Business

Opposition to Taiwanese chemical plant grows

Shallow pools of water glisten softly as egrets fly overhead in Taiwan's largest wetland. The low tide exposes oyster shells strung up in neat rows.

Hsieh Shu, a fourth-generation oyster farmer, tends to them.

"My parents, grandparents and great grandparents were all oyster farmers, and now my kids also work in this field.

"We've been doing this for more than 100 years," Hsieh said.

This area in western Taiwan's Changhua County will look and function very differently if Taiwan's government allows state-owned oil refiner CPC Corporation to build a $20bn petrochemical plant here.

Plans for the 2,000-hectare plant include a 300,000 barrel-a-day refinery, factories that produce 25 types of chemical products, and a plant that will significantly boost Taiwan's capacity to produce ethylene.

Ethylene is a lucrative and much sought-after petrochemical product used in construction materials, textiles and plastic and film products.

First proposed in 2006, with the current site selected in 2008, the Kuokuang project has been stalled for four years because of objections from farmers, local residents and environmentalists.

It has seen the strongest public opposition to an industrial project in Taiwan in years.

Objections have intensified recently as stakeholders step up efforts to win government approval.

Ecosystem fears

Opponents say it will harm the precious eco-system, and pollute the air and water in an area that provides much of the country's fish and farm products.

Environmentalists say the oil tankers and pollution will also damage the habitat of the already endangered Taiwanese white dolphins, which live in the waters off the wetland and number only about 100.

Image caption The Dacheng wetland area is already home to numerous factories

The project could also affect the health of local residents and wipe out traditional farming industries, critics argue.

"If Kuokuang is built, we'll be unemployed and even our kids won't have jobs, so I'm definitely against it," Hsieh Shu said.

However, backers of the project say it is needed to prevent a monopoly by Taiwan's other oil refiner, the private Formosa Petrochemical Corporation, which currently has a much bigger production capacity than CPC.

At least 7,000 jobs will be created, they say.

Competitiveness

More importantly, according to the project's backers, it will boost Taiwan's competitiveness in the key petrochemical industry, avoid a reliance on imports and help Taiwan's economy through exports.

"We can't just shut our doors and look within," said Su-chen Chen, a spokeswoman for Kuokuang Petrochemical Technology.

"In Asia, other countries including South Korea, Japan and Singapore are all developing their petrochemical industries and their production capacities are either greater than ours or will be greater," she said.

The company was set up by the investors which, besides CPC Corporation, include several Taiwanese petrochemical companies and major firms.

There is much at stake, according to the company and pro-industry, pro-development advocates.

The Asia-Pacific region consumes more than a third of worldwide demand for ethylene and produces about that much.

Although Taiwan is one of Asia's main petrochemical production bases, its annual ethylene capacity is below that of both Japan and South Korea.

This year even its smaller neighbour Singapore will surpass it when it raises production to 4.6 million tons, according to government statistics.

"Many countries are moving toward this trend of increasing their ethylene production capacity," Su-chen Chen said.

The new plant will boost Taiwan's ethylene production capacity by 22% to 5.4 million tonnes a year.

Image caption Opponents to the chemical plant fear it will damage livelihoods and the environment

Taiwan's Chinese neighbour is a huge consumer of ethylene and Taiwan could benefit from this if it boosts its own production.

"Taiwan is a small island. We cannot survive without exports," Su-chen Chen said.

"And as Taiwan's economy develops, its ethylene demands will rise."

She added that it was currently not cost-effective to develop alternative sources,

"Green energy is not practical," she says.

"Its costs are very high and it's not translating into economic benefits yet. Oil is still cheapest."

To get the green light, the company has reduced the scale of the project and offered to use cleaner natural gas to power the plant.

Growth v environment

But residents and environmentalists say the project will still cause irreparable and costly damage to the environment and people.

They fear the company will expand and renege on its damage-control promises once the plant is built.

Several protests have been held by farmers and environmentalists.

There is a growing conflict in Taiwan between those who believe that economic development is of supreme importance and those who question the health and environmental consequences of such economic development.

Image caption Local resident Hsu Li-yi is worried about the plant's impact on her children's health

The government has requested an environmental impact assessment and conducted several meetings with the company, but has not yet reached a decision.

Since coming to office in 2008, President Ma Ying-jeou has voiced support for sustainable development - ordering bikeways to be built, encouraging electric car production and stressing green energy as a key sector to develop.

However, it is unclear whether he would reject Taiwan's decades-long practice of putting economic development ahead of environmental protection.

Wetlands are believed to be the most diverse of all ecosystems - rich in plant and animal life.

Around the Dacheng Wetland area, the tens of thousands of people who depend on it for a living or who live nearby say they can survive on their current jobs and do not need more development in an area already known as Taiwan's industrialised western corridor.

"I can barely stand the rotten smell from a factory near my home," said Hsu Li-yi, a mother of a small child.

"I'm already worried about my daughter's health. We don't need another industrial plant, we have got enough."

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