Environmental compliance is critical when investing and operating in Vietnam. As the Vietnamese government increasingly emphasizes sustainable development and environmental regulations, businesses must strictly adhere to these regulations in site selection, production, and daily operations. This article aims to provide businesses with a comprehensive, actionable environmental compliance guide to help them operate successfully under Vietnam’s green development plans.

1. Core Requirements of Vietnam’s Environmental Regulations

Vietnam’s Environmental Protection Law (amended in 2020) outlines mandatory requirements for pollutant emissions, wastewater treatment, and environmental impact assessments (EIA). When selecting a site and setting up production, businesses must consider the following specific requirements:

• Emissions Permit: All newly built or expanded factories must apply for an emissions permit before starting operations. This permit covers the allowable limits for air pollutants, water pollutants, and solid waste emissions. For example, industries with high pollution levels, such as chemicals, textiles, and food processing, are required to conduct at least two emission monitoring sessions annually and submit reports to local environmental authorities.
• Environmental Impact Assessment (EIA): According to the Environmental Impact Assessment Regulation, any new industrial project must undergo an EIA before starting construction. The review period for an EIA is 60 days. During the assessment, businesses must submit detailed pollution source analysis, pollution control measures, and an ecological impact evaluation. For example, a foreign electronics company entering Ho Chi Minh City’s industrial zone experienced a three-month project delay and incurred additional review costs because its EIA report failed to provide sufficient details on the wastewater treatment system.

2. Compliance in Production under Green Development Plans

Vietnam’s Green Growth Strategy has set specific targets to reduce greenhouse gas emissions by 2030. To comply with these targets, businesses need to adopt clean production methods and implement energy-saving and emission-reducing measures. Here are the steps businesses need to follow for operational compliance:

• Introduction of Energy-Saving Equipment and Technologies: The Vietnamese government encourages businesses, especially in high-energy-consuming industries such as cement, steel, and chemicals, to use energy-efficient equipment. By introducing advanced environmental technologies, companies can reduce energy consumption and pollutant emissions. For instance, a Chinese building materials company established a plant in Bac Ninh province and reduced energy consumption by 20% by installing energy-saving cement kiln equipment imported from Germany. As a result, the company received environmental subsidies and a three-year corporate income tax reduction.
• Construction of Wastewater Treatment Systems: Under Vietnam’s environmental laws, all industrial projects must be equipped with a compliant wastewater treatment system. For example, a textile company in Ba Ria-Vung Tau province faced fines of up to 1 billion VND (approximately USD 43,000) and was required to suspend operations for failing to install a sufficient wastewater treatment system as specified in its EIA. Businesses can adopt multi-stage wastewater treatment systems to ensure that industrial wastewater meets the discharge standards.

3. Environmental Compliance Guidelines for Site Selection

When selecting a site, businesses must consider not only transportation and labor factors but also ensure that the site complies with Vietnam’s environmental regulations. The following are the key compliance points for site selection:

• Avoiding Environmentally Sensitive Areas: According to the Natural Resources and Environment Law, businesses are prohibited from setting up factories in national parks, protected areas, or along riverbanks. Practical suggestions include using GIS (Geographic Information System) to screen target plots for environmental assessments and ensure that the plot is not located in environmentally sensitive areas. For example, a multinational automotive parts company had to relocate after violating the 50-kilometer construction ban around the Red River Delta Nature Reserve, resulting in a one-year project delay.
• Prioritizing Industrial Parks with Established Environmental Facilities: Industrial zones in southern provinces like Binh Duong and northern provinces like Bac Ninh provide well-developed environmental facilities, such as centralized wastewater treatment plants and solid waste processing stations. Businesses located in these zones do not need to build their own environmental facilities, significantly reducing environmental costs. For instance, a foreign electronics company operating in Bac Ninh saved over USD 2 million annually on environmental infrastructure costs by using the zone’s wastewater treatment services.

4. Key Environmental Compliance Measures in Daily Production Operations

Once operations begin, the Vietnamese government will conduct regular environmental inspections to ensure that businesses comply with relevant regulations. The following are the critical compliance measures businesses must implement during daily production:

• Regular Environmental Monitoring and Reporting: According to the Environmental Monitoring Regulation, businesses are required to monitor pollution sources such as air, water, and soil quarterly and submit monitoring reports. It is advisable for businesses to hire qualified third-party environmental monitoring agencies to ensure the accuracy and legality of the data. For example, a Chinese food processing company monitors its wastewater discharge quarterly and submits monitoring reports, ensuring smooth passage during annual inspections by environmental authorities and avoiding fines or suspension.
• Pollutant Limit Control and Treatment: Vietnam has clear pollutant emission limits, and businesses must adhere to the emission limit standards specified in the Vietnam National Environmental Standards (QCVN). Depending on the industry, businesses must install appropriate air and wastewater treatment equipment. For example, electronics manufacturers are required to install gas purifiers, while chemical manufacturers must set up high-efficiency wastewater treatment systems. A foreign chemical company was fined 200 million VND for failing to upgrade its gas treatment equipment and exceeding emission limits, and it was given a deadline for rectification.

5. Case Study: Environmental Compliance Experience of a Multinational Textile Company

In 2018, a multinational textile company established a factory in southern Vietnam, primarily producing garment fabrics. During the early stages of the project, the company faced significant challenges with its EIA because the local environmental authority required a detailed wastewater treatment plan and proof that wastewater discharges met industrial wastewater discharge standards. To ensure compliance, the company took the following specific actions:

• Design and Installation of Wastewater Treatment Systems: The company hired a local environmental engineering firm in Vietnam to design a three-stage wastewater treatment system, which passed government environmental approval. This system processes 5,000 cubic meters of wastewater daily, with discharge quality meeting the standards set by QCVN 40:2011/BTNMT.
• Energy-Saving and Emission-Reduction Measures: The company installed a solar power generation system to supply part of the factory’s electricity, reducing reliance on coal and oil. This resulted in an annual reduction of approximately 500 tons of CO2 emissions, in line with Vietnam’s energy-saving and emission-reduction policies. The company also enjoyed income tax reduction benefits for its green project.
• Regular Environmental Monitoring and Compliance Reporting: The company contracted with a local third-party environmental monitoring firm to conduct monthly monitoring of wastewater and gas emissions to ensure compliance with environmental regulations. By submitting detailed quarterly reports, the company passed local environmental inspections for two consecutive years, avoiding potential fines and production suspensions.

This textile company’s compliance practices provide a practical reference for businesses looking to understand the steps and challenges involved in achieving environmental compliance in Vietnam.

Conclusion

Against the backdrop of Vietnam’s green development initiatives, businesses must carefully plan and implement environmental compliance measures across site selection, equipment investment, wastewater treatment, and energy-saving practices to ensure successful operations. By developing sound environmental plans and regularly monitoring and reporting, businesses can avoid penalties while gaining government support and incentives, thus achieving sustainable development.