Better Work explores ways to help make garment factories more environmentally compliant
30 April 2018
Ho Chi Minh City – Like many fast-growing developing economies, Vietnam’s recent economic growth has come with a significant environmental price tag. The garment industry, one of the nation’s biggest employers and exporters, carries sustainability risks that have caught the attention of consumers, brands and, notably, the government.
In response, the country has introduced new, tougher legislation. The 1994 Law on Environmental Protection was updated and strengthsuened in 2005 and 2014. In 2017 fines for violations of environmental protection laws were significantly bolstered and gaps in regulation continue to be closed.
It is against this backdrop that Better Work is working with the International Finance Corporation (IFC), a member of the World Bank Group, to trial a new service aiming to boost environmental compliance in Vietnam’s garment industry. Better Work, itself a joint programme of the IFC and the International Labour Organization (ILO), is testing the feasibility of integrating environmental compliance training, advisory and assessment services into its well-established labour compliance operations.
Changes in both consumer attitudes and law have implications for garment makers. “Nowadays, environmental risks have a significant impact on any organizations as they affect investment decisions, stakeholder interaction and government regulations,” says Lynn Luc, head of Vendor Compliance and Sustainability for Li & Fung in Vietnam.
Environmental legislation is necessarily complex and many factories, even those keen to lift their standards, face a daunting task in both understanding and implementing the requirements of their government, and the wishes of their buyers. It was to close these gaps in knowledge and capability that the IFC collaborated with Better Work to implement the environmental services pilot.
In June 2017, with the help of development NGO the Asia Society for Social Improvement and Sustainable Transformation (ASSIST), Better Work began delivering a combination of training, self-assessment tools, guides and advisory services to help factories improve compliance with national laws on eight issues: Water Extraction and Consumption; Wastewater Management; Solid Waste; Hazardous Waste; Air Emissions; Noise and Vibration; Energy Management, and; Chemical Handling and Management.
According to Shantanu Roy, team leader with ASSIST, the pilot reflects a growing industry trend to combine social and environmental sustainability into a single consolidated approach. “It is a good fit. Poor environmental compliance can see factories lose orders or even be closed by the government, which is obviously bad for workers. Better Work already talks to all levels of the industry and can help make the case for improved performance on environmental issues.”
Industry awareness of the need to produce garments in a more compliant way is growing in Vietnam. “We were surprised by how many factories voluntarily contacted us to sign up for the programme without being asked to do it by their buyers,” says Maria Soledad Requejo of the Better Work team at the IFC. “A lot of factories want to be in compliance but they simply don’t know the best way to go about it”.
Integrating the pilot with existing industry programmes was an important consideration in its design phase. Prominent among those programmes is the Higg Index. Developed by the Sustainable Apparel Coalition, the Index is a suite of tools that enables brands, retailers, and facilities of all sizes to accurately measure and score a company or product’s sustainability performance.
“Helping factories become compliant on environmental regulations sets them up to participate in –and ultimately fulfil the basic requirements under the Higg measuring and scoring process,” explains Thanh Nguyen, of Better Work Vietnam. “It’s important for the factories, as brands look on the Index as the industry standard for assessing environmental and social sustainability throughout the value chain.”
The pilot will conclude this month (June 2018) and will, amongst other outcomes, produce a country guide and a comprehensive self-assessment tool which can be used in factories across the industry. “With these tools in place, companies can develop their own action plans,” says Roy. In addition, factories will also have benefitted from site visits to advise and monitor progress.
For their part, factory managers appear happy with the progress to date. “With the advice from the (pilot) team we have reviewed and plan to update our waste water management system and also expect some gains on energy usage,” says Lưu Thúy Nga, compliance officer with Shinwon Ebenezer Hanoi, a large garment exporter.
Water management challenges were also highlighted by Manh Luan of Vina Korea Co., “The project showed us that we need improvement on issues like classifying waste from origin, recycling boiler steam, and collecting and using rainwater.”
Meanwhile, the pilot’s broader aims are shared by many in the industry. “Proper management of an organization’s energy, natural resources and waste has a substantial effect on environmental performance. This is why improving the environmental performance of factories in sustainability has now become an essential ingredient to ensure our long-term business success,” says Li & Fung’s Luc.