Additional $346.3 million to go to steel and deep-water seaport project, raising total investment to $11.03 billion.
Formosa Ha Tinh Steel (FHS), the Vietnam subsidiary of Taiwan’s Formosa Plastics Group, has asked the local government for permission to increase its total investment in a steel complex in the north-central province of Ha Tinh, in a bid to strengthen waste treatment facilities.
The company plans to add a further $346.3 million to the steel and deep-water seaport project, raising its total investment to $11.03 billion.
The additional capital will be used to strengthen waste management and build environmental protection facilities at its steel mill, a toxic leak from which caused one of the worst marine disasters in the country’s modern history last year. Vietnam is still tying up the loose ends almost a year after the event.
According to a local government report, FHS has disbursed 94.37 per cent of its investment so far in the first phase, or $10.69 billion, making it the largest foreign-invested project in the province to date.
The Taiwanese company has fixed 51 out of 53 violations identified by the Ministry of Natural Resources and Environment following the April incident. The steel mill is expected to come into operation in the second quarter of this year.
The Vietnamese Government has called on authorities to complete compensation payments for all fish farmers in the country’s north-central and central provinces affected by the incident. The executive order, issued at a recent meeting chaired by Deputy Prime Minister Truong Hoa Binh, stated that the provinces of Ha Tinh, Quang Binh, Quang Tri and Thua Thien Hue should complete payments in the next three months. Various ministries and the office of the government have also been urged to send inspection teams to check and assist the compensation process.
Last month, Vietnam publicly named eleven government, provincial, and industry officials responsible for the incident. It named the then Minister of Natural Resources and Environment Nguyen Minh Quang, former Vice Minister Bui Cach Tuyen, and former Chief of Ha Tinh’s provincial Communist Party unit Vo Kim Cu, along with eight other officials, saying they should be disciplined or face review.
FHS polluted more than 200 km of coastline in the incident, killing more than 100 tons of fish and devastating the environment, jobs, and economies in the four provinces. The Taiwanese company admitted to having discharged untreated waste into the sea, and agreed last June to pay $500 million in compensation.
The environment ministry said that the affected region is expected to take a decade to completely recover, while experts predict that the disaster may set Vietnam’s economy back for years to come.
The incident was a wake-up call for enterprises, as they have become more compliant to policies and adopted internal environment regulations, the Vietnam Chamber of Commerce and Industry (VCCI) announced at the release of its Provincial Competitiveness Index (PCI) 2016 report on March 14.
The report points out that since Formosa dumped toxic industrial waste into the sea, businesses have become more aware of their obligations to conform to environmental regulations issued by local authorities despite any higher costs.
Mr. Edmund Malesky from the US-based Duke University, one of the authors of the PCI 2016 report, said enterprises have accepted not to pursue economic growth at the cost of the environment, while also revealing that enterprises are willing to spend more to comply with environmental regulations or to enforce their own internal regulations to avoid causing pollution.