Formosa unit offers $500 million for causing toxic disaster in Vietnam

By Mai Nguyen

HANOI (Reuters) - One of the biggest environmental disasters to hit Vietnam was caused by a unit of a Taiwanese conglomerate leaking toxic waste into the sea, the Hanoi government said on Thursday, ending months of mystery and rare public outrage.

Formosa Ha Tinh Steel, a subsidiary of Formosa Plastics, has promised $500 million in damages and admitted that its $10.6 billion steel plant had caused massive fish deaths along a 200-km (124-mile) stretch of coastline that occurred in April, the government said.

The disaster unleashed a huge outcry, with months of public anger on social media and on the streets of big cities. Vietnamese vented their fury at both the government and Formosa, one of the communist country’s biggest investors, accusing them of a cover-up.

“Violations in the construction and testing operations of the plant are the causes for serious environment pollution killing a massive amount of fish,” government office chief Mai Tien Dung told a news conference.

The new steel plant is set to become the biggest of its kind in Southeast Asia and its complex will be expanded to include a deepwater port and 1,500-megawatt thermal power complex.

The disaster left a new government grappling to contain a major crisis, just days after taking office.

In what seemed to be an attempt to prevent a backlash, Taiwan’s foreign ministry urged Vietnam late on Thursday to protect Taiwanese businesses. “We hope for the continued support of the Vietnamese government and its people,” it said in a statement.

In a video message, the chairman of its steel unit went further, asking for forgiveness. “We deeply hope the Vietnam people can be generous,” Tran Nguyen Thanh said.

“I CHOOSE FISH”

The announcement backed up initial reports by Vietnamese media that blamed Formosa. Anger was stoked further when a Formosa official said the Vietnamese people should choose between catching seafood and having a modern steel industry. “I choose fish” became a social media slogan.

Preliminary inquiries by the firm and the government found nothing linking the dead fish to the plant. The latest findings said the toxins were phenol, cyanide and ferrous hydroxide.

Government officials denied engaging in any cover-up to protect a big investor and said the delay in reaching a conclusion was to ensure certainty, adding that Japanese, German and French scientists were among 100 experts involved.

Asked by reporters if Formosa Ha Tinh would be prosecuted, Dung suggested its admission of guilt might be enough to avert that, and Vietnam needed to protect its image.

“Vietnam is building an investment environment, an image of integration and participation in trade agreements, and highly appreciated by foreign investors,” he said.

The crisis took on more significance when thousands of demonstrators mobilized via Facebook on successive weekends in a rare show of organized dissent in the tightly-run state.

The authorities ran a propaganda campaign to discredit the protesters, saying they were exploited by “reactionary forces” bent on overthrowing the government.

Police blocked or cracked down on the rallies, some of which came ahead of a visit by U.S. President Barack Obama, in which Vietnam’s human rights record was a key issue.

Additional reporting by My Pham in Hanoi and J.R. Wu in Taipei; Writing by Martin Petty; Editing by Mark Heinrich