Stink of crime hangs over Vietnam chemical plant

LAO CAI, Vietnam – Grey and white smoke round the clock, dust-covered trees and non-stop noise: Residents living next to Vietnam’s biggest chemical production complex co-exist with toxic fumes from the factories.

“It smells stinky, pungent, rotten,” said 64-year-old Nguyen, who lives in a one-storey concrete house 3km from the Tang Loong industrial park in remote Lao Cai province. She asked to be identified by one name due to security concerns.

“Even if we close the doors, the smell is still in the air,” she told AFP.

Among the largest of several firms at the industrial park is Duc Giang Chemicals Group (DGC), whose giant facilities produce yellow phosphorus and phosphoric acid.

It describes itself as one of the world’s largest exporters of yellow phosphorus – used in producing fertilisers, flame retardants and phosphoric acid – with an annual capacity of nearly 70,000 tonnes.

The police in March announced the arrest of DGC chairman Dao Huu Huyen – one of the country’s richest men – alongside his son, who was once the firm’s chief executive, and five other company officers.

They were accused of “illegal dumping of millions of tonnes of waste across an area spanning tens of hectares” and illegally extracting hundreds of thousands of tonnes of phosphate ore, as well as tax offences.

The alleged crimes took place over an extended period and sparked “public outrage”, police said.

It is an unusually high corporate fall. DGC is a member of the VN-30 stock index and had a market capitalisation of around US$1 billion (S$1.29 billion) before the arrests came to light.

Originally a state-owned company, it was partly privatised more than 20 years ago.

“There normally is a political reason why certain big domestic companies or company executives are targeted in Vietnam’s political economy,” said Mr Miguel Chanco, an economist focused on Asia at Pantheon Macroeconomics.

But the DGC bosses’ arrests “may eventually be framed as just another case of high-level corruption”, he added.

The one-party state has in recent years pursued a sprawling, high-profile anti-corruption campaign, which has netted dozens of business leaders and senior government figures.

The sweeping drive – accelerated by top leader To Lam, who became communist party chief in 2024 – has removed many of his opponents, according to analysts, leaving him as Vietnam’s most dominant leader in decades.

Dr Andrew Wells-Dang, a South-east Asia expert at Washington-based Stimson Center, said the authorities would have investigated the case extensively before acting.

The accusations against DGC were “probably not different from what many mining companies do, just on a larger and more blatant scale”, he added.

“If anything, what the arrests show is a negative: The Duc Giang leaders apparently do not have the level of political connections to be able to avoid this outcome.”

‘Nowhere to go’

Vietnam is a manufacturing hub – phosphoric acid is used in making semiconductors and electric vehicle batteries – and one of Asia’s fastest-growing economies. Tang Loong illustrates the trade-off in many developing countries between growth and the environment.

Government schemes drove agricultural and then industrial development in the poor, mountainous province in the 1970s. Over the years, concrete roads have replaced grass-covered paths, while neighbourhoods feature newly built villas and private cars.

“My parents were among the first ones to settle down here,” said one woman living nearby. “They were poor and had to work so hard on the hills to make ends meet.”

Now young people can earn at least 10 million dong (S$489) a month at the factories – considered a reasonable wage outside Vietnam’s major cities.

“My kids all work in the industrial zone,” the woman said outside her modern two-storey house. “None of my children and grandchildren have health problems.”

Madam Nguyen said she had become used to the smoke and noise. “We want a better life, less polluted of course, but we have to accept the way it is. We have nowhere else to go.” AFP