03/01/2018
The implementation of corporate social responsibility (CSR) will help small- and medium-sized enterprises (SMEs) achieve sustainable development by complying with environmental protection regulations; minimising the chance of environmental pollution; recycling waste; saving natural resources, etc. However, Vietnamese SMEs are having difficulty fulfilling their CSR duty and complying with local regulations on environmental protection. The Vietnam Environment Administration Magazine (VEM) spoke with Nguyễn Ngọc Lý, Director of the Centre for Environment and Community Research, to better understand the issue.
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| Nguyễn Ngọc Lý – Director of the Centre for Research of Environment and Community |
VEM: Can you talk about some of the available policies of the State that support Vietnamese SMEs in their production and business as well as in conducting CSR and environmental protection activities?
Ms. Nguyễn Ngọc Lý: In Viet Nam, to fulfill their CSR duty, enterprises must conform to current laws and legal policies such as the Law of Enterprises, the Law of Labour, the Law of Environmental Protection 2014 and the Law of Inspection and Examination. Regarding environmental protection, enterprises must be accountable for the impact of their activities on the environment and the community, which are displayed through controlling pollution, processing and recycling waste and saving natural resources. If they strictly follow the rules, there will be plenty of benefits for them.
At the moment, supportive policies for SMEs have focused only on production, as stated in Decree 90/2001/ND-CP and Decree 56/2009/ND-CP, issued by the government, regulating the assistance available to SMEs. According to the two decrees, the government can provide advantageous opportunities and conditions for SMEs to renovate their technologies and machines to develop new products and services and modernise their production and management systems to improve the quality of products and services and their competitiveness in the market. In addition, the Law of Small- and Medium-Sized Enterprises is being reviewed by the National Assembly, and it will be an important foundation for supporting the development of SMEs.
Although there is no specific policy to help SMEs conduct CSR activities to improve their ability to control pollution and protect the environment, the Law of Environmental Protection 2014 points out that enterprises can borrow from the Environmental Protection Fund to build the collective wastewater treatment system, clean polluted areas, monitor the quality of the environment and produce environmentally-friendly output.
VEM: What are the opportunities and challenges that Vietnamese SMEs have met with while following CSR and environmental protection regulations?
Ms. Nguyễn Ngọc Lý: Conducting CSR activities will help enterprises create a safer, healthier working environment, making employees focus on their work and increasing labour productivity. In addition, compliance with environmental protection policies will put businesses in a charge-free situation. According to Decree 155/2016/ND-CP, an enterprise can be fined from the lowest level of dozens of millions of dong to the highest of VND1-2 billion if it violates environmental protection rules. The important thing is the enterprises can reach higher profits if they do well in protecting the environment. For example, Hướng Hóa Quảng Trị Tapioca Starch Company saves around VND15 billion each year from collecting wastewater and processing biogas, while Văn Điển Fused Magnesium Phosphate Fertiliser Joint Stock Company saves around VND30-40 billion each year for re-using solid waste.
In addition to opportunities, enterprises have encountered many challenges in conducting CSR activities and following environmental protection rules. Despite the government issuing supportive policies to help SMEs improve their business and production, it has only provided solutions without any instruments or materials to implement those policies. Vietnamese SMEs have only just gotten used to the concept of CSR, and there are no specific policies and training programmes on this issue. Although the Ministry of Natural Resources and Environment has asked local departments to organise training courses on environmental protection for all enterprises, SMEs have been left out of the policy. Moreover, the training courses only provide information on current regulations, not instructions for how local businesses can comply with environmental protection rules. Local SMEs are confused when applying environmental protection rules in practice as many of the rules are listed in various legal documents, such as the Law of Environmental Protection 2014, the Law of Water Resources 2012, the Law of Inspection and Examination, the Law of Taxation on Environmental Protection and other decrees and circulars.
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| SMEs need providing training programmes that specialised in environmental protection |
VEM: Can you suggest some solutions to encourage SMEs to conduct CSR activities and follow current environmental production rules?
Ms. Nguyễn Ngọc Lý: We need to support SMEs in gaining access to finance and advanced technologies. The government needs to release the set of legal documents on environmental protection. The Vietnamese economy should be an environmental-industrial one, which is able to administrate the available technologies and improve them based on Viet Nam’s conditions. Those technologies must be standardised so that all SMEs are able to use them, while they are also supported by practical policies such as tax cuts and business financing.
A business always targets profit, thus a business sees environmental protection as being too costly and harmful to its profit margin. This idea is inaccurate, and we need to organise a training programme that focuses on environmental protection, instructs local businesses on ways to develop their environmental protection plans and educates them on environmental protection. In addition, we need to promote the names of typical local enterprises that have performed well in both making profits and protecting the environment, as examples for others to follow■
Thank you!
Châu Loan (Implemented)
