Vietnam Industrial Parks InfoGate ! Industrial Zones ! Export Processing Zones ! Business need to be consulted on legal policies

The Director of the Legal Department under the Ministry of Industry and Trade, Truong Quang Hoai Nam related that he sometimes is ‘confronted’ by his five brothers. They are owners of small private businesses. Nam said that at every family meeting, the brothers criticize legal documents promulgated by the ministry. “With your documents, everything gets mixed up,” the brother said.

“My brothers always criticize me. But when I ask them why they do not make suggestions at the time the legal documents are being established, they say that they have no time to do that,” Nam related. He added that because his brothers run small businesses, they have to do a lot of jobs – they negotiate with partners and fill the roles of owners, salesmen and cashiers as well.

Nam himself is always very busy, because he is the key official who oversees the drafting of many policy directives for one of the most powerful and influential ministries in Vietnam

The story Nam related turns out to be typical of the non-cooperation between the state agencies and the business community when directives and instructions are compiled. Government agencies promulgate policies which affect the affairs of many thousands of businesses, but they don’t think that they need to consult the businesses. Meanwhile, the businesses do not bother to make suggestions during the time that such documents are prepared. As a result, many documents prove to be unrealistic and ineffective.

A recent survey of 2500 businesses by the Central Institute of Economic Management (CIEM) showed that 80-90 percent do not have necessary knowledge about the investment, insurance, customs, and co-operative laws. “It turned out that they knew very little about laws and regulations,” said Dinh Van An, Director of CIEM.

The Director of the Legal Department of the Prime Minister’s Office, Pham Tuan Khai, criticized businesses: “They (businesses) need information, but they are afraid of the policy-making process. They are not open with us.”

Tran Huu Huynh, who heads the legal department at the Vietnam Chamber of Commerce, said that it is understandable why businesses do not make suggestions while directives are being drafted.

Huynh said that there are some 20,000 different government instructions covering the operation of businesses. “The documents, if piled up, will be taller than a man’s height. How can businessmen arrange enough time to read all the documents?” he asked.

VCCI has pointed out that only 9% of private businesses said local authorities consult with them about changes in the legal regime, while 63% said that they have to have ‘close relations’ with officials to get access to such documents at the provincial level.

Let’s return to Nam’s story. Nam says he really wishes to have discussions to find out the most suitable way for business management. However, businesses sometimes hesitate to voice their ideas. That explains why a lot of policies have undesired effects and are not applauded by the business community.