Pollution ruling against Texas unit not final: Formosa Plastics | Economics | FOCUS TAIWAN


Taipei, July 8 (CNA) A ruling finding that Formosa Plastics Corp.’s subsidiary in the U.S. state of Texas violated the Clean Water Act, which could result in a fine of up to US$162 million, is not yet final, the company said Monday.

Formosa Plastics, the flagship entity of the Taiwan-based conglomerate Formosa Plastics Group, gave the update on the case in a filing with the Taiwan Stock Exchange, but said it would not make any other comment because the case is still ongoing.

The Texas Tribune reported on June 28 that U.S. District Judge Kenneth M. Hoyt found Formosa Plastics in “enormous” violation of state-issued permits and the federal Clean Water Act for discharging more plastic pellets into bays and creeks than the amount it was allowed to release from its plant in Point Comfort.

The judge sided with Texas’s environmental groups and residents in the Port Lavaca area who have charged for a decade that Formosa Plastics was polluting the Lavaca Bay and nearby waterways.

They have demanded that the state and federal supervisory authorities punish the company, but the Texas Commission on Environmental Quality (TCEQ) had been either unwilling or unable to bring the company into compliance, according to the report.

The environmental groups and the residents in the area filed a petition in July 2017 against Formosa Plastics and the judge started to hear the case at the end of March 2019.

In the ruling handed down on June 25, Judge Hoyt said: “The evidence demonstrates that Formosa has been in violation of its Permit concerning the discharge of floating solids … since January 31, 2016 and that the violations are enormous,” according to the report.

The judge said Formosa Plastics violated the law for about 1,150 days. “The evidence shows that Formosa has never reported a single discharge of floating solids to TCEQ,” he said, according to the report.

The plaintiffs have been seeking US$162 million in fines, which represents US$104,828 for every day Formosa Plastics was out of compliance with state and federal environmental permits and laws that require companies to report such violations.

The judge said Formosa Plastics argued that it had already been fined US$121,875 by the TCEQ for six violations in April and May 2017, which made the lawsuit moot, according to the report.

Though facing the lawsuit, Formosa Plastics said it remained upbeat about its Texas unit’s earnings this year, expecting its pretax profit to surpass last year’s US$1 billion in profit since the corporate income tax in the U.S. has been cut to 20 percent from 35 percent.

In addition, Formosa Plastics said an expansion of its Texas subsidiary is currently underway, which is expected to further boost its sales and earnings.

(By Wei Shu and Frances Huang)
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