A view of the administrative building of Formosa Ha Tinh Steel Corporation, a unit of Formosa Plastics Group, in Vung Ang Economic Zone in the north-central province of Ha Tinh. The provincial administration has ordered the zone's management board to halt the construction of a shrine inside the zone by the Taiwanese firm. Photo: Nguyen Dung
Communist Party officials in the north-central province of Ha Tinh have ordered the management board of the Vung Ang Economic Zone to halt the construction of a shrine inside the zone by Taiwan's Formosa Plastics Group.
Tran Dinh Thuyen, a spokesman for the the Ha Tinh Party Unit, told Thanh Nien News on July 19 that the order was made following public outcry over the provincial government’s acceptance of Formosa's request to build the shrine after a deadly anti-China riot left three Chinese workers dead and 149 others, both Chinese and Vietnamese, injured on May 14.
China’s deployment of a giant US$-1billion oil rig into Vietnamese waters on May 2 triggered peaceful anti-China protests that erupted into violence in central and southern Vietnam two weeks later. Rioters torched, looted and vandalized hundreds of foreign-owned factories.
The violence racked up millions of dollars in losses and claimed the lives of three Chinese nationals.
Taiwanese businesses, mistaken for being Chinese, suffered most. Taipei claims at least 200 factories were looted or burned down in the riots. Around 3,000 Chinese workers subsequently fled Vietnam.
Two months after the riot, Formosa submitted an “unprecedented” request to the government for permission to build its own special economic zone in Vung Ang.
In addition to asking for its exclusive economic zone under the direct control of the central government, Formosa also called for a raft of safeguard measures for the steel sector and waivers on import duties for equipment and raw materials.
On top of that, the Taiwanese firm asked that the government grant it land-use rights to a large area of the Vung Ang Economic Zone so it can build infrastructure and housing facilities to accommodate its 15,000-strong staff and their relatives, most of whom are Chinese.
The request was turned down. Vietnam’s current regulations do not allow such special treatment for foreign investors according to comments made by Nguyen Van Nen, Minister and Chairman of the Government Office, during a press briefing on July 1.
The rejection came at a time when the government is making great strides in restoring foreign investor confidence after anti-China riots shut down three industrial parks in mid-May.
But on July 3, Formosa received permission from the Ha Tinh provincial government to build the shrine, which it said would allow employees to pray to “the wandering souls whose graves were lost.”
In Vietnamese and Chinese culture, individuals who are killed far from home (particularly those who die violent deaths) have a tendency to wander among the living rather than pass into the spirit world. These ghosts are called 'hungry souls' because it is believed that they do not enjoy regular offerings of food and other amenities traditionally laid out on family alters in the home.
The Formosa Ha Tinh Steel Corporation, a unit of Formosa Plastics Group, was in the process of building a huge steel complex in Vung Ang when the deadly riot broke out.
The Formosa plant is to be the largest steel mill in Southeast Asia once the construction is completed. It is also one of the biggest foreign direct investment projects in Vietnam.
Formosa Plastics Group said on Monday it will receive $2.39 million in compensation from the Vietnamese government and a Vietnamese insurance firm for damages incurred during anti-China protests, according to a Reuters report.
Analysts say Vietnam still desperately needs foreign investment to boost growth but at the same time must be careful not to hand over too much power to businesses.
While foreign direct investment is important to economic growth and development in any country, these analysts say no government can allow itself to be held hostage by any one company.