In 1982, the Chiao Tung Bank received a command from the Ministry of Finance to start a program for providing loans to "strategic and important industries" for purchasing machinery and equipment. In 1985 an amount of NT$500 million was set aside especially for loans of pollution prevention and control. Furthermore, starting from 1986 the limitation of NT$400 million was eliminated. The annual interest rate was 5.25 percent, which was 2.75 percentage points lower than the basic interest rate required by the Chiao Tung Bank. Consequently, in 1986-1987 the Chiao Tung Bank approved 39 cases of application for loans to set up equipment for pollution prevention and control; the total amount of loans reached NT$3766.25 million. Of these cases approved, the metal industry took 25.64 percent the textile industry 17.95 percent, and the paper industry 15.38 percent. (Wu Hsi-hsin, 1988)

     In addition to providing loans with a low interest rate, the government also adopted guidance and promotion measures in other aspects. In terms of favorable taxation, enterprises who import pollution prevention equipment that has not been manufactured domestically are allowed to be exempted from an import duty; but a 10 percent import duty is required for importing equipment that has already been manufactured domestically. Those who import pollution prevention equipment for research purposes are exempted from an import duty. Moreover, enterprises may apply for a two-year acceleration of depreciation for the pollution prevention equipment and thus reduce their income tax. The government also tried to encourage enterprises to move to industrial districts by exempting from paying part of the electricity charge and land tax. Finally, the IDB set up a group to specialize in providing technical guidance and service for the prevention and control of industrial pollution. (Yang Yi-jung, 1986)

     In addition to guidance and rewards, the IDB has also adopted technical measures to control pollution since 1974. According to reports by IDB officials, some results were already obtained in the early 1980s and the important ones may be mentioned here. (Lin Chih-shen, 1981; Lin Chia-hsiung, 1983)

(1)

From 1974, newly established soda and chlorine factories were not allowed to use a mercury electrolytic tank; old factories were required to set up a "closed system" to recover mercury. From 1979, the import of mercury was limited. At the end of 1979, all factories reduced the amount of using mercury to produce one ton of caustic soda from 450 grams to 50 grams; this was comparable to the standard in advanced countries. In 1981 regulations reduced the amount of using mercury from 50 grams to 30 grams by the end of 1982. Moreover, existing mercury electrolytic tanks were expected to become obsolete by 1991