Formosa Plastics Corporation
Analysis of Formosa Plastics Corporation
The Formosa Plastics Corporation produces petrochemical products and other plastic products. It is located in Taiwan, and it was founded in 1954 by Wang Yung-ching. In 2015, Formosa Plastics Corporation had higher sales and was ranked as the fifth largest corporation in the world. In 2016, it was among the Forbes Global 2000 companies and was ranked no. 861. In Taiwan, Formosa Plastics Corporation is well-known as the largest corporation that produces a high capacity of PVC resin (Formosa Plastics Group, 2015). Formosa Plastics Corporation is also located in the United States as an owned subsidiary. Writers who offer operations management assignment help at Edudorm essay writing service notes that in terms of financial performance, Formosa Plastics Corporation has enjoyed high margins and income revenue as a result of cheap petroleum prices. For example, in 2015, the company’s income was US$ 1.5 million, and this was an increase compared with US$ 0.3 million in 2014. In management concepts, Formosa Plastics Corporation focuses on “diligence and frugality,’ sustainability, society development, and ultimate excellence. The corporation has advanced processing in petroleum refining. It has logistic planning and production models, which help Formosa Plastics Corporation, meet the dynamic changes. Formosa Plastics Corporation also meets the demand of the emerging petroleum market through various trading houses in different areas located around the globe (Formosa Plastics Group, 2015).
Environmental Issues in the Formosa Plastics Corporation
Environmental issues in the Formosa Plastics Corporation have created tough challenges in Vietnam. Despite the fact that cheap petroleum prices have caused a high demand on petroleum products, high profit margins, solid competition within the corporation, and various unethical practices have caused a recession in overall production. Although Formosa Plastics Corporation has a strong identity system, which is tied with powerful development, it lacks environmental business ethics (DesJardins, 2012). Every organization or corporation should value environmental ethics and understand humans’ interaction with nature. The corporation should be responsible for protecting the environment in which their operations take place. Furthermore, corporations should understand that lack of environmental ethics will negatively affect their business operations and that, afterward, the businesses may collapse (DesJardins, 2012). The “Formosa Plastics Corporation” is faced with environmental issues, such as environmental abuse and protection. Formosa Plastics Corporation is involved in the damage of the natural environmental through discharging waste products, thereby harming the ecological system. The waste has affected not only organisms, such as fish, but also human beings (Ives, 2016). This counts as immoral behavior because Formosa Plastics Corporation, for many years, seems to be indifferent to the environment and focuses on a profitable business. In general, business and the management fail to understand business ethics based on the idea that, as human beings, they should have the interest, moral obligation, and responsibility to protect the environment without following the law. The Formosa Plastics Corporation has caused environmental issues, which have affected Vietnam, where many fish have died; about 200,000 people have been affected and have faced challenges from unfair compensation (Van, 2016).
Marine pollution is among the main issues that Vietnam is facing as a result of Formosa’s unethical behavior. In May 2016 Vietnam’s people demonstrated their grievances and accused the Taiwanese firm for causing an environmental disaster. On April 6, 2016, several fish carcasses were found in the Ha Tinh province (Nam, 2016). Later, other carcasses were found in three other provinces in central Vietnam. Protesters expressed their feelings and demanded a clean environment and an investigation process on May 1, 2016. Hundreds of people argued that Formosa Plastics Corporation has brought the worst environmental disaster and caused the death of fish in four provinces. The appalling thing is that the Formosa Plastics Corporation is indifferent to this matter, based on evidence that the Formosa spokesman said, “Vietnam should choose whether to catch fish and shrimp or to build a state-of-the-art steel mill” (Nam, 2016). The Vietnamese government investigated and found 70 tonnes of dead fish, and further investigation showed that the Formosa Plastics Corporation had connected a sewage pipe that carried 12,000 cubic meters of waste every day. This clearly shows that Formosa Plastics Corporation has polluted Vietnam’s ecosystem and affected the health of marine animals (Ives, 2016). Experts who offer MBA assignment help at Edudorm essay writing service indicates that this is a big issue not only to the fishermen but also to the government, which is responsible in addressing this issue. Scientific research on the ocean environment confirms that human activities have greatly affected the ecosystem and marine life through the disposal of chemical particles in the ocean. As a result, marine mammals will not thrive for long, and this affects not only the aquatic life but also the world economy. In this case, Formosa Plastics Corporation pollutes the ocean environment through a pipe, connected directly to the ocean. Marine mammals such as fish are greatly affected due to the lack of oxygen and quality sea water (Ives, 2016). The toxic chemicals also affect the organisms by causing thermal pollution, which creates a rise in temperature, and organisms are unable to live in a high-temperature environment. The Vietnam populace is interested in the management of foreign investment, food safety, and measures to protect the environment (Ives, 2016). The government is concentrating on creating a civil society that will help in addressing environmental issues.
Ethical Issues in the Formosa Plastics Corporation
Ethics and economy go hand in hand, and in this case, environmental ethics has an impact on economic performance. Before affecting the economy, a business that fails to follow environmental ethics faces legal issues. For example, the state government creates rules that the business should follow, and failure to comply with these rules results in large fines and other costly legal battles (DesJardins, 2012). In addition, failure to follow the rules may affect internal and external environments, and as a result, the business may face criminal charges.
Another point is that a company with unethical behavior loses credibility, and this affects its business image (DesJardins, 2012). In terms of economy, Vietnam is counting losses in the tourism and fisheries sectors as a result of the environment disaster. Tutors who offer corporate strategy assignment help at Edudorm essay writing service acknowledges that a great impact is felt by Vietnam’s central provinces since the environmental disaster, which has occurred in the ocean, has affected tourism. In 2015, tourists had booked trips to these four provinces, but these trips were canceled due to the disaster. It is important to note that tourism plays an important role in economic development, and when a country’s environment is unhealthy, the economy cannot develop since tourists do not want to visit unclean and unpleasant surroundings (Van, 2016). When the shores are contaminated, the economy is damaged in that a longer time will be required to restore the environment.
The toxic disaster has affected the lives of 200,000 people in Vietnam. Forty-one thousand are fishermen who rely on fishing to sustain their lives. According to the Vietnamese government, these 41,000 fishermen sustain not only their own lives but also those of 176,000 people who have been greatly affected (Van, 2016). Authorities also asserted that fishing activities have reduced, following that the total amount of seafood produced has decreased by 1,600 tons per month. This unethical issue has not only affected the people’s lives and the economy, but it has also created detestation between the people and the government. The people accuse the government of failing to provide measures for protecting public health and for offering a slow response to the Formosa Plastics Corporation (Clark, 2016).
In May 2016 the Vietnamese believed that the long-anticipated visit of President Obama could save them from the environmental calamity. They petitioned the president and expressed their need of appropriate action against corporate wrongdoers. Vietnam’s citizenry wants a strong government that will implement international environmental standards. Government critics argued that the government uses a long time for investigation and that the incident could have been dealt with if the government took the matter seriously from the beginning (Binh, 2016). Authors who offer strategy assignment help at Edudorm essay writing service points that the protesters say that as a result of the late response, the corporation will take decades to deal with environmental issues. It is important to note that this environmental disaster is the worst ever in Vietnam, and its impact on jobs and the economy is immeasurable. They also blame the government for failing to hold discussions on the incidence of mysterious fish deaths. This is one way of showing that the government has a sluggish response time (Binh, 2016).
Vietnamese Government Role in Formosa Plastics Corporation
The government’s sluggish response solving the environment disaster is due to foreign investments and corruption. The Vietnamese government faces some challenges that hinder quick responses to the environmental issues. Evidence shows that the government is corrupt in that during Vietnam’s reforms conduct by national congress, the hot issues were fighting corruption, creating a transparent government, and rule of law (Clark, 2016). However, environmental laws for foreign investors were overlooked. This clearly shows that the government ignores environmental laws, and this is the issue that makes the populace angrier toward the government. The ruling party in Vietnam is not serious with government transparency because the environmental issue is not the only problem that affects the country’s populace. These people face everyday problems such as corruption and police violence, among many others. Protesters’ voices are not heard particularly when they express their opinions against the South China Sea and Chinese actions (Clark, 2016). The violent condition of protests has made the government’s corruption issues emerge. The populace is eager to see how the government will react not only to the pollution issue but also to other deeper problems that have affected Vietnam in the past many decades. The awful thing is that the government is reluctant, and the populace faces unexpected reactions, such as arrests and violence, from the government. Educated people in Vietnam who have adequate knowledge on the global environment can tell how the climate will affect Vietnam in the future (Minh, 2016). The government itself is aware of the negative impact of climate change, which will affect Vietnam and, in part, the Mekong regions in the future. However, despite the environmental concern, the government views the issue of climate change as an external threat. Vietnam has faced environmental scandals, and people have become irritated since the government does not take the matter at hand seriously. For example, in 2008, MSG polluted the environment by pumping untreated water into the Thi Vai River for over 10years. Formosa Plastics Corporation paid low fines, and the matter was not disclosed to the public. These environmental issues and more have worsened the environment’s condition (Minh, 2016).
On June 30, 2016, Formosa Plastics Corporation admitted their actions and agreed to take the responsibility and to compensate for the disaster. Formosa Plastics Corporation also disclosed information and said that a sewage pipe imported 300tonnes of chemicals into the ocean. They apologized and agreed to compensate for the damage with $500 million (Agence France-Press, 2016). The compensation would help the locals recover from economic losses and seek new employment. The compensation was also provided to help four affected central provinces recover from the damage to marine environment. To avoid corruption, Deputy Prime Minister Trương Hòa Bình asked the government to approve corporation planning and follow standards and regulations when corruption arises (Agence France-Presse, 2016). The deputy also urged all national institutions and parties to implement law enforcement to deal with similar cases effectively. He said that the compensation money, $500 million, should be distributed equally to the affected people so that they can return to their normal lives (Nguyen, 2016). The issue of corruption still exists in Vietnam following that on October 2, 2012, a thousand people from the North-Central province petitioned the local government for unfair compensation. They argued that the government had provided a small amount of compensation, which failed to cover the total losses, occurred (Nguyen & Pham, 2016). Mentors who offer marketing assignment help at Edudorm essay writing service recognizes that despite the fact that the corporation released the money, the local government showed slow progress in releasing the payouts. The corporation said that it will cover 200,000 people who submitted their complaints to local authorities. However, villagers complained that some people were denied compensation and that the government had said that they were not eligible. They also expressed their complaints and said that the government concealed some money, and for that reason, Formosa should take the responsibility (Nguyen & Pham, 2016).
The environmental disaster in Vietnam introduced the issue of corruption within the government. The issue of corruption was made apparent when the civil society expressed their anger not only toward the compensation for environmental disaster but also for other governmental problems (Pike, 2016). The problem with the government is that it failed to implement anti-corruption law, and this becomes a challenge to the public. Focusing on the global corruption trend, which was analyzed in July 2013, a large Vietnamese population said that corruption is at a high level. According to a report from Transparency International, Vietnam has a higher level of corruption compared with other nations in Asia. The survey showed that 55%of people from Vietnam said that the corruption is high, and 48% in Southeast Asia said the corruption is low (Pike, 2016). In 2013, the Global Corruption Barometer in Vietnam showed that the country’s populace does not trust the government in eliminating corruption. Several surveys in Vietnam have confirmed that corruption is a major problem in Vietnam, and the areas affected by corruption are law enforcement, Property Township, and public health (Agence France-Presse, 2016). Another important point to note is that corruption is at a higher level because the government lacks transparency and accountability. Many corruption opportunities arise among governmental agencies, and this is due to the fact that bureaucratic procedures overlap and hence create confusion. Prime Minister Nguyen Tan Dung announced that under his leadership, there will be a new anti-corruption agency to end various corruption scandals (Agence France-Presse, 2016). Since 2005, when the Anti-Corruption Law had been implemented, corruption has remained a problem because the government has not shown accountability in implementation and enforcement. Despite the fact that various agencies, such as the Steering Committee, Government Inspectorate, and others, have been assigned duties to end corruption, corruption cases are still being prosecuted. According to the survey from USAID’s VNCI Project, paying commissions and petty corruption are viewed by the Vietnamese government as a common business operation (Pike, 2016). The Anti-Corruption Law states that a public official who practices corruption should receive criminal penalties. However, the government neglects and fails to effectively implement the law. Despite the fact that the government enforces the law and recommends the involved agencies to restructure the inspection measures and publicize officials’ corruption, corruption remainsa major concern (Pike, 2016). Vietnam citizens have the right to express their concern and address complaints when they notice failure within the government. However, the main problem is that when the citizens publicize the inefficient government, the latter views the complaints as political criticism. Perpetrators are abused and arrested, and their demonstration is regarded as an act against the law (Pike, 2016).
Recommendations
To prevent future environmental damage, Formosa Plastics Corporation should create a waste management strategy. Even though it promised to compensate the damages with $500 million, the cost of compensation is higher than that of waste management. Note that the Vietnamese government threatened Formosa that it will close the Formosa Ha Tinh Steel Corporation (FHS) if such incidents occur again. It was reported that coke production in the FHS released toxins that caused the deaths of fish in Vietnam. Therefore, Formosa should change coke production and develop an eco-friendly technology (VietNamNet Bridge, 2016). Meanwhile, Formosa Plastics Corporation should monitor the chemical waste process and ensure the treatment of air emissions and solid waste from coke production. The corporation should also create an effective wastewater treatment system. They should develop technologies for wastewater treatment and build biomarker ponds where treated wastewater will be stored for safety assessment. If wastewater is safe, then the underground pipeline should remain to allow water to move to the sea with respect to federal regulations (VietNamNet Bridge, 2016). Formosa Plastics Corporation should use waste identification strategies to manage waste and avoid environmental damage. If the waste is hazardous, Formosa Plastics Corporation should comply with federal regulations. They should accumulate the hazardous waste and wait for waste disposal. The accumulation process will require safe management and safe treatment. Formosa Plastics Corporation should also select containers and label the chemical wastes (National Research Council, 2011). Instructors who offer business development assignment help at Edudorm essay writing service argues that all these processes will help reduce pollution and promote health and safety. Another point is that Formosa Plastics Corporation management should control pollution by implementing stricter standards for waste management. Formosa should consider environmental ethics and make decisions based on protecting people and the natural world. The management should focus on conservation ethics and value the environment and its importance to humans. By considering humanity, Formosa Plastics Corporation will avoid pollution and strive to create a positive environment (National Research Council, 2011).
The Vietnamese government has a lot to do. First, the government should end corruption. The issue of corruption has negatively affected the Vietnam people who were directly and indirectly impacted by environmental damage. Though various cases of corruption in Vietnamese government are hidden, corruption from environmental compensation is transparent. Vietnam people are corrupted by the government, and this is not fair. Clearly, Formosa promised to compensate 200,000 people for the environmental damage, but the government limits human rights and freedom of speech. This is not the first case of environmental damage or the first instance of corruption in Vietnam. Various cases have been reported, but the government is reluctant about addressing this issue (Tatarski, 2016). In other cases, the government takes small amounts of money, and the cases are withdrawn or not presented in public at all. There should be equal distribution, and all the affected people who submitted their cases should be equally compensated. However, if corruption continues, there will be no quality of services. Quality services in Vietnam should be shown in the distribution of funds. However, the lack of quality will lead to improper justice, and citizens will suffer. Vietnamese people will live poor lives as a result of lack of employment and poor health. For example, when the economy is affected by pollution, people will become jobless and try to survive in an unhealthy environment (Tatarski, 2016). In general, future corruption will lead to the lack of development and mistrust in the government.
Before implementing an environmental monitoring system, the government should end impunity. This should be done through implementing law enforcement and a legal framework. The government should consider reforming the financial management (Tatarski, 2016). To curb corruption, it is important to reform the public sectors and disclose the budget information, and this is one way to prevent the misappropriation of resources. Note that the Vietnamese government lacks transparency, and to end corruption, the government should promote transparency and show openness and responsiveness in the access of information.
Another important point is that empowering citizens is the core element to end corruption (Tatarski, 2016). The government should create mutual trust and be accountable in addressing citizen needs. Academicians who offer project management assignment help at Edudorm essay writing service states that in addressing current environmental issues, the government should create a mentoring system in each of the affected provinces. Authorities accountable for monitoring will ensure that the change is implemented and provide measures to avoid future environmental damage. Sea management and protection is an important aspect that the government should consider to restore the ecosystem (Tatarski, 2016). Another important point is that the government together with other companies should join hands in improving the environment.
Summary
In this case, the Formosa Plastics Corporation caused a big challenge in Vietnam. The corporation polluted the environment by directly connecting a pipe to the Vietnam ocean. Not only were fish affected, but also the people and the economy. A higher percentage of people in Vietnam rely on fishing to sustain their livelihood. Due to environmental damage, people were left jobless, and the economy declined in areas of tourism. The corporation did an important thing because it offered compensation for the environmental disaster. It agreed to pay $500 million to cover the 200,000 people who were directly and indirectly affected. However, the issue of compensation raised the corruption problem where the affected people blamed the government for unfair compensation. The government was also blamed for the lack of transparency and slow response toward the environmental disaster. The villagers’ sentiments disclosed the corruption practices with the government.
The essay concludes that even though the corporation had unethical environmental practices, the Vietnamese government is weak since it has failed to implement and enforce the Anti-Corruption Law, which would solve corruption scandals that Vietnam has faced for various decades. Corruption is a major problem in Vietnam, and the only way to deal with it is through implementing and enforcing the Anti-Corruption Law. The law, together with enforcement action, will help the government in preventing and detecting misconduct.
References
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Clark, Helen. (2016, May 13). As fishing protests turn violent, Vietnam’s new government faces its first tests. The Interpreter.
DesJardins, J. R. (2012). Environmental Ethics. Belmont, CA: Wadsworth.
Formosa Plastics Group. (2015). 2015 Formosa Chemicals & Fibre Corporation CorporateSocial Responsibility Report.
Ives, Mike. (2016, Oct 3). Outrage Over Fish Kill in Vietnam Simmers 6 Months Later. The New YorkTimes.
Minh, Ho Binh. (2016, May 1). Rare rallies in Vietnam over mysterious mass fishdeaths. Reuters.
Nam, Chi. (2016, Jul 1). Vietnam blames toxic waste water from steel plant for mass fish deaths.The Guardian.
National Research Council (U.S.). (2011). Prudent Practices in the Laboratory: Handling andManagementof Chemical Hazards. Washington, D.C.: National Academies Press.
Nguyen, Hoai. (2016, Jul 9). Deputy PM Requests corruption probe into Formosa’s licensing. VNExpress International.
Nguyen, Mai,& Pham, My. (2016, Dec 4). Vietnam says recovery from Formosa industrialdisaster could take a decade. Reuters.
Pike, John. (2016). Vietnam – Corruption. GlobalSecurity.org.
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