Vietnam: Operationalizing ESG - The National Action Plan for promoting Responsible Business Practices

Changes are on the horizon
26 Jan 2024    4 minute read
Operationalizing ESG National Action Plan for Promoting Responsible Business Practices in Vietnam Sustainability Diversity & Inclusion EC Featured Content

In brief

This alert details the National Action Plan to Promote Responsible Business Practices in Vietnam in the 2023 – 2027 period (“RBP NAP”), wherein Vietnam identifies priorities in the fields of:

  i. Investment
  ii. Labor
  iii. Vulnerable Group Protection
  iv. Environmental Protection
  v Consumer Protection

Contents

Under the RBP NAP expanded implementation documents or amendments will be considered in relation to the following regulations:

  • The Bidding Law
  • The Law on Occupational Safety and Health, Law on Social Insurance, Law on Employment
  • The Trade Union Law
  • Law on Gender Equality, Law on People with Disabilities, Children's Law
  • Legal documents on natural resources and the environment
  • The Law on Consumer Rights Protection
  • The Code of Civil Procedure
  • The Laws on the handling administrative violations in the fields of investment, labor, environmental protection, protection of vulnerable groups, and consumer protection
  • The Commercial Arbitration Law

Furthermore, the development of two new laws will also be explored:

  • Law on Gender Change
  • Law on Personal Data Protection

In detail

ESG priorities and related responsible business initiatives continue to grow in importance resulting in a shift from a moral imperative to a legal obligation. Vietnam has recently embraced this change via the drafting of a National Action Plan (NAP) to promote responsible business practices (RBP). Specifically, on 14 July 2023, the Prime Minister promulgated Decision No. 843/QD-TTg Promoting the RBP NAP. Subsequently, on 2 October 2023, the Ministry of Justice (MOJ) released Decision No. 2306/QD-BTP Promoting a Plan for Implementing the National Action Program to Complete Policies and Laws to Promote Responsible Business Practices in Vietnam in the Period 2023-2027.

The RBP NAP is intended to comply with the following instruments:

  • The 17 United Nations Sustainable Development Goals (SDGs).
  • Resolution No. 27-NQ /TW dated 9 November 2022 of the 13th Party Central Committee on continuing to build and perfect the Vietnamese socialist rule-of-law state in the new period.
  • Vietnam's international commitments in bilateral and multilateral economic cooperation frameworks, especially the Vietnam - European Union Free Trade Agreement (EVFTA), Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Under the RBP NAP expanded implementation documents or amendments will be considered in relation to the following regulations (completion date in parenthesis):

i.
Investment

ii.
Labor

iii.
Vulnerable Group Protection

 iv.
Environmental Protection

v.
Consumer Protection
Propose improvements to implementation of the Bidding Law 
(2024).

Review, propose laws and regulations related to the promotion and protection of labor rights and welfare of employees (2025).

Release policies on protecting employment, retraining workers and protecting workers' 
rights in relationships with digital platform companies (2025).

New Trade Union Law and implementing documents (2027).

Prevent and stop acts of gender-based violence in the online environment (2025).

Review and propose adjustments to legal documents related to gender equality; anti- discrimination and protection of the rights of vulnerable groups in business activities to align with international standards, including: Law on Gender Equality, Law on People with Disabilities, Children's Law and documents guiding their implementation (2025).

Develop a Gender Transition Law to implement Article 37 of the Civil Code 
(2025).

 Make improvements to legal documents on natural resources and environment to promote RBP
(2027).

Implementing documents for the Law on Consumer Rights Protection (2024).

Research and prepare proposals to develop a law on personal data protection 
(2026).

Additional amendments are proposed in related fields, including:

  • Review and propose adjustments to the Code of Civil Procedure and related documents to promote RBP (2027).
  • Research and review laws on the handling administrative violations in the fields of investment, labor, environmental protection, protection of vulnerable groups, and consumer protection to promote RBP (2027).
  • Research, review and propose improvements to the Commercial Arbitration Law and related legal provisions on conciliation and out-of-court dispute resolution to promote RBP (2025).

Additionally, the RBP NAP prioritizes improving the effectiveness and implementation of existing laws and policies via improved:

  • Investment project screening.
  • Mechanisms to collect statistics, develop databases, monitor, receive and process feedback in priority areas.
  • Promotion, guidance and dialogue relating to RBP.

The implementation of the RBP NAP will offer both challenges and opportunities. On one hand legislative changes relating to RBP may increase the compliance obligations for enterprises. At the same time early adopters of RBP may enjoy an elevated reputation among peers, consumers, talent and stakeholders. Furthermore, enshrining RBP in the law will allow enterprises to harmonize compliance requirements within their supply chain.

* * * * *

If you would like more information on how ESG obligations may impact your operations in Vietnam, please do not hesitate to contact us.

Contact Information
Lan Phuong Nguyen
Partner
Ho Chi Minh City
Read my Bio
lanphuong.nguyen@bakermckenzie.com

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