VietNamNet Bridge – The Trans-Pacific Partnership (TPP) is expected to continue the shift of investment flows into industries of high pollution risk in Vietnam like textile-dying, paper, iron and steel.

Economic and environment specialists say that Vietnam’s regulation and monitoring of wastewater treatment are still loose, with many gaps, so investors can dodge the law. Meanwhile, the Prime Minister has asserted that once pollution occurs, the local government must be responsible.

“Giant” projects

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In Vietnam, many textile-dying projects, paper, and steel projects have been reported polluting the environment.

The Chinese-invested Mei Sheng Textiles Co. Ltd Vietnam in the southern province of Ba Ria - Vung Tau has been suspended seven times since 2010 for illegally discharging waste into the environment.

This company built a dyeing enterprise with an annual capacity of 1,100 tons per year. This plant discharged untreated wastewater to the Da Den Lake, which supplies water to 90% of people in Ba Ria - Vung Tau.

On June 30th 2016, the Environment General Department and the Ba Ria - Vung Tau authorities asked the company to shut down the dyeing workshop.

Most recently, people in Phu Thu Town in Kinh Mon District of the northern province of Hai Duong asked for intervention of the authorities as the environment was seriously polluted by the operation of two Chinese-owned companies – Tan Nguyen Metallurgical JSC and Tan Dong Aluminum Co. Ltd.

Local residents claimed that dust and smoke with stinking smell discharged by the two companies was destroying their lives. The rate of people suffering from respiratory diseases has increased quickly.

According to the Foreign Investment Agency, the TPP has become a "magnet" to attract capital into the textile, and paper industry, with a series of large-scale investment projects from China, Taiwan ...

Last year investment in textile and garment projects reached $3.5 billion. In the first half of 2016, there were 83 textile and garment projects, including 50 textile projects.

Among them are very big projects: a $660 million project of Hyosung Co. Ltd of Turkey producing fibers of various kinds to produce carpets in the southern province of Dong Nai; a $300 million project of Worldon Vietnam Co. Ltd, invested by an investor from British Virgin Islands in HCM City, producing high-end garments; $274.2 million project of the Far Eastern Polytex Co. Ltd Vietnam in the southern province of Binh Duong to produce polyester synthetic fiber.

Chinese investors have three major projects: construction of a textile-garment industrial park worth $400 million in Nam Dinh; Texhong’s $300 million project in Quang Ninh and $200 million of TAL in Hai Duong; Dai Duong Paper Co., Ltd (Taiwan)’s $220 million project to produce paper of various kinds in the southern province of Tien Giang.

Dr. Luu Bich Ho, former Dean of the Institute for Development Strategy of the Ministry of Planning and Investment, noted that Chinese technology is generally good but Vietnam must carefully monitor technology transferred to Vietnam, which may be secondhand or outdated.

Dr. Ho warned that Vietnam’s policies to attract FDI were outdated and should be amended. The technological and environmental standards must be made more clear. The State also should monitor the import of equipment and technology.

"It’s time for Vietnam to be choosy in attracting foreign investment. The management of foreign investment projects, especially investment in the fields of high risk of pollution, must be tightened in accordance with environmental standards," Dr. Ho stressed.

High risk of pollution

To create conditions to attract investment into the textile and garment sector and to be favorable in waste water treatment, the Vietnam Textile-Garment Association has suggested that the Government adjust textile-garment planning in the period 2035-2040, and build textile industrial zones of 500-1,000 hectares to call for investment in the production of fabric, fiber and dying.

The Minister of Industry and Trade Tran Tuan Anh recently petitioned the Prime Minister to consider the association’s proposals.

Assessing investment in the industries of high risk of pollution in Vietnam, especially textiles-dying projects from China, Mr. Phan Huu Thang - former Director of the Foreign Investment Agency - said China is paying the price for the hot development of its textile industry with heavy environmental pollution.

Therefore, Vietnam should be careful with textile-dying projects from China, to avoid falling into the similar "footsteps" of environmental pollution.

Dr. Nguyen Duc Thanh, Director of the Institute for Economic and Policy Research of the Economics University, Vietnam National University, said the cost of wastewater treatment of the textile and steel industries was huge.

The management and monitoring of waste discharge is difficult, requiring high technical level. Developed countries do well in supervision and management of waste discharge so it is easy to understand that these projects are coming to Vietnam.

"If we do not handle polluting enterprises strictly, ensure effective protection of the environment, then damage to society and the people will be enormous, threatening to sweep away our efforts to make economic growth and social stability," Thanh said.

Mr. Dinh Duc Truong, head of the Study of Environmental Impact of Foreign-invested Firms Team of the National Economics University, said many FDI enterprises have modern waste water treatment stages but the authorities could not monitor them. These firms "ignored" the stages to save VND80 million ($4,000)/day.

Speaking at a recent conference held by the Ministry of Trade and Industry, Prime Minister Nguyen Xuan Phuc said that the mass fish deaths in the central region caused by Taiwanese investor Formosa was a big lesson in attracting foreign investment.

"I have asked leaders of ministries and localities to be responsible before the Government, State and people if similar environmental disasters occur. The Government is determined to protect the environment, including the natural environment, social environment and competitive environment, especially the people's living environment," Prime Minister Nguyen Xuan Phuc stated.

Tien Phong