Know thy enemy

Vietnam needs a strong, independent watchdog and greater consumer awareness

A girl walks past shelves of groceries at a minimart in Hanoi March 18, 2011.

Corporate social responsibility, or CSR, has been in fashion for some time now. It has emerged as a response to growing consumer awareness in developed countries of sweatshops, unfair trade practices and environmentally harmful activities as well as a refusal to accept them.

While there have been rare instances of one man’s courage and conviction making a huge difference for consumers, most notably Ralph Nader, whose book, “Unsafe at any speed,” forced automakers to develop safer products and gave us the modern car, many of the later successes were widespread movements like product and brand boycotts.

It is important to remember this background to CSR, that it was not something that the corporate sector did of its own volition, but something that it did to offset, and later, pre-empt consumer-driven opposition and rejection. It is also a PR plank for the company, boosting its image and enhancing brand value.

The plethora of “returning to the community” projects that many companies implement has certainly done some good, but CSR is no substitute for consumer vigilance.

In Vietnam, we witnessed a shocking case of corporate social irresponsibility when Taiwanese monosodium glutamate maker Vedan Vietnam, which was bound to take environmental protection measures, was found to have been doing the opposite for more than 14 years. After the exposure, it denied the extent of its wrongdoing, and tried not to pay due compensation.

In fact, it was a consumer boycott led by supermarkets refusing to carry its products that finally pushed Vedan to pay farmers the compensation they and representative organizations had negotiated.

There have been many companies that have since been found polluting the environment against the law, but laws in Vietnam seem to lack sharp teeth. Most of the time, environmental polluters get away with puny fines.

What has been the response of Toyota Vietnam in light of the recent exposure of technical flaws in some of their models. Note that, in its Sustainability Report 2008 the company said that “Toyota came to Vietnam not only to achieve business objectives, but also to perform social responsibilities and obligations toward the community for a thriving and prosperous life.”

The carmaker has insisted that the flaws are minor, wouldn’t affect driver safety, and there is no need to recall around 8,830 defective cars as it has received no complaints from consumers so far.

If, as the whistle-blower engineer has claimed, the company tried to prevent the exposure and wanted the flaws not be exposed in the first place, how much trust can consumers place in Toyota Vietnam’s statements, not just about its noble aims, but about its own products?

Vietnamese consumers are still vulnerable. They need all watchdogs, from the press to government agencies responsible for checking product quality, to do their job well to make sure the products and services they buy are safe and priced fairly.

But given all the shortcomings that the watchdogs operate under, it is difficult to expect that they will get the job done by themselves.

The Vietnam Register, in charge of supervising vehicles’ technological soundness, told Thanh Nien that it only checked 30 percent of a car to make sure it’s generally safe.

“We can’t check every single thing on a car… The manufacturers are responsible for any safety problems with other parts,” said Do Huu Duc, deputy general director of the agency.

On July 1, the Consumer Protection Law will take effect. However, for it to really benefit consumers, professional agencies armed with appropriate knowledge, equipment and manpower need to be established. Consumers must be able to turn to a trustworthy, qualified agency when they are adversely affected.

Most of all, consumers themselves should be aware of their rights and responsibilities. CSR should be placed in the context of a self-regulatory effort designed to allay the customer, and at the same time, avoid tougher government regulations and other monitoring measures.

Companies will act responsibly if, and only if, their profit margins are threatened.

This is the bottom line.

By Thanh Nguyen