I.

Overview of VSIP Bac Ninh Industrial Park:

1.1 Legal framework:

The VSIP Industrial Park - Bac Ninh was established under the decision of the Prime Minister in
2007. With an area of 700ha, including 500ha of industrial park and 200ha of urban and service
area. This is a joint venture between Vietnam and Singapore and is built according to
international standards.

1.2 Location:

VSIP Bac Ninh Industrial Park is located in Bac Ninh province, an area adjacent to the northern
midland and mountainous region in Bac Giang province. Bac Ninh city is about 30 km northeast
of the capital Hanoi, with the following geographical positions:

Bac Ninh borders Hanoi to the west and southwest.

Bac Ninh borders Bac Giang province to the north.
Bac Ninh borders Hai Duong province to the east and southeast.
Bac Ninh borders Hung Yen province to the south.

=>The industrial park has a convenient geographical location because it is close to the economic
center of Vietnam, including the capital Hanoi and neighboring provinces such as Hai Duong
and Hung Yen. This creates favorable conditions for businesses in the industrial park to access
large markets and abundant labor resources.

1.3 Field of activity:

Investment in construction and business of industrial park infrastructure

Design, leveling, complete construction of technical works, infrastructure, facilities, public
utilities, standard factories, warehouses, yards, environmental assurance works , environment;
fire and explosion prevention for industrial parks built by the company, in order to:
For investors to rent land plots or ready-built factories in the area.
 Business in warehousing services for industrial parks.
 Business cleaning services in industrial zones.
 Provide investment services to project owners who will invest and operate in the area.
 Implement connection services and provide utilities for investors in the area.
 Participate in transporting goods within the industrial park and outside.

Investment in construction and business of commercial and residential projects

 Planning, construction management for sale and lease of commercial and residential
buildings invested by the company.
 Provide connection services and provide all utilities for commercial and residential
projects invested by the company.

II. Risk categorization:

2.1 Risk Categories:

Bac Ninh Industrial Park has a large scale of operation and makes an important contribution to
the economy and development of the region. However, like every other industrial park, it also
faces some risks. Here are some common risks in industrial zones:

 Financial Risk: refers to the potential for losses resulting from inadequate or failed
internal processes, systems, people, or external events

 Operational risk: refers to the possibility of loss in financial investments or transactions,

matters related to the financial position of the company.
  Human risk: refers to potential threats or uncertainties related to the management of a
company's workforce.

 Force majeure: Natural disasters, extreme weather conditions, terrorist act.

 Environmental risks: Environmental risk refers to the potential for negative impacts on
the natural world, ecosystems, and human health resulting from various activities and
events.
 Property risk: refers to the potential for damage, loss, or destruction of a physical asset.
 Legal risk: Legal risk refers to the potential for a company or individual to face legal
challenges or negative consequences due to their actions, decisions, or operations.
 Manufacture risks: Manufacturing is a complex process that involves multiple stages
and can be subject to various risks that may cause harm to employees, damage to
equipment, and financial losses to the company..
 Others risk: These risks include many different types of risks and are not included in the
risk categories above.

2.2 VSIP identified risks:

Financial Risk: Human Risk Operational risk Force majeure Legal Risk

 Foreign  Conflicts  Logistics  Earthqua  The

Direct and cost. ke paperwork
Investment fighting  Power  Flood for
(FDI)  Fraud and outage buying,
inflow into theft  Increased selling,
industrial  Confidenti wastewat and
park real al er investing
estate has informatio treatment is
stagnated. n leakage fees. complicat
 Difficulties  Strikes ed and
in internal demandin difficult
financial g higher  Land use
manageme wages and lease
 nt.  Health policy
 Bad debts. and safety  Not
 Inflation.  Labor paying
shortages taxes
 Managers

Manufacture Risk Property risk Others Risk Environmental risks

 Security Risks  Fire damage  Political  Water pollution

 Device  Infrastructur risk  Noise pollution
problem e  Reputation  Air pollution
 Quality risks  Equipment risk
(e.g. water- damage or
soaked loss due to
containers, technical
unusable failure
packaging, a
faulty
manufacturin
g process,
etc.)
 Supply chain
disruption

2.3 Risk Analyse:

Consequence

Frequency Insignificant Minor Moderate Major Severe

Almost certain Medium High High Extreme Extreme

Likely Medium Medium High Extreme Extreme

Possible Medium Medium High High Extreme

Unlikely Low Medium Medium High High

Rare Low Low Medium High High

 Severity: The amount of losses as a consequence of a risk

 Frequency: The probability of a risk to happen

Type of risk Pure Risk Risk Description Probability Consequence Level

Financial Risk - Foreign -Industrial park real

Direct estate has always
Investment attracted small and
(FDI) inflows medium foreign
have slowed enterprises, but FDI Moderate Major High
down. inflows into Vietnam,
- Bad debt. especially industrial
- Difficulties in parks such as VSIP,
internal have slowed down in
financial the context of global
management. economic instability.

Human Risk - Conflicts and -VSIP is a large

bullying industrial park, so
there will be a lot of
- Health and workers here, so there Likely Minor Medi
safety will be many problems um
such as conflicts of
 interest, or lack of
information and
communication.

-When workers work

in a large industrial
park, it is inevitable
that health and safety
problems in the
industrial park can
include work
accidents,
environmental
pollution, exposure to
hazardous chemicals,
and lack of personal
protective equipment

Operational - Logistics -Rising transportation

risk costs costs, supply
shortages, inventory
- Wastewater management
treatment cost problems, delivery Likely Major Extre
delays, and supply me
chain management
failures. This can lead
to increased operating
costs and reduced
production efficiency
of an industrial park

-The increase in
wastewater costs may
expose the VSIP
industrial park to the
costs of operating and
maintaining the
wastewater treatment
system, as well as
fines or penalties from
the authorities if the
discharge exceeds
allowable threshold.
This can lead to a
difficult financial
situation and affect the
 business performance
of the organization.

Force majeure -Earthquake -An earthquake in an

-Flood industrial park is the
possibility of an Rare Catastrophic High
earthquake that cannot
be predicted and
affects the operation
situation in an
industrial park. This
can cause severe
damage to
infrastructure,
property, and
disruption to
production and
business operations.

-In an industrial park,

flooding can cause
severe damage to
business infrastructure,
equipment, and assets.
This can lead to
production and
delivery disruptions,
loss of profits, and
potential data loss
risks.

Legal Risk - The -regulatory ambiguity,

paperwork for cumbersome and time-
buying, consuming procedures,
selling, and unpredictable changes
investing is in tax and regulatory Moderate Moderate High
complicated policies, as well as the
and difficult potential for legal
disputes due to a lack
- Tax Evasion of understanding
of regulations.

-Related to tax evasion

in industrial zones
includes being
 detected and
criminally handled for
violating tax laws.
This can lead to hefty
financial penalties or
even prison sentences,
depending on the
severity of the
violation. At the same
time, the image and
reputation of
individuals or
businesses can also be
seriously affected if
tax evasion is
disclosed and spread.

Manufacture - Security -Involves infiltration

Risk Risks through hackers or
malware, loss of
- Device important data,
problems cybersecurity Moderate Major High
incidents, and
- Product potential leakage of
quality critical product,
process, or technology
information turmeric.
This can lead to
damage to property,
reputation and the risk
of loss of
competitiveness in the
market.

-Equipment
breakdown in an
industrial park is a
situation that occurs
when one or more
production equipment
or machinery breaks
down, stops working,
causing interruption in
the production
process. This can lead
to reduced
 productivity, increased
downtime, waste, and
impact on product
quality.

Property Risk - Fire damage -risk of property

-Infrastructure damage caused by fire
or explosion. This
may result in damage
to facilities, Unlikely Major High
equipment, goods and
may affect the
surrounding
environment. At the
same time, risks
related to the safety of
employees and
residents in the area
are also an important
factor.

-When the
infrastructure is
degraded, it will lead
to unsecured and
damaged works
causing heavy losses.
In addition, the
infrastructure in
industrial zones is
degraded due to fire,
natural disasters such
as floods or
earthquakes.

Environmental -Water -Water pollution in

Risks pollution industrial parks can
include industrial
-Air pollution discharges containing
toxic chemicals into
water sources, Almost Major Extre
affecting human health certain me
and the natural
environment. This can
lead to deterioration of
 water quality,
affecting aquatic life
and surrounding land.

-Air pollution in
industrial parks is a
situation when harmful
substances such as
exhaust gasses, dust
particles and chemical
vapors are emitted
from production
activities in industrial
zones causing
pollution to the
surrounding air. This
can cause serious
health problems for
people such as
respiratory problems,
cardiovascular disease,
and increased risk of
chronic diseases. In
addition, air pollution
also affects the
environment, harming
plants and animals,
and causing climate
change problems.

Others Risk -Political risk -Political instability,

-Reputation changes in policies,
risk laws or regulations,
stagnation in
international relations,
and the impact of local Unlikely Major High
or global changes on
production and
business activities in
the region. industry.
This can cause
uncertainty about the
business and
investment climate,
influence business
decisions, and create
 space for
unpredictable changes.

-The occurrence of a
polluting environment
incident, a serious
occupational accident,
violation of safety
regulations, or non-
compliance with social
and ethical rules in
business operations.
These events can
seriously damage the
reputation of the
business in the
industrial park
community and the
business community as
a whole.

Likelihood Consequences

1 2 3 4 5

A S S H H H

B M S S H H

C L M S H H

D L L M S H

E L L M S S

Legend:
H High risk; detailed research and management planning required at senior levels
S Significant risk; senior management attention needed
M Moderate risk; management responsibility must be specified
L Low risk; manage by routine procedures
 II. Evaluating and Treating Potential Risks
Bac Ninh Industrial Park has a large scale of operation and makes an important contribution to
the economy and development of the region. However, like every other industrial park, it also
faces some risks. Here are some common risks in industrial zones.

Target
Risk TR
Gross
1=lowest
Risk GR
5=highe
1=lowest
st
5=highe
L:
st
Likeliho
L:
od
Likeliho Risk
Potential Risk Affecte I:
Risk od Treatm Risk Control
Risks Impact d Impact
I: ents
Impact
I:
Impact

G
T
R
R
L I L L I
L
x
xI
I
Financial - Foreign *The Firm 3 4 12 Control  FDI 2 3 6
Risk Direct impact of - Thanks to
Investmen these risks Staff financial
t (FDI) can be support from
inflows detrimenta Busines the government
have l to s profit to attract
slowed enterprises investment
down. in the capital.
- Bad industrial Including
debt. zone by concessional
- reducing loans, special
Difficultie profits, lines of credit,
s in capital, or or financial
internal market assistance
financial capitalizati through
managem on. investment
ent. funds.
 Bad
debt
 - Debt
restructuring,
debt collection,
training, and
consulting to
improve
financial
management
and reduce the
possibility of
bad debt of the
business.
 Internal
financial
managem
ent.
- VSIP solves
difficulties in
internal
financial
management by
optimizing
resource
management,
enhancing cost
control and
enhancing asset
utilization
efficiency.

- *The 4 2 8 Transfer  Conflict 2 2 4

Conflicts impact of Employ Control s and
and human ee bullyin
bullying risks in g
industrial - Educate
Human - Health zones can employees
Risk and safety be labor
accidents, - Create a
environme hotline for
ntal employees
pollution,
and health - Promote a
effects. Positive
Workplace
*Occupati Culture
 - Set strict
regulations on
employees
fighting and
bullying (fines,
deductions
onal
from salary,
accident
dismissal)
risks are
 Health
also an
and
essential
safety
issue in
industrial
- Medical
parks, as
clinic: MUST
production
HAVE in
and
company.
machinery
operations
- More wellness
can cause
programs:
serious
Trips, Fitness,
incidents.
Nutrition, Team
building,..

- Support to
pay health
insurance for
labor
- *Impact Partner 4 4 16 Control  Logistic 3 2 6
Logistics on ship Accept s costs
costs business: - Build strong
Operation Operation Produc partnerships
al risk - al risks in es with carriers
Wastewat the and suppliers to
er industrial Employ optimize supply
treatment park can ee chains.
cost also affect
the Factory - Invest in
business technology to
activities track and
in the area. manage
logistics more
accurately.
 Wastewate
r treatment
cost
 - Optimizing
water use:
Consider using
recycled to
reduce waste
water.

- Improve
wastewater
treatment
system

- Carry out
regular
monitoring and
maintenance of
the wastewater
system
- Train staff on
responding to
earthquakes
and floods in
*The
mastering
impact of
evacuation
natural
plans and safety
disasters
measures.
causes
Employ
damage to
ee - Build flood
facilities,
and earthquake
- property,
Propert resistant
Earthquak machinery
Force y Control infrastructure.
e , 1 5 5 1 3 3
majeure Accept
- Flood equipment
Product - Back up
, and
important data
supplies of
Equipm to avoid loss of
the
ent important
industrial
information.
park. Even
affects
- Develop an
human
emergency
life.
response plan

- Buy disaster
insurance
Legal - The*Legal Product 3 3 9 Control  The 2 3 6
Risk paperwor risks in the ion paperwork
k for
industrial for buying,
buying, zone that Busines selling, and
selling, can affect s investing is
and production complicate
investing and Partner d and
is business ship difficult
complicat activities
ed andin the - Cooperate
difficult region with
include appropriate
- Tax insecurity authorities to
Evasion in the simplify and
legal field, optimize the
quality buying and
standards, selling and
culture investment
and paperwork
business process.
ethics.
- Apply
*It will technology to
even cause transform the
disagreem paperwork and
ents and management of
disputes in purchasing and
the legal investment
field information
between into a digital
businesses form, saving
. time and
reducing errors.
 Tax
Evasion

- Strictly check
and collate
information to
avoid data
fraud

- Train
employees to
understand and
comply with
 regulations.

- Use
technology to
track and
automate
accounting and
tax processes
 Product
quality
*Productio - Regular
n risks can testing and
leak analysis
confidenti
al - Establish
informatio quality control
n about checkpoints
the Custom
industrial ers
- Security
park,  Device
Risks
seriously Product proble
affecting ion ms
Manufact - Device
production 3 4 12 Control - Periodically 3 3 9
ure Risk problems
. Product checks the
quality equipment.
- Product
*Or it can
quality
lose Busines
credibility s profit  Securit
with y Risks
customers - Building a
because of tight and multi-
poor layered security
product system
quality
- Back up
important data
 *The risk
of
property in
industrial
parks can  Fire
cause - Guidance
many signboards
negative emergency
effects exits.
such as
property - Fire drill,
damage, Evacuation
production plan
Propert
disruption,
y
- Fire occupation
- al safety, Transfer  Infrastr
Property Faciliti
Infrastruct and human 2 4 8 Control ucture 2 3 6
Risk es
ure health - Periodic
impacts. inspection and
Product
maintenance of
s
*In the
addition, infrastructure
these risks
can lead to - Build a
reduced backup system
enterprise for sudden
reliability, breakdowns
impact
brand, and
hinder
investment
and credit
access.
 - Water *Environ Employ 5 4 20 Control  Water 4 3 12
Pollution mental in ees' Pollutio
- Air industrial health n
Pollution parks can - VSIP Bac
affect People Ninh has taken
people's Local measures to
Environm health and treat
ental environme Plants wastewater,
Risks ntal risks, which is to
including build a
air, water, Detention
and noise Basin and an
pollution, incident lake.
land The treated
pollution, wastewater will
and harm be discharged
to living into the
organisms, Detention
posing Basin, and if
health the wastewater
hazards is not treated
and promptly, it
potential will be
injuries to discharged into
employees the incident
. lake.
- Invest in
waste gas
treatment
systems by
biological
process.
Includes
biological
oxidation
process or
microbial
exhaust gas
treatment
process to
remove
pollutants from
the air.
 Air
Pollutio
n
 - Set up a
separation
treatment
system. These
methods may
include
separation of
water, oil or
other chemicals
from the air.
*Controve
rsial
political
events or  Politica
scandals in l risk
the - Understand
political the regulations
field, and policies
businesses according to the
, or law of Vietnam
organizati
ons in the - Make a
industrial financial
- Political zone may contingency
risk also be plan to deal
Others - affected. with
2 4 8 Control 1 3 3
Risk Reputatio contingencies
n risk *Reputatio due to political
nal risks in upheaval.
an
industrial
park can  Reputat
also have ion risk
a major
impact on - Build a strong
industrial brand
park
attraction, - Follow social
investment media
, and
customer
retention.
Risk Matrix

Before After

*Note:

Low : Medium : High :

 The application of the Matrix helps businesses understand the company's operations,
develop directions, focus on areas for improvement or investment, minimize risks, and
optimize performance through risk assessment from the Matrix .Therefore, after
tabulating the two matrices for comparison, we can clearly see that the magnitude and
frequency of potential risks are significantly reduced.

III. Conclusion

After completing the full risk assessment process of the industrial park, VSIP has identified and
evaluated potential risks that could impact its business operations. As a result, VSIP has
implemented effective preventive measures and risk management strategies. The risk assessment
results, along with the pre- and post-treatment risk matrix tables, provide crucial information for
making business decisions and providing an overall perspective on the implementation of risk
monitoring and evaluation. This ensures the safety and sustainability of the company's operations
and enhances the effectiveness of VSIP's risk management.

IV. Overall review of what was learned during the vsip tour