CORPORATE SOCIAL RESPONSIBILITY IN THE VIETNAMESE FOOD INDUSTRY: SITUATION AND POLICY RECOMMENDATIONS

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MINISTRY OF EDUCATION AND TRAINING
FOREIGN TRADE UNIVERSITY
MASTER THESIS
CORPORATE SOCIAL RESPONSIBILITY IN THE
VIETNAMESE FOOD INDUSTRY: SITUATION AND
POLICY RECOMMENDATIONS
Specialization: International Trade Policy and Law
LE THI KIM PHUNG
Hanoi – 2019

Viết thuê luận á, luận văn thạc sĩ, chuyên đề ,khóa luận, báo cáo thực tập
Sdt/zalo 0967538 624/ 0886 091 915 lamluanvan.net
MINISTRY OF EDUCATION AND TRAINING
FOREIGN TRADE UNIVERSITY
MASTER THESIS
CORPORATE SOCIAL RESPONSIBILITY IN THE
VIETNAMESE FOOD INDUSTRY: SITUATION AND
POLICY RECOMMENDATIONS
Specialization: International Trade Policy and Law
FULL NAME : Le Thi Kim Phung
Student ID’s number : 1606060030
Supervisor : Dr. Ly Hoang Phu
Hanoi – 2019

i
DECLARATION
I hereby declare that this master thesis is the scientific research of my own
which made on the basis of the theoretical studies, field surveys and under the
direction and supervision of Dr. Ly Hoang Phu. The research contents and results of
this thesis is completely honest. These data and documents for the analysis, review
and evaluation were collected from various sources which are fully listed in the
reference list.
I am fully responsible for the content of this master thesis as well as this
declaration.
Hanoi, 14 March 2019
Author
Le Thi Kim Phung

ii
TABLE OF CONTENTS
DECLARATION....................................................................................................... i
TABLE OF CONTENTS......................................................................................... ii
ACKNOWLEDGEMENT........................................................................................v
LIST OF ABBREVIATIONS................................................................................. vi
LIST OF TABLES ................................................................................................. vii
LIST OF FIGURES ............................................................................................... vii
ABSTRACT........................................................................................................... viii
INTRODUCTION.....................................................................................................1
1. Research Rationale ..........................................................................................1
2. Literature Review................................................................................................3
3. Research objectives.............................................................................................6
4. Research questions .............................................................................................6
5. Scope of research................................................................................................7
6. Research methodology........................................................................................7
7. Thesis outline ......................................................................................................7
CHAPTER 1: THEORETICAL BACKGROUND OF CORPORATE SOCIAL
RESPONSIBILITY...................................................................................................9
1.1. Background......................................................................................................9
1.1.1. Definition ...................................................................................................9
1.1.2. Determinants of CSR...............................................................................11
1.2. Models of CSR ...............................................................................................13
1.2.1. Carroll’s CSR pyramid............................................................................13
1.2.2. Wayne Visser’s CSR 2.0 Model ..............................................................15
1.2.3. The Consumer-driven Corporate Responsibility (CDCR) Model..........16
1.3. CSR Practices in Developing Countries .......................................................18
1.3.1. Content Theme.........................................................................................18
1.3.2. Knowledge Type.......................................................................................18
1.3.3. Various drivers for CSR in developing countries...................................19
1.3.4. CSR Pyramid for developing countries ..................................................23

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...............................................................................................................................23
CHAPTER 2: CSR APPLICATION IN VIETNAMESE FOOD INDUSTRY ..26
2.1. Overview of Vietnamese food industry..........................................................26
2.2. Vietnam research context ..............................................................................29
2.2.1. CSR in Vietnam .......................................................................................29
2.2.2. Key stakeholders in CSR in Vietnam......................................................35
2.3. CSR in Vietnamese food industry .................................................................37
CHAPTER 3: CASE STUDIES ...........................................................................40
3.1. Vietnam Dairy Products JSC ........................................................................40
3.1.1. Overview of Vietnam Dairy Product JSC...............................................40
3.1.2. Human nutrition and safety....................................................................40
3.1.3. Environment and energy.........................................................................42
3.1.4. Local economic development ..................................................................43
3.1.5. Employees ................................................................................................44
3.1.6. Support and community development ....................................................45
3.2. C.P. Vietnam Corporation.............................................................................46
3.2.1. Overview of CP Vietnam .........................................................................46
4.2.2. Heart ........................................................................................................47
3.2.3. Health.......................................................................................................49
3.2.2. Home........................................................................................................50
3.3. Heineken Vietnam .........................................................................................51
3.3.1. Overview of Heineken Vietnam ..............................................................51
3.3.2. Prosperity of people .................................................................................51
3.3.2. Prosperity of planet..................................................................................53
3.4. Vedan Vietnam...............................................................................................54
3.4.1. Overview of Vedan Vietnam....................................................................54
3.4.2. Social responsibility activity....................................................................54
3.4.3. Environmental protection .......................................................................54
3.4.4. Employee activity.....................................................................................55
CHAPTER 4: POLICY IMPLICATION .............................................................56

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4.1. Evaluation of CSR application in Vietnam food industry ...........................56
4.1.1. Achievements ...........................................................................................56
4.1.2. Existing issues .........................................................................................64
4.2. Future CSR development and challenges in Vietnamese food industry .....65
4.3. Recommendations..........................................................................................67
4.3.1. Recommendations to the companies.......................................................67
4.3.2. Recommendations to the government bodies .........................................70
CONCLUSION........................................................................................................72
REFERENCES

v
ACKNOWLEDGEMENT
During the completion of this master thesis, I received the guidance and
valuable help from the lecturers, siblings and friends. With great respect and deep
gratitude, I would like to express sincere thanks to:
Dr. Ly Hoang Phu, who wholeheartedly helped, supported and encouraged me
from the initial to the final level of this dissertation. He provided me with
comprehensive guide from choosing the topic, outlining the thesis and editing this
research.
Professors and lecturers, who not only spread profound knowledge and
information in the fields of economy and law but generated strong motivation for
me while I was taking this course as well.
Last but not least, I would like to express my sincere thanks to my family, my
colleagues and my friends, who have always by my side encouraging, supporting,
contributing valuable ideas and giving me favourable conditions for me to complete
this scientific research.

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LIST OF ABBREVIATIONS
Abbreviation Full name
ASEAN Association of South East Asian Nations
CIEM Central Institute for Economic Management
CDCR Consumer-Driven Corporate Responsibility
CSR Corporate Social Responsibility
FDI Foreign Direct Investment
GDP Gross domestic product
GMP Good Manufacturing Practices
ISO International Organization for Standardization
HACCP Hazard Analysis and Critical Control Points
SME Small-and-Medium-Size Enterprise
VCCI Vietnam Chamber of Commerce and Industry
VGCL Vietnam General Confederation of Labour
UN United Nations
UNIDO United Nations Industrial Development Organization
WB World Bank
WTO World Trade Organization

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LIST OF TABLES
Table 3.1: Occupational health and safety index in Vinamilk..................................43
Table 3.2: Occupational health and safety index in Vinamilk..................................45
Table 4.1: Summary of CSR system and activities of Vinamilk ..............................57
Table 4.2: Summary of CSR system and activities of CP Vietnam..........................59
Table 4.3: Summary of CSR system and activities of Heineken Vietnam ...............61
Table 4.4: Summary of CSR system and activities of Vedan Vietnam....................63
LIST OF FIGURES
Figure 1.1: Era of CSR................................................................................................9
Figure 1.2: Carroll's CSR Pyramids..........................................................................14
Figure 1.3: Visser’s CSR 2.0 Model (Visser 2012) ..................................................15
Figure 1.4: The Consumer-drive Corporate Responsibility model (Claydon 2011)17
Figure 1.5. CSR Pyramid for developing countries (Visser, 2008, 489)..................23
Figure 3.1: Production cycle of Vinamilk.................................................................41
Figure 3.2: The supply chain system of CP Vietnam ...............................................47

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ABSTRACT
Corporate social responsibility is the corporates commitments for stable
economic development through that improve the quality of life of workers, their
family, community, and society in a manner that benefits both corporate and social
development. The good application of CSR by the companies does not only ensure
their sustainable development but also the society. Today big enterprises in Vietnam
often brings the CSR into their own business strategy and the ones with export
market. Meanwhile, opportunities and benefits of the CSR have not been seen by
the medium and small enterprises, some of them have even misunderstood or
intentionally misunderstood the importance of CSR. It is the fact that for public
businesses who implement social responsibility well, their benefits do not decrease
but increase. The benefits that businesses gain when implementing social
responsibility include reducing costs, growing revenue, increasing brand value,
decreasing the rate of quitting jobs, improving productivity and more possibilities to
access the new markets. This thesis focused on analyzing the corporate social
responsibility, roles of the implementing the CSR and some matters of
implementing the CSR in Vietnam food industry.
Using qualitative methodology with a multiple case-study approach, this thesis
explores the driving factors of CSR strategies and implementation in the
Vietnamese food industry, which is intended to conduct only four cases of big
corporations. The thesis contributes to the body of knowledge and slight reality
on CSR practices in a developing-country context as well as Vietnamese food
industry.

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INTRODUCTION
1. Research Rationale
Corporate social responsibility (CSR) has attracted the unprecedented
attention of governments, non-government agencies, civil society and businesses in
developing countries. The interest was heightened when recent significant economic
growth has been accompanied by unsustainable and irresponsible business practices
and their consequent environmental and social problems in these countries. For
more than a decade, the number of companies all over the world recognizes the
economic benefits of CSR practices. CSR commitments go beyond the desire of
profit growth and show that the company is fully aware of its responsibility to
employees, customers, communities and the environment. A variety of companies
have used CSR as a new business strategy when they realize that it can help
improve the financial situation, employees' motivation and boost customer loyalty
as well as company trademark. When markets become more and more difficult and
consumers become "smarter", products are not only required to ensure quality but
also require to ensure environment.
In the context that Vietnam is integrating more and more deeply into the world
economy, the issue of CSR needs even more attention. Now, companies not only
compete with price and quality of products but also compete with commitments to
take care of life, working environment for employees, activities that contribute to
the development of community, protecting consumers' interests, protecting the
natural environment towards sustainable development. Although CSR is a relatively
new concept for many Vietnamese enterprises, it is really an urgent requirement
today. In order to successfully penetrate large but fastidious markets such as Japan,
the United States and Europe, companies need to strengthen their research into the
ability to apply international standards of CSR such as the ISO14000, SA8000 or
near standards. This is ISO26000 to express our responsibility to society. Many
Vietnamese enterprises believe that CSR standards are technical barriers to enter the
international market and they are reluctant to implement CSR (Twose and Rao,
2003). However, the benefits of CSR bring to businesses are very big. The

2
immediate benefit is to have more orders from purchasing businesses that require
CSR standards, and long-term benefits for businesses themselves such as improving
business relations, reducing costs and increasing productivity, reducing recruitment
costs and train new employees, increasing revenue, brand value and access to new
markets. Therefore, enterprises need not only to raise awareness of CSR but also to
implement CSR effectively in enterprises.
In fact, CSR awareness of Vietnamese enterprises is not comprehensive and
the implementation of CSR in Vietnamese enterprises appear passive and reluctant
in the uptake of CSR because foreign partners requires compliance with their code
of conduct (Twose and Rao, 2003). Some businesses understand that CSR is for
charity purpose. Some businesses hesitate to implement CSR because they assume
CSR programs are very expensive. There are not many businesses being fully aware
of CSR and integrate CSR activities effectively in the production process of the
enterprise. They still view CSR as a cost or a compliance issue pushed by global
buyers rather than a sustainable investment to gain a competitive advantage.
Therefore, in the last few years, we have seen many cases of violation of CSR
exposed and condemned by the social community. There is a need for CSR studies
in Vietnam to promote the implementation of CSR in the business community
because CSR have been a part of increasing importance in the development process
of enterprises. CSR programs can be considered in the strategic management
process of the business, which can be integrated into the daily operations of the
business and thereby create a competitive advantage for the business.
The Vietnamese food industries are the focus of this research because of their
economic and social significance as well as prevalent social issues. These industries
play a significant role in the economy of Vietnam. Vietnam’s food sector accounts
for 20% of GDP and Vietnam’s food manufacturing sector grew at 9.0 percent in
2016 (General Office of Statistics, 2017). However, current production and
management practices of industry players have worrying social implications.
Concerns related to human rights, labour issues (minimum wages, insurance,
occupational safety) and environmental problems have been raised by international

3
governance agencies (Vietnam, 2010). Therefore, raising awareness and promoting
CSR implementation in the Vietnamese food industry is really an urgent issue. The
most typical cases include violations of CSR in food safety.
The thesis contributes to the body of knowledge on CSR practices in a
developing-country context. First, the prominent form of implicit and informal
internally-focused CSR in labour strongly reflects the national institutional context
and political economy in which the notion of employee and social welfare is
embodied in socialist ideology and the perceived role of businesses as job and
income generators in a developing country. Moreover, the thesis adds a nuanced
understanding of CSR development in a developing-country context in which CSR
concept is diffused, translated and adapted at the State, industry, company and
manager levels and manifested in variations of CSR expressions.
From the above reasons, the author selected the topic "Corporate social
responsibility in the Vietnamese Food Industry: situation and policy
recommendations".
2. Literature Review
While a significant amount of researches have been conducted in the fields of
CSR, there are not many researches focusing on CSR in Vietnamese Food Industry.
The main reason is that the current literature on CSR in Vietnam reveals a sketchy
picture of how CSR is conceptualised, driven and implemented by business.
However, researches on international CSR as well as CSR in Vietnam are really
huge collection. This section shall make a general assessment on several typical and
prominent researches.
First of all, Social Responsibilities of the Businessman (Howard R. Bowen,
1953) is a book which the term CSR officially appeared for the first time for the
purpose of propaganda and appealing to property managers and charity to reimburse
damages caused by businesses harming society.
The A to Z of Corporate Social Responsibility (Wayne Visser) is really a
must-have textbook in economics of lecturers, students, economists and lawyers. It
draws on the literature of a unique publication and is the culmination of over a

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hundred of the world's leading thinkers, opinion formers, academic and business
people providing an easy-to-use guide to CSR: from general concepts such as
sustainability, stakeholder management, business ethics and human rights to more
specific topics. In addition to definitions of the most important terms across the
wide range of CSR associated topics, this book also covers all the most important
codes and guidelines, such as the Equator Principles, the UN Global Compact and
ISO standards, as well as providing background on organizations such as the World
Business Council for Sustainable Development and Transparency International and
profiles of CSR in particular industries and regions.
The research that must mentioned is Ackerman R.W. (1973), “How companies
respond to social demands”, Harvard Business Review. This is one of the first
studies on the field of corporate social responsibility, and this is also an important
reference, laying the foundations for many later studies in the field of CSR in
general and CSR in the food industry in particular. Research shows the ways that
every business often does to fulfill its social responsibilities in different ways,
consistent with their particular circumstances.
Other paper can be mentioned is “The Effect of Environmental Corporate
Social Responsibility on Consumer Behavior, Andel W., Voogd S. (2010)” to focus
on assessing the impact of social enterprises on consumer behavior. The study also
shows a vivid picture of how businesses take advantage of their social obligations to
create benefits for their core businesses, and build business relationships -
consumers use together to benefit.
“Consumers Perception of Corporate Social Responsibility in a Developing
Country” Arli D.I., Lasmono H.K. (2010) is a study from a consumer perspective to
assess and analyze corporate social responsibility. The paper also shows that
consumers' perception of corporate social responsibility is often very low, thereby
urging consumers to raise their voice to enhance corporate social responsibility and
protection consumer rights.
“Exploration of corporate social responsibility (CSR) in multinational
companies within the food industry” Rana, Padmakshi, Platts, Jim & Mike Gregory

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(2009), illustrates the exploration of CSR and sustainability literature with the
development of the conceptual framework, followed by a brief overview of
sustainability in the food industry, the adopted research design and a short summary
on preliminary findings from case studies.
Besides these above mentioned books focusing on CSR, there have been a
number of papers specialized in CSR in Vietnam - “The Corporate Social
Responsibility in Vietnam today” Phu-Hop Mai (2017) - Journal of Business and
Economic Development. This is a short study that has presented a very general
status of social responsibility of enterprises in Vietnam today. This paper says that
Vietnam today who are bringing the CSR into their own business strategy often are
big enterprises and the enterprises with export market. Meanwhile, the medium and
small enterprises have not been seen opportunities and benefits of the CSR, some of
them have even misunderstood or intentionally misunderstood the importance of
SCR. This article focused on analyzing the corporate social responsibility, roles of
the implementing the SCR and some matters of implementing the SCR in Vietnam.
To more detail, Corporate Social Responsibility in the Vietnamese Garment
and Food Industries: Antecedents, Strategies and Performance (Do Thi Ha Lan,
2018) is one of those papers. The paper explore motivations that shape CSR
practices at the institutional, organizational and individual levels. It is, particularly
intriguing to understand how CSR is conceptualised and implemented in the context
of Vietnam with its hegemony of the State Party, the increasing power of different
stakeholders and businesses, demographics, and relevant features. To conclude, it
suggests several recommendations for Vietnamese companies and authorities to
adopt for CSR.
“Does Corporate Social Responsibility (CSR) matter to Vietnamese
Consumers? A Qualitative Study of Modern Food Retailers” Vo Thi Mai Ha - Hue
University (Vietnam), looking at CSR practices of modern food retailers (MFRs) in
Vietnam, the aim is to obtain first insights into the relevance of CSR for Vietnamese
consumers. Some findings of this research are product responsibility is perceived to
be the primary concern of urban consumers in Vietnam. In contrast, animal welfare,

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fair trade, and child labor, the aspects which are intensively discussed in western
countries, are of little relevance for Vietnamese consumers. Vietnamese consumers
value firms that behave socially responsibly, but they do not react to CSR at the
same manner.
These are several of the studies that I filtered out and suggested that these are
quite detailed studies and references in many other studies. However, there are
many very useful and in-depth studies that I cannot name such as corporate social
responsibility (CSR) in Vietnam: a conceptual framework - “Corporate social
responsibility of the production and processing food enterprises in Vietnam” –
Nguyen Phuong Mai, 2015 are also very useful references.
3. Research objectives
The thesis aims to analyze the situation of how CSR has been applied in the
Vietnamese food industry and provide some personal as well as collected opinions
from different publications about policy recommendations can be taken to make the
CSR situation in in the Vietnamese food industry better. The objectives are:
- To identify how some Vietnamese food enterprises implement CSR practices
into their operation;
- To evaluate the successes; limitations; opportunities and challenges of CSR
situation in some representatives of Vietnamese food enterprises.
- To recommend some suggestions to the food companies and government
bodies.
4. Research questions
The objectives of the research are derived from the research questions as
follows:
-What are the types and forms of CSR activities and strategic postures that
Vietnamese companies adopt?
-What needs to be done in order to facilitate the application of CSR in
Vietnamese food industry?
- How do the big Vietnamese food corporations perceive CSR?

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- What are the current CSR practices and strategies adopted by Vietnamese
food companies?
5. Scope of research
Regarding the content of the dissertation, it focuses on the real situation of
CSR in the Vietnamese Food Industry and policy recommendation. The scope of
this thesis is as follows:
As for geographical scope, the research is intended to conduct only the case of
big corporations, either Vietnam – originated or multinational corporations
operating in the market. However, as approximately 80% of the Vietnamese
businesses are small and medium sized, this thesis will only contribute to the
understanding of the topic on a small scale.
As for time scope, the research focuses on analyzing the case companies in the
period from 2016 to 2019, the author can draw more reasonable results from the
analysis. As for the general theoretical framework, there will be no limits of time.
6. Research methodology
The author has chosen a qualitative approach towards this thesis because
unlike the quantitative approach, qualitative approach will allow the author to study
and analyze the data acquired and come to a conclusion based on them, hence better
suits the main aim of this thesis.
The collected data throughout this research are based on the primary and
secondary sources. The primary data are collected from the interviews of staff from
two studied cases as well as the author’s observation through companies’ reports.
Subsequently, the articles, books, and reports focusing on the CSR topic are
considered the secondary source. Most of the information is issued in 2010-2017
which likely provide the most up-to-date data in this specific field.
7. Thesis outline
Depart from the introduction, reference document and the conclusion. This
thesis contains four chapter:
Chapter 1: “Theoretical Background of Cooperate Social Responsibility”
provides the most essential knowledge of CSR including theories, concept

8
Chapter 2: “CSR Application in Vietnamese Food Industry” analyzes the
situation in Vietnamese food industry and some case studies to present more detail
on CSR practices applied by the companies.
Chapter 3: “Case Studies” presents more detail on CSR practices applied by
the food companies
Chapter 4: Policy Implication draw a general picture of how CSR has been
applied in the Vietnamese food industry and also point out some recommendations.

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CHAPTER 1: THEORETICAL BACKGROUND OF CORPORATE SOCIAL
RESPONSIBILITY
1.1. Background
1.1.1. Definition
If the concept of "corporate social responsibility" (CSR) is relatively new and
mentioned a lot since the 1950s, however, attention to the consequences arises from
the enterprise activities in particular and economic activities in general have existed
for a long time in the world (Capron and Quairel-Lannoizelee, 2009). In other
words, the need to implement social responsibility in business is not a new concept.
Chinese, Egyptian, and Xume ancient records emphasized trade rules to promote
trade and concern interests of the wider community. Since then, public interest in
social and business interactions as well as the development of business activities has
been gradually growing.
In the early 1950s, the first official CSR studies were published. The term
CSR officially appeared for the first time in 1953 in the book "Social
Responsibilities of the Businessmen" by Howard Rothmann Bowen for the purpose
of propagating and appealing to managers who should not harm the rights and
interests of others, and should do charity to compensate for damages caused by
businesses.
According to Patrick Murphy (University of Michigan Business Review,
1978), the concept of CSR has progressed through four main eras. It is illustrated in
this following figure:
Figure 1.1: Era of CSR
(Source: Patrick Murphy, 1978)
Philanthropic era
(1800s – 1950s)
Awareness era
(1953-1967)
Issue era
(1968-1973)
Responsiveness
era (1974-1978)

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With such a prolonged origin, the concept of CSR that is being integrated
nowadays within the strategic procedures of assorted business entities has, however,
grown, manifested and flourished as a product of the twentieth century. The term
CSR is being understood in many different ways. The meaning of CSR can be
understood from the meaning of the three words contained in this phrase:
responsibility, society and cooperation. According to Capron and Quairel-
Lanoizelee (2009), refering to "responsibility", enterprises need to answer the
question "what are corporations responsible for? and to whom are they
responsible?". With the question "who is responsible?", There may be many
different answers, depending on the concept of corporations and the position of the
corporations in society. Corporations are only responsible for shareholders because
the role of business is maximizing profits for the mutual benefit of shareholders
(Friedman, 1993) . The second type of response, according to the European Union,
should be concerned with individuals or groups that may be affected by their
activities, or groups or individuals. The third answer is that corporations must be
responsible for the common interests of the community. At present, when common
interest issues have crossed the borders of national states, the issue of business
contribution to the common interests should be placed in the context of
globalization, but this issue has so far. There are only sketches or limited
experiences of regulatory mechanisms.
The question of "to whom are they responsible?" refers to the criteria on which
people will assess whether a corporations applies certainly social responsibility.
These criteria are extremely diverse, difficulty in making assessment objectively,
because the evaluator cannot be affected by his own values as well as his position in
the relationships or the benefits of organizations for which he is a member.
Despite the impressive number of formal writings on the topic of CSR, all of
them, bear some similarities. All of them point out to the need of maintaining as
much integrity in terms of social, environmental and ethical values as possible along
the way of businesses making profit. For the purpose of this study, the term
corporate social responsibility (CSR) will be used to describe how business acts to

11
implement the broad societal responsibility of going beyond economic criteria, such
as creating products, employment, and profits, to meet broader social and
environmentalexpectations. The term CSR is preferred as it maintains the focus on
the issue of responsibility to society as a whole, and it is a term that corporations are
increasingly using, both internally and in their communication efforts with external
audiences.
1.1.2. Determinants of CSR
CSR is a broad category so that there are also a number of related categories in
its development process including: business ethics, civic enterprises, accountability.
business process, and corporate sustainability (Carroll, 2008).
Business ethic:
According to the Oxford dictionary, business ethics is "the application of
moral principles to the status of business organizations". Although the concept of
CSR has a moral aspect, these two concepts are not identical. According to Carroll,
business ethics is part of the CSR. This author has argued that enterprises have four
types of responsibilities including economic responsibility, legal responsibility,
moral responsibility and charity responsibility. Accordingly, business ethic is
”responsibility to do things rightly, appropriately and fairly” (Branco, 2007).
Therefore, this is an inseparable part of the concept of CSR because if the enterprise
implements the other three types of responsibilities without fulfilling this
responsibility, the enterprise cannot fulfill its contribution to society (Carroll, 2001).
Corporate citizenship
Corporate citizenship is a concept that is often used instead of the term CSR.
The term civic enterprise began to appear in the 1950s and then became popular in
European countries in the 1990s. Its prevalence was associated with waves of
opposition to globalization such as criticizing businesses' outsourcing strategy,
concerns about climate change and other serious environmental problems caused by
businesses, and parallely being urged by policies introduced by global institutions
such as the World Trade Organization (WTO), the World Bank (WB), and the
International Finance Organization (IFC).

12
This concept is understood as a business considering its responsibility to the
whole society as a responsible citizen. There are many definitions of civic
enterprises such as the United Nations that corporate citizenship is the integration of
social and environmental concerns into corporate policies. The American Society
for Social Responsibility defines that citizenship responsibility as the operation of a
business in a certain way that satisfies both legal and religious expectations as well
as ethics and social trade for businesses . The Boston Business Center at Boston
University argues that "a good corporate citizenshipneeds to integrate basic social
values into its daily business activities and policies. It allows these values to
influence daily decisions regarding all aspects of business and consider its impact
on stakeholders, including employees, customers, plus copper, suppliers and natural
environments ”.
It can be said that the two concepts of corporate citizenship and CSR have
something in common. However, the difference that can be noticed between these
two concepts is that while CSR relates to the economic, legal, moral and charitable
responsibilities of the business, corporate citizenshipfocuses more on attaching the
overall corporate responsibility to corporate’s strategies and policies. Carroll (2008)
argues that corporate citizenship are narrower than the concept of CSR because he
considers that the term ”corporate citizenship”only implies that enterprises
conducting charitable activities are already a ”good”enterprises. Therefore, it is
clear that CSR will be a broader category because it includes all corporate
responsibilities, from economic responsibility, legal responsibility, moral
responsibility to charity responsibility.
Social entrepreneurship
Social entrepreneurship is a type of business established to create social value
through a certain business model to solve social problems. This is a new type of
business that appeared in 1980. The first social enterprise in the world is
Ashokafounded by Bill Drayton. After that, this type of business gradually appeared
more in European countries and especially in India.

13
The term social enterprise can be confused with the term CSR because usually
when an enterprise performs CSR, it means that it is on the way to become a social
entrepreneurship. But in fact they are different because social entrepreneurship are a
business model and CSR is a category that covers responsible actions that
businesses take to meet the expectations of stakeholders.
Corporate accountability
Corporate accountability is the foundation for the concept of CSR. Therefore,
it is used quite often to replace the term CSR. According to Branco (2007), due
diligence relates to the perception of enterprises on its impacts on the external
environment. Thus, the most important thing is that businesses need to be
responsible for the effects that it creates for all stakeholders. In addition, due
diligence also requires the willingness of the company to report on the situation of
the company in a transparent manner to the stakeholders. In other words, the
corporate accountability represents the responsibility of the business to explain its
actions in a logical and meaningful way to the parties. However, Branco (2007)
argues that corporate accountability is actually only part of the concept of CSR. If a
company wants to perform CSR well, it must first ensure the implementation of
accountability.
1.2. Models of CSR
1.2.1. Carroll’s CSR pyramid
The Pyramid of CSR model (Figure 2) was first introduced by Carroll in 1991
and this has been through empirical observation tested and supported by several
different author (e.g. Aupperle, Carroll & Hatfield, 1985; Pinkston & Carroll,
1994). Carrol’s CSR pyramid pointed to shed light on how imperative it is for
businesses to completely react to all aspect of the social world, naming economic,
legal, ethical and philanthropic (Figure 2). According to Carroll, economic
responsibilities of business should perform an obligation to be productive and
profitable and meet the consumer needs, which is the first responsibility of the
business as it is to be a properly functioning economic unit and stay in business.
And this is the base of the pyramid, only when these condition is met, the other

14
layers of responsibility appear. The second aspect of the pyramid focuses on the
legal responsibilities of businesses, which emphasize a concern that economic
performance should be conducted along with the written laws. If companies choose
to “bend” or even ignore their legal responsibilities, the price can be very high for
the business. For example, US software giant Microsoft has faced a long running
anti-trust case in Europe for abusing its monopolistic position to disadvantage its
competitors which resulted in tough settlements against the company. The third
layer - the ethical level, in which businesses are expected to treat their stakeholders
fairly and rightfully and reasonably, without any harmful intentions. Ethical
responsibilities are not necessarily imposed by law, but they are expected from
ethical companies by the public and governments. At the top of the pyramid lies the
philanthropic level, which indicates the responsibility of businesses to act as a good
citizen to the community, and provide resources where needed (Carroll, 1991). It
focuses on more extravagant things such as developing the quality of life of
employees, local communities and ultimately society in general. A few focuses
ofthe philanthropic responsibilities of the businesses can be controversial and
requires separate studies aimed to it. For instance, who should decide on what
reason to spend the money, how much, and on what basis these decisions should be
made.
Figure 1.2: Carroll's CSR Pyramids

15
(Source: Corporate Social Responsibility blogspot 2015)
However, the model faces various of critics. For example, Campbell (2007)
claims that the SMEs enterprises are likely less engaging in CSR activitiesbecause
they have fewer resources to contribute in. In this way, their execution might not
meet the thresholdof socially responsible behavior. Moreover, he pleadsthat the
relationship between the economic conditions and corporate behavior is affected by:
public and private regulations; non-governmental institutions and organizations that
monitor corporate behavior; institutional norms regarding appropriate corporate
behavior; associative behavior amongst corporates themselves; and organised
dialogues among corporations between them and their stakeholders (Campbell,
2007). Thus, the straightforward structure of pyramid proposed by Carroll is not
sastisfied to clarify the complicated relationship between business, society, and
environment.
1.2.2. Wayne Visser’s CSR 2.0 Model
Visser (2005) makes a critic of Carroll’s pyramid that it is need of
consideration of environmental management and corporate sustainability.
Explaining his work, Wayne Visser provides a new model of CSR which indicate a
shift from a mono-dimensional “CSR 1.0” to a multi-dimensional “CSR 2.0”.
Figure 1.3: Visser’s CSR 2.0 Model (Visser 2012)

16
The figure 4 shows four DNA Responsibilities Bases, including value
creation, good governance, societal contribution, and environmental integrity. Value
creation base displays the goal of economic development, which means not only
contributingto the shareholders and executives, but also improve the economic
context in which a company operates, including investing in infrastructure, creating
jobs, providing skills development, etc. In another way, Visser emphasized that
there can be any number of KPIs to measure a cooperation’s economic
development, beneficial products, which figures out whether a company’s products
actually improve the quality of life or cause harm instead; and inclusive business,
which figures out how the economic benefits are shared, the skillfullness of
employees, SMEs in the supply chain and the poor communities genuinely
empowered. Secondly, Good Governance base is determined by how well a firm is
doing in terms of institutional effectiveness. If the institution fail to stay transparent
and fairin daily operation, it would decline the effort that CSR is trying to
achieve.Thirdly, Societal Contribution is an area that CSR is traditionally more used
to addressing, with its goal of stakeholder orientation. It already deliver a wider
acess to Carroll’s philanthropic responsibilities and clearing the other urgent task of
the society such as child labour and more equal labour practices. This area of
stakeholder engagement, community participation and supply chain integrity
remains one of the most important elements of CSR. Finally, Environmental
Integrity sets the bar way higher than decreasing the damage of economic
development and rather attempt to preserve the sustainability.
1.2.3. The Consumer-driven Corporate Responsibility (CDCR) Model
According to a variety of researches in recent years, consumers are
increasingly concerned with social and environmental issues, as well as they have
greater expectation for a company to act socially responsibly (Frederick, 2006).
Smith (2007) in the research of consumer and CSR indicates consumers are
increasingly playing a more important role in promoting companies to implement
CSR and very few consumers are affected by CSR issues when purchasing goods;
but consumers tend to boycott the goods of companies recorded as violations of

17
CSR. For instance, consumers want to assist their local farmers adapting green
technology in manufacturing through their purchasein a project by Coca-Cola Inc.
(2011).
Figure 1.4: The Consumer-drive Corporate Responsibility model
(Claydon 2011)
The model of Consumer-Driven Corporate Responsibility starts from the
consumers’ increased demand for CSR (Figure )as a guideline to how companies
can be profitable and socially aware and environmentally responsible. Therefore,
the corporation does not only make a huge profits, but also involve in socially and
environmentally responsible behaviour, as a result, the company would get a higher
reputation and esteem from the public, which create a competitive advantage and
attract more customers to buy (Claydon, 2011). This model demonstrates to be a
prevalent compared to the previous two models in a way that it emphasizes the
vitalness of businesses frequently react, update and coordinate their CSR activities
to suit their everchanging demand of the customer bases.
Increased consumer
demand for
CSR=>businesses adopt
CSR
Increased customer base =>
Increaased consumer demand for
CSR
Businesses adopt CSR lead
to increased customer base
=> More Profit
More Profit (coming from
CSR application) leads to
higher reputation => increased
customer base

18
1.3. CSR Practices in Developing Countries
There are various ways to classify the literature on CSR in developing
countries, including in terms of content (thematic coverage), type (epistemological
approach), and level (focus of analysis). These will each be briefly considered in
turn.
1.3.1. Content Theme
Using the same classification of content as Lockett et al. (2006), the CSR
literature can be grouped into four dominant CSR themes: social, environmental,
ethics, and stakeholders. What is immediately evident in applying this
categorization to the literature on CSR in developing countries is that, in contrast to
Lockett et al.’s (2006) findings that most CSR articles in top management journals
focus on ethical and environmental themes, most scholarly work on CSR in
developing countries focuses on the social theme. In part, this reflects the fact that
corporate social responsibility is the preferred term in the literature to describe the
role of business in developing countries, as opposed to, say, business ethics,
corporate citizenship, corporate sustainability, or stakeholder management. More
than this, however, social issues are generally given more political, economic, and
media emphasis in developing countries than environmental, ethical, or stakeholder
issues (Schmidheiny, 2006). And there is also still a strong emphasis on the
philanthropic tradition in developing countries, which is often focused on
community development.
1.3.2. Knowledge Type
Lockett et al. (2006) also classify CSR papers by epistemological approach
and find a roughly even split between theoretical and empirical research, which is
also the 476 CSR in global context case in the literature on CSR in developing
countries, although the latter has a slight weighting towards empirical work. What is
interesting is that, whereas Lockett et al. (2006) find that 89% of theoretical CSR
papers are non-normative, in the CSR in developing countries literature, the balance
is far more evenly split. This is largely due to the relatively large number of papers
on the role of business in development, which tend to adopt a normative, critical

19
perspective (Blowfield and Frynas, 2005). In terms of empirical research, there are
also differences. According to Lockett et al. (2006), the CSR literature is dominated
by quantitative methods (80%). In contrast, CSR papers on developing countries are
more likely to be qualitative. Lockett et al. (2006) suggest that their findings
probably reflect the positivist editorial tendencies of many of the top management
journals, rather than the inherent epistemological preference of CSR scholars. And
indeed, the CSR and development journals in which most developing country
papers are published seem to have more interpretive or epistemologically flexible
editorial policies.
1.3.3. Various drivers for CSR in developing countries
(1) Cultural Tradition:
While many believe CSR is a Western invention (and this may be largely true
in its modern conception), there is ample evidence that CSR in developing countries
draws strongly on deep-rooted indigenous cultural traditions of philanthropy,
business ethics, and community binding. Indeed, some of these traditions go back to
ancient times.
(2) Political Reform
CSR in developing countries cannot be divorced from the socio-political
reform process, which often drives business behavior towards integrating social and
ethical issues. For example, De Oliveira (2006) argues that the political and
associated social and economic changes in Latin America since the 1980s, including
democratization, liberalization, and privatization, have shifted the role of business
towards taking greater responsibility for social and environmental issues.
In South Africa, the political changes towards democracy and redressing the
injustices of the past have been a significant driver for CSR, through the practice of
improved corporate governance (Roussouw et al., 2002), collective business action
for social upliftment (Fourie and Eloff, 2005), black economic empowerment (Fig,
2005), and business ethics (Malan, 2005). Visser (2005a) lists more than a dozen
examples of socio-economic, environmental, and labor-related legislative reform in
South Africa between 1994 and 2004 that have a direct bearing on CSR.

20
Likewise, more recently, the goal of accession to European Union membership
has acted as an incentive for many Central and Eastern European countries to focus
on CSR, since the latter is acknowledged to represent good practice in the EU
(3) Socio-economic Priorities
There is a powerful argument that CSR in developing countries is most
directly shaped by the socio-economic environment in which firms operate and the
development priorities this creates.
Amaeshi et al. (2006), for example, argue that CSR in Nigeria is specifically
aimed at addressing the socio-economic development challenges of the country,
including poverty alleviation, health-care provision, infrastructure development, and
education. This, they argue, stands in stark contrast to many Western CSR priorities
such as consumer protection, fair trade, green marketing, climate change concerns,
or socially responsible investments.
(4) Governance Gaps
CSR as a form of governance or a response to governance challenges is
discussed elsewhere in this book (Levy and Kaplan, Chapter 19). However, of
particular relevance for developing countries is the fact that CSR is often seen as a
way to plug the ‘governance gaps’ left by weak, corrupt, or under-resourced
governments that fail to adequately provide various social services (housing, roads,
electricity, health care, education, etc.). Matten and Moon (forthcoming) see this as
part of a wider trend in developing countries with weak institutions and poor
governance, in which responsibility is often delegated to private actors, be they
family, tribe religion, or, increasingly, business. Furthermore, ‘as many developing
country government initiatives to improve living conditions falter, proponents of
[CSR and bottom of the pyramid] strategies argue that companies can assume this
role
(5) Crisis Response
Various kinds of crises associated with developing countries often have the
effect of catalyzing CSR responses. These crises can be economic, social,
environmental, health-related, or industrial. For example, Newell (2005) notes that

21
the economic crisis in Argentina in 2001–2 marked a significant turning point in
CSR, prompting debates about the role of business in poverty alleviation. Others see
climate change (Hoffman, 2005) and HIV/AIDS (Dunfee, 2006) as crises that are
galvanizing CSR in developing countries.
(6) Market Access
The flipside of the socio-economic priorities driver is to see these unfulfilled
human needs as an untapped market. This notion underlies the now burgeoning
literature on ‘bottom of the pyramid’ strategies, which refer to business models that
focus on turning the four billion poor people in the world into consumers (Prahalad
and Hammond, 2002; London and Hart, 2004; Rangan et al., 2007). As we have
previously noted, this straying of business into the development arena is not without
its critics or problems (Hardcourt, 2004).
(7) International Standardization
Despite the debate about the Western imposition of CSR approaches on the
global South, there is ample evidence that CSR codes and standards are a key driver
for CSR in developing countries. As already noted, Baskin’s (2006) survey of CSR
practices in emerging markets indicates growing adoption rates of ISO 14001 and
the Global Reporting Initiative’s Sustainability Reporting Guidelines.
(8) Investment Incentives
In some developing countries, like South Africa, the SRI trend is well
documented (AICC, 2002). In addition to featuring prominently in the SRI
movement in the 1980s through the anti-apartheid disinvestment phenomenon, since
1992, South Africa has introduced more than 20 SRI funds nationally which track
companies’ social, ethical, and environmental performance (Visser, 2005a).
According to research by the African Institute of Corporate Citizenship (AICC)
(2002), the size of the South African SRI market in 2001 was already 1.55% of the
total investment market. In a significant development, in May 2004, the
Johannesburg Securities Exchange also launched its own tradable SRI Index, the
first of its kind in an emerging market (Sonnenberg et al., 2004). A similar index
has also subsequently been introduced in Brazil

22
(9) Stakeholder Activism
In the absence of strong governmental controls over the social, ethical, and
environmental performance of companies in developing countries, activism by
stakeholder groups has become another critical driver for CSR. Lund-Thomsen
(2004) describes this as “an outcome of micro-level struggles between companies
and communities over the distribution of social and environmental hazards which
are created when global political and economic forces interact with local contexts
around the world” (page 106).
(10) Supply Chain
Another significant driver for CSR in developing countries, especially among
small and medium-sized companies, is the requirements that are being imposed by
multinationals on their supply chains. This trend began with various ethical trading
initiatives (Blowfield, 2003, 2004), which led to the growth of fair trade auditing
and labelling schemes for agricultural products sourced in developing countries
(Dolan and Opondo, 2005; Schrage and Ewing, 2005). Allegations of poor labor
conditions and human rights abuses in several high profile multinational supply
chains in the sporting and clothing sectors were also a significant catalyst for greater
attention to CSR requirements (Hussain-Khaliq, 2004; Kaufman et al., 2004;
Nielsen, 2005).
Research into CSR in developing countries is still relatively underdeveloped
and tends to be adhoc with a heavy reliance on convenience-based case studies or
descriptive accounts. The focus is often on high profile incidents or branded
companies and a few select countries (e.g. Brazil, China, India, South Africa), with
a general lack of comparable benchmarking data. Hence, there is an urgent need for
further research on CSR in developing countries at the international, regional,
national and sectoral levels, as well as on theoretical constructs. There is a dearth of
international research which surveys the nature and extent of CSR in developing
countries, as compared with developed countries. Next to this need for more data in
general, there is need for more comparative work which analyses CSR between
regions (e.g. Africa, Latin America, Asia) and between countries within regions. On

23
a more national or regional level, there is need for detailed national research on
CSR, especially on the more than 100 developing countries that appear to have had
no academic papers published about them in CSR journals. Alongside these efforts
there seems to be a specific need for more sectoral research on CSR codes and
practices, especially for the lesser covered industries like chemicals, financial
services, infrastructure (including construction), manufacturing (including motor),
media, retail, telecommunications, and travel and leisure. Finally, all these different
streams of empirical research should inform more conceptual work on CSR
conceptions, frameworks, or models that are more applicable to developing
countries. What is clear from this section, therefore, is that CSR in developing
countries is a rich and fascinating area of enquiry, which is becoming ever more
important in CSR theory and practice. And since it is profoundly under-researched,
it also represents a tremendous opportunity for improving our knowledge and
understanding about CSR.
1.3.4. CSR Pyramid for developing countries
Figure 1.5. CSR Pyramid for developing countries (Visser, 2008, 489)

24
Economic Responsibilities
Most of developing countries suffer from an insufficiency of foreign direct
investment, from high unemployment rate, as well as widespread poverty. It is
obvious to recognize the government highly appreciates the economic contribution
of companies in developing countries (Visser, 2008, 490). Therefore, CSR practices
must emphasize on the capability to get new investment and income, manufacture
safe products and services for consumers, create more jobs, construct infrastructure,
etc (Nelson, 2003).
Philanthropic Responsibilities
As mentioned in the previous part “Drivers of CSR”, the socio-economic
situation and the crisis response that demand for CSR actions aiming at
philanthropic purpose is a regular norm. This is seen as a direct path to improve
firm’s image and reputation within community. Generally, developing countries are
in the early stage of maturity in CSR, they even consider CSR and philanthropy
equally (Visser, 2008, 490).
Legal Responsibilities
As shown in the pyramid, legal responsibilities in developing countries place
at the third priority which is lower than in developed country. The reason could be
the poorly developed legal infrastructure and many lacks of independence,
resources, and administrative efficiency. It does not necessarily mean that
companies thread the law, yet there is less pressure for good conduct (Visser, 2008,
491). For instance, tax advance by companies is one of the most critical examples of
irresponsible business behavior in developing countries (Christensen and Murphy,
2004)
Ethical responsibilities
Finally, ethics is put at the last priority on the CSR agenda which is a
voluntary action encouraged by the government. According to Transparency
International’s Annual Corruption Perception Index and Global Corruption
Barometer, developing countries usually have the poor rank. Many survey
respondents approve that corruption still affects business to a large extent. Thus,

25
there is a long way to embed ethical responsibilities in developing countries (Visser,
2008, 492). In case of Vietnam, a developing country, the author use Visser’s
Pyramid model to explain the situation of CSR implementation by Vietnamese
enterprise.

26
CHAPTER 2: CSR APPLICATION IN VIETNAMESE FOOD INDUSTRY
2.1. Overview of Vietnamese food industry
Vietnam is determined as one of the fast-growing economy in ASEAN. From
2016 to 2018, GDP growth rate of the country is grown from 6.2% to 7.1% and it is
expected at 6.8% in 2019 (The Asian Development Bank, 2019). GDP per capita
growth is also highest compared to other countries in ASEAN region and it is stood
at 6.1% in 2018 while other countries like Thailand and Malaysia have GDP per
capita growth rates at 3.5% (The Asian Development Bank, 2018). With such
economic development, Vietnam is transforming from low income to a lower-
middle income country (The World Bank, 2019). ATKearney (2019) also rank
Vietnam at 6th
position in term of global retail development index and Vietnamese
government has done remarkable activities in term of liberalizing investment laws
in order to move the country ahead in global retail market. Beside of that, Vietnam
receives strong foreign direct investment, the raise of tourism industry, and strong
domestic demands (Nguyen, 2018). According to Business Monitor International
(2018), unemployment rate of Vietnam is low at below 3.5% while the minimum
wage of Vietnamese labors has been increasing over the time.
Table 2.1: Overview of Vietnam's economy
Item Unit 2017 2018 2019
GDP growth rate %, year 6.2% 7.1% 6.8%
GDP per capita %, year 5.8% 6.1% 5.8%
Inflation %, year 3.5% 3.7% 4.0%
Source: The Asian Development Bank (2019)
Vietnamese food industry has been fueling by strong economic development.
The industry witnesses a revenue of US$149 million in 2018 and it is projected at
US$149 million in 2019 and US$407 million in 2023 (The Statista, 2019). The
revenue growth rate in 2017 and 2018 is reported at 29.7% and 34.3% respectively
(The Statista, 2019). It is explained by the fact that food is positioned as essential
spending and food and drink consumption accounts for more than 20% of total
household consumption in Vietnam (Business Monitor International, 2018).

27
Vietnamese consumer behavior towards food products have been changing. Due to
the growing of household income which is translated to US$2,385 in 2017
compared to US$2,115 in 2016 (Megan et al., 2018), Vietnamese people are more
preference towards higher-value products and they aim to purchase food products
with safe origination even if they must be purchased at higher prices (The British
Business Group Vietnam, 2019). Local consumer preference towards imported food
products is surging with total imported value for food and agricultural products is
up to US$24 billion in 2017 and it is 4.7% higher compared to 2016 (Megan et al.,
2018). General Statistics Office of Vietnam (2019) reports that the main imported
items in trade balance of the country is belonged to aquatic products, milk and dairy
products, vegetable and fruits, and wheat and most of these items have import
growth rate more than 10% compared to 2017.
Table 2.2: Main imported items of Vietnam
Imported item Value in 2018, US$ million 2018 vs. 2017, %
Aquatic products 1,717 119.2%
Milk and dairy products 963 102.5%
Vegetables and fruits 1,738 112.3%
Wheat 1,165 117.1%
Cattle feed and supplies 739 97.1%
Source: General Statistics Office of Vietnam (2019)
According to Rama (2018), Vietnamese consumers are spending about
US$80-120 per month for local food stuffs and the primary food consumption
products are sticky rice, milk tea, and coffee. The food consumption market also
witnesses the raise of foreign food cultures from Japan and Korea and fast food
provided by KFC and McDonald (The British Business Group Vietnam, 2019). The
local news reports that there are more than 1,000 Japanese food serving chain and
nearly 400 fast food chains in Vietnam in which Lotteria has opened in more than
100 locations, followed by KFC with 140 locations and Jollibee with 100 locations
(Vietnam Economics News, 2017). The world famous fast food chain, McDonald

28
also open 20 chains in Vietnam and its plan is to increase the number of fast food
chain in Vietnam to 100 (Nguyen, 2018).
To meet the growing demands from local-based customers, there are many
food processing companies in Vietnam. Currently, the country has more than 8,000
registered companies which are doing business in food processing sector and nearly
90% of these companies have small business scale at lower than 50 labors (Megan
et al., 2018). However, the market consists of some big food processing
manufacturers, including Vietnam Diary Products JSC (Vinamilk), Masan
Consumer Corporation (MCC), Acecook Vietnam JSC (ACE), Kido Group (KG),
etc. in which Vinamilk is among the top favorable brands in dairy and dairy
substitutes products while Masan is leading brand in food products (The Kantar
World Panel, 2019). These companies in Vietnamese food industry is utilizing one
of or mixed between different distributions channels (Megan et al., 2018). The basic
distribution model is started when food processing companies are not only
producing foods but also acting like direct local importers. The distribution channel
is also expanded with the participation of the distributors and the wholesalers and
traditional sales channels (i.e. food stores, hypermarket, and supermarket). The
competition landmark is also increasing with the reduction of tariffs as the result of
free trade agreements between Vietnamese government and other countries,
including Korea, Japan, Australia, Chile, China, and India. Moreover, the growing
of the Internet-based application allows Vietnamese consumers to purchase foods
products from foreign countries and these products are shipped to Vietnam by
shipment companies (Megan et al., 2018).
In summary, there are some key trends in Vietnamese food industry (Megan et
al., 2018; Nguyen, 2018; Dang et al., 2018). The first trend refers to the demand of
packaged food products due to Vietnamese people are preference towards busier
lifestyles. It is also captured the trend of growing consumption towards ready meals
and it is evidenced from high number of fast food chains in Vietnam. Moreover, the
demand is surged in big cities like Hanoi and Ho Chi Minh City (HCMC). Average
transaction per meal per consumer in these two cities are estimated at US$2-4. The

29
second trend captures the sales of packaged foods to be grown rapidly due to
stronger distribution network which is fuelled by the presence of convenience
stores, hypermarket, and supermarket. The third trend is recognized as the shift of
consumer behavior towards safety food products and they are willing to purchase
extra cash in return of quality imported food products. Moreover, Vietnamese
consumers strongly require more detail and traceable information related to food
processing and food ingredients. The fourth trend is highlighted as the slow demand
of noddle products and the growing demand for organic products. It is denoted that
Vietnamese government supports the development of organic products but the
customer awareness and customer consumption towards this food category is still
limited. The fifth trend emphasizes the growth in frozen processed meat, chilled
processed meat, and seafood due to the influence of Western cultures. Finally,
Vietnamese people are in high demand for sweet biscuit, snacks, and fruit snacks
and these food products are treated as personal gifts. The last trend in Vietnamese
food industry is captured by Dang et al. (2018) and this trend acknowledges the
development of the Internet in Vietnam and it directs the consumer behavior
towards online food order. According to CIMIGO (2011), Vietnam is among the
countries with high Internet’s penetration rate and it affects positively to the
development of electronic commerce. Moreover, the number of customers who
purchase products via online merchants is increased by more than 20% during 2017
and the incremental rate is expected at 13% by 2020 (Vietnam News, 2017;
Vietnam News, 2018). In this context, more and more Vietnamese customers are
able to purchase processed foods which are provided by online food providers
(Forbes, 2013).
2.2. Vietnam research context
2.2.1. CSR in Vietnam
CSR is determined as important activities that are integrated deeply into the
business structure of the companies operating in Vietnam. It is evidenced through
the governmental guidance and laws which are implemented in the last 20 years,
including the law of environmental protection implemented firstly in 1991 and

30
refined in 2005, the law of labors in 1994 and 2005, the law on social insurance in
2006, the law on trade unions in 1990, etc. (Ha, 2018). Vietnamese government also
follows the conventions regulated by the International Labor Organization to
regulate ethical labor practices, to protect the labors from poor working conditions,
to resolve labor conflicts, and to provide the minimum wage level (The
International Labor Organization, 2017). In addition, Vietnamese government also
provides legal provision for business sector, reflecting through several laws such as
the law on foreign investment, the enterprise law, the law on procurement, and the
law on securities (Ha, 2018). With the government’s efforts, it is concluded that the
regulators in Vietnam have been done remarkable jobs in term of formulating legal
framework for business activities in the way of labor and environmental protection
(Tran, 2011; Ortmann, 2017; Ha, 2018).
Although there are several laws to be issued by different governmental bodies,
CSR has just been introduced in Vietnam recently, according to Hamm (2012). It is
explained by the integration of Vietnam to global economy, starting after the
country officially joined World Trade Organization in mid-2017. Following the
WTO accessibility, Vietnamese companies are forced to implement CSR practices
in order to ensure social and environmental compliance and the effort is proven
through the enforcement of maintaining working conditions for the labors and
avoiding environmental deteriorated by business activities (Hamm, 2012; Ha,
2018). Moreover, the presence of foreign investment sectors and the development of
the Internet increase the awareness of local companies towards carbon footprints
and the contribution to reduce the harmfulness from climate change (Tran, 2011).
The growing of the Internet in Vietnam with more than 50% of the Internet
penetration (The Internet Word Stats, 2019) enables the information transparency in
which the issues related to environment and labor are being highlighted in public
media such as online newspaper and the Facebook (Nguyen and Pham, 2011).
All these statements above bring a strong sense of CSR implementation for
Vietnamese companies in order to avoid negative attitude from the customers
although the gap is still existing and varied. A survey which is conducted by

31
Vietnam Report (2017) shows that CSR has been becoming important activity in
Vietnamese companies and the survey recognizes some CSR issues and the
motivation of CSR implementation is to increase brand reputation. Earlier, Vietnam
Report (2015) carries a survey about CSR and the sample includes top 500
Vietnamese companies and it reveals rising demands of CSR implementation.
Another survey indicates that the awareness of CSR is low in Vietnam and the
employees in local companies receive inadequate trainings about CSR (Do, 2018).
An empirical evidence which is provided by Do et al. (2016) emphasizes that CSR
is not mentioned in the reports of 100 largest companies in Vietnam.
In the shed of recent effort of implementing CSR from key stakeholders, food
industry gains much attention from the policy makers and business practitioners in
term of how CSR practices are implemented and maintained in Vietnamese food
industry. It is because of food products are consumed directly the consumers and
food production process requires the raw materials that may lead to the
environmental deterioration in case of misleading uses (Hartmann, 2011; Forsman-
Hugg et al., 2013; Pettersen and Tobiassen, 2014; Vo, 2016). As mentioned in
earlier sections, Vietnamese food industry achieves significant growth and key
trends ae captured as the raise of out-of-home dining, the demand for packaged
foods, higher demands from imported quality foods from the consumers, and their
awareness of safety foods with the avoidance of those are processed from harmful
ingredients (Megan et al., 2018; Nguyen, 2018). This background information
enables the demands of exploring what the current situation of CSR in Vietnamese
food industry.
In fact, the customers in Vietnamese food industry are more and more
concerned about the food product quality. A survey which is carried by the market
researcher, Nielsen, clearly emphasizes that 37% of total respondents dictate their
demands to understand how the product quality of purchased food products. This
survey also affirms that 87% of the consumers are willing to pay extra prices for
qualified food products and 76% of the consumers want to understand all
ingredients in a food-related product. In addition, when Vietnam participates into

32
global market, local food manufacturing companies in Vietnam must achieve many
international standards for quality such as SA8000, BCSI, SMETA, etc. CSR today
becomes more important in the Vietnamese business environment through a series
of alarming incidents conducted by food manufacturers to the environment and
society, such as the case of Vedan Company releases tons of untreated waste water
to Thi Hai River, the use of expired materials of Tan Hiep Phat Company to
produce beverage products, the bitter potato flavor of PepsiCo Vietnam, and
Vinamilk tries to purchase raw materials from the farmers at the prices much lower
than average market prices. Recently, local newspaper reports that the country has
91 cases of food poisoning in the first 10 months of 2018, leading to the infection of
more than 2,010 people in which there are 15 cases of death due to alcohol drinking
and poisonous mushrooms consumption. Regarding Governmental agencies have
checked and sanctioned 99 company which have been violating food safety units
with a total amount of nearly VND 6 billion. Moreover, Vietnam food market
witnesses a trend of advertising on websites, websites about functional food
products in contravention of regulations such as improper advertising with product
quality, incorrect content registered for licensing, or advertising with unlicensed
content. When detected to be dealt with, the relevant units said that the website or
social networking sites posted the product content not created by the company. This
is a new issue, therefore, Department of Food Safety is coordinating with the
Ministry of Information and Communications to have solutions to handle and
manage this situation to ensure information of products to ensure safety for users. In
the food processing industry in Vietnam, raising awareness and promoting CSR
implementation is really an urgent issue. In fact, many businesses operating in the
field of food production and processing in Vietnam also operate in a "snatch", for
profit but ignore the benefits of consumers and communities. The most typical cases
include violations of CSR in food safety and hygiene. Currently, the production and
processing of food in our country is mainly made by about 10 million farm
households and 500,000 processing establishments, of which 85% are small and
medium scale, and produce seasonally, so equipment and workshops do not ensure

33
food safety conditions (Ministry of Health, 2014). Statistics show that from 2004 to
2008, in the whole country there were 2,160 cases of food poisoning causing 85,000
people with poisoning, 388 deaths.
Many enterprises implementing CSR has lead to practical results in production
and business. The survey results of Institute of Labour Science and Social Affairs
on 24 enterprises in two fields of food and textile show that when they take the CSR
activities, their revenues have been increased by 25%, their labour capacity has
been increased from 34.2 million dong to 35.8 dong/1 labourer/year; the rate of
export goods has been rise from 94% to 97%. In addition to economic benefit, these
enterprises also have consolidated its reputation with customers, created loyalty and
satisfaction of employees, attached highly professional labourers (Phu Hop Mai,
2013). Recognizing the importance and benefits of the implementation of social
responsibility in the context of globalization and international integration, a variety
of large businesses in Vietnam, in addition to tax liability, sign up to implement
social responsibility as a commitment to protect the environment, contribute to the
benefits to the local community. For instance, Vinamilk implemented the social
program titled “6 million cups of milk for children”; Dutch Lady established the
scholarship fund “Firefly Lights”; Unilever Vietnam Foundation financed the
project “Improving health of the community by improving personal hygiene and
environmental sanitation behaviors”; Friesland Campina Vietnam Co., Ltd invested
in knowledge, tools, experience and financed farmers to increase productivity,
quality of milk, reduce energy consumption, noise, and perform waste treatment by
biogas system; P/S had the program “Protecting Vietnamese Smile”; Viettel
organized the program “Operation Healthy Heart”; Cafe Trung Nguyen held the
program “Journey for Vietnamese Aspirations” which supports the youth in all
fields to create their own future and to complete their obligations to Family, the
Society and country; Him Lam JSC held the program “Inspire a dream”; Hoa Sen
Group organized the program “Vietnamese homes”, etc.
Nevertheless, it can be claimed that Vietnamese enterprises today who are
provide the CSR into their own business strategy often are big enterprises and the

34
enterprises with export market. Meanwhile, the SMEs have not been seen
opportunities and benefits of the CSR, some of them have even misunderstood or
intentionally misunderstood the importance of CSR. They simply think that they
can take full advantage of resources, the labor of employees and other tricks to
maximize profits; then they perform other social activities such as charity and
support for a few of individuals and agencies.
From the meaningful programs, it can be said that the CSR campaign in
Vietnam today remains its values. However, the heart of sponsors will be perfect if
there is no report of violation of environmental sanitation, food safety or poor
quality, fake goods, salary debts, tax debts, violation of legal interests and benefits
of labourers, increasing prices of articles to secure profits resulting to more serious
inflation, etc. For the purpose of profitable benefits, many enterprises only take all
action in all ways to obtain such purposes and forget the interests of customers,
responsibility to labourers, to eco-environment, to the community and to the future
generations. Recently, people are paying much attention to a series of serious
violation cases; for example, productions of foods containing substances harmful to
human health such as milk containing birth control drug, melamine of China, soya
source containing 3-MCPD (Phu Hop Mai, 2013), resulting to cancers, rice cakes
containing phormol, foods containing borax, using banned chemicals to clean rancid
meats then process meals; HT USA Medical Equipment and Trading JSC faked
Lumbrotine, etc...; Vedan Vietnam Company directly discharged 100000m3
(cubic
meter) of untreated waste into Thi Vai river in every month, and a series of cases of
untreated waste discharge into the environment of Mi won, Hao Duong JSC, Viet
Tri paper JSC, Hyundai Vinashin Company (Khanh Hoa); Kim Ngoc Long Co., Ltd
in Can Tho; Phu Giang Paper and Bags Co., Ltd in Bac Ninh; An Hoa Paper JSC
(Tuyen Quang); or the case of Sonadezi in polluting Dong Nai river; Nicotex Thanh
Thai JSC (Thanh Hoa) buried pesticides into the ground; Thanh Loi Steel JSC (Da
Nang) illegally imported nearly 1,000 tons of scrap wastes; etc.
In addition to the tax evasion, fraud in business, fraud in financial statements;
failing to ensure labor safety; producing and trading poor quality goods, fake goods,

35
etc, many enterprises violated legal regulations on salary, insurance policy, labor
safety which are not become rare phenomenon and cause urgency for the society. In
2014, there were 6,709 cases of working accidents, with 6,941 affected people, of
which 630 deaths. Compared to 2013, 14 cases were increased 56 victims are
increased too. Of which, the cause of working accidents resulting to deaths are
mainly from labourers (72.7%) due to no implementation of process, working safety
method, unsecured working tools, untrained labourers, etc.
2.2.2. Key stakeholders in CSR in Vietnam
It is asserted that the implementation of CSR practices requires strong support
from key stakeholders. There are some stakeholders majorly influencing on the
implementation of CSR in Vietnam, including the governmental actors and civil
society, non-governmental organizations, and multinational companies (Hop, 2015;
Ha, 2018).
The first key stakeholder in CSR implementation in Vietnam is the
governmental actors. The role of the government towards CSR is reflected through
the action conducted by Communist Party of Vietnam (CPV) in the last 20 years.
The first action is traced back to the year of 2001 when CPV issues a resolution
which clearly states the importance of sustainable socio-economic development.
The effort of CPV is continued since when it issues Vietnam Agenda 21 (VA21)
with the content to be aligned with the United Nation’s convention and to prioritize
social economic areas that must be strongly maintained and enhanced. Later on, the
Social and Economic Development Strategy for the period of 2011-2020 are
approved by CPV and it directs future development of the country in the way of
achieving certain targets in both social and economic development. With the VA21,
different Vietnamese governmental bodies are cooperating with international
organizations to provide the guidelines and the directions to help local companies to
achieve sustainable development (Do, 2018). According to Tran (2011),
Vietnamese government takes the role of issuing national policies and guidance as
well as the communication through mass media in social economic development
and it is determined as the foundation for CSR implementation in Vietnam. The role

36
of the government towards further development of CSR in Vietnam is highlighted
through the establishment of some governmental associations and unions. For
example, the establishment of Women Union, Trade Union, and Youth Union
enable the provision of protecting the rights of women and young workers as well
as providing the supports to disabled people in the society (Alpert, 2005). In
addition, the government’s efforts are shown through the policies implemented by
existing governmental bodies. For example, the Vietnam General Federation of
Labor collaborates with the Ministry of Labor and the Invalids and Social Affairs of
Vietnam to issue out labor standards (Nguyen, 2011). Vietnam Chamber of
Commerce and Industry and local labor management offices develop the labor
conflict management and resolution framework (Tran, 2011). Here in, the role of
Vietnam Chamber of Commerce and Industry is highlighted through its effort in
collaboration with non-governmental organizations to further improve the CSR
awareness in small and medium enterprises in Vietnam (Tran and Jeppesen, 2016).
The recognition of CSR is proven through a national award which is given to the
qualified companies since 2005 (Nasrullah and Rahim, 2014).
The second key stakeholder in CSR implementation in Vietnam refers to civil
society and non-governmental organizations. The role of civil society towards CSR
implementation in Vietnam is still limited since they are in the process of
identifying the roles to different social economic development aspects (Ha, 2018).
Civil society refers to the presence of Women Union, Trade Union, and Youth
Union and they are on early stage of issuing the guidance to sustainable social and
economic development. In this context, CSR implementation in Vietnam is more
wide-spread by the efforts from non-governmental organizations. It is denoted that
non-governmental organizations have been existed in Vietnam for many years and
their efforts are recognized in both public and business sectors (Bach, 2001). The
role of non-governmental organizations towards CSR implementation is evidenced
through the collaboration of non-governmental organizations with governmental
bodies. Some famous non-governmental organizations are the World Bank, the
United Nations Industrial Development Organization, and OXFAM. According to

37
Ha (2018), these non-governmental organizations have involved into different
economic sectors and they help Vietnamese government to gradually increase the
CSR awareness and the CSR implementation.
The third key stakeholders in CSR implementation in Vietnam is multinational
companies. According to Hop (2015), CSR and related topics are introduced in
Vietnam by this stakeholders’ introduction and implementation of code of conducts
and standardized business practices. There are many case studies which are found in
term of CSR implemented by foreign companies. For example, Honda Vietnam
introduces a television program named “I Love Vietnam” with the objective of
increasing the awareness of traffic safety amongst Vietnamese people. Unilever
Vietnam also introduces an education program to increase the personal hygiene
among the children living in rural and mountain areas of the country. A computer
training programs which are sponsored by Microsoft, Qualcomm
Telecommunication Group, and Hewlett Package Corporation bring the
opportunities to Vietnamese people to have a change of using advanced
technologies in order to improve working efficiency and quality of life. Samsung
Vietnam also provides the financial and social supports to the victims of a bridge
collapse in Can Tho Province.
2.3. CSR in Vietnamese food industry
Given to current situation in Vietnamese food industry, the researcher
perceives that the consumers today are more concerned about safety foods and they
are willing to purchase premium fees or even higher prices for imported products,
organic products, and safety products from local food processing companies. This
statement is early introduction of the importance of CSR that must be integrated
deeply into the business of Vietnamese food processing companies. In this section,
the researcher would like to explore general CSR framework in Vietnam. The
researcher plans to explore current situation of CSR application in Vietnam and
some current CSR issues being faced by food manufacturing companies.
In the shed of recent effort of implementing CSR from key stakeholders, food
industry gains much attention from the policy makers and business practitioners in

38
term of how CSR practices are implemented and maintained in Vietnamese food
industry. It is because of food products are consumed directly the consumers and
food production process requires the raw materials that may lead to the
environmental deterioration in case of misleading uses (Hartmann, 2011; Forsman-
Hugg et al., 2013; Pettersen and Tobiassen, 2014; Vo, 2016). As mentioned in
earlier sections, Vietnamese food industry achieves significant growth and key
trends ae captured as the raise of out-of-home dining, the demand for packaged
foods, higher demands from imported quality foods from the consumers, and their
awareness of safety foods with the avoidance of those are processed from harmful
ingredients (Megan et al., 2018; Nguyen, 2018). This background information
enables the demands of exploring what the current situation of CSR in Vietnamese
food industry.
According to the research of the Central Institute for Economic Management
in 2013 on the implementation of CSR in Vietnam on a sample of more than 8000
enterprises, CSR in Vietnam today is mainly implemented in compliance with
legally enforced governance rules in the enterprise. Very few enterprises carry out
CSR beyond the scope of business and towards external partners. If so, the activities
mainly focus on environmental protection and poverty reduction (CIEM, 2014).
With the majority of SMEs in the industry, raising awareness and promoting CSR
implementation is really an urgent issue. In particular, it is the fact that many
enterprises in the Vietnamese food industry still operate in a vision of short-term for
the purpose of profit, which ignores the interests of consumers and the community.
The most typical cases include violations of CSR in food safety and hygiene.
Currently, food production and processing activities in our country are mainly
carried out by nearly 10 million farm households and 500,000 processing
establishments, of which 85% are small and medium scale and seasonal production.
Therefore, the equipment and workshops that do not ensure food safety conditions
(Ministry of Health, 2016).
Environmental issues in food processing are another concern (Global
Compact, 2010). For instance, waste-water discharged from production facilities

39
lead to the issue with high concentrations of harmful substances beyond permitted
standards. More particularly, media attention on cases such as Vedan had put
environmental issues in the spotlight (Bui, 2008). Additionally, as seen by
businesses, investment in proper waste treatment is considered too expensive
(Global Compact, 2010). This presents a challenge to a variety of small, traditional
food processing premises which traditionally use manual techniques, thereby
seriously polluting the environment. Also, there is a perceived lack of enforcement
of environmental regulations and a high frequency of corruption by regulators.
The food industry, particularly the dairy sub-industry are included in the
government development agenda. In addition to new regulations on food safety, the
State Government launched a Food Branding Programme and Strategic Plan for
Rural Development of the dairy industry (Vietnam Trade Promotion Agency, 2014).
The food processing industry have been one of the major economic contributors to
the national economy and important sources of job generation. At the same time,
they face significant challenges relating to labour and environmental issues. Given
their importance to the national economy, the State Government introduced
strategic development plans for these industries. However, there is no specific
government policy or guidelines for CSR promotion in this industry.

40
CHAPTER 3: CASE STUDIES
3.1. Vietnam Dairy Products JSC
3.1.1. Overview of Vietnam Dairy Product JSC
Established since 1976, Vietnam Dairy Products JSC, aka Vinamilk, is one of
the biggest companies in Vietnam food industry. The company has a vision of
becoming a global brand in food and beverage industry and achieving customer
trust through the production of nutrient and healthy products. The business and
operation of Vinamilk is set around five core values, including integrity, respect,
fairness, ethics, and compliance. The company commits that all business activities
to be carried in highest transparency and integrity. Moreover, the employees and the
partners of the company are treated with the respects and fairness. The operation of
the company is to strictly follow the governmental laws, the internal policies and
procedures, and code of conduct. Vinamilk establishes ethical standards and they
are maintained frequently. After nearly 50 years of operation, Vinamilk is growing
rapidly with more than 200 products to be distributed to more than 30 countries and
more than 18 million products are consumed everyday by the consumers. The
products of Vinamilk are categorized into liquid milk, Vinamilk yogurt, powered
milk, infant cereals and ridielac, special nutrition products for adults, condensed
milk, beverages, ice cream, cheese, and soymilk. Towards the CSR implementation
and practices, it is worth to explore how Vinamilk acts to achieve sustainable
development. Currently, the sustainable development of the company is achieved
through clear commitment and plan towards human nutrition, environment and
energy, local economic development, employees, and support and community
development.
3.1.2. Human nutrition and safety
In term of human nutrition, Vinamilk considers food safety is the most
importance and it is guaranteed through a closed loop production cycle as depicted
below:

41
Figure 3.1: Production cycle of Vinamilk
Source: Vinamilk (2019)
Figure 4.1 depicts current production cycle of Vinamilk and it is begun with
the research and design for safe and nutritious products. To achieve the objective of
producing safe and nutritious products, Vinamilk is very careful during raw material
selections and a code of conduct is established to restrict the use of unhealthy
ingredients and chemicals that result the negative effect to the customers’ health.
Vinamilk commits that 100% of its final products are going through immune system
before going to the market. The company also collaborates with different
governmental bodies to produce the products with high values to human health. For
example, Vinamilk cooperates with the National Institute of Nutrition to produce a
nutrition product for diabetics and this product helps to stabilize blood glucose and
to reduce the risk from the diabetics. Vinamilk’s effort in producing valued products
is remarked by the introduction of Dielac Alpha Gold and CanxiPro. While
DielacAlpha Gold is developed for infants with the main value to brand

42
development, CanxiPro aims to strengthen the bones with the addition of calcium
and low fat.
In the process of strengthening food safety, Vinamilk gains the certification
HACCP system. Moreover, Vinamilk also achieve Halal standards in order to
supply its products to Muslim countries. The food safety is further expanded by the
achievement of FSSC 22000 in 2014. The raw materials are imported from famous
suppliers in U.S., Australia, New Zealand, and France. Beside of imported raw
materials, the company also builds its raw material supplying system with the
establishment of large scale dairy farms located in different regions of Vietnam,
including Binh Dinh, Nghe An, Thanh Hoa, Lam Dong, Tuyen Quang, and Tay
Ninh. To ensure the quality of raw materials collected from dairy farms, Vinamilk
fulfills the requirement of ISO 9001:2008 issued by the Bureau Veritas and Global
GAP issued by the Control Union. After raw materials are selected, they are put into
production process and Vinamilk applies modern equipment and technologies in
order to product high quality products. Overall production process of Vinamilk is
controlled by a management and quality control system. It is denoted that this
system qualifies for international standards, such as BRC and ISO 17025. Vinamilk
also develops clear policy for product recalls and the disposal process. Finally, all
information related to the company’s production process is published to the
customers. These information is printed in the packages of Vinamilk’s products
with the ingredients, the nutritious values, and the preservation guidelines.
3.1.3. Environment and energy
Beside of producing nutritious products, Vinamilk directs its business and
operation towards environmental protection and energy saving. Vinamilk provides a
clear target for energy consumption during the period of 2012-2017 in which the
company aims to reduce energy consumption by 3%, to minimize the CO2 emission
to reduce the impact from green house effects, and to build an energy management
system to comply with ISO 50001:2011 in all belonged factories. The commitment
of Vinamilk is partially fulfilled and it is evidenced by the action of replacing
traditional energy by renewable energy. In some factories, Vinamilk utilizes CNG

43
and BIOMASS instead of oils consumption. It is denoted that CNG is a type of fuel
which is very useful in case of the ground area is not enormous while BIOMASS is
a renewable energy which gains much attention of big companies in Vietnam.
Table 3.1: Occupational health and safety index in Vinamilk
Energy type 2015 2016 2017
DO/FO 9% 10% 7%
Vapor 53% 60% 62%
CNG/Biomass 38% 30% 31%
Source: Vinamilk (2019)
Moreover, Vinamilk’s energy consumption is reduced significantly by the
adoption of LED technology since it allows the company to save energy
consumption by more than 50% compared to traditional lighting methods. Like
other companies in food industry, Vinamilk deals with high water usage and the
company commits to apply economical recycling solutions to reduce the water
consumption. It is confirmed by the achievement of QCVN 40:2011 which is
defined as Vietnamese standards for industrial sewage treatment. It is denoted that
100% wastewater is treated before flushing through the pipeline. Total water use in
2017 is decreased significantly by 8.6% in comparison with 2016. Vinamilk’s
factories also achieve the ISO 14001:2004 which is perceived as international
standards for environmental management.
3.1.4. Local economic development
Local economic development is positioned as important area in the sustainable
development of Vinamilk. It is asserted that Vinamilk is a leading company in
Vietnam and the company’s business brings values to the economic development
such as infrastructure renovation, bringing employment opportunities to local
people, and further improving dairy industry of Vietnam. Up to now, Vinamilk has
dairy farms located in different provinces and the company invests into surrounding
infrastructures as well as brining more than 4,500 stable jobs to local people. A
supply chain model is developed and utilized by Vinamilk in which the company
collaborates with the dairy cow breeders. The collaboration brings the benefits to

44
both Vinamilk and the breeders. While Vinamilk can control the raw materials
quality, the breeders gain the benefit of stable and reasonable purchasing prices and
they are able to join in training programs provided by Vinamilk to further improve
the quality and the productivity. During 2013, Vinamilk conducts more than 40
trainings for more than 1,600 households in different provinces; that is considered
as remarkable training results. The role of Vinamilk to local economic development
is reflected through the company’s participation into market stabilization programs.
For example, when Vietnamese economy was suffering through a downturn cycle
as adverse effect from global financial crisis in late 2008, Vinamilk commits with
the government to provide the products with stable prices.
3.1.5. Employees
The employees are key stakeholders in the business of Vinamilk. At first,
Vinamilk commits to maintain and to continuously enhance workplace safety and
healthcare for its labors. Workplace safety is fulfilled by providing personal
protection equipment to all employees, the submission of different healthcare
programs and health insurance, the application of anti-fire system with trainings are
given to the employees, and clear regulation and policies related to workplace
safety. Vinamilk also invests into personal hygiene and safety network in all
factories and storages. The employees of Vinamilk have annual health checks and
the insurance coverage is 100%. Women labors are being cared effectively since
Vinamilk provides two times of health check per annum. There are no gender
discrimination in the workplace and it is evidenced through the ratio of women
labor holding managerial position in Vinamilk more than 54%. Vinamilk regulates
that when a labor gets into workplace accidents, the insurance claimed value is up to
30 monthly salary. Occupational health and safety indexes are constructed and
measured in Vinamilk with key criteria are occupational disease rate, leave date
rate, and injury rate. All occupational accidents are reported by the company in
annual sustainable reports.

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