Illegal factories on farmland unregistered for 20 years must exit; the Factory Management Act sets a sunset clause

The draft amendment to certain articles of the Factory Management and Assistance Act, which governs the oversight of factories on farmland, was finally passed by the Legislative Yuan on its third reading today (the 27th), confirming the establishment of a "sunset clause." Illegal factories that existed before May 20, 2016 (ROC year 105) must complete the procedures for oversight, improvement, payment of assistance fees, registration and land use change within 20 years; if they cannot complete them, the factories may not continue operating. Illegal factories newly added after May 20, 2016 (ROC year 105) must be forcibly demolished. In response to the past predicament in which local governments failed to act and the central government had no legal means to intervene, the amendment to the Factory Management and Assistance Act also grants the central government the power to cut off water and electricity or demolish structures in accordance with the law.

Article 28-5 of the draft new amendment to the Factory Management and Assistance Act stipulates that low- and medium-pollution illegal factories on farmland shall apply for oversight within 2 years after the amendment, submit an improvement plan within 3 years, and after applying for oversight, pay an oversight assistance fee annually until registration is obtained; they must obtain specific factory registration within 10 years and complete all legal procedures within 20 years. As for medium- and high-pollution factories, the government shall guide them to transform, relocate or shut down, and those that refuse to cooperate shall have their power and water supply cut off and be demolished in accordance with the law.

Regarding this outcome, Guo Hongyi, a lawyer and director of the Environmental Jurists Association, said, "Although not satisfied, having something is better than having nothing." Because Article 28-10 of the law stipulates that illegal factories "in principle may be legalized on-site," and only exceptions (medium- and high-pollution factories) need to relocate, the determination of what constitutes a "medium- and high-pollution factory" will become the next decisive battleground in defending farmland.

DPP Legislator Tsai Pei-hui: Drawing this line is not easy, but this historical legacy cannot be left unaddressed

DPP Legislator Tsai Pei-hui said that if illegal factories on farmland are not dealt with, wastewater and air pollution will continue to contaminate farmland; can this really be left unaddressed? This is a historical legacy. The amendment to the Factory Management and Assistance Act provides three blades: first, medium- and high-pollution factories will be relocated or shut down; if local authorities fail to act, the central government can cut off water and electricity. Low-pollution operators must properly handle industrial safety and environmental safety issues and meet the standards before they can obtain a specific factory registration certificate; only 10 years after obtaining the registration certificate can they truly become legal.

Tsai said that at present it is not only industry versus agriculture, but also "industry versus industry," meaning that legal manufacturers must pay high costs to operate, while illegal factories can operate at low cost because they violate the law, creating unfair competition within industry. Tsai Pei-hui said, "This law is not simple; drawing this line is not easy."

"Citizen litigation" was not included; environmental groups: the existing reporting mechanism is virtually useless

Wu Hui-jun, executive secretary of the Changhua Environmental Protection Union, pointed out that since 2017, the Changhua Environmental Protection Union and civic groups have reported 29 cases of newly built illegal factories on farmland, and civil groups have repeatedly sent letters demanding that the "report and demolish immediately" policy be truly enforced, but due to local governments' dereliction of duty and indulgence, not a single one was demolished. During this period, they have continued to receive complaints from residents about newly built illegal factories on farmland, and 9 more cases have been added so far. Precisely because government agencies are negligent and fail to enforce the law, illegal factory operators, seeing that government agencies do not act, build with abandon until everything is filled up.

Civic groups have repeatedly demanded that the Factory Management and Assistance Act include "citizen litigation," so that residents and civic groups around illegal factories can, through judicial remedies, require local governments to actively enforce the law. Wang Mei-hua, political deputy minister of the Ministry of Economic Affairs, believes that a reporting mechanism already exists and that there is no need to add "citizen litigation." But environmental groups say the current reporting mechanism is fundamentally useless, and they express strong regret that "citizen litigation" was not included.