Amid efforts by President Tsai Ing-wen’s (蔡英文) government to ramp up its “new southbound policy,” there was a disturbing reminder that such overseas ventures are not without risk, as a subsidiary of Formosa Plastics Corp on Thursday took responsibility for a toxic discharge from a steel plant in Vietnam that led to massive fish deaths along more than 200km of coastline beginning in early April.
An estimated 60.5 tonnes of dead fish washed ashore, threatening the fishing, tourism and food production sectors, as well as triggering public protests in Hanoi, Ho Chi Minh City and Ha Tinh Province.
In a video aired on Vietnamese television, Formosa Ha Tinh Steel chairman Chen Yuan-cheng (陳源成) said the company accepted full blame for the fish deaths and asked the Vietnamese for forgiveness.
He said the company was working to fix shortcomings at the plant’s wastewater treatment facility that were behind the disaster.
The company blamed the spill on its contractors, but said it would pay US$500 million to help with a clean-up and pay compensation to fishermen and others affected by the spill.
However, an apology has taken more than two months, with Formosa Ha Tinh Steel and the Vietnamese government initially insisting that the plant was not to blame for the disaster and that the plant’s US$45 million wastewater treatment system had the necessary permits and met national standards.
Now Hanoi says wastewater containing cyanide, carbolic acids and other toxins was released into the sea during a test run of the plant.
Perhaps it is a coincidence, but the mea culpa came just two weeks after Formosa Plastics Group confirmed that the scheduled launch date of June 18 for the steel mill’s No. 1 furnace had been postponed and no new one set, amid reports that Vietnamese authorities were demanding that the group pay US$70 million in back taxes, as well as paperwork delays.
One cannot help but wonder if Vietnamese authorities were using the tax bill and red tape to pressure the company into taking responsibility for the spill, which had become a key test of Hanoi’s ability to balance its desire for more foreign investment with its willingness to force investors to comply with national regulations and standards.
Formosa Plastics Group and its subsidiaries have a rather dismal environmental track record. To cite just two examples, the US Department of Justice announced in September 2009 that Formosa Plastics Corp, Texas, and Formosa Plastics Corp, Louisiana, would spend more than US$10 million on pollution controls to address violations at their petrochemical plants in Point Comfort and Baton Rouge, and had agreed to pay a civil penalty of US$2.8 million to resolve violations of four laws, while in May, the Texas Commission on Environmental Quality announced that a Formosa Plastics Corp plant had dumped plastic pellets into Lavaca Bay.
Formosa Plastics Group only decided to build the steel plant in Vietnam after it ran into difficulties with the environmental review process for plans to build the plant in Yunlin County.
As Taiwanese corporations expand overseas, both they and the government should remember that they are seen as representatives of the nation, a nation that needs all the friends it can get. With the government eager to help businesses expand beyond the Chinese market, it should do whatever it can to convince local firms to be good corporate citizens wherever they operate.
Unfortunately, too many in the business world have the mindset shown by a former Formosa Ha Tinh Steel official, who amid the initial complaints about the fish kill said that Vietnam had to choose between “catching fish and shrimp and building a modern steel industry.”
Taiwanese have made it clear that they are no longer willing to tolerate such Hobson choices; they must make it clear that they will not tolerate Taiwanese companies investing abroad and trashing the environment.
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