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Study of different strategies and approaches followed by footwear companies in vietnam to comply with reach regulation
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Advisor(s)
Abstract(s)
The European Registration, Evaluation, Authorization and Restriction of Chemical (REACH) is
the world’s most ambitious initiative governing the use of chemicals not only on their own but in
mixtures or articles. REACH assures the supply of safe products that do not present any hazards
to end users or if there is a hazard, it must be communicated properly along with risk
management plans.
Theoretically, REACH compliance is only mandatory for European companies. In fact, REACH
could influence company’s activities beyond its border through economic interdependence.
Outsourced manufacturing is a good example as European buyers play an important role on
fostering REACH application in other countries.
By taking advantages of low labor cost and favorable tariff reduction from Free Trade
Agreements (FTAs) which Vietnam has signed with Europe, Vietnam becomes an attractive
outsourcing destination of many European footwear buyers. Since “made in China” is no longer
cheap, it could be foreseen that Europeans would soon move their manufacturing to Vietnam
which is now maintaining the second position after China. However, there is a risk that Vietnam
loses its opportunity due to REACH compliance issues. REACH compliance is not easy and it is
much more challenging in developing countries, where gaps in technologies and stringency of
standards each country applies are encountered.
The objective of this thesis has been to assess the difficulties felt by Vietnamese companies, in
particular footwear companies, when faced with the requirements of REACH regulations. To
address the compliance situation in Vietnam, an online survey was developed and disseminated
to Vietnam footwear suppliers with the support of Vietnam Leather, Footwear and Handbag
Association (LEFASO) and Decathlon (a European brand having its manufacturing in Vietnam).
The survey has sets of questions that allow the researcher to assess Vietnam footwear supplier’s
awareness of REACH regulation, particularly, Substances of Very High Concern (SVHCs)
communication obligations and Restricted Substances (RS) management. The survey also digs
into difficulties Vietnam footwear suppliers are facing as well as solutions they are applying to
overcome these difficulties.
None of LEFASO’s company member participated in the survey. Out of suppliers of Decathlon in Vietnam, only 13 companies responded. The results of the study are largely based on these answers. Data from the survey reveals that almost all of the suppliers are familiar with the
REACH regulation and aligning REACH requirements to their operations. Major concerns
identified by suppliers when trying to comply with REACH regulation are costs of testing
products against chemical lists, lack of knowledge of where regulated chemicals are introduced
to the supply chain and frequent addition of new chemicals in the regulated list. These issues
would be resolved if information of chemical compositions of materials supplied to the industry
is made available. Although suppliers are coming up with individual processes to improve
information flow throughout their supply chain, there are still shortcomings which would
become another problem in the future. In the light of that, an approach proposed by the
researcher is also discussed in the study to tackle both current and foreseeable problems
Description
Keywords
REACH regulation Compliance Vietnam Footwear