Promoting corporate social responsibility (CSR) and occupational safety and health (OSH) in public companies

The US-based Institute for Public Relations also defines CSR as “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis”.

CRS mainly deals with occupational standards regarding ethics, obligation and responsibility as well as businesses’ labor policies including those related to child labor, forced labor, non-discrimination at the workplace, the right to join the trade union, collective bargaining, salaries and wages, OSH, rewards and penalty, social security, training, employment, environmental protection…The majority of codes of conduct are based on conventions (mostly those of the ILO), international practices and national laws such as Conventions 25 and 105 on banning forced labor, Conventions 138 and 182 on prohibiting child labor and Convention 87 on freedom of association and the right to organize associations. Other agreements for reference include Convention 98 on the right to organise and to bargain collectively, Conventions 100 and 111 on non-discrimination in respect of employment and occupation, Convention 155 on OSH… The above-mentioned codes of conduct are basically in line with Vietnam’s labor laws.

A company’s business operations depend on customers’ needs. In developed nations, there is a strong demand for clean products, which means that they must be produced in a healthy working environment. As a result, multinational companies have issued codes of conduct that their contractors are requested to follow in an effort to prove the cleanness of their products. To gain orders, processors and exporters in developing countries including Vietnam must strictly observe codes of conduct introduced by the buyers. Some Vietnamese businesses such as the Thai Binh Shoes Joint Stock Company, the Viet Tien Garment Joint Stock Corporation, the Phong Phu Garment and Textile Corporation, Biti’s… have set a shining example in this regard.

For public companies, integrating CSR in business strategies is a good way to demonstrate their sustainable development and reinforce shareholders’ confidence.

OSH and environmental protection-an important component of CSR

OSH and environmental protection are closely associated with a company’s production and business activities as well as its personnel. OSH and environmental protection are a must for any business while employees should obtain or be provided with basic knowledge on these areas so that they can protect themselves and their colleagues from dangers at the workplace. Ensuring OSH and environmental protection is vivid evidence of CSR.

OSH and environmental protection are indispensable in every code of conduct. Any product which violates these standards is unclean and will be boycotted by the market.

Circular 14 jointly issued on Oct 10, 1998 by the Ministry of Labor, Invalids and Social Affairs, the Ministry of Health and the Vietnam General Confederation of Labor stipulates that every business must establish an OSH management system, a labor protection council and a unit in charge of labor protection and health. Businesses including public companies are requested to design labor protection plans and take related measures to ensure effective enforcement. They also have to conduct self-inspections on labor protection and report the outcome to relevant administrations.

In fact, the number of businesses that have fulfilled this assignment can only be counted on the fingers of one hand, hindering efforts to collect data on occupational accidents. According to incomplete statistics, only 6,658 businesses reported their labor protection practices in the first half of 2008, accounting for 4.21% of the total number of registered businesses. The figures in Hanoi, Da Nang and Ho Chi Minh city were 177 (or 0.35% of 50,319 businesses), 17 and 130 respectively. Statistics on the number of businesses operating in Da Nang and HCM city are not yet available.

There are thousands of public and listed companies in Vietnam but it is almost impossible to find any single line of OSH and environmental protection in their annual business reports, which are merely confined to business operations and finance. This burning problem should be discussed as soon as possible.

Vietnam needs statistics to prove itself as a country of high occupational standards in order to attract more customers, even demanding ones. Transparent and voluntary reporting of occupational standards will help businesses distinguish themselves from others in the market and raise their profile internationally. In addition, effective implementation of OSH and environmental protection practices indicates the success of a company. No shareholder or investor will be interested in a business, which fails to exercise its CSR and prevent occupational diseases and accidents, while polluting the environment. Shareholders have the legal and legitimate right to demand public companies include OSH and environmental protection activities in their balance sheets.

Recommendations

– State management agencies in charge of the securities market and OSH should encourage listed companies to improve the transparency and publicity of their occupational standards. OSH and environmental protection practices must be included in their annual business reports.

– Public and listed companies which excelled themselves in OSH and environmental protection should be honored and encouraged to share their experience with others.

– Research institutes and social organizations including the Vietnam Securities Business Association, the Vietnam Occupational Safety and Health Association and the Institute of Public Corporate Governance should continue to put forth measures to encourage OSH practices and secure successful OSH management in public companies.

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