Final Paper for the course: Chinese Politics

and Governance

Ha My Nguyen

15th December 2016

The environmental implications of Chinese and Taiwanese

investments in Vietnam
I. Introduction

In April 2016 Vietnam experienced one of the most catastrophic environmental disasters

in the modern history. More than 200 tons of dead fishes floating up the surfaces and washing up

along the 200 km-coastlines of four provinces in the Central Vietnam affected the livelihoods of

200,000 local including 41,000 fishermen1. Under unprecedented pressure of the public outcries

and nationwide protests against the alleged culprit of Hung Nghiep Formosa Ha Tinh Steel

Corporation (Formosa Steel Corp) one of the largest foreign direct investment (FDI) projects in

the country, the Vietnamese government finally announced that the real cause of the catastrophe

was the highly contaminated industrial wastewater being discharged directly from the alleged

company into the ocean after almost three months of investigation, making it the biggest man-

made environmental disaster in the country during the past three decades.

The following months witnessed a massive unveil of many environmental scandals related

to FDI projects. Many foreign companies including Vedan Vietnam Corp., Chia Chen Co., and

Mei Sheng Textiles Vietnam Co., which violated the environmental regulations and neglectfully

destroyed their surrounding environment were brought to light by national newspapers and

environmental activists2. The fact that the majority of these companies are from Taiwan and China

elevated the levels of negative perception of Chinese investment activities which had already been

pervasive among a large segment of Vietnamese population. Many researchers and newspapers

like the Saigon Times pushed forward the pollution havens hypothesis to the debate table and

1
Radio Free Asia, Cht thi ca Formosa H Tnh nh hng hn 200 ngn ngi. Accessed December 14,
2016. http://www.rfa.org/vietnamese/vietnamnews/vn-says-taiwan-firm-s-pollution-affected-200000-people-
07292016090943.html
2
Tien Phong, 60% doanh nghip FDI x thi vt quy chun. Accessed December 14, 2016.
http://www.tienphong.vn/kinh-te/60-doanh-nghiep-fdi-xa-thai-vuot-quy-chuan-1012840.tpo

1
called for special monitor of Chinese FDI into the country3. They stated that Chinese companies

moved their operations to less developed countries like Vietnam in order to take advantage of less

stringent environmental regulations. In addition, many provinces in Vietnam purposely

undervalued their natural resources and environment in order to attract new investment. Either way

this led to excessive level of pollution and environmental degradation. There are some different

opinions, though really rare, believing that Chinese investment helped to provide funding for

Vietnam which was hungry for development projects, and also created employment opportunities

for local labors. However, regardless of controversial debates about the nature and the role of

investment between China and developing country like Vietnam, there are few empirical studies

that examine the patterns and motives behind as well as the environmental consequences of the

growing presence of China and Taiwan in the country. Therefore, with this paper the author hope

to shed more light on the issue.

In the following section, the history and current trend of China and Taiwans investments

in Vietnam will be analyzed aiming to highlight the complexity of the rapidly emerging presence

of Chinese economic and investment project in the country. Section 3 seeks to estimate the

environmental impacts of Chinese and Taiwanese investments, especially through two high-profile

on-going scandals involving the Alumina Bauxite Complex Tan Rai Lam Dong and Nhan Co

Alumina Factory projects and Formosa Steel Corporation. Section 4 touches upon the pollution

haven hypothesis and also concludes the paper.

II. Chinese and Taiwanese investment trend

2.1. Chinese OFDI and construction contracts

3
The Saigon Times, Thin ng nhim t FDI Trung Quc. Accessed December 14, 2016.
http://www.thesaigontimes.vn/147376/Thien-duong-o-nhiem-tu-FDI-Trung-Quoc.html

2
 The total investment of Chinese FDI in Vietnam is not as large as other international

investors, in fact it is rather minimal considering the enormous magnitude of bilateral trade

between the two countries. While China continues to be the largest trade partner of Vietnam, with

the bilateral trade volume reached US$67 billion in 2015, accounting for approximately 21% of

the Vietnams total trade turnover4, the total registered capital of Chinese FDI projects only stood

at US$10 billion, which ranked China the ninth out of 110 countries and territories investing in

Vietnam5. According to the data from Vietnam Foreign Investment Agency, by the end of 2015

Chinese FDI represented only 2.58% of the countrys total pledged FDI, whereas the top four

investors including Korea, Japan, Singapore and Taiwan accounted for 11.46%, 9.89%, 8.92% and

7.86% respectively6. Though it seems that Chinese investment activities should not be the matter

of concern due to its relatively small size, they have their own characteristics that are needed to be

analyzed.

First, it is important to understand why Chinese companies were not interested in FDI

projects in Vietnam. Since the normalization between the two countries in 1991, Chinese

companies tend to prefer bidding for major EPC (Engineering/ Procurement/ Construction)

contracts. The number of Vietnamese construction projects implemented via EPC contracts by

Chinese companies increased rapidly over time and reached US$15.42 billion by the end of 2009,

making the country the largest EPC partner of China in Southeast Asia7. Until 2014, Chinese

contractors had won up to 90% of the total EPC contracts in Vietnam, concentrating mainly in the

4
Statistical Handbooks of Vietnam 2015
5
Foreign Investment Agency, Tnh hnh u t nc ngoi 12 thng nm 2015. Accessed December 14, 2016.
http://fia.mpi.gov.vn/tinbai/4220/Tinh-hinh-dau-tu-nuoc-ngoai-12-thang-nam-2015
6
Ibid.
7
Le Hong Hiep, The Dominance of Chinese Engineering Contractors in Vietnam. Accessed December 14, 2016.
https://lehonghiep.net/2013/01/17/the-dominance-of-chinese-engineering-contractors-in-vietnam/
3
fields of petroleum, chemicals, power, mining, and textiles. Of which, 30 projects were identified

as national focus projects worth billions of dollars8.

The two main reasons many Chinese companies seek economic opportunities in the form

of EPC contracts rather than FDI investment in Vietnam are: (1) the conditions attached to Chinese

export financing activities including preferential export buyers credits and concessional loans

being given to Vietnam are to exclusively use Chinese contractors, technology, equipment, and

services; (2) Chinese companies wicked business strategy has been working well in Vietnam

without facing any punitive actions from the government. These companies offer much lower

bidding prices than other international contractors, taking advantage of the loophole in Vietnamese

Law on Tendering which favors low prices over technical aspects to win the contract and later

trying to save costs by persuading project owners to change the contracts original terms and

conditions, or just ignoring them in general and using lower-than-standard materials, technologies

and equipment or simply demanding more capital9. For example, the total investment capital for

the expansion project of Thai Nguyen Steel Corporation was doubled from 3,843 billion dong to

$8,104 billion dong by the Metallurgical Corporation of China Co. (MCC) as the EPC contractor

after winning the contract in 2012 and now the project has been abandoned by the MCC due to the

capital exhaustion on the side of the Vietnamese investor resulting from the unexpected high

increase in cost10.

Although EPC projects involving concessional loans from Chinese government are not FDI

but a form of cooperation or economic aid, they are in fact a political tool, functioning as an

important channel to promote Chinas Going global strategy: they have supported Chinese

8
Bao giao thong, Nhng d n cht d v cng ngh, nh thu Trung Quc. Accessed December 14, 2016.
http://www.baogiaothong.vn/nhung-du-an-chet-do-vi-cong-nghe-nha-thau-trung-quoc-d151121.html
9
Le Hong Hiep, The Dominance of Chinese Engineering Contractors in Vietnam. Accessed December 14, 2016.
https://lehonghiep.net/2013/01/17/the-dominance-of-chinese-engineering-contractors-in-vietnam/
10
Bao giao thong, Nhng d n cht d v cng ngh, nh thu Trung Quc. Accessed December 14, 2016.
http://www.baogiaothong.vn/nhung-du-an-chet-do-vi-cong-nghe-nha-thau-trung-quoc-d151121.html
4
companies to gain business overseas, promoted foreign trade, prioritizing economic gains and

enhancing their sphere of influence over developing countries like Vietnam. This does not seems

to fit well into the definition of Official Development Assistance (ODA) set by Development

Assistance Committee (DAC). In addition, they have significant impacts on the host country as

this type of aid makes up more than 60% of the total value of Vietnams investments11. Hence, in

this paper, alongside with Chinese FDI, I will consider such EPC projects by Chinese contractors

as Chinas investments in Vietnam. These projects are often poor quality and dragged over a longer

time than stipulated, creating losses for the country economically, socially and environmentally.

Such implications will be examined in details in the next section.

Second, as the Chinese FDI flows into Vietnam are forecasted to increase more rapidly in

the coming period, their characteristics deserve special focus. The FDI flows from China into

Vietnam can be categorized into three phases in accordance with Chinas political and regulatory

environment towards OFDI: the first phase of 1991-2000 Finding the stepping stones, the second

phase of 2001-2010 A bridge is built, and the third phase from 2011 until today Crossing the

bridge.

1991-2001 Finding the stepping stones

This phase reflected the Chinese governments push towards liberalization and

marketization (1992-1998) and the investigation for the Going global strategy (1999-2001)12.

There was no Chinese FDI into Vietnam in the first decade of Chinas economic reforms 1979-

1990 because Chinese governments main focus was to attract foreign MNEs to the country and

OFDI was not of importance to the Chinese leaders, and also because the relationship between

both countries wasnt normalized until November 11th 1991, two decades after the 1979 border

11
Nguyen Van Chinh, Chinas Comrade Money. Impact of Chinas rise on the Mekong region (2012): 53-84
12
M Fetscherin, H Voss, P Gugler, Thirty years of Chinese outward foreign direct investment: An
interdisciplinary literature review. International business review (2010): 235-246

5
conflict. In late November 1991, the very first Chinese FDI was established in Hanoi as a joint-

venture between a Chinese company from Guangxi and a Vietnamese company from Hanoi to

open a restaurant13. In China, as the consequence of the famous Southern China tour of Deng

Xiaoping in 1992 to rally support for economic reforms and market opening in China, Chinese

OFDI was officially put in the national economic development plan and later endorsed by the

President of China Jiang Zemin14. Such measures encouraged Chinese local and provincial

authorities to seek more business opportunities overseas and allow companies under their

supervision to establish affiliates abroad, albeit with cautious and limited investment. This

translated into the insignificant amount of Chinese FDI into Vietnam during the first decade: there

were only 100 Chinese investment projects with total registered capital of approximately US$200

million in 2001 (Figure 1). The common characteristics of Chinese FDI in this period were small

scale joint-ventures, simple equipment or low technology, and concentration in light industries,

production of consumer goods and service sectors such as hotels and restaurants. The average

amount of Chinese capital investments was US$1.5 million per project, and many of them covered

just US$100,00015.

2001-2010- A bridge is built

The period of 1991-2010 witnessed the considerable increase in Chinese FDI inflows: there

were 749 investment projects worth US$3.2 billion by the end of 2010, almost 16 times larger than

the investment capital recorded in 2001 (Figure 1). This could be the result of further reform

measures after China joined the WTO in 2001 and Going global policy implementation since

2002, as well as the more open and friendly investment climate in Vietnam after its WTO accession

in 2007. WTO accession means that China has to gradually open its protected domestic markets

13
Dong Phuong, u t trc tip ca Trung Quc ti Vit Nam sau hn 20 nm nhn li. Accessed December 14,
2016. http://dongphuong.hcmussh.edu.vn/?ArticleId=af61ca6e-232a-41a3-908b-ad0af67aecd1
14
Ibid.
15
Nguyen Thu Hang, u t trc tip ca Trung Quc ti Vit Nam: tc ng v mt s vn t ra, 2012.
6
to foreign firms and in turns Chinese companies have to face more competition, forcing many of

them especially private-owned enterprises which lack domestic political protection to go out and

find new market abroad. In addition, after two decades of explosive growth, China has reached

serious level of natural resource constraints, especially in coal, oil and other raw materials. The

industrial structure needed to be adjusted, the foreign reserve has soared and the production

capability of Chinese companies has grown making them more competitive compared to other

developing countries. Thus, against these backdrop, Jiang Zemin introduced going global policy

intending to encourage investment abroad in a manner that would exploit partner countries

comparative advantages to secure Chinas national interests and to ensure its survival in the

globalizing world. This policy was also a reflection that China had become sufficiently developed

and ready to take its appropriate place in the international stage, characterized by its increasing

economic strength and scope of its multinational enterprises.

In the case of developing country like Vietnam, Chinese companies aimed to exploit

natural resources, cheap labor and preferential investment incentives granted to FDI projects. This

period, thus, saw many larger scale investment projects from China ranging between US$10

million and US$100 million established in Vietnam, mainly in the fields of manufacturing,

construction, mining, steel and cement. By the end of 2010, 76% of Chinese FDI capital was

registered under the category of industrial manufacturing, followed by construction (5.6%), and

agriculture and forestry (3.8%). The average amount of Chinese capital investments increased to

US$4.3 million per project, almost tripled the average size in the previous decade16. It is important

to note that in the mining, transportation and energy sectors, Chinese companies tend not to use

FDI but compete for EPC contracts as mentioned previously. The Alumina Bauxite Complex Tan

16
Dong Phuong, Accessed December 14, 2016. http://dongphuong.hcmussh.edu.vn/?ArticleId=af61ca6e-232a-
41a3-908b-ad0af67aecd1
7
Rai Lam Dong and Nhan Co Alumina Factory projects worth US$3.1 billion were contracted out

to China Aluminum Intl. Engineering Company are good examples for such EPC contracts17.

Figure 1: Chinese and Taiwanese FDI in Vietnam, 1990-2015

China Taiwan
Year Number of Registered Capital Number of Registered Capital
projects (US$ million) projects (US$ million)
1990 - - 17 252
1991 - - 26 520
1995 33 60 65 1,239
2001 110 221 137 455
2004 391 771 142 424
2006 77 401 128 845
2007 130 572 230 2,489
2008 73 373 132 8,851
2009 76 380 95 1,626
2010 105 685 126 1,453
Period 1991-2010 749 3,190 - -
2011 85 757 69 579
2012 76 371 59 2,658
2013 110 2,338 75 637
2014 112 497 101 1,228
2015 175 744 115 1,468
Accumulation 1,296 10,174 2,478 30,997
Source: Statistical Handbooks of Vietnam 2005-2015

2011- now - Crossing the bridge

The investment value of Chinese OFDI started to vary considerably during this phase, but

on average the number of projects and the total registered capital are much higher than the previous

two decades (Figure 1). The average investment capital per project reached US$7.1 million, more

17
Du an khai thac boxit o Tay Nguyen. Accessed December 14, 2016. https://voer.edu.vn/m/du-an-khai-thac-bo-
xit-o-tay-nguyen/434ddc73
8
 than doubled the previous phase, but still below the national average of US$15 million per

project18. There are two special characteristics in this period.

First, the strong interest of Chinese investments in energy sector, especially thermal energy

has become evident. The total investments and contracts of China in Vietnam during the period

2011-2016 accounted for approximately US$9 billion, of which energy investment projects

constitute 2/3 of the total (Figure

2). In 2013 the first Chinese mega

FDI project, 1,200-megawatt

Vinh Tan 1 Thermal Power Plant

in Binh Thuan Province, was

granted license. This is the BOT

investment of a consortium

between two Chinese companies

and Vietnam National Coal-

Mineral Industries Holding

Corporation Ltd (Vinacomin)

Figure 2: China investment and contracts in Vietnam 2010 -2016
Source: China Global Investment Tracker registered for US$1.75 billion of

investment capital. However, the consortium only provide 20% of capital needed, the rest is

financed by 5 Chinese banks including China Development Bank, Export-Import Bank of China,

Bank of China, Industrial and Commercial Bank of China, and China Construction Bank 19. This

FDI project was carried out alongside other energy investment projects by Chinese EPC

contractors, especially in constructing thermal plants. It is estimated that 15 out of 20 national

18
Ibid.
19
Tuoi Tre News, Work starts on $1.75bn Chinese-owned thermal power plant in Vietnam. Accessed December
14, 2016. http://tuoitrenews.vn/business/29308/work-starts-on-175bn-chineseowned-thermal-power-plant-in-
vietnam
9
thermal plant projects are built by Chinese EPC contractors with zero domesticalization rate

meaning no domestic labors, products, equipment and technologies is used20. Such a situation has

posed several concerns including the poor quality of these projects, influx of Chinese labors,

environmental consequences and most important of all, the national security in terms of energy

security and long-term occupation of strategic locations21. According to Truong Duy Nghia-

Chairman of Vietnam Thermal Science and Technology Association, Chinas eagerness to invest

in thermal power in Vietnam can be explained as their desire to provide a convenient training

ground for Chinese contractors in this field to perfect their skills and build their track records

before competing with other high-profile players in international markets. In addition, this can also

serve the ambition to increase Chinas presence and extend their influences through controlling of

one of the most important energy sources in Vietnam, the thermal energy22.

Second, the volume of Chinese investments in garment industry has increased rapidly. As

Vietnam has actively negotiated and sealed many bilateral and multilateral free trade agreements

(FTA) during this period, opportunities for both domestic and foreign investors operating in

fisheries, textiles and footwear to enter new markets with lower barriers are huge. 2015 was called

the year of integration for Vietnam since a series of agreements were signed and came into effect,

including the establishment of ASEAN Economic Community (AEC), the Regional Economic

Partnership (RCEP) between ten ASEAN countries and six partner countries, EU- Vietnam FTA,

agreements on the Trans-Pacific Partnership (TPP), Vietnam- Korea FTA, and continued tariff

reduction followed WTO concession. Vietnamese experts pointed out that many international

20
Lao Dong, Mi nguy t cc d n tng thu EPC ri vo tay nh thu Trung Quc!. Accessed December 14,
2016. http://laodong.com.vn/kinh-te/moi-nguy-tu-cac-du-an-tong-thau-epc-roi-vao-tay-nha-thau-trung-quoc-
205587.bld
21
Doi song phap luat, V sao Trung Quc "bm" tin vo cc d n nhit in VN?. Accessed December 14,
2016. http://www.doisongphapluat.com/kinh-doanh/doanh-nghiep/bai-19-vi-sao-trung-quoc-bom-tien-vao-cac-
du-an-nhiet-dien-vn-a39232.html
22
Ibid.
10
investors including Chinese were rushing to set up their factories in Vietnam in order to take

advantage of zero tariff rate for textiles once the negotiations on TPP will be ratified especially

when the exports from China were subjected to tariff of up to 37% when entering the US textile

market. This was evident by 75% of greenfield investments in Vietnam in 2015 pouring into textile

industry. Texhong Textile Company was the first comer to this playground, setting up US$ 450

million industrial park in the northern province of Quang Ninh and planning on additional US$640

million for supporting industries23. Another Chinese company, Pacific Textiles which was

preparing a US$180 million joint-venture with the Crystal Group of Hong Kong also planned to

invest an addition US$49 million to increase the capacity of the factory. However, on November

17th 2016, Prime Minister Nguyen Xuan Phuc announced that Vietnam would not submit its

proposal for ratification of the TPP after the US President-elect Donal Trump vowed to withdraw

the country from the TPP on his first day in office24. The ease of TPP will undoubtedly alter the

momentum of Chinese FDI into the garment industry and other areas such as footwear and

agriculture. The FDI inflows from not only China, but other countries might be dampened as

international investors find Vietnam losing its prospective access to the enormous market of twelve

Pacific Rim countries covering 40% of the world population and 60% of global GDP25.

To sum up this section, it is important to remember that Chinese FDI inflows into Vietnam

remain relatively small in comparison with other countries such as Korea and Japan, thus the

implications of Chinese FDI could be considered as not as significant as the other types of

investments. The matter of focus related to Chinese investments here is that China won the

23
Vietnambiz, Cc cng ty Trung Quc tng u t vo Vit Nam v TPP. Accessed December 14, 2016.
http://vietnambiz.vn/cac-cong-ty-trung-quoc-tang-dau-tu-vao-viet-nam-vi-tpp-7000.html
24
Forbes, Good News For China? No TPP For The U.S., And Now Vietnam. Accessed December 14, 2016.
http://www.forbes.com/sites/xiangwang/2016/11/17/good-news-for-china-no-tpp-for-the-u-s-and-now-
vietnam/#7c2a41943dc8
25
Brock R. Williams, Trans-Pacific Partnership (TPP) Countries: Comparative Trade and Economic Analysis. CRS
Report for Congress, 2013.
11
majority of EPC contracts in sectors of great significance like energy, metals and transportation.

Most of these Chinese investment projects would cost Vietnam much more than the initial bidding

prices due to their wicked business strategy and also pose serious threat to the environment.

However, the Vietnamese government still blindly hands over such projects to Chinese companies.

According to an economist Pham Chi Lan, such situation is the result of certain interest groups

benefited from awarding such EPC contracts to Chinese companies, in turns leading to the lack of

transparency and accountability in the process of tendering, selection and management of these

projects, and weak enforcement in case of Chinese companies non-compliance with the

contractual obligations26.

2.2. Taiwanese OFDI

The investment inflows from Taiwan possesses different characteristics compared to those

of China, especially when the FDI inflows plays a much more significant role in the relation

between Vietnam and Taiwan. After the Law on Foreign Investment was promulgated in

December 1987 to create legal framework for FDI attraction in Vietnam, Taiwan was one of the

earliest investors setting up the first FDI project worth US$1.5 million in 1989 which ranked the

country 8th out of 13 countries and territories presented in Vietnam at that time27. Not until 1993

when President Lee Teng-Hui launched the Heading South policy to encourage Taiwanese

companies to invest and seek business opportunities in Southeast Asian countries that the

investment flows started to increase noticeably (Figure 1). The Taiwan Vietnam investment

protection agreement signed also in 1993, and followed by other agreements including the double

taxation avoidance agreement in 1998 have contributed to provide a more secure and friendly

26
Bao Dat Viet, u t dt may n TPP:Trung Quc hng li thay Vit Nam?. Accessed December 14, 2016.
http://baodatviet.vn/kinh-te/doanh-nghiep/dau-tu-det-may-don-tpptrung-quoc-huong-loi-thay-viet-nam-
3038136/

27
Tran Quang Minh, Two decades of Taiwans FDI in Vietnam An analysis and Assessment, 2011
12
business environment for Taiwanese investors operating in Vietnam. By 2000, Taiwan became the

largest FDI investor in Vietnam and since then it has always been in the top five. By the end of

2015, Taiwan has 2,478 FDI projects in Vietnam with the total registered capital of approximately

US$31 billion, accounting for 7.86% of the total FDI. As can be seen from figure 1, the FDI flows

from Taiwan increased dramatically in 2007 and peaked in 2008 but remained relatively large in

the following years, though the average investment capital from Taiwan was only $11.83 million

per project, slightly below that of the national average28. Such unusual increase came from few

mega FDI projects registered during the period 2007-2016, including a cellphone plant by the

Foxconn Group (US$80 million) in 2007, a steel complex by the Formosa Steel Corporation

(US$7.9 billion) in 2008, a tire manufacturing factory by the Bridgestone Company (US$574.8

millions) in 2012, and a paper factory by Cheng Loong Corp (US$1 billion) in 2015. This brings

out the first important characteristic of Taiwanese investments in Vietnam: large investment

capital and number of projects, however the majority of investment capital concentrates in the few

big projects and the rest are mostly small enterprises.

The second characteristic is the skewed investment structure with approximately 90% of

the capital coming to processing and manufacturing industries, and the rest coming to real estate

as well as agriculture sector29. The period 1989-2006 saw investments focusing on light industries

including apparel, textile, leather and footwear which relied on cheap intensive labor. After 2007

when Vietnam officially joined the WTO and started to open more to foreign investors, small and

medium Taiwanese companies found new opportunities and invested more in other light industries

such as consumer goods, electronics, computer components, automotive parts, and sport

28
Cuc Duong Thuy Vietnam, i Loan u t vo Vit Nam: D n nhiu nhng quy m nh . Accessed
December 14, 2016. http://web.viwa.gov.vn/tbt/Form/Tintuc_Preview.aspx?ID_TT=2250
29
VOV, D n u t ca i Loan ri khp 17 tnh, thnh Vit Nam. Accessed December 14, 2016.
http://vov.vn/kinh-te/du-an-dau-tu-cua-dai-loan-rai-khap-17-tinh-thanh-viet-nam-507410.vov
13
equipment30. In addition, as mentioned previously there are also few mega projects which

concentrate mainly in heavy industries like steel, cement and chemicals establishing since then.

From 2014 onwards, similar to Chinese investors, Taiwanese investors anticipating the benefits

from Vietnams prospect of participating in a series of bilateral and multilateral FTAs, most

importantly the EU- Vietnam FTA, the TPP and the Vietnam Korea FTA, started to invest in

textile, apparel and footwear industries, hoping to gain free access to the markets of EU and the

US. Many existing Taiwanese firms who established a strong foothold in these sectors also planned

to expand their production. In particular, the Far Eastern Group announced the US$274 million

polyester and cotton yarn production factory in Binh Duong in 201531; the Vega Balls

Manufacturing Company invested a US$50 million shoe sole production factory in 2016; and the

Taiwanese Pou Chen Group who owns tens of footwear production subsidiaries in Vietnam is also

planning to grow its scale of production to take advantage of newly signed free trade agreements 32.

It is expected that the FDI investment from Taiwan will continue to flow into Vietnam even

though the TPP deal has been dropped, as the new Taiwanese President Tse Ing-wen announced

the New Southbound initiative in May 2016 with a budget of US$131 million to encourage and

promote Taiwanese companies to adjust their business strategies towards ASEAN markets, aiming

to reduce Taiwans economic reliance on mainland China. Currently, 40% of all Taiwanese export

goes to China, making the country exceedingly vulnerable to economic warfare being waged by

Beijing. Thus, the President Tse Ing-wen is really committed to escape this situation, pushing many

measures to make sure the new initiative successful and try to overcome the shortcomings faced

by similar policies of her predecessors. Alongside is the fact that Chinas slow down, rebalancing

30
Ibid.
31
VIR, Binh Duong welcomes US$760 million garment and textile project. Accessed December 14, 2016.
http://www.vir.com.vn/binh-duong-welcomes-760-million-garment-and-textile-project.html
32
WJI, Taiwanese firms rush into Vietnam footwear sector. Accessed December 14, 2016. http://wji.at/Vietnam-
News/taiwanese-firms-rush-vietnamese-footwear-sector/

14
and rising wages have driven many Taiwanese companies to look for opportunities elsewhere, and

Southeast Asian countries, especially Vietnam and Thailand with rapid growth and burgeoning

population proved to be attractive new destinations.

III. The environmental impacts of Chinese and Taiwanese investments

The author reviewed over 100 articles on Vietnamese media including national

newspapers, scientific journals and government agencies web portals in both English and

Vietnamese from 2008 to 2016, as well as a few research papers in order to gather information and

synthesize the data on the environmental implications of several Chinese and Taiwanese

investment projects. It is important to note that Environmental Impact Assessments (EIA) which

is mandatory for investment projects establishing in Vietnam are considered confidential and often

inaccessible by the public. In addition, the quality gap between the EIA required by the Vietnamese

Law on Environmental Protection in 2005 and in practice remains significantly large, thus could

not provide much of useful data related to projects environmental risk. The on-going

measurements and assessments of the environmental impacts of a project after licensing are

basically non-existent. The majority of the data presented in this paper are from investigations and

reports of journalists and scientists related to big environmental scandals which were published in

the press and scientific journals.

3.1. Environmental impacts of Chinese investments

In section 2, the author pointed out that EPC contracts won by Chinese investors are the

area of focus as such projects account for the majority of Chinese investments in Vietnam and

concentrates in energy, metals and transportation sector which are also most environmental

sensitive. The destruction and poisoning of ecological system of Chinese investment in Vietnam

can be analyzed through the Alumina Bauxite Complex Tan Rai and Nhan Co Alumina Factory

projects- the two largest bauxite mining and processing projects in Vietnam.

15
 After the Prime Ministers Decision 167 approving the Zoning Plan for exploration,

mining, processing and use of bauxite reserves throughout the country was issued on November

1st 2007, the first two pilot projects for Tan Rai in Lam Dong Province and Nhan Co in Dak

Nong Province were proposed. Both the Tan Rai and Nhan Co projects aimed to build the alumina

processing plant targeted 600,000-650,000 tons per year by 2010 and 1.2 million tons per year

thereafter33. The Tan Rai project was owned by the Vietnam Coal and Mining Corporation

(Vinacomin) and the Nhan Co project was owned by the Nhan Co Alumina Joint Stock Company

where Vinacomin owned the majority share. Both projects were contracted out the China

Aluminum Intl. Engineering Company (CHALIECO). The Chinese contractor was responsible for

the construction and design of the alumina plants and mining sites, as well as operation for the two

years before handing them over the Vietnamese partners. Construction for the Tan Rai project

began in July 2008 and the factory came into operation at the end of 2012 with two years overdue.

The investment capital was estimated to increase from the initial amount of US$628 million to

approximately US$800 million34. The Nhan Co project commenced in February 2010, and still has

not been completed after 3.5 years behind its schedule in 2012 35. The pledged capital investment

for this project was US$697 million, but the actual capital has increased significantly36.

When the zoning plan was issued, a highly controversial public debate emerged and

many government scientists, artist-intellectuals, domestic reporters, activist bloggers and overseas

Vietnamese communities, as well as some high-ranking government officials including the iconic

military leader General Vo Nguyen Giap voiced out against the plan. Many workshops and

seminars, articles published in the national newspapers, open letters and petitions, public

33
Decision No. 167/QD-TTg
34
Vnexpress, nh gi li hiu qu d n b-xt Ty Nguyn. Accessed December 14, 2016.
http://kinhdoanh.vnexpress.net/tin-tuc/vi-mo/danh-gia-lai-hieu-qua-du-an-bo-xit-tay-nguyen-2698361.html
35
VCCI, Progress of Alumina Project in Central Highlands. Accessed December 14, 2016.
http://vccinews.com/news_detail.asp?news_id=33606
36
Vnexpress, nh gi li hiu qu d n b-xt Ty Nguyn.
16
demonstration and a lawsuit against the then Prime Minister Nguyen Tan Dung were organized.

This widespread opposition was fueled by the concerns over environmental and social impacts of

bauxite mining, as well as national security issues. Some of the environmental consequences

predicted by the scientists have been proved to be accurate and the longer-term effects are going

to be seen in the very near future.

Land loss, deforestation and soil erosion

According to the Decision 167, the Tan Rai project was expected to occupy 207 km2 (2.1%

of the total provincial area of Lam Dong), including 140 km2 for bauxite deposits (1.4%). The

Nhan Co project was estimated to cover between 1/3 and 2/3 of the Dak Nong provincial area of

6,516 km2. The first major concern was deforestation and biodiversity loss as 60% of the deposit

area in Lam Dong was forest and 40% was tea and coffee plantation37. By 2012 when the factory

in Tan Rai commenced, all the primitive forest and plantation were completely cleared38. Since

the Central Highlands is also the source of at least four major rivers and the upper watershed region

for the South and South Central Vietnam, such deforestation could cause the low-lands become

more vulnerable to droughts and floods and affect the fresh water supply for agriculture, industrial

and urban areas in the Southern region39.

The second impact is soil erosion. The technology used for bauxite extraction in these two

projects are strip-mined, meaning the complete removal of the topsoil and everything upon it.

Vinacomin, however, presented their environmental rehabilitation strategy to rolling up a straw

mat referring to the action of rolling back the topsoil after removing the bauxite from the

underneath and replacing it with tree planted on top. Though, in fact, the bauxite helped to hold

37
Jason Morris, The Vietnamese Bauxite Mining Controversy: the Emergence of a New Oppositional Politics,
2013
38
Bao Daknong, Xung quanh d n khai thc b xt Ty Nguyn: Hy n hiu r hn!. Accessed December
14, 2016. http://www.baodaknong.org.vn/boxit/xung-quanh-du-an-khai-thac-bo-xit-o-tay-nguyen-hay-den-de-
hieu-ro-hon!-33835.html
39
Jason Morris The Vietnamese Bauxite Mining Controversy: the Emergence of a New Oppositional Politics
17
the fertile areas in place and mining bauxite destroyed the topographical structure and wash away

the rich soils40.

Mining waste and red mud

The Tan Rai project produces 4.6 million m3 of waste water per year and 650,000 tons of

red mud per year41. Red mud is a caustic sludge coming from the Bayer process used in these

projects to produce bauxite. It is a muddy backwash with a high pH level, and in its wet form the

risk of red mud contamination to soils and freshwater sources is alarming. Hungarian red mud spill

that destroyed all life in the Marcal River in 2010 set a terrifying example. On the 8 th October

2014, one of the reservoirs for wastewater of Tan Rai project broke and a large amount of mud

escaped following the slope and entering in the nearby rivers and streams. The muddy water was

later identified to be not red mud and the chemical level was not as dangerous, though still polluted

the water source for agriculture and household. More than 4,000 m2 of fish ponds in the

neighborhood was covered by the muddy water, and are still abandoned up to today as the process

of pollution treatment have not finished42. On the 13th February 2016, the wastewater pipe

connecting with one of the red mud cesspools was found to leak and was quickly repaired before

the significant amount of wastewater drained out. This time, the wastewater was identified to carry

a high level of pH and could have extinguished species living in the water, and damaged plantation

and health of people who use the water source. The cause of all the incidents was reported as the

low quality of construction materials and equipment and low-technology used by the Chinese

40
Ibid.
41
Vinacomin, Cng tc x l bn ti 2 d n Nhn c v Tn Rai (Rred mud treatment at Nhan Co and Tan Rai
projects). Accessed December 14, 2016. http://boxit.vinacomin.vn/vi/faq/Cong-tac-xu-ly-bun-do-tai-2-du-an-Nhan-
Co-va-Tan-Rai/
42
Bao Dat Viet, V ng ng nc cha xt bauxite Tn Rai. Accessed December 14, 2016.
http://baodatviet.vn/khoa-hoc/su-kien/vo-duong-ong-nuoc-chua-xut-bauxite-tan-rai-3300220/
18
contractors in order to save cost43. However, Vicomin and the Ministry of Industry and Commerce

have spoken up about these small incidents and their negligible environmental effects, saying

that this should not present any concern for local people in the nearby areas44. However, many

local, scientists and environmental activists were assured by the governments statement and

described that these red mud cesspools are like mud boom hanging over Southern Vietnam and

could explode soon if there is no safety measures conducted in the near future.

Water and air pollution

The monitoring parameters in the environmental assessment report on the groundwater and

air in the nearby areas of the Tan Rai project published in March 2016, showed that the

concentrations of Fe and Mn in the groundwater exceeded a standard from 1.4 to 2.8 times. The

dust concentration was from 1.5 to 14.5 times higher for the air around the plant, especially near

the red mud cesspools and the alumina bauxite conveyor45. The Vice chairman of Bao Lam District

acknowledged the decrease in the water and air quality, but said that there was no concrete

evidence to assess the magnitude of the environmental degradation as the air and water quality was

not measured before the project.

Along with increasingly alarming environmental consequences, the economic loss of these

projects also raised anger and resentment among the public. The Tan Rai project alumina plant is

expected to experience loss ranging US$7.7 - 11.3 million per year between 2015 and 2020.

However, the Central government considered this as normal and the Ministry of Industry and

43
Bao Dat Viet, Bc ng ng bauxite Tn Rai: 'H qu cng ngh Trung Quc'. Accessed December 14, 2016.
http://baodatviet.vn/khoa-hoc/quan-diem/buc-duong-ong-bauxite-tan-rai-he-qua-cong-nghe-trung-quoc-
3300338/
44
Bao Dat Viet, V ng ng bauxite Tn Rai: Chuyn nh, dn yn tm. Accessed December 14, 2016.
http://baodatviet.vn/khoa-hoc/quan-diem/vo-duong-ong-bauxite-tan-rai-chuyen-nho-dan-yen-tam-3300530/
45
Bao Dat Viet, Ngun nc quanh nh my bauxite Tn Rai b nhim?. Accessed December 14, 2016.
http://baodatviet.vn/khoa-hoc/quan-diem/nguon-nuoc-quanh-nha-may-bauxite-tan-rai-bi-o-nhiem-3302629/
19
Commerce even suggested to reduce investment costs for red mud cesspools and environmental

fees paid by the Chinese contractor CHALIECO to help reduce the loss46.

The Tan Rai and Nhan Co projects are not the only Chinese investment that deserve

attention. Many thermal plants such as Vinh Tan Thermal Power Plants in Binh Thuan Province

also create controversy among the public and the government. In 2014 and 2015, Vietnam

Sustainable Energy Alliance (VSEA) conducted many environmental assessments on coal mining

and processing, as well as on activities of thermal plants, reporting that because of the usage of

low-technology in processing and ash controlling, coal-burning smoke and coal ash from the

thermal plants have been polluted the air and water sources including groundwater, streams, rivers

and seas in the neighborhood, even contributed to acid rain. The health of local in those areas are

damaged and the premature mortality rates increased significantly47. As the environmental

consequences have become more and more visible and directly affected the livelihoods and health

of the local, the public outcries have grown stronger demanding for a more responsible government

and more transparent management of such projects. In April 2015, the local people in Binh Thuan

Province blocked the national roadway 1A to express their anger and fear over the air pollution

created by the Vinh Tan Thermal Power Plant48.

3.2. Environmental impacts of Taiwanese investments

The Hung Nghiep Formosa Ha Tinh Steel Corporation (FHS) is the main subject for

assessing the environmental impacts of Taiwanese investments in Vietnam. Many government

46
Cafef, Bauxite Ty Nguyn c m n xi?. Accessed December 14, 2016. http://cafef.vn/vi-mo-dau-
tu/bauxite-tay-nguyen-co-dam-an-xoi-201403200151087504.chn
47
Dan Tri, Kin ngh dng cc d n nhit in than v lo nhim mi trng. Accessed December 14, 2016.
http://dantri.com.vn/kinh-doanh/kien-nghi-dung-cac-du-an-nhiet-dien-than-vi-lo-o-nhiem-moi-truong-
20161026134607177.htm
48
Ha Tinh News, im mt 10 cng ty gy nhim nghim trng nht Vit Nam. Accessed December 14, 2016.
http://hatinhnews.com/20160803093656799p0c377/diem-mat-10-cong-ty-gay-o-nhiem-nghiem-trong-nhat-o-
viet-nam.htm

20
official argued that this was a one-off incident and should not be a representative example of

Taiwanese investments. However, with such an impressive scale of destruction, the consequences

of the Formosa Steel Corporation are needed to be carefully analyzed and inferred for future policy

making.

The FHS was granted investment license in June 2008 to construct (i) a steel

complex with capacity of 7.5 million tons per year and later will be upgraded to 22.5 million tons

per year; (ii) Son Duong seaport with 11-32 docks; and (iii) a 650MW thermal plant. The

construction commenced in October 2010.

This was one of the largest FDI investment

in Vietnam at the time with the total

pledged capital of US$10.5 billion49. In

February 2016, the FHS had finished more

than 90% of all construction and produced

its first ever 4,000 tons of steel. The plant

also planned to put into all the operations

on an experimental basis50. During 2015

and early 2016, the company imported

approximately 384 tons of toxic chemicals

Figure 3: Estimated impacts of the mass fish dealth in
the Central Vietnam for cleaning the pipeline before operating.
Source: Danish- Vietnamese Association It was estimated that the plant used 52 tons

49
Ha Tinh, Dau n D n Formosa H Tnh. Accessed December 14, 2016.
http://hatinh.gov.vn/dautunuocngoai/FDI/Pages/D%E1%BA%A5u%E1%BA%A5nD%E1%BB%B1%C3%A1nFormosaH
%C3%A0T%C4%A9nh.aspx
50
Nong Nghiep, Nhng m thp u tin trn i cng trng Formosa. Accessed December 14, 2016.
http://m.nongnghiep.vn/nhung-me-thep-dau-tien-tren-dai-cong-truong-formosa-post156594.html
21
of these chemicals in early 2016. This piece of information was not revealed until many journalists

conducted their independent investigations after the scandal51.

On the 6th April 2016, Ha Tinh province witnessed the mass fish death floating up to the

shore. Four days later, Quang Binh experienced similar disaster. On the 15th and 16th, the mass fish

kill expanded to Hue and Quang Tri provinces. The scale of this environmental disaster were

massive and catastrophic, swiping up more than 200 tons of fishes and affected directly more than

200,000 people (Figure 3). The media reports tied the fish kill to alleged toxic dischargs coming

from the FHS. Late April, the controversy over the scandal was exacerbated when Chu Xuan

Pham- a representative of Formosa in Hanoi challenged the whole country with the shocking

statement that Vietnam had to choose catching fish and shrimp, or building a modern steel

industry52. This created a wave of anger and resentment among the public against the company

and the governments dubious response,

especially in the world of social media.

After the fisherman Nguyen Xuan

Thanh living in Ky Anh commune, Ha

Tinh discovered and reported the illegal

underwater pipeline discharging yellow

wastewater directly from the FHS to the

ocean53, there was even stronger media

Figure 4: Mass protest in Ha Noi on May 1st 2016
Source: T.A The Diplomat

51
Bao Dat Viet, Formosa nhp 400 tn ha cht c hi. Accessed December 14, 2016.
http://baodatviet.vn/chinh-tri-xa-hoi/tin-tuc-thoi-su/formosa-nhap-400-tan-hoa-chat-doc-hai-3307623/

52
Business Insider, Vietnam media ties massive fish kill to Formosa Plastics steel unit. Accessed December 14,
2016. http://www.businessinsider.fr/us/r-vietnam-media-ties-massive-fish-kill-to-formosa-plastics-steel-unit-2016-
4/
53
Doi Song Phap Luat, Gp ngi u tin pht hin ng x thi ngm di bin. Accessed December 14, 2016.
http://www.doisongphapluat.com/tin-tuc/tin-trong-nuoc/gap-nguoi-dau-tien-phat-hien-ong-xa-thai-ngam-duoi-
bien-a142873.html
22
social outcries demanding more responsible actions from the government in finding the real cause

and alleviating the impacts. Many debates and activism escalated on the online platform, resulting

in many rallies and public demonstrations took place at unprecedented scale, spanning throughout

the country, mainly in Ha Noi and Ho Chi Minh City during a national four-day holiday early

May54. This marked a birth of a strong online civil society in Vietnam when altruistic individuals

including Vietnamese and overseas scientists, journalists, artist-intellectuals joint-handed to

conduct many independent research and continued to share information related to the scandal,

informing all the users and updating the latest news, and even gave rise to the rare nationwide

public demonstrations. As simmering conflicts were brought to the surface, and the voice of the

public became so strong that the government was unable to keep denying the link between the

disaster and the FHS. After two month of cooperating with more than 100 scientists from Vietnam,

Australia, Japan, Germany, France, the US and Isarel, the Vietnamese government held a

conference and revealed the culprit was the FHS and the direct cause was the toxic chemicals used

for cleaning the pipeline, including phenol, xyanua, iron hydroxide, etc being discharged from the

FHS plant. It was noted that the level of all these chemicals exceeded the Vietnamese standards

which were considered very loose according to international standards55. The officials from the

FHS also attended and they offered an apology to the public along with a bow. They also pledged

to pay US$500 million to compensate for economic losses and treat the pollution. This was

broadcasted nationally, which was considered as the governments strategy to calm the public in

the wake of social unrest. Later the government inspection reported that the FHS has committed

53 violations relating to project design, construction and operation, especially the deployment of

the system was not handled according to the regulations and pledged to exercise on-going

54
The Diplomat, Amid Fish Deaths, Social Media Comes Alive in Vietnam. Accessed December 14, 2016.
http://thediplomat.com/2016/05/amid-fish-deaths-social-media-comes-alive-in-vietnam/
55
Dan Tri, Hnh trnh truy tm cht kch c di y bin". Accessed December 14, 2016.
http://dantri.com.vn/xa-hoi/hanh-trinh-truy-tim-chat-kich-doc-duoi-day-bien-20160630220831089.htm
23
monitoring over the plants activities56. However, many intellectual voiced against the set fine as

there was no concrete scientific-based arguments for the amount that the FHS agreed to pay.

According to a research by a scientist Nguyen Thi Hai Yen published in July 2016, the total cost

including the economic and environmental damages caused by the incident was estimated to be up

to US$ 1,000 billion when the long-term effect on the sea ecological like coral reef, open ocean

were taken into account57.

This disastrous incident, however, is not the only environmental scandal faced by the

Taiwanese investors in Vietnam. Vedan Vietnam, a Taiwanese company, which produces

monosodium glutamate (MSG), has also inflicted significant environmental damage in Vietnam

over a decade. The plant first opened in August 1994 and by late 1994, the government had

received many complaints from the farmers on the pollution of Thi Vai river. In September 2008,

investigators concluded that Vedan had been polluting the Thi Vai river for 14 years by directly

discharging untreated wastewater into the river, destroying the livelihoods along the river,

affecting the source of drinking water and creating loss of local governments revenue since ships

were unable to anchor at Go Dau port in Dong Nai Province due to pollution damage. Such

examples demonstrate Vietnams weakness in public institution and governance and serve as

strong support for the pollution haven hypothesis. This will be in details in the following section.

IV. Conclusion

Currently, much of the debate on Chinese and Taiwanese FDI and the environment in

Vietnam evolve around the pollution haven hypothesis. The goal of this paper was to paint a

clearer picture of FDI from China and Taiwan into Vietnam, their environmental impacts as well

56
Tuoi Tre, Lp hi ng nh gi khc phc 53 vi phm ca Formosa. Accessed December 14, 2016.
http://tuoitre.vn/tin/chinh-tri-xa-hoi/20161031/lap-hoi-dong-danh-gia-khac-phuc-53-vi-pham-cua-
formosa/1210675.html
57
Vietecology, C S KHOA HC TNH TON THIT HI THM HA SINH THI TI VNG BIN MIN TRUNG VIT
NAM T THM HA FORMOSA VNG NG: 1000 T USD V KHNG FORMOSA Accessed December 14, 2016.
http://www.vietecology.org/Article.aspx/Article/153
24
as to clarify the misperception about such hypothesis. According to Javorcik and Wei (2004), the

pollution haven hypothesis refers to the possibilities that multinational firms, particularly those

engaged in pollution-intensive industries, relocate to countries with weaker environmental

standards58. At the first glance, the author agreed that the examples from Chinese and Taiwanese

investment into Vietnam fit well into the logic behind the pollution haven hypothesis as the

environmental regulations and environmental protection fees are low and the enforcement of such

laws are often weak in Vietnam. This can be seen from the Environmental Impact Assessments

(EIA) submitted by the FHS, which comprised of 285 pages and 9 chapters in accordance with

instructions of the Circular 08/2006-BTNMT on the guidance for environmental assessment.

However, there were only 2.5 pages regarding the wastewater covering information on the types

of wastewater from the plant and no information on their environmental impacts. There was also

zero information relating to the impacts on sea ecological environment as well as air and land

pollution. There was no detailed description on treating wastewater and mitigating the pollution.

However, this was approved quickly by the Ministry of Resources and Environment after

submission in order to facilitate the project registration process 59. Another example is the Mei

Sheng Textiles Vietnam- a Taiwanese company, which has been sanctioned more than 6 times

after continuous violations against the law, still operated illegally and discharged untreated

wastewater into Da Den lake, the water source of 90% of population in Ba Ria-Vung Tau

Province60. In general, a research conducted by National Economics University (Vietnam) in 2015

revealed that 60% of FDI companies exceeding waste discharge standards, mainly in the fields of

58
Javorcik and Wei, Pollution Havens and Foreign Direct Investment: Dirty Secret or Popular Myth?, 2001
59
Tien Phong, nh gi tc ng mi trng ca Formosa: Git mnh!. Accessed December 14, 2016.
http://m.tienphong.vn/xa-hoi/danh-gia-tac-dong-moi-truong-cua-formosa-giat-minh-1029013.tpo#ref-
http://www.tienphong.vn/xa-hoi/danh-gia-tac-dong-moi-truong-cua-formosa-giat-minh-1029013.tpo
60
Dau Bao, 6 ln b nim phong, doanh nghip i Loan vn sng git song. Accessed December 14, 2016.
http://daubao.com/6-lan-bi-niem-phong-doanh-nghiep-dai-loan-van-song-de-giet-song/xa-hoi/102745.html
25
textiles, leather and steel61. It is the unspoken law well-known among the Vietnamese population

that both domestic and foreign companies could be able to escape the regulations and laws as long

as they establish the good relationship with the local and national authority and share the rent

from their unlawful activities. After such incidents, a strong call from the public, individuals and

organization for a more transparent and accountable government has been expressed constantly in

the newspaper and social media. Yet the bureaucracy and resistance to change in the government

have been built-up in Vietnam for a long time under the communist regime that it is extremely

difficult to transit to a more transparent, accountable and rule-based system, nor the government

actually desire to change at all.

However, the pollution haven hypothesis should not be considered as the main reason

why Chinese and Taiwanese investors coming to Vietnam. The other comparative advantages

including potential markets, cheap labors and materials, as well as attractive investment incentives

also play a considerable role in the decision making process. In the case of the FHS, the most

important factor in the investment decision was documented as the preferential investment policies

offered by the Vietnamese government, including the low land rental rate of US$4.5 million for

3,300 hectare of land and water for the period of 70 years (according to Vietnamese Law on

Investment, the maximum land lease is only 50 years). The corporation also receives the maximum

level of tax incentives, including exemption and reduction on corporate income tax, personal

income tax and duty-free import of machinery, equipment and fixed assets, etc. This was the

highest incentives that the FHS had been offered when conducting market research in the Southeast

Asia region62. In the case of Chinese EPC contracts, the motive behind the aggressiveness of

61
Tin Bao Chi, Cnh bo FDI vo VN t cc lnh vc nguy c gy nhim cao. Accessed December 14, 2016.
http://tinbc.com/APUCEQ/Canh-bao-FDI-vao-VN-tu-cac-linh-vuc-nguy-co-gay-o-nhiem-cao.html

62
Cafef, Formosa c H Tnh u i nhng g?. Accessed December 14, 2016. http://cafef.vn/formosa-duoc-
ha-tinh-uu-ai-nhung-gi-20160707092131847.chn

26
Chinese investors in acquiring the big projects in energy, metals and transportation were

mentioned in section 2 including the provision of training ground for Chinese companiese and

the political tool of Chinese government to develop their unconscious power and influence over

the Vietnamese government. Therefore, the author emphasizes that the pollution haven

hypothesis is not an ultimate motive for investors in highly-polluting industries moving their

factories to Vietnam, but rather the result of weak institutions and management of the Vietnamese

government. The focus then should be directed towards the macro-level issues such as more

stringent environmental policies, more transparent public governance and better regulatory and

monitoring capacity of the government official, especially the empowerment of the civil society

in Vietnam.

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