Amid criticism following the discovery that substandard 95-octane unleaded gasoline was sold at some CPC Corp, Taiwan (CPC) stations in northern Taiwan, the company last week said that it would refund and reimburse customers affected by the tainted gasoline.
It said it was willing to provide a full refund for about 41 million liters of tainted gasoline purchased at 159 stations, as well as vouchers equivalent to the refund.
The state-owned refiner said the cost of such a move was likely to total NT$2.7 billion (US$87.08 million), but whether its compensation efforts will appease the public is not known.
The rationale behind CPC’s compensation plans was to shoulder all responsibility and resolve its shortcomings, and that the company was looking at the issue from the consumers’ perspective, Minister of Economic Affairs Shen Jong-chin (沈榮津) said.
It was relying on the compensation offer to regain the public’s trust in its products, he said, despite concerns that the terms appear extraordinarily generous and are provided at the expense of all taxpayers.
The Ministry of Economic Affairs gave CPC a week to submit a report on the contamination and which workers should face disciplinary measures. Several lawmakers said CPC chairman Tai Chein (戴謙) should resign, just as former chairman Derek Chen (陳金德) resigned after a gas supply disruption led to an almost nationwide blackout in August last year.
However, the issue is not the amount of money for compensation or seeing yet another company chairman bow out over an industrial issue — it is whether the government can make CPC a more responsible company if policymakers want it to remain a state-owned enterprise and meet the demands of government policies.
More importantly, it is about whether CPC can achieve better management and quality production.
In the past 10 years, CPC has had six chairmen and seven presidents, but just when it seemed to be leaving a troubled past behind, it has encountered one incident after another.
This year alone, CPC has been in the headlines several times: in January there was a gas explosion at a refinery in Taoyuan caused by a malfunctioning control valve; in June it recalled all of its “ionic water” bottles after its producer was found to have used expired mineral concentrate; in July, the media reported it had concealed a months-long oil leak at its oil depot in Penghu; and last month it was fined by the Taitung Environmental Protection Bureau for an oil leak at its gasoline station on Green Island.
After every such incident in recent years, the government has told CPC to carry out a comprehensive review and take appropriate disciplinary action, but despite the turnover of high-level executives, mishaps continue.
Yet each time CPC has been shown to have performed badly, the public blames structural and policy factors, which relieve the company from coming up with the right solutions.
However, it is clear that human errors and management flaws are to blame for the wave of incidents, including the gasoline contamination.
These incidents show that CPC has yet to ensure workers’ awareness of standard operating procedures and operational risks, while the combination of a state-run entity and a corporate culture that places greater emphasis on the hierarchy than shared responsibility are at the crux of the problem.
With government help, there might be a chance to help CPC reform and contribute to the nation’s long-term energy development, but CPC must make a genuine effort to make improvements at every level and commit to a thorough overhaul to get its act together.
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