Most leather and footwear businesses in the South have closed for more than a month; partners have gradually moved orders to other countries. Leather and footwear enterprises wish to have a set of production criteria for safe production during the pandemic; electricity price reduction; and a halt to collecting port fees.

Illustration. Photo: Nguyen Hue

Flexibly develop a set of production criteria during the pandemic

According to the Vietnam Leather, Footwear and Handbag Association (Lefaso), many large leather and footwear enterprises are concentrated in the southern provinces such as HCM City, Dong Nai, Binh Duong, and Binh Phuoc. The implementation of social distancing under Directive 16 has caused most businesses to close because they cannot conduct the "three on-site" model.

According to Phan Thi Thanh Xuan, Lefaso’s Vice President and General Secretary, although businesses in the North are still operating, their capacity is only 50% due to the lack of raw materials from factories in the South. Meanwhile, imports from China are not favorable because of difficulties in transportation.

"Therefore, partners have gradually moved orders to other countries," said Xuan.

Facing the mounting difficulties, in the dispatch just sent to the Government Office and the Ministry of Planning and Investment to comment on the draft Resolution to support businesses in the Covid-19 pandemic, Lefaso made a series of suggestions to recover production and support businesses.

Regarding the plan to restore production, the association made additional comments, which is to assign the Ministry of Health to develop a set of criteria for safe production during the pandemic for different operation modes, so that localities have a framework to evaluate the operational plans submitted by enterprises. For example, a fixed set of criteria on the “three on-site” and “one route - two destinations”.

A set of criteria is needed for enterprises to apply the "two on-site" or "four green" according to the ratio of gradually increasing capacity from 30-50-70%, taking into account the fact that the majority of workers in labor-intensive export industries have not been vaccinated yet or the rate of the first dose is very low and it will take many months to get the second dose.

Additionally, it is necessary to have a set of criteria for enterprises to apply even if the employees received one or two doses of vaccine.

Moreover, the Ministry of Health and the Ministry of Industry and Trade should be assigned to work together to develop a standard process for localities to assess risk level in business operations to minimize business closures.

The association also gave additional suggestions to assign the Ministry of Labor, Invalids and Social Affairs to study and allow enterprises to apply Article 108 of the Labor Code to exceed the overtime limit at both monthly and yearly levels; and may consider applying Article 108 in the current special situation until the end of 2021.

“If only the ceiling by month is raised, many businesses have used up most of the ceiling of the year. Therefore, there will be no room to speed up production to make up for lost time, and workers will recover their income more slowly,” said Xuan.

According to Xuan, it is necessary to assign the Ministry of Labor, Invalids and Social Affairs to coordinate with the General Confederation of Labor to allow enterprises to negotiate wages after the first 14 days of closure with employees in the form of collective, in which the Trade Union is the representative of the employees.

Most businesses in the South have been closed for more than a month and are facing many difficulties when negotiating benefits with individual employees via phone and zalo, especially for units with thousands or tens of thousands of employees. Xuan said that this collective bargaining is especially important, helping businesses retain employees and reduce re-recruitment costs.

Stop collecting seaport fees, reduce electricity prices

In terms of business support, Lefaso suggested that the Ministry of Labour, Invalids and Social Affairs should study and propose to stop paying to the retirement and survivorship fund as prescribed in Resolution 68/NQ-CP, but not only within six months from the date of dossier submission, but a year from the date of application. For enterprises located in the area applying Directive 16/CT-TTg, 50% of the payable amount will be reduced.

For the Vietnam General Confederation of Labor, the association proposed to stop collecting trade union fees until June 30, 2022 with the conditions as specified in Resolution 68/NQ-CP on stopping paying to the retirement and survivorship fund (i.e. at least 15% of employees, including those who have stopped working, suspended, agreed to take unpaid leave) instead of 50% as prescribed in Official Letter No. 2059/TLD of the General Confederation dated May 28, 2021.

Exemption until December 31, 2021 for businesses located in the areas implementing Directive 16; allowing enterprises to coordinate with grassroots trade unions to use the trade union funds to pay for fast testing costs and support workers.

Concerning electricity price reduction, the association proposed a 30% reduction in electricity prices for businesses until the end of 2021.

“Additionally, Hai Phong city will stop collecting seaport fees until December 31, 2021 and research to reduce it by 50% in 2022. HCM City will postpone the application of port fees until June 30, 2022,” said Xuan.

Regarding credit, the association wants the State Bank to direct the banking system not to lower the credit limit for businesses facing difficulties due to Covid-19, continue to reduce lending interest rates from 0.5% - 1% per year, and extend the repayment period of principal and interest in 2021 and 2022.

Besides, localities do not adjust land rent when businesses have to fight the pandemic, and study to reduce land rent by 50% for businesses in localities applying Directive 16.