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Home › Dodgy Deals ›
Dodgy Deal
Formosa Plastics' "Sunshine Project"United States

Project – Active

This profile is actively maintained
Lead organisations:
RISE St. James & Stop Formosa Plastics coalition
Work partners:
Friends of the Earth US
Contact:

Maaike Beenes, BankTrack

Last update: 2022-09-16 00:00:00
March against Death Alley, October 2019. Photo: Louisiana Bucket Brigade and the Center for Biological Diversity

Project – Active

This profile is actively maintained
Lead organisations:
RISE St. James & Stop Formosa Plastics coalition
Work partners:
Friends of the Earth US
Contact:

Maaike Beenes, BankTrack

Last update: 2022-09-16 00:00:00
Why this profile?

Why this profile?

The Sunshine Project, located in Louisiana’s “Cancer Alley”, is a textbook case of environmental racism, releasing many more carcinogens into a predominantly African-American community already inundated with health problems caused by industrial pollution. It would also be a major greenhouse gas emitter, as well as exacerbating the global plastic pollution crisis.

What must happen

Banks and asset managers should publicly commit to no direct or indirect financing of the Sunshine Project.

Also, given Formosa Plastics’ track record of being a “serial environmental offender", banks and asset managers should divest from Formosa Plastics Corporation and Formosa Petrochemical Corporation; sell and refrain from underwriting or buying bonds issued by Formosa Plastics Group and its subsidiaries and affiliates; and cease all underwriting or asset management activities for Formosa Plastics equities and debt.

About
Take Action!
Send a message to JPMorgan Chase to demand they defund Formosa Plastics
Sectors Chemical Manufacturing
Location
Status
Planning
Design
Agreement
Construction
Operation
Closure
Decommission
Website http://www.sunshineprojectla.com/

The Sunshine Project is a proposed petrochemicals complex on a 2,400-acre site in St. James Parish, Louisiana. It will use ethane, a byproduct of fracking, as the feedstock for the production of various plastics (polyethylene, polypropylene, polymer and ethylene glycol). The project is operated by Formosa Group LA (FG LA LLC), a US subsidiary of Formosa Plastics Group, a Taiwanese conglomerate.

The Sunshine Project will be located within an 85-mile stretch of the Mississippi River between New Orleans and Baton Rouge that is widely known as Cancer Alley due to the number of petrochemical facilities that populate the area. The region is predominantly inhabited by historic Black neighbourhoods, including St. James Parish. In the 10-mile radius around St. James alone, there are twelve toxic petrochemical facilities.

UN human rights experts specifically cited concerns over the Sunshine Project when they stated that the further industrialization of Cancer Alley amounts to a form of “environmental racism". There is significant local community and civil society resistance to the project.

Impacts

Social and human rights impacts

Public health in Cancer Alley: a textbook case of environmental racism Formosa Plastics’ Sunshine Project is a textbook case of environmental racism. The petrochemicals complex poses a grave threat to the health and safety of residents in St James Parish and other local communities. There are already twelve toxic petrochemical facilities within a 10-mile radius of the planned Formosa project, which forms part of an 85-mile stretch of the Mississippi River, predominantly inhabited by historic Black neighbourhoods, that is widely known as “Cancer Alley”. The complex will be built directly adjacent to a residential area of the 5th District and one mile from an elementary school that serves an almost entirely Black student population.

According to data from the U.S. EPA’s Risk-Screening Environmental Indicators (RSEI) database, the cancer hazard of facilities in St. James Parish has increased by nearly 800% over the last decade (2007 – 2018). In March 2021 United Nations human rights experts raised serious concerns over further industrialization of Cancer Alley and called for an end to environmental racism in the 85 mile area, specifically citing concern over Formosa Plastics’ proposed petrochemical complex. The experts found that the industrialization of the lower Missippippi has polluted the land and water and subjected primarily African American residents to adverse health effects: "This form of environmental racism poses serious and disproportionate threats to the enjoyment of several human rights of its largely African American residents, including the right to equality and non-discrimination, the right to life, the right to health, right to an adequate standard of living and cultural rights”.

Building on top of gravesites of formerly enslaved ancestors In 2019, an independent cartographic analysis showed that on the site where Formosa Plastics plans to build its facility, multiple cemetaries of former plantations were located. This means the plant would be built on top of the burial sites of enslaved ancestors of the local community. What’s worse, Formosa Plastics knew about the grave sites while seeking land use approval from the St. James Parish Council, but chose to withhold this crucial information from state and municipal decision makers and the local community. Formosa Plastics’ proposed chemical complex not only poses further severe health problems for the community, but threatens to destroy newly discovered spiritual links to its ancestral history.

The March 2021 letter from UN Human Rights experts also made this important connection of a long history of anti-Black racism in the United States: “The African American descendants of the enslaved people who once worked the land are today the primary victims of deadly environmental pollution that these petrochemical plants in their neighbourhoods have caused," they said. "We call on the United States and St. James Parish to recognise and pay reparations for the centuries of harm to Afro-descendants rooted in slavery and colonialism.”


Environmental and climate impacts

Accelerating climate catastrophe Each year, the Sunshine Project would be permitted to emit 86,000 kilograms of benzene, 1,3-butadiene, acetaldehyde, formaldehyde, and ethylene oxide – all known carcinogens – into a community already inundated with health problems caused by industrial pollution.

The complex would emit 13.6 million tons of CO2e (greenhouse gases) per year, equivalent to the annual emissions of three coal-fired power plants. In combination with existing facilities, UN experts found that this would mean the annual greenhouse gas emissions of St. James Parish could exceed those of 113 countries.

Among other things, the complex would produce plastic resins and petrochemicals for single use plastics like shopping bags and plastic cups, contributing to the global plastics waste problem. Formosa Plastics Corporation already is among the 20 leading companies that together generate more than half the world’s polymer production destined for single-use plastic waste, together with among others Dow, ExxonMobil and Sinopec.

Built in a vulnerable floodplain Hurricane Katrina was a monumental environmental disaster that is quickly becoming a marker of what is understood to be the new normal for the local Gulf Coast’s notoriously destructive hurricane season. The rising intensity of seasonal storms poses elevated risks to Formosa Plastics’ proposed project site, which is located in a natural floodplain. Forty percent of St. James Parish is classified as ‘wetlands’, made up of marshes and swamps. Major flooding in St. James in 2016 caused significant damage; throughout Louisiana, 40,000 homes were destroyed and 13 people died. Siting massive toxic petrochemical facilities in the area poses enormous public health and environmental risk. Recent storm-induced industrial disasters affirm the gravity of these risks, such as the 2017 Arkema explosions near Houston during Hurricane Harvey.

This super-polluting project does not belong in a climate-safe world and certainly not in Louisiana where accelerating coastal erosion (Louisiana has lost approximately 25% of its land mass from 1932-2016), sea level rise, and strengthening hurricanes are already creating some of the United States’ first climate refugees.


Other impacts

The Sunshine Project is not an isolated case. Formosa is a “serial offender” in violating environmental regulations, as well as putting workers and communities in danger. In the company’s 65 year history, Formosa Plastics has totalled over US$ 650 million in fines and penalties across nearly a dozen sites worldwide. In 2016, a Formosa subsidiary was responsible for the worst environmental disaster in the history of Vietnam.

Formosa Plastics’ track record in Texas, where it operates a similar facility to the Sunshine Project, is also a cause for alarm. In June 2019, a federal judge found that Formosa had committed “enormous” violations of the Clean Water Act, having dumped plastics pellets and powder into Lavaca Bay every day for years, for which it had to pay a record US$ 50 million settlement.

Formosa’s record of environmental and rights violations means it can’t be trusted, as some financiers have begun to recognize. In August 2020, Norway’s Sovereign Wealth Fund announced exclusions for two Formosa Plastics subsidiaries, citing an “unacceptable risk for violation of human rights". Also in August 2020, Storebrand Asset Management added two Formosa Plastic subsidiaries to its exclusion list as part of its broader effort to divest from companies contributing to the climate crisis.

Financiers

Although originally projected at US$ 9.4 billion, coronavirus pandemic-related delays and rising prices for construction materials are leading to significantly higher costs. A December 2020 estimate by Taiwan Ratings put costs at US$ 12 billion.

On March 9, 2020 filings with the Taiwan Stock Exchange, FG LA LLC majority shareholder Formosa Petrochemical Corporation reported that total equity investment in FG LA LLC (with FPC owning 100% of shares) amounted to US$ 413 million. Considering the lengthy timeline of the company's estimated US$ 9.4 billion Sunshine Project, this equity may be enough project financing for the time being, precluding the need for any direct loans to FG LA LLC.

Below financiers have provided loans or underwritten bond issuances to FG LA's parent companies. The biggest financiers are a number of Taiwanese financial groups: Yuanta Financial, Fubon Financial, Mega Financial, Taiwan Financial Holding and CTBC Financial.
Institution type
Finance type
Year
Companies

The project is operated by Formosa Group LA LLC (FG LA LLC). FG LA is a full subsidiary of FG Inc., registered in Delaware. FG Inc. is owned by the following Formosa Plastics Group companies:

  • Formosa Petrochemical Corporation (57%);
  • Formosa Chemical & Fibre Corporation (30%);
  • Nan Ya Plastics Corporation (10%);
  • Formosa Taffeta (3%).

Formosa Plastics Group is a conglomerate in which each constituent entity owns a significant stake in multiple other group companies, in a circular ownership structure. Taiwanese Formosa Plastics Corporation is part of the Formosa Plastics Group, but does not have a direct stake in FG LA LLC. It does, however, hold an indirect minority stake through other group companies.

Project sponsor

Formosa Group LA LLC

United States
Website
No companies
News
BankTrack
Partners
Blog
External
BankTrack news BankTrack blog Partner news Partner blog

Judge cancels permits for Formosa plastics plant, citing health risks

2022-09-15 | Plastics News
BankTrack news BankTrack blog Partner news Partner blog

EPA probes environmental justice in Louisiana projects

2022-04-09 | Associated Press
BankTrack news BankTrack blog Partner news Partner blog

IEEFA U.S.: Problems have mounted over last year for proposed Formosa petrochemical plant

Project Sunshine obstacles increase likelihood that Formosa will decide against Louisiana plant
2022-03-24 | IEEFA
Blog
BankTrack news BankTrack blog Partner news Partner blog

New report on Formosa Plastics Group reveals danger of plastics production

From Taiwan to Texas, Cambodia to Cancer Alley; petrochemical giant poses threat to communities and the environment
2021-10-07 | Washington DC | Center for International Environmental Law (CIEL)
BankTrack news BankTrack blog Partner news Partner blog

Government suspends permit for controversial Louisiana plastics plant

2021-08-19 | The Hill
BankTrack news BankTrack blog Partner news Partner blog

Formosa’s new St. James project is the real pest

2021-07-07 | The Big Easy
BankTrack news BankTrack blog Partner news Partner blog

Sharon Lavigne 2021 Goldman Prize Recipient North America

2021-06-21 | The Goldman Environmental Prize
BankTrack news BankTrack blog Partner news Partner blog

Plastic Waste Makers Index

Unveiling the source of the single-use plastics crisis
2021-06-01 | Minderoo Foundation
BankTrack news BankTrack blog Partner news Partner blog

'One Oppressive Economy Begets Another'

2021-05-07 | The Atlantic
Blog
BankTrack news BankTrack blog Partner news Partner blog

175 groups call on banks not to finance Formosa Plastics’ Louisiana plant

Huge US$ 12 billion plant in cancer alley faces staunch public opposition 
2021-04-27 | St. James, Louisiana | RISE St. James, Stop Formosa Plastics coalition
BankTrack news BankTrack blog Partner news Partner blog

Huge plastics plant faces calls for environmental justice, stiff economic headwinds

2021-04-19 | Washington Post
BankTrack news BankTrack blog Partner news Partner blog

IEEFA U.S.: Proposed Formosa, Louisiana petrochemical complex financially unviable

IEEFA finds significant financial, market, regulatory and political risks for multibillion-dollar ‘Sunshine Project’ in Louisiana’s ‘Cancer Alley’
2021-03-23 | IEEFA
BankTrack news BankTrack blog Partner news Partner blog

In test for environmental justice, Chair Grijalva and Rep. McEachin urge Biden to revoke permits for proposed plastics plant in Louisiana’s Cancer Alley

2021-03-17 | US House Natural Resources Committee Chair Raúl M. Grijalva
BankTrack news BankTrack blog Partner news Partner blog

Environmental racism in Louisiana’s ‘Cancer Alley’, must end, say UN human rights experts

The further industrialization of so-called “Cancer Alley” in the southern United States, known for its pollution-emitting chemical plants, should be halted according to a large group of independent UN human rights experts, who on Tuesday branded it a form of “environmental racism”.
2021-03-02 | UN News
Blog
BankTrack news BankTrack blog Partner news Partner blog

Opponents of Formosa Plastics’ Louisiana plant petition shareholders to drop project at Taiwan annual meeting

Plant would pollute Black community, become America’s largest new climate polluter
2020-06-10 | Louisiana | Center for Biological Diversity, Earthworks, RISE St. James
BankTrack news BankTrack blog Partner news Partner blog

Lawsuit Appeals Permit for Formosa Plastics to Build in Louisiana's 'Cancer Alley'

2020-02-07 | CommonDreams
Blog
BankTrack news BankTrack blog Partner news Partner blog

Lawsuit challenges Trump administration’s fast-tracking of Louisiana plastics project

2020-01-15 | Washington | Center for Biological Diversity
BankTrack news BankTrack blog Partner news Partner blog

Key air permits granted for $9.4B Formosa Plastics complex in St. James Parish; opponents promise fight

2020-01-07 | The Advocate
BankTrack news BankTrack blog Partner news Partner blog

Huge toxic site to be built on grounds where slaves are likely buried, files reveal

Massive petrochemical complex proposed in southern Louisiana opposed by activists angered by revelations of site’s significance
2019-12-18 | The Guardian
BankTrack news BankTrack blog Partner news Partner blog

What Could Happen if a $9.4 Billion Chemical Plant Comes to “Cancer Alley”

In St. James Parish, Louisiana, a Taiwanese industrial giant seems likely to be granted a permit to build a billion-dollar plastics plant. Its proposed emissions could triple levels of cancer-causing chemicals in one of the most toxic areas of the U.S.
2019-11-18 | ProPublica
BankTrack news BankTrack blog Partner news Partner blog

Louisiana’s ‘Cancer Alley’ is getting even more toxic — but residents are fighting back

One of the most polluted regions of the country is being overrun by a new glut of oil and gas facilities, including one that will emit as much carbon as three coal-fired power plants
2019-10-30 | RollingStone
Resources
Documents
Videos
Links
2022-05-03 00:00:00

Annual report 2021

Annual report
2022-05-03 00:00:00 | Formosa Plastics Group
2022-03-24 00:00:00

Formosa’s Louisiana Project Update

Supply and Demand Dynamics, Legal Challenges Bode Ill
Other document
2022-03-24 00:00:00 | IEEFA
2022-01-12 00:00:00

Permian Climate Bomb chapter 4: Petro-Chemicals

The toxic byproduct of the permian fracking boom
NGO document
2022-01-12 00:00:00 | Oil Change International, Earthworks, CIEL
2020-11-20 00:00:00

Stormy Outlook

Capacity and production in the U.S. Plastics Production Corridor, an area which runs along the U.S. Gulf Coast in Texas and Louisiana, are forecast to grow to 2035, despite increasing climate risks from storms, sea-level rise and storm surges, causing the growing possibility of stranded assets of USD 16 billion in the short-term (by 2021) and USD 45 billion over the mid-term (by 2025).
NGO document
2020-11-20 00:00:00 | Planet Tracker
2020-06-05 00:00:00

Q1 2020 Financial Statements

Company document
2020-06-05 00:00:00 | Formosa Petrochemical
2021-03-31 00:00:00

Formosa Petrochemical Corporation and Subsidiaries

Consolidated financial statements January 1, 2021 to March 31, 2021
Company document
2021-03-31 00:00:00 | Formosa Petrochemical Corporation
2020-03-31 00:00:00

Formosa Petrochemical Corporation and subsidiaries

Consolidated Financial Statements January 1, 2020 - March 31, 2020
Company document
2020-03-31 00:00:00 | Formosa Petrochemical Corporation
2020-01-08 00:00:00

Formosa toxic waste spill and plastic pollution in Lavaca Bay, Texas, United States

NGO document
2020-01-08 00:00:00 | EJ Atlas
2021-06-01 00:00:00

Plastic Waste Makers Index

Unveiling the source of the single-use plastics crisis
NGO document
2021-06-01 00:00:00 | Minderoo Foundation
2021-07-21 00:00:00

Bankrolling Plastics

NGO document
2021-07-21 00:00:00 | Portfolio Earth
2021-03-17 00:00:00

Grijalva McEachin letter to Biden on Army Corps permit for Formosa Plant

Other document
2021-03-17 00:00:00 | US House Natural Resources Committee Chair Raúl M. Grijalva
2021-03-23 00:00:00

Formosa’s Louisiana Project: Wrong Products, Wrong Time, Wrong Place, Wrong Finances

Plastics Market Oversupply and Legal Challenges Loom
NGO document
2021-03-23 00:00:00 | IEEFA

Formosa Plastics Toxic Tour

2021-07-12 16:32:21

Video links

https://www.netflix.com/nl/title/80118100
https://www.facebook.com/consideritshow/videos/1129478933881054/

Stop Formosa Plastics

Organisations working to stop Formosa Plastics inlucde RISE St. James, Louisiana Bucket Brigade, Center for Biological Diversity, Healthy Gulf, Earthworks, CADA, Sierra Club, No Waste Louisiana, 350 New Orleans and Sunrise Movement New Orleans.

President Biden: Stop Formosa Plastics

Urge President Biden to stay true to his commitment to environmental justice and revoke Formosa Plastics' permits today.

Formosa Petrochemical Corporation Investor Relations

Information about quarterly results and consolidated financial statements for Formosa Petrochemical Corporation and its subsidiaries.

Updates

2022

2022-09-14 00:00:00 | Formosa Plastics Sunshine project permits cancelled over health risks

On 14 September, the air quality permits and all other permits issues to Formosa Plastics' project by the Louisiana Department of Environmental quality were vacated in a lawsuit from environmental groups. The ruling cited health risks and recognized the local Black residents are "tied to the land" through "the blood, sweat and tears of their ancestors, who were kidnapped from Africa" (PlasticsNews.com).

2021

2021-08-19 00:00:00 | Government suspends permit for controversial Louisiana plastics plant

The US federal government has suspended a permit for a controversial proposed plastics plant in Louisiana while an environmental review takes place after advocates raised concerns about its impacts. In a memo on Wednesday, acting Assistant Army Secretary for Civil Works Jaime Pinkham said a permit for the plant would be suspended amid a rigorous environmental review known as an Environmental Impact Statement. (The Hill).

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