The recent pollution scandal involving Advanced Semiconductor Engineering Inc (ASE) made front-page news and prompted intensive discussions about levying stricter punishments against the world’s biggest chip packager for discharging untreated wastewater into a river in October.
However, there is scarcely any talk about pushing the government and environmental protection agencies to re-examine the nation’s policies, nor on how to tighten rules to reduce the potential for water and air pollution.
Farmers whose land may have been contaminated by the wastewater, labor union members and environmental activists have taken to the streets to accuse ASE of polluting the environment and demand that the company shut down the factories with problematic wastewater systems. They also said ASE should continue to pay workers from any affected plants.
On Oct. 1, ASE was found to have discharged untreated wastewater from its K7 plant into Greater Kaohsiung’s Houjin River (後勁溪), contaminating it and nearby farmland. ASE operates 17 factories in the municipality. This was not the first time that ASE had broken the Water Pollution Control Act (水污染防治法) by discharging wastewater containing harmful chemicals or heavy metals into the river.
The firm was fined the maximum NT$600,000 (US$20,200) penalty, which is a trifling amount for a company that had an annual revenue of more than NT$72 billion last year. The worst-case scenario for ASE will be that it is forced to shut down the factory. However, even a shutdown would scarcely affect the company because the plant only accounts for 10 percent of its overall revenue.
A three-month shutdown at the K7 plant would cut 3 percent of ASE’s chip-testing and packaging revenue, and 12 percent of the company’s net profit next year, Credit Suisse analyst Randy Abrams said.
As the punishment is nickel-and-dime stuff for ASE, there are calls for tougher punitive measures. However, those populist calls have no legal basis.
After a midnight raid on one of ASE’s factories in Jhongli (中壢), Taoyuan County, last week, environmental protection officials said they suspected the company was also breaking the law by discharging wastewater through a concealed pipeline. Three wafer slicing machines were suspended from operation as a result.
Some legislators said ASE should pay back tax incentives of about NT$3 billion. Minister of Economic Affairs Chang Chia-juch (張家祝) told legislators that it would be unlikely that the ministry could recover that amount because there was no legal recourse to do so. The government would have to revise the laws governing tax breaks for research and development investment to recover the funds, Chang said.
The minister said that ASE has received tax benefits valued at NT$300 million because of the NT$3 billion it invested in research and development projects. What the ministry can do is deny the Greater Kaohsiung-based company future tax benefits.
The Greater Kaohsiung environmental protection bureau said it plans to seek punitive damages from ASE. The agency said it plans to seek at least double the NT$110 million in gains it claimed ASE made during the period the company discharged toxic wastewater from the K7 plant. That would require a revision of the Administrative Penalty Act (行政罰法).
As the nation is heavily dependent on its industrial sector, the economy would suffer if factories are shut. To strike a balance between economic growth and environment protection, tougher regulations against pollution are required. Otherwise, it will be easy to lose control over polluters as there are more than 12,300 factories operating in the nation’s 62 industrial areas alone.