Decision No. 929/QD-TTg dated July 17, 2012 of the Prime Minister on approval of scheme "Restructuring of State-owned enterprises, focusing on economic groups and State-owned corporations period 2011 - 2015"

THE PRIME MINISTER

Decision No. 929/QD-TTg dated July 17, 2012 of the Prime Minister on approval of scheme "Restructuring of State-owned enterprises, focusing on economic groups and State-owned corporations period 2011 - 2015"

Pursuant to the Law on Organization of the Government dated December 12, 2001;

Pursuant to the Resolution of the 3rd Congress of the XI^thParty Central Committee;

Pursuant to the Government’s Resolution No. 94/NQ-CP dated September 27, 2011 on the Government s regular session in September 2011; Resolution No. 01/NQ-CP dated January 03, 2012 of the Government on the key measures in directing the implementation of the plan of socio-economic development and the state budget estimate in 2012; The Government’s Resolution No. 12/NQ-CP dated May 09, 2012 of the on Government s regular session in April 2012;

At the proposal of the Minister of Finance and Head of theSteering CommitteeforInnovationandEnterprise Development,

DECIDES:

Article 1. Approving scheme "Restructuring of State enterprises, focusing on economic groups and State-owned corporations period 2011 - 2015" with the following contents:

I. OBJECTIVES

Restructuring of state enterprises, focusing on economic groups and state-owned corporations in order to achieve the following objectives:

- State-owned enterprises have a more reasonable structure, concentrating on key sectors and areas, providing products, essential public services for society, security and national defense, being the hub for the state economy to perform the leading role and the important material force for the State to orient and regulate the economy and stabilize the macro-economic.

- Improving competitiveness, the rate of return on equity for enterprises; completing the task of production and providing products, essential public services for society, security and national defense for public utility enterprises.

II. TASKS

1. Classifying enterprises with 100% state capital in the following groups:

a)Group 1: State-owned enterprise holding 100% charter capital in State exclusive areas, security and national defense; publication; irrigation; ensuring traffic safety; lottery; power production and distribution with multi-purpose large scale having special significance on society and economy attached to national defense and security; managing and operating the urban and national rail infrastructure system; airports; sea ports of type I; printing and minting money.

b) Group 2: Equitized enterprises whose charter capital is held over 50% by the State operate in sectors as stipulated in Decision No. 14/2011/QD-TTg dated March 4, 2011 of the Prime Minister Government on promulgating criteria, classification list of state-owned enterprises specifically as follows:

- The State holds over 75% charter capital upon equitization of economic groups, corporations, large size state-owned enterprises operating in the areas of mining and processing of natural resources and minerals and supply of communication network infrastructure

- The State holds from 65% to 75% charter capital upon equitization of large size enterprises operating in area of basic chemical production, chemical fertilizer, wholesaling of foodstuff, preventive and curative medicine, pharmaceuticals; finance, credit, insurance, water supply and drainage, environmental hygiene and lighting in large urban centers; production and storage of plant and animal varieties, production of preventive vaccine; management and maintenance of domestic roadway and waterway; management and operating seaports, large-scale power production; railway and aviation transportation.

In addition to the above-mentioned enterprises, the other enterprises upon equitization, based on the specific situation and market capacity, the State shall hold from over 50% to less than 65% charter capital or no shares.

c) Group 3: The State-owned enterprises extend loss without remedial capacity shall sell or transfer enterprise; restructure their debts to be transformed into joint-stock companies, multi-member limited liability companies; dissolved or broken.

2.Complying with market rules the state divestment of state capital invested in the sectors which are not the main business or not directly related to the sector of main business; state capital in joint stock companies the State does not need to control.

3. Restructuring enterprises by sectors irrespective of management level and agency. In the short term, in the areas of construction, commerce, telecommunication, publication, lottery, water supply and drainage, urban environment, irrigation, management and repair of roadway, railway and waterway

4. Restructuring group and state corporations comprehensively from organizational model, management, human resources, production and business lines, strategic development, investment to market and production. Reorganizing a number of economic groups and state-owned corporations to be in line with the actual situation and mission requirements.

5. Improving institution, mechanism and policies.

a) For 100% state capital enterprises

Improving the legal framework for business enterprises to operate in the general regulatory environment and fairly compete with enterprises of other economic sectors, effectively use resources invested. The enterprises manufacturing and supplying products, public services, national defense and security must account and perform well the tasks of assigned social policy.

Renovating corporate governance for state-owned enterprises that are mainly the economic groups, State-owned corporations to enhance their autonomy and self-responsibility in production and business; expanding scale together with improving the efficiency, competitiveness and sustainable development. Having management mechanism and control the import of technology, machinery, equipment ... of the enterprises.

Specifying and clarifying the powers and responsibilities of the Board of members, the General Director / Director of enterprises in the management and use of State capital and assets to ensure the autonomy of production, business and preservation and enhance the efficient use of capital and assets.

Perfecting the mechanism of business and investment of state capital into the enterprise and financial management for business and profit distribution mechanism under market mechanism.

Having regime of publication and transparency of financial statements, financial information, business and administration of economic groups and state-owned corporations; enhancing the accountability of the Board of members and Executive Board.

Improving the legal framework on state economic groups. Having separate decree on the organization and operation of each specially important economic group and state corporation to improve the legality, strengthening supervision and inspection of state ownership and economic groups and state-owned corporations for more efficient operation.

Perfecting the financial mechanism for enterprises producing and supplying products, public services, national defense and security to ensure a reasonable income for employees, profits for enterprises and attract the participation of social resources. Expanding mode of orders, production procurement and supply of products and public services.

Continuing the innovation of management mechanism of salary and bonus for enterprises to be active in the payment of salary and bonus associated with labor productivity, production efficiency and business; harmonizing the interests of the State, enterprises and employees; attracting highly qualified workers to work.

b) Promotion of the restructuring of state-owned enterprises

Amending and supplementing the provisions of equitization, sale, transfer, dissolution and bankruptcy of enterprise. Focusing on removing the current difficult problems, especially in business valuation, financial settlement, debts, land, labor regime ... and preventing loss of property.

Promulgating regulations and guidelines of the implementation of the reorganization of enterprises under sectors irrespective of the management level and agencies.

Developing financial markets, especially the stock market, buying and selling debt to promote equitization, enabling enterprises to access and mobilize capital for restructuring. Reviewing the debt settlement of state-owned enterprises, remedy delay in debt and unhealthy capital appropriation. Assessing and taking measures to promote the company to buy and sell outstanding debts and assets of the enterprises. Encouraging economic organizations to buy and sell debts of state-owned enterprises.

In the implementation process of restructuring State-owned enterprises, the ministries, sectors, localities, Board of Directors, Board of members of economic groups, state-owned corporations shall study and make proposal to competent authorities to have measures the arising issues which need adjustment related to institutions, mechanisms and policies such as restructuring costs, debt settlement and regulation for workers, tax...

c) Institution, mechanism for management of state owners for state-owned enterprises.

Completing the assignment and decentralization to exercise the rights, responsibilities and obligations of the State owners for State-owned enterprises and state capital invested in enterprises. In particular, focusing on the rights, responsibilities and obligations of the Government, the Prime Minister, Sector managing Ministries and direct superior levels of the owners at economic groups and State-owned enterprises - the Ministries: Finance, Planning and Investment, Home Affairs, Labor, War Invalids and Social Affairs and the Board of members, Board of Directors – as the owners of economic groups and state-owned corporations in the organization, operation, supervision, examination and inspection of implementation of objectives and tasks of production and business, investment and development; management, use, conservation and development of capital, management staff evaluation and performance of state-owned enterprises at the same time having mechanisms and sanction for organizations and individuals to effectively implement the rights, responsibilities and obligations assigned or decentralized. Establishing agencies to implement effective monitoring tasks, examination and management of the use, conservation and development of capital and evaluate the effectiveness of capital invested in the enterprises.

Issuing a mechanism of monitoring, inspection and assessing the performance of organizations and individuals performing the rights and obligations of state owners.

Developing mechanism of selection and appointment of appropriate staff, hiring General Director, executive Director, members of Board of Directors, Board of members.

III. SOLUTION

1. Continuing to thoroughly grasp the views, objectives, tasks, solutions to arrange, renovate, develop and improve the efficiency of state-owned enterprises in accordance with the Resolution of the Party Central Committee and Politburo conclusion, creating the high consensus across the political system to further enhance awareness and decisive and particular action in the implementation.

2. Expeditiously completing the approval for restructuring of State-owned enterprises by 2015 of the Ministries, sectors, localities, economic groups and state corporations. Determining the number and specific list of state-owned enterprises holding 100%, more than 75%, from 65% to 75%, from over 50% to less than 65% of charter capital and other enterprises. In the implementation process, based on the actual situation, review should be continued to promote equitization.

Completing criteria and classification list of enterprise in the direction of promoting diversification of ownership; identifying the sectors and areas upon equitization of State-owned enterprises holding over 75%, from 65% to 75%, less than 65% of the charter capital or holding no share.

Implementing the target for arrangement and equitization of enterprises under approved plans; regarding it as a key task in the years 2012 - 2015. Strictly following the market mechanism and the provisions of law in equitization without letting occurrence of negative, loss of assets, affecting the interests of employees, investors and enterprises. Strengthening the listing of economic groups, large size state-owned corporations which have been equitized in the domestic and international market.

3. Each economic group and State-owned corporation approved for establishment by the Prime Minister shall submit the Prime Minister; each corporation and enterprise approved for establishment by the Minister, Chairman of People s Committee of centrally-affiliated provinces and cities shall submit the Ministries and Chairman of People s Committee of provinces and cities the restructuring Plan for approval in Quarter III in 2012 and deploy the implementation with the following main contents:

a) Reviewing and redefining the tasks, major business lines. Economic groups and State-owned corporations only carry on business of the main sectors and sectors related directly to major business lines.

b) Developing strategy by 2015, with a vision to 2020 consistent with the strategy sector development, market demand, capital capacity and management qualifications.

c) Making plan for the re-organization of business and production, implementing the restructuring of member enterprises to implement specialization, division and cooperation without scattering and dispersal of natural resources, avoid internal competition in the direction of merger, consolidation of member enterprises of the same business line.

d) Developing financial plans to implement the main tasks assigned and handle existing financial problems during the restructuring process.

- Terminating the investment outside the main sector and area of production and business before 2015. For the following fields: banking, finance, securities, real estate, insurance, the economic groups and state-owned corporations, shall follow the directions below:

+ Selling the capital portion of the parent company - group/Sate-owned corporations to organizations or individuals outside economic group and state-owned corporations, not selling or transferring it to other internal member units.

+ Transferring capital to economic group and state-owned corporations and enterprises having appropriate main business line. The capital transfer is made​​through the form of capital transfer or capital assignment.

+ Transferring the entire enterprises whose capital is held 100% by the group and corporation to the group and corporation having business line the same as that of the transferring enterprises. The transfer is made in the form of enterprise assignment or integrity transfer.

- The groups and State-owned corporations are in financial difficulties, on the one hand it is necessary to clarify the responsibility of the relevant managers, on the other hand need to restructure capital and assets in the direction: Assessing the actual situation, determining capital need to have a handling mechanism of additional capital to continue to implement urgent projects, limit loss of capital due to prolonged project prolongation; restructure assets by assignment and merger of ineffective and low-priority projects and investments to focus resources on core business activities.

- Determining the reorganization, restructuring or dissolution, bankruptcy for enterprises operating inefficiently with prolonged losses and unable to pay their debts due as prescribed.

e) Boosting association between member enterprises in economic groups and state corporations through economic contracts, rules and regulations on the management and co-operation between the parent company and its subsidiaries, associated companies. The parent company of the economic groups and state corporations enhance their functions to study the development strategy, organizational innovation, management, technology, products, market development and training. Restraining the parent company and subsidiaries from investing in one enterprise

The parent company – group/state-owned corporation must organize regular and periodic supervision, examination and inspection of compliance with the law, implementation of strategic objectives, plans and duties assigned, evaluation of operation efficiency of the subsidiaries and management staff, prompt correction of violation. Fully grasping information on activities of affiliated companies through the representatives who are the shareholders involved in decisions of the General Meeting of Shareholders, the Board of Directors as prescribed by law.

g) Applying corporate governance principles under international corporate governance practices; completing control mechanisms, internal audit, focusing on financial risk control to take timely measures to prevent, restrict, fix and adjust business and production plans appropriately; enhancing capacity and powers of the control board, controller and internal audit.

Strengthening management apparatus, enhancing training and retraining to improve the level of business managers to meet the administrative requirements under market mechanism. Placing leaders and managers and the State capital representatives with qualifications, moral quality and professional capacity to perform their roles as representatives of state owners in the enterprises

Applying the organization of scientific labor in production and business. Rearranging and improving the labor quality in enterprises; focusing on technical workers with reasonable numbers, sectoral structure and optimal worker level for each technology, line, stage, work and on that basis to enhance the productivity of each employee and general labor productivity of enterprises.

h) Actively deploying research, application and investment in technology, product and service innovation, gradually raising the added value for products and services to meet environmental standards; gradually replacing devices and technologies consuming much energy, raw materials; gradually removing non-environmentally friendly products to enhance business efficiency and sustainable development.

i) Implementing transparency in investment, financial management, procurement, distribution of income, the work of staff; signing and implementing contracts with people related to enterprise managers as prescribed by law.

4. The Ministries managing technical economic sectors (Construction, Industry and Trade, Information and Communications, Finance, Agriculture and Rural Development, Transport) shall review and evaluate thereasonablenesspossibility, conditions, method of re-organization in order to build enterprise restructuring plan operating in the area in charge regardless of management level and agencies and submit it to the Prime Minister for approval in the third quarter of 2012 and direct implementation.

5. The Ministries and sectors shall submit the Government, the Prime Minister or issue under the authority the institution and mechanisms of management for enterprises with 100% state capital; promote enterprise restructuring and institution and mechanism of management of state owner (details in attached Appendix).

6. Strengthening responsibility of leaders of Ministries, sectors, localities, economic groups and state corporations in the implementation of the restructuring, plan for arrangement and equitization approved; seeing this as an important political task importance. Any unit which fails to perform its task shall review and clarify the causes, the responsible person and take responsibility before the Government, the Prime Minister.

IV. IMPLEMENTATION ORGANIZATION

1. Ministry of Finance:

a) Assuming the prime responsibility and coordinating with theSteering CommitteeforInnovationandEnterprise Development tourge the Ministries, sectors and People s Committees of centrally-affiliated provinces and cities, economic groups and state corporations to implement this Decision.

b) Guiding, monitoring and inspecting the implementation of this Decision and making quarterly report to the Prime Minister to promptly propose handling of arising problems.

c) Joining opinions so that the Sector managing Ministries and provincial-level People s Committee can approve the restructuring plan of the state-owned corporations and enterprises established by decision of the Minister and Chairman of the provincial People s Committee.

2. Ministers and heads of ministerial-level agencies:

a) Appraising the restructuring plan of the state-owned groups and corporations established by the Prime Minister’s decision. Inspecting, urging and monitoring the implementation after the Plan has been approved.

b) Directing the development, approval, inspection, urging and monitoring of the implementation of the restructuring plan of the state-owned corporations and enterprises established by the Ministry’s decision

c) Making quarterly report to the Prime Minister on the result of implementation of this Decision and the restructuring plan of the economic groups and state-owned corporations within the scope of management; sending it to the Ministry of Finance for review and submission to the Prime Minister.

d) Coordinating with the Ministry of Finance, theSteering CommitteeforInnovationandEnterprise Development in implementation of this Decision.

3. Chairman of People’s Committees of centrally-affiliated cities and provinces:

a) Directing the development, approval, inspection, urging and monitoring of the implementation of the restructuring plan of the state-owned corporations and enterprises established by provincial People’s Committee’s decision

b) Making quarterly report to the Prime Minister on the result of implementation; sending it to the Ministry of Finance for review and submission to the Prime Minister.

c) Assuming the prime responsibility and coordinating with the Ministry of Finance, theSteering CommitteeforInnovationandEnterprise Development in implementation of this Decision.

4. The Board of members of economic groups and state-owned corporations established by the Prime Minister’s decision to develop the restructuring plan and submit it to the Prime Minister for approval and implementation; complete equitization, reorganize member enterprises under the approved overall plan for the period 2011 - 2015.

5. The Board of members of corporations and state-owned enterprises established by decision of Minister and Chairman of provincial-level People’s Committee to develop the restructuring plan and submit it to the Minister and Chairman of provincial-level People’s Committee for approval and implementation; complete equitization, reorganize member units under the approved plan for the period 2011 - 2015.

6. The Board of members of economic groups and state-owned corporations shall make quarterly report to the Ministry of Finance, theSteering CommitteeforInnovationandEnterprise Development,sector managing Ministries and provincial-level People’s Committee on the result of implementation of the restructuring plan.

7. The Minister of Planning and Investment, Minister of Home Affairs, Minister of Labor, War Invalids and Social Affairs shall assume the prime responsibility and coordinate with the sector managing Ministries, the Ministry of Finance in the implementation of tasks within the scope and area of management; joining opinion in each restructuring plan of economic groups, and state-owned corporations, making quarterly report on the situation and result of implementation to submit it to the Ministry of Finance for making report to the Prime Minister.

8. TheSteering CommitteeforInnovationandEnterprise Development shall act as a hub to help the Prime Minister to direct the implementation of this Decision and the approved restructuring plan of economic groups and state-owned corporations established by the Prime Minister’s decision

9. The Ministry of Information and Communications shall organize the widespread information, propagation and dissemination of this Decision.

Article 2.This Decision takes effect from its signing date.

Article 3.The Ministers, heads of ministerial-level agencies, the heads of the agencies attached to the Government, Chairman of the People s Committees of Centrally-affiliated provinces and cities, the Head of theSteering CommitteeforInnovationandEnterprise Development, the Chairman of the Board of members of economic groups and state-owned corporations and enterprises are liable to execute this Decision. /.

The Prime Minister

Nguyen Tan Dung