For an Economy of Unconflicted Profit and Environmental Protection

2:35:25 PM | 31/12/2019

The draft policy on encouraged application of circular economy models will be submitted to the Government in the second quarter of 2020, said Mr. Nguyen Quang Vinh, Secretary General of the Vietnam Chamber of Commerce and Industry (VCCI) and Vice Chair of Vietnam Business Council for Sustainable Development (VBCSD), to Vietnam Business Forum Magazine on this issue. Duy Anh reports.

Despite being a key trend, the circular economy is still a very new model, even in advanced countries in the world or ASEAN countries. How is this phenomenon characterized in Vietnam?

Circular economy is a non-emission economy or an economy that does not have conflicts between economic interests and environmental protection. The trend of producing and consuming circular products or environment-friendly products has become stronger. Companies are also increasingly aware of their responsibility to sustainable development and essential requirements related to environmental protection under free trade agreements (FTAs) that Vietnam is a signatory of or from stricter legal policies on environment that the Government has put in place. Consumers are also more aware of environmental protection and they want to choose more environment-friendly products.

Choosing to make and use such products is a reciprocal relationship. A typical example is the first road in Vietnam reinforced with recycled plastic in DEEP C Industrial Zones, Hai Phong City. Completed at the end of 2019, the 1.4-km long road transformed a total of 6.5 tons of plastic packaging from plastic waste. This is probably the first time that local authorities, infrastructure investors, asphalt suppliers, waste collection units and materials scientists joined hands to solve plastic waste problem in Vietnam. Therefore, the road also becomes a symbol for government - business cooperation in the sustainable development strategy in general and the timely response to the Prime Minister's call for combating plastic waste in particular.

For its part, the Vietnam Business Council for Sustainable Development (VBCSD) has already launched an initiative to support enterprises to adopt the circular since the beginning of 2018. For example, the “Zero Waste to Nature” Initiative, after one year of piloting waste sorting at the source in Tan Phu District, was appreciated by the Ho Chi Minh City People’s Committee and expected to be scaled up throughout the city. The “Vietnam Materials Marketplace” Project, aimed to build a secondary marketplace for trading secondary inputs, completed the first phase. The survey with more than 300 companies/organizations shows the need for building an online platform for businesses to exchange and trade used/usable materials. Currently, VBCSD is also joining as a partner of the cooperation project for post-consumer recycled plastic market development, aiming to develop a market for local post-consumer plastic recycling industry by creating the demand (business partners are committed to using post-consumer recycled plastics for packaging or input materials) and the supply (forming PET recycling facilities) in 15 months.

So, how can more circular economy initiatives and practical actions like these be implemented, especially as 98% of Vietnamese enterprises are small and medium in size and are still struggling to survive in the market and face a lot of difficulties?

For small and medium-sized enterprises (SMEs), the biggest concern is still how to make a profit and how to survive in the marketplace. The first difficulty faced by SMEs is the shortage of resources. They lack resources for investment in research and development and innovation. Please note that the circular economy is not only a reuse - recycle - renew approach but this model aims to extend the life of products/services right from the designing phase and product designing. To design a circular product, businesses need to invest a lot of human resources and financial resources for research and development.

In addition, they are facing difficulty in accessing “green credit” to develop sustainable business and protect the environment. Information on such sources is quite rare and hard to access.

Moreover, the legal barrier is also a big challenge for them to pursue the circular economy. We do not yet have a specific legal framework or law on circular economy for them to base on to carry out their actions.

Why is the process of completing policies and legal frameworks for the circular economy still slow?

This is because this is still a very new economic model. Even in advanced countries in the world or in ASEAN countries, there is currently no clear and complete policy framework for this model to fully grow. Moreover, in order to bring this model into practice, many branches of authority need to get involved like the Ministry of Industry and Trade, the Ministry of Science and Technology and the Ministry of Natural Resources and Environment. Therefore, to have a legal corridor or a specific law on circular economy will take a long time.

Positively, right after the latest National Sustainable Development Conference 2019, the Prime Minister issued a conclusion directing the Ministry of Natural Resources and Environment to work with the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Industry and Trade, the Ministry of Construction, the Ministry of Agriculture and Rural Development, the Vietnam Chamber of Commerce and Industry, and related agencies, to study and formulate policies encouraging the application of circular economy to business and submit them to the Prime Minister in the second quarter of 2020.

In order for the business community to truly become an important steering wheel of the boat to a “better world” through “better business”, companies must take action on their own. Nevertheless, the decisive factor to success is the determination to act, by the Government and the entire political system, the accompaniment of media, and the support and understanding of consumers. This is a concentric circle where all stakeholders are working closely together and acting strongly for a decade of more sustainable development.

Thank you very much!