Cutting business conditions: "removing old, adding new"

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Enterprises always hope to have an open and more favourable business environment. Photo: H. Diu

"Quiet"

According to the report on "Flow of business legal regulations 2019" released by the Vietnam Chamber of Commerce and Industry (VCCI), since 2016, the list of conditional business lines has been reviewed, amended and supplemented. As a result, 12 occupations have been abolished, 19 occupations have been revised and six industries have been added. This is an important advance in promoting business freedom.

However, compared to previous years, cutting and simplifying business conditions were "quiet" in 2019. Dau Anh Tuan, Director General of the Legal Department of VCCI, said as of mid-November 2019, the VCCI had received only two suggestions from two ministries on the draft decree amending and supplementing decrees relating to business investment conditions in fields managed by the ministry, which were the Ministry of Industry and Trade and the Ministry of Health. According to a report of the Ministry of Planning and Investment sent to the Prime Minister on June 27, 2019 on evaluating the abolition and simplification of regulations on business conditions and the actual impact on enterprises, the Ministry of Planning and Investment knew two ministries (the Ministry of Industry and Trade and the Ministry of Agriculture and Rural Development) had plans to abolish and simplify business conditions under Resolution 02 in 2019.

However, for ministries that announced the reduction, VCCI said several provisions amending business conditions in the draft were still in place. Some provisions were amended or abolished but did not change their nature of the regulations, or some were amended but not thoroughly. Typically, the draft decree amending and supplementing gas business conditions in Decree 87/2018/ND-CP has some unreasonable conditions that are still retained, such as the condition that requires traders to have a lease contract of facilities with minimum lease term (traders exporting and importing gas with wharves or having at least a five-year lease contract on wharves of Vietnam's port system that have been authorised for use by the competent authority; and gas production and processing traders who have gas quality laboratories or have at least a one-year lease contract of traders and organisations with laboratories capable of testing criteria under provisions of national standards). The minimum term requirement of the lease is unreasonable, interfering with rights of the parties to the agreement.

Long journey

Cutting business conditions is always an "earnest" desire of the business community because this gives businesses a more convenient and easy production and business environment. However, due to objective and subjective reasons, as well as potential benefits, reducing business conditions for enterprises has not yet been fully realised. Many businesses said there were many unreasonable business conditions that still exist, leading the situation of "leaving old, adding new", enterprises faced more difficulties with revised business conditions.

According to lawyer Truong Thanh Duc, Chairman of the Members’ Council of BASICO Law Firm, it is necessary to have a strong and thorough solution instead of cutting and discussing investment and business conditions. For example, to protect freedom to conduct business, citizens and businesses should be allowed to initiate lawsuits to remove illegal provisions and re-establish voting activities for the 10 worst regulations annually. To eliminate conditions for legal representatives, the regulation on legal representatives (up to now heads of enterprises) should be removed, instead of the legal representation mechanism. This would avoid the requirement that the president and director who is the legal representative must have qualifications and certificates. Otherwise, the conflict and confusion between management and career, trade and expertise could not be solved.

In fact, the reduction of business conditions is being implemented by ministries and branches in a shortened order, so affected subjects may not be aware of the policy. Therefore, the aforementioned issues show reforming, reducing and simplifying business conditions is a long journey and would have to be done well and regularly. The business community has always expected the efforts of regulatory agencies will be towards a favourable and open business environment. However, experts said enterprises must speak up, because the involvement of businesses in this process would ensure the feasibility and consensus of policies.