Vietnam: Many businesses still lack a clear understanding of responsible business practices

Vietnam: Many businesses still lack a clear understanding of responsible business practices

Awareness of responsible business among businesses remains limited, with some even confusing it with corporate social responsibility. ASL LAW was a speaker at the Workshop on developing and implementing policies to promote “Responsible Business Practices: Experience in the European Union (EU), Thailand”

During the workshop on developing and implementing policies to promote “Responsible business practices: Experience in the European Union (EU), Thailand” held on November 3, Mr. Tran Nhat Minh, the Director of the Institute for Research on Development Communication (RED), emphasized the significance of responsible business practices (RBP) in achieving the dual objectives of economic growth and sustainable development.

In response to this, the United Nations has introduced the Guiding Principles on Business and Human Rights (UNGPs) to promote RBP on a global scale and assist countries in translating it into actionable national programs. As of October 2019, 25 countries have integrated RBP issues into their national agendas. Among these, 23 out of 25 have established national action plans tailored to their specific contexts. In Southeast Asia, Thailand became the first country in the region to unveil a national plan in 2019.

In Vietnam, the Ministry of Justice has issued a National Action Program designed to enhance policies and legislation promoting responsible business practices within the country for the 2023-2027 period (as stipulated in Decision 843/QD-TTg by the Prime Minister on July 10, 2023).

Furthermore, the European Union (EU) is currently proposing a new Corporate Sustainability Due Diligence (CSDD) law. This directive obliges businesses to conduct due diligence to prevent, mitigate, and resolve adverse impacts on human rights and the environment in their operations, as well as those of their affiliated companies and the entire corporate supply chain, both within and outside of Europe.

During the seminar, while assessing the challenges that businesses face when implementing Decision 843/QD-TTg, Mr. Vu Tuan Anh – ASL LAW Firm noted that the awareness level of responsible business practices among businesses in Vietnam is still relatively low.

“Approximately 56% of businesses have a solid grasp of this concept, whereas 35.7% perceive RBP as a mere legal compliance requirement. A further 6.8% of businesses confuse RBP with corporate social responsibility,” Mr. Tuan Anh remarked.

Mr. Tuan Anh also highlighted that state-owned enterprises exhibit the highest awareness levels (81%), whereas private enterprises have the lowest (47%). Concerning the degree of RBP implementation by businesses in Vietnam, 62% of businesses are fully compliant with regulations, while 27% have not met the requirements. Most of the areas and aspects focused on RBP implementation by businesses in Vietnam pertain to labor and the environment.

To enhance the legal framework related to labor while balancing the interests of employees and employers, Mr. Tuan Anh recommended establishing a team of entrepreneurs with a commitment to sustainable development and responsible business practices. He also emphasized the need to improve the operational efficiency of employee representative organizations within small and medium-sized enterprises and industry associations.

Mr. Tuan Anh further proposed the establishment of mechanisms and agencies to provide legal support to workers at low or no cost and the issuance of industry-specific labor handbooks suitable for each group of worker groups.

ASL LAW is the top-tier Vietnam law firm for in-depth legal advice in Vietnam and internationally. If you need any advice, please contact us for further information or collaboration.

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