The importance of the petrochemical industry to Taiwan’s economy
instantly involved national officials of the ruling party in the incident, but they
did not mandate the immediate modification of water and sewage treatment
facilities. Instead, companies were required to compensate villagers for lost
income, in the amount of NT$250 million,^39 and to modify plants within a year.
Yet the compensation settlement was considered a victory at an early stage in
the development of Taiwan’s environmental movement.
It is interesting that since this incident, CAPCO has taken environmental
protection quite seriously. Using BP as a standard, it promoted total quality
control, re-engineering its operations to improve safety and lower resource
consumption in order to reduce pollution. It formed a pollution prevention
team responsible for research, coordination, and tracking of all operations
related to environmental protection. In 1999, CAPCO published the first
annual report on safety in Taiwan’s petrochemical industry. These efforts won
a series of plaudits and awards from the Taiwan government, including the
first-ever award for reductions in voltaic organic compounds. The company
routinely contributes to disaster relief, assists with greening of school
campuses, and donates to other local educational and cultural activities.^40
The Bayer Case
The petrochemical industry of Taiwan has played a major role in the country’s
development. Despite the need to import most needed raw materials, the indus-
try has prospered because of cooperation among upstream and downstream
producers, and strong downstream processing capacity. In 1986, the govern-
ment decided to allow the private sector to integrate upstream into ethylene
production, as a means to both retain and attract petrochemical investment.
When Taiwan manufacturers began to step up their offshore investment,
there was serious concern that the trend could lead to a hollowing-out of the
Taiwan economy. Those fears heightened when medium and large companies
began to shift production facilities to China’s Fujian province, across the
Taiwan Strait, in the late 1980s and early 1990s. A new generation of
industries emerged to usher Taiwan into its next phase of economic
development. The focus was on industries that produced advanced materials,
high-quality textiles, transportation equipment, and petrochemicals. The
government promised to provide necessary assistance if these companies
faced difficulties in acquiring land or recruiting workers.^41
Bayer AG, a German multinational chemical and pharmaceutical giant,
proposed to build a US$1.8 billion plant on reclaimed land in the western port
city of Taichung, in central Taiwan. The plant would manufacture toluene di-
isocyanate (TDI), a substance used in the manufacturing of coatings and rigid
foams for upstream products such as plastic used in the aerospace industry and
Business organizations and biodiversity conservation 145