10/10/2016
A serious environmental incident caused by Formosa Hà Tĩnh once again raises an issue of Việt Nam’s “right to choose” in attracting FDI. To better understand Việt Nam’s recent FDI attracting policies, Environment Magazine has interviewed Prof. Nguyễn Mại - Chairman of Vietnam Association of Foreign Investment Enterprises (VAFIE)
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| Prof. Nguyễn Mại - Chairman of VAFIE |
Would you let us know about Vietnamese recent FDI attracting and utilizing policies ?
Prof. Nguyễn Mại: On 27th March 2013 in Hà Nội, Ministry of Planning and Investment held a conference on reviewing 25 years of FDI operation (1987-2012). Following this conference, the Government issued Resolution no.103/NQ-CP on new directions and measures on increasing FDI’s roles in socio-economic structure, quality and effectiveness. The Resolution emphasizes that priorities shall be given to projects with modern, low carbon and greenhouse gas emission, energy saving and environmentally - friendly technologies and contributing to develop high quality human resources and green and sustainable economy. In the meantime, the resolution revises and complements some preferential treatment for FDI projects and integrates sectoral preferential treatment into that of the region. Projects using a large number of workers are eligible for preferential treatment only if they are carried out in low economy localities, not in cities as before.
In practice, during 25 years of attracting FDI, many localities said no to backward technology and polluting projects. However, illusions of attaining economic growth at all costs have made the localities give more priorities to big investment projects without taking into account potentially environmental risks.
What do you think about the recent Formosa induced environmental incident in Central coastal provinces of Việt Nam?
Prof. Nguyễn Mại: I agree with Minister, Chair of Government’s Office that we should not refuse those with good will of redemption. Leaders of Formosa Hà Tĩnh Company have apologized for the mistake and committed to restoring the polluted environment and supported local people in occupational transition which may be also costly, in addition to 500 million of USD for damage compensation. In my view, the Government has handled the case scientifically and objectively.
However, we should not jump to a conclusion as some people requested, when convincing evidence was insufficient. Therefore, it is correct that the operation license was not withdrawn. In the meantime, the Prime Minister has strongly stated that it would be intolerable if Formosa violates again. Many good lessons have been learned after this case.
After the Formosa pollution incident, what should Việt Nam do to continue attracting high quality FDI capitals?
Prof. Nguyễn Mại: Attracting FDI remains important for our economy. However, it is crucial that we should exercise the right of selecting projects and investors that ensure a direction of rapid and sustainable economic development towards a green economy as stated in Resolutions of the Party’s 12th Congress. This is a task of the Government, enterprises and people, and it should be paid due attention right at the stage of selecting FID projects and investors.
Following this direction, I recommend that the Government should consider and direct localities to be more cautious in selecting environmentally high risk projects such as: oil refinery, cements, steel and textile and dying. Oil refinery and cement projects are potentially polluting and already abundant at the moment in Việt Nam, thus it is necessary to temporarily stop deployment of new projects in these sectors. Besides, steel projects should also be postponed, learning from Chinese lessons in pollution and oversupply of steels. Therefore, Việt Nam could switch priorities to advanced metal mix production. For textile and dying, to prevent environmental disasters, Ministry of Trade and Industry should cooperate with MONRE in studying and developing environmental standards and requirements for investment in environmental protection for specific projects. Only projects meeting environmental standards will receive operation permits. I believe that pursuing industrialization at a later stage, Việt Nam should learn from other countries’ lessons and avoid their mistakes.
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| Formosa Steel Production Complex - a culprit of the serious environmental incident |
What can Việt Nam learn about environmental management after this incident ?
Prof. Nguyễn Mại: It should be noted that mistakes are not only of Formosa but also of state management authorities. Although environmental management has been decentralized to localities, including environmental polices, it is regrettable that serious environmental incidents still happened.
If the authorities had performed well and effectively with high spirits for community and with adequate monitoring equipment to be able to report timely to competent agencies, such a serious environmental disaster would not have happened.
At present, environmental impact assessment is mainly based on reports by investors. Such reports seem impractical and receive little attention after projects enter operation. Therefore, in the coming period, attention should switch from ex-ante to ex-post supervision. It would be difficult to have ex-post supervision without good experts and modern equipment. Therefore, to switch to ex-post supervision, we need to prepare well.
The Formosa causing dead fish incident was detected late because of a lack of monitoring. The province depended on Formosa’s reports. Therefore, it is necessary to have monitoring equipment connected between the factory and competent authorities and supervised by qualified experts. However, switching to ex-post supervision means a radical change and completion of current pitfalls■
Thank you!
Phạm Đình
(Implemented)
