Licence penalties incurred by foreign electronics groups

December 21, 2023 | 10:52
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A series of electronic component and telecommunications equipment manufacturers have been fined for flouting construction and environmental regulations.
Licence penalties incurred by foreign electronics groups
Licence penalties incurred by foreign electronics groups, illustration photo/ Source:

Last month it was revealed that Fushan Technology Vietnam Co., Ltd., a subsidiary of Foxconn, will have to pay a $22,000 fine due to proceeding with construction without the prerequisite licence.

The company, which is located in the northern province of Hai Duong, was implementing four construction items without a licence: two mobile phone assembling facilities, an eating room, and a parking area. The company failed to get a licence for such works or conduct a feasibility report.

Meanwhile, Hai Duong-based Synopex Vietnam was fined $9,700 for discharging wastewater at 1,200-1,400 cubic metres. Synopex makes products such as electronic circuit boards and glass for camera equipment, phones, and tablets.

A first-level vendor of Samsung Group in Vietnam, it is also a partner of large corporations such as Vingroup, Foxconn, and BKAV.

In mid-November, Phu Tho People’s Committee fined Electro M Vina Co., Ltd. $18,000 for violations in environmental protection. The South Korean-invested electronic spare parts and component manufacturer did not approve the results of appraisal of an environmental impact assessment report according to regulations.

The companies in question have between 30 and 90 days from the date of issuance of the sanctioning decision to resolve the environmental results or complete dossiers to get the relevant construction permits and environmental impact assessment report.

Two of the three manufacturers are either a supplier or a subsidiary of Foxconn. According to Foxconn’s global code of conduct policy, all activities of Foxconn shall be carried out with respect for the environment.

Bui Van Thanh, president of New Sun Law Firm, said that such violations are one of the negative aspects in attracting and using foreign investment capital.

“One of the reasons for this situation is that the assignment, decentralisation, and coordination among agencies in localities in fulfilling the state management function on investment are still scattered, inconsistent, and inadequate,” Thanh said.

“The work of monitoring, supervising, and inspecting the operation of investment projects concerning labour, environment, and construction have not yet been coordinated among sectors,” he added.

“The authorities at all levels attach more importance to the promotion and issuance of investment certificates, rather than the management of foreign-invested projects after being licensed. As a result, the efficiency has not been truly brought into play, and the handling of violations has been indecisive and delayed, leading to risks of instability in social order and safety,” Thanh said.

However, construction violations in industrial parks, such as in Vinh Phuc and Bac Ninh provinces, are mainly attributed to rapid growth of investment and building amid a thin force of officials in charge of planning management and construction licensing. There is also a spate of late inspection, discovery, and handling of violations.

Nguyen Dinh Bo, deputy director of Hai Duong Department of Science and Technology, told VIR the province has reported several violations by foreign-invested enterprises (FIEs).

“The management and supervision of the operation of FIEs is complicated. If local authorities want to inspect any FIE, they have to inform the company and prepare enough documents. If the local authorities conduct an unannounced inspection, the company has the right to ask the embassy to work with the local parties immediately. It is the reason for why the violations still happen,” Bo said.

“This situation is a barrier for the local authorities to control, inspect the operation, and detect violations quickly. We hope that there will have a strict management mechanism to avoid unexpected violations, impacting the business environment and the national security and defence.”

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