1.

Background information of Vedan

Name: Vedan Vietnam Enterprise Corporation Limited (Vedan Vietnam), a

company wholly owned by Taiwanese investors.
Year of establishment: 1991 in accordance with Investment Certificate No.
171/GP issued by the State Committee of Copperation and Investment on 08/3/1991.
Location: Phuoc Thai Commune, Long Thanh district, Dong Nai Province,
Viet Nam.
Principal activities: production of monosodium glutamate (MSG), lysine,
and modified starch.
Business philosophy: Taking roots in Vietnam- Developing long-term
business.
Related to environmental governance, on its website, the company asserted that
since its establishment, it has put into use modern sewage treatment system and
equipment as well as implemented resource of recycled products for reuse and
will keep efforts basing on foundation of protecting environment, sustainable
development in order to gain the long-term business targets.
2.

Vedan casse

2.1 Thi Vai pollution

Thi Vai River is 76km long, flowing through Long Thanh district (Dong
Nai) and Tan Thanh district (Ba Ria Vung Tau). By dint of the rivers geographic
advantage, local residents mainly live by fishing and breeding shrimps and fishes.
-

Vedan had built its factories in an area of 120 hectares near Thi Vai river.

Since Vedans first plant was put into operation in 1994, it had dumped wastewater
into Thi Vai river, causing deaths of living creatures in the river and local farmers
losses. In 1995, after negotiation, the company agreed to pay the farmers a
compensation of VND 15 billion.
However, the pollution had become more and more serious, destroying farmland
nearby the river and pushing farmers to the edge of bankruptcy. Further, local
people, due to consuming contaminated water, suffered a series of diseases such as
skin rashes, digestive problems, and even cancer.


9/2008: Receiving numerous complaints from the local community, the state
agency conducted an investigation at Vedans factories along Thi Vai River. Their
initial discovery as follows.
-

Vedans discharging amount was 5-10 times higher than that allowed.

More seriously, it was revealed that in addition to a registered sewage

treatment system, Vedan had erected an underground system to illegally dispose of
untreated sewage into Thi Vai River.
With the grave violation, the Ministry of Natural Resources and Environment
(MONRE) carried out further investigations and research on the pollution caused
by Vedan. The conclusion as follows:
Vedan had been poisoning Thi Vai river for a period of 14 years (1994-2008)
by directly dumping untreated wastewater into the river at a rate of 105,600 cubic
meters per month, constituting systematic violations of environmental regulations.
Vedans sewage was the main culprit polluting Thi Vai river, contributing to
about 89% of the pollution. Consequently, water, soil and air in the surrounding
area had been severely contaminated by toxic chemicals with the level hundreds of
times exceeding acceptable standards.
4. Effect
4.1Negative effect with VN government
- Reduce the trust with VN government. In Congress meeting, Environment
Minister was asked 24 questions about this case. But his answer was considered
irresponsible.
- Vedan case creates a seriously environment pollution:
+) Vedan discharged direct of untreated water into environment for over 14 years
+) This caused over 10 serious environmental problems
- Causing serious damage about environment and financial. To improve the
water environment, VN government used over than 127 billion VN.
- Over 2000 ha fishery was affected, lands also affected, many area can not use
for planting anymore Government must spent approximately 107 billion VN
to solve these problem

4.2 Negative effect on resident

-First of all, the Thi Vai pollution brought out serious influence on local residents
health.
-Contamination of groundwater by Vedans effluents leaded to pollution in soil, air
and water of surrounding area throughout 14 years.
-The pollution has even contaminated underground water while many wells in the
area are foul and unusable. A local resident in Phuoc Binh Commune, Tran Thi
Son, said that the water has a bad odor and color; he cannot find fresh water any
more although he had drilled other new wells because all of them were foul. It
directly caused the ill-effects on the local residents health such as skin rashes,
respiratory diseases and headaches.
-These consequences not only happen in several years, within several people; they
last a long time and affect from this generation to the next ones. Since it is difficult
to recover the pure environment of Thi Vai River area like before Vedans actions.
4.3 Negative effect on company
From feedback and annoyance of local residents about the status stealthily
discharging untreated waste into the environment, after more than 3 months of
follow-up, September 13, 2008, inter-agency inspection team was caught in the act
Vedan stationed in Long Thanh district, Dong Nai province discharge a large
amount of waste water untreated into the Thi Vai river. According to estimates,
Vedan can discharge waste water to 5,000 m3 / day into the river. [1] According to
the original exhaust system installation services of Vedan's waste in violation of the
provisions of the law on environmental protection. [2]. According to Colonel
Luong Minh Thao, violations are extremely serious. At the scene, Deputy Director
of the office Vedan Vietnam has acknowledged violations of the company. [1]
September 19, the Ministry of Natural Resources and Environment announced the
results of the investigation of Vedan 10 violations, including:

1. Discharge of wastewater exceeds permitted standards by 10 times or more for

manufacturing modified starch company.

2. Discharge of wastewater exceeds permitted standards by 10 times or more for

the MSG factory and the company's lysine.
3. Discharge of wastewater exceeds permitted standards by 10 times or more for
the company's other plants.
4. Submitting incomplete survey data, survey, monitoring and other relevant
documents to the agency data storage environmental information under the
provisions of the state agency having jurisdiction.
5. No registration is committed to protecting the environment with the state
authorities on environmental protection for pig farms.
6. Do not report environmental impact assessment which was built and put into
operation projects for investment projects to raise capacity xut- acid factories from
3,116 tonnes / month to 6,600 tons / month.
7. Do not make reports on environmental impact assessment that has been built and
put into operation projects for investment projects to raise capacity of monosodium
glutamate factory from 5,000 tons / month to 15,000 tonnes / month, starch
denaturation of 2,000 tonnes / month to 4,000 tons / month, lysine from 1,200
tonnes / month to 1,400 tons / month, senior spice powder 20 tons / month, PGA
700 tons / year, 70,000 tons of fertilizer Combination / year (solid) , 280,000 tons /
year (liquid).

8. Discharge of fetid, unpleasant odors directly into the environment without

limiting environmental equipment.
9. Management of hazardous wastes in contravention of regulations on
environmental protection.
10. The company discharging wastewater into water sources incorrectly specified
location in the license. [3]
11. October 6, Chief Inspector of the Ministry of Natural Resources and
Environment decision sanctioning of administrative violations of environmental
protection for the total fine Vedan is 267.5 million, forced to retrospectively pay
protection fees more than 127 billion VND environment. 12. October 13, the Prime
Minister of Vietnam is directing the relevant authorities to urgently and resolutely

implementing measures to handle violations of legislation on environmental

protection for the Public Vedan. [4]
5.

Reactions and solutions

5.1.

The government

According to the decision of the MONRE on handling of Vedan violations of

environment protection, Vedan must:
Pay administrative fine : VND 267,500,000
Pay accrued environmental fee owed by the company for 14 years: VND
127,268,067,520.
Temporarily close its four factories that released improperly treated sewage.
Entirely dismantle the underground discharge system and create a detailed
operational diary of the registered discharge system.
Upgrade the sets of treatment equipment at the plants to ensure the compliance
with the national technical standards.
The other factories allowed to operate need to be put under strict oversight of
local environmental authorities to ensure its compliance with the national
standards.
Take measures to remedy the pollution.
Vedans response: full compliance. It paid the fine and accrued fee between 2008
and 2009, invested approximately in upgrading the existing treatment system,
installing new modern equipment and adding recycling facilities
5.2

The local communities

Require Vedan to be liable for damages they suffered, i.e. their losses of
investment in farmland and breeding aquatic creatures, as a consequences of
pollution caused by the company.
To assist the farmers, the Prime Minister required provincial authorities in Dong
Nai, Ba Ria Vung Tau and HCM City to conduct research to determine the
economic and environmental damages Vedan caused to local people. The damage
claimed by the three local communities:

Community

Number of household

Compensation claimed

Ba Ria Vung

affected (households
1255

(VND billion)
53.6

Tau
Ho Chi Minh

839

45.7

City
Dong Nai

5,064

119.5

Vedans response:
- Commit to compensate affected farmers.
- However, during the negotiations, express its lack of responsibility and goodwill:
Intention to prolong the process without valid reasons:
+ Upon receiving documents stating the damages, the company had delayed
responding for several times until intervention of the local authorities.
+ The MONRE sent an official document requesting the Chairman of Vedan,
who was in Taiwan, to attend the meeting with farmers representatives and local
agencies but the Chairman refused because of being occupied. In fact, the
Chairman had never come to Vietnam to deal with the problems. His
communication with the other parties was via correspondence.
Arguments about damage measure and the companys liability.
The damage measure was inaccurate and exaggerated without legal basis.
The compensatory damages the company offered

Local communities Compensation claimed

(VND billion)
Ba Ria Vung Tau 53.6
Ho Chi Minh City 45.7
Dong Nai
119.5

Compensation
offered (VND billion)
10
12
15

- Inconsistent behaviours: Although Vedan signed the minutes of the meeting with
Ba Ria - Vung Tau farmers on 27/5/2010 stating that the compensatory amount was
VND 31.9 billion, it then only accepted to pay VND 10 billion.
- The amount Vedan offered to Dong Nai farmers, who are most seriously
impacted by the pollution, was 15 billion. Despite the severely poisoning of the
environment for 14 years, Vedan offered the same as that it had paid farmers for its
environmental effects in 1995. Then, experiencing local residents strong
opposition, the company increased the amount to VND 30 billion.
Because there have been a number of companies operating along Thi Vai river,
Vedan should not be the only company which had to be responsible for the
pollution.
- The period of negotiations lasted from 2008 to 2011 (roughly 3 years).
Facing Vedans unwilling and uncooperative attitudes, the local communities
intended to take legal action.
5.2.

Customers

- Consumer boycotts
A boycott of Vedans products arose from consumers discontent with Vedans
environmental violations and irresponsibility for local residents losses. The
statement calling for anti-Vedans products appeared on websites, personal pages
and facebook.
Finally, Vedan agreed to paid local people 100%