VietNamNet Bridge - If Vietnam does not tighten control over licensing of foreign invested projects, it will have to pay a heavy environmental price for foreign direct investment (FDI), experts say.

The mass fish deaths in the central provinces in April were believed to be caused by untreated waste water from Taiwanese Formosa’s plant have once again raised public anger.

Eight years ago, the public was stunned by the discovery that Vedan, also a foreign invested enterprise, discharged untreated waste water, turning the Thi Vai River in Dong Nai province into a dead river. The polluter then had to pay VND119 billion in compensation for the damages it caused to aquaculture.

CIEM in late March 2016 released a report on the environmental impact of FDI on Vietnam, pointing out that though Vietnam strives to attract FDI to high-technology fields, 67 percent of foreign invested enterprises in Vietnam belong to manufacturing industries with low added value which use low energy-consuming and high-emission technologies.

Only 5 percent of foreign invested enterprises in textile & garment, footwear, chemicals and machine manufacturing use high technology, 80 percent use average tech and the remaining low tech. 

Meanwhile, foreign investors do not pay appropriate attention to water supply and waste treatment.

If Vietnam does not tighten control over licensing of foreign invested projects, it will have to pay a heavy environmental price for foreign direct investment

A survey conducted by an economics university of 150 foreign invested enterprises showed that 45 percent of enterprises did not apply the less-emission production process.

Many enterprises did not make reports on the possible environment impact, or did not fulfill commitments on environmental protection.

Sixty nine percent of enterprises said they won’t implement the procedures to reduce emissions if this is not a compulsory requirement, while 57.5 percent said they won’t make investment in the procedures because of high costs.

The survey also found differences in the degree of compliance with laws on environment between developed and developing countries.

The regulations on environmental protection are more strictly followed in Japan and South Korea than Vietnam. 

Therefore, it may happen that the enterprises in developed countries would bring outdated technologies to Vietnam.

Duong Thi To, director of the Center for Environment and Community Development, said in 2011-2015, more than 50 percent of inspected subjects were found committing violations in environmental protection.

According to Nguyen Manh Hai from CIEM, Vietnam has entered a new period, when it id not trying to attract FDI at any cost, but is more selective in choosing foreign investors.

However, loopholes in environment management in the past have caused major consequences.

Nguyen Mai, chair of the Vietnam Association of Foreign Invested Enterprises’ Association (VAFIEs), noted that Vietnam needs to implement well its right to choose investment projects.


CV