Photo: Courtesy/Duc Anh
Government to conduct review to establish whether mistakes were made in licensing the steel project found to be responsible for marine pollution on the central coast.
The government is reviewing the licensing process of the $10 billion Formosa steel project in north-central Ha Tinh province following the environment pollution scandal that killed dozens of tons of fish in April.
Deputy Prime Minister Truong Hoa Binh told the government’s monthly meeting on July 1 that relevant ministries and agencies must review the licensing of the project due to the huge damage it inflicted on the country’s environment.
“Project evaluation and approval during Formosa’s licensing need to be reviewed to establish whether any mistakes were made,” he said.
He also asked relevant ministries and agencies to focus on allocating the $500 million compensation paid by Formosa based on correct calculations of losses. A final scheme on the allocation will be completed and released by the end of the month.
The Ministry of Agriculture and Rural Development (MARD) will lead the task of allocating the funds, with the Ministries of Finance and Industry and Trade acting as coordinators. “We must assist farmers and fishermen in affected areas to clean up the environment,” he said. “This will also help create jobs for local people.”
The Formosa Iron and Steel Making Plant at the Vung Ang Industrial Zone was identified on June 30 as being responsible for polluting coastal waters and killing dozens of tons of fish.
Formosa accepted responsibility and agreed to pay $500 million in compensation as part of a five-point package of commitments after apologizing to the Vietnamese Government and the people.
At the government’s press briefing on June 30, Deputy Minister of Planning and Investment Dang Huy Dong said that the ministry warned that the project’s environment impact assessment was “sparse” but insisted that the licensing process “complied with the 2005 Law on Foreign Investment.”
He was quick to confirm that Vietnam’s policy on foreign investment remains consistent and the country would never trade off the environment for economic benefits. “What has happened is unfortunate,” he said. “It is a lesson for authorities in reviewing licensing processes and procedures.”
The mass fish deaths were first reported on April 6, when large numbers washed up ashore in Ha Tinh province. The deaths soon spread south along the coast, to Quang Binh, Quang Tri and Thua Thien Hue provinces.
Over 70 tons of dead fish were found in the four provinces. Thua Thien Hue also reported that 35 tons of fish raised on farms had died. Many theories were put forward in April and May, including “red tide” and chemical toxins in wastewater. FHS quickly became the prime suspect.
FHS, under Taiwan’s Formosa Plastics Group, has been the investor in the Son Duong Iron Steel and Port Complex at the Vung Ang Industrial Zone since 2008, with total investment capital of around $10 billion on an area of more than 3,300 ha.
Project capacity is 7 million tons per year in the first phase in 2015, to be raised to 22 million tons in 2020 with capital of $26 billion. The project was licensed in 2008 with three sub-projects: the Formosa Iron and Steel Making Plant, the Son Duong Deep-Water Port, and the Formosa Thermal Power Plant.