Vedan comes clean and pays farmers

According to the agreement documents signed on August 13 with lawyers and local authorities, Vedan will compensate the affected farmers of Ho Chi Minh City and Ba Ria-Vung Tau province $2.4 million and $2.8 million respectively.

The polluter was also committed to pay $6.3 million to affected farmers of Dong Nai province, but local authorities and farmers had not yet to sign the deal with Vedan as Ho Chi Minh City and Ba Ria Vung Tau did.

The compensation value was exactly the same amount asked by the localities’ farmers earlier.

Regarding the compensation payment, the polluter proposed to give half of the sum to local farmers within seven days after the signing date of the agreement documents, and it would transfer the remaining half no later than January 14, 2011.

It is the first time a foreign company operating in Vietnam have provided such a large chunk of compensation for environmental offences to prevent lawsuits from the local affected community.

The Taiwanese company, which came to Vietnam in 1991, was detected discharging waste water directly into the Thi Vai River two years ago, allegedly causing serious damage to agricultural production of thousands of farmers nearby.

Vedan Vietnam general director Yang Kun Hsiang said after the meeting with the localities’ authorities in Ho Chi Minh City last week that the payment would compensate the farmers for damages the company caused in southern provinces by polluting the Thi Vai River.

He said the compensation payment would also be made on the condition that no farmers from the region would pursue any lawsuits against them.

As of early August, more than 1,300 petitions against Vedan had been received, according to Dong Nai province’s farmer association. The province was the last locality to take legal proceedings against Vedan though it was the most affected by Vedan’s pollution.

Vedan had several times proposed inadequate compensation for affected families in the three localities, thus bringing strong objections from residents, local authorities, business community and state management agencies.

Earlier last week, major retailers in the southern hub such as Big C and Saigon Co.op started to boycott Vedan’s products. The retailers made the announcement saying that they had stopped buying and selling Vedan’s monosodium glutamate and dehydrated soup mixes.

More retailers such as Vinatex Mart are expected to follow the boycotting trend until the whole compensation deal is settled.