Social insurance weighs heavily on shoulders

According to Mai Duc Chinh, vice chairman of Vietnam General Confederation of Labour (VGCL), so many domestic and foreign enterprises owed social insurance, particularly labour-intensive enterprises operating in the textile-garment and footwear sectors.

Vietnam Social Insurance reported that by the end of August, 2012, enterprises owed it VND8.12 trillion ($390 million), mainly private and foreign-invested enterprises. This figure accounted for 7.4 per cent of the total incomings and increased by more than VND1.63 trillion ($78.7 million) against the same period last year. For instance, the social, health insurance and unemployment debts of South Korean-invested garment maker Sae HwaVina Company Limited in Ho Chi Minh City’s Cu Chi district hit  VND5.7 billion ($274,038), with more than three months without social insurance payments, according to Ho Chi Minh City Social Insurance Company.  

Sae Hwa Vina Co., Ltd established in August, 1999. At the beginning, the firm operated smoothly. However, the company has faced with difficulties and making losses, leading to late salary payments and social insurance debts since end of 2011, said Nguyen Thanh Sang, vice head of Labour Department of the Cu Chi’s People’s Committee. The company’s director Kong Wan Sik has been changing his home’s address continually and left more than 700 workers without salaries and social insurance payments, Sang said.

Nguyen Thi Cam Ly, a firm’s female worker staying in a lodging house located in Ho Chi Minh City based- Trung An hamlet in Cu Chi district was quoted by local press as saying: “Since July, 2012, the company refused to pay our salaries with many excuses coming up. Over more than a month, hundreds of workers have to seek new jobs  to make ends meet, and some even have to ask for help from their family.”

“We have come to the Korean company many times, but we could meet with Sik once. Sik said that the company was implementing procedures to sell its factory in Long An to cover its salary and social insurance debts. At present, the firm is closing down and its workers lost their jobs and without salary payments as well,” said Sang.

Therefore, Ho Chi Minh City’s Department of Labour, Invalids and Social Affairs has asked the city’s public security to find Sik and co-operate with South Korean embassy to help collect the VND8.7 billion ($418,269) debt including late-payment salaries, local press reported. As a result, the company paid VND2 billion ($96,154) social insurance debt on September 25, 2012 and that means the company now owes the city’s Social Insurance a debt of more than VND4 billion or $192,308, Ho Chi Minh City Social Insurance told VIR.

Chinh said solving enterprises’ social insurance debts would take time and there must be law changes to protect workers’ interests.