Timber | Vietnam

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Salient Themes

Areas of Most Severe Impacts

  • Labour
  • Culture & Indigenous Peoples
  • Land & Natural Resources

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Vietnam is one of the world’s largest exporting countries of timber and timber products. The country has about 4,500 wood processing enterprises that are involved in export, of which more than 90% are small or very small, privately owned enterprises46. About 80% are located in the south, close to Ho Chi Minh and Dong Nai. Vietnam is known for its production of high-end wood products, particularly furniture46. The furniture manufacturing typically involves six stages: 1) chemical treatment and drying, 2) cutting, 3) joining, 4) assembling, 5) sanding and 6) painting (finishing). Main destination markets for the exports of wood products (all products, except furniture and pulp & paper products) are the USA, Japan and China.

In Vietnam, there are over 4,500 wood-related factories and 800 enterprise have FSC-CoC (big and small). The majority of the companies are medium and small enterprises. Usually, working conditions are much better when companies work with a big buyer, because when they select a supplier they look carefully at the capacity and working conditions. In Vietnam there are roughly three types of wood processors:
1) Furniture villages that export handcraft furniture to China and the regional market. This group is not producing for Dutch markets.
2) Exporting factories that are very modern with fire safety and OSH methods. These factories are situated in industrial parks and developed by industrial investors. Through automation the workplaces are becoming more safe and accident rates are decreasing. They often work with reliable clients with long-term relations that ask audits and visits from buyers, for example the IKEA factories are regularly audited. In wood sector there are buyer agents in between, who do not always look at working conditions. If this agent acts responsible, it will work better in the chain, so it is important for the company to also know the agent.
3) ME Factories with big risks, that have less audits and low quality audits, some of which are self-assessment and some can be bribed. It is a high risk culture and this is also seen in the factory through the behaviour of workers. Only if the factory is themselves keen on safety and uses good machinery and factory facilities the risks are lower.

Dutch Context

The Netherlands is not listed in the top-10 wood export markets for Vietnam in 2018 with an export value share below 1%. For furniture, the main export markets are the US, Japan, the UK, China and South Korea and buyers include retailers (e.g. IKEA, Kingfisher) and wholesalers.

Vietnam is of importance to the Netherlands at the fourth place with respect to the import of semi-finished and finished tropical timber products (especially furniture). However, there are no or few members of the VVNH that do business with Vietnam. Data for Vietnam covers the different processing levels: from primary processing of a log to the fabrication of semi-finished parts and manufacturing of finished products. In particular the following subsectors were covered: sawmills for primary processing (sawnwood, woodchips), finger joinery, MDF fabrication, furniture manufacturing. It includes observations from FSC certified operations, the occasional PEFC certified operation and non-certified companies.


Potential and actual adverse impacts have been reported regarding:
– Decent Work
– Occupational Safety and Health
– Freedom of Association & Collective Bargaining
– Forced/Bonded and child Labor

Reports indicate that:
• Right to freedom of association and collective bargaining is not upheld; The government bans all unions that are independent of the government or the Party, workers who have attempted to form labor organizations outside of the official union structure dominated by the state and the Communist Party have been prosecuted and jailed on criminal charges in retaliation for their efforts, conditions to be met for organizing a strike legally are so restrictive it is almost impossible to respect them and workers who lead ‘wild cat’ strikes can suffer firing, blacklisting, physical violence and imprisonment.
• There is evidence confirming compulsory and/or forced labour, in particular in so-called drug rehabilitation centres and this includes work in the timber sector and a five year obligated military service includes active implementation of socio-economic development programmes.
• There is evidence confirming discrimination in respect of employment and/or occupation, and/or gender: Even though the country is one of Southeast Asia’s best in terms of fostering gender equality and the gender wage gap is much lower than the global average, there is evidence of gender discrimination in the labour market: regulation regarding retirement age is an example of direct discrimination that requires women retire at age 55 while men retire at 60; enterprises hold back from recruiting young women without children and ask female workers to delay their plans to have children; women usually hold lower positions whereas most of management posts belong to men; female workers often have fewer training opportunities before and during their work career compared to their male colleagues and women with families even face more difficulties; in enterprises, women held only about 6.3 per cent of leadership positions. The household registration system (hộ khẩu), results in discrimination against ethnic minorities belonging to “unrecognized” religious groups in the fields of employment and there is a general concern regarding the existence of racial discrimination and inequality between ethnic groups, as well as the persistence of negative societal attitudes and stereotypes against persons of minority ethnic origin. In rural areas, ethnic minorities are much less likely to have written work contracts, receive pay-slips or have social security benefits.
• There is evidence confirming child labour: As of 2012, some 1.75 million working children are categorized as “child labourers”, accounting for 9.6per cent of the national child population or 62per cent of children engaged in Economic Activities; A significant number of these children work in the forestry and timber sector.
• The country is signatory to only 5 of the 8 fundamental ILO Conventions which are all in force: Vietnam did not ratify C87 Freedom of Association and Protection of the Right to Organize Convention, 1948, C98 Right to Organize and Collective Bargaining Convention, 1949 and C105 Abolition of Forced Labour Convention, 1957.
• There is evidence that any groups (including women) do not feel adequately protected related to the rights mentioned above: see information on gender and ethnic minorities above.
• Violations of labour rights are not limited to specific sectors: Examples of violations were found in relation to agriculture including forestry, domestic services, construction and others.

OSH problems are common in companies in Vietnam and improving work safety is also reported as a challenge in the furniture sector. The government requires companies to cover health and social insurance for workers, but some companies try to delay the payment. Then, the government needs to enforce compliance with the law for these companies. Due to poor health and safety conditions and inadequate employee training, the number of work accidents is high. Only small non-fatal accidents have been reported. High levels of dust was mentioned as an issue that could possibly lead to a lack of oxygen. Especially in summer, very high temperatures can be felt in the factories leading to risks of fainting. Lack of hygiene was identified as a risk. For small companies unsafe construction of the building is listed as a risk. Malfunctioning or unsafe machinery was not identified as a risk in the semi-finished processing and finishing facilities, but in sawmills and chip mills there are observations of saws without a guard to physically protect workers. In some small enterprises safety covers are removed, also old machinery is used that is not as safe as modern versions. Exposure of workers to hazardous chemicals and substances (glue in semi-finishing processes, paint, bleach and conserving chemicals in the finishing process) was mentioned as a problem. Lack of PPEs for workers was indicated as a risk in all operations, but with a higher risk in non-certified operations. Aspects include no provision of all required PPEs to all employees, insufficient quality of PPEs (old and/or damaged, not effectively protecting workers against risks, breathability of masks) and no or improper use of all PPEs by workers due to discomfort (too hot). Hearing damage due to factory noise (saws and in-factory traffic) is reported. Finally, a lack of emergency preparedness and response is listed by many sources as a risk in Vietnam.

There are frequent violations of the employment law on both sides:
– Not all workers have contracts as required by law.
– Equipment is not adequate because the contract normally state that workers have to organize it themselves.
– Employers do not have the right certificate for the type of work.
Some cannot pay even a basic salary for employees.
– The agreement between the employers and the trade union exists in theory only.
Not all social rights are covered by the relevant legislation and enforced in Vietnam, in particular in relation to freedom of association, right to organize and collective bargaining, forced labour, child labour and gender discrimination.

Environment & Public Health

Potential and actual adverse impacts on the Environment & Public Health have been reported regarding:
– Health
– Healthy Environment
– Community Safety
– Biodiversity
– Climate Change

Reports indicate that:
Reported risks for the environment are GHG emissions, water pollution (chemicals and dust), safety of the surroundings (dust, noise, smoke, water pollution, uncontrolled fires) and discharge of hazardous substances into the environment (glue, oil).

When a processing facility is set up in the industrial zone impacts on nearby communities are not reported, but when a timber processing facility is located in the country side (family model) there may be issues regarding exposure to chemicals and substances, quality of the water and dust exposure leading to health issues due to deterioration of air quality and health issues due to exposure to chemicals and substances.

Illegal logging in Vietnam is significant and Vietnam is also a large importer of timber from countries with a high risk for illegal logging. Trade data discrepancies and analysis of trade flows indicate that illegal trade remains a serious problem. The root cause for the precipitous loss of biodiversity and tropical forest degradation in Vietnam is described as the country’s dysfunctional environmental governance system in the context of a fast-evolving national and global economy.

Conflict & Security

Reports indicate that:
Although several sources mention illegal timber and import of illegal timber in Vietnam, no information was found on Vietnam as a source of conflict timber and the forest sector seems not to be associated with violent armed conflict in Vietnam.


Potential and actual adverse impacts on Land have been reported regarding:
– Land and Natural Resources

Reports indicate that:
– The cost of the services for issuing certificates can make the officers and organizations granting certificates prolong the process as they await payment. This leads to lobbying and bribery by applicants. This risk is common throughout the country.
– There are frequently issues with areas of land allocated to State Enterprises that do not have the capacity to administer this land. In these instances, local communities commence using the land, planting trees or crops, for example, then issues of ownership arise when the state attempts to reclaim the land at a later date. This has caused long disputes, with the outcome usually in favour of the encroachers.
– When the State decides to revoke a land-use-right and/or forest-use-right, a compensation amount is decided. The amount of compensation is decided by the Provincial People’s Committee, and is done so without consultation with the recipient of the revoked right. This issue is becoming increasingly problematic in relation to decisions around the conversion of land to other uses. Land-use-rights and forest-use-rights are frequently being revoked to re-allocate land for conversion. The risk of this occurring is very high and many local people have instigated lawsuits, complaints and claims of corruption. There are reports that a majority of complaints made to Government from citizens relate to the field of land allocations.

There is a general risk of corruption in Vietnam Transparency International’s Corruption Perceptions Index ranked Vietnam 96th out of 198 countries assessed and scored a corruption index of 37, meaning it has a high perception of corruption. The 2019 World Bank Worldwide Governance Indicators (WGI) gave Vietnam the following ranks out of 100: Regulatory Quality: 41.83; Rule of Law: 3.37 and Control of Corruption: 34.13.

Culture & Indigenous Peoples

Potential and actual adverse impacts on Culture & Indigenous Peoples have been reported regarding:
– Indigenous Peoples Lands, Territories, Resources and FPIC
– Indigenous Peoples Cultural Rights
– Cultural Heritage & Practice

Reports indicate that:
The Vietnamese government does not use the term “indigenous peoples” for any groups but it is generally the ethnic minorities living in the mountainous areas that are referred to as Vietnam’s indigenous peoples. The Hmong are considered a distinct indigenous ethnicity from Laos, constituting a sizable minority population within Viet Nam. The ILO Convention 169 is not ratified and UNDRIP is endorsed, but not effectively enforced; Vietnam does not recognize ethnic minorities as indigenous peoples.

There is significant evidence of violations of legal and customary rights of indigenous peoples (IPs); Forest land is not allocated to local people but given as a priority to private companies. Moreover, State-run agro-forestry farms have managed large areas of land ineffectively, without creating any positive changes in the life of the forest-dependent communities living in these areas. Although rights recognition in forests and land allocations have been to individuals, ethnic minorities have tended to be excluded from their share of entitlements. Ethnic minorities, who live primarily in wooded, highland areas are far more dependent on forestry than the majority Kinh people. Yet in the Central Highlands, only 3% of households have long-term rights to forestry land. In particular, ethnic minority women have reported feeling disenfranchised by the land allocation process. The government implements a policy of population transfer specifically targeting the ethnic minorities. Overall, the government’s policies of forced resettlement, State-appropriation of land, expropriation and population displacement have effectively deprived the ethnic minorities of the right to own and inherit ancestral homelands. Conflicts over land are rampant in Vietnam. Some erupt into physical violence and catch the attention of the media, while others linger without attracting wider attention.

Logging of hardwood forests in the Central Highlands have a long-term, devastating environmental and socio-economic impact on those remaining indigenous populations struggling to survive in the Central Highlands. Sacred burial plots of the Central Highlands Indigenous Peoples known as ‘msat’ have often been violated. Major government programs to protect the forests and prevent deforestation, such as the Forest Strategy 2006-2020 have also negatively impacted ethnic minorities because these programs are decided at a national level with very limited consultation with local residents. There are numerous reports of extreme police force and arbitrary trials and detention used against indigenous peoples practicing their rights and engaging in peaceful protests.

Grievance & Redress

Reports indicate that:
Local people appear to have a very limited understanding and awareness of their land and resource rights. Compounded to this is the serious lack of information available related to conflict or dispute resolution and mechanisms of redress for local people whose rights to land and resources may be violated. Laws are written in the majority Kinh language while the educational level of ethnic minorities is very low. Commune judicial officers hardly ever provide advice to local people, and there is a general lack of ethnic minority lawyers. Moreover, local governments and “Peoples committees” almost always support the new Vietnamese settlers in land conflicts or political issues

Participation & Inclusion

Reports indicate that:
The participation of ethnic minority groups at a local level is very low. Whereas many ethnic minorities have their own village constitution and regulations, these are not recognised in Vietnamese law. Ethnic minorities have little say in the selection of their representatives, nor opportunity to participate in the decision-making process about policies that affect them.


IRBC agreement ‘Promotion of sustainable Forestry’ (2020). International responsible business conduct in tropical timber value chains.

FSC (2017). Centralized National Risk Assessment for Viet Nam.


Company data provided by SPOTT. This data assesses multiple timber and pulp producers and traders on the public disclosure of their corporate commitments to environmental, social and governance (ESG) best practice. Each company receives a percentage score as a measure of its transparency in relation to ESG risks.

Latest update: July 2020 | Next scheduled: July 2021