better work vietnam - 1st compliance synthesis report

8/6/2019 Better Work Vietnam - 1st Compliance Synthesis Report

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Reporting period:

December 2009 June 2010

Number of factory assessments in this report: 32

Country: Vietnam

ISIC: C-14

Better Work Vietnam: Garment Industry

1st

Compliance Synthesis Report

Produced on 20 August 2010


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First published (2010)

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ILO Cataloguing in Publication Data

Better work Vietnam : garment industry : 1st compliance synthesis report / International Labour Office ;

International Finance Corporation. - Geneva: ILO, 2010

1 v.

ISBN: 9789221240969 (web pdf)

International Labour Office; International Finance Corporation

clothing industry / working conditions / workers rights / freedom of association / forced labour / child labour /

discrimination / minimum wage / labour standards / ILO standards / application / rapid assessment / Viet Nam

08.09.3

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Table of Contents

Executive Summary ................................................................................................................................. 3

Section I: Introduction and Methodology ............................................................................................... 5

Introduction ......................................................................................................................................... 5

Institutional Context ............................................................................................................................ 5

Better Work Methodology .................................................................................................................. 7

Calculating Non-Compliance ............................................................................................................... 8

Limitations in the Assessment Process ............................................................................................. 10

Section II: Findings ................................................................................................................................. 11

Non-Compliance Rates ...................................................................................................................... 11

Non-Compliance Checklist Rates ....................................................................................................... 13

1. Core Labour Standards .......................................................................................................... 132. Working Conditions ............................................................................................................... 16

Section III: Conclusions .......................................................................................................................... 20

Conclusions and Next Steps .............................................................................................................. 20

Annexes ................................................................................................................................................. 21

Annex A: Factories covered in this report ......................................................................................... 21

Annex B: Buyers participating in Better Work Vietnam (this reporting period) ............................... 22


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Executive Summary

The Better Work Vietnam program, a partnership of the International Labour Organization and the

International Finance Corporation, began conducting independent assessments of working

conditions in apparel factories in Vietnam in December 2009. Each of assessment consists of four on-site person days and includes management interviews, union and worker interviews, document

reviews, and factory observation.

The goal of the factory assessments is to establish a baseline of performance against which

participating factories can work with Better Work Vietnam as a partner to make improvements.

This first public synthesis report covers all of the first 32 factories assessed by the program between

December 2009 and June 2010. As this is the first report, it is only an initial baseline and does not

show any change over time of participating factories. Subsequent reports will indicate the degree to

which participating factories have made improvements or faced additional challenges since this first

report.

Assessment results show the following:

- Child/Young Labor: The program did not find any cases of child labor during the reporting

period. Findings in this area relate to lack of adequate procedures for checking

documentation and some cases of lack of proper protection for young workers (age 15-18).

- Forced Labor: The program reported only one finding in this area. In one factory, the

employer did not have evidence to show that they ensured their private employment agency

does not use bonded labour. This is not a finding of confirmed bonded labor but rather lack

of evidence of a proper procedure for ensuring proper employment practices of thecontracted employment agency.

- Discrimination: Discrimination findings relate to gender discrimination against males in

hiring and the hiring of adequate numbers of disabled workers. There were no other

assessment findings based on discrimination on any other grounds.

- Freedom of Association and Collective Bargaining: Factories monitored failed to comply

with core labour standards on freedom of association and collective bargaining. The lack of

compliance is partially rooted in Vietnamese legislation, which does recognize the right to

organize and the right to strike of workers, but does not permit them to establish or join

organizations of their own choice: Enterprise-level unions must be approved by and affiliatedwith the Vietnamese General Confederation of Labour (VGCL). Factories are, therefore,

bound to fail the freedom of association compliance test.

VGCL itself is a major socio-political organization, representing working class, intellectuals

and workers in Vietnam. All workers and employees who act voluntarily in an enterprise

trade union and contribute regulated union fees can join the union. The union is formed

based on the voluntary will of workers and is the only legal representative of the working

class in Vietnam

Core labour standards require that employers do not interfere with the functioning and

activities of trade unions, and in particular do not discriminate against workers or jobapplicants for their membership or activities with trade unions. In the factories monitored,

the majority of enterprise-level trade union officials belong to the company management,

causing the factories to fail the non-interference test. The Labour Code prohibits acts of anti-


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Section I: Introduction and Methodology

Introduction

The Better Work Vietnam program, a partnership between the International Labour Organization

(ILO) and the International Finance Corporation (IFC), was launched in July 2009. The program aims

to improve competitiveness in the apparel industry by enhancing economic performance at the

enterprise level and by improving compliance with Vietnamese labor law and the principles of the

ILO Declaration on Fundamental Principles and Rights at Work.

The initial focus of the program is the apparel industry in Ho Chi Minh City and surrounding

provinces. The garment sector is among the top two largest export earners for Vietnam. In 2009,

total exports earnings derived from textile and garment industry reached US$9.1 billion, making

Vietnam amongst the top ten apparel exporters worldwide. The sector is also the largest formal

employer in Vietnam, providing jobs for more than 2 million people. Most of the workers are young

women migrating from rural areas, who in turn support a number of extended family members

through remittances. Over the next five years, Better Work Vietnam will work with roughly 700,000

workers in the Vietnamese apparel industry.

The program engages with participating factories by conducting independent assessments and

offering advisory and training services. This report is an overview of findings from the assessments,

which in turn form the basis for the individualized advisory work.

As part of its mandate of sharing information with all program stakeholders, and encouraging

continuous improvement, Better Work Vietnam will produce two public synthesis reports per year

aggregating information on the performance of all participating factories. This first report is an initial

baseline and therefore does not yet show change over time of the participating factories.

This first synthesis report provides an overview of the working conditions of 32 factories over the

period December 2009- June 2010. These factories employ a total of 61,388 workers, of which more

than 84% are women workers. In average, each factory employs 1,918 workers. The vast majority of

workers (94%) are regular workers.

Institutional Context

Vietnam has experienced impressive growth within the last decade. The real annual GDP growth has

averaged around 7.5% and the rate of poverty has fallen from around 70% to below 20%.1 The

country is successfully transitioning from a centrally-planned to a market economy, and joined theWorld Trade Organization (WTO) in 2007.

This economic transition is exposing Vietnam to increased competition at the same time it is opening

new opportunities for growth. Both the private and public sector are looking for ways to enhance

productivity and increase access to international markets. One result as in many other countries

around the world -- is increased pressure for factories to increase their quality while also decreasing

costs and improving their turn-around times. This confluence of pressures often leads to increased

worker vulnerability.

This transition has in turn led to an increased level of industrial disputation, including strikes.

1World Bank, Vietnam Country Partnership Strategy, February 20, 2007.


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The National Assembly is currently in the process of discussing revisions to the National Labor Code,

in part meant to address these industrial disputes. At the same time, the Vietnamese General

Confederation of Labor (VCCL) is debating revisions to the Trade Union Code. Final decisions on both

the Labor Code as well as Trade Union Law are expected in 2011.

In the meantime, enterprises are still struggling with how to implement effective workplace

cooperation and meaningful worker representation. One of the cornerstones of the Better WorkVietnam program is the establishment of Performance Improvement Consultative Committees

(PICCs) at each factory, composed of an equal number of management and union representatives. It

is these committees who review the programs assessment reports and work collaboratively to

develop a factory improvement plan, timeline, and implementation steps.

At the program level, Better Work Vietnam has a Project Advisory Committee (PAC) that advises and

monitors the development and progress of program operations. The PAC consists of representatives

from the Ministry of Labor, Invalids and Social Affairs (MOLISA), The Vietnam Chamber of Commerce

and Industry (VCCI) and The Vietnam General Confederation of Labor (VGCL). Each of these project

partners helps Better Work Vietnam to ensure its mandate and operations continue to address the

concerns of the programs local social partners.

The program also works closely with international buyers sourcing apparel from Vietnam. The

primary mechanism for interaction with the buyers is through international forums at the

headquarters levels, two regional buyers forums per year, and regular forums for local

representatives of international buyers based in Vietnam.
http://www.molisa.gov.vn/http://www.molisa.gov.vn/http://www.molisa.gov.vn/http://www.vcci.com.vn/http://www.vcci.com.vn/http://www.vcci.com.vn/http://www.congdoanvn.org.vn/http://www.congdoanvn.org.vn/http://www.congdoanvn.org.vn/http://www.congdoanvn.org.vn/http://www.vcci.com.vn/http://www.molisa.gov.vn/


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Better Work Methodology

Better Work carries out factory assessments to monitor compliance with international labour

standards and national labour law. In its factory and industry-level reports, the program highlights

non-compliance findings. Better Work reports these findings to help factories identify areas in need

of improvement. Collecting and reporting this data over time will help factories demonstrate their

commitment to improving working conditions.

Better Work organizes reporting into eight areas, or clusters, of labour standards. Four of the clusters

are based on fundamental rights at work. Adopted in 1998, the ILO Declaration on Fundamental

Principles and Rights at Work commits Member States to respect and promote principles and rights

in these four categories, whether or not they have ratified the relevant Conventions.

The four categories of fundamental rights include: (1) freedom of association and the effective

recognition of the right to collective bargaining, (2) the elimination of forced or compulsory labour,

(3) the abolition of child labour and (4) the elimination of discrimination in respect of employment

and occupation.

In particular, the ILO Conventions 29, 87, 98, 105, 100, 111, 138, and 182 provide the framework for

compliance with the fundamental rights clusters across all Better Work country programmes.

The four other clusters monitor compliance with standards primarily set by national law, so they vary

from country to country. The four areas of national labor law include: (1) compensation, (2) contracts

and human resources, (3) occupational safety and health, and (4) working time.

Each of the eight clusters is divided into sub-categories. These sub-categories are known as

compliance points [CP]. The detailed list of CPs within each cluster, and the number of questions in

each CP, are indicated in the table below.

Compliance Clusters Compliance Points

CoreLabourStandards

1 Child Labour 1. Child Labourers2. Worst Forms

3. Hazardous Work

4. Documentation

2 Discrimination 5. Race and Origin6. Religion and Political Opinion

7. Gender

8. Other Grounds

3 Forced Labour 9. Coercion

10. Bonded Labour11. Forced Labour and Overtime

12. Prison Labour

4 Freedom of Association and

Collective Bargaining

13. Union Operations

14. Interference and Discrimination

15. Collective Bargaining

16. Strikes

WorkingConditions

5 Compensation 17. Minimum wages18. Overtime wages

19. Premium Pay

20. Method of Payment

21. Wage Information, Use and Deduction22. Paid Leave

23. Social Security and Other Benefits

6 Contracts and Human

Resources

24. Employment Contracts

25. Contracting Procedures

26. Termination27. Discipline and Disputes


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7 Occupational Safety and

Health

28. OSH Management Systems29. Chemicals and Hazardous Substances

30. Worker Protection

31. Working Environment

32. Health Services and First Aid

33. Welfare Facilities

34. Worker Accommodation

35. Emergency Preparedness8 Working Time 36. Regular Hours

37. Overtime

38. Leave

Calculating Non-ComplianceThere are two factory-level rates that are used to measure findings collected by Better Work

enterprise advisors during their factory assessments:

1) The non-compliance rate, which is reported in factory-specific assessment reports, shows

how a factory has performed in each cluster. It does this by indicating the percentage of sub-categories ( Compliance Points) that are non-compliant within each of the eight clusters.

A compliance point is found to be violated if even one question is found in non-compliance.

The non-compliance rate is useful for Better Work to aggregate and compare data across

countries, since it is not tied to country-specific questions. The non-compliance rate pertains

only to individual factory assessment reports and is not presented in this aggregated report.

The chart on page 13 displays the number of factories with non-compliance findings within

each compliance point. This non-compliance rate is a strict indicator. It is useful, however, in

that findings can be compared across countries.

2) The second rate, referred to as the non-compliance checklist rate, provides the number ofspecific questions found to be violated by a factory at a given time, as a percentage of the

total number of questions within a compliance point. These figures are presented in Section

II: Non-Compliance Checklist Rates.

Because it is based on the individual questions, the checklist rate provides a finer level of

detail. It is important to note that the Better Work questionnaires vary across countries as

they are fully adapted to the national labour law. The total number of questions within each

compliance point will likewise be different for each country. Therefore, unlike the non-

compliance rate, the non-compliance checklist rate is not comparable across countries.

The following table provides an example of how both the non-compliance rate and non-compliance

checklist rate are calculated for a particular compliance point.


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Q # Chemicals and Hazardous Substances Compliance Point

Question Compliant?

159 Are chemicals and hazardous substances properly labeled? Yes

160 Are chemicals and hazardous substances properly stored? No

161 Does the employer have chemical safety data sheets for the hazardouschemicals used in the workplace?

No

162 Does the employer keep an inventory of chemicals and hazardous

substances used in the workplace?

Yes

163 Does the employer provide adequate washing facilities and cleansing

materials in the event of exposure to hazardous chemicals?

No

164 Has the employer effectively trained workers who work with chemicals

and hazardous substances?

No

165 Has the employer taken action to assess, monitor, prevent and limit

workers' exposure to chemicals and hazardous substances?

No

Checklist Non-Compliance Rate 5/7 = 71%

Non-Compliance Rate 100% (the CP is

automatically 100%out of compliance ifeven 1 question is N)


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Limitations in the Assessment Process

The assessments carried out by Better Work follow a thorough checklist covering the above-

mentioned labour standards. The detailed factory assessment reports are based solely on what was

observed, investigated and analyzed during the performance of the actual assessment. Before the

reports become official, factories are given seven days to provide feedback that may in some cases

impact the final report language.

As this is the first Better Work Vietnam Public Synthesis Report, it covers the first set of factories

assessed by the program. Over this period, the program made some minor changes to its

assessment methodology as well as to its classifications of non-compliance. These changes were

made in consultation with the Program Advisory Committee and in particular, with MoLISA who

offered additional clarifications on areas of the law needing further interpretation. These changes

may have minor implications for levels of compliance with specific questions or compliance points in

the report.

Moreover, some of the areas covered by the Better Work Vietnam program may be either new or

more detailed than the typical social compliance audits that factories may have experienced in the

past.

Some issues are also difficult to assess and report on at the factory level. In particular, certain

aspects of Freedom of Association in Vietnam are national-level versus industry or enterprise level

issues. According to Vietnamese law, there is only one legal trade union, the VGCL. As such, every

factory will be out of compliance with related questions on freedom of association. However, the

report shows variety between enterprises on other aspects of Freedom of Association and Collective

Bargaining, such as the degree to which the existing trade union is able to operate independently

from management (see Section 2 below for additional details). Better Work Vietnam advisors will

work with factories during advisory work on those areas of non-compliance that can be improved

within the parameters of Vietnamese law.

In addition, the issue of excessive overtime relates both to factory-level procedures as well as to a

more general industry-level challenge for apparel factories in Vietnam and more globally. Almost all

factories covered in this report exceed the national yearly overtime limit of 300 hours and the

majority also exceeds either daily or weekly overtime. Factories face stiff competition on price, along

with the expectation of fast turnaround times, factors which lead most to exceed overtime limits

and/or use unreported subcontractors. In many cases, factories try to conceal these excessive hours

through keeping more than one set of hours records, an issue which again is more broad than the

factories covered in this report.


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Section II: Findings

Non-Compliance Rates

NB: The individual factories non-compliance rates, described above in the Methodology section,

were used to develop the chart on the following page. Better Work recognizes that this is a severe

calculation, and derives it solely for the purpose of cross-country comparison. Chart 1 is the only use

of this indicator in the report. The non-compliance checklist rate is used for all other tables in this

section. Chart 1 does not present, nor is it intended to present, a complete picture of labour

standards compliance at participating factories in Vietnam.

Chart 1 indicates the following:

In the areas of Core Labour Standards:

- Child and Young Labour: Seven factories are non-compliant in Documentation of Child

Labour, and two are non-compliant with Hazardous Work for Young Labourers

- Forced Labour: One factory is non-compliant with the Bonded Labour CP.- Discrimination: All factories are in non-compliance with the Other Grounds CP, which refers

mainly to legal requirements for disabled workers. Seven factories are in non-compliance

with the gender discrimination section, in particular for discrimination against potential male

applicants.

- Freedom of Association and Collective Bargaining: All factories are non-compliant with

Union Operations as per national law restricting freedom of association; 31 out of 32

factories have non-compliance findings in Interference and Discrimination, and 21 are non-

compliant in Collective Bargaining.

In the areas of Working Conditions (national law):

- Compensation: 25 factories are found to be non-compliant with Paid Leave

- Contracts and Human Resources: 14 factories are non-compliant with Discipline and

Disputes, primarily around proper grievance handling mechanisms

- Occupational Safety and Health: Most of non-compliance is concentrated in this cluster. All

factories are non-compliant with Worker Protection, Chemicals and Hazardous Substances

and Welfare Facilities. A large number of factories are non-compliant with OSH Management

Systems (29), Health Services and First Aid (26) and Emergency Preparedness (23).

- Working Time: 31 out of 32 factories are non-compliant on Overtime.


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12

4

31

15

32

23

26

29

32

3

32

7

6

14

8

4

1

4

3

25

1

1

8

21

31

3

32

7

32

1

7

2

Leave

Overtime

Regular Hours

Chemicals and Hazardous Substances

Emergency Preparedness

Health Services and First Aid

OSH Management Systems

Welfare Facilities

Worker Accommodation

Worker Protection

Working Environment

Contracting Procedures

Discipline and Disputes

Employment Contracts

Termination

Method of Payment

Minimum Wages

Overtime Wages

Paid Leave

Premium Pay

Social Security and Other Benefits

Wage Information, Use and Deduction

Collective Bargaining

Interference and Discrimination

Strikes

Union Operations

Gender

Race and Origin

Religion and Political Opinion

Other Grounds

Bonded Labour

Coercion

Forced Labour and Overtime

Prison Labour

Child Labourers

Documentation

Hazardous Work

Unconditional Worst Forms

Working

Time

OccupationalSa

fetyand

Health

Contracts

andHuman

Resources

Compensation

Freedom

of

Association

and

Collectiv

e

Bargaining

Discriminati

on

Forced

Labour

Child

Labour

not in compliance


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Non-Compliance Checklist Rates

This section describes the level of compliance across participating factories for each sub-section

(Compliance Point) within each of the eight categories covered by the Better Work Vietnam

assessments. Percentages indicate the number of questions within each sub-section that were out of

compliance. Note that the percentages relate only to the 32 factories covered during this period.

1. Core Labour Standards

Child/Young Labour

Participating Industry average

non-compliance checklist rate

Child Labourers 0%

Documentation 19%

Hazardous Work 6%

Unconditional Worst Forms 0%

As the area of documentation emerges as an area of concern, it is explored in greater detail in thetable below:

In focus: Documentation

Checklist questions Percentages of factories out of compliance:

Does the employer keep a record of workers under 18 years of age as

specified in national law?

16%

Does the employer use reliable documents to verify the age of workers

prior to hiring?

22%

Participating industry average 19%

Concerning Hazardous Work, in two factories there were findings of workers under age 18 who are

doing hazardous work, including handling of chemicals, working more than 7 hours per day and

working overtime.

Forced Labour



Bonded Labour 1%

Coercion 0%

Forced Labour and Overtime 0%

Prison Labour 0%

The non-compliance findings in the Bonded Labour CP concern one factory in which the employer did

not have evidence to show that they ensured their private employment agency does not use bonded

labour. This is not a finding of confirmed bonded labor but rather lack of evidence of a proper

procedure for ensuring proper employment practices of the contracted employment agency.


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Discrimination


Non-compliance checklist rate

Gender 3%

Other Grounds 9%

Race and Origin 0%

Religion and Political Opinion 0%

Gender discrimination refers to recruitment materials such as job announcements or job application

forms making reference to the applicant's gender (13% of factories) and to an applicant's gender

being a factor in hiring decisions (9% of factories). All of these cases involved discrimination against

male candidates. In one factory, the employer required pregnancy tests or use of contraceptives as a

condition of employment. In one factory, the gender of a worker constitutes a factor in decisions

regarding conditions of work.

Within the Other Grounds CP, employers did not comply with regulations regarding the hiring ofdisabled workers, which may be due to inconsistencies between the law and other legal

requirements related to recruiting disabled workers and contributing to the disabled fund.

Freedom of Association and Collective Bargaining


Non-compliance checklist rate

Collective Bargaining 12%

Interference and Discrimination 18%

Strikes 2%

Union Operations 43%

All factories assessed during this period have an enterprise-level trade union affiliated with VGCL.VGCL is a major socio-political organization, representing working class, intellectuals and workers in

Vietnam. All workers and employees who act voluntarily in an enterprise trade union and contribute

regulated union fees can join the union. The union is formed based on the voluntary will of workers

and is the only legal representative of the working class in Vietnam

In addition, all factories that have signed Collective Bargaining Agreements (CBAs) comply with the

legal regulation that their provisions be at least as favorable as the law.The main areas of non-compliance are Interference and Discrimination and Union Operations,

explored in further detail in the tables below.

In focus: Interference and Discrimination


Are workers free to meet without management present? 94%

Does the employer consider a job applicant's union membership or union

activities when hiring?

3%

Does the employer provides incentives to workers to keep them from joining

a union or engaging in union activities?

0%

Does the employer punish workers for joining a union or engaging in union

activities?

0%

Does the employer threaten, intimidate, or harass workers who join a union

or engage in union activities?

0%

Does the employer use blacklists to ensure that union members or union

officials are not employed?

0%

Has the employer not renewed a worker's employment contract due to the 0%


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worker's union membership or activities?

Has the employer terminated a union official without consulting the union

board or the higher-level union?

9%

Has the employer terminated workers for joining a union or engaging in

union activities?

0%

Has the employer tried to interfere with, manipulate, or control the union(s)? 97%

Has the employer tried to promote the formation of a union to competeagainst existing union(s)?

0%


Non-compliance is concentrated in the checklist questions concerning employers meeting without

management presence, and the employer trying to interfere with, manipulate or control the

union(s). These findings stem from the historical issue that most union officials at the enterprise

level in Vietnam are also part of the management of the enterprise.

However, guidelines on the VGCL Statutes adopted on 6 May 2009 prohibit management staff

serving on the companys board of directors to stand for office at enterprise-level trade union

elections (although the trade union may accept them as honorary member without decision-makingpowers).This is one of the key areas that Better Work Vietnam is working on in its Performance

Improvement Consultative Committees at the factory level.

In focus: Union Operations


Can the union(s) freely form and join federations and confederations of their

choice?

100%

Can workers freely form or join the union of their choice? 100%

Do union representatives have access to the workers in the workplace? 0%

Does the employer contribute 2% (in case of a domestic enterprise) or 1% (in

case of a foreign-invested company) of the members' payroll to the union fund?

44%

Does the employer provide the trade union with the necessary facilities and

time to enable it to carry out its activities?

6%

Does the employer require workers to join a union? 9%


According to Vietnamese law, there is only one legal trade union. As such, all enterprises will be out

of compliance with the first two questions above regarding whether they are free to form and join

federations or confederations of their choice or form or join the union of their choice.

In 44% of factories, employers did not contribute 2% (domestic enterprises) or 1% (foreign-investedenterprises) of the members payroll to the union fund.


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2. Working Conditions

Compensation



Method of Payment 1%

Minimum Wages 7%

Overtime Wages 3%Paid Leave 9%

Premium Pay 3%

Social Security and Other Benefits 1%

Wage Information, Use and Deduction 7%

The Paid Leave area is explored in further detail below:

In focus: Paid Leave


Do workers receive maternity-related medical benefits? 3%

Does the employer correctly pay workers during sick leave? 0%

Does the employer pay for other types of leave when required? 3%

Does the employer pay for paternity leave when required? 0%

Does the employer pay full average monthly wages and maternity

allowance of two month's minimum wage to entitled workers?

3%

Does the employer pay women workers for 30 minutes rest per day during

their periods?

78%

Does the employer pay workers correctly for legally required annual leave? 3%

Does the employer pay workers correctly for personal leave? 0%

Does the employer pay workers during work stoppages caused by the

employer or by force majeure?

6%

Does the employer pay workers for legally mandated paid public holidays? 0%

Does the employer pay workers for one hour breastfeeding break per day? 0%


Non-compliance is concentrated in the checklist question concerning the employer paying women

workers for 30 minutes rest per day during their periods (in 78% of the factories). While some

factories may have documented policies around this issue, almost none implement it in practice, in

large part because workers are also hesitant to ask for this rest period.


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Contracts and Human Resources



Contracting Procedures 7%

Discipline and Disputes 14%

Employment Contracts 6%

Termination 2%

Given the 14% non compliance rate, the issue of Discipline and Disputes is explored further below:

In focus: Discipline and Disputes


Did the employer resolve grievances and disputes in compliance with legal

requirements?

13%

Do disciplinary measures comply with legal requirements? 13%

Have any workers been bullied or harassed for any other reason? 3%

Have any workers been disciplined using physical punishment or humiliating

treatment?

6%

Is there a Labour Conciliation Council in the factory? 34%


As the table shows, the areas of non-compliance center on lack of proper procedures for and

implementation of grievance and dispute resolution. In particular, roughly a third of all factories do

not have a functioning Labour Conciliation Council, which is intended to be the primary vehicle for

addressing issues of labour disputes in the enterprise.

Occupational Safety and Health



Chemicals and Hazardous Substances 68%

Emergency Preparedness 13%

Health Services and First Aid 21%

OSH Management Systems 42%

Welfare Facilities 30%

Worker Accommodation 1%

Worker Protection 41%

Working Environment 5%

The three highest non-compliance areas around Occupational Health and Safety are explored in the

tables below:

In focus: Chemicals and Hazardous Substances


Are chemicals and hazardous substances properly labelled? 72%

Are chemicals and hazardous substances properly stored? 78%

Does the employer keep an inventory of chemicals and hazardous

substances used in the workplace?

69%

Does the employer keep chemical safety records for the hazardous

chemicals used in the workplace?

59%

Does the employer provide adequate washing facilities and cleansing

materials in the event of exposure to hazardous chemicals?

47%

Has the employer effectively trained workers who work with

chemicals and hazardous substances?

69%


19/2318

Has the employer taken action to assess, monitor, prevent and/or

limit workers' exposure to chemicals and hazardous substances?

81%


In focus: OSH Management Systems


Does the employer inspect and measure the environmental conditions in the

workplace on an annual basis?

6%

Does the employer keep updated records of work-related accidents and

diseases?

16%

Does the employer require workers to comply with OSH requirements? 34%

Does the factory have an approved OSH feasibility study? 81%

Has the employer performed an assessment of general occupational safety

and health issues in the factory?

66%

Has the employer set up a labour protection council and agreed with the

union on a network of OSH collaborators?

50%


In focus: Worker Protection


Are chairs for seated workers adjustable and provide adequate lower back

support?

97%

Are electrical wires, switches or plugs properly installed, grounded, and

maintained?

22%

Are materials, tools, switches, and controls within easy reach of workers? 0%

Are proper guards installed and maintained on all dangerous moving parts of

machines and equipment?

72%

Are standing workers properly accommodated? 34%

Are there appropriate safety warnings posted in the workplace? 13%Are there sufficient measures in place to avoid heavy lifting by workers? 38%

Are workers effectively trained and encouraged to use the personal

protective equipment that is provided?

63%

Are workers effectively trained to use machines and equipment safely? 72%

Does the employer force workers to continue working when they have

refused to work due to clear imminent and serious danger to their life or

health?

0%

Does the employer provide employees with all necessary personal

protective clothing and equipment?

38%


In addition to these widespread non-compliance findings, there are additional OHS checklist

questions with high non-compliance findings:

In 66% of the factories, emergency exits were found to be inaccessible, obstructed, or locked

during working hours, including overtime.

In 75% of the factories, workers who are exposed to work-related hazards did not receivefree pre-assignment and periodical health checks every 6 months.

In 88% of the factories, the workplace did not have other legally-required welfare facilities.

In the area of Health and Safety non compliance, Better Work Vietnam is working with all factories

on a systems approach. The issues cannot be addressed by the simple development of a policy or

one-time trainings, but rather must be understood by factory management within the larger contextof how to enhance overall factory performance. This foundational work is the emphasis of Better

Work Vietnam Enterprise Advisors, who in most cases have begun their advisory work with factories

with a focus on Occupational Health and Safety.


20/2319

Working Time



Leave 2%

Overtime 36%

Regular Hours 10%

In focus: Overtime


Does the employer comply with limits on overtime hours worked? 97%

Does the employer comply with notice requirements regarding overtime? 16%

Does the employer ensure that workers have on average at least 4 rest days

per month when weekly rest is not possible?

41%

Does the employer work overtime only for reasons allowed by law? 3%

Is overtime work voluntary? 22%


Almost all factories in this report do not comply with limits on legal overtime and 41% of factories do

not provide workers with at least 4 days rest per month. Moreover, in over a fifth of the factories

overtime is not voluntary.

Issues of excessive working hours are widespread across apparel factories worldwide. As part of its

advisory work, Better Work Vietnam is focused on identifying ways in which factories can make

improvements to their systems in order to enhance their productivity and enable them to decrease

overtime hours. In addition, Enterprise Advisors are working with Performance Improvement

Consultative Committees to explore other scheduling and shift arrangements that could help

factories come into working hours compliance.

In cases were overtime is not voluntary, the program is working on this issue with factories as a

priority issue needing immediate attention.


21/2320

Section III: Conclusions

Conclusions and Next Steps

Better Work Vietnam has begun advisory services in 28 of the factories covered in this report. The

goal of the advisory work, as well as the programs stand-alone training services, are to work with

factories to assist them in proactively closing the areas of non-compliance as mentioned in this

report.

All Better Work Vietnam advisory processes are led by an enterprise-level Performance Improvement

Consultative Committee (PICC), comprised of an equal number of management and union

representatives. During the first year of advisory work, the program places a heavy emphasis on

helping the PICC develop the ability to jointly identify and address issues in the factory. Enterprise

Advisors lead the group through problem solving training, applying easy-to-use tools to help

participants collaborate and trust one another as the basis for making change. Over time, Enterprise

Advisors gradually pass facilitation of the PICCs over to the factory itself, with program staff acting as

a coach and content expert in the process.

After roughly six months of advisory work, the program has already seen a measurable change in the

attitudes of many factories around this collaborative approach and can show considerable and

documented improvements in these factories on the key non-compliance issues.

On the primary areas of non-compliance, key focus areas of the program include the following:

- Discrimination: Better Work Vietnam is actively working with factories to revise their

recruitment materials and procedures to help prevent gender discrimination against men or

women who may be pregnant in hiring.

Freedom of Association and Collective Bargaining: The primary focus of the program in this

cluster is to improve the collective representation of workers interests as a prerequisite for

effective labour dispute settlement and meaningful collective bargaining. The separation of

functions of factory management and worker representation is an important aspect of

strengthening the trust of workers in trade unions.

- Occupational Health and Safety: Most Enterprise Advisors are beginning their factory

advisory work with a focus on OSH issues. Some issues are easy to solve and present good

opportunities for quick progress by the factory. Discussing OSH issues is also a good way to

start to develop an understanding of the importance of systems level changes.

- Working Hours: Excessive overtime is a problem at almost all factories in Vietnam and more

globally in the apparel industry. This issue is not one that can be immediately solved.

Instead, the program is working with factories to ensure they are transparent regarding true

hours of work. From there, the program is starting to work at various strategies with each

enterprise to improve productivity and explore other strategies of coming into compliance

on hours.


22/2321

Annexes

Annex A: Factories covered in this report

Protrade

United Sweetheart

Shinsung Vina

NB Blue

Saitex International Vietnam

Hamlin Vietnam

Hansae Vietnam

Hansae TN

Tri Dat Garment Co. Ltd.

L&S Vina

Lotus Textile & GarmentPanko Vina Corporation

Sae Hwa Vina

SS Vina

King Star Garment

Saigon 3 Garment

Hansoll Vina

Ocean Sky Apparel

Chutex International

Nobland Vietnam 2

Nobland VietnamSarah

Poong In Vina

Domex Vietnam

Jiangsu Jing Meng Vietnam

Sundia Binh Duong

T&T Co. Ltd.

Dae Kwang -Maika Co. Ltd

O-Sung Vina Co. Ltd

Cao Hoa Co.

Shillabags International Co.King Hung Garments Industrial Co.


23/23

Annex B: Buyers participating in Better Work Vietnam (this reporting period)

During the first year of operations, many buyers began to encourage or require the factories in

Vietnam to join the Better Work Vietnam program. The following buyers formally registered for the

program and received reports during the reporting period:

Abercrombie & Fitch

American Eagle Outfitters

Ann Taylor

Brooks Sports

Gap, Inc.

G-Star International

Pentland

Target

better work vietnam - 1st compliance synthesis report

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