Vert Magazine: CSR Issue

Page 1

PILLARS OF SUSTAINABILITY

ASEAN: Advantages of CSR OUR HOME IN BAC GIANG



Table of Contents 1 - 2 Vert in Vietnam 3 ‘A Moral Imperative’ 5 - 8 Our Home in Bac Giang 9 - 12 Equal Opportunity 13 - 14 Vert Development 13 - 14 SA - 8000 Checklist 15 - 18 ASEAN: Advantages of CSR 19 - 20 More Than a Business 21 - 22 From Material to Retail 23 - 26 Pillars of Sustainability 27 - 30 A Way Forward 31 - 32 Vert Visitors 33 - 37 Making a Difference 38 Buyers


Vert in Vietnam RESPONSIBLE EFFECTIVE SUSTAINABLE ESTABLISHED EFFICIENT GROWING

1 VERT Company


SA-8000/ISO9001 CERTIFIED 2013 REVENUE USD5.5M, 2014 USD7.2M (PROJECTED) BUSINESS ENVIRONMENTAL PERFORMANCE INITIATIVE (BEPI) PILOT MEMBER SOURCING OFFICE (CHINA), SALES OFFICE (EUROPE), 300SQ.M SHOWROOM (HANOI), FACTORY (BAC GIANG) ANNUAL PRODUCTION 1.2M UNITS, FLEXIBLE U-SHAPED PRODUCTION LINES 508 EMPLOYEES (80% FEMALE, ALL CONTRACTED)

“A moral imperative” 2


‘A Moral Imperative’

m

ipsum

The information age has brought with it fast rising ethical expectations. Companies and individuals can no longer avoid the critical eye of the public. They can no longer ignore their responsibility to be ethical to their stakeholders. Vert, as a young company, has never had to undergo the massive transformation of older enterprises whose labor practices and environmental policies were below par. This has also enabled us to go far beyond just meeting a basic standard. In Vietnam, Vert has stepped up as a pioneer in best practice and sustainability. We underscore ethics as a principle and seek new ways to support our employees and community and provide quality to our customers.

Alexander Falter

Vert’s Vietnam experience has been full of significant challenges and many new things to learn. We have put a lot of effort into changing, or at least informing the beliefs and methodologies of people and organizations, from our employees to local authorities. We have struggled to make workers understand their rights and obligations; we had to overcome numerous administrative hurdles to establish a unique business in a fairly rural part of Vietnam. We have worked hard to develop reciprocal relationships with authorities and organizations to further cement our presence here. We have been successful by setting ambitious but realistic goals, and have persevered by finding efficient, unique solutions to overcome problems and reach our targets quicker. This was best evidenced by our receiving SA8000 certification in just 18 months, the shortest time a factory has ever done so. Despite an uphill climb, we have found ourselves a comfortable and prosperous home in Vietnam. The people are wonderful and hardworking, the country has an abundant and skilled labor force, and it is highly welcoming of and supports foreign investment. We are confident that we will have continued success in Vietnam and make further gains in our ethics-driven venture into this land of opportunity. Vert is a company that values sustainability – business and social – above all else. Please join us as we take a walk through our Vietnam journey, and see how we are making a difference.

Alexander Falter General Director 3 VERT Company


“A moral imperative� 4



Our Home in

Bac Giang


Our Home in Bac Giang Selecting a location for an export factory is a complex process – it involves a variety of factors from a skilled, capable workforce and adequate infrastructure to a welcoming investment environment and close proximity to an airport and port. Vert’s Vietnam facility is located in Bac Giang, a province in the northeast of Vietnam located in the Red River Delta. Bac Giang has a population of 1.6 million with its land area primarily dedicated to agriculture and another quarter devoted to forestry. It is 50km from Hanoi and is within both the HanoiHai Phong-Quang Ninh and Nam Ninh-Lang Son-Hanoi-Hai Phong-Quang Ninh economic corridors. Before the province was slated for industrial development in 1997, 90 percent of agricultural workers still lived below the poverty line. Between 1997 and 2008 however, it welcomed 410 investment projects valued at USD23.174 billion, including 74 FDI projects totaling USD432.9 million. By 2005 the poverty rate fell to 17.78 percent and textiles and garments exports accounted for USD130 million, 76 percent of the province’s export turnover. During the same period, infrastructure such as national highways and rural roads were expanded and the province welcomed industrial parks, urban areas, service and high-tech parks, all of which helped promote and facilitate investment. The province aims to have a GDP growth rate of 11-12 per cent by 2020 and towards this goal has planned key industries including fertilizer, hightechnology, forestry products, textiles and power generation.

7 VERT Company

Vert’s selection of Bac Giang as its Vietnam base of operations was first based on the available workforce. Previously mentioned was the extremely significant role textiles and garments play in the province’s total export turnover (76 percent). This implied it already had a workforce technically skilled in Vert’s principle operations. However, the company also realized that despite this strength, there was also a weakness in the overwhelming number of current and former agriculture workers. As the province moves from an agrarian economy to that of light manufacturing, many people are looking to move into new fields of work. Vert had the foresight to include in-house vocational training as part of its operational strategy, as well as develop relationships with local vocational schools that could train our workers and certify their skills. The company’s criteria for choosing workers was based firstly on age (18-25), education level (high school and over), and finally a good labor capacity with strong community spirit. The factory is located in Tan Yen district, in the north of the province and 15km from the city center. This area boasts a population of more than 165,000 with 43,500 households. Around 4,400 people reach working age each year. The labor force that falls within Vert’s age and education standards currently amounts to 25,453 people with nearly a 50:50 male to female ratio.


Given this sizable worker pool and Vert’s emphasis on training and team building as part of both its CSR and operational strategies, both the province and district showed great promise. Vert’s operations also require input materials (fabrics and cloth) from China to be brought by ship or air to the Vietnam plant and then finished products to be transported by ship or air overseas. This meant Vert needed to find a locale that offered easy access to international transportation hubs. Bac Giang offered both options. It is 60km from Hanoi’s Noi Bai international airport and 110km from Hai Phong port. As well as the aforementioned conveniences and strengths, Bac Giang offered one more major advantage, its investment environment. While doing business anywhere in Vietnam

can be difficult, Vert has made major gains in terms of working with local authorities to develop a positive, proactive relationship. Those same authorities, aware of the importance of investors to the province, have made significant efforts to improve conditions such as working towards a single-window policy to facilitate administrative procedures, business registration, investment approval, and land leasing, among many others. Vert has settled in Bac Giang because it offers us the resources and opportunities we need. The province has a young, skilled workforce, easy access to transport hubs, and local authorities who appreciate and support both domestic and foreign investors. The company can truly say: “there’s no place like home”. •

“A moral imperative” 8


Equal Opportunity

“I’m a person with disabilities, but I’m very proud and happy to be a part of the Vert team”. When Giap Van Thuong was a young boy he lost his leg in an accident. Now 25 years old, he lives in his parents’ house about 1.5km from the Vert factory where he currently works. Although life has handed Thuong some tough breaks, he considers himself very lucky, and rather than bemoan the things he cannot change, he focuses instead on appreciating the things he does have. “I feel very free, and I’m happy to be working here. The management team and my colleagues don’t make me feel any different because of my disability.” Thuong is surrounded by the hum of a thousand sewing machines, and sitting there amongst them, and smiling from ear to ear, Thuong seems perfectly at home. However, before working here, Thuong didn’t feel

confident about applying for a job in any company, and was afraid that he would be discriminated against because of his disability. Indeed, the equal opportunity recruitment system at Vert is not something that many of its employees have encountered in their previous jobs. “Vert is the first company I’ve worked for where there’s such a thing as a ‘labor contract’. Even the concept of ‘social insurance’ was an alien notion to me before working here.” In his previous job, Thuong used to work as a carpenter in a small privately-owned workshop. Thuong says that working for Vert is a very different experience. The company makes a concerted effort to offer opportunities to those often marginalized by employers. Vert not only employs those with disabilities, but has no age restriction in its hiring policy, and out of its overall staff of 500, nearly 80% are women. Beyond that, the company’s policy is to empower its workforce through vocational training programs, in addition to offering favorable pay and an allowance for food and transportation. What all this does is create a convivial work atmosphere where each and every employee feels valued as an individual. This stands in stark contrast to the Dickensian factory management system of old where people were viewed as cogs in a machine, and were expected to function as such. At Vert, the formal divide between management and employees is made as small as possible, and employees are encouraged and assisted by the higher-ups. In fact, when Thuong was first applying for his job at Vert, he was impressed by how helpful the human

9 VERT Company


I feel very free, and I’m happy to be working here. The management team and my colleagues don’t make me feel any different because of my disability.”

“A moral imperative” 10


resources officer was. “The administrator was very nice and helpful, and even guided me through how I should prepare and present a full CV.” To date, Thuong has been working at Vert’s garment factory in Bac Thuong for one-anda-half years. “I’ve been trained up on several machines, but of course, there are still limits to what ones I can operate. I’m very grateful to the company management team who always give me strength and encourage me to learn new things.” In the future, as Thuong trains up on more machines, he can get to know various aspects of the production process, which is important, not only for his own mental stimulation and bank of skills, but also to offer him the opportunity to advance to more senior positions within the company structure. This is something that would have seemed impossible for Thuong before coming to work for Vert. Even now, Thuong remains grateful for the opportunity he was given when he was recruited. “They gave me the same chance as any other employee.” When asked about his salary, Thuong’s face lights up even more than usual, “I split my salary into three parts: I give some to my parents, put some aside for monthly expenses and I put a little into savings”. The rate of pay in Vert is unusual within the wider context of factory pay in Vietnam. The company’s policy is to pay considerably higher than the minimum wage, starting at 15 percent and going up based on skills and experience. This on its own would not be enough to guarantee the levels of loyalty and satisfaction that the company currently enjoys among its staff, but coupled with the strong focus on employee’s rights and benefits, the favorable wages comes as a welcome ‘cherry on top’ for Vert’s workers. And Thuong, with his hands busy and a smile on his face, is the perfect embodiment of this. With his levelheadedness and his happy attitude to work, there’s no doubt that he’ll go just as far as his ambitions take him. • 11 VERT Company


“A moral imperative� 12


Vert

SA - 8000 CHECKLIST Child Labor

Development

Forced & Compulsory Labor

Company History

Freedom of Association &

2010 June

Right to Collective Bargaining

Establishment of the Joint Venture Company between Vert Asia Limited and Nguyen Hoang Exim

Health & Safety

Discrimination

2011 February Completed 45-year

Disciplinary Practices

2011 March

Prepped land and foundations

Working Hours

2011 August

Remuneration

land lease

Started construction

2012 February Completion of all

facilities - workshop, offices. All machines, equipment and production line installed

2012 June

Four hundred employees contracted, 70 percent employees female. Salaries at least 15 percent above minimum wage

2012 August

Completed on-the-job training for all employees. Two staff trained in China and the Netherlands

2013 November SA-8000 certified 2014 April

ISO9001 certificate issued

2014 May

5 blue-chip customers signed

13 VERT Company

Management Systems


“A moral imperative� 14


ASEAN: Advantages of CSR

CSR is fast becoming a popular catchphrase throughout South East Asia. The Roadmap for the ASEAN Community 2009-2015, in its strategic objectives, aimed to “ensure that Corporate Social Responsibility is incorporated in the corporate agenda and to contribute towards sustainable socio-economic development in ASEAN Member States. Under this vision, numerous companies in Vietnam and throughout SEA have begun implementing CSR into their strategies and operations.

Principles These efforts are specifically aimed at some key indicators: 1. ASEAN has the third biggest population in the world, behind China and India, with 600 million people.

15 VERT Company


2. It will have a combined GDP of USD2.356 trillion, making it the eight largest economy in the world, larger than India, Russia or Brazil. 3. ASEAN has cornered 7.6% of global FDI 4. Its total land area will cover 7.6 million square kilometers, the seventh largest in the world. Its territory has one of the most biodiverse systems on the planet and has an abundance of natural resources. As an emerging economic powerhouse, ASEAN is a key market for numerous global companies, both in terms of production for export, but also those looking to supply its fast rising domestic consumer class. However, these companies must beware being perceived as exploiting local people for profit and should extol the virtues of professionalism and quality to ensure their sustainability in the region, and particularly as consumers abroad are increasingly aware of where their products come from and the impact their consumer behaviors have on local people. Cone Consumer reported in its 2010 Cause Evolution Study that “even as cause marketing continues to grow, consumers are eager for more. In fact, 83 per cent of Americans want MORE of the products, services and retailers they use to support causes.” CSR also has a tremendous advantage in terms of recruiting workers at home. PriceWaterhouseCoopers reported that 88 per cent of millennials or “echo boomers” prefer employers who have a strong reputation for CSR and that 86 per cent would seek new employment “if their companies’ CSR values no longer met their expectations.”

In fact, 83 per cent of Americans want MORE of the products, services and retailers they use to support causes.” The efficiency factor CSR gives not only consumers peace of mind, but workers as well. Throughout the long history of foreign companies investing into Asia and SEA in particular, there have been numerous discoveries of human rights abuses and unfair labor practices. As a result, firms have struggled with social instability – worker strikes, trade union disputes, etc. – that impact their operations. Therefore, it is actually in their best interest for firms to implement CSR. After the Bangladeshi factory collapse on April 24, 2014, workers throughout SEA, including Indonesia, Thailand and the Philippines, showed up in force on May Day to protest working conditions both in their countries and throughout the region. Last October, thousands of Indonesian workers, many of them from the textile and garment sector, took to the streets to protest low wages against rising living costs. There were fears of a national strike. Such protests and instability affect firms’ operations as they are forced to suspend their production. This is only one of many examples that demonstrate the benefits of CSR. If companies are unable to do business, the economy similarly struggles. CSR is aimed at ensuring not only the best interests of workers, but also uninterrupted business, for all parties concerned. “A moral imperative” 16


Relationship with local governments According to a report by Organization for Economic Cooperation and Development (OECD) on Responsible Business Conduct (RBC), governments throughout SEA have set CSR standards with Indonesia, Malaysia, Thailand and Vietnam as the most notable. These were marked by the establishment of the ASEAN CSR Network, which includes six countries, the four aforementioned and also Singapore and the Philippines. Its job is to gather business associations from these countries to monitor and report on CSR and RBC policies and efforts. Specifically in terms of Vietnam’s textile and garment sector, among many initiatives and events, in 2006 the government established the Factory Improvement Program (FIP) which aimed to “help factories from the garment industry to improve their quality and productivity while also building better worker/management relationships through training and dialog,” said the OECD report. It focused on workplace cooperation, human resources and workplace relationships, health and safety, quality, productivity, and cleaner production. It is clear that CSR is fast becoming a standard for the region, and if companies, both foreign and domestic, want to succeed, they had better keep up. Numerous production and manufacturing firms from around the world are moving to SEA thanks to advantages such as a cheaper labor force and closer access to material sources (i.e. China), but if they wish to succeed over the long-term, it is wise for them to implement a people-first, policy-oriented CSR doctrine. •

17 VERT Company


If they wish to succeed over the long-term, it is wise for them to implement a peoplefirst, policy-oriented CSR doctrine”

“A moral imperative” 18


More Than a Business Vu Thi Sen was born in 1985, she got married when she was 23 and has a four year old boy. Her life has not been an easy one. Her family lives with her mother-in-law who is very old. Her father-in-law was a soldier who fought in the Battle of Quang Tri. What makes her life even harder is that her husband is a victim of Agent Orange and can no longer work or even take care of basic household tasks. Vert’s CSR efforts are not only aimed at giving workers a higher wage and social insurance, they strive to give workers a better life. Sen is a perfect example. For her, family is most important, and time is her most valuable asset. She told us that her old sewing job in a factory was 15km away from her house. This commute put increasing stress on her ability to take care of her child and family. There was also the cost of petrol, something many of us take for granted, but for a factory worker in Vietnam, this is a heavy expense. She moved to Vert for many reasons, but one of the most important was that the factory is only 1.5km away from her home. This has allowed her to cut down on travel time and cost. Vert also benefited from her decision, as she was already a skilled worker in making garments and had the team spirit Vert emphasizes in its employment policy. In speaking with Sen about her family, you can hear the emotion in her voice. The kind that comes from hardship, but also gratitude at having found an employer that cares about her and the needs of her family. When asked whether she knew about her husband’s illness before they married, she replied, “Yes I did. But I thought, ‘he’s already unfortunate, not many girls accept his 19 VERT Company

situation. I’m a bit more lucky; I would share difficulties with him.’” She added that her mother-in-law was past working age, and also had difficulty even helping around the house. “She has rheumatoid arthritis, you know this disease, and it gets more painful as people get older. She worked in a rice field before, but we no longer have our own land.” With her husband in poor health and motherin-law retired, Sen is the sole breadwinner of her household and also must take care of nearly all the housework and childcare. She explained that in her previous job, before her husband’s health declined to the point of disability, she was the last one to the leave the workshop, as overtime was the only way for her to make enough money to support the family.


But she began to realize that she needed more time at home. Her husband was no longer able to take care of the baby. She explained that it took him an hour to give the child a bath, and she feared this could cause sickness or even death. Vert’s remuneration policy has an emphasis on an 8-hour workday for a generally higher wage. Many other factories in Vietnam require a longer working day for the same or less money. This, in the company’s opinion, is unethical and unacceptable. Workers should be able to earn a fair wage and still have enough time to care for their families. Sen explained how her higher salary at Vert for less working time has helped her spend the time she needs at home, while still earning enough to make ends meet. A higher wage also gives employees the ability to invest in education for their children, which is an essential part of the socio-economic development process.

Sen was asked whether she was able to send her son to school and how much it cost, and she replied that she did and was able to pay VND200,000 (around $10) each month. Finally, Vert’s transportation and lunch allowance for all employees is aimed at helping cut down on their expenses and hopefully save for the future. Sen said that because the factory is so near her home, she can go at midday to eat. She noted that she puts her travel and food allowance into savings. When asked what differences she saw between working with Vert and her former company, Sen answered with a story. “I remember a truly touching moment when on my birthday I suddenly heard the Happy Birthday song playing over the loudspeaker. I looked up and my colleagues were singing along around me. One of our managers came and gave me a gift.” I had never experienced that at work before. It showed me just how much this company cares about its individual workers. •

“A moral imperative” 20


Material to Retail MATERIALS

FINISHED GARMENTS

FACTORY IN CHINA

Well-Vetted Sustainable EnvironmentallyFriendly Suppliers ISO Certified

FACTORY IN VIETNAM

Low GHG Shorter, Direct Routes SA-8000, ISO9001 Certified.

HAI PHONG PORT

Close Proximity to Local Transport Hubs

Low CO2, Short Routes to Transport Hubs

Largest Deepwater Port in the North of Vietnam, International Hub

21 VERT Company

TO BUYERS

Able to Sell on FOB, DDP (Incoterms)


SUPPLIERS NANJING (CHINA)

PRODUCTION BAC GIANG (VIETNAM)

Fabrics • Polyester Trims • Wool • Bamboo • Zippers • Hemp • Buttons • Organic Cotton • Straps • Frills • Lacing

Apparel • Shirting • Jackets • Skirts • Pants • Outerwear

“A moral imperative” 22


Pillars of Sustainability

With a rapidly increasing global population and expansion of the middle class, Vert recognizes that the fast rising demand for garments must be addressed through sustainability. This ensures the development of a successful long-term business and that all stakeholders, from workers to communities to consumers, share in that success. General Director Alexander Falter explains his vision for Vietnam and how Vert is balancing its business goals with its CSR principles. If the last 50 years have taught us anything, it is that the world of today will look nothing like the world of tomorrow. But this doesn’t have to be entirely true. Yes the world is growing and the middle class expanding, but a sustainable vision can protect the future for coming generations and ensure business continues in a way that benefits all those involved. Vert’s pillars of sustainability aim to uphold the rights, benefits and well-being of employees, communities, and end clients. According to the UN, by 2050 the global population is expected to rise from its current 7.2 billion to 9.6 billion. Additionally, the middle class is also expected to surge upwards over that period. Given this, and the fundamental importance of the garment sector in the middle class market, Vert’s business is aimed not only at supplying increasing demand, but supplying increasingly CSR-conscious demand. We live in an ever more transparent world that is connected via various media channels, from the traditional such as newspapers and 23 VERT Company

television to ultra-modern social networking and alternative news. It is ever more important to ensure products are produced ethically. Consumers want products that are socially responsible, and they are willing to pay more for them. Moreover, many young consumers are driving this trend and are likely to continue this buying pattern throughout their lives. As such, this should not be looked at as a fad, but rather a trend, which is very likely to continue over the long-term. These same consumers have access to information like never before. If human rights abuses or labor violations are discovered halfway across the world, they often read that same news only minutes or hours later. In most cases there is outrage and even boycotts. After the Bangladeshi factory collapse, several companies faced harsh criticisms from their customers all across the world as their products were found in the rubble. There have been numerous cases such as this in recent history. Vert offers its buyers peace of mind, as they know their products are coming from


a socially responsible manufacturer that cares about its worker’s rights, well-being and safety. What’s more, it is clear that being socially neutral is not enough in the modern age. There is a greater need than ever before to give workers more than the bare minimum, consumers want to know they are buying products from producers that are giving back and giving more. Vert’s CSR focus on workers includes paying them well above the minimum wage to ensure they have a fair living standard, as well as vocational training that provides them with the skills they need to succeed, with Vert and beyond. Our company underscores the role of women in the workplace, and we have achieved a more than 80 percent female workforce. We also provide health checks and training in terms of equipment use and fire emergencies. Our workers are healthy, happy, and highly skilled. As a reflection of these achievements, our Bac Giang factory is SA8000® certified. This certification is a standard combining four main

social elements – fundamental rights, work and labor rights (conditions of work), work and labor rights (conditions of employment), and work and labor rights (empowerment of workers). Perhaps most notably, we were able to meet these standards in a record 18 months. Vert is proud of this accomplishment and is continuing to pursue other certifications that testify to our CSR values. When we selected Bac Giang’s Tan Yen province as our home, we did so on the basis that it offered us the worker pool we needed, but also the community we desired. Originally Vert looked at Vietnam as a potential destination for various reasons, some of them economic, but also others, such as the smiling people and determined work ethic. Tan Yen has proven our belief in all of these ideas to be true. Its people are communityoriented and have team spirit; they are happy and friendly; and most important, they have proven highly capable in producing the quality Vert expects and its customers demand.

“A moral imperative” 24


In Tan Yen, Vert has adopted a communityconscious approach that engages both individuals and organizations. We provide gifts to the children and families of our workers on holidays and hold an annual charity at Tet (Lunar New Year). More than that, we work with the local Trade Union to keep our workers abreast of their rights and responsibilities as well as with other groups to enhance Vert’s role and relationship with local people. Vert will continue to play an active role in the Tan Yen community and seek new opportunities to do so. Not only to help people, but to enhance their ability to help themselves. If you ask why Vert is a CSR company with a sustainable vision, the answer is simple: because it’s ethical. Our efforts go far beyond our workers and community. We are also ecologically and environmentally conscious. Our choice to use organic materials such as cotton and hemp helps to mitigate climate change and reduce ecological destruction. We try and transport our products via container ships that emit minimal greenhouse gases. We use best practice technology to ensure efficiency. Many people think these decisions may come with high overhead, and in some ways they do, but Vert has adopted a trade approach and other cost-saving measures to ensure a fair price on the world market. Our customers seek high-quality, socially responsible products, and we are able to deliver them within their price range. To work in principled fashion, you need to uphold the above principles. It is important that all stakeholders in the business model are considered and cared for, from the workers to the community to the end client. Here at Vert we deliver the right product at the right price in the right lead time sustainably. •

25 VERT Company


“A moral imperative� 26


A Way Forward

Nguyen Thi Thu is a wife, a mother, and a warehouse manager, so striking a balance between her job and her family is always a chief concern. Thu works at Vert’s garment factory in the district of Tan Yen, in Bac Giang province, where her husband also works as a mechanic. With her home only five minutes’ away by motorbike, the commute to and from work is quick and easy. As such, Thu is pretty happy with the amount of time she has to spend with her family, but it wasn’t always this way.

“Recently, I was very impressed by the present the company gave me on my birthday. I was at my desk, when suddenly I heard the ‘Happy Birthday Song’ being played through the speakers. And then Chien, the administrator, came over to me with a gift, and all around me there were smiles from my colleagues. It was really quite touching.”

Before she started working at Vert two years ago, she worked for a different clothing factory 10km to the north. Typically, she would only return home from work at around 9 or 10pm, which left her precious little time to spend with her son – or her husband, for that matter, who also happened to work at the same place.

However, working at Vert means more to Thu than just giving her more time in the evenings and a collegial atmosphere while she works. It has also reinforced her concept of her rights and obligations as a worker.

“Nowadays I have more time to spend with my child. As you know, my husband and I worked at the same company before; we both came home very late. Sometimes we felt very guilty but… it was business, we couldn’t leave earlier while the entire workshop was still working.” Working at Vert has increased the amount of time that Thu has available to spend with her family. When asked if she considers Vert to be a family-orientated workplace, she replied, “Our children are looked after here. In fact, they receive gifts for the moon festival and for international children’s day.” She went on to say that her supervisors were “very friendly and nice”. In fact, the factory director always tells his employees to “consider him as their father”.

27 VERT Company

“Yes, in April, the company cooperated with Tan Yen Trade Union to promote labor laws among the workers. We learnt a lot about our many rights as well as our responsibilities as stipulated by the labor laws. For example, now we understand more clearly the important role of the Trade Union in avoiding un-organized strikes.” Thu recognizes that there are many opportunities for advancing her career within Vert. She began her journey with the company when she was hired as warehouse staff. Then in March of this year she was promoted to warehouse manager in recognition of her skills. Obviously, in line with her increased responsibility, she received a bump in her salary. Throughout the Vert company structure, those in positions of higher responsibility are paid an “accountability allowance” which encourages employees to work more responsibly and aim towards the highest standard of quality attainable.


Our children are looked after here. In fact, they receive gifts for the moon festival and for international children’s day.”

“A moral imperative” 28


What’s important at Vert is that everyone has an equal chance at advancing upwards if they want a higher position within the company. It is a transparent working environment where the culture of favoritism and politics does not exist. Employees are valued for their efforts, and are encouraged to speak their minds in discussions with the management team in order to come up with the best solutions. Vert’s management believe that by getting employees involved in the decision-making process, the workers can take ownership of the company, and the company can, in turn, become a bigger part of the community. This cycle of reciprocation will drive both the company and the individuals working within it forward to a sustainable prosperity. Rewards within the company are a big part of how employees see their efforts being recognized. For example, the food allowance and transportation allowance mean a lot to Vert’s employees. Another way of encouraging employees is the Employee-of-the-Month Award, which Thu received in May of this year. “I was very happy because all of my efforts were recorded.” With accolades and promotions underscoring her firm sense of job satisfaction, and with her home and work life balanced, Thu seems content with her lot. When asked what she sees herself doing in 5-10 years, she said, “I don’t know because I consider Vert as my destination. I’m quite happy to work here.” Of course, although Thu refers to Vert as her destination, it is by no means a static point. With the company’s vocational training program and Thu’s will to improve, her journey within Vert looks set to be a long and interesting adventure. •

29 VERT Company


“A moral imperative� 30


Vert Visitors Department for Asia and Oceania at the Netherlands Ministry of Foreign Affairs (28/01/2013) Mr. Jan Waltmans

Deputy Director General Netherlands Ministry of Foreign Affairs

Mr. Cas vander Horst Deputy Head of Mission Dutch Embassy

Visit by Local Officials before Lunar New Year (06/01/2014) Nguyen Manh Cuong

Deputy Chairman People’s Committee of Bac Giang province

Duong Ngo Manh

Chairman People’s Committee of Tan Yen district

Nguyen Huu Nguyen

Chief of Office People’s Committee of Bac Giang province 31 VERT Company


Nguyen The Dung

Deputy Director Ministry of Labor, Invalids and Social Affairs

Dutch Business Association Vietnam Visit (17/01/2014) Elise Smal

Deputy Director MDF Asia

Martin Hoeksema

DBAV

Cas van der Horst

DBAV

Ywert Visser

DBAV

Jan van Huis

DBAV

Other Delegates Lai Thanh Son

Deputy Head of Bac Giang People’s Committee Upcoming Visit by

Lilianne Ploumen

Minister for Foreign Trade and Development Cooperation (the Netherlands) “A moral imperative” 32


Making a Difference ”Meeting the needs of the present, without compromising the ability of future generations to meet their own needs.”*

 This concept was introduced as the foundation of Vert by Chairman Herman Poelmann. As such, he established that “This definition of sustainability is the foundation of our actions. VERT Company will ensure the highest quality without social or environmental harm. Our measurement of quality goes beyond the quality of the finished product. We measure quality in terms of the sustainability of raw materials and above all, the circumstances under which the product is made.”

Vert’s CSR foundations focus on benefiting three main groups – its employees, community and consumers.

Employees In any enterprise, it is reciprocally beneficial to take care of workers. Employees are more productive when they are happy; they have more stable home and financial lives and therefore they work better; and they stay at their jobs longer. Vert’s first priority was to ensure its employees were paid above the minimum wage. In Yan Ten district where the factory is located, this is VND2.1 million (around $100). Vert on the other hand aims to pay its employees at least 15 percent above this minimum, and has accomplished this. In many cases, skilled workers such as seamstresses are earning VND3.5 million on average (around $175). Moreover, this is based on an eight hour workday. Many factory workers may make a similar wage, but they are working far longer hours. Vert’s strategy is to give its workers a balance between work and home, to provide people time to care for their families and children. This is both fair to workers, and creates a better working environment for all. Also, Vert workers receive transportation and food allowances on top of their wage, which most other companies do not provide at all. Vert ensures that all of its employees, from managers to security and janitorial staff, are contracted. This means they are all entitled to

*“Our Common Future” by Mrs Brundtland (UN Report 1963) 33 VERT Company


Another major element of Vert’s CSR and operational foundations is its internal vocational training program for unskilled workers.”

“A moral imperative” 34


participate in social insurance. We have no age limit for workers and provide opportunities to people from all walks of life. Another major element of Vert’s CSR and operational foundations is its internal vocational training program for unskilled workers. This ensures the workforce meets the company’s high standards for product quality as well as empowers them with lifelong knowledge and skills. Vert also set the goal of having 70 percent of its workers female, which it accomplished last year. This year it has expanded to include a total 508 employees, nearly 80 percent of whom are female. Vert has certainly shown that the ‘circumstances under which the product is made’ can be very employee conscious while still maximizing business potential.

Communities Vert made a very conscious decision when it selected Bac Giang that it wouldn’t locate in any of the many industrial parks and zones in the area. It wanted a location that was unique to the company’s needs and vision, would reduce worker travel time, and provided the opportunity to engage with and become a stakeholder in the local community. Tan Yen district offered all of the above and since settling there, Vert has received outstanding support from local residents, and most importantly, its employees. In return, as part of its social responsibility foundation, it has done its utmost to give back to that community. Perhaps first and foremost have been Vert’s efforts to educate and inform employees about labor laws by cooperating with and establishing a chapter of the local Trade Union. Through this Vert workers have become more aware of their rights and responsibilities. This has created a feeling of goodwill between the factory and its workforce and has improved their knowledge – both of which also benefit productivity, accountability and a team spirit. 35 VERT Company

Vert understands the importance of playing a role in the community and recognizes that it is a two-way street.” In addition to Vert’s work with the Trade Union, it cooperates with the Bac Giang Fire Department to conduct fire prevention training once each year. The company also holds annual occupational health and safety training for all its employees and provides them with a health check each year. Vert’s community extends well beyond its factory walls. The company works with local authorities at various levels, as well as business associations and organizations to promote investment in the area to other foreign companies. For holidays the company organizes charity events for the less fortunate in the area. It cares about its workers’ families as well, giving gifts to their children for holidays such as the Mid-Autumn Festival, International Children’s Day, Tet (Lunar New Year), and more. In the summer, each worker is given 2 kilograms of sugar which they can use to make juices or other drinks to keep their energy up. This may seem a minor detail, but in the heat and humidity of Vietnam, it is a small step that goes a long way.


Consumers Vert’s business is centered on using as many organic materials as possible in the production of its finished products. While organics may seem like a simple consumer preference, it is actually so much more than that. Nonorganic materials cause serious harm to the environment and health of farmers. For example, nylon and polyester are synthetics made from petrochemicals that at every stage of their development harm the environment and contribute to global warming. Moreover, they are nonbiodegradable, meaning that once disposed of they act as harmful waste for years or even decades to come. To produce nylon, nitrous oxide is used and released. It is 310 times stronger than carbon dioxide and seriously affects the environment. Even non-organic natural fibers require the use of pesticides, particularly non-organic cotton which uses more pesticide per plant than any other crop in the world. Pesticides affect ecosystems by killing certain plants and animals and causing an imbalance. Soil and land over time lose fertility. The mass production of wool uses sheep dips which have been linked with illness among farmers.

Vert’s strategy is two-fold - firstly it is environmentally aware and conscious of the health of its suppliers, secondly it recognizes the market niche and growing demand for organic products. Vert uses as many organic materials as possible in production, and puts emphasis on sustainable organics such as cotton, bamboo, recycled wool and hemp. Sustainable Market Growth Year

2008 2009 2010 2011 2012

2013

Market Value (USD millions)

3.2

4.3

6.0

8.3

9.8

12.1

% Increase

-

35%

40%

39%

18%

23%

The company has a close relationship with With a growing demand for organic materials, and the intrinsic environmental and health benefits of using them, Vert’s strategy fulfills both its business and CSR objectives. The company has a close relationship with Solidaridad, an NGO network that works with cotton manufacturers around the world. Vert also has organic competence, which is rare anywhere in the world. There is little competition in Asia in terms of this market segment, most is found in India and Turkey. By going to China rather than these markets for our sourcing, we reduce our carbon footprint due to shorter shipping routes.

“A moral imperative” 36


Perhaps most importantly, Vert’s clients actively seek or require organic materials, and so do their customers. Vert’s materials are sourced from reputable Chinese companies that have the latest ISO certifications and operate under best practice principles. Lastly, Vert aims to reduce its carbon footprint at every step of its supply chain from ships and trucks that produce less greenhouse gas emissions and closer-to-home suppliers to best practice technology that ensures efficiency. Organics and environmental awareness have allowed Vert to operate a successful enterprise that doesn’t compromise ‘the ability of future generations to meet their own needs.’

Vert’s Ethics Vert’s consistent drive to emphasize employees, community and consumers as foremost in its ethics-based strategy has produced the desired results and more. Its workers are treated with respect and dignity; they are skilled, happy, and driven members of a focused team. They are rewarded for their achievements and motivated to succeed. Moreover, they work in a safe and healthy environment that respects and upholds their rights.

37 VERT Company

Vert’s community has welcomed its presence in the area, and reciprocally the company has done its utmost to be a part of that community and promote its socio-economic development. All residents, not just employees, are acknowledged, respected, and supported through a variety of CSR programs. Vert understands the importance playing a role in the community and recognizes that it is a twoway street. Vert’s awareness of sustainability through the use of organics, and the demand for such products at home, has guided both its business and CSR journey. Its choices have minimized environmental impact, ensured the continuation of family businesses, and made a recognizable impact on the world of today and tomorrow. Its achievement of SA-8000 certification, an auditable standard for decent workplaces, showcased the company’s focus on all three of these core groups. The company’s future-focused vision and its present-aware perception have manifested its ethical vision: “meeting the needs of today, without compromising the ability of future generations to meet their own needs.” •


Buyers

“A moral imperative� 38


Vietnam Office Address: 1st Floor, Hancom, No. 39, Lane 603, Lac Long Quan, Tay Ho, Ha Noi, VN Factory Address: Kim Trang, Viet Lap, Tan Yen, Bac Giang, Viet Nam T + 84 (0) 438729472 /73 F + 84 (0) 438729474 E info@vert-company.com

China Representative Office D4 Building, 1865 CSTD Park, 388 Yingtian Street, Qinhuai District, Nanjing, P.R.China 210006 T +86 0(25) 518 851 58 F +86 0(25) 518 851 59

The Netherlands Representative Office Nieuwe Spiegelstraat 18, 1406SJ Bussum, The Netherlands T +31 (0)35 625 7840 F +31 (0)35 625 7841