FIEs frustrated with new abode rules
FIEs frustrated with new abode rules
Many foreign-invested enterprises are continuing to struggle with arranging accommodation for expat workers due to a decree released last year on prescribing the management of industrial and economic zones.
Manufacturers in the southern province of Dong Nai have reflected that since Decree No.35/2022/ND-CP came into effect in July last year, they remain confused about implementing the regulations regarding accommodation for foreign workers.
Many factories currently have dorms on their campus for their workers. However, the new regulation in Decree 35 asks workers of entire enterprises to live in a concentrated accommodation area within the industrial zones (IZs). In other words, according to the new rules, IZ developers have to arrange particular land in the complex for enterprises to build dorms for their expats, instead of them living in dorms on factories’ campuses.
A Dong Nai representative of the Korean Chamber of Commerce and Industry in Vietnam, said at a February meeting that Korean expats often want to live in areas that have international schools to be favourable for their children, such as District 7 or Thu Duc in Ho Chi Minh City.
“The distance to their factories is far and the traffic is frustrating, and factories often operate all day and night, thus expats have to stay at the factories to resolve technical troubles,” Whan said.
Before the introduction of Decree 35, expats would often take their downtime in private rooms at hotels near manufacturing areas, or in office buildings at the factories.
“But Decree 35 requires expats to stay in concentrated abodes in IZs, but we have no such facilities in Dong Nai. As a result, enterprises are forced to book hotel rooms for them, which come at a large cost,” he said. Whan has asked the authorities to build concentrated lodgings for foreign workers as soon as possible.
A representative of Samil Vina Co., Ltd., in Long Thanh IZ said that Article 25 of Decree 35 regulates that accommodation establishments must be built on the area of land intended for services of IZs. They must ensure conformance to environmentally safe distance requirements set out in the Law on Construction and other relevant regulatory provisions; and ensure conformance to social security requirements and no adverse impacts on production and business activities inside the perimeter of IZs.
“The company currently has dorms for expats on the company’s campus. However, because the decree does not allow enterprises to use such accommodation, we had to contact the operating unit of Long Thanh IZ to study land plots to hire or to build dorms – but they say that the land for this has run out,” the representative said.
Responding to opinions, Dong Nai Industrial Zones Management Authority acknowledged that current IZs do not have sufficient accommodation built for this purpose. Manufacturers are often proactive in arranging resting places for overseas workers near the manufacturing area of factories and office building areas. Thus, they cannot now comply with the regulations about accommodation as laid out in Decree 35.
Dong Nai is collecting corporate opinions to report to its people’s committee to allow businesses to maintain accommodation at factories for at least the next few months, with the hope a solution can be found.
The same situation is being felt at many other IZs, such as in Haiphong and Nam Dinh in the north of the country.
A representative of Nam Dinh Industrial Zones Management Authority said many large-scale enterprises also built housing for their foreign workers. At present, the local authority is asking these enterprises to restructure their accommodation area for business purposes. At the same time, it is working with the provincial leadership to adjust planning, so that land planned for accommodation can be turned into industrial service land, thus enterprises can maintain accommodation for their foreign workers.
Responding to enterprises’ concern, Tran Quoc Trung, deputy director-general of the Economic Zones Management Department under the Ministry of Planning and Investment, said that Decree 35 allows enterprises to build housing for foreign workers at land areas planned to be service land area of IZs. If enterprises built housing areas before the decree came into effect, they are still allowed to maintain their buildings.
