Published on February 2020 by Fred Waelter
As supply chains spanning Asia evolve in the wake of the U.S.-China Trade War and long-standing sustainability challenges throughout the continent as well as lingering instability and disruptions to business continuity in Hong Kong, retailers and brands are searching for alternative supply chain partners in nearby nations.
Vietnam stands near the top of the list of possibilities as a nation increasingly making moves to attract international business. Many brands and retailers are considering beginning or increasing sourcing for a variety of products from Vietnam as the country’s manufacturing center evolves and diversifies to cover a broader list of goods beyond traditional soft goods, footwear, and apparel products. After spending a year in Ho Chi Minh City, Vietnam, hiring and training auditors as well as performing sustainability audits and special investigations for an array of corporate partners, I’ve gained some valuable insights from the field related to the special circumstances present in Vietnam that create lingering challenges for responsible sourcing, including difficulties in detecting social responsibility issues as well as struggles in working with Vietnam-based suppliers to correct identified issues.
In this second par of a two-part series (read part 1 here), I’m looking at the potential issues related to overcoming language barriers in Vietnam.
Many corporations are not only considering sourcing from Vietnam, but also relocating factories and other manufacturing facilities to the country in order to take advantage of the lower wages that Vietnam offers. A large proportion of manufacturing in Vietnam – stretching across a span of industries, including garments, toys, footwear, and furniture – is done in facilities that are foreign-invested enterprises. In my experience auditing factories owned by management from South Korea, China, and Taiwan, it can be complicated for a foreign entity to familiarize itself with local requirements and customs, and even the best ways to effectively communicate with Vietnamese workers.
Foreign management may struggle to read or speak Vietnamese. In some instances, such as with Taiwanese and Chinese management, there may be an easier time communicating with local staff due to the large proportion of ethnic Chinese Vietnamese workers that may speak a dialect of Chinese at home – typically either Cantonese or Mandarin. If a Taiwanese or Chinese company manages to hire reliable Chinese-speaking counterparts to help research laws and navigate cultural issues, as well as interpret when necessary for communication directly with production staff, such managers will have a leg up versus other foreigners trying to manage the same challenges. Also, while there are many Korean speakers in Vietnam, it is likely that a Korean-owned factory will need to rely on English to communicate with a middle management which would also likely have a working knowledge of English; which can then also make communication more challenging due to the English proficiency of the Vietnamese staff and the Korean management. This issue related to language also creates an inability to communicate directly with workers, especially regarding urgent quality or safety matters and may cause frustration and become a cause of verbal abuse on the work floor.
Finding staff that can help foreign management to communicate only fills part of the need – those staff members also need to be knowledgeable regarding local laws, or at least know how to get necessary legal information. Hiring skilled auditors and staff in Vietnam is not straightforward as the propensity for applicants in a competitive job market to embellish on skills and other attributes in order to secure a position is prevalent. If foreign management knew how to obtain laws, set up a compliant HR management system, communicate effectively with local workers, etc., they could evaluate candidates with respect to those key indicators. The fact that foreign management may not be coming to Vietnam with this knowledge means that they will often not know whether a candidate truly meets their needs, and such issues often do not come to light until a factory undergoes an audit and Vietnamese middle management in charge of handling HR and other topics must learn which laws apply, and how the laws interact, through repeated auditing. These phenomena are understandably frustrating for the foreign management that may have made concerted efforts to set up relevant systems appropriately.
There are resources which factories can rely on for legal information. For example, Better Work Vietnam provides an excellent resource for public documents with the names of laws, as well as explanations and examples of how various laws apply, which would serve as a primer for anyone looking to understand the laws that fall in the scope of a sustainability audit. It’s likely the most comprehensive collection of legal information for the country freely available. Additionally, Chambers of Commerce from other countries often have internal resources available, either with documents for reference or as a membership support service, for foreign-invested companies to ask questions in their native language.
For more insights and information on sustainability and supply chain insights, please contact our team at email@example.com.