For the past 5 years, there have been a growing number of private companies operating in the environmental services sector along with the former state monopoly companies. With simple input requirements, mainly professional human resources, the model of companies and centres with few employees, about 20, is becoming more common.
The main services of those companies include environmental impact assessments, commitment to environmental protection and environmental monitoring reports. The value of the contracts ranges from US$50 million to less than US$1 billion. A few have larger projects, with value up to VND5 billion, which are often related to research projects and large-scale assessment of hydropower, highway, subway, new mining (medium and small scale) or ODA projects.
Huge potential
Recently, the Ministry of Trade and Industry has announced the results of the survey in 20 provinces on the needs and development capacity of environmental services. Preliminary results showed that the market for environmental services in Vietnam has relatively large potential. Particularly, solid waste emissions are currently at about 30 million tonnes and the annual growth rate reaches about 7 percent. Estimated annual market demand for solid waste disposal areas is around VND2,340 billion. According to the World Bank, the recycling potential of industrial solid waste is very high, especially in many industries, the proportion of recyclable waste reaches over 80 percent. If each production factory recycled 50 percent of its own waste, each year VND54 billion would be saved. Other potentials in pollution prevention and control, technical supporting services, technology transfer consulting, and equipment, materials and environment-friendly product production are also very large.
According to the report released by the Ministry of Natural Resources and Environment, the inspection of industrial parks (IPs) in 2012 showed that the rate of IPs strictly observing the law on environmental protection is still low. Specifically, 20.51 percent of the IPs have yet to draw up environmental impact assessment (EIA) reports, or have not been approved by authority to make their EIA report. Although 28.26 percent of IPs has developed centralized sewage treatment system, up to 50 percent of of these release wastewater still violating standards or release more wastewater than permitted by national regulations.
2005 Environmental Protection Act has dedicated five articles (from Article 131 to Article 135) to imposing compensation for damages caused by pollution and environmental degradation. Nevertheless, in fact, there are just a few such cases pursued. Currently in Vietnam, there are no organizations with the capacity to carry out the assessment and evaluation of environmental damage.
It can be said that the problems mentioned above have shown that the sense of environmental protection in Vietnam is not very strong. However, this is also an opportunity for environmental service enterprises to develop.
In need of coherent policies
Although for the time being, Vietnam has made great progress in the environmental industry, this is still a newly-developed industry. Due to this, the capacity of units providing environmental services in Vietnam is still limited, experience and professionalism is low. Currently there is no policy framework and investment incentives, tax assistance and specific interest rates for businesses in this sector. Most businesses operate with their own capital, without bank or financial institution guarantees.
According to statistics of the Ministry of Natural Resources and Environment, there are 3,769 companies operating in the field of environmental services, licensed by local authorities in 46 provinces and cities. 96 enterprises licensed by the Ministry of Natural Resources and Environment are operating inter-regionally and in many different provinces, mainly in the field of collection, transportation and treatment of hazardous waste. The statistics showed that businesses which collect, transport and handle hazardous waste were established mainly in areas with highly developed service industries with a large amount of emissions of hazardous waste. In just Hanoi and Ho Chi Minh City, there are 2,283 environmental service enterprises operating, accounting for 60.57 percent of the total number of enterprises in the country.
Currently Vietnam has made a lot of changes in environmental decrees and policies, adding to the significance of the environmental service for the country’s development. However, to make this industry really grow, according to environmental experts, Vietnam should soon develop a system of appropriate policy mechanisms to increase the participation of businesses, people who will invest more in the field of environmental remediation. Besides, it is crucial to create a fair business environment between private and state-owned enterprises, domestic and foreign enterprises to participate in procurement projects providing technology and equipment for waste processing. The state should ensure the charging mechanisms and pay back to investors. This will significantly contribute to attracting private capital investment (without having to rely on ODA) in the field of technology and environmental treatment equipment. This is an opportunity to open up more potential contracts for the development of environmental consulting services, creating favourable conditions for environmental service businesses to grow in the coming years.
Do Ngoc
Vietnamese
