Development partnerships with the private sector

Project description

Title: Development partnerships with the private sector
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Socialist Republic of Viet Nam
Overall term: 2003 to 2014

Context

Viet Nam’s ascension into the ranks of middle-income countries is a success that would not have been possible without a strong economy. Environmental and social issues, however, have received little attention during the country’s impressive economic development and the associated success in reducing poverty. Many companies are driven by short-term profit, and rarely have long-term business models. The associated increase in demand for dwindling resources poses risks for the country’s further development, as do pollution caused by industry, and workers who in some cases have little training and work under poor conditions.

Objective

Vietnamese companies are trained on corporate social responsibility and use this training to help drive sustainable economic development.

Approach

The project works at the intersection between development policy objectives and commercial profit-seeking. The corporate social responsibility (CSR) strategy includes training measures for staff members, the design of value chains, and the introduction of standards. In this way, participating companies reduce the negative environmental impacts of their production activities, while at the same time improving working conditions. Thanks to longer-term business models, companies generate a greater share of domestic added value, which in turn helps entrepreneurs contribute to sustainable economic development in Viet Nam.

Among other things, the project focuses on raising awareness and knowledge transfer. Further training measures teach Vietnamese trainers about CSR. The trainers then pass on their knowledge of CSR and best practices to entrepreneurs and the chairpersons of cooperatives. Additional training activities provide company staff with expert knowledge on topics such as health and safety at the workplace, resource efficiency and environmental protection.

The project targets committed companies through calls for tenders on issues such as working conditions or energy efficiency. GIZ provides technical advisory services and partial funding to support selected entrepreneurs. The partners implement projects with this support, in order to improve working conditions, increase the know-how of employees, or reduce negative environmental impacts.

The project supports the develoPPP.de programme of the Federal Ministry of Economic Cooperation and Development (BMZ). It also promotes development partnerships between European companies, Vietnamese partners and GIZ. The partnerships pursue shared objectives such as improving vocational training or optimising value chains.

Results achieved so far

The CSR concept taught to training participants has enabled them to evaluate their business model as regards risks and long-term orientation. During training on the efficient use of production resources (good housekeeping), entrepreneurs created action plans for implementing the necessary measures in their factories. Evaluations showed that many participants had already undertaken initial activities to improve working conditions and production efficiency shortly after the training was completed. Medium-term plans for larger-scale activities and demand for corresponding expertise demonstrate a new level of awareness and changes in companies’ actions.

With the support of GIZ, the companies selected through the calls for tender have implemented activities, which have improved conditions for workers and reduced pollution, which benefits local residents. The companies are regarded as pioneers and provide inspiration for other businesses.

Since 2003, the project has implemented over 90 development partnerships with Vietnamese companies. Among other things, these partnerships have built the professional expertise of workers through training programmes, improved health and safety, and installed extraction units and wastewater treatment plants. The participating companies benefit from better trained staff, which increases productivity. Furthermore, by improving their cultivation techniques, farmers have gained access to international value-added chains, earn higher incomes, and at the same time use fewer pesticides.