Enhancing the corporate social responsibility (csr) of fdi enterprises in viet nam in the new context

Nội dung text: Enhancing the corporate social responsibility (csr) of fdi enterprises in viet nam in the new context

1. ENHANCING THE CORPORATE SOCIAL RESPONSIBILITY (CSR) OF FDI ENTERPRISES IN VIET NAM IN THE NEW CONTEXT MA. Mai Thanh Tu1 Summary: With the capital flow of Foreign Direct Investment (FDI), Multinational Companies and Foreign Invested Companies have exposed new codes of conduct about Corporate Social Responsibility (CSR). Although CSR seems to be familiar to developed countries, it still seems to be unfamiliar in Vietnam and does not have the complete and comprehensive awareness. Nowadays, in the context of globalization, implementing the CSR of Vietnamese enterprises, especially in Foreign Invested enterprises not only contributes the long-term benefit for growth and economic development but also brings the realistic benefits for enterprises. In order to have a clearer look at the situation of executing CSN in Vietnamese FDI enterprises, this article will analyse these perspectives: obligations to the state, labor relations within enterprises, protection of workers’ rights and benefits, environmental protection, community development etc. Then, some solutions are proposed to improve social responsibility of FDI enterprises in the context that Vietnam is actively integrating deeply and widely into the global economy. Keywords: CSR, FDI, globalization, Vietnam INTRODUCTION Globalization and its reverses have brought consequences that cause negative effect to growth and social economic development of each nation: the gap of the rich and the poor, unemployment, overexploitation of nature resources and industrial wastes causing the environment severely polluted; diseases arise and develop such as SARS, avian flu, Ebola and COVID-19 In that context, well-implementing enterprises’ corporate social responsibility will not only help them do business well but also support them to solve strategic issues related to business and social perspectives. 1. GENERAL INTRODUCTION ABOUT CORPORATE SOCIAL RESPONSIBILITY There are many different conceptions about corporate social responsibility (CSR). Each organization, company and government look at CSR with its own view, this depends on their conditions, features and level of development. It can be thought that: CSR is the guarantee of enterprises to contribute to consistent economic development through complying with standards on environmental protection, gender equality, occupational safety, labor rights, fair pay, staff training and development, community development, etc. The reality in the past time have confirmed that when enterprises implement social responsibility will make many benefits that will contribute to improving the quality, brand value and reputation of enterprises, that help enterprises increase revenue, attract partners and investors and workers. Especially, in the current context of globalization and international integration, if companies do not comply with social responsibility, they will not be able to 1 VNU University of Economics and Business; Email: tumaithanh9@gmail.com 846
2. INTERNATIONAL CONFERENCE PROCEEDINGS: GLOBAL FDI AND RESPONSES OF FDI ENTERPRISES IN VIETNAM IN THE NEW CONTEXT 847 access the world market. . For Vietnam, the improvement of market economy institutions and the current trend of global economic integration have created many advantages and opportunities for Vietnamese enterprises to develop. At the same time, it also poses great challenges if any enterprise cannot timely change and adapt to new conditions. Therefore, an enterprise that is towards sustainable development should not only focus on business development but also pay attention to social responsibility. In which, take special priority in taking care of workers’ lives; To preserve the surrounding environment with practical views and actions that have the meaning in contributing to the social community. This is even more evident in 2020 - a challenging year for the global economy due to the COVID-19 epidemic, natural disasters and fluctuations in the political situation, trade conflicts among the nations About the content of CSR, many business leaders believe that the social responsibility of enterprises is to participate in programs to help social objects such as supporting disabled people, orphans, building charity houses, and supporting the people affected by flood and natural disaster. That is true, but it is not enough, because besides participating in volunteer activities, CSR also includes other issues such as: performing obligations to the state, the treatment regime for employees, environmental protection policies and commitments to the market about the quality or safety of products and services that enterprises provide To sum up, CSR of enterprises in the current context is reflected in the following aspects: - Fully perform the obligation of contributing to the state budget - Ensure legal rights and interests for employees - Ensure employee welfare - Protecting the rights of consumers - Strictly implement protecting environment protection and natural resources - Actively participate in community development activities 2. CURRENT SITUATION OF IMPLEMENTING CORPORATE SOCIAL RESPONSIBILITY OF FDI ENTERPRISES IN VIETNAM Analysing the CSR of FDI enterprises in Vietnam will be based on the following criteria: 2.1. Fulfilling the obligation to contribute to the state budget In more than 30 years of attracting FDI, Vietnam has attracted an average of more than 7 billion USD/year, about 2.15 million USD/a thousand people. In the period 1988-2019, about 47% of registered FDI capital was carried out [9]. For state budget revenue, foreign-invested enterprises have increased their contribution to state budget revenue in recent years. (Table 1). Table 1. Revenue before tax and contribution to the state budget of FDI enterprises Revenue before tax Rate in revenue of FDI enterprises Contribution to state budget (Billion of Rate in contributing Year (Billion of VND) (%) VND) to state budget (%) 2015 233.792 34 140.979 30 2016 327.401 45.9 161.608 21.9 2017 347.948 43.8 172.166 27.9 2018 343.390 38.34 186.371 28.2 2019 387.064 40 210.234 27.6 Source: Author’s own calculation and synthesis from different sources
3. 848 KỶ YẾU HỘI THẢO KHOA HỌC QUỐC TẾ FDI TOÀN CẦU VÀ ỨNG BIẾN CỦA DOANH NGHIỆP FDI TẠI VIỆT NAM TRONG BỐI CẢNH MỚI In fact, although FDI enterprises have low rates of number of businesses, employees and capital, they are currently creating the largest profits compared to enterprises in the remaining economic sectors. But, in contrast to the largest profit, FDI enterprises have the lowest rate of contributing to the state budget. Graph 1 shows that, compared to the proportion of profit before tax and the total number of enterprises in the country, the rate that FDI enterprises contribute to the state budget is very low. (Source: data from table 1) In 2015, FDI enterprises generated about 233.8 trillion VND in pre-tax revenue, accounting for 34% of the total before tax revenue of enterprises in the country, but their contribution to the state budget was only 23% [11]. From 2016 to 2019, on average, the proportion of pre-tax revenue of FDI enterprises in the total number of enterprises in the country is over 40%, but the average contribution rate to the state budget of FDI enterprises is only 26.4%. Therefore, the revenue is high, but the tax payment of FDI enterprises is very modest. According to synthesized, analysis results of the financial report of FDI enterprises in 2019, which have just been reported to the Prime Minister by the Ministry of Finance, in 2019, Vietnam Samsung company’s production activities earned a pre-tax revenue of nearly 4 billion USD. In particular, two big companies of Samsung Vietnam, Samsung Electronics Vietnam (SEV Bac Ninh) and Samsung Electronics Thai Nguyen (SEV Thai Nguyen), gain about 1.1 million billion VND in profit ( accounting for 48% of total revenue of the whole industry ). In which, profit before tax of Bac Ninh SEV is 37,364 billion VND, profit before tax of Thai Nguyen SEV is 48,554 billion VND; profit after tax of SEV Bac Ninh is VND 35,029 billion and SEV Thai Nguyen is VND 46,083 billion. However, the actual budget payment of both is 2,858 billion VND and 2,079 billion VND respectively from the corporate income tax rate paid from 5.1 to 6.25%. To be simplified, Samsung Vietnam for every 100 dong profit only has to pay tax from 5 to 6 dong, compared to the normal corporate income tax rate of 20 dong. In addition to Samsung Vietnam, in 2019, there are also many foreign “big men” in the high-profit industry group that always report losses, causing
4. INTERNATIONAL CONFERENCE PROCEEDINGS: GLOBAL FDI AND RESPONSES OF FDI ENTERPRISES IN VIETNAM IN THE NEW CONTEXT 849 the tax industry to conduct inspections and collect hundreds of billions of dong like Standard Chartered Besides, although revenue and profit before tax of FDI enterprises have increased steadily over the years, the rate of enterprises reporting losses, accumulated losses, capital losses over the years has increased and has not shown any sign of decreasing. This is the way of FDI tax evasion through transfer price form. Notably, although the growth rate in the number of enterprises reporting losses and accumulated losses was high, the growth rate of investment and operation scale of those enterprises was reported high too. This shows that the transfer price situation of FDI enterprises is increasing and more complicated. According to a report of the Ministry of Finance on the results of synthesis and analysis of financial statements in 2019 of foreign-invested enterprises (FDI), up to 66% of FDI enterprises reported losses. Specifically, Iron and Steel Co., Ltd, Hung Nghiep Formosa Ha Tinh, has total assets of the Company of 286,804 billion VND, of which, short-term assets are 38,927 billion VND, inventory is 26,573 billion VND, which rose from 25,044 billion VND at the beginning of the period. Liabilities are VND 185,990 billion, of which, short-term debt is VND 64,393 billion, long-term debt is VND 121,596 billion. Equity is VND 100,814 billion, of which, owner’s investment capital is VND 118,308 billion, accumulated loss is VND 25,388 billion. Revenue from production and business activities and revenue from financial activities of the Company in 2019 was VND 72,030 billion. However, the loss in 2019 of Hung Nghiep Formosa Ha Tinh Iron and Steel Company Limited was 11,538 billion VND. The amount paid to the state budget in 2019 of the Company is 51.6 billion VND. On the other hand, Hoa Phat Group’s revenue in 2019 was lower, reaching 64,678 billion VND, but paying VND 6,639 billion to the budget[2]. If we look at Posco Yamoto Vina Steel Joint Stock Company (Ba Ria - Vung Tau), the same scenario can be seen. Or like Posco Yamoto Vina Steel Joint Stock Company (Ba Ria - Vung Tau) in a similar scenario. On December 31, 2019, the total assets of the company was 19,957 billion VND, of which short-term assets was VND 11,034 billion (inventory was VND 2,245 billion); Liability was VND 15,649 billion, of which short-term debt was VND 15,646 billion, long-term debt was VND 2 billion; equity was 4,308 billion VND, of which owner’s investment capital was 7,168 billion VND, accumulated loss is 8,904 billion VND. In 2019, the company reported a loss of 2,780 billion VND, and paid 41 billion VND to the state budget in 2019. 2.2. Ensuring workers’ legal right and benefits Firstly, about labor relations: In general, the enforcement of labor contracts between employees and employers in FDI enterprises is quite good. Labor relations in industrial areas and manufacturing areas were initially implemented on the basis of agreement and self- determination of the parties according to the principles of the market and the law. Basically, enterprises in industrial areas and manufacturing area strictly comply with the law on signing labor contracts. Employers’ compliance with the labor law is also put a higher concentrate and has many positive changes, many FDI enterprises are interested in improving working conditions, increasing income, and supporting housing and taking care of the cultural and spiritual conditions for employees. For example, through reviewing and evaluating the terms of the collective labor agreement of the Bac Giang Provincial Labor Confederation, up to 80% of agreements in this province have from 3 to 5 contents beneficial to employees that
5. 850 KỶ YẾU HỘI THẢO KHOA HỌC QUỐC TẾ FDI TOÀN CẦU VÀ ỨNG BIẾN CỦA DOANH NGHIỆP FDI TẠI VIỆT NAM TRONG BỐI CẢNH MỚI are outside the mandatory provisions of the labor law. Some enterprises strictly implement new signing, re-signing or supplementing arising appendices with more favorable terms for employees, such as: Nichirin Vietnam Co., Ltd (Quang Chau Industrial Park, Bac Giang) has terms that allow workers to take breaks between shifts to reduce stress; Viet Pan Pacific Co., Ltd (Bac Giang City) rewards active employees weekly and monthly ; Haem Vina Co., Ltd (Song Khe Industrial Park - Noi Hoang, Bac Giang) supplies vitamins to pregnant female workers and advances her salary of 6 months of maternity leave for female workers giving birth to ensure living expenses However, there are still many FDI enterprises that do not make commitments in contracts seriously, that violate to workers’ rights, lead to labor disputes or collective work cessation. The violations mainly focused on the following issues: salary, bonus, attendance; too much overtime, unsafe working conditions, do not pay social insurance , behavior, employee management in the total number of labor contracts executed at FDI enterprises, the number of labor contracts with unspecified time just accounted for only 33.4%; Number of labor contracts from 1 year to less than 3 years, accounting for 55%; the number of contracts from 3 months to less than 1 year accounted for 8.7% and under 3 months accounted for 1.4%; The remaining 1.5% is the number of employees working in FDI enterprises without labor contracts [6]. FDI enterprises all apply working time of 8 hours/day, 48 hours/week, however, the number of overtime hours is relatively large, each employee works 275.8 hours/year on average. The number of overtime hours is especially high in textile, footwear and electronics enterprises. Many businesses have overtime hours of up to 500-600 hours/year/employee. The Department of Labor, War Invalids and Social Affairs of Ho Chi Minh City has shown that: The average overtime of employees is 0.89 hours/day, 22 hours/month, 260 hours/year for 90% of employees. Thus, the number of workers who have to work overtime is very large. The average total overtime hours in the year is about 30% higher than the provisions of the Labor Code. Secondly, there are general regulations in the payment for labor by Vietnamese enterprises that are issued by the State. However, FDI enterprises pay salaries in their own way, not according to the regulations on salary scale and table. In theory, wages and salaries are an agreement between the employee and the employer. However, on the common ground, the general feature of the majority of unskilled Vietnamese workers is that they are untrained, have no qualifications or skills, or are at a very low level, so the ability to negotiate to reach an agreement on salary in a labor contract with the employer is not feasible. According to statistics of the Ministry of Labor, Invalids and Social Affairs, in recent years, the average monthly salary of workers in FDI enterprises ranks the second (The highest is employees working in state-owned enterprises). Specifically, for FDI enterprises: The average salary in 2019 was 7.5 million VND/person/month, which is 2.7% higher than the number in 2018. The average 2020 New Year bonus was 800,000 VND/person, which is only equal to 56.7% compared to 2019. The Lunar New Year bonus of 2020 averaged 6.91 million VND/ person, which is 11.1% higher than the number in 2019. For FDI enterprises in Hanoi, the average salary in 2020 was 6,300,000 VND/person/ month, which is equal to 2019. In which, the enterprise with the highest salary was 180,000,000
6. INTERNATIONAL CONFERENCE PROCEEDINGS: GLOBAL FDI AND RESPONSES OF FDI ENTERPRISES IN VIETNAM IN THE NEW CONTEXT 851 VND/person; Enterprises with the lowest salary reached 4,730,000 VND/person/month [10]. This average salary is 8% higher than the average of the private enterprises that rank second in payment of salary. That shows the interest of FDI enterprises in the treatment and attraction of workers, especially workers with high professional capacity (shown by the highest salary that enterprises pay to employees). In addition, there are still some disputes over salary and bonus between employees and FDI enterprises on issues such as slow salary adjustment when the State increases the minimum wage; wages between different types of labor are not clearly regulated, especially between simple and technical workers, between people who have worked for many years and those who are new is not significant different; working overtime, overtime exceeding the prescribed time, but paying inadequate wages [6]. Thirdly, about the implementation system of social insurance. Over the past years, FDI enterprises have developed more and more, becoming one of the most dynamic economic sectors in Vietnam’s economy, contributing to increasing budget revenue, creating jobs for people, and stabilizing the social situation. Particularly for the field of social insurance, health insurance and unemployment insurance, by the end of 2019, the total number of FDI enterprises participating in those insurances nationwide was 26,066 enterprises, accounting for 6.8% of the total number of enterprises participating in social insurance and health insurance; with a total number of more than 4.7 million people participating in social insurance, which is equal to 43.1% of the total number of participants in social insurance in the enterprise sector; total source of collection of social insurance, health insurance and unemployment insurance from this sector equals 46.5% of total revenue of enterprises; the average salary participating in social insurance is more than 5.7 million VND/person/month, which is 6.9% higher than the general average of the business sector. By March 2021, the total number of FDI enterprises participating in social insurance, health insurance and unemployment insurance was 26,987 enterprises, which increases 3.53% compared to 2019. The total number of participants was 4,979,354 people, which increases 5.9% compared to 2019; the average salary of people paying in social insurance, health insurance and unemployment insurance was more than 6 million VND/ person/month, which is 5% higher than the number in 2019 [3]. It can be seen that the FDI sector has been creating a large number of jobs for Vietnamese workers, so ensuring social security in this area is very important. The FDI sector contributes not only in ensuring and improving the quality of life for employees, but also in increasing labor productivity, efficiency and profit, improving competitiveness, and promoting the connection between enterprises and employees. They are the driving forces for enterprises to increasingly implement national and international standards on working conditions, supporting the community , contributing to the country’s socio-economic development in a sustainable way. Fourthly, about training to improve the quality of human resources. It can be said that labor resources are the determining factor for the success or failure of enterprises. In order to have the success as before, FDI enterprises in Vietnam have made certain investments in retraining workers when accepting them to enter to work. Some FDI enterprises have invested great financial resources and efforts to train human resources, such as Toyota Vietnam with many
7. 852 KỶ YẾU HỘI THẢO KHOA HỌC QUỐC TẾ FDI TOÀN CẦU VÀ ỨNG BIẾN CỦA DOANH NGHIỆP FDI TẠI VIỆT NAM TRONG BỐI CẢNH MỚI training programs for engineering students. They have created quality human resources not only for their own businesses but also for society. Toyota Vietnam has implemented technical training programs since 2000 with the goal of supporting universities and colleges to provide technical training and vocational education in the automobile industry. The programmes have improved the quality of student and skilled technicians significantly. In early 2021, the Vietnam - Korea Business & Investment Association (VKBIA), VKBIA Group Joint Stock Company, signed a memorandum of comprehensive cooperation with Industry University of Ho Chi Minh City (IUH) aims to train qualified, skilled and culturally and linguistically knowledgeable human resources , that in order to meet the needs of human resources working at FDI enterprises, enterprises in supporting industry, manufacturing enterprises and the fields that society is in need of. Fifthly, about the implementation of building a safe and effective working environment. In general, in the work of ensuring labor safety at enterprises, FDI enterprises perform better than domestic enterprises. The reason is that these enterprises have better financial potential, so there is a greater investment in labor safety work. With multinational corporations, they always have a set of standards about safety to be carried out at factories. However, there are still many serious occupational accidents and unsafe incidents in FDI enterprises. Typically, the accident caused by collapsing scaffolding at the Formosa Project of Iron and Steel Hung Nghiep Formosa Ha Tinh Company in March 2015 caused 13 people to be killed and 29 people to be injured. Or the scaffolding collapse at the Saigon South Office Building (Tan Phong ward, District 7), which happened in July 2015, killing 3 people, injuring 4 people 2.3. Implementing CSR regarding to customers Customers are the most important strategic business partners in strategic of enterprises, who determines the speed of development, revenue, profit and the success of enterprises. Therefore, in the matter of supplying products and services, almost businesses have done well in their distribution role, that is bring products and services to customers, then bring the revenue for the company. However, for the quality of products and services and ensuring the safety for customers, many businesses have made a series of events related to agricultural products and food that does not ensure food hygiene and safety that causes negative consequences to customers. There are cases of production of food containing substances harmful to human health, such as soy sauce contains the carcinogen 3-MCPD, noodle soup contains phosmol, foods contain fenugreek, milk contains melamine, production and import of fake drugs The pressure of enterprises to lower the purchase price has led big distributors to exert pressure to lower prices, mistreat employees and impose harsh conditions on suppliers. It’s turn of these people to exploit their workers by not complying with minimum human rights thresholds. Consumer’s organizations mainly focus on optimizing the relationship between quality and price, so not everyone is interested in implementation of CSR for the community. 2.4. Implementing the protection of environment and natural resources Besides the contributions to the state budget, job creation and technology transfers, a number of FDI enterprises in Vietnam are quite active in environmental protection. In general, FDI enterprises understand and basically implement regulations on managing
8. INTERNATIONAL CONFERENCE PROCEEDINGS: GLOBAL FDI AND RESPONSES OF FDI ENTERPRISES IN VIETNAM IN THE NEW CONTEXT 853 waste water, emissions and solid waste. However, besides the positive contributions, the FDI sector has also been creating many negative impacts on the sustainable development of the country, specifically the negative impacts on the ecological environment that cause damage to the environment and greatly harm to the property and health of the community. The environmental violations of FDI enterprises that are often encountered during the inspection process are violations of environmental standards on emissions, wastewater, and solid waste. In fact, many industrial zones have come into operation but have not yet implemented the construction of a local wastewater treatment system or have but do not operate, or operate inefficiently or degraded. There are still a number of businesses that accidentally or even intentionally violate regulations, causing heavy consequences for the ecosystem and reducing the sustainability of Vietnam’s economic growth. According to the inspection results of the General Department of Environment in 28 northern provinces in 2017, 2018 and 2019, the rate of FDI enterprises violating regulations on environmental protection has increased over the years. Specifically, in 2017 there were 12/27 violating enterprises, accounting for 44.5%; In 2018, there were 14/25 violating enterprises, accounting for 56% and in 2019 there were 13/19 violating enterprises, accounting for 68% [1]. The violations often focus on a number of specific acts such as: Not to repeat the project’s environmental impact assessment report as prescribed; incorrect implementation of one of the contents of the environmental impact assessment report; there is no certificate of completion of environmental protection works serving the operation period of the project; or improper implementation one of the contents of the approved environmental protection project. In addition, there are also enterprises that cause violations of waste management such as: performing periodic waste monitoring improperly and incompletely according to regulations; incomplete declaration of transferred harmful waste in harmful waste documents; self-treating harmful wastes without approval from competent authorities In many cases, enterprises violate regulations on wastewater management such as: discharging wastewater in excess of technical standards; install pipelines to discharge untreated waste into the environment. In order to reduce costs and increase profits, many businesses, although having waste treatment systems, always intentionally violate them, using sophisticated tricks and stealthily discharging waste into the environment. They build a secret and complicated system, disguised by a standard system, so it is difficult to detect, such as the case of Vedan Vietnam Company, Miwon Limited Liability Company, In addition, many companies or corporations are considering social responsibility for the environment and labor as a “burden” or just a way of marketing and creating an image to bring the most benefit for businesses. Besides, about 80% of FDI projects have average technology compared to the world (80%), a significant part have outdated technology (14%) and only 6% have high technology. Even in the case of Nokia, Samsung the production stages in Vietnam are mostly in the final stage, just assembling, which does not require high-quality labor and advanced technology. In addition, because many FDI projects have put on outdated technology lines and are not self-conscious in complying with regulations on environmental protection so lead to negative impacts on the environment such as: Vedan Company in Dong Nai, Tung Kuang Company in Hai Duong, Long Tech Company in Bac Ninh and recently Taiwan Formosa Company in Ha
9. 854 KỶ YẾU HỘI THẢO KHOA HỌC QUỐC TẾ FDI TOÀN CẦU VÀ ỨNG BIẾN CỦA DOANH NGHIỆP FDI TẠI VIỆT NAM TRONG BỐI CẢNH MỚI Tinh At the same time, the uncontrolled and unplanned exploitation of mineral resources by FDI enterprises from oil and gas to coal, ore has been causing great loss of Vietnam’s non- renewable resources. 2.5. Participating in community development For the community, in general, the responsibility of the enterprise is to contribute to the development of the local community where the enterprise operates. In which, doing charity is an honorable activity of enterprises in order to develop the community, help the poor people, and build their images. Those CSR activities through charity include diverse activities such as giving scholarships, building charity houses, building schools, supplying clean water, visiting and donating equipment and necessities, periodically recruiting disabled people, providing free medical services, supporting disaster-affected areas, etc. Typically, in 2019, Aviva Community Fund of the Aviva Insurance Company in Vietnam will support 3 billion VND for community projects in three categories of environment, health and education. This is not the first year that enterprises have implemented social responsibility (CSR) in Vietnam, this program has been implemented since 2017. From Aviva’s point of view, corporate community projects will bring positive effects. The strongest and pervasive impact is when local individuals and social organizations implement the projects. In addition, Prudential also prioritizes investment in activities, which have practical meanings for the sustainable development of the community, they focus on all three areas: healthy living, education and safety. Only in the period of 2011 to 2020, the investment of Prudential for community activities reached more than 205 billion . In 2020, Prudential prioritizes joining hands with the whole country to fight against the epidemic with many activities, such as: providing medical equipment, masks and hand sanitizer to 14 frontline hospitals, and giving necessities to people in the region affected by the disaster, deploying “Rice ATM - Give love” in many provinces and cities. Then, each enterprise has done well on different levels. However, there is a common thing that FDI enterprises often not only carry out CSR as a simple volunteer activity, but they also regularly deploy these activities to be able to support more areas in need. They support through cooperation with local society, since the start of entering Vietnamese market. 3. ASSESSMENT OF THE IMPLEMENTATION OF FDI ENTERPRISES’ CORPORATE SOCIAL RESPONSIBILITY IN VIETNAM It is important to build a socially responsible business model for any business. Particularly for FDI enterprises, this also affects the long-term survival and development in a country. In fact, CSR was introduced into our country through the activities of FDI companies. These companies often develop universal codes and standards of business ethics to apply in many different regions and markets. Up to now, a number of multinational enterprises have carried out methodical and highly effective social activities, and contributed to the development of the community. Through the above analysis, it can be seen that FDI enterprises have performed quite well in some aspects of CSR in the following points: - Paying attention to the treatment and attraction of workers, especially with highly qualified workers, is reflected in the highest salary that enterprises pay employees compared to other groups of enterprises. - Paying attention and spending a lot of money, providing many training opportunities for local workers to meet the higher requirements of the production process.
10. INTERNATIONAL CONFERENCE PROCEEDINGS: GLOBAL FDI AND RESPONSES OF FDI ENTERPRISES IN VIETNAM IN THE NEW CONTEXT 855 - Actively implementing community development programs, contributing to improving the social-cultural life of the host country, through cooperation with local society. Besides many aspects that have been done quite well, many FDI enterprises have not implemented CSR well, particularly: - There are still many FDI enterprises avoiding responsibility for contributing to the state budget, using the form of “transfer pricing” to avoid taxes, that causes loss to the state budget. - The violating situation of the regulation about legal rights and interests of employees still occurs. Many FDI enterprises intentionally evade, use sophisticated tricks, and are not self-conscious in complying with regulations on occupational safety and hygiene. - Not paying enough attention to protecting the rights of workers. Attracting labor is only to exploit the source of cheap labor with little training, even to use the probationary mechanism to continuously replace workers. - Despite having more conditions and potential than domestic enterprises in the issue of building a safe and effective working environment for employees, there still exist many FDI enterprises having accidents and unsafely at work, that causes serious consequences. - There are still many FDI enterprises that seriously violate regulations on environmental protection such as discharge of waste, that causes polluted water, air, noise and land In addition, many FDI projects have put backward technology into production lines, lack of self-conscious in complying with regulations on environmental protection, then put negative impacts on the environment. - The majority of the CSR activities that are well done are “surface” activities such as charity, while other contents of CSR have not been fully implemented. 4. SOLUTIONS TO IMPROVE THE IMPLEMENTATION OF ENTERPRISES’ CORPORATE SOCIAL RESPONSIBILITY In order to raise awareness of FDI enterprises in implementation of social responsibility, especially in the current context of globalization and climate change, FDI enterprises as well as the state need to take a number of measures as follow: 4.1. State agencies’ perspective Firstly, strengthen propaganda about the obligations and benefits of implementing corporate social responsibility. Propaganda can be carried out through many forms, such as through the mass media, mandatory training programs for business leaders, scientific conferences and seminars Moreover, this work of propaganda should be extended to the relevant state management agencies, managers, macro policy makers At the same time, the content of implementation of corporate social responsibility, updated information on codes of conduct and related corporate social responsibility standards must be fully and clearly disseminated to enterprises. Secondly, clearly delimit the responsibilities of state management agencies and related subjects in policy making, information, propaganda, inspection and handling violations of enterprises on the issues that related to corporate social responsibility in general, and that that related to responsibility to the market, consumers and environmental protection
11. 856 KỶ YẾU HỘI THẢO KHOA HỌC QUỐC TẾ FDI TOÀN CẦU VÀ ỨNG BIẾN CỦA DOANH NGHIỆP FDI TẠI VIỆT NAM TRONG BỐI CẢNH MỚI in particular. Ministries/sectors and localities need to actively assign tasks and coordinate explicitly, give prominence to the responsibilities of the assigned leaders and individuals; promote propaganda, seriously and effectively implement the regulations of the law Thirdly, strengthen the connection and inspection through to the comprehensive process in environmental protection and labor protection from the central to local levels, at the same time actively support social organizations, environmental protection and workers. The coordination between state management agencies and other related objects also plays a very important role, because corporate social responsibility is only highly appreciated and becomes urgent when there is a synchronous monitoring system, the combination between the government and civil forces in society, especially associations, non-governmental organizations and the press media. Fourthly, promulgate policies to encourage and support enterprises to implement corporate social responsibility. It is necessary to have strong enough measures to handle violations of enterprises in the implementation of corporate social responsibilities, especially for enterprises producing agricultural products and food that do not meet quality standards, affecting the quality of food and agricultural products and harmful to consumers’ health and lives, cause pollutions on the environment; At the same time, it is necessary to strengthen forms of encouragement and reward for businesses that are self-conscious and well perform corporate social responsibilities, such as giving corporate social responsibility awards, “green” brands, and certificates for enterprises that ensured the requirements related to social responsibility standards in the applied codes of conduct Fifthly, strengthen inspection and examination, timely handle violations of the law on environmental protection and employees; establish and introduce switchboards, hotlines, websites for advice, and services on environmental protection and workers. In addition, it is necessary to encourage to establish representative institutions, intermediaries, non- governmental organizations, associations, interest groups, etc., which are civil organizations that play an important role in preventing and protecting rights of workers and consumers from the violations of CSR by enterprises with the environment and labor. 4.2. FDI enterprises’ perspective As mentioned above, implementing CSR brings to FDI enterprises their own benefits. Therefore, FDI enterprises need to attach much importance to CSR in the process of production and business activities. At the same time, it is necessary to have a methodical CSR implementation plan. Corporate social responsibility should be considered as a benefit of FDI enterprises so that they can actively deploy towards an effective business community with brand’s products that are trusted by consumers and build internal resources of valuable talents and to gain a good standing and reputation in society To achieve goals above, it is necessary to pay attention to following main measures: The first is to build a strategy to implement CSR because CSR is becoming an increasingly important activity for enterprises, especially for FDI enterprises to match the trend of standardization in behavior and professionalizing the organization. Therefore, FDI enterprises should make a strategic plan on implementing corporate social responsibility, because only
12. INTERNATIONAL CONFERENCE PROCEEDINGS: GLOBAL FDI AND RESPONSES OF FDI ENTERPRISES IN VIETNAM IN THE NEW CONTEXT 857 when there is a strategy, can FDI enterprises clearly define the goals as well as the path to implement corporate proactively and for the long term. FDI enterprises need to have a clear strategy and action plan, which is reviewed, monitored and evaluated by a system of specific criteria and widely recognized standards. Strategies should be towards the long-term goal of developing and implementing corporate socially responsible standards. In the work strategic planning, the company management board with the help of an agency that specializes in corporate social responsibility, can take the following steps: Defining the corporate social responsibility vision; Analyzing the current situation of corporate social responsibility and the impacting environmental factors to determine the priority order of issues related to corporate social responsibility, the conditions of resources for the implementation of corporate social responsibility; And proposing some overall solutions to implement corporate social responsibility. The second is to establish a team dedicated to corporate social responsibility. It is a common fact among Vietnamese companies that corporate social responsibility activities are often not carried out consistently and regularly. The basic reason is that there is no division within enterprises that is dedicated to corporate social responsibility. Therefore, in order to improve the performance of corporate social responsibility, it is necessary to establish a dedicated team on corporate social responsibility. Accordingly, this specialized team needs to have a size and composition that is suitable to the organizational structure of the enterprise, including departments related to the central issues of corporate social responsibility. On the other hand, in the dedicated team, the members also need to have a general understanding of corporate social responsibility, the company can hire more external experts to participate as part-time members to advise the specialized team and company about hot spots of corporate social responsibility that need to be resolved immediately. The establishment of a dedicated team may incur costs for businesses, but this is a necessary job for enterprises when at the beginning of implementing corporate social responsibility, when the principles and standards of corporate social responsibility are not well understood by employees, while corporate social responsibility activities have not been systematically implemented. In the future, when the company’s activities go in order, when the employees have a good awareness and actively implement corporate social responsibility activities, the members of the dedicated team can return to work in their previous departments. CONCLUSION The objective of building CSR of FDI enterprises in Vietnam is to strengthen the commitment of this sector to contribute to sustainable economic development, through the compliance with standards on environmental protection, gender equality, and labor safety. This is a long-term process that requires perseverance, persistence and decisiveness, with a view to affirm national- standardized values and create a business environment that respects the law, treasures business ethics, CSR, and fair competition in the business community.
13. 858 KỶ YẾU HỘI THẢO KHOA HỌC QUỐC TẾ FDI TOÀN CẦU VÀ ỨNG BIẾN CỦA DOANH NGHIỆP FDI TẠI VIỆT NAM TRONG BỐI CẢNH MỚI REFERENCE 1. Công Phong (2015), Enhancing the Enterprises’ CRS, source trach-nhiem-xa-hoi-cua-doanh-nghiep-20150814203245962.htm; 2. truong-309691.html 27/08/2020 3. gia-625528/ 4. nghiep-fdi-578587.html 5. canh-hien-nay-130646.html 6. phat-trien-kinh-te-viet-nam-333238.html 18/04/2021 7. 8. 9. Phạm Nguyễn Vinh (2018), Understanding comprehensive corporate social responsibility, https:// tinnhanhchungkhoan.vn/hieu-day-du-ve-trach-nhiem-xa-hoi-cua-doanh-nghiep-post179375.html 10. Phạm Văn Đức (2010). Corporate social responsibility in Vietnam: Theoretical issues and urgent practices – Journal of Philosophy. 11. Trần Ngọc Mai (2020), Corporate social responsibility of FDI enterprises in Vietnam, issues and solutions, PhD thesis, Foreign Trade University Hanoi