Polluter Vedan offers lower compensation, ministry asks for PM’s instruction

As Taiwanese-owned MSG maker Vedan Vietnam continues bargaining down the amount of compensation it will pay victims of its pollution scandal, the Ministry of Natural Resources and Environment requested instructions from the Prime Minister in an effort to settle the case expeditiously, as the time limit for farmers right to take legal actions has nearly expired.   

On June 8, Natural Resources and Environment Minister Pham Khoi Nguyen submitted a report to the Prime Minister regarding the pollution caused by Vedan and the compensation the company must pay to victims.

In the report, the minister said Vedan pledged to pay compensation for economic loss and serious environmental damage it caused. However, the company has not been active making payments to the effected households.

The ministry proposed the Prime Minister order the People’s Committee of Dong Nai Province, where Vedan is headquartered, to coordinate with the People’s Committees of Ho Chi Minh City and Ba Ria-Vung Tau Province, the Vietnam Farmers Association, and the ministry to settle the case decisively and swiftly.

The head office of Vedan Vietnam in Long Thanh District, Dong Nai Province (Photo: CAND Online)

Promises, no action
In September 2008, Vedan was caught discharging untreated wastewater to the Thi Vai River in Dong Nai Province, causing serious pollution and heavy losses to thousands fishing households, including those in Ba Ria-Vung Tau and HCMC.

Soon after the scandal, Vedan Vietnam general director Yang Kun Hsiang apologized to the public for his company’s wrongdoings and promised to pay compensation to victims according to investigation results by agencies concerned.

But one year later, when three Farmers Associations of HCMC, and Dong Nai and Ba Ria-Vung Tau Provinces assessed Vedan’s financial responsibility to be VND569 billion (US$30 million), the company rejected the figure, saying the evaluation of damage was not objective and thus constituted an unjust basis for compensation.

Vedan demanded the economic and environmental damage be reevaluated by a professional agency and that rendering would be the basis for payment of damages. It then continued promising compensation.

Under the Prime Minister’s direction, the ministry, the HCMC National University’s Natural Resources and Environment Institute and other relevant agencies, launched an investigation, concluding that Vedan was the perpetrator of 90 percent of the contamination in the Thi Vai River.

However, agencies concerned only asked Vedan to pay for 77 percent of the pollution.

Despite the goodwill, Vedan used expert arguments to reject the conclusion and claims assessed by those agencies.

In May 2010, the ministry issued an urgent dispatch to Vedan asking it to work with the local authorities to settle the case.

Vedan’s offer far below expectations

In early June, the HCMC People’s committee issued a document to Vedan claiming total damages of VND45.7 billion ($2.4 million) for 839 households engaged in fishing and aquaculture in Can Gio District’s Can Thanh Commune.

Justifying the claim, Nguyen Van Phung, chairman of the HCMC Farmers Association, said the figure was based on the evaluation by the HCMC National University’s Natural Resources and Environment Institute.

On June 8, Vedan issued a document to the city People’s Committee saying it would only agree to pay VND7 billion for Can Gio farmers.

Vedan’s offer was far lower than the expectation, so households did not agree to it, Mr. Phung said.

In Ba Ria-Vung Tau Province, the Institute’s evaluation indicated that 1,255 households have been affected by Vedan’s polluting acts suffering total damages valued at VND216.8 billion ($11.4 million). However, the province claimed only VND53 billion from Vedan, but the company only said it would pay VND10 billion, less than one-fifth of the claim.

It is unacceptable for Vedan to continue offering low compensation and thus delay its payment for damages while the time limit for victims to take legal action is about to end, said the ministry.

Under Article 159 of the Civil Procedure Code, the time limit for taking actions in a civil case is two years from the date of the incident.

By Le Long – Translated by Truc Thinh

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