Responsible Business - Key to Balance Economic Growth and Sustainable Development

10:38:27 AM | 5/5/2022

Responsible business, an inevitable trend for all companies, shapes an equally competitive environment for all companies for the sake of corporate sustainability and social sustainability, including the rights of employees and consumers.

Fostering responsible business practices

According to Deputy Minister of Justice Phan Chi Hieu, promoting investment, manufacturing and business activities for rapid and sustainable development is both a requirement and a goal of all countries in the world, including Vietnam. Protecting legitimate rights and interests of stakeholders in these activities is the responsibility of government, business and society.

However, rapid economic growth not only brings opportunities but also comes with a number of social and environmental risks that have wide-ranging effects on workers, consumers, communities and important natural resources to human livelihoods. He said, some legal violations of market manipulation or illicit profit-making during the pandemic time, which are being handled in Vietnam, are examples of consequences of irresponsible business practices. Against this backdrop, promoting responsible business practices is key to balancing Vietnam's economic growth with sustainable development.

Currently, corporate social responsibility (CSR) is understood to be an optional encouragement, while responsible business practice is mandatory. Responsible business shows the responsibility of a company to its stakeholders such as employees, consumers, and communities affected by its business activities. Responsible business practices require it not only to comply with the law but also to take measures to assess risks for human, social and environmental factors and, at the same time, address potential threats like preventing, minimizing, or taking appropriate corrective action when violations occur.

Ms. Caitlin Wiesen, UNDP Resident Representative for Vietnam, said, Vietnam is among seven Asian countries carrying out the United Nations Guiding Principles on Business and Human Rights by developing the National Action Program. The construction of the program, which aims to promote respect for human rights in a business context, demonstrates Vietnam's strong commitment as a future member of the United Nations Human Rights Council, especially as Vietnam is running for office in the Council in the 2023-2025 term.

Notably, Vietnam is increasingly joining global supply chains and integrating deeply into the world economy. The country has signed more than 15 free trade agreements (FTAs), including two new-generation FTAs that advance sustainable trade with positive impacts on human rights. Promoting responsible business is a manifestation of Vietnam's strong political commitment to foster sustainable development in documents of competent authorities.

“However, business and human rights have not been sufficiently emphasized. The National Action Plan to uphold responsible business practices will fill this gap, and ensure consistency of policies and regulatory documents,” she said.

National Action Program on Policy and Regulatory Improvement needed

Deputy Minister Phan Chi Hieu said that Resolution 99/NQ-CP dated August 30, 2021 of the Government on Action Program (2021-2026 term) for implementation of the National Assembly's Resolution on Socioeconomic Development Plan in 2021-2025 assigned the Ministry of Justice to develop a scheme on promulgation of the National Action Program on Policy and Regulatory Improvement to promote responsible business practices in Vietnam, to be submitted to the Prime Minister in 2023.

The Ministry of Justice recently actively coordinated with central and local authorities, with the support of the United Nations Development Program (UNDP), to conduct studies, reviews and consultation workshops on this issue, in which it identified at least three approaches to preparing scheme contents, align them with execution tasks and solutions, including perfecting policies and regulations on responsible business practices; uphold the effect and quality of law and policy enactment; raise awareness and capacity of responsible business practices for authorities, businesses and civil society organizations.

He added that the Vietnamese legal system also regulates responsible business, pointing to the Civil Code 2015, Law on Enterprises 2020, Labor Code 2019, and Law on Environmental Protection. However, it also needs to be perfected and adapted to international commitments and international practices on responsible business practices.

To conduct responsible business effectively, lawyer Nguyen Hung Quang, leader of the Expert Authors Group of the Report on Status of Responsible Business in Vietnamese Companies, said, the government needs to guarantee this business by launching the National Action Program on Policy and Regulatory Improvement to boost responsible business practices in Vietnam, supporting enterprises and social organizations to uphold responsible business practices through fair and effective incentive, self-management and supervision mechanisms, solving problems and complaints, strengthening awareness-raising for people, businesses, and civil servants about responsible business practices.

For the business community, it is necessary to promote responsible business practices by working out mechanisms and plans, especially for large enterprises, foreign-invested enterprises and companies in supply chains, developing self-correction and prevention mechanisms like complaint handling procedures and principles, regulations on internal governance and ethical business conduct.

By Anh Mai, Vietnam Business Forum