To Lure Foxconn, Wisconsin Waives Environmental Regulations

Published October 16, 2017

The state of Wisconsin is waiving several environmental regulations as part of a deal that enticed Taiwanese company Foxconn to build a high-tech manufacturing plant in the state.

The $10 billion, 1.6 square-mile facility is expected to bring between 3,000 and 13,000 jobs to southeastern Wisconsin, an area hit hard by the closing of manufacturing plants in recent years.

Foxconn has yet to choose the exact location for the factory and is reported to be considering two sites in the Village of Mount Pleasant in Racine County.

“This is a once-in-a-century opportunity for our state and our country, and Wisconsin is ready,” Gov. Walker said in a statement.

Environmental Waivers

To facilitate the construction and operation of the plant, the state will grant Foxconn several environmental waivers, including allowing it to discharge dredged material or fill into wetlands without a state permit; exemption from a state law requiring businesses to create wetlands when they get a permit to fill existing ones; allowing it to change the course of or straighten a stream without a state permit; allowing it to build on a lake or stream bed without a permit; exemption from a state laws requiring environmental impact statements before construction can begin; and letting a public utility begin work on hooking the Foxconn complex up for service without prior approval by the Wisconsin Public Service Commission.

In addition to $3 billion in tax incentives for Foxconn, most of which will be awarded by the Wisconsin Economic Development Corporation, the plan calls for the state to borrow $252 million to widen Interstate 94 south of Milwaukee, a project long sought by many Wisconsin officials and lawmakers.

Foxconn will also be exempt from Wisconsin’s sale tax on building expenses, and the plan authorizes local governments to create Tax Incremental Financing Districts for the project.

Federal Permits Still Required

State officials note the company will still be subject to federal environmental regulations, including having to apply for permits from the U.S. Environmental Protection Agency (EPA) or U.S. Army Corps of Engineers where appropriate. In addition, Foxconn will still have to apply for permits from the state Department of Natural Resources (DNR) for air emissions, hazardous waste, and wastewater disposal.

Foxconn, the world’s largest contract manufacturer of consumer goods, is expected to produce liquid crystal screens for TVs, laptops, and wireless telephones at the Wisconsin complex. The manufacturing process for these items typically uses substantial amounts of water and employs chemicals such as zinc, cadmium, chromium, copper, and benzene. Foxconn, a major supplier to tech giant Apple, experienced an explosion at its plant in Chengdu, China in 2011, resulting in the deaths of three workers and injuring 15 others.

The accident raised concerns among Democrats in the Wisconsin legislature over the company’s safety and environmental performance. During the legislative debate leading up passage of the Walker administration’s Foxconn plan in August, Democrats, citing the company’s record in China, offered riders to the bill to reduce or weaken the plan’s environmental exemptions. The efforts failed.

Confident in Abilities

State and local officials say they are confident they will be able to oversee Foxconn’s operations effectively and maintain environmental quality. In addition to complying with federal regulations, Foxconn’s environmental performance will be monitored by the state DNR and Racine Water and Wastewater Utilities.

Charles Daniel, president of the Delaware-based Caesar Rodney Institute, said Wisconsin’s deal to attract Foxconn ensures environmental protection while promoting critical manufacturing development.

“Given that redundant federal regulations will remain in place to protect local residents and the environment, Wisconsin leaders are wise to ease the burdens on such projects and to work with major job-providers,” Daniel said. “Delaware should become similarly flexible at a time when people in the state desperately need good jobs, hope, and a lifeline.”

‘Template’ for Other States

Craig Rucker, executive director of the Committee for a Constructive Tomorrow, says the Foxconn deal shows industrial activity need not come at the expense of the environment.

“What the Foxconn deal shows is that large-scale industrial projects, though challenging, are completely compatible with environmental protection,” Rucker said. “Gov. Walker and his team have provided a template that other states should follow.”

Bonner R. Cohen, Ph.D. ([email protected]) is a senior fellow at the National Center for Public Policy Research.