H.E. Mr. Nguyen Khanh Ngoc, Deputy Minister of Justice
H.E. Ms. Ann Mawe, Swedish Ambassador to Viet Nam,
Distinguished representatives from government, business, non-governmental, the United Nations, and media,
Ladies and gentlemen,
Good morning, Xin Chao!
It is with great pleasure that I join Vice Minister Ngoc and Ambassador Ann in welcoming you to the National consultation workshop ‘Advancing responsible business practice in Viet Nam. Thank you for taking time to be with us here this morning.
At the outset, I would like to thanks to the Ministry of Justice and to the Swedish Embassy for co-hosting and supporting this important and timely initiative on responsible business. I would like to share with you one key message this morning. And that is that COVID-19 has disclosed pre-existing inequalities and vulnerabilities in our systems, including in how we do business, and has shown us that our businesses and communities must become more resilient to adapt to shocks and risks, both now and in the future. Viet Nam has shown tremendous leadership in managing the pandemic. Recovering from and co-existing with COVID provides Viet Nam with an opportunity to extend this leadership and build forward better, by developing businesses that are responsible to the people and the environment, and businesses that can continue to drive economic growth without compromising sustainable development.
Before looking at why we should embrace responsible business, we need to understand what it is.
At its core, responsible businesses are businesses that actively assess their impact on society, take measures to prevent negative impacts, and provide effective remedies when negative impacts occur. This includes going beyond compliance with national laws, and where necessary aligning with international standards, including international labour standards, international environmental law, and international human rights laws.
Responsible business practice differs from corporate social responsibility, or CSR, which is voluntary in nature. Responsible business practice focuses on ensuring minimum standards are embedded in business culture and operation. What makes a company a ‘super star’ in CSR does not make it a responsible business if, for example, it pollutes the environment or underpays workers.
You may ask why responsible business? And what is the “business case” for it?
Firstly, responsible business practice helps Viet Nam to attract high-quality and sustainable investment which will contribute to both economic growth and the achievement of the Sustainable Development Goals, which is in line with Resolution 50 of the Politburo, calling for higher quality investments to Viet Nam by 2030. Greater responsibility in business practice has been shown to yield higher returns for businesses over the longer term, helping to boost the economy in ways that are inclusive and sustainable - enabling it to become more resilient to shocks and risks. This in turn helps to protect communities, vulnerable and marginalized groups to ensure ‘no one is left behind’ as Viet Nam moves forward in its next development phase.
Secondly, as Viet Nam has ratified two significant new-generation free trade agreements (FTAs), including the EVFTA and CPTPP, responsible business has become a minimum requirement for Vietnamese businesses to seize opportunities of market access brought about by greater global integration. Principles of responsible business practice are embedded in these trade agreements. Experience from companies that have met minimum requirements set out in the FTAs shows that that they can significantly reduce operational and legal risks, in addition to enhancing business performance over the longer term. Responsible business is also a game changer as it helps businesses gain significant advantages over competitors. And this is thanks to drivers for more responsible practices from employees, a growing base of ethically minded consumers and investors. In ASEAN, a number of countries are taking the lead in developing national strategies on responsible business practice, and in that context, we are delighted to welcome partners from the Ministry of Justice Thailand to share their experience later this morning.
Now turning from the ‘why’ to the ‘how’ we can support greater responsible business practice:
We are pleased to be launching today, the Preliminary Assessment of the regulatory framework on responsible business in Viet Nam, which adopts the UN Guiding Principles on Business and Human Rights (UNGPs) as the primary guiding framework. It shows that Viet Nam has an extensive regulatory framework to build on to ensure responsible business practice, and which helps to align with the country’s commitments under international conventions, treaties and trade agreements. Yet, there are areas where greater alignment is needed. These include:
(i) Recognizing the specific duty of businesses to society and the environment in corporate law.
(ii) Developing a more robust policy framework to protect marginalized and vulnerable groups, including workers, in particular workers in the informal economy, women, persons with disabilities, ethnic minorities and children.
(iii) Extending greater support to individuals to monitor and report environmental degradation by businesses.
(iv) And finally, where businesses abuse the rights of people, strengthening judicial and non-judicial systems to ensure such victims have access to effective remedies.
To address these challenges, we recommend the following three practical steps:
- Firstly, creating a National strategy on responsible business practice that investors and businesses can rely on to make longer term investment plans in Viet Nam, and give communities and other stakeholders the confidence they need to know their rights are being protected.
- Secondly, extending to businesses the support they need to implement responsible practices, through training, and financial incentives, to promote the champions, and single out those behaving irresponsibly.
- Thirdly, in all interventions, ensuring a participatory multistakeholder process for advancing responsible business practice, including businesses, employers, employees, consumers and affected communities.
This Consultation today is a hugely welcome step take by the Ministry of Justice in this regard.
In conclusion, I would like to reiterate that responsible business should not be seen as another layer of regulation or as an administrative burden, but rather, an essential foundation for ensuring Vietnam’s continued economic, social and environmental development – vital to the achievement of the SDGs.
As this requires collective effort from multiple stakeholders, we look forward to your support as we continue to progress our Responsible Business project to create a more favourable and sustainable business environment in Viet Nam.
Thank you/ Xin cảm ơn.