Asia Nikkei | Jul 05, 2016
TAIPEI — Formosa Plastics Group was slapped with a $500 million fine for the petrochemical titan’s alleged culpability in mass fish deaths in central Vietnam on June 30, but a source close to the company said that it was coerced into pleading guilty.
Hanoi issued the fine to Formosa Plastics Group — which owns Formosa Plastics, Formosa Chemicals & Fiber, Nan Ya Plastics and Formosa Petrochemical — after authorities allegedly found that a $10.5 billion steel facility operated by the company had discharged toxic waste into local waters during its trial run that killed a large number of fish along a 200 km stretch of Vietnam’s central coast since early April.
A person familiar with the issue told the Nikkei Asian Review, however, that Vietnamese officials forced Formosa Plastics, one of the country’s largest foreign investors, into pleading guilty. Nonetheless, Formosa Plastics said that now it would focus on dealing with the aftermath of the pollution before deciding on the mass production schedule.
Chang Fu-Ning, executive vice president of the Ha Tinh steel facility told NAR on June 30 that the company regretted Hanoi’s decision but respected the investigation outcome. “We will pay Vietnamese government $500 million in two to three months,” Chang said. “As for now, we don’t have a timetable for the steel project to begin full production before we settle the case.”
According to the source who did not want to be named, Formosa Plastics Chairman William Wong and senior company executives flew to Vietnam to discuss the shoals of dead fish with Hanoi in mid-June.
However, Wong was allegedly prevented from boarding the return flight until he signed a deal to say Formosa Plastics was to be blamed for the deaths and would pay a hefty fine. Wong was only allowed to board the plane back to Taipei after signing the affidavit, the source said.
The source said: “Formosa Plastics has been under a lot of pressure as local police have taken away their staff, and local authorities threatened to close the steel plant, and there are still some 1,000 Taiwanese employees at the facility so the company also needs to ensure their safety.”
Formosa Plastics declined to comment further. Emails to Vietnam’s Ministry of Natural Resources and Environment and the Ministry of Foreign Affairs seeking comment were not answered.
The group’s four major listed subsidiaries — Formosa Plastics, Formosa Chemicals & Fiber, Nan Ya Plastics, and Formosa Petrochemical — generated 1.45 trillion New Taiwan dollars ($44.61 billion) in revenue and a net profit of NT$141.47 billion in 2015. In relative terms, some said the $500 million fine may have been interpreted as bearable.
In a sign that this issue might have triggered some diplomatic tension, Taiwan’s Ministry of Foreign Affairs urged the Vietnamese government to “protect the legitimate interests of Taiwanese businesses with investment in the country and the safety of Taiwanese businessmen and their assets.”
A senior Taiwanese official told NAR that Hanoi has been in contact with Taiwan’s Foreign Ministry about the dispute. The Taiwanese representative office in Vietnam has warned Taiwanese businessmen there to keep a low profile and to be careful, given anti-China protests in 2014.
The official said that new Vietnamese Prime Minister Nguyen Xuan Phuc supported the Ha Tinh steel project and his government had promised to ensure that Formosa Plastics would not continue to be demonized in the local press after the penalty.
But the government’s fine was a U-turn from its statement on April 27 when it said there were no links between the new Taiwanese steel plant and fish deaths in farms and coastal waters. It said then that it found no evidence to blame Formosa Plastics’ steel unit.
On the same day, Formosa Plastics said it would have been impossible to discharge wastewater that did not meet Vietnamese national standards and that it monitored its wastewater system all the time.
On June 2, Vietnamese officials said they had found the cause of the pollution, without elaboration. Then on June 30, the Vietnamese authorities blamed Formosa Plastics for the pollution.
“No matter you like it or not, and no matter what the truth is, the Formosa Plastics case would be a painful lesson learned for every company who wants to expand [its] foothold in Southeast Asia especially during the transition period of local political forces,” said Leo Lee, an analyst at Yuanta Investment Consulting.
Lee was referring to former Vietnamese Prime Minister Nguyen Tan Dung’s departure from the post he held for a decade in April after a failed bid to become the chief of the Communist Party. Nguyen Tan Dung was a supporter of the steel facility in Ha Tinh, but the newly elected Prime Minister Nguyen Xuan Phuc was said to be friendly to Beijing.
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July 6, 2016
Controversy shrouds Formosa Plastics’ Vietnam fine
by Nhan Quyen • [Human Rights]
Asia Nikkei | Jul 05, 2016
TAIPEI — Formosa Plastics Group was slapped with a $500 million fine for the petrochemical titan’s alleged culpability in mass fish deaths in central Vietnam on June 30, but a source close to the company said that it was coerced into pleading guilty.
Hanoi issued the fine to Formosa Plastics Group — which owns Formosa Plastics, Formosa Chemicals & Fiber, Nan Ya Plastics and Formosa Petrochemical — after authorities allegedly found that a $10.5 billion steel facility operated by the company had discharged toxic waste into local waters during its trial run that killed a large number of fish along a 200 km stretch of Vietnam’s central coast since early April.
Chang Fu-Ning, executive vice president of the Ha Tinh steel facility told NAR on June 30 that the company regretted Hanoi’s decision but respected the investigation outcome. “We will pay Vietnamese government $500 million in two to three months,” Chang said. “As for now, we don’t have a timetable for the steel project to begin full production before we settle the case.”
According to the source who did not want to be named, Formosa Plastics Chairman William Wong and senior company executives flew to Vietnam to discuss the shoals of dead fish with Hanoi in mid-June.
However, Wong was allegedly prevented from boarding the return flight until he signed a deal to say Formosa Plastics was to be blamed for the deaths and would pay a hefty fine. Wong was only allowed to board the plane back to Taipei after signing the affidavit, the source said.
The source said: “Formosa Plastics has been under a lot of pressure as local police have taken away their staff, and local authorities threatened to close the steel plant, and there are still some 1,000 Taiwanese employees at the facility so the company also needs to ensure their safety.”
Formosa Plastics declined to comment further. Emails to Vietnam’s Ministry of Natural Resources and Environment and the Ministry of Foreign Affairs seeking comment were not answered.
The group’s four major listed subsidiaries — Formosa Plastics, Formosa Chemicals & Fiber, Nan Ya Plastics, and Formosa Petrochemical — generated 1.45 trillion New Taiwan dollars ($44.61 billion) in revenue and a net profit of NT$141.47 billion in 2015. In relative terms, some said the $500 million fine may have been interpreted as bearable.
In a sign that this issue might have triggered some diplomatic tension, Taiwan’s Ministry of Foreign Affairs urged the Vietnamese government to “protect the legitimate interests of Taiwanese businesses with investment in the country and the safety of Taiwanese businessmen and their assets.”
A senior Taiwanese official told NAR that Hanoi has been in contact with Taiwan’s Foreign Ministry about the dispute. The Taiwanese representative office in Vietnam has warned Taiwanese businessmen there to keep a low profile and to be careful, given anti-China protests in 2014.
The official said that new Vietnamese Prime Minister Nguyen Xuan Phuc supported the Ha Tinh steel project and his government had promised to ensure that Formosa Plastics would not continue to be demonized in the local press after the penalty.
But the government’s fine was a U-turn from its statement on April 27 when it said there were no links between the new Taiwanese steel plant and fish deaths in farms and coastal waters. It said then that it found no evidence to blame Formosa Plastics’ steel unit.
On the same day, Formosa Plastics said it would have been impossible to discharge wastewater that did not meet Vietnamese national standards and that it monitored its wastewater system all the time.
On June 2, Vietnamese officials said they had found the cause of the pollution, without elaboration. Then on June 30, the Vietnamese authorities blamed Formosa Plastics for the pollution.
“No matter you like it or not, and no matter what the truth is, the Formosa Plastics case would be a painful lesson learned for every company who wants to expand [its] foothold in Southeast Asia especially during the transition period of local political forces,” said Leo Lee, an analyst at Yuanta Investment Consulting.
Lee was referring to former Vietnamese Prime Minister Nguyen Tan Dung’s departure from the post he held for a decade in April after a failed bid to become the chief of the Communist Party. Nguyen Tan Dung was a supporter of the steel facility in Ha Tinh, but the newly elected Prime Minister Nguyen Xuan Phuc was said to be friendly to Beijing.