Runaway foreign investors leave big questions for FDI attraction hinh anh 1Workers at Sang Hun company receive their salary after the employer escape. (Photo: VNA)

Hanoi (VNA) –
Recent years have seen an increase in the number of foreign investors fleeing Vietnam after facing financial trouble. They left behind big debts in workers’ salaries, tax and social insurance, affecting hundreds of thousands of workers. However, there is a gap in the legal system regarding “fleeing businesses.”

The issue was discussed at a conference held by the Vietnam General Confederation of Labour (VGCL) in Hanoi on June 4 on ensuring the rights of workers at bankrupt businesses or firms whose owners had fled the country.

Social insurance debts exceed 1 trillion VND

Tran Thi Thanh Ha, Deputy Director of the Vietnam General Confederation of Labour’s Department for Labour Relations, cited statistics of the Vietnam Social Security (VSS) which showed that insolvent firms and those that halted operation and waited for dissolution owed more than 1 trillion VND (43.3 million USD) in social insurance and unemployment insurance premium payment for nearly 60,000 labourers as of October 31, 2018.

Ho Chi Minh City is a hotspot for runaway foreign employers, with 20 reported to have left the country after running into bankruptcy during 2013-2018, according to the city’s Labour Federation.

According to the trade union organisation, some 4,282 workers, more than 3,700 of whom worked in textile firms, were left in the lurch as their employers owed them 23 billion VND in salaries and more than 58 billion VND in social insurance.

Notably, 12 out of the 20 insolvent companies were foreign-invested firms.

Deadbeat businesspeople have also caused headaches for authorities in Dong Nai province. More than 5,000 labourers were affected as their employers failed to pay salaries, social insurance, unemployment insurance and healthcare insurance.

Runaway foreign investors leave big questions for FDI attraction hinh anh 2Most businesses whose owners fled the country owed social insurance premiums. (Photo: VietnamPlus)

Most recently, 1,900 workers at the Korean-invested textile and garment manufacturer KL Texwell Vina in Bau Xeo Industrial Park, Trang Bom district did not receive salaries and bonus for the 2018 Tet holiday. The firm’s owner disappeared before Tet, owing nearly 13.7 billion VND in salaries and leaving policies for workers like social insurance and maternity leave unsettled.

Not attracting FDI at all costs

Labour federations of many provinces and cities said most of the deadbeat business owners silently dispersed their assets before fleeing, leaving business administration work to managers, who would also disappear after liquidating valuable assets. If caught by functional agencies, the managers declared they were also in the same situation as the workers.

Vice President of the Vietnam General Confederation of Labour Ngo Duy Hieu said the problem was only set to get worse.

“Although the trade unions have taken a wide range of measures to support workers, there are many formidable challenges ahead which need to be addressed soon, especially legal loopholes, and the responsibility of State management agencies in inspecting the law enforcement in businesses”, Ngo Duy Hieu admitted.

To ensure the rights of workers, authorities should not try to attract investment at all costs, he said, adding that Vietnam should not become a “paradise” for any business to evade tax and cheat local labourers.

To that end, the Government should complete the legal framework to handle similar cases, while the Ministry of Planning and Investment and the People’s Committees of provinces and cities are advised to choose capable investors, particularly those who have a sense of law compliance as well as social responsibility.-VNA