HANOI (Reuters) - The Vietnamese government said on Wednesday there was no evidence that discharge from a new Taiwanese-built steel plant was to blame for the death of huge numbers of fish in farms and coastal waters.

Slideshow ( 11 images )

Farms in Ha Tinh province, 400 km (250 miles) south of Hanoi, began to see fish dying on April 6 and dead fish have washed up on nearby beaches. Media said discharge from a drainage pipe at the nearby a steel works was poisoning the water.

The local unit of Taiwan’s Formosa Plastics which is building the plant whose first phase began operation in December has denied that, saying all regulations and standards had been respected.

At a news conference to announce the government’s assessment, deputy environment minister Vo Tuan Nhan said: “Thus far, through testing and collecting evidence, there is no proof yet to conclude a link between Formosa and the facility to the mass fish deaths.”

With fears for Vietnam’s seafood industry, worth $7 billion a year in exports, there is huge public interest in the case, but Nhan declined to take questions after reading a statement.

He said there were two possible causes of the fish deaths: toxic discharge by human activities on land or at sea, or a phenomenon known as “red tide”, when dangerous algae bloom at an abnormal rate and produce toxins.

“This is a complicated issue that had happened in many places around the world, requiring time to identify causes,” Nhan said. “It is necessary to research the cause systematically, fundamentally and in a fact-based way.”

Suspicions about a link between the fish deaths and the steel plant were exacerbated when Chu Xuan Pham, a Hanoi-based representative of Formosa’s local unit, said in comments reported on Monday that Vietnam had to choose between “catching fish and shrimp and building a modern steel industry.”

Taiwan is Vietnam’s fourth-biggest foreign investor after South Korea, Japan and Singapore. Hung Nghiep Formosa Ha Tinh Steel Corp began the first phase of the $10.6 billion steel complex in December in the Vung Ang economic zone.

Chu apologized for his comments and Formosa Ha Tinh said: “We are deeply shocked and sorry. We cannot understand why so many fish have died.”

Fish and shellfish deaths have now been reported along a stretch of some 200 km (124 miles) on Vietnam’s central coast, in the provinces of Quang Binh, Quang Tri and Thua Thien-Hue.

“I’ve been doing this job for 19 years but I’ve never seen such a phenomenon,” Ha Tinh clam farmer Nguyen Xuan Phuong told state-run Vietnam Television (VTV). He said it had caused him losses of 200 million dong ($9,000).

Tests of seawater taken from Thua Thien-Hue province showed higher-than-normal levels of ammonium and chromium, Nguyen Huu Quyet, deputy head of the provincial environment department, said on Wednesday in a VTV broadcast.

But deputy minister Nhan said: “There has not yet been detection of environmental parameters exceeding regulated standards.” ($1 = 22,266 dong)