VZCZCXRO9727
RR RUEHAST RUEHHM RUEHLN RUEHMA RUEHPB RUEHPOD RUEHTM
DE RUEHHI #1261/01 3180905
ZNR UUUUU ZZH
R 130905Z NOV 08
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC 8724
INFO RUEHHM/AMCONSUL HO CHI MINH 5290
RUEHBK/AMEMBASSY BANGKOK 6505
RUEHUL/AMEMBASSY SEOUL 3379
RUEHGP/AMEMBASSY SINGAPORE 2674
RUEHKO/AMEMBASSY TOKYO 5931
RUEHIN/AIT TAIPEI 1627
RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
RHMFIUU/HQ EPA WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEAWJA/DEPT OF JUSTICE WASHINGTON DC

UNCLAS SECTION 01 OF 04 HANOI 001261 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EAP/MLS, OES AND INL 
DEPT PASS USAID TO LAC/RSD, LAC/SAM, G/ENV, PPC/ENV 
JUSTICE FOR ENVIRONMENT AND NATURAL RESOURCES (JWEBB) 
EPA FOR INTERNATIONAL (MKASMAN) 
COMMERCE FOR ITA/MAC/HONG-PHONG PHO 
 
E.O. 12958: N/A 
TAGS: SENV TBIO ECON POL SOCI VM
SUBJECT: CRIMINAL INVESTIGATION OF WASTEWATER VIOLATIONS HIGHLIGHTS 
VIETNAM'S ENVIRONMENTAL CHALLENGES 
 
REF: HANOI 981 
 
HANOI 00001261  001.2 OF 004 
 
 
¶1. (U) Summary. The recent targeting of Vedan Vietnam, a 
Taiwanese-owned manufacturer of monosodium glutamate for illegal 
discharges of untreated wastewater into the Thi Vai River in 
southern Dong Nai province, highlights the growing scope of 
environmental degradation in Vietnam resulting from unchecked 
industrial growth.  However, the case may serve as a tipping point 
in the Vietnamese approach to environmental protection, as central 
and local authorities, prompted by vigorous public and media 
criticism, plan tough penalties for the company and plot a larger 
enforcement strategy.  However, the Vedan case also highlights the 
many challenges facing Vietnamese environmental enforcement, 
including lax punishments, unclear authority, constant demand for 
economic growth, and suspicions of financially-compensated collusion 
between members of local governments and industries to look the 
other way.  End Summary. 
 
Foreign-Owned MSG Manufacturer Caught 
Illegally Discharging Wastewater 
------------------------------------- 
 
¶2. (U) On September 15, 2008, the Ministry of Natural Resources and 
Environment (MONRE) announced that Vedan Vietnam, a Taiwanese-owned 
manufacturer of monosodium glutamate (MSG) had illegally discharged 
tens of thousands of meters of waste into the Thi Vai River in Dong 
Nai province every month for the past several years, saving the 
company tens of billions of dong (millions of dollars) by evading 
waste water processing limits.  Responding to ongoing complaints 
from locals, the Environmental Police Department (within the 
Ministry of Public Security) led an inter-agency team that 
apparently staked out the facility for three months to gather proof 
of alleged violations, eventually discovering that the company had 
secretly installed pipes to bypass waste-water treatment facilities 
and by which it pumped up to 5,000 cubic meters of effluent 
containing post-fermentation molasses waste and solid substances 
into the river daily.  MONRE eventually charged Vedan with failing 
to comply with hazardous waste management regulations, illegal 
discharges, failure to conduct an environmental impact assessment, 
and improperly increasing processing capacity. 
 
Environmental Agencies had Looked the Other Way 
--------------------------------------------- -- 
¶3. (U) Despite the eventual inter-agency response to reports of 
pollution from the Vedan facility, it appears that regulators failed 
for years to respond to growing complaints from residents in Dong 
Nai province.  In a recent press conference, MONRE Minister Pham 
Khoi Nguyen confirmed the serial nature of Vedan's violations, which 
polluted residential water supplies, while destroying the nearby 
shrimp farming industry.  Local scientists claimed to have reported 
the ill-effects from Vedan's pollution to provincial environmental 
authorities in 1997, to little avail.  Over the years, the Dong Nai 
Department of Environment and Natural Resources (DONRE) fined the 
plant over 20 million dong (approximately USD 1,250) for three 
breaches of pollution laws.  In 1995, fishermen living near the Thi 
Vai River sued Vedan for wiping out their livelihood.  Eventually, 
according to press reports, in 2005, Vedan paid 15 billion 
Vietnamese dong (approximately USD 930,000) to support aquaculture 
in Dong Nai and Vung Tau provinces. 
 
VEDAN Faces Severe Penalties . . . or Does It? 
--------------------------------------------- - 
 
¶4. (U) Though the Prime Minister and MONRE Minister threatened to 
throw the book at Vedan, punishment remains unclear.  Following the 
Prime Minister's decision to authorize the Vietnam Environmental 
Protection Fund to receive environmental fines and fees, MONRE 
asserted that Vedan must pay 127 billion dong (approximately USD 7.7 
million) in retroactive wastewater fees (roughly equal to the USD 
6,000 per day Vedan saved by not operating wastewater treatment) and 
asked the Dong Nai DONRE to suspend Vedan's operations until the 
company brought its operations up to standard.  MONRE also 
recommended that the central police consider criminal charges. 
However, enforcement plans quickly floundered as the Dong Nai DONRE 
asserted that prior MONRE actions precluded suspension and MONRE 
 
HANOI 00001261  002.2 OF 004 
 
 
backed down.  Additionally, MONRE officials believe that existing 
laws provide authority to criminally target a company, but only 
allow prosecution of individuals.  MONRE officials stated that they 
do not want to prosecute local plant officials, whom they 
characterized as "just staff." 
 
Full and Frank Media Coverage 
----------------------------- 
 
¶5. (U) An increasingly assertive Vietnamese media has blanketed the 
Vedan case, while also beginning to track similar incidents 
throughout the country.  While frequently quoting high-ranking GVN 
officials, who emphasize the government's resolute response to the 
pollution crisis, the press has not hesitated to closely question 
and criticize those officials about the response to the Vedan case, 
highlight alleged lack of prior enforcement, emphasize disputes 
between local and central authorities, and quote local residents 
condemning government responses.  Over the past few weeks, state 
controlled television and print media were openly critical of local 
environmental authorities, with a VTV report and several major 
dailies questioning "the role of local authorities who let [the 
illegal discharges to] happen right under their noses."  This 
follows a growing pattern of harder-hitting stories on the 
environment, in which the press has cited "deliberate flouting of 
environmental regulations" in favor of economic benefits.   Within 
the past month, Vietnamese media noted that "environmental pollution 
is set to assume monumental proportions" with 70 per cent of 
industrial zones in the country without water and solid waste 
management systems and 90 per cent of enterprises across the country 
discharging untreated waste directly into rivers and canals. 
 
Citizens Increasingly Outspoken 
------------------------------- 
 
¶6. (U) Local citizens, dissatisfied with the response to years of 
complaints to authorities, have become much more proactive.  Moving 
beyond graphic descriptions of the horrific impacts of industrial 
pollution to their neighborhoods, and criticism of the government 
response, some have taken to the courts.  On a recently televised 
question and answer session on VTV 6, young Vietnamese peppered the 
GVN panelists with questions about the failure to enforce 
environmental provisions.  (Note: At the same time, no indigenous 
NGOs focus on "brown" issues, instead concentrating on "green" 
issues like wildlife protection).  The Ho Chi Minh City Farmers 
Association recently announced that it would file suit against Vedan 
for damages caused by its illegal discharges.  Angry bloggers have 
joined the fray, questioning the competence and motivation of 
central and local environmental authorities and asking consumers to 
boycott polluters' products.  Local press in Saigon reported that 
consumers have stopped purchasing Vedan seasonings and many 
supermarkets have removed them from the shelves. 
 
Vedan not the Only Polluter on the Thi Vai River 
--------------------------------------------- --- 
 
¶7. (U) Despite enforcement hiccups, the Vedan case has aimed a 
spotlight at ongoing, massive pollution threatening waterways 
surrounding Vietnam's booming industrial zones (Ref Hanoi 981)  Like 
many rivers and canals throughout the country, the Thi Vai River 
suffered serious contamination from toxic waste discharges over the 
past several years.  MONRE officials stated that the river receives 
over 34,000 cubic meters of untreated wastewater from nearly 200 
facilities every day, along with substantial discharges from 
residential areas and cattle farms.  After complaints from local 
residents who claimed that contact with river water caused skin 
rashes, VEPA recently reported that a 10 kilometer section of the 
Thi Vai River was totally "dead" due to pollution from a nearby 
Industrial Park.  Local scientists predict the entire 40 kilometer 
river may suffer from severe pollution by 2010.  Worsening pollution 
has also caused losses to enterprises as Singaporean and Japanese 
cargo ships, which make up over one-third of total cargo capacity, 
refused to dock in June at Go Dau Port where the Thi Vai River meets 
the East Sea after several Japanese vessels reported that pollution 
(possibly from concentrated organic pollutants or heavy metal salts) 
removed paint and decreased hull thickness by eight millimeters 
 
HANOI 00001261  003.2 OF 004 
 
 
(about one third of an inch) over a five day period. 
 
Environmental Agencies Now Finding Pollution Everywhere 
--------------------------------------------- ---------- 
 
¶8. (U) Soon after the Vedan case erupted, the media reported on 
several other pollution incidents.  In mid-September, MONRE found 
another two other factories on Thi Vai river, the locally-owned My 
Xuan Paper Factory and Tien Dat Seafood Company, also improperly 
discharged wastewater directly into the river.  In mid-July, police 
in the south-central province of Khanh Hoa caught shipyard Hyundai 
Vinashin, a joint venture of Korea's Hyundai Group and the Vietnam 
Shipbuilding Industry Corporation, attempting to dump waste near a 
residential area.  In early October, the Dong Nai Environmental 
Police Department reported that it discovered the Civic Washing 
Company, a Vietnamese-Taiwanese joint venture at Bien Hoa 1 
Industrial Park bypassing the park's wastewater treatment plant to 
discharge directly into a local waterway. In Hanoi, local media 
reported that Miwon Vietnam, a South Korean owned condiments 
manufacturer, illegally pumped wastewater into the Red River. The 
company acknowledged it had exceeded legal limits but stated that it 
had voluntarily reported the discharges and had previously hired a 
government-affiliated contractor to build a wastewater treatment 
system - which did not work.  Following public criticism from the 
municipal legislature earlier in the month, in mid-October, the Ho 
Chi Minh City DONRE raided the Hao Duong leather company for 
releasing untreated carcinogenic effluents into the Dong Dien river 
beginning in 2005. 
 
GVN Officials Now Talking the Talk 
---------------------------------- 
 
¶9. (U) The recent outcry over pollution has caused some government 
officials to question policies centered almost exclusively on 
economic growth.  During the October  Vietnamese National Assembly 
sessions, many deputies highlighted the unsustainable burden placed 
on the environment from unchecked growth, criticized environmental 
officials for lack of responsiveness to public complaints, and 
stated that current punishments are insufficient to deter illegal 
behavior.  Eager to avoid blame, central officials, including MONRE 
Minister Pham Khoi Nguyen, publicly criticized local officials for 
looking the other way and discussed a possible investigation of 
their role in the Vedan scandal. On the GVN website in October, 
Prime Minster Dung told local authorities to ensure the 
compatibility of economic development and environmental protection 
(Note: In an ironic twist, in 2001, the Prime Minister awarded 
now-maligned Vedan Vietnam's first "Distinguished Tax Payer of the 
Year Award.")  Officials at the Vietnam Environmental Protection 
Agency (VEPA) stated that excessive focus on economic growth and a 
disregard for its environmental fallout was a main reason for the 
recent spate of pollution incidents.  Yet, at the same time, GVN 
officials remain under great pressure to ensure constant economic 
growth.  Soon after announcing a stronger MONRE enforcement program, 
Minister Nguyen noted to the press that he had received many calls 
from local officials asking him to lower environmental standards to 
attract foreign investors. 
 
Comment: But Will They Walk the Walk? 
------------------------------------- 
 
¶10. (SBU) Now comes the tricky part.  Claiming a commitment to 
environmental protection is not difficult.  Acting on that 
commitment is.  While Vietnamese officials are sensitive to 
increasing public dissatisfaction with environmental pollution, 
their top priority has long been economic growth.  To date, GVN and 
provincial officials have not been willing to sacrifice industrial 
development or foreign investment for environmental protection. 
Expected tough economic times may make it even more difficult to 
upgrade Vietnamese environmental enforcement.  And the ever-present 
role of corruption further weakens the commitment to mitigating 
pollution.  Nevertheless, public pressure continues to grow. 
Following the path of the Asian Tigers and China, as Vietnam becomes 
more affluent, its people will lobby for a better quality of life. 
The GVN needs to realize that failure to address these concerns will 
have economic, social, and national security consequences. 
 
HANOI 00001261  004.2 OF 004 
 
 
 
¶11. (U) This cable has been coordinated with Consulate General Ho 
Chi Minh City. 
 
MICHALAK