Apple and Dell shifting supply chains to Vietnam opens huge opportunities for local firms — bundled with strict supplier codes of conduct and audits where a breach can kill a contract overnight. Distinguishing legal duties from contractual ones is the key to preparing correctly.
Code of conduct and audits: contractual, not statutory
First principle: the Supplier Code of Conduct of Apple or Dell is a private contractual requirement, not Vietnamese legislation. But once a supply contract incorporates it, it becomes an enforceable contractual duty — serious breaches (child labour, falsified audit records) can trigger immediate termination.
Audits typically cover: working hours (Apple’s 60-hour weekly cap — stricter than Vietnamese law allows), minimum working age, occupational safety, environmental protection and conflict minerals. Run an internal self-audit before the official audit team arrives.
Supply contracts: the clauses that matter
Contracts with US tech giants are usually framework agreements governed by Vietnam’s Commercial Law 36/2005/QH11 (if Vietnamese law is chosen) or another law the parties agree. Negotiate hard on:
- Quality and penalties: AQL standards, inspection mechanics, late-delivery penalties and damages — penalty levels in tech supply chains run very high.
- Pricing: adjustment mechanics for material and FX swings; avoid long fixed-price deals with no escalation clause.
- Termination: big buyers often reserve termination for convenience on short notice — model the payback point of your line investment accordingly.
- Governing law and arbitration: push for arbitration (VIAC/SIAC) over foreign courts.
Trade secrets and intellectual property
Manufacturing for Apple or Dell means handling drawings, processes and core technologies — trade secrets protected under Vietnam’s IP Law (2022 amendments) and the Competition Law 2018 (Article 45 on trade secrets). The legal duty: never disclose or misappropriate trade secrets in any form.
Practical shields: NDAs with every employee touching confidential information; tiered system access; non-compete clauses for key staff (within labour-law limits); register trademarks and designs for your own products so your brand is not swallowed in the OEM relationship.
Losing the contract: prevention
- Failed audits: build an internal compliance function with an independent owner and periodic self-assessments against the buyer’s checklist.
- Single-customer dependence: keep one buyer below 50–60% of revenue; diversify for bargaining power.
- US trade-policy swings: tariffs and USMCA origin rules can reroute orders — monitor policy and keep capacity flexible.
- Payment disputes: fix payment terms, late interest and the right to suspend delivery in the contract.
Frequently asked questions
Is Apple’s Supplier Code of Conduct Vietnamese law?
No. It is Apple’s private contractual requirement; but once accepted in a supply contract it becomes an enforceable duty — serious breaches can end the contract.
How does Apple’s working-hours standard differ from Vietnamese law?
Apple caps at 60 hours per week (including overtime) with mandatory rest days — stricter than the maximum overtime frame under Vietnam’s Labour Code 2019. Suppliers must meet the contractual standard, not just the legal one.
How are trade secrets protected when manufacturing for a tech giant?
Under the IP Law (2022 amendments) and Competition Law 2018 (Article 45), trade secrets may not be disclosed or misappropriated. In practice: staff NDAs, tiered access and non-competes within legal limits.
Where should disputes with a US tech buyer be resolved?
Negotiate an arbitration clause (VIAC, SIAC or ICC) and governing law in the framework agreement — avoid defaulting to foreign courts when disputes arise.
Contact FLAT Law Firm
FLAT Law Firm walks with Vietnamese suppliers in global tech supply chains: reviewing codes of conduct, negotiating framework agreements, NDAs and trade-secret protection. Contact us before signing with a major buyer.
This article has been quality-reviewed by the FLAW AI Legal Council