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Government to determine use of Formosa compensation

Released at: 21:09, 01/07/2016

Government to determine use of Formosa compensation

Photo: Viet Tuan

Ministry of Agriculture and Rural Development to draft policy on how $500 million in compensation for pollution on central coast will be distributed.

by Duy Anh

The Vietnamese Government is working out how to best use the $500 million in compensation paid by Taiwan’s Formosa Ha Tinh Steel (FHS) after it was found to be responsible for the mass fish deaths along Vietnam’s north-central and central coast in April.

Prime Minister Nguyen Xuan Phuc has asked the Ministry of Agriculture and Rural Development (MARD) to draft a policy that includes assistance to help local livelihoods and restore the marine environment.

The Ministries of Finance (MoF), Planning and Investment, and Natural Resources and Environment will work with MARD in this regard, the Prime Minister told the government’s monthly cabinet meeting on July 1.

“The policy must have long-term support programs for local livelihoods and sustainable environmental treatment,” PM Phuc was quoted as saying by Minister and Chairman of the Office of the Government Mai Tien Dung. “Ministries must send compensation plans to MoF for submission to the government at the soonest possible time.”

North-central Ha Tinh province, where the Formosa Iron and Steel Making Plant is located, set up a damage evaluation committee on June 30 led by Deputy Chairman of the Provincial People’s Committee Duong Tat Thang. Its major task is to calculate the scale of the damage from the environmental disaster.

The steel 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.

Subsequent action is being considered by relevant ministries and agencies. But, “a scheme on allocating the compensation will be completed before the end of July,” the PM said, as reported on the government’s news portal.

Long term, according to Minister Dung, the government will review licensing procedures and environmental regulations, in particular the licensing conditions for the environmental impact assessment reports required for investment projects. “Vietnam will never trade off the environment for economic benefits,” PM Phuc confirmed at the government meeting.

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.

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