Consumers succeed where governments failed as Vedan capitulates on compensation demand
Products of Taiwanese-owned monosodium glutamate maker Vedan were taken off the shelves at a Saigon Co.op supermarket in Ho Chi Minh City. Officials said the boycott of Vedan's products at local retailers has partly prompted the company to accept the compensation claims of afected farmers.
Taiwanese river polluter Vedan Vietnam has caved in to public anger and agreed to pay full compensation to affected farmers after playing hard to get for more than a year.
Nguyen Thai Lai, deputy minister of Natural Resources and Environment, informed the press on Monday (August 9) that the MSG maker has committed to paying farmers in Ho Chi Minh City and the southern province of Ba Ria-Vung Tau compensation of VND45.7 billion (US$2.39 million) and VND53.6 billion ($2.8 million) respectively.
These are sums calculated by the Institute for Environment and Resources under direction from the Ministry of Natural Resources and Environment, and later approved by local governments.
At the time of the announcement, Vedan and authorities in the southern province Dong Nai hadn't reached an agreement on the compensation, but two days later, the company offered the province nearly VND119.6 billion ($6.26 million) as estimated by the institute.
Dong Nai's authorities have not commented on the offer thus far.
While authorities in other two localities committed their support to farmers, authorities in the most affected province, Dong Nai, were reticent about applying pressure on the company despite the prolonged damage it had willfully inflicted on the local environment.
The Dong Nai Farmers' Association had, at one stage, declined to back affected farmers in filing a lawsuit against the company on the grounds they would find it difficult to prove the extent of damage suffered in court.
Farmers willing to go ahead with the lawsuit were backed by lawyers from HCMC who felt they had every chance of winning the lawsuit, and later by local lawyers as ordered by Dong Nai's authorities.
Vedan Vietnam was caught in 2008 discharging untreated effluents directly into the Thi Vai River in Dong Nai Province through secret underground pipes. It had been doing this for 14 years, inflicting serious damage on the river system, fish farms as well as rice fields located on the banks of the river.
While it admitted its culpability, the company had balked at paying the compensation demanded by affected farmers in three localities. During the negotiations, it refused to accept the calculation of compensation with various arguments, despite repeated pleas by all the affected governments for a more reasonable settlement offer. On the farmer's side, the initial demand for compensation was whittled down many times.
It said it was not solely responsible for the pollution, that the calculations of damage were groundless, and that its own findings indicated much lower levels of damage.
However, Vedan has become "clearly aware" of its responsibilities to pay compensation to farmers affected by its polluting the Thi Vai River, Lai said at the press briefing.
The company has also realized that it is facing a high risk of being boycotted in Vietnam and that thousands of farmers were currently filing lawsuits against it, Lai said.
The Saigon Co.op and Big C supermarket chains announced last week that they had stopped selling Vedan products.
"Vedan's leaders want to end the case and don't want farmers to bring it to court," Lai said.
"We hope that Vedan Company will continue operating efficiently and for the long-term in Vietnam on condition that it properly compensates affected farmers for what it caused," he added.
In an interview with press agencies after the meeting, Vedan Vietnam General Director Yang Kun Hsiang said they will pay 50 percent of the compensation within one week of signing an agreement with authorities in HCMC and Ba RiaVung Tau, and the other 50 percent will be paid next January.
Hsiang made the same proposal in a written offer of compensation sent to Dong Nai People's Committee on Wednesday.
Hsiang said his company hadn't agreed to pay compensation as claimed at first because they needed time to verify the conclusions reached by the Institute for Environment and Resources.
Vedan had maintained earlier that the conclusions were illogical and made counter offers that were rejected as too low by farmers and authorities.
The company initially offered VND7 billion to Dong Nai, then raised it to VND15 billion and later to VND30 billion. The offer to Ba Ria-Vung Tau started as low as VND6 billion, and was later raised to VND10 billion, while HCMC was offered VND7 billion at first, and VND12 and VND16 billion later.
It's not over
However, Vedan's latest move doesn't necessarily mean that it will be freed from legal procedures.
Tran Van Cuong, vice director of Ba Ria-Vung Tau Department of Agriculture and Rural Development, said local authorities cannot say whether affected farmers will withdraw their lawsuit after Vedan's capitulation.
Nguyen Van Phung, chairman of HCMC Farmers' Association said that while waiting for compensation agreements to be signed, affected farmers in Can Gio District will continue with their lawsuits.
"Our viewpoint is that everything will only end after Vedan pays the compensation," he said. "I believe that when Vedan agrees to pay, Can Gio farmers will not want to file lawsuits."
Nguyen Duc, chairman of Dong Nai Bar Association, also said its lawyers will continue helping local farmers complete procedures to file lawsuits against Vedan.