ESG Global Vision

Government-led Standard

In force

The Labour Law applies to all employers, registered and unregistered workers, Lao workers for foreign organisations, and foreign workers who are employed within Lao PDR.

Security and health at work

Article 117 of the Labour Law states that occupational health and safety is the responsibility of employers, employees and the government in order to ensure protection is provided against any workplace accidents, injury, and occupational disease.

Article 64 of the Labour Law requires health and safety regulations for employees to be set out in the internal regulations (which is a mandatory document that must be accepted by the employee representatives and the Lao PDR Labour Management Authority).

Article 119 of the Labour Law sets out the employer’s obligations which include ensuring workplace health and safety of the employees and maintaining the workplace in a manner that ensures good health of the employees. Article 119 of the Labour Law also encourages training to be given to employees on basic health and safety practices and appoints employees responsible for workplace health and safety.

Minimum wage

Article 105 of the Labour Law creates legally binding obligations for employers to pay at least a statutory minimum wage. At present, the Notification on Direction of Improvement of the Minimum Wage (№ 829/PMO, 13 June 2022) states that the minimum wage of employees in Lao PDR is LAK 1.3 million per month with effect from 1 May 2023.

Diversity at work

Articles 5 and 143 of the Labour Law promotes a workplace environment that avoids discrimination throughout the term of employment on the grounds of marital status, gender, or health conditions.

Government-led Standard

In force

The Environment Law applies to persons, legal entities and organizations including Lao citizens and foreigners, who are living and working in Lao PDR.

The Environment Law provides a set of principles, and measures related to environmental management, protection, preservation, and restoration with the purpose of protecting natural resources and public health as well as contributing to socio-economic development.

Principles

Article 6 of the Environment Law sets out the following principles for protecting the environment:

1. promoting socio-economic development along with sustainable protection of the environment;
2. rehabilitating the environment and tackling environmental damage on a priority basis;
3. actively engaging legal entities and individuals to assist with protecting the environment;
4. utilising natural resources, raw materials and energy in the most efficient manner to extract maximum benefit for the minimum environmental cost from the natural environment; and
5. managing any damage caused to the environment by commercial and industrial activities punishing and extracting damages from entities and persons responsible.

Measures

Part III of the Law sets out the following preventive measures for protecting the environment:

1. preventive measures against natural disasters through afforestation and canal and drainage construction to reduce and prevent impacts of climate change;
2. preventive measures for pollution control by only allowing the release of wastewater, burning of waste, garbage and toxic chemicals in designated areas; and
3. preventive measures against environmental emergencies by demarcating areas as environmental emergency zones and prohibiting any activities in such zones which may pose a danger to human and animal life, and the surrounding ecosystem.

The Law also provides for measures such as re-education, disciplinary sanctions, fines and penal measures to be imposed on entities and individuals depending on the degree of offence and the discretion of the environmental management authority.

Use of renewable energy

Article 24 of the Environment Law governs the use of clean energy for the operation of business activities and encourages entities and individuals to use clean power generated from renewable sources.

This section of the Law is largely redundant, given the Laos generates 90% of its energy through renewable sources.

Government-led Standard

In force

The Climate Decree applies to individuals, legal entities and organizations both local and foreign who live and perform activities in the Lao PDR.

The Climate Decree specifies the obligations and regulations regarding the management and monitoring of climate change for combating, suppressing, and reducing the risks associated with climate change.

Principles

The Climate Decree sets out the following principles and aims in order to manage climate change impacts and causes:

1. ensuring integration and coordination of relevant climate change management tasks at central and local levels;
2. ensuring that the implementation of protective measures against climate change and that the reduction of greenhouse gases is undertaken in an efficient and effective manner;
3. ensuring the smooth circulation of relevant information to the relevant stakeholders;
4. ensuring the collaboration and engagement of the relevant sectors of society and industry required to tackle climate change; and
5. ensuring compliance with all treaties and international conventions to which the Lao PDR is a signatory, in relation to climate change and other environmental issues.

Measures

Article 9 of the Decree mandates the creation of a comprehensive system for studying and addressing issues related to climate change to centralise information relating to climate change management tasks and chalk out sectorial responsibilities for society and industry.

Article 20 of the Decree allocates responsibility for dealing with the reduction of greenhouse gases between government ministries, and stipulates measures and powers for effecting change.

Chapter 7 of the Decree provides for setting up a climate change fund. The fund will be used to address priority climate change issues by framing strategic policies, plans, and legislation in relation to climate change forcings and to promote scientific research and technology to deal with the same.

The Fund will also be used to promote the use of technology designed to assist with the reduction of greenhouse gas emissions (such as carbon capture and other emerging technologies) and to update existing technical knowledge and skills within government and industry to target the causes of climate change in Laos.

Carbon Dioxide emissions

Article 5 of the Decree sets out multiple climate change measures which include the reduction of carbon dioxide emissions by developing and promoting the use of environmentally friendly technology, such as electric cars, wind power, and battery storage solutions.

The Climate Decree further states that the Ministry of Agriculture and Forestry, the Ministry of Public Works and Transport, and the Ministry of Industry and Commerce should promote the development and use of renewable sources of energy as well as the application of environmentally friendly technologies to lower greenhouse gas emissions.

Government-led Standard

In force

The Pollution Control Decision applies to all natural persons, businesses, and organizations that operate or reside in the Lao PDR.

The Pollution Control Decision sets out measures to limit, monitor and control pollution to reduce and limit the effects of pollution and measures for identifying areas that pose a risk to health and safety in the Lao PDR.

Use of renewable enery

Article 9.b(2) of the Pollution Control Decision sets out guidelines and regulations to reduce firewood consumption, and provide other sources of heating from renewable sources instead. This article is aimed at cutting air pollution in the country.

Carbon Dioxide emissions

Article 9 of the Pollution Control Decision further outlines measures for reducing air pollution, including a requirement that gasoline and coal are burned using environmentally friendly technologies to reduce particulate matter emissions to reduce any negative impact on the environment and public health.

Waste management

Article 11 of the Pollution Control Decision requires that waste disposal must take place in designated sites in compliance with technical standards in order to implement soil pollution control measures. Following the closure of such waste disposal sites, the site’s soil quality should be assessed, and if required restored, in accordance with an environmental management and monitoring plan approved by MoNRE.

Government-led Standard

In force

The Chemical Law applies to both domestic and foreign persons, businesses, and organizations engaged in the business of chemical operations in Lao PDR.

Use of chemicals

The Law sets out the principles, regulations, and measures related to the management, monitoring, and regulation of the use of chemicals, to ensure that the use of chemicals by companies and businesses is in accordance with sound environmental and pollution principles. This includes the discharge of chemicals, and limiting harmful by-products of chemical production and use. 

Government-led Standard

In force

The EIA Decree applies to the public sector and private sector, domestic and foreign individuals, legal entities and organizations which undertake investment projects and activities in Lao PDR.

The EIA Decree regulates environmental impact assessments by public bodies to ensure that assessment activities are undertaken efficiently and effectively and thereby reduce and rectify environmental and social impacts arising from the improper use of various resources.

Sustainability standards and certification

Article 44 of the EIA Decree requires new projects, major buildings and various other potentially harmful investments to apply for environmental certificates before proceedings. These require the project to have undertaken a detailed environmental impact assessment report together with having environmental management and monitoring plans in place before being granted.