Alexa

Thoughtless charges may hurt Taiwan

Thoughtless charges may hurt Taiwan

In recent months, we have witnessed a virtual flood of indictments by prosecutors of government officials for "corruption," "breach of trust" or "favoritism."
While the diligence of prosecutors to crack down on corruption should be applauded, there is also growing concern in society over how many of these prosecutions are truly justified and whether, as President Chen Shui-bian claimed recently, have become "overly politicized" and may be generating more problems than they are solving.
For example, the flurry of prosecutions and investigations regarding the alleged misuse of special executive allowances, now involve President Chen, former Taipei City Mayor Ma Ying-jeou and senior officials of several other city and county governments with reputations for political integrity. As revealed by studies by the Directorate-General for Budget, Accounting and Statistics and other agencies, the confusion over the character, purpose, use and accounting of such allowances is a complex and historical issue that begs for a systematic and legal solution instead of individual prosecutions for "corruption" because of, quite likely unintentional, trespasses of mutual contradictory legal or accounting standards or practices.
Although the exposure of this problem can definitely contribute to necessary and overdue political and administrative reform, the evident politicization and "micro-management" of such prosecutions has decidedly not contributed to an institutional resolution. Perhaps an even graver problem is fermenting over an evident lack of professionalism and even common sense among prosecutors and investigators that may fuel suspicions of "politicized" indictments, and may inhibit efforts by national and local governments to take preventive action to deal with problems.
A notable example is the indictment handed down by Tainan District Prosecutor Kao Feng-chi against former National Science Council vice chairman Hsieh Ching-chih for "corruption" in relation to an NT$8.4 billion "vibration reduction" for the section of the North-South High Speed Railway that passes through the Tainan Science-Based Industrial Park.
According to Tainan District Prosecutor Kao Feng-chi, the project was "unnecessary" and the cost of the US$250 million bid awarded to the Hong Hua Company was "exorbitant." Citing an evaluation by the Taiwan Semiconductor Manufacturing Corp that showed that the vibrations would be a problem and that several other semiconductor companies that moved into the Tainan Science-Based Industrial Park had built their own vibration reduction or protection systems, the prosecutor claimed that Hsieh and his "accomplices" had "created a totally unnecessary project."
Even though the prosecution offered no evidence of bribery, its indictment maintains that Hsieh had "illicitly passed favors" to Hong Hua, whose owner was also indicted with a requested 12-year sentence through the "exorbitant" price granted to the company to implement its solution to the vibration problem. The indictment alleged that Hsieh agreed to changes in the construction method and allowed Hong Hua Technologies, whose owner was also indicted and which allegedly had no professional experience in civil engineering, to win an NT$35 million contract.
The former National Science Council vice chairman, who has impressive academic and professional credentials and experience in civil and aeronautical engineering, maintains that there was a real problem, that Hong Hua had been chosen because it found the best solution to the complex and unique engineering problem, and the company's NT$8 billion price tag was higher than an alternative firm's NT$1.8 billion because of its unique solution, the success of which was not guaranteed, and that the key price determinate was an estimate of the value of Hong Hua's intellectual property, not the physical construction costs.
Both Hsieh and the NSC have stated that recent safety and vibration reduction tests of the HSR show that the project have been effective.
A gap in business practices
There is clearly a gap in understanding of business practices in high technology engineering project methodology between the NSC and its vice chairman and the prosecution, which seems to be obsessed with the (obsolete) notion of "lowest cost" bid. However, the most fundamental question is whether there was a genuine problem and therefore a genuine need for the government, through the NSC, to take action.
Looking back nearly six years, it is easy to find convincing evidence that there was indeed a serious problem that threatened to torpedo official hopes to attract massive investment funds into the Tainan technology park and build a new center for wafer fab fabrication and processing.
Uncertainty over the potential impact of vibration from the HSR on wafer fabrication operations was not a "false" but a very real and critical issue for companies which had planned to invest in the zone, many of which openly stated that they would cancel such plans and go elsewhere if the problem, namely the uncertainty, was not eliminated.
One of the several examples that were widely reported in the domestic and international trade press was Winbond Electronics Corp, which announced in early 2001 that, after an independent assessment, it was considering canceling a planned NT$12 billion investment in the construction of two 12-inch wafer fabrication plants due to the "fear" that even the slightest vibration could affect production precision and quality.
At that time, Winbon's Chairman and CEO told the Central News Agency that his firm "cannot take any chances." Indeed, it did not. Instead of building facilities in Tainan, Winbond has built one 12-inch wafer fabrication plant, which held its grand opening in April, in the Central Taiwan Science Park near Taichung City.
The fact that companies such as TSMC adopted their own solutions to the vibration problem, perhaps out of fear that the government's efforts would not be successful, does not confirm that the HSR project was "unnecessary" or "created" out of thin air.
We must admit that in one sense the prosecution is correct. If the Democratic Progressive Party government had not acted on the vibration risk, the NSC-based project would indeed have been "unnecessary" since there would be far fewer, if any, semiconductor wafer fabrication plants.
Whether Hsieh is truly guilty of "corruption" is a matter which the courts must decide, but if the former NSC vice chairman had in fact adopted a successful preventive solution that relieved a major risk to all potential investors, he should be rewarded instead of prosecuted.