The business law system in Vietnam witnessed many notable developments in the first half of 2018. Many legal documents that impact business operations (food safety, gas trading, printing business, etc.) have been issued. A series of plans for reducing and simplifying business conditions performed by central authorities have produced positive impacts on the business environment.
Uneven inclusion of authorities and sectors
Dr Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry (VCCI), said, building business laws is one of the important objectives of the Government in action.
According to VCCI statistics, local authorities issue about 1,000 legal documents each year, of which above half are business laws. This evidences the importance of business laws in the legal system.
“VCCI statistics show that Vietnam has about 10 - 20 new laws each year in addition to 200 decrees, decisions and directives of the Government and a lot more from ministries,” said the VCCI President.
Looking back on the process of cutting down business conditions across ministries, he pointed out that the inclusion of ministries and sectors in this process is uneven. Some ministries are very active but some are not.
“Two years ago, in June 2016, VCCI hosted the first workshop on business conditions where many companies blamed that strict business conditions are squeezing SMEs. From that point on, VCCI, together with the business community and associations, has launched a number of initiatives to abolish these troublesome business conditions. With the spirit of reform, the Ministry of Industry and Trade obliterated a series of unreasonable business conditions to gain stronger trust of businesses. Many sent letters of gratitude to the Government after Decree 87/2018 replaced Decree 19/2016/ND-CP,” Dr Loc added.
Many ‘untying’ documents have been promulgated. Particularly, the Ministry of Industry and Trade has taken the lead, followed by the Ministry of Health with Decree 15 on food safety where more than 90 per cent of administrative procedures were got rid of, he noted.
In fact, policy latency is unavoidable but the true hindrance is the engagement of ministries and branches.
In the coming time, VCCI will conduct a review of business law every six months, Dr Loc said.
“A lot of new policies come out every year. Once enforced, policies will have a certain impact and they should be analysed and assessed to provide warnings and facilitate institutional reform. This is also an opportunity for us to see how community recommendations will be solved and accepted,” he said.
Going into essence
Mr Dau Anh Tuan, Director of Legal Department, VCCI, said, plenty of legal documents have been enacted in the first half of 2018 to tackle hardships against enterprises.
“To put it bluntly, the first six months of 2018 could be seen as a first step in “turning words into actions,” he added.
Actions may be direct attacks on barriers to business operations (business conditions), to specific products made by enterprises (standards, technical regulations), or to day-to-day business operations (autonomy, business freedom). These actions will help reduce State administrative burdens in many forms of administrative reform and may aim to boost fair, credible competition protected by justice through the transparency of judgments.
In the first half of 2018, the Ministry of Industry and Trade remarkably issued decrees on gas and rice business. Some regulations on product quality management have been issued to bring in the new breeze of inspirational reforms in a field that has a lot of long unsolved weaknesses.
Specifically, Decree 15/2018/ND-CP on food safety is really a revolution that is helpful for business operations of food companies struggling with food safety procedures and processes. Or Decree 74/2018/ND-CP on amendments to Decree 132/2008/ND-CP on detailed regulations on the Law on Product and Commodity Quality is also remarkable.
According to estimates by the European Chamber of Commerce in Vietnam, Decree 15 will reduce administrative costs by up to 90 per cent, save 10 million working days and VND3,700 billion a year for businesses.
Additionally, judicial reforms have make a credible business environment. In May and June, the judiciary sector issued two important legal documents to troubleshoot bad debts and execute bankruptcy decisions. Resolution 03/2018/NQ-HDTP and Joint Circular 07/2018/TTLT-BTP-VKSNDTC-TANDTC will clear the “clots of blood” of the economy for years because of no clear guidelines from policymakers.
However, in practice, abusing business conditions and imposing unnecessary or excessive risk control requirements is quite common. This leads to excessive impediment and interference, distorted market entry and competition while public interests remain unprotected. Unclear business conditions, depending on the subjective will of competent authorities, also create a place for harassment and corruption. Although reduction plans achieve the goal, numbers are just numbers when we look more deeply into details.
To review and adjust business conditions in substance, it is necessary to enhance consultations of the business community in law reviews, strengthen control mechanisms, unify viewpoints on law reviews and expand proposals in business law amendment schemes, said VCCI President Vu Tien Loc.
Quynh Anh
Vietnamese
