State inspectors have found that managers at Vung Ang Economic Zone in Ha Tinh Province went beyond their authority and broke quite a few rules when offering too many incentives to a Taiwanese investor.
Among the violations, according to the Government Inspectorate, the Formosa Plastics Group’s Ha Tinh Steel Complex & Son Duong Port was illegally licensed for a 70-year period.
Vietnam's Investment Law states that a foreign-invested project must not last more than 50 years, and if necessary, the government may extend the length of the project for 20 more years.
The government, however, has not given any extension to the Formosa project yet.
The Vung Ang Economic Zone’s management board was also suspected of multiple violations in land clearance for the project, causing fierce and prolonged conflicts with local residents.
State inspectors found that the Formosa company had not been asked to pay an environment tax of VND136.76 billion (US$6.4 million) for its exploitation of sand used to build the project.
The Government Inspectorate has sought Prime Minister Nguyen Tan Dung’s permission to punish those responsible for the wrongdoings and called on relevant ministries to revise the license of the Formosa project.
The PM has assigned the authorities of Ha Tinh Province to implement the inspectors’ proposals.
The Formosa plant in Ha Tinh became the unlikely target of anti-China violence triggered by China's illegal deployment of a US$1-billion oil rig in Vietnamese waters on May 2, 2014.
Rioters torched, looted, and vandalized the construction site of the Taiwanese investor.
The incident on May 14 left three Chinese workers dead and 149 others, both Chinese and Vietnamese, injured.
The project recruits around 40,000 laborers, of which 5,659 are Chinese. Around 3,000 households must be relocated to have around 2,000 hectares of land for the project.