* Detailed mineral regulations crucial for sustainable mining: Experts have recently expressed their concern about low efficiency and environmental impacts of the mining industry as well as mineral waste and smuggling, attributing them primarily to poor exploration and mining planning and especially abundant unspecific regulations which fail to properly regulate the booming growth of the industry.
At a consultation conference of mining managers, scientists and law experts held early this month by the National Assembly’s Science, Technology and Environment Committee, participants urged the prompt issuance of legal documents guiding the 2010 amended Mineral Law, which took effect on July 1, 2011, as well as some directly relevant laws (including the Petroleum Law and Water Resources Law) particularly to provide consistent legal grounds for rational, economical and efficient mineral protection, management, mining, processing and use; mineral ownership, pricing and taxation; and transparent finance in the mining industry.
Nguyen Khac Vinh, chairman of the Vietnam Union of Geological Sciences, said the country should adopt a uniform strategy for rational and economic use of all mineral resources, aiming not only to protect the environment but also to assure sustainable development of the mining industry and social security; strictly control the mining licensing and limit and eventually stop the mining and export of rare and highly valuable minerals.
According to Vietnam Investment Review, the implementation of mineral mining policies and laws combined with environmental protection regulations is already included in the National Assembly Standing Committee’s 2012 supervision program.
Regarding financial transparency in the mining industry, experts from the Vietnam Chamber of Industry and Commerce and the Consultancy on Development Institute proposed adoption of a roadmap for joining as soon as possible the Extractive Industries Transparency Initiative (EITI), which introduces a set of global standards on transparency of revenues from the mining industry, and set up a national EITI committee composed of representatives of relevant ministries.
* Industrial park licensing to be halted: The Prime Minister has recently instructed local authorities nationwide to suspend the formation of new industrial parks, export processing zones and economic zones, in an effort to improve the management and efficiency of operating ones.
He assigned the Ministry of Planning and Investment to coordinate with related ministries, sectors and localities in assessing the planning, establishment and operation of these parks and zones, then proposing drastic measures to handle ineffectively operating or pulluting enterprises in these parks and zones. The Ministry would also revise industrial park, export processing zone and economic zone development plans through 2020 and submit revised plans to the Government in the fourth quarter.
Ineffective or slow-moving projects should find new sources of capital to develop their infrastructure facilities and lure investors in key sectors.
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However, the country’s legal framework, which has been developed to meet the WTO commitments and realize the service market opening roadmap and is considered fairly comprehensive, remains not effective enough to create a fair environment for service providers. According to logistics specialists, the sector also needs policies to “nurture” fledging logistics activities as well as material supports from all relevant authorities and unified management to improve the quality of strategic forecasts, transport infrastructure planning and investment, and commercial, import-export and customs regulations.
Many domestic experts suggested forming a government specialized body in charge of logistics development, like a “national committee for logistics”, as a coordinator to assist and advise the Government on a national strategy for logistics development in line with national socio-economic development strategies.
VIFFAS Chairman Do Xuan Quang suggested on Vietnam Economic Times replacement or comprehensive revision of Decree No. 140/2007/ND-CP, which details the Commercial Law on logistics service provision conditions and limit liability of logistics service providers, and formulation of a national program on development of human resources for logistics, including state management officials and logistics business managers.
* Big stride in transfer pricing combat: Deputy Prime Minister Hoang Trung Hai has recently assigned the Ministry of Finance to formulate a general action program and annual plans to control more effectively transfer pricing in foreign investment in
The general action program would set forth objectives and contents of legal system improvement, propose penalties and provide specific guidance on transfer pricing combat, training of human resources and hiring of foreign consultants to deal with this problem in conformity with international practice.
This move follows the Scheme against transfer pricing in foreign investment in
The General Department of Taxation has also officially announced that the country is planning to apply the mechanism of advance pricing agreement (APA) based on market prices between tax agencies and businesses in order to fight frauds in transfer pricing. Under this mechanism, transnational corporations are required to take the initiative in proposing pricing methods or recommend prices when their member units make transactions with one another before making tax declarations. Vietnamese tax agencies, in coordination with their counterparts in countries with double taxation avoidance agreements with
The Ministry of Planning and Investment also recommended the inclusion of the APA mechanism in the Tax Administration Law and relevant regulations on inspection of machinery and equipment, wage payment, advertising expenses and sales of these businesses.
* What settlement mechanism appropriate to international investment disputes in the country? Where can foreign investors resort to when they found themselves in disputes with the State of the host country, especially when such type of dispute is on the rise? According to Nguyen Minh Hang from the
Since these disputes usually arise from investment agreements between institutional foreign investors and the State of the host country, investors would suffer greater damage because the State usually enjoys the national immunity for its assets and can use this immunity at any court. And even though it loses a case, it may still be immune from enforcement measures.
Legal experts suggested a possibility for foreign investors to survive disputes with the State of the host country by invoking the WTO’s fair and equal treatment (FET) principle, especially when they can prove the State’s motive in discriminating or maltreating them based on their nationalities, or by filing lawsuits against the State, especially when the State is bound to investment agreements involving obligations toward investors, before international arbitrations.
The ASEAN member states have concluded many bilateral investment protection agreements and there have been several cases in which foreign investors filed lawsuits against these states.
As suggested by Nguyen Minh Hang on Vietnam Investment Review, Vietnam should consider legalizing the mechanism of investment dispute settlement through the International Center for Settlement of Investment Disputes, established under the 1965 Washington Convention, and incorporate it in the 2005 Investment Law, which currently provides that disputes between foreign investors and the Vietnamese State will be settled through Vietnamese arbitrations or courts, unless otherwise agreed.
* Securities authority to raise listing standards, merge bourses: The State Securities Commission (SSC) recently announced that new regulations on listing standards based on higher profitability and corporate governance criteria would be issued in the first half of this year and take effect immediately. This would pave the way for large-sized and profitable public companies to float shares on the bourses and prevent bad stocks from being listed.
According to Vietnam News, the minimum charter capital of public companies to list on the Ho Chi Minh City Stock Exchange would increase to VND 120 billion from current 80 billion, while the requirement for Hanoi Stock Exchange would be tripled to 30 billion.
Earlier this month, the SSC held a conference to announce stock market development goals, following the Prime Minister’s request for close coordination among the Ministry of Finance, the Ministry of Planning and Investment and the State Bank of Vietnam in working out a plan to establish a secondary market for derivative products, such as global depository certificates, and a bond market in the second quarter of this year.
According to Finance Minister Vuong Dinh Hue, the stock market restructuring this year would focus on commodities (products), investor structure, securities companies, and the system of stock exchanges and the
Securities firms would be allowed to open an account at a commercial bank for each investor or investors themselves may open accounts in banks designated by brokerages. In April, brokerages themselves would be divided into three groups categorized as “normal”, “under control” and “under special control.”
At the conference, SSC chairman Vu Bang said a plan on merger of the country’s two stock exchanges would be submitted to the Government in the third quarter.-