Pacific News #38 • July/August 2012

Pacific News #38 •
July/August 2012
4
Corporate Social Responsibility in Vietnam
Integration or Mere Adaptation?
Brigitte Hamm
Abstract: Initially, corporate social responsibility (CSR) had been a movement of businesses emphasising the wil
-
lingness to behave ethically and simultaneously drawing a profit from this. Increasingly however, the topic be
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came integrated into the broader concern of how to govern the global economy. In this article, CSR is understood
as an institution of transnational governance. CSR has been exported by Western actors to production countries
of the Global South. Against this background one of the questions raised revolves around the relevance of the
domestic embeddedness of CSR. In Vietnam transnational corporations, development agencies of Western donor
countries and international organisations have been drivers of CSR. The concept is taken up in a pragmatic way
using the term in regard to varying issues, thereby emphasising the competitive advantage for the country. Until
today, a public CSR policy is lacking in Vietnam, and also the responsibility within the government needs to be
further clarified.
Keywords: Corporate Social Responsibility (CSR); Vietnam, Private Governance; Global Governance; Globalisation
[Submitted as Scientific Paper: 04 May 2012, Acceptance of the revised reviewed manuscript: 28 May 2012]
Pacific News #38
• July/August 2012
In the past decades, the production of goods, especially in labour-intensive sectors such
as the textile, garment and electronics industries, was outsourced by major brand firms to
countries with cheap labor and weak enforcement of labor rights. Often these are located
in Asia, with prominent examples being China and India, but also Bangladesh, Cambodia
and Vietnam. To many observers, Myanmar/ Burma will be the country that offers even
cheaper labor force in the near future. In competition among each other, governments of
such countries wish to attract foreign direct investment (FDI) and other foreign business
activities by rendering favorable conditions of production often at the cost of weak regula
-
tory standards. However, Western brands not only ask for cheap production conditions, but
under the pressure of civil society actors in consumer countries, they increasingly request
the respect of suppliers for social and environmental standards, for example through
compliance with codes of conduct. Thus, in their attempt to increase their integration
into the global economy, governments of production countries also enhance activities to
strengthen corporate social responsibility (CSR), as required by Western companies. Today,
we encounter debates and policies on CSR in all parts of the world.
Garment Factory in Hanoi, supplier to a
German member of the Fair Wear Foundation
Source: Brigitte Hamm
Pacific News #38 •
July/August 2012
5
Parallel to the process of econo
-
mic globalisation, these debates have
emerged since the 1980s. Companies
have supported this trend, inter alia
because the focus of CSR on volunta
-
riness corresponds well to the neolibe
-
ral course of the globalisation with the
emphasis on flexibilisation, deregula
-
tion and privatisation (Utting, 2005).
At the same time, a strong transna
-
tionally organised anti-globalisation
movement that has boosted since the
early 1990s took up the topic, linking
CSR with demands for corporate
accountability and corporate responsi
-
bility for human rights.
This article will direct the atten
-
tion to CSR in Vietnam. Questions
covered relate to the emergence of
the CSR debate in that country. Who
are the actors involved? How is CSR
becoming embedded in Vietnam?
The research partly rests upon inter
-
views which were carried out in the
context of two projects during several
research trips to Vietnam since 2010
1
.
These were designed as structured
face-to-face interviews. Interviewees
were CSR representatives of transna
-
tional corporations (TNCs) in Viet
-
nam, suppliers and representatives of
national business associations. Further
interview partners represented other
stakeholder groups such as internati
-
onal organisations, German organisa
-
tions active in Vietnam, civil society
organisations and unions as well as
ministries and further stakeholders
close to the government.
CSR and Private Governance
Today, the term CSR may be taken as
a catch-all phrase for discussing the
responsibility of businesses in the
global economy. However, in spite
of the popularity of the term, a lack
of conceptual clarity remains, which
is expressed by varying understan
-
dings of what CSR should entail. The
vagueness of the concept is extensi
-
vely discussed in the Oxford Hand
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book of Corporate Social Respon
-
sibility (Crane et al., 2008). In 2011,
the European Commission presented
its second communication on CSR,
defining it as “the responsibility of
enterprises for their impacts on soci
-
ety” (European Commission, 2011, 6).
This most recent definition abandons
the focus on voluntariness and instead
underlines due diligence and accoun
-
tability as comments of the Commis
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sion reveal: “To fully meet their cor
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porate social responsibility, enterprises
should have in place a process to inte
-
grate social, environmental, ethical,
human rights and consumer concerns
into their business operations and core
strategy in close collaboration with
their stakeholders, with the aim of
1) maximising the creation of shared
value for their owners/shareholders
and for their other stakeholders and
society at large and 2) of identifying,
preventing and mitigating their possi
-
ble adverse impacts.” (ibid.)
The shift to due diligence and
accountability reflects the impact of
the debate on ‘Business and Human
Rights’ on the topic of CSR. This
debate has especially emerged with the
nomination of John Ruggie as United
Nations Special Representative of the
Secretary General for Business and
Human Rights in 2005. Ruggie sees a
need for adequately closing so-called
governance gaps created by globalisa
-
tion (United Nations, 2008, 5). This
particularly refers to measures of self-
and co-regulation as demanded in the
context of due diligence. In June 2011,
the UN Guiding Principles on Busi
-
ness and Human Rights (Guiding Prin
-
ciples) were launched, which are based
on Ruggie’s UN “Protect, Respect and
Remedy“ Framework. This Frame
-
work is built on three pillars, namely
the state duty to protect, the corporate
responsibility to respect, and access to
remedy. As a consequence, the gover
-
nance contributions and interaction of
the state and of private actors gained
further attention, and human rights
were included in key policy documents
on the topic of corporate social res
-
ponsibility.
More or less parallel to this political
development and reflecting it, CSR
and private governance have increa
-
singly become linked in the academic
literature (e. g. Brammer et al., 2012;
Fransen, 2012). This linkage means
that normative discussions on CSR
are complemented with the reflec
-
tion of the role of business in society.
The focus lies on the question of how
corporations manage their operations
globally, placing CSR within the wider
field of “[...] economic governance
characterised by different modes,
including the market, state regulation
and beyond.” (Brammer et al., 2012, 7)
Characteristic for new modes of
CSR governance is the inclusion of
non-state actors – above all business
and civil society. Decision-making
takes place along vertical and horizon
-
tal levels, through formal and informal
coordination and varying mechanisms
of enforcement and control. In addi
-
tion to state regulation and internatio
-
nal regimes, other types of formal and
informal agreements emerge with soft
law instruments such as the above-
mentioned Guiding Principles or
corporate codes of conduct. Private
control mechanisms such as labelling,
auditing, and certification are incre
-
asingly becoming important. Thus,
state regulation is complemented and
sometimes substituted by activities of
private actors on multiple levels. Espe
-
cially economic activities with trans
-
national outreach are governed by a
mix of state/ international regulation,
market-based self-regulation and vari
-
ous systems of co-regulation, most
often in the form of multi-stakeholder
initiatives.
Brammer et al. (2012) propose
understanding CSR as comprising a
set of institutions in the sense of for
-
mal and informal rules, regulations
and norms that enable or constrain
behaviour of private governance at
the transnational level. Accordingly,
they perceive CSR as a means of trans
-
national governance with influence
and impact at all levels. Thereby, they
distinguish between three areas. First,
they point to transnational and global
institutions with private, semi-private
and public regulations, standards or
self-commitments: Examples are the
Global Compact or ISO26000. “These
standards seek to institutionalize parti
-
cular elements of CSR. [...] This new
‘public domain’ [...] with ‘global public
policy networks’ [...] is [...] one of
the most powerful sources of isomor
-
phic pressure to institutionalize CSR
in business” (Brammer et al., 2012,
15f). Also, institutionalisation of CSR
takes place as corporate governance
within the transnational organizational
structure of TNCs, for example with
the implementation of codes of con
-
duct. Moreover, new modes of inter
-
national and transnational governance
emerge with Western norms being
spread leading to institutional changes
in countries of the Global South.
These transnational CSR endeavors
encounter varying institutional set
-
tings at the national and local levels.
The variations of CSR policies fol
-
lowing different traditions and cultu
-
res have