Formosa Steel owns up to toxic spill, agrees to pay Vietnam $500 million

In a sharp turn around, owners of Formosa Ha Tinh steel mill on Thursday admitted that toxic chemicals discharged from their massive plant in the Vung Ang Economic Zone caused one of the largest environmental disasters in Vietnam's history.

The owners of Taiwan’s Formosa Ha Tinh steel mill on Thursday admitted that toxic chemicals discharged from their massive industrial plant in the Vung Ang Economic Zone caused one of largest environmental disasters in Vietnam’s history and offered $500 million in compensation.

A Vietnamese government investigation into the April spill determined that the release of toxic chemicals including cyanide from the plant caused the fish kill and the company, a subsidiary of the Formosa Plastics Group, apologised for the spill.

“We take responsibility,” Formosa Ha Tinh chairman Chen Yuan-Cheng said in a video played at the press briefing Thursday. “We sincerely apologise to the people of Vietnam, particularly people from four central provinces, including Ha Tinh, Quang Binh, Quang Tri and Thua Thien Hue.”

In addition to the apology, Chen said the company plans to make up for the damage it caused to the environment and the fishermen.

We pledge to make compensation for the economic damage caused to the people and to treat contamination and restore the natural conditions in the four provinces.

Chen Yuan-Cheng, chairman, Formosa Ha Tinh

The spill caused an estimated 70 tonnes of dead fish to wash up on the shores of Vietnam’s central coast starting in early April. An untold number of people were sickened when they ate the fish, and the disaster sparked rare protests across Vietnam, creating a crisis for the government.

Thursday’s long awaited announcement confirmed what activists and many ordinary Vietnamese had long believed. Critics noted, however, that the company and government officials failed to address the question of how government officials signed off on Formosa’s skirting of rules and standards.

An about face

Formosa’s admission marks a sharp turn-around for the Taiwanese firm as it initially denied that it was responsible for the fish kill, citing the $45 million it spent upgrading waste-water treatment at the plant.

“All wastewater generated from the factory is processed properly,” the company wrote in an April letter to news media. “It is tested in accordance with Vietnam’s standards before being released to protect the marine ecology and at the same time to ensure Formosa’s adaptation with the area and that our development is on par with the development of the local area”.

Vietnam’s head of the Government Office, Mai Tien Dung, told the news conference on Thursday that Formosa Ha Tinh Steel Corp. will pay $500 million to compensate the affected people, clean up the environment and help fishermen find new jobs.

“Violations and accidents that happened in the process of the trial operation of Formosa Ha Tinh plant are the reason for the serious ocean pollution that caused mass fish deaths in four central provinces from Ha Tinh to Thua Thien Hue in April,” he said.

The plant’s scheduled opening on June 25 was delayed. No new date has been announced.

The government said the factory mixed up a toxic cocktail when it dumped phenols, iron hydroxide and cyanide into the sea. Hanoi is still monitoring water quality offshore and has not declared the water safe for fishing within 20 nautical miles of the coast.

While Hanoi’s investigation laid the blame for the spill on Formosa, it also marked a turn-around for the government as it initially placed the blame on a red tide in a statement that prompted widespread derision and mistrust.

“There are two main reasons that may have led to the mass fish deaths,” Natural Resources and Environment Deputy Minister Vo Tuan Nhan said at an April news conference. “The first is due to the effects of a chemical toxin generated by people on land or sea, and the second is due to an unusual environmental phenomenon combined with peoples’ influence that causes a red tide.”

The disaster sparked rare protests across Vietnam as people took to the streets to demonstrate against the government and Formosa. Authorities often broke up the protests and arrested at least 500 people.

Not enough

While government officials placed the blame on Formosa, some outside experts criticised the size of the settlement.

“All things considered, $500 million is not enough,” said Le Huy Ba, the former director of the Institute for Environment, Science, Technology and Management, at the Institute of Industry in Ho Chi Minh City.

“They have to compensate for millions of people who live along the coast, offering them help in life for a long time, not just two or three months,” he added. “Besides, they have to pay for environmental damages. To me, $500 million is nothing.”

Nguyen Quang A, the former director of the Institute of Development Studies, agreed.

“I think the $500 million is just a small part at the beginning,” he said. “I support that there should be a legal action to assess all damages and demand Formosa compensate people who live along the affected coast.”

Prominent blogger Nguyen Huu Vinh remained critical of the government, saying the disaster was compounded by Hanoi’s complicity with the steel company.

“They repressed people and detained environmental protesters,” he told RFA. “Everything just tells us the truth behind this, so even though the government announced the cause of the mass fish deaths and solutions, I think it is just an action amid the public pressure. I don’t have much hope in the announcement.”

Nguyen Quang A told RFA he hopes the disaster sends a message to the government and industry.

“If we are strict, then we can regain people’s trust,” he said. “This can also be a warning to foreign investors who do business in Vietnam, telling them that they have to respect the interests of our country, of our people. We are not a dumping site.”

Reported by RFA’s Vietnamese Service. Translated by Viet Ha. Written in English by Brooks Boliek.

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