Environment issue poses challenge for government
The call by Taichung County mayor-elect Liao Yung-lai for a referendum on German-based multinational Bayer Co's plans to build a multi-billion US dollar chemical plant poses problems for the Taiwan central government, Bayer and other foreign investors, and the mayor's Democratic Progressive Party (DPP).
Bayer Taiwan Co chairman Horst Muck said his firm's plan to build the NT$10 billion (about HK$2.41 billion) chemical plant in central Taiwan had passed most requirements, including approval of its environmental impact assessment (EIA) by the Environmental Protection Administration (EPA), and should begin construction early next year.
Bayer's assurances that the plant would not be highly polluting and would meet EPA standards have not calmed a vocal movement opposing the plant.
A DPP internal poll in September showed 48 per cent opposed, compared with just 23 per cent in favour.
Mr Liao, a former environmentalist who won the mayoralty with 38 per cent of the votes, promised a referendum on the plant's future.
Although lacking a legal basis, a referendum could complicate Bayer's operations by justifying delays in local licences.
As Mr Liao does not take office until December 20, efforts at further dialogue called for by leaders, including DPP chairman Hsu Hsin-liang, are more likely than confrontation, but the incident has sparked worries among foreign firms that it could set a precedent.
Such fears are probably exaggerated, but the case does reveal the need for all parties to adjust to the new realities of doing business in democratic Taiwan.
The most pressing need for adjustments is clearly at the central government level. The long-term lack of public trust in the official commitment to enforce environmental standards and in Taiwan industry's willingness to abide by them remain key factors in the persistence of anxieties.
Ironically, the Bayer investment was among the first big projects to be screened under the belated EIA law.
The EPA has moved to improve transparency and consistency, but is still limited by its lack of a clear mandate and manpower to monitor enforcement of national environmental standards.
The Bayer case raises the question of how differences in local and central government standards can be mediated.
Feng Teh-yu, government liaison for the European Council of Commerce and Trade, said central and local government regulations frequently differed, but 'effective channels to resolve such differences do not yet exist'.
A welcome sign that industry is taking its social and environmental responsibilities more seriously is the voluntary 'Responsible Care' initiative, under way for the past year.
Part of a global initiative begun 10 years ago, the programme is unmatched in that it has brought multinational and Taiwan firms together to co-operate.
No less of a challenge is faced by the DPP, which must live up to its new status by offering positions on industrial, energy and environmental policies that need not be 'pro-business' or 'soft', but must be clear and consistent.
