June 30, 2016 7:25 pm JST

Formosa Plastics fined $500m over toxic waste in Vietnam

ATSUSHI TOMIYAMA, Nikkei staff writer

HANOI -- The Vietnamese government on Thursday ordered Taiwan's Formosa Plastics Group to pay a $500 million fine for discharging toxic waste from its steel plant in the country, killing a large number of fish.

The fine, believed to be the highest ever imposed on a single company in Vietnam, comes as the government has linked April's mass deaths of fish in nearby waters to toxic waste from the group's large-scale steel plant under construction in Ha Tinh Province.

The plant is one of the biggest foreign investment projects in the country. It was initially scheduled to go on stream in late June. It will now be suspended until environmental protection measures are in place.

According to investigation results released Thursday by Vietnam's Natural Resources and Environment Ministry, the toxic waste leaked from underground pipes laid at the plant in April.

The material later reached the sea off the coast of Ha Tinh, killing a large number of fish, the report said.

In response, Formosa Plastics has come out with countermeasures, such as moving the pipes in question to the surface of the ground to make it easier to check for pollution.

The Vietnamese authorities will then examine the pipes to see if the plant can start operations.

Chang Fu-Ning, executive vice president of Formosa Ha Tinh Steel, the Taiwanese conglomerate's steelmaking unit, told the Nikkei Asian Review late Thursday night that the company felt regret but respected the investigation outcome of the Vietnamese authorities. "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."

Formosa's steel plant was previously scheduled to go into mass production in late June.

Taiwan's Ministry of Foreign Affairs said in a written statement on Thursday that Taiwan's representative to Vietnam is helping Formosa Plastics Group resolve the issues with Hanoi.

"We will continue to urge the Vietnamese government to provide sufficient information to Taiwanese businesses investing in the country and guidance on how companies can appeal cases like this in the future," the ministry said.

"We hope the Vietnamese government will do its best to protect the legitimate interests of Taiwanese businesses with investment in the country and the safety of Taiwanese businessmen and their assets, to boost the willingness and confidence of Taiwanese who are interested in investing in Vietnam," the ministry added.

Additional reporting by Nikkei staff writers Debby Wu and Ting-Fang Cheng in Taipei.

Asia300

Formosa Plastics Corp.

Taiwan

Market(Ticker): TAI(1301)
Sector:
Industry:
Process Industries
Chemicals: Specialty
Market cap(USD): 19,168.42M
Shares: 6,365.74M

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