(U) TAIWAN'S EVERGREEN MARINE CORPORATION

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 000082 SIPDIS DEPT FOR EAP/TC E.O. 12958: DECL: 01/09/2016 TAGS: PINR EWWT EAIR TW CH PM SUBJECT: (U) TAIWAN'S EVERGREEN MARINE CORPORATION (C-AL5-01182) REF: A. 05 STATE 229901 ¶B. 05 TAIPEI 1511 ¶C. 05 TAIPEI 1781 ¶D. 05 TAIPEI 2011 Classified By: AIT Director Douglas H. Paal, Reason 1.5 b (U) AIT offers the following information on the questions raised in ref A regarding the nature of Evergreen's relationship with the Chen administration: ¶A. (C) Evergreen Marine Corporation's relationship with the Chen administration is primarily a function of the relationship between the Chairman of Evergreen Group Chang Yung-fa and President Chen Shui-bian. Chang founded Evergreen Marine in 1968 and has maintained close family control of the firm as well the group's other entities, which include EVA Air. Chang has passed the chairmanship of Evergreen Marine to his third son, Chang Kuo-cheng. His youngest son, Chang Kuo-wei, is president of EVA Air. -- (C) President Chen's ties to the company go back to his days as an attorney. Chen specialized in maritime law in law school and worked as a legal consultant for Evergreen on several cases. Chang supported Chen when he ran for President in 2000. After Chen was elected Chang was named as one of his senior presidential advisors. -- (C) However, Chang shifted his support to the pan-Blue camp in the 2004 election with an indirect but clear endorsement of pan-Blue candidate Lien Chan. Days before the election, Chang released a statement saying that the ideal candidate must "be able to build a peaceful, stable and harmonious cross-Strait relationship." On May 23, 2004, Chang announced that he would resign as a senior presidential advisor. -- (C) Chang's shift in support may be due in part to Chen's failure to establish direct shipping links with the Mainland. In early 2002, Chen administration officials criticized Evergreen Marine for its decision to flag more than half of its ships in the UK and Italy to help the firm penetrate the growing PRC shipping market. On November 5, 2003, Chang gave a scathing speech at the China Marine College in Taipei, arguing that the Chen administration had ignored the industry and that Chen himself knew nothing about shipping. -- (C) Nevertheless, Evergreen's efforts to distance itself from Chen are largely the result of pressure from the PRC. Reports of such pressure emerged immediately after Chen's election in 2000. Arnold Wang, President of Evergreen Marine, recently confirmed to AIT that the PRC applied pressure to Evergreen, particularly in 2001 when authorities placed restrictions on the firm that Wang declined to describe in detail. Wang pointed out that since the firm had established a more neutral political stance its situation in the Mainland had improved, noting that the firm now has 14 liaison offices there. ¶B. (C) Wang told AIT that Evergreen operates joint East Asia-South Africa routes with COSCO. Evergreen operates seven vessels on the routes and COSCO operates two. He said that starting in May 2006 Evergreen and COSCO will jointly operate East Asia-U.S. East Coast routes with the two firms operating six and four vessels, respectively. In January 2005, Evergreen's Italian affiliate company, Lloyd Triestino, announced that it would invest USD 250 million in two berths at Ningbo Harbor near Shanghai. The Italian firm had previously invested in Shenzhen harbor in 2003. In early 2005, Wang told AIT that 70 percent of Evergreen Marine's revenue comes from the Mainland China market (PRC and Hong Kong). ¶C. (C) AIT defers to U.S. Embassy Panama on Evergreen's operations in Panama. Local media have reported that Evergreen has invested more than USD 100 million in a marine terminal at Cristobal in addition to investment in a hotel and restaurant in Panama City. ¶D. (C) As indicated in section A above, Evergreen confirms that the PRC applied pressure on the firm to stop support for Chen Shui-bian. Evergreen's situation is similar to that of other Taiwan firms that the PRC perceives to be pro-independence as described in refs B, C and D. AIT does not have information on what support the firm might still provide to the Democratic Progressive Party behind the scenes. PAAL