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The Company Behind Vietnam’s Largest Environmental Disaster

Fishermen in Ha Tinh Province now struggle to make a living. Photo: Tri Minh

Fishermen in Ha Tinh Province. (Tri Minh/Thanh Nien News)

Some three months later, the Vietnamese people have their answer as to who was responsible for the onset of “the most serious environmental incident Vietnam has faced”.

The crisis started on April 20, as dead fish started washing up along a beach in Thua Thien-Hue province, in central Vietnam. Local fishermen reported seeing red water discharging from a pipeline which led to the Vung Ang Economic Zone. The pipeline belonged to the unfinished Hung Nghiep Formosa Ha Tinh Steel Corporation—a steel plant being constructed by Taiwan-based Formosa Plastics Group.

As tons of fish continued to wash up on shore, the newly-elected Vietnamese leadership announced measures to seek out the culprit, conducting tests which ruled out disease and abrupt changes in water temperature.  Investigative authorities started a review of hundreds of facilities along the coastline—eventually singling out three suspects: the Vung Ang thermal power plant, the Ha Tinh Industrial Park, and the Formosa steel plant.

With tons of dead fish continuing to wash ashore in the neighboring provinces of Quang Tri and Quang Binh, hundreds of Vietnamese gathered for peaceful protests in Hanoi and Ho Chi Minh City over successive Sundays in April and May. The protests also drew a significant police presence, which resulted in arrests and violence.

On International Workers’ Day (May 1), Vietnamese Prime Minister Nguyen Xuan Phuc visited Ha Tinh, declaring “The people need a scientific and specific conclusion to this case”. On May 9, Phuc pledged support for the fishermen in the four affected provinces, who not only lost their catch but faced a serious fall in demand from customers refusing to eat fish or seafood. Estimates put the amount of dead fish at 70 tons along a 200-kilometer coastline.

In late May, the protests started to fade, after security officials cracked down on the protestors—drawing the ire of the UN High Commissioner for Human Rights (UNCHR), who called on the Vietnamese leadership to respect the right of freedom of assembly. Finally, on June 2, the new leadership held a press briefing declaring the cause of the massive fish kill had been identified, but promising to release the results after various scientific and legal objections could be dealt with. During the investigation, Formosa Ha Tinh Steel was reportedly “considering whether to raise its investment in Ha Tinh from $10.5 billion to $28.5 billion”.

By the end of June, the government was ready to release the final results. Based on input from over 100 scientists from Vietnam and abroad, the scientific results revealed what the fishermen had known long ago—that the fish had died from industrial waste discharged by Formosa Ha Tinh Steel’s plant.

According to the report, the industrial waste included harmful chemicals such as phenol, cyanide and iron hydroxides. An energy audit also revealed abnormal power consumption over a five-day period during which reports of dead fish surfaced.  The report also cited the plant for poor management and an inadequate waste treatment process.

For its part, the management of Formosa Ha Tinh Steel announced its acceptance of the findings, adding, “We respect the government’s investigation results and are cooperating with the authorities to handle and mitigate the consequences”.  During a press conference to announce the results, officials from Formosa Ha Tinh Steel offered their apology with a bow, while also pledging to pay 11.5 trillion Vietnamese dong ($500 million) in compensation for economic losses and to help treat the pollution.

What the new Vietnamese leadership must do now is to ensure the $500 million is transferred over the next three months and then well-spent. Authorities will also need to ensure the public that improvements to the steel plant’s wastewater treatment system are implemented and that measures are taken to help return the environment to its original condition, including growing reel, seagrass and mangrove forests.

Unfortunately, as part of the compensation is targeted at finding new employment for some 186,000 fishermen and fish farmers, this may indicate the marine environment may take some time to recover if at all. The conclusion of the over 100 scientists who helped investigate the cause of the disaster was the regional environment will need at least 50 years to recover. The newly-elected government in Hanoi has seemingly managed to skirt a major social upheaval this time around—measures will need to be taken urgently to prevent another environmental disaster from taking place.



Gary Sands

Gary Sands is a Senior Analyst at Wikistrat, a crowdsourced consultancy, and a Director at Highway West Capital Advisors, a venture capital, project finance and political risk advisory. He has contributed a number of op-eds for Forbes, U.S. News and World Report, Newsweek, Washington Times, The Diplomat, The National Interest, International Policy Digest, Asia Times, EurasiaNet, Eurasia Review, Indo-Pacific Review, the South China Morning Post, and the Global Times. He was previously employed in lending and advisory roles at Shell Capital, ABB Structured Finance, and the U.S. Overseas Private Investment Corporation. He earned his Masters of Business Administration in International Business from the George Washington University in Washington, D.C. and a Bachelor of Science in Finance at the University of Connecticut in Storrs, Connecticut. He spent six years in Shanghai from 2006-2012, four years in Rio de Janeiro, and is currently based in Ho Chi Minh City, Vietnam. Twitter@ForeignDevil666