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In recent years, the flow of FDI has become even
more important than international trade as the rate of
growth of manufacturing investments has outpaced
that of international trade flow of merchandise. As a
result, many countries are resorting to intense
promotional strategies to attract FDI.
Trends Of FDI
It is possible that the economic gains associated with
an increase in FDI could be negated by potential
environmental costs as FDI may occur simultaneously
with increased environmental issues.
FDI vs Environment
1% in increase
Lead to 0.04%
increase in
FDI vs Environment
Firstly, developing countries
may relax environmental
standards for foreign firms,
thus encouraging firms in
developed countries to move
their pollution-intensive
Second reason is race-to-thebottom hypothesis which
argues that increased gains
from globalization are achieved
at the expense of the
Case study
Although FDI is the great investment and bring
many benefits for the country but still exist some
errors that could significantly affect to the
Miwon and the discharge
of untreated
wastewater and
emissions into the
Company name: Miwon Vietnam Co., Ltd
Address: Phu Tho Province
Sector: Manufacturer & Trading Company
Home country: South Korea
MIWON Vietnam Co., Ltd with the brand name Miwon Vietnam - Giving you the
real natural spice products. Throughout the history, MIWON has brought
sweet, rich and perfect spice to the kitchen of many families and now
became an indispensable companion of every meal.
In 2008, 2009 in Phu Tho province, there were many cases of environmental
violations. Typically, the violation at Miwon Vietnam Co., Ltd. with the
discharge of untreated wastewater and emissions into the environment,
polluting the surrounding area.
Due to the increasing capacity of the factory, the wastewater treatment
system could not handle all the resulting waste. Typically, in 2007, an
overloaded sewage pipeline broke, causing the entire residential area to
"flood" in pollution. From the banks of the Red River to the residential area,
everyone is surrounded by a thick, suffocating smell to the chest. The smell
of uncleanness, chemicals ... makes the trees in this area "burn" and dry
their leaves.
Mei Sheng and
environmental scandal
Company name: Mei Sheng textiles Vietnam company LTD
Address: Ba Ria-Vung Tau Province
Sector: Spinning of textile fibers
Home country: Taiwan
The company has a total of 2,000 employees with registered capital of 544
billion VND.
On May 10th, 2016, the authorities of Ba Ria - Vung Tau province sealed all 28
clusters of dyeing machines. The sealing period is 3 months for this company
to take remedial measures for violations. Notably, this is the 7th sealing
for this company.
Specifically, Ba Ria - Vung Tau province did not license the company's dyeing
products, but this company was still arbitrarily built and put into
operation with a capacity of nearly 1,100 tons/year.
In addition, during the operation, the company did not prepare an
environmental protection project to submit to the competent authority;
failing to comply with the regulations on reporting and monitoring the
environment; failing to arrange boiler emission monitoring points to serve
emission control; the report form and the time of reporting to the
hazardous waste source owner are not in accordance with regulations.
Vedan responsible for
77% of Thi Vai River
Company name: Vedan VietNam Enterprise Co., Ltd
Address: Dong Nai Province
Sector: packaged food production
Home country: Taiwan
The company has a total of 2,000 employees with registered capital of 544
billion VND
In 2008, Vedan was caught discharging untreated wastewater into the Thi Vai
River. The company polluted the river for 14 years with up to 105.6 million
liters of untreated wastewater per month. The toxic water killed farmers'
fish and shrimp and ruined farmland along the river banks.
The company paid the fine and the fees of nearly 128 billions VND and closed
down four of its factories. However, the compensation due to farmers who'd
suffered severe losses because of the company's environmental violation
that destroyed crops and farmland while poisoning fish and shrimp in nine
communes at HCMC, Ba Ria - Vung Tau Province, and Dong Nai Province. was yet
to be decided.
2016 Vietnam marine life
Company name: Formosa Ha Tinh Steel
Address: Ha Tinh
Sector: steel plant
Home country: Taiwan
In 2016, fish carcasses were reported to have washed up on the beaches of Hà Tĩnh
province and later, a large number of dead fish were found on the coast of Hà Tĩnh
and three other provinces. After denying responsibility for months, Formosa
accepted responsibility for the fish deaths. The company discharged toxic industrial
waste illegally into the ocean through drainage pipes.
The disaster disrupted the livelihood of fishermen in four provinces in the central
coast of Vietnam. Approximately 80 tonnes of fish carcasses had been washed up to
the shores of four central provinces of Vietnam from Hà Tĩnh to Thừa Thiên–Huế.
The massive marine life destruction led to a number of protests by Vietnamese
citizens in some cities, calling for a cleaner environment and demanding
transparency in the investigation process. This was the most serious environmental
disaster Vietnam has ever faced.
State management
agencies need to
notify enterprises fully
and promptly
amendments and
supplements in legal
Establish new
favorable policies to
attract more high-tech
FDI projects.
Improve policies and
regulations on
protection in a clearer
and more stable
Increase the
level of
penalties for
Build an official information
system to help FDI enterprises
update information on policies
and requirements from the
Before issuing business
licenses, businesses are
compulsory to build waste
treatment facilities
There should be appropriate
coordination between
environmental management
office to avoid overlap in
monitoring and supervision of
the work
Train and improve the
qualifications of
environmental officers
in enterprises.
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