Administrate Paperwork Needs Cutting Out of At Least 30%

“Administrative procedure remains superfluous and uncorrelated to regional countries. Thus, this time’s reform of administrative procedures will help trim 30 per cent of investment formalities,” said Dr. Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry (VCCI), said at a mid-term conference on administrative reform recently held in Hanoi by VCCI and foreign business associations in Vietnam.

 

Mr Hong Sun, General Secretary of Korea Chamber of Commerce (Korcham) and the President of HS Construction and Development Co., Ltd, said: “After Ha Tay province was merged with Hanoi, a new regulation on land price, compensation cost and site clearance has led the company’s project to a deadlock. “Because compensation costs for land have increased between five and seven times, South Korean companies are very worried and do not know how to react,” he complained.

This is one of more than 900 similar projects in the capital city of Hanoi which are clearing and compensating the land involving more than 192,000 households, organisations and individuals.

 

In addition to computable economic losses, the time for business operations is also wasted, resulting in the loss of business opportunities.

 

Mr Choi Hyung Joon, another member of Korcham, said: “At present, no investor can give an exact answer to the time of customs clearance in Vietnam and it usually takes many days to complete customs procedures. This certainly causes negative impacts on production plans.”

 

Also according to Mr Hong Sun, the current tax structure in Vietnam does not encourage the production of complete products. “In Vietnam, the import duties on finished products are much lower than on parts for domestic production. For instance, the import tariff on a bottle of water may be lower than an empty bottle. This will not encourage enterprises to produce goods in Vietnam,” he emphasised.

 

With respect to current legal documents, Mr Hiroaki Yashiro, President of the Japan Business Association in Vietnam (JBAV), said: “Presently, in Vietnam, legal documents on business are commonly provided in instructive circulars while in the world the most important contents are written on the laws or decrees. “This is a deterrent to enterprises when they approach new regulations,” added Mr Hiroaki Yashiro. Therefore, according to Mr Hiroaki Yashiro, Japanese businesses want Vietnam to have a transparent legal framework and enactment regime, a sufficient and more observed law system.

 

A representative of the France Chamber of Commerce said several French companies have entered Vietnam to seek business opportunities for 15 years but they now have intentions to shift their presence to Morocco because this country has more competitive business environment than Vietnam.

 

Mr Alain Cany, Chairman of the European Chamber of Commerce (Eurocham), said: “Ineffective administrative procedure may cost Vietnam 20-30 per cent of additional costs. “If this problem is resolved, it will save a lot of money for Vietnam while improving the competitiveness of Vietnam,” Mr Alain recommended.

 

VCCI President Vu Tien Loc said: “The objective of the Government in the administrative procedure reform in State apparatus from 2007 to 2010, which is commonly known as Project 30, is to build the most attractive business environment in the region. “Therefore, the administrative procedure reform will not be stopped after the second phase of this project,” Mr Loc affirmed.

 

According to Mr Ngo Hai Phan, Deputy Head of the Working Group on Administration Reform of the Government, Project 30 has been completed halfway. The work group has totalled more than 5,700 administration procedures at four tiers of administration throughout the country, nearly 9,000 legal documents stipulating the administration procedures and more than 100,000 forms. So far, 24 ministries and 63 provinces/cities have announced their administrative procedures within their authorities. “The government plans to announce the national database on administrative procedures on the internet in mid-October 2009,” added Mr Phan.

 

Mr Phan said that Project 30 has stepped into the second phase - examining the administration procedure to make amendments to the nature of administration formalities by streamlining regulations on administrative procedures, based on such criteria as necessity, rationality and legality. To ensure effective examination, the Prime Minister has assigned ministries, branches and localities to streamline at least 30 per cent of current regulations on administrative reform by getting rid of unnecessary, irrational and illegal regulations.

 

According to the schedule, Project 30 will send packages of proposals to the Government. The first package including 261 administrative procedures will be completed in October 2009 and submitted to the Government in December 2009. The second package will be completed in February 2010 and sent to the Government in May 2010. Enterprises can take part in the checking of administrative procedures through workgroups of The Advisory Council on Administration Reform, which includes representatives of Amcham, Eurocham and Kotra or the website www.thutuchanhchinh.vn. .