Recently, we prepared a long chapter on employment law issues in Vietnam. One of the questions we addressed involved legal protections for whistleblowers–employees or individuals who reported instances, specifically, of harassment in the workplace, but also of other legal violations committed by their employer. Vietnam’s employment law does not provide for whistleblower protections and, except for the related law on denunciations, there are very limited provisions covering the issue. In general, in the corporate setting, whistleblower protections are dependent upon the incorporators of a given company setting out those protections in their governing documents.
And then, the other day, I read an article about a man–working near the poverty line–who spent years monitoring and denouncing a Chinese construction firm for shortcuts in the building of a stretch of highway that resulted in poor quality roadways. It outlined how he went from authority to authority, tried to get the local departments to do something about the shortcuts and the corruption he saw in the company, but how he was only listened to after construction was complete and the roadway began to fall apart. It outlined how, during the years of his efforts, he had been attacked, feces and blood thrown at his house, stones through his windows, and other atrocities against his person. The point of the article, though, was about how he’d devoted so many years and so much effort to preserve benefits for his fellow citizens and received a certificate of recognition in a private meeting as his only compensation. But I saw the article as a question of something more.
When someone in the corporate or public spheres decides to report wrongdoing, what protections can they receive to prevent reprisals, injuries, or other losses caused because of their whistleblowing? In the United States, there are elaborate schemes for protecting whistleblowers in the public sphere, and in publicly listed corporations levels of anonymity built into the reporting mechanisms to protect their identity and livelihoods. In Vietnam, however, it seems there are few, if any, protections.
As I mentioned, there are no provisions in the business laws (investment, enterprise, securities, etc.) nor in the labor laws to protect whistleblowers in the corporate environment. Thus, unlike in Western companies where an internal reporting organization is put in place to monitor and investigate complaints of illegal behavior within a company, Vietnamese employees are best advised not to complain within their organization. The only protection for them exist if they report outside the company to public officials.
This is an unfortunate development as it denies companies the benefit of corporate-minded employees who want only to improve their employers state of operations. Without internal reporting regimes, companies may not know of illegal behavior by management or employees until they are approached by the authorities in an investigation. This governance failure breeds further illegality as there is a failure to punish wrongdoing, thus fostering an atmosphere of toleration. Furthermore, the company without a reporting regime loses the opportunity to fix the problem before it rises to the level of triggering an external investigation or, in a minority of cases, of self-reporting the problem to the authorities in an effort to mitigate consequences of the wrongdoing. These flaws are especially egregious in light of the criminal liabilities and the ease of bringing derivative shareholder suits against management.
A wise incorporator, then, would–according to the size and scope of the enterprise–institute a reporting regime and put in place protections for internal whistleblowing. This could extend to a separate unit within an enterprise, perhaps under the direction of the inspection committee or, at least, the board of management. Or, it could be as simple as setting up an anonymous email address to which employees could submit complaints. Regardless, the lack of legislation protecting corporate whistleblowers within their own organization potentially causes a great deal of harm to companies and puts management on a reactionary footing, unable to anticipate problems within their organization or to fix them when they become aware of them.
The wise employee, faced with illegality committed by his employer, should skip reporting up the chain of command and go directly to the authorities if they want to obtain the few protections provided by law.
The law on denunciations, which applies to the proper public authorities who are in receipt of a complaint or denunciation from a person, are under certain obligations to protect that person from retaliatory actions of the denounced party or affiliates. These protections comprise the only protections provided under Vietnam’s law for whistleblowers in any context. But what obligations do the receiving authorities have towards the whistleblower?
First, they must protect her personal information. Her name, position, address, etc. and any information that might reveal her identity, or the identity of her immediate family. If through the action of the authority (and not in the case of the party making denunciation revealing such information) such information is released, the authority must obtain suggestions from the party making denunciation to protect them from reprisals.
Second, the receiving authority has the duty to protect the business and employment of the whistleblower within their ability so to do. Such protection should include preserving the whistleblower’s current position by requesting the employer to cease retaliatory actions, restoring employment. If retaining employment with the original employer fails, then the authority will assist in finding new employment or business for the whistleblower.
Third, the police, government, and people’s committees must protect the life, health, property, honor, and dignity of the whistleblower. They may use necessary resources to protect the whistleblower in place or, should the situation require, transport the whistleblower to a place of safety.
That, unfortunately, and in the space of a few articles in the law, covers the only protections available for whistleblowers in the public sphere. There are no time limits set to these protections, but there are also no requirements that they continue for a lengthy period of time. In fact, the period for resolving a denunciation is 30 days. It is highly possible that the authority responsible for resolving the denunciation will see its duties towards the whistleblower terminated at the end of that period and thus leave the whistleblower vulnerable to retaliation after such date.
When a whistleblower’s denunciation can bring administrative, civil, or even criminal penalties upon her employer’s head, she is in continuing danger of retaliation concomitant with the size and degree of the illegality she reported. Longer-term protections need to be provided if called for by the situation.
Whistleblower protections in Vietnam are minimal. There are major deficiencies in the legal framework and no clear best practices for enterprises in developing internal mechanisms for monitoring and reporting corporate behavior. The protections provided are vague and come to an end all too soon. When a person risks their livelihood to protect the benefits of the government in preventing illegal behavior on the part of corporations, there should be some more provision for their safety and security.
Negative prescriptions aside, the government could also consider a positive inducement to successful whistleblowers. In the United States, for instance, the SEC offers a percentage of obtained damages to whistleblowers of FCPA violations. Other than a moral compass–which is skewed towards respecting management by predominant Confucian ethics–there is little to lure employees to report wayward employers. Vietnam needs to revisit this issue and provide both inducements and protections for whistleblowers if they wish to better monitor corporate behavior in the future.