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Made (Green) in Vietnam

April 16, 2014

By Linda Greer, Lisa Hook

The burgeoning growth of the apparel industry in Vietnam offers an opportunity to foster best practices in sustainable manufacturing processes. While China may be best known for, and is currently the leading global exporter for apparel, many multinational companies are moving production to Vietnam, due primarily to rising labor costs in China. In Vietnam, textiles and apparel account for approximately 20 percent of the country’s GDP, and between 2005 and 2011, Vietnam’s garment exports increased by 32 percent, the highest of any nation in the world and more than double the increase in China. As a result, today Vietnam is the second largest source of U.S. apparel imports. However, this growth also forecasts a potential threat to the country’s natural environment.

In Vietnam, textiles and apparel account for approximately 20 percent of the country’s GDP. Photo/Flickr user ILO in Asia and the Pacific

In Vietnam, textiles and apparel account for approximately 20 percent of the country’s GDP. Photo/Flickr user ILO in Asia and the Pacific

Vietnam’s apparel sector is primarily comprised at the cut-and-sew end of the supply chain, which requires minimal technology or skill-based input, and has less impact on the environment than other parts of the production process such as textile dyeing and finishing. However, according to a 2013 World Bank study, to remain competitive, Vietnam will need to add greater value to its input, namely by investing in upstream and downstream production processes – including cotton manufacturing and textiles production. But it is textile dyeing and finishing that has the most significant environmental impact – as it is particularly water and energy-intensive and highly polluting if not carefully controlled.

Without proper regulations, oversight, and manufacturing standards, chemicals from the textile dyeing and finishing are often discharged into local rivers. Moreover, while some industry leaders and government officials herald the proposed Trans-Pacific Partnership (TPP) free trade agreement as a way to accelerate the growth of this industry in Vietnam, the boost will mean managing the environmental risks at an even faster pace and at a much larger scale. The TPP would set forth a “yarn forward” criterion, which requires every stage of garment production (weaving, dyeing, finishing, sewing, etc.) to be done within Vietnam in order to qualify for lower tariffs in trade with the United States. This rule is expected to vastly increase the number of dyeing and finishing enterprises in the country.

Vietnam is already struggling to control its industrial pollution. In the Red River Delta region around the capital city of Hanoi, which accounts for over a quarter of the country’s industrial output, only 30 percent of industrial wastewater is treated, leaving water supplies at the mercy of the remaining 70 percent. The threat posed by the burgeoning textile industry to Vietnam’s water needs is growing, and therefore, the establishment of an effective environmental regulatory system that accommodates this new economic growth will need to be a priority in the coming years.

The Government of Vietnam’s Law on Environment (2005) includes a number of amendments to address environmental regulation of private sector industries, including an intervention to adopt fees for wastewater pollution from the most polluting industries that do not comply with discharge standards. However, implementation has been slow and needs additional approaches – a clear delineation of responsibilities to implement regulation, including permits, inspections, and enforcement – all capacities that will help safeguard against pollution problems in the coming years. In addition to regulatory programs, automatic, continuous monitoring of wastewater discharges with remote reporting to government offices can be very effective. Public disclosure of this information is essential to provide transparency and accountability to government, business, and the public on industry practices and impacts to water quality.

Most of the multinational companies that contract the textile factories are well aware of the heavy impacts inherent in uncontrolled manufacturing and have been heavily criticized in the press over the years for poorly controlled industrial discharges in China. The Institute of Public and Environmental Affairs, a Chinese based environmental NGO in China, has published a number of reports on extensive violation of pollution discharge standards from textile mills in China, and Greenpeace, an internationally-based organization has launched a “zero discharge” campaign calling for the apparel industry to completely phase out the use and release of 11 categories of toxic chemicals, including nonyphenol ethoxylates (NPEs).

While some argue that the companies themselves have been slow to act on the impact that their factories have on the local environment, there are initiatives taking place among many of the multinational buyers of finished apparel products that aim to improve practices. Many of the most responsible of these companies participate as members of the Sustainable Apparel Coalition, a San Francisco-based association with over 90 corporate members, which has developed a set of practical tools to benchmark, track, and improve social and environmental performance issues in the factories in their supply chain.

Still in a relatively early stage, Vietnam’s developing apparel sector has the opportunity to proactively address the environmental impacts from apparel production. The global and interconnected system of apparel production offers Vietnam both an opportunity for economic development, as well as innovation in sustainable production.

Linda Greer is director of Health Programs at the Natural Resources Defense Council and Lisa Hook is a senior program officer for The Asia Foundation’s Environment Programs in San Francisco. She can be reached at [email protected]. The views and opinions expressed here are those of the individual authors and not those of The Asia Foundation.


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