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Collateral damage
By Son Nguyen
Thursday,  Aug 30, 2018,20:07 (GMT+7)

Collateral damage

By Son Nguyen

The cause looks noble when government agencies with the mandate to protect consumers have launched inspections into enterprises suspicious of wrongdoing. However, the unintended consequences of such inspections that are conducted with the participation of numerous media outlets, as claimed by inspectors, are extremely damaging to enterprises. The practice, repeated time and again, therefore, is simply unacceptable, according to local media in the soul-searching aftermath of the latest case involving the famous Kieu Giang restaurant chain.

Examples of devastating damage caused to enterprises are countless in the past years, but the recent recurrences pose numerous questions over the execution of official duties and integrity by State officials concerned. In the latest case of Kieu Giang Broken Rice Restaurant, inspectors are found not only to be reckless but also to show signs of violations.

The case began on August 22, when officials of the HCMC Food Safety Management Board launched an inspection into the restaurant located on Hanoi Highway in HCMC’s District 9. The inspectors found huge stacks of bags containing unknown substances without documents showing their names or origins, besides other minor problems like the presence of flies in the kitchen, workers wearing no protective gear as required, and the poor condition of the kitchen floor. Such findings made big headlines in the local media as “embedded” reporters accompanied the inspection team.

Days later, the restaurant owner submitted all documents proving the legal sources of materials and ingredients found in the restaurant. After scanning through the documents, according to Nguoi Lao Dong newspaper, the HCMC Food Safety Management Board accepted the papers and finally issued a decision on August 30 imposing a fine of VND2.3 million for minor shortcomings including the unsuitable protective gear used by a few employees in the restaurant, and the presence of flies in the kitchen.

Such a conclusion by the inspectors was a huge sigh of relief for the restaurant, but the Pandora’s box has already been opened. And the consequences are immeasurable and unbearable.

Nguyen Trung Phong, managing director of the Kieu Giang eatery chain, says on the website of Dien Dan Doanh Nghiep newspaper that the incident has caused the 28-year-old chain to lose up to one-third of its regular customers. “While the loss in revenue is tremendous, it is still less damaging than the loss of customer confidence in the chain,” he is quoted by the paper.

Given the final conclusion, previous stories published in many news outlets with such details as “meat soaked in strange additives” and “ingredients of unknown origin” have finally turned out to be untrue, according to Nguoi Lao Dong. The news site questions the origin of such details, and says such information either came from writers who were invited by inspectors to join the probe, or was given by the inspectors themselves.

Despite the damage suffered by the enterprise, the officials concerned show no signs of regret. Pham Khanh Phong Lan, head of the HCMC Food Safety Management Board, says in Phap Luat that the damage “is the price paid for Kieu Giang’s reputation.” The top food safety official of the city says she sympathizes with the restaurant upon its damage, but in a document sent to the enterprise ahead of the inspection, “the HCMC Food Safety Management Board stated that inspectors would look into hygienic conditions and the origin of food materials and ingredients. Therefore, the enterprise should have prepared all related documents,” she explains in the paper. Such an explanation fails to convince the public, however.

Nguoi Lao Dong questions the intention of the inspectors when inviting reporters to join them in the inspection, asking whether such inspectors might want to kill off the enterprise as well when having reporters joining them while performing their official duty.

The collateral damage is not limited to Kieu Giang alone. Late last month, a store chain named Con Cung also fell victim to an inspection by the HCMC Market Surveillance Agency, when hundreds of thousands of its fashion items were sealed due to suspicion over the legal origin. Numerous stores of the chain across the country were then inspected, with accusations that the chain is selling copycats bearing high-quality brands, including smuggled goods. The accusations brought the store chain’s business to a halt.

Similar to the case of Kieu Giang, the news spread quickly, and customers shunned the stores. However, the store chain owner one week later, on August 6, submitted all documents from 30 brands confirming that Con Cung is selling their genuine products. And days later, the Ministry of Industry and Trade also issued a decision clarifying that none of the grave accusations stand. The ministry also made a new decision grilling market surveillance officers involved in the case to determine whether or not any irregularities are committed.

The damage incurred by Con Cung is also unfathomable, according to Vietnamnet. Luu Anh Tien, CEO of Con Cung, says on the news site that apart from a sale plunge of 20%, the unbearable pain to the company also includes a seriously-tainted fame, and the damaged honor of the store chain’s workforce of 2,000 employees and their relatives among others.

Vietnamnet also refers to another similar case two years ago, when Binh Duong-based Vietfoods had a batch of its sausage products confiscated by Hanoi City’s Market Surveillance Agency for allegedly containing cancer-causing additives, which was later found to be wrong. The false accusation caused Vietfoods to lose VND100 billion in the following days, but the graver consequence is the company’s reputation being lost for good. Vietfoods was known as the fourth most popular sausage product on the local market, but after the scandal, its products have almost disappeared from all store shelves.

In all these cases, lawyers assert that State agencies have violated the law.

Tran Dinh Dung, a lawyer at the HCMC Legal Consultancy Center, says in Kinh Te & Do Thi that the Law on Food Safety requires inspectors to keep information confidential until the final results are released. Similarly, Lawyer Nguyen Van Duc of the HCMC Bar Association says in Nguoi Lao Dong that several laws, including the Order on Market Surveillance and the Law on Handling Administrative Violations, require State agencies to keep information secret in the inspection process until a formal conclusion is made.

Kieu Giang, Con Cung, Vietfoods and other similar cases should serve as a bitter lesson for all state agencies that have the right to inspect businesses, says Phap Luat. When performing their official duties to protect consumers, prudence must be exercised to minimize collateral damage for the society, and functional agencies with violations causing losses to enterprises should be held responsible and forced to compensate, according to the paper.

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