had known about the contamination since 2003, but had not reported it to the government.
The 2011 fine was huge for Taiwan, yet at the current exchange rate is just a little more than US$2.61 million, and FPC obviously did not learn anything from it, seeing as Hoyt wrote in June that it had “never reported a single discharge of floating solids” over the course of 1,149 days from 2016 to this March.
Efforts by the EPA or local authorities to impose bigger fines on repeat offenders, such as the NT$102 million handed to Advanced Semiconductor Engineering for its K7 plant polluting Kaohsiung’s Houjin River (後勁溪), have all too often been reduced on appeal on technical grounds.
However, the Texas case and the settlement are cause for hope, as they prove that private citizens and groups can play a key oversight role in protecting the environment. It was private citizens and groups that collected the majority of water samples submitted to the court, not the state.
It is clear that the public cannot rely on either companies to self-report spills and pollution incidents or government agencies alone to tackle the problem, whether in Taiwan or elsewhere.
It also shows that Taiwan needs to change its laws to dramatically boost the size of penalties for repeat offenders.
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