Friday, April 22, 2011

Significance of Construction Halt On Kuo Kuang Petrochemical Plant

Significance of Construction Halt On Kuo Kuang Petrochemical Plant
China Times editorial (Taipei, Taiwan, ROC)
A Translation
April 23, 2011

For the first time in decades, the central government has ordered construction halted on an investment project worth hundreds of billions of NT dollars, based on environmental protection, community aspirations, and other considerations. As important economic interests conflict with sustainable development, the government has forsaken short term advantage, in favor of sustainable development. We support and applaud President Ma's decisiveness. This decision may well mark a turning point in Taiwan's long-term development, from "development above all" to environmental protection and sustainable development. It represents the rise of a grass-roots movement on Taiwan, and a fresh beginning for social movements. After this, the government must be more careful about the negative impact on Taiwan's economy, industry, and business investment. It must attempt to turn deficits into assets.

Let us recall the decades long tug of war between economics and the environment. Without exception, both KMT and DPP administrations have backed the "development above all" policy one hundred percent. So-called environmental protection and sustainable development have long been mere window-dressing. Environmental groups ridiculed them as "mere lip service." Residents opposed to the Sixth Naphtha Cracking Plant in Ilan, Guanyin, and other locales, forced its relocation. But the central government never wavered. Eventually Yunlin was chosen. The DuPont, Bayer, and other investment projects died stillborn. The reason the central government withdrew its support was not environmental protection considerations. The reason was overwhelming public opposition. Manufacturers changed or canceled their plans. As for the Seventh Naphtha Cracking Plant, the company that developed it found itself in financial distress.

Both DPP and KMT administrations originally supported the Kuo Kuang Petrochemical Plant project. The Kuo Kuang Petrochemical Plant was a 600 billion NT investment. It would have created economic benefits, and led to direct and indirect job creation. But deficits invariably go hand in hand with assets. No matter how much technology may progress, the petrochemical industry remains a highly polluting, energy-hungry industry. Take the Sixth Naphtha Cracking Plant. The amount of water it consumes, and the amount of greenhouse gases it emits, make it the island's single largest source of pollution.

Kuo Kuang Petrochemical itself estimates the cost to society at around 219 billion NT. Other scholars estimate the cost at one trillion NT or more. Never mind which figure is closer to the facts. A trip to the Sixth Naphtha Cracking Plant in Yunlin will show how difficult it is for a large petrochemical plant to coexist with Mother Nature. For tiny Taiwan, the Kuo Kuang Petrochemical Plant is an intolerable burden. Moreover, Taiwan has certain unique resources and assets. Taiwan ought to abandon its smokestack industry mentality, and move towards more refined, higher value-added, higher density knowledge industries. This is the best way out for Taiwan's economy and industries.

The government understands the economic and Industrial trends, as well as public sentiment. At this crucial moment, it has seized the initiative and decided to withdraw its support for the Kuo Kuang Petrochemical Plant projet. For this it deserves credit. President Ma has announced that Changhua City, where the Kuo Kuang Petrochemical Plant was to be built, will become instead a wetlands park. This decision should be swiftly implemented.

We must also confront and accept the consequences of terminating the Kuo Kuang Petrochemical Plant, and the potential impact on Taiwan's industry and economic system. This involves two aspects. The first is the future of the petrochemical industry. Once the Kuo Kuang Petrochemical Plant project is terminated, the possibility of another another naphtha cracking plant or large-scale petrochemical zone on Taiwan near zilch. The future of the petrochemical industry, of upstream, midstream, and downstream companies, all require proper government planning. If the Kuo Kuang Petrochemical Plant is relocated to the Mainland or Southeast Asia, the government must provide assistance. It must obtain the best investment conditions. It must draw up regulations that enable it to connect and interact with industries on Taiwan. It should, as much as possible, minimize the negative impact of relocation.

The second aspect is the overall state of the economy and industry. This is a six to seven billion NT investment. The medium and long term impact on the economy and industry will surely be negative. But from another perspective, the land, capital, and human resources not invested in the Kuo Kuang Petrochemical Plant, may be transferred to other industries. The government's plans for the six emerging industries, or local industries developing on their own initiative, and eco-tourism, can all take advantage of the opportunity. How will these industries develop and fill the gap left by the departure of the Kuo Kuang Petrochemical Plant? That will require government planning and support.

Note also the growing power of long silent grass roots social groups. The Kuo Kuang Petrochemical Plant controversy allowed them to regroup. They now show signs of reawakening. The DPP once supported these social groups. During the era of Democratic Progressive Party rule however, they fell silent and scattered with the winds. They collapsed and lost power. But the Kuo Kuang Petrochemical Plant controversy has given them a new lease on life. They no longer march in lockstep with political parties. They go their own way. Political parties may crowd each other out. But they will no longer be able to view these groups as their auxiliaries. Instead, they will have to cope with these new and independent power centers. The ruling and opposition parties must realize this, and how they must interact with them.

2011-04-23 中國時報









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