Vedan lawsuit warning for other foreign firms investors.

Vietnam’s once pristine environment has been soiled by many foreign operators

It is the first time a foreign company operating in Vietnam has been sued for environmental pollution.

Seasoning producer Vedan Enterprise Corp Ltd (Vedan), which has been present in Vietnam since 1991, was detected discharging waste water directly into the Thi Vai River two years ago, allegedly causing serious damage to local agricultural production.

If farmers in Ho Chi Minh City, Dong Nai and Ba Ria-Vung Tau provinces win their cases, Vedan will have to pay $11.5 million.

Cao Ba Khoat, general director at investment consultant K&Partners Law Firm, said the lawsuit would send a strong warning to foreign companies disregarding Vietnam’s environmental laws.

“This is an unprecedented case. I believe foreign investors are eyeing the lawsuit and will see it as a lesson,” said Khoat.

Vedan is not the only foreign investor detected polluting the environment in Vietnam. Several other foreign-invested companies like Miwon in northern Phu Tho province and Tung Kwuang in northern Hai Duong province were also found to be discharging waste water directly into rivers.

“The lawsuit against Vedan will encourage people in other regions to implement similar actions once their living environment is polluted by foreign companies’ manufacturing operations,” Khoat said.

Vedan late last month said it would raise its “financial support” to affected farmers to $6.8 million from the previously proposed $1.3 million.

Farmers in affected localities have reportedly not accepted Vedan’s proposal.

Minister of Natural Resources and Environment Pham Khoi Nguyen said the farmers would probably win their cases, adding that Vedan must compensate farmers as required.

Khoat said he was confident farmers would win the lawsuit.

A Ministry of Planning and Investment’s Foreign Investment Agency report showed that many foreign investors are polluting Vietnam’s environment.

Despite having to pledge their investment projects would not cause harmful impacts to the local environment before being able to win an investment certificate in Vietnam, many foreign invested enterprises reportedly ignore such obligations once the projects come into operation.

“That explains why foreign investors like Vedan and Tung Kwuang can seriously pollute the environment for a long time,” said Nguyen Mai, former vice chairman of the State Committee for Cooperation and Investment and chairman of Vietnam’s Association of Foreign Invested Enterprises.

Bui Quang Tuan, vice head of Vietnam Economic Institute - who recently completed research into the impacts of foreign direct investment on Vietnam’s economy, said the Vedan lawsuit would contribute to raising foreign investors’ responsibility for environment protection in Vietnam.

“Foreign investors will see that they can face similar lawsuit if their investment projects pollute this country,” said Tuan.

September 12 is the effective deadline for farmers to file a lawsuit to Vedan.