Policy must be future-oriented

By Chou Kuei-tien 周桂田  / 

Mon, Oct 25, 2010 - Page 8

There has been something of a misconception floating around of late, that opposition to the expansion of the Kuokuang Petrochemical Technology Co (KPTC) plant is tantamount to hobbling Taiwan’s petrochemical industry. People are saying that every major country in the world has the means to produce a certain amount of ethylene and that anyone opposed to the KPTC project is failing to take into account the fact that the textile, automobile parts and information technology (IT) industries, not to mention the green energy industry — that the people opposing the KPTC project are always going on about — all need petrochemicals as raw materials. It’s not that simple. Somebody is being economical with the truth and I think the Ministry of Economic Affairs deserves most of the blame.

Where the ministry went wrong was in overselling the case for the KPTC project during its environmental impact assessment (EIA). What it did was announce that if the KPTC plant wasn’t built, it would only be a few years before Taiwan was unable to produce enough ethylene to satisfy demand.

This situation can be viewed from a number of different perspectives.

First, the ministry’s EIA report was based on projected estimates for ethylene demand that assume Taiwan will continue to have an economic model that relies heavily on manufacturing over the next two decades. This basic premise is questionable.

Second, research clearly shows that a conspicuously large percentage of ethylene produced in Taiwan goes to low value-added, heavily polluting mid-stream plastics, predominantly for export.

Third, if we look at Taiwan’s manufacturing structure, then it is clear that manufacturing has already largely given way to knowledge-based service industries. Statistics from the Directorate General of Budget, Accounting and Statistics show that service industries accounted for 73 percent of GDP in 2008, compared with 25 percent for manufacturing. It consequently makes little sense to consider the future direction of Taiwan’s economy in terms of an economic model based on traditional manufacturing.

Other than promoting the arts, innovative, green energy and cloud computing technologies, we need to comprehensively assess whether or not we really need to produce such large amounts of ethylene to support our textiles, components, IT and green energy industries.

Fourth, the ministry’s preoccupation with getting the KPTC plant built has led it to ignore any possible Plan B.

When industrial policy is drafted in any developed country, various alternatives are usually considered.

In Taiwan, that might involve adjusting the industrial policy that existed before the KPTC plant was proposed, and the Third Naphtha Cracker Renovation and Expansion Project, for example, in which existing plants at the current location are being upgraded in response to the planned 2015 dismantling of the Houjin Fifth Naphtha Cracker Plant. This already has the capacity to meet demand for ethylene from manufacturing or emerging industries. Moreover, since the upgrade was designed to reduce pollution and enhance productive capacity at the site, it also addresses international pressure to reduce carbon emissions.

State-run CPC Corp, Taiwan, has already started the process of decommissioning its refinery in Kaohsiung and relocating operations to a new industrial complex in Changhua. There are concerns about the possible impact this is going to have on the integration of up, mid and downstream petrochemical industries, not to mention jobs, in the south, as well as national pollution levels.

The above alternative would be so much better than the KPTC plant for reasons not directly related to the petrochemical industry. It will have benefits in terms of a reduced environmental impact, public health, food safety and the livelihood of fishermen. There would also be less risk of land subsidence and it would be possible to preserve natural coastal wetlands, as well as avoid other hitherto unknown dangers that could arise from building the plant.

Supporters of the KPTC proposal may well be bringing calamity on the petrochemical industry in Taiwan. Several top academics have already pointed out that there is a real danger the plant could end up in the sea as a result of global warming. We cannot ignore the potential dangers of building this plant: Local residents having to reinforce their homes every four years or so against land subsidence; damage to the foundations of supporting pillars along the high speed rail line; unjustifiable allocation of water resources; potential risk of food contamination; the threat to the livelihood of local fishermen; the destruction of world-class coastal wetlands; and the extinction of the Chinese white dolphin, which lives along Taiwan’s west coast and whose conservation even Beijing is committed to.

The ministry’s policy on environmental impact lacks both foresight and a sense of national direction. It seems tethered to the mindset that economic growth is king and the environment, public health and concerns over pollution be damned.

Unfortunately, we haven’t seen this sort of thing before. In 2005, when air pollution from a Taiwan Steel Union plant in Changhua was found to have dioxin levels 375 times EU standards, the director of the Industrial Development Bureau at the time blocked a directive from the Environmental Protection Administration to shut production at the plant down. The reason given was that such an action would have obstructed the Challenge 2008 Six-Year National Development Plan.

The question is, do we still need this kind of unsustainable economic development mentality?

The EIA for the KTPC project, is a testament to the questionable idea that without the proposed plant Taiwan will have to rely on Formosa Plastics for its ethylene production. Again, this is misleading. It effectively portrays Taiwan as some kind of third-world country riddled with corruption, where the government and business are in each other’s pockets and it is possible for one company to monopolize the market with no fair trade regulation or economic supervision.

Finally, given the magnitude of the issue, shouldn’t the government be holding public hearings so that people can be made aware of the various permutations being considered as the law says it should?

The government has recently tried to force its development agenda through with so-called “conditional EIAs.” It is clearly unacceptable that the largely discredited Environmental Impact Assessment Commission is handling such a contentious issue.

A few days ago, Public Television Service aired a documentary on the petrochemical industry. How is it that the government is not listening to the fears and concerns of the public? Isn’t their attitude incompatible with President Ma Ying-jeou’s (馬英九) Double Ten National Day speech, when he talked about respecting people’s rights to earn their own livelihoods and lead healthy lives?

At a time when we are calling on China to release a democratic rights activist, how can we convince people that our own government is a beacon of democracy, given the way it continues to make policy?

Chou Kuei-tien is a convener of the Center for Ethics, Law and Society in Bio-medicine and Technology and a professor at the Graduate Institute of National Development at National Taiwan University.