Vietnamese enterprises and due diligence for supply chain

Vietnamese Government has signed 15 free trade agreements with countries and territories. In order to capture market opportunities from these agreements, enterprises need to understand and comply with the commitments and requirements of partner countries’ markets. Besides the productivity and quality requirements, foreign partners are increasingly tending to set more requirements, related to the society and environment in the process of selecting suppliers. This trend is being accelerated by regulations on due diligence responsibilities, relating to sustainable development, which have been enacted in some developed countries. These regulations require enterprises to assess and mitigate the risk of violating labor and environmental standards throughout the supply chain, said Ms. Tran Thi Hong Lien.

Although Vietnamese enterprises are not directly governed by the above provisions, they are still affected when participating in the supply chain of foreign companies, which is under the subject matter of the law. The early capture of the requirements of potential customers will help domestic enterprises prepare an effective internal monitoring system, ensuring their standard of labor and production activities environment.

Improving the enforcement of social and environmental standards in business operations will make an important contribution to enhancing the country’s position in the global supply chain as well as increase Vietnam domestic’s value. Domestic enterprises, developing in a more sustainable and responsible way will also contribute to fulfilling Vietnam’s commitments on sustainable development, including a commitment to carbon neutrality by 2050.

Ms. Gwendolyn Remmert – Director of Sustainable Links consulting company shared with enterprises some information about due diligence responsibilities in the supply chain, including differences with other social responsibility requirements and some legal regulations in other countries that apply to companies in the supply chain.

Ms. Tran Thi Hong Lien and Ms. Hoang Lan Anh consulted and exchanged with enterprises about the overview of Vietnam’s regulations on labor, society and environment, which enterprises must comply with international commitments, stipulated by Vietnamese law and the Code of Conduct of the Brand.

At the end of the meeting, businesses appreciated the timely information provided by VCCI, VASEP and had some requests to clarify and train on the issue of due diligence in the supply chain, such as identifying risks, appraisal process, compliance with regulations on labor, society, environment...