SASK's Project To Improve Working Conditions Nearing Completion
Jaakko Takalainen
translated by Juuso Takalainen
The SASK pilot project initiated in 2006 to improve working conditions in supplier companies in Vietnam is now nearing completion. The goals of the project are to encourage Vietnamese companies to comply with better working and environmental standards in line with the BSCI*. The project has been facilitated on the ground by Union Aid Abroad-APHEDA, the humanitarian aid arm of Australian Council of Trade Unions.
In March 2008, we travelled to Hanoi, the capital of Vietnam, to meet Dr. Sharan KC, APHEDA’s Mekong regional manager, and Ms. Hoang Thi Le Lang, APHEDA’s Vietnam Program Manager to discuss this project.
A Range of Enterprises Involved
When the project first began in 2006, there were 21 companies taking part in the project. These enterprises include the textile, furniture, shoes, handicraft, and gemstone businesses. The smaller companies employ between 70 – 700 persons while the bigger companies employ in the range of 1,200 persons. However, due to a variety of reasons, only 18 companies have continued with the project. These reasons include the fact that one factory was completely burnt. These 18 companies run 21 different enterprises.
The first audit was conducted in summer 2006 following a period of self-assessment and of the 16 companies taking audited then, one managed to pass the audit.
“The one who passed was able to do so because the project supported it to prepare for the audit. The most important thing is to ensure there is a strategy in place for the future continuation of the positive changes in the company”, says Sharan.
Following the first audit, the companies had to develop a Corrective Action Plan (CAP) which laid out their strategy to make improvements in order to pass the audit. These improvements were generally in the field of work safety, health care, contracts, working environment, insurance and payment. The companies' and workers' commitment to the project were assessed by means of a job satisfaction survey.
”In each phase, it's vital to understand the views of all participants. Even if it doesn't cost anything to enter the BSCI, it won’t automatically attract companies to join the project unless there is some direct financial benefit to the companies”, Sharan states.
The number of companies taking part in the project dropped to 14 after the first audit. The second audit is currently underway. Was it a big disappointment to see many companies give up the game? According to APHEDA, it is disappointing to see the companies leaving but it is not surprising.
”For the sake of learning about the challenges of this type of project, it has been good to have many different kinds of businesses taking part. Of course, we would've liked about 20 of them to continue until the end”, says Sharan.
“Ultimately, it's not whether the companies pass or fail in the BSCI or any other social audit. Equally important is how to continue whatever changes have been made for the betterment of the working condition of the workers. How can we ensure that this will continue after the social audit projects are completed? The important thing is that there have been some development, and even the smallest improvement in the workplaces makes a difference for the workers,” Sharan thinks.
Hang agreed that the improvements in the workplaces have been beneficial for the workers and provided the example of drinking water.
“Water dispensers have been installed in some workplaces. At the beginning of the project, these workplaces did not have adequate water supply. In some cases, there was only one bottle of water and a few glasses to be shared between hundreds of employees,” Hang noted.
Tripartite Approach Found Helpful
The success of the project can also be attributed to the fact that it adopted a tripartite approach in both Finland and Vietnam. Apart from SASK, the Finnish Chamber of Commerce (involving nationwide import, distribution and responsible importers network retail companies like Kesko, Stockmann and Tuko), the Vietnam Chamber of Commerce (VCCI), the Vietnam General Confederation of Labour and the ILO’s Vietnamese representative were also involved.
“This project is unique because the retailers also took part in financing and realizing the project in such a positive way,” stressed both Sharan and Hang.
”Without the active participation of the Finnish retailer companies, we would have found that only very few Vietnamese companies are willing to take part. The companies that have undertaken the BSCI expect to gain benefits both in terms of marketing and improved efficiency”, Sharan says.
”Also, it was important to get the cooperation of the Vietnamese officials. Once everything was in place, it was easier to get the companies to move along with the project,” notes Hang.
According to Sharan, the Vietnamese labour legislation is rather advanced, even better than in Australia in some issues. The problem is the lack of knowledge of that legislation, and complying with it.
”That's why the education we supply is mostly lecturing about the most basic things. All in all, we've held courses to over 8,000 employees”, Sharan tells.
Being a socialist country, the degree of labour organization is very high in Vietnam. Now with increasing foreign direct investment and equitising of the state own enterprises, it is going to be a big challenge to recruit new members to join the unions.
”We have to convince the workers that it pays to be in the union and pay the fee”, Sharan summarizes.
He thinks it is obvious that market-oriented doi moi politics will not automatically bring much positive development in working conditions.
”Clearly it's the labour union in Vietnam who can and will bring about improvements and best-practises to the workplaces”, says Sharan.
Economic Boom Visible
Vietnam's economy has taken giant leaps lately. The World Bank Group (WBG) estimates that the annual GNP growth over the last five years was 4 per cent a year, lately even up to 8 per cent a year. The growth easily surpasses that of China and Thailand, for example.
“The boom also affects our project. The companies complain that if we try to stop an educated worker from doing overtime more than allowed, he or she will change employers”, Sharan tells.
He believes there may be some truth in these complaints. Many workers come from the poor countryside and work to raise money for a Vietnamese new year or wedding for example. They tend to live in dormitories near the factories and prefer to work longer hours to earn extra money, even beyond the overtime limit. While it is generally true that the workers do not have many diversions for their leisure time, many of these workers are young and unmarried. There is a growing concern of the spread of sexually transmitted diseases such as HIV/AIDS.
“They say that if there are young men, money and beer, there'll always be problems too”, Sharan says.
While the minimum wage in Vietnam is 950,000 dong, (37 euros) a skilled worker can make as much as 1,700,000 dong (67 euros). In six years, the pay may rise to 2,650,000 dong (105 euros).
Economic Growth Brings Mixed Blessings
The pilot project will be concluded in mid 2008 and Sharan and Hang are unsure of the follow-up projects. According to their information sources, the DGB is planning to facilitate a similar project.
”If the rapid economic growth is not managed properly, it can cause greater economic inequality that is growing all the time. Without systematic improvements in working conditions, it's hard to imagine that there would not also be growing discontent amongst Vietnamese society”, says Sharan.
The Business Social Compliance Initiative (BSCI) system was used to assist the Vietnamese supplier companies establish the necessary standards. The BSCI was a European initiative by Foreign trade association, EU Brussels and is based on the ILO’s declaration of workers’ rights and national labour code.
