Linyuan District used to be a town of Kaohsiung County, which is now part of Kaohsiung built up area which encompasses 10 cities (or districts) out of 18 in official Kaohsiung Metro Area. It is a seaside township near the estuary of the Kaoping River in southern Taiwan. Before the installment of a petrochemical zone in the 1970s, fishing and aquaculture was the main local livelihood. Industrialization brought about a grave subsistence crisis, as petrochemical plants recklessly extracted underground water and discharged their wastewater into the river and sea . In November 1973, the proposal of “Ten Major Construction Projects”  including the construction of the Linyuan petrochemical industrial zone was announced at the fourth plenary session of the 10th Central Committee of Kuomintang.
The construction of the Linyuan Industrial Park was completed in February 1976 at a cost of NT$ 2 billion, with a designed area of 388 hectares which turned out to be 403 ha after completion.  There was one electrical plant and 18 petrochemical plants in the region, including the Naphtha Cracker No. 3 and No.4 of China Petroleum Corporation (CPC) and a combined sewage plant.
The Linyuan incident began with an accident that occurred in September 1988, at the Linyuan petrochemical complex in Kaohsiung County, centered on the Linyuan plant of CPC. Heavy rain caused contaminated water to leak from the reservoir tank at the water treatment plant. The direct cause of the incident was the reservoir tank’s insufficient capacity to handle wastewater.  As local fishermen found dead fish floating in their harbor (Shanwei fishing port), residents and eel farmers in seven villages near the complex started a self-relief movement in October demanding NT$2.4 billion in compensation. On October 11, some of them stormed into the industrial zone and forcibly shut down the power of the sewage treatment plant. As a result, eighteen companies in the industrial zones all halted their production. 
Since the Linyuan industrial zone was a key upstream provider, the conflict evolved into a severe crisis for Taiwan's petrochemical industry. Negotiations started between the residents and the central government’s Ministry of Economic Affairs with the mediation of the member of the Legislative Yuan (parliament) elected from the district, and the negotiations were brought to a successful conclusion on October 15 (for an overview of key conflict events, see Project Details). The eighteen enterprises operating in the complex agreed to pay a total of NT$1,305 million in compensation. This amount was the highest ever for such a case. 
During the three weeks of negotiation, economic officials constantly threatened to use police force to disperse the blockade.  At the same time, local fishermen who were eager to secure compensation angrily rejected the voluntary intervention of outside environmentalists. This unhappy confrontation resulted in a growing detachment of outside environmentalists from local pollution disputes. Without the participation of outside movement organizations, the localization of antipollution protests was reinforced. As a result, pollution disputes were largely settled by the tug of war between residents and producers. 
The Linyuan incident is a representative ex-post-facto movement aiming at gaining compensation for pollution caused by an accident. It was a very successful one from the standpoint of the local people concerned, considering the large amount of money paid in compensation, and also because the local residents received exemptions from responsibility for the illegal acts they committed. But since then, Linyuan people have also been criticized or decriminalized as green hooligans, mobs and greedy people by other Taiwan people including those from the government and the academia, deeming that they lost the legitimacy of the original environmental protection claims after getting the compensations.