Formosa delays opening of steel plant

Only a few protesters managed to march before police stepped in

The Taiwanese company has been targeted by activists for alleged complicity in the mass death of fish

The Formosa Plastics Group of Taiwan has postponed the start of operations for its controversial steel plant in Ha Tinh province following a tax dispute with the Vietnamese government.

The steel complex has been at the centre of an angry backlash over the mass death of fish off the coast of central Vietnam. Vietnamese activists have accused the steel plant of dumping toxic chemicals through a waste pipe from the plant.

The company has denied any involvement in the environmental disaster while government investigations have so far been inconclusive.

Taiwan’s official CNA news agency reported that no future date had been set for the start of operations following the postponement of the scheduled date of June 25.

The Vietnamese authorities have demanded that the company pay $70 million in unpaid taxes.

Reports also said that the authorities needed more time to process the application to start production.

Unnamed sources were quoted as saying that political factors could have played a part.

That would not be a surprise.

The public fury directed at Formosa was exacerbated by the statement of a company official, who has since been dismissed, that Vietnam had to chose between industrial development and clean water.

The lack of transparency in the government’s response to the disaster, and unexplained delays in the investigation, have also fuelled suspicion of a possible cover up and collusion between officials and company executives.

Vietnamese officials will be aware of the potentially explosive public response if they gave the go ahead for operations in the current climate.

State media in Vietnam reported that Formosa had been placed under close scrutiny by tax evasion and anti-transfer pricing agencies following suspicion of financial irregularities.

They said it had been asked to pay back tax refunds that had been wrongly claimed.

The postponement of the opening of the steel complex could have repercussions for other investors in Vietnam, particularly from Taiwan.

The company had already been targeting during a wave of anti-Chinese protests that swept through industrial areas in May 2014 after China placed a giant oil drilling rig in disputed waters off the Vietnamese coast.