Vietnamese firms forced to pay protection fees to criminal gangs: commerce chamber

Businesses in Vietnam are being forced to pay local gangs protection money in order to continue operating undisturbed, according to a new survey conducted by the Vietnam Chamber of Commerce and Industry (VCCI).

Although just 3 percent of companies surveyed in the VCCI’s Provincial Competitive Index (PCI) report said they had to pay protection fees, the problem was an “outstanding concern” for the business community in 2017, the first year that the VCCI included the “security” factor in its report.

Dau Anh Tuan, head of the VCCI's Legal Department, said experts had asked the chamber to investigate the impacts of these gangland operations on local businesses, and what local authorities have done about it so far.

Among the 12,000 companies surveyed, including 10,200 private domestic firms and 1,800 foreign invested companies, 14.5 percent said their companies or workshops were broken into last year.

They lost $667 worth of assets on average, and in some cases the damage hit $22,000.

“For small companies, this loss makes up a considerable part of their annual revenue,” said the report.

The report also pointed out that businesses in the Mekong Delta were the most prone to theft, with Ca Mau, Bac Lieu, Soc Trang, An Giang, Kien Giang and Tien Giang the worst hit.

But most of those companies said they believed in the local police and said they had been very helpful.

In 2017, Quang Ninh climbed to the top of the PCI with 70.7 points, mainly thanks to strong administrative reforms. Only 6 percent of surveyed enterprises had to wait for more than a month to complete the required paper work to obtain licenses to start operations in the province.

Da Nang, which dominated the ranking from 2013 to 2016, came second with 70.1 points, followed by Dong Thap (68.8) and Long An (66.7).

Ho Chi Minh City (65.2) ranked eighth, while Hanoi (64.71) ranked 13th.