Decree No. 68/2017/ND-CP dated May 25, 2017 of the Government on management and development of industrial clusters

DECREE

On management and development of industrial clusters[1]

Pursuant to the June 19, 2015 Law on Organization of the Government;

Pursuant to the November 26, 2014 Law on Investment;

Pursuant to the June 18, 2014 Law on Public Investment;

Pursuant to the November 26, 2014 Law on Enterprises;

Pursuant to the June 18, 2014 Law on Construction;

Pursuant to the November 29, 2013 Land Law;

Pursuant to the June 23, 2014 Law on Environmental Protection;

At the proposal of the Minister of Industry and Trade;

The Government promulgates the Decree on management and development of industrial clusters.

Chapter I

GENERAL PROVISIONS

Article 1.Scope of regulation and subjects of application

1. This Decree prescribes the planning, establishment and expansion of industrial clusters; investment in the construction of technical infrastructure and production and business in industrial clusters; policies on incentives and supports for development of industrial clusters, and state management of industrial clusters.

2. This Decree applies to:

a/ Enterprises, cooperatives and units investing in the construction of industrial cluster technical infrastructure;

b/ Organizations and individuals carrying out production and business activities in industrial clusters;

c/ Other agencies, organizations and individuals involved in the management and operation of industrial clusters.

Article 2.Interpretation of terms

In this Decree, the terms below are construed as follows:

1. Industrial cluster means a delimited place where industrial, cottage industry and craft production activities are carried out and services for these activities are provided and there are no inhabitants, which is constructed to attract small- and medium-sized enterprises, cooperatives and cooperative teams to invest in production and business or relocate their existing production and business facilities.

An industrial cluster must neither be larger than 75 hectares nor smaller than 10 hectares. For those in mountainous districts and industrial clusters of craft villages, each must neither be larger than 75 hectares nor smaller than 5 hectares.

2. Craft village industrial cluster means an industrial cluster serving the relocation and expansion of production and business of small- and medium-sized enterprises, cooperatives, cooperative teams and production facilities of households and individuals in craft villages in order to overcome pollution and develop local crafts and craft villages.

3. Project owner in the construction of industrial cluster technical infrastructure is an enterprise, a cooperative or a unit established and operating under Vietnamese law to invest in the construction of an industrial cluster and manage and operate the system of technical infrastructure facilities therein.

4. District-level industrial cluster development center is a revenue-generating non-business unit which is attached to a district-level People’s Committee and established under the Regulation on management of industrial clusters promulgated together with the Prime Minister’s Decision No. 105/2009/QD-TTg of August 19, 2009.

5. District-level industrial cluster management unit is a unit attached to and established by a district-level People’s Committee and assigned or authorized by the latter to act as the project owner in the construction of industrial cluster technical infrastructure in the locality.

6. System of common-use technical infrastructure facilities of an industrial cluster consists of systems of internal traffic works, pavements, greeneries, water supply and drainage, wastewater and solid waste treatment, power supply, public lighting, internal information and communications, administration and security houses, and other facilities to serve the operation of the industrial cluster.

7. Investors in production and business in an industrial cluster include enterprises, cooperatives and cooperative teams established in accordance with Vietnamese law; and individuals and households (for craft village industrial clusters) which register their business in accordance with law.

8. Industrial land area is the land area of an industrial cluster which may be leased or subleased to enterprises for production and business, which is identified in a detailed plan approved by a competent agency.

9. Area for construction of the system of common-use technical infrastructure facilities in an industrial cluster is the land area of an industrial cluster reserved for the construction of the system of common-use technical infrastructure facilities, which is identified in a detailed plan approved by a competent agency.

10. Occupancy rate of an industrial cluster is the percentage of the industrial land area already leased or subleased for production and business in the total industrial land of such industrial cluster.

11. Master plan on development of industrial clusters is a system of objectives, orientations, solutions, mechanisms and policies on development of industrial clusters within a provincial-level locality in a certain period with a view to distributing and developing the network of industrial clusters in a rational manner on the basis of efficiently utilizing local resources.

Article 3.Fields, sectors, trades and production and business facilities encouraged to be invested in or relocated into industrial clusters

1. Fields, sectors, trades and production and business facilities encouraged to be invested or relocated into industrial clusters:

a/ Production and business facilities that cause or are likely to cause pollution in craft villages, residential areas, urban centers and other production facilities that need to be relocated into industrial clusters;

b/ Manufacture of products and spare parts, and assembly and repair of machinery and equipment to serve agriculture and rural areas;

c/ Manufacture of supporting industry products on the Government-issued list of supporting industry products prioritized for development;

d/ Production of consumer products with local materials and workers;

dd/ Advantaged sectors, trades and products of localities and regions and other fields, sectors and trades in conformity with local master plans on development of industries, cottage industries and crafts;

e/ Farm, forest and aquatic product processing.

2. Investors in production and business in industrial clusters in the fields, sectors and trades and production and business facilities encouraged to be invested in or relocated into industrial clusters defined in Clause 1 of this Article shall be given priority in the grant of investment incentives and supports.

Article 4.Industrial cluster database

An industrial cluster database consists of information on the planning and establishment of industrial clusters in provincial-level localities and nationwide and their technical infrastructure construction investment and operation.

Chapter II

PLANNING AND ESTABLISHMENT OF INDUSTRIAL CLUSTERS

Section 1

PLANNING OF DEVELOPMENT OF INDUSTRIAL CLUSTERS

Article 5.Planning of development of industrial clusters

1. Grounds for formulation of a master plan on development of industrial clusters:

a/ Socio-economic development master plan; master plan on development of industry, cottage industry and crafts; master plan on land use; master plan on construction and master plans on other related sectors, products and fields in the locality;

b/ The demand for ground area for attraction and relocation of investors in production and business in industrial clusters;

c/ Capability to mobilize investment funds from enterprises and the State and other lawful sources for investment in the construction of technical infrastructure facilities in industrial clusters in the locality.

2. Contents of a master plan on development of industrial clusters:

a/ Legal grounds for and necessity of formulating the master plan;

b/ Assessment and estimation of the development needs of industries, cottage industries and crafts and factors affecting the development of industrial clusters; needs for land areas of investors in industrial clusters;

c/ Assessment of the current situation and progress of implementation of the master plan and investment in the construction of technical infrastructure, the attraction of investment, occupancy rate and operation effectiveness of each industrial cluster; achievements, weaknesses and causes;

d/ Orientations for distribution and development of industrial clusters, rationale for planning each industrial cluster (specifying its name, location, area and land status on the principle of restricted use of planned land areas for rice cultivation, sectors and trades operating in the industrial cluster, schedule of technical infrastructure investment, possibility of connection with technical infrastructure outside the industrial cluster; the need for renting land in the industrial cluster, and favorable and unfavorable factors);

dd/ Assessment of the environmental status and environmental management work of existing industrial clusters in the locality; projected environmental impacts and measures to address environmental pollution of industrial clusters planned for establishment;

e/ Projected total investment amount for the construction of industrial cluster technical infrastructure, solutions that are mechanisms and policies, capability to mobilize investment funds; and implementation plan of the master plan;

g/ Projected lists of planned industrial clusters under different options, the selected option and its presentation on a planning map (showing the name, location, area, sectors and trades to operate in the industrial cluster, projected total investment amount in technical infrastructure, and planning phases).

3. The formulation of a master plan on development of industrial clusters shall be funded by local budgets under current regulations.

4. A master plan on development of industrial clusters in a provincial-level locality shall be formulated for every 10-year period, taking into account prospects for subsequent 10 years, and announced within 30 days after it is approved.

Article 6.Formulation and approval of master plans on development of industrial clusters

1. The process of formulation and approval of master plans on development of industrial clusters must comply with the law on socio-economic development master plans.

2. Provincial-level Departments of Industry and Trade shall assume the prime responsibility for, and coordinate with related provincial-level departments and sectors and district-level People’s Committees in, organizing the formulation and appraisal of master plans on development of industrial clusters in their localities and submit them to their provincial-level People’s Committees for sending to the Ministry of Industry and Trade for agreement under Clauses 3 and 4 of this Article.

3. A dossier of request for agreement on the master plan must comprise:

a/ A written request of the provincial-level People’s Committee for agreement on the master plan;

b/ A report on the master plan;

c/ An appraisal report on the master plan;

d/ Written comments of related provincial-level departments and sectors and district-level People’s Committees and an assimilation and explanation report on these comments;

dd/ Other documents (if any).

The dossier shall be made in 3 sets to be sent to the Ministry of Industry and Trade.

4. Within 30 working days after receiving a complete dossier of request for agreement on a master plan, the Ministry of Industry and Trade shall complete the appraisal and issue a written agreement on the master plan.

In case the dossier or master plan is unsatisfactory or contains an unclear content, the Ministry of Industry and Trade shall issue a written request for completion of the dossier or master plan or for consultation with related ministries and sectors. The time for completion of the dossier or master plan or for consultation will not be included in the time limit for appraisal of and agreement on the master plan.

5. On the basis of the Ministry of Industry and Trade’s written agreement on the master plan, the provincial-level People’s Committee shall direct the completion of the dossier and finalization and approval of the master plan on development of industrial clusters in its locality. One copy of the decision on approval of the master plan shall be sent to the Ministry of Industry and Trade.

Article 7.Conditions for adjustment and addition of master plans on development of industrial clusters

1. Conditions for addition of an industrial cluster to a master plan:

a/ The industrial cluster conforms with the socio-economic development master plan; master plan on development of industry, cottage industry and crafts; provincial- and district-level master plans and plans on land use; master plan on construction and master plans on other related sectors, products and fields in the locality;

b/ There is sufficient industrial land for establishment of a new industrial cluster;

c/ Existing industrial clusters in the district-level locality fail to meet the demand for land for production and business;

d/ The project owner in the construction of the industrial cluster’s technical infrastructure has been identified.

2.  Conditions for removal of an industrial cluster from a master plan:

An industrial cluster that satisfies either of the following conditions shall be considered for removal from a master plan:

a/ It no longer conforms with the socio-economic development master plan; master plan on development of industry, cottage industry and crafts; master plan and plan on land use; master plan on construction and urban centers, and master plans on other sectors, products and fields in the locality;

b/ Its technical infrastructure is operated with low efficiency and there is a need to use the industrial cluster for developing another field or sector in conformity with the orientation of the approved socio-economic development master plan and master plan on construction and urban centers in the locality.

Article 8.Dossiers for adjustment or addition of a master plan on development of industrial clusters

1. A dossier of request for adjustment or addition of a master plan must comprise:

a/ The district-level People’s Committee’s written report on the request for adjustment or addition of the master plan;

b/ A report on the adjustment or addition of the master plan;

c/ Other documents (if any).

Major contents of a report on the adjustment or addition of the master plan:

a/ A report on addition of the master plan must state the legal grounds, necessity, satisfaction of the conditions for addition of the master plan, projected ground area for attraction of investment and relocation into the industrial cluster; the master plan addition plan (specifying the name, location, area and land use status, sectors and trades to operate in the industrial cluster, infrastructure investment schedule, possibility to connect with the outside infrastructure, legal status, capacity of the project owner, funding sources, fund raising solutions, technical infrastructure construction investment plan, projected impacts, measures to handle environmental issues and management of the industrial cluster after it is added to the master plan);

b/ A report on adjustment of the master plan must state the necessity and satisfaction of the conditions for adjustment of the master plan; assessment of the current state and effectiveness of investment in the construction of technical infrastructure, and the plan on conversion of the industrial cluster.

Article 9.Process of adjustment and addition of a master plan on development of industrial clusters

1. The district-level People’s Committee shall prepare a report addressed to the provincial-level People’s Committee and 8 sets of dossier of request for adjustment or addition of the master plan (including 2 original sets) and send them to the provincial-level Department of Industry and Trade which shall assume the prime responsibility for, and coordinate with related provincial-level departments and sectors in, organizing the appraisal of the legality and validity of the dossier and contents and feasibility of the report.

2. Within 15 working days after receiving a complete dossier, the provincial-level Department of Industry and Trade shall complete the appraisal and report to the provincial-level People’s Committee the adjustment or addition of the master plan. Within 5 working days after receiving the appraisal report of the provincial-level Department of Industry and Trade, the provincial-level People’s Committee shall send an official letter together with 1 dossier set and related documents to the Ministry of Industry and Trade for agreement.

3. Within 15 working days after receiving the letter together with the dossier and related documents from the provincial-level People’s Committee, the Ministry of Industry and Trade shall issue a written agreement on the adjustment or addition of the master plan.

4. Within 5 working days after receiving the written agreement from the Ministry of Industry and Trade, the provincial-level People’s Committee shall issue a decision on the adjustment or addition of the master plan. One copy of such decision shall be sent to the Ministry of Industry and Trade.

Section 2

ESTABLISHMENT AND EXPANSION OF INDUSTRIAL CLUSTERS

Article 10.Conditions for establishment and expansion of industrial clusters

1. Conditions for establishment of an industrial cluster:

a/ The industrial cluster is included in the approved master plan on development of industrial clusters;

b/ There is an enterprise or a cooperative having legal status, capacity and experience in investment in the construction of technical infrastructure or a unit assigned to invest in the construction of technical infrastructure;

c/ In case there are already various industrial clusters in the district-level locality, the average occupancy rate of these industrial clusters must exceed 50% or the total unoccupied land area in these industrial clusters is smaller than 50 hectares.

2. Conditions for expansion of an industrial cluster:

a/ The industrial cluster, once expanded, must not be larger than 75 hectares; there is available land in conformity with the district-level master plan and plan on land use;

b/ There is an enterprise or a cooperative having legal status, capacity and experience in investment in the construction of technical infrastructure or a unit assigned to invest in the construction of technical infrastructure;

c/ The industrial cluster’s current occupancy rate reaches at least 60% or the need for renting industrial land in the industrial cluster surpasses the existing industrial land area in the industrial cluster;

d/ Common-use technical infrastructure facilities have been completely constructed and put into routine operation according to the approved detailed plan.

Article 11.Dossiers of request for establishment or expansion of industrial clusters

1. A dossier of request for establishment or expansion of an industrial cluster:

a/ A written request for establishment or expansion of an industrial cluster, made by the district-level People’s Committee;

b/ An enterprise’s or a cooperative’s written request for acting as project owner in the construction of technical infrastructure or a document of the unit assigned to invest in the construction of technical infrastructure of an industrial cluster enclosed with a report on investment in the establishment or expansion of the industrial cluster;

c/ A copy of the establishment decision or document proving legal status;

d/ A copy of any of the following documents: the last two years’ financial statements of the project owner; the parent company’s commitment to provide financial assistance; a financial institution’s commitment to provide financial assistance; guaranty of the project owner’s financial capacity; and document describing the project owner’s financial capacity;

dd/ Other related documents.

2. Major contents of a report on investment in the establishment or expansion of an industrial cluster:

a/ Legal grounds, necessity, assessment of the conformity of and satisfaction of conditions for establishment or expansion of an industrial cluster; impacts of industrial parks in the locality on the investment effectiveness and occupancy rate of the industrial cluster;

b/ Current land use status, orientations on arrangement of sectors and trades that can connect and support one another in production; land use structure and estimated investment to be attracted into the industrial cluster; assessment of the possibility of connection of technical infrastructure inside and outside the industrial cluster;

c/ Objectives, area, location and scope of investment in the construction of technical infrastructure; analysis and selection of the plan on investment in the construction of technical infrastructure facilities; plan on ground clearance and resettlement support (if any); project implementation schedule suitable to reality and the capability to mobilize resources; plan and schedule of attraction of investment and relocation and projected occupancy rate of the industrial cluster;

d/ Assessment of the capacity and legal status of the project owner; projected total investment amount, structure of and capability to balance or mobilize investment funds (including public investment, if any) for implementing the project;

dd/ Costs of maintenance and operation of technical infrastructure facilities and other related expenses; methods of management, operation and use after these facilities are put into use;

e/ Assessment of the current environmental state, environmental management work, the possibility to receive wastes around the area projected for establishing or expanding the industrial cluster; projected sources of waste, environmental impacts of sectors and trades projected to be attracted into the industrial cluster, and the environmental management plan;

g/ Analysis and preliminary evaluation of the socio-economic benefits of the industrial cluster; implementation solutions.

Article 12.Process of establishment and expansion of industrial clusters

1. An enterprise or a cooperative shall make a written request for acting as project owner in the construction of technical infrastructure or the unit assigned to invest in the construction of technical infrastructure shall make a written request enclosed with a report on investment in the construction or establishment of an industrial cluster and send them to the district-level People’s Committee.

2. Within 5 working days, the district-level People’s Committee shall assume the prime responsibility for, and coordinate with the enterprise, cooperative or unit in, compiling 8 sets of the dossier of request for establishment or expansion of an industrial cluster (including at least 2 original sets) and send them to the provincial-level Department of Industry and Trade for appraisal in coordination with other related provincial-level departments and sectors.

3. Within 15 working days after receiving a complete dossier of request for establishment or expansion of an industrial cluster, the provincial-level Department of Industry and Trade shall complete the appraisal and report on the establishment or expansion of an industrial cluster to the provincial-level People’s Committee.

In case the dossier or report on the establishment or expansion of an industrial cluster is unsatisfactory, the provincial-level Department of Industry and Trade shall send a written request to the district-level People’s Committee for completion of the dossier. The time for completion of a dossier will not be included in the appraisal time limit.

4. Within 5 working days after receiving the dossier for establishment or expansion of an industrial cluster and the appraisal report from the provincial-level Department of Industry and Trade, the provincial-level People’s Committee shall decide whether to permit the establishment or expansion of an industrial cluster. One copy of the decision on the establishment or expansion of an industrial cluster shall be sent to the Ministry of Industry and Trade.

In case the established or expanded industrial cluster has an area which is more than 5 hectares larger than the planned area already agreed upon, the provincial-level People’s Committee shall, before approving it, obtain a written agreement from the Ministry of Industry and Trade.

Article 13.Contents of appraisal of the establishment or expansion of industrial clusters

1. The legality and validity of the dossier for establishment or expansion of an industrial cluster.

2. The content and feasibility of the report on investment in the establishment or expansion of an industrial cluster:

a/ Legal grounds, necessity, conformity, satisfaction of conditions for establishment or expansion of an industrial cluster;

b/ Name, area, objectives, sector or trade and selected option of investment in the construction of technical infrastructure;

c/ Capacity and legal status of the project owner, total investment amount, structure of and capability to balance and solutions to mobilize funding sources for completing construction of technical infrastructure (if using public investment funds, procedures prescribed by the law on public investment shall be carried out);

d/ Related costs and methods of management, operation and use of technical infrastructure facilities after they are put into operation;

dd/ Solutions to attract investment and relocation and economic, social and environmental benefits of the industrial cluster.

Article 14.Major contents of a decision on establishment or expansion of an industrial cluster

1. Name, area and location of and main sector or trade to operate in the industrial cluster.

2. Project owner in the construction of technical infrastructure.

3. Scale of investment in the construction of technical infrastructure, total investment amount and structure of funding sources.

4. Implementation schedule of the investment project on construction of technical infrastructure.

5. Investment incentives and supports and application conditions (if any).

6. Effective date of the decision.

Chapter III

INVESTMENT IN CONSTRUCTION OF INDUSTRIAL CLUSTER TECHNICAL INFRASTRUCTURE

Article 15.Project owners in construction of industrial cluster technical infrastructure

1. Project owners in the construction of technical infrastructure shall be selected in the stage of establishment or expansion of industrial clusters.

2. For geographical areas with difficult or extremely difficult socio-economic conditions and geographical areas incapable of attracting enterprises to invest in commercial operation of industrial cluster technical infrastructure, at the proposal of the district-level People’s Committee and provincial-level Department of Industry and Trade, the provincial-level People’s Committee may assign one of the following units to act as the project owner in the construction of industrial cluster technical infrastructure:

a/ The district-level industrial cluster development center established under the Regulation on management of industrial clusters promulgated together with the Prime Minister’s Decision No. 105/2009/QD-TTg of August 19, 2009;

b/ The district-level industrial cluster management unit;

c/ A public non-business unit attached to the provincial-level Department of Industry and Trade.

3. It is encouraged to prioritize the selection of enterprises and cooperatives to act as project owners in the construction of industrial cluster technical infrastructure. In case there are two or more enterprises or cooperatives wishing to act as the project owner in the construction of technical infrastructure of an industrial cluster, depending on their financial capacity and experience and the level of feasibility of their report on investment in the construction or expansion of an industrial cluster, the provincial-level Department of Industry and Trade shall report them to the provincial-level People’s Committee for selection in accordance with law.

Article 16.Process of investment in the construction of industrial cluster technical infrastructure

1. Making and approving a report on investment in the establishment or expansion of an industrial cluster.

2. Making and approving a detailed plan on the construction of an industrial cluster.

3. Making and approving an investment project on construction of industrial cluster technical infrastructure.

4. Organizing construction of industrial cluster technical infrastructure facilities and managing the operation of these facilities after they are completed.

Article 17.Detailed plans on construction of industrial clusters

1. The district-level People’s Committee shall direct related agencies and units to make and approve detailed plans on construction of industrial clusters in its locality before attracting and relocating enterprises and production units to invest in production and business in industrial clusters. The contents of a detailed plan must conform with the report on investment in the establishment or expansion of the industrial cluster and include arrangement of a system of environmental protection technical infrastructure facilities suitable to the sector or trade operating in the industrial cluster and requirements on treatment and discharge of wastewater into water sources in accordance with law.

2. The contents and process of making, appraisal, approval and management of detailed plans on construction of industrial clusters must comply with current regulations on construction. The detailed plan shall be used as the basis for making, appraising and approving the investment project on construction of industrial cluster technical infrastructure.

3. At the proposal of the district-level People’s Committee, the provincial-level People’s Committee shall direct the planning and arrangement of land areas in appropriate locations in the locality for building houses for industrial clusters’ workers.

4. The fund for making detailed plans on construction of industrial clusters shall be included in the annual local budget plans; in case an enterprise or a cooperative acts as the project owner in the construction of industrial cluster technical infrastructure, the fund for making such detailed plans shall be covered by the investment preparation fund and included in the project’s total investment amount.

Article 18.Investment in construction of industrial cluster technical infrastructure

1. Management of investment projects to construct technical infrastructure:

a/ The system of common-use technical infrastructure facilities of an industrial cluster shall be simultaneously and synchronously designed in an investment project in order to save cost and land and facilitate the construction, repair and operation of these facilities. An investment project to construct technical infrastructure must conform with the report on investment in the establishment or expansion of the industrial cluster and approved detailed plan, and is not required to obtain a decision on investment policy.

The project owner shall formulate and implement an investment project on construction of industrial cluster technical infrastructure. The contents and process of formulation, appraisal, approval and management of investment projects on construction of industrial cluster technical infrastructure must comply with the laws on investment and construction.

b/ In the stages of preparation and implementation of an investment project, the project owner shall make, submit and strictly implement an environmental impact assessment report of the project after it is approved by a competent state agency, carry out environmental protection activities and prepare plans on prevention and control of pollution, degradation and depletion of water sources in accordance with law; the fund for making an environmental impact assessment report shall be included in the project’s investment fund;

c/ The provincial-level Department of Natural Resources and Environment shall assume the prime responsibility for, and coordinate with the provincial-level Department of Industry and Trade and district-level People’s Committee in, examining and supervising the project owner in implementing the contents of the environmental impact assessment report of the industrial cluster, and detect in time and handle violations of the law on environmental protection.

2. The project owner shall report to the local statistics office on the situation of investment in the construction of industrial cluster technical infrastructure in accordance with the Statistics Law and also send one copy of such report to the provincial-level Department of Industry and Trade. The report must state the schedule of investment in technical infrastructure, implemented fund, investment result of the project, result of attraction of investment in the industrial cluster, revenues remitted to the state budget, result of enjoyment of the State’s incentives and supports, employment, environmental protection and specialized contents according to the field of operation.

Article 19.Management of public services and utilities

1. Public services and common-use utilities in an industrial cluster include protection and preservation of security and order; information and communications; water supply and drainage; environmental sanitation and wastewater and waste treatment; fire prevention and fighting; maintenance and operation of technical infrastructure facilities and other public services and utilities.

The prices of public services and utilities shall be determined on the principle of agreement through contracts signed between service users and the project owner in the construction of industrial cluster technical infrastructure. If agreement fails, the project owner shall report it to the district-level People’s Committee for settlement in accordance with law.

2. The project owner in the construction of industrial cluster technical infrastructure shall organize the provision and management of public services and common-use utilities in the industrial cluster; formulate and approve a Regulation on management of public services and utilities after consulting investors in production and business in the industrial cluster, which may not contravene law. Within 5 working days after approving the Regulation, the project owner shall send it to the provincial-level Department of Industry and Trade and district-level People’s Committee for monitoring and management.

3. Complaints and disputes arising in the management, provision and use of public services and common-use utilities in industrial clusters shall be settled in accordance with law.

Article 20.Rights of a project owner in the construction of industrial cluster technical infrastructure

1. To mobilize and receive investment projects in the industrial cluster on the basis of its detailed plan and production sector or trade already approved by competent authorities.

2. To raise funds for investment in the construction of industrial cluster technical infrastructure in accordance with law.

3. To invest in the construction of workshops, storehouses and storage yards and offices for lease or for sale, and provide public services and other utilities in the industrial cluster in accordance with law.

4. To sublease or transfer the rights to use land with common-use technical infrastructure; to determine rent rates or transfer prices of the rights to use land with technical infrastructure, rent rates or selling prices of workshops, storehouses and storage yards and offices and prices of other public services and utilities. In case the district-level industrial cluster management unit or industrial cluster development center or a public non-business unit attached to the provincial-level Department of Industry and Trade acts as the project owner in the construction of the industrial cluster’s technical infrastructure, the provincial-level Department of Industry and Trade shall report the sublease or transfer of the land use rights, rent rates and transfer prices of land use rights, or rent rates and selling prices of workshops, storehouses and storage yards and offices and prices of other public services and utilities to a competent agency for decision.

5. To propose competent agencies to revoke the investment policy on or investment registration certificates or handle investment projects in the industrial cluster that violate the law, stop operation or are not implemented after 12 month from the date they are licensed.

6. To enjoy incentives and supports prescribed in this Decree and relevant laws.

Article 21.Obligations of a project owner in the construction of industrial cluster technical infrastructure

1. To organize implementation of the investment project to construct industrial cluster technical infrastructure according to the approved detailed plan, ensuring its implementation schedule; if the implementation is behind schedule, to seek for permission for extension and obtain the approval of a competent agency in accordance with the investment law.

2. To maintain the system of common-use technical infrastructure facilities in the industrial cluster throughout their operation period; to provide services and utilities (if any) serving production and business in the industrial cluster.

3. To arrange water sources to serve the on-site fire fighting; to arrange and ensure safe distances between heat sources, electric equipment and fire-insulation systems and inflammable objects and adjacent areas of  the industrial cluster.

4. To perform the obligations as prescribed by the laws on land, finance, accounting, audit, statistics, insurance, labor, standards of construction, occupational safety, industrial sanitation and environmental protection.

5. To support and create favorable conditions for organizations and individuals to carry out procedures for investing in production and business in the industrial cluster.

6. To report annually to the provincial-level Department of Industry and Trade and publicly post information on unoccupied land areas on the websites of the enterprise and the locality.

7. To perform other obligations as prescribed by law.

Chapter IV

INVESTMENT IN PRODUCTION AND BUSINESS IN INDUSTRIAL CLUSTERS

Article 22.Receipt of investment projects in industrial clusters

Organizations and individuals that wish to invest in or production facilities that need to be relocated into industrial clusters shall contact the project owners in the construction of their technical infrastructure to receive instructions on the planning, arrangement of sectors and trades, rent rates of land, workshops, storehouses and storage yards, offices and charge rates for public services and utilities, procedures for implementing investment projects in the industrial clusters, and reach agreement on the locations, sites and areas of industrial land expected to be rented.

Article 23.Rent of land and grant of construction licenses in industrial clusters

1. Investors in an industrial cluster shall carry out procedures to rent land from the State or rent land with technical infrastructure from the project owner in the construction of such technical infrastructure; and manage and use such land in accordance with the land law.

2. Construction licenses shall be exempted for construction works with appraised designs located in industrial clusters with approved 1:500-scale detailed plans. In this case, a written notice of the time of commencement of construction together with the construction design dossier shall be sent to the district-level People’s Committee for monitoring and filing.

Article 24.Rights of investors in production and business in industrial clusters

1. To use land and have land use duration extended in accordance with the Land Law; to sublease land, workshops, storehouses and storage yards, offices and assets on their rented land in accordance with law.

2. To pay charges for using technical infrastructure facilities, public services and other services under regulations.

3. To advance or contribute funds for the construction and commercial operation of technical infrastructure as agreed with the project owner in the construction of technical infrastructure.

4. To be supported and provided with favorable conditions in recruiting and training workers to meet production and business requirements.

5. To be provided with instructions and favorable conditions in carrying out procedures for investing in production and business in the industrial clusters.

6. To enjoy incentives and supports as prescribed in this Decree and relevant laws.

Article 25.Obligations of investors in production and business in industrial clusters

1. To use land and implement investment projects and carry out production and business activities according to economic contracts signed with the project owners in the construction of technical infrastructure and the decisions on approval of investment policy or investment registration certificates (if any); in case of delayed implementation, to report it under regulations to the project owners and the agency competent to approve extension.

2. To perform obligations prescribed by the laws on business registration, investment, finance, accounting, audit, statistics, insurance, occupational safety and health, environmental protection, fire and explosion prevention and fighting, and security, and order and pay charges for using technical infrastructure, public services and utilities as agreed upon.

3. To actively participate in attracting workers and creating jobs in the locality, giving priority to employing social policy beneficiaries and members of households whose land is recovered for the construction of industrial clusters.

4. To perform other obligations as prescribed by law.

Article 26.Management of production and business activities

1. Production and business activities in industrial clusters shall be carried out in accordance with current law. Investors in production and business shall formulate and implement environmental protection plans or environmental impact assessment reports in accordance with law.

2. Specialized examinations and inspections of investors in production and business shall be conducted according to plans approved by competent state agencies and on a regular basis no more than once a year, unless signs of violation are detected. Agencies competent to conduct examinations and inspections shall regularly coordinate with provincial-level Departments of Industry and Trade, district-level People’s Committees and project owners in the construction of technical infrastructure in preventing and handling violations in the industrial clusters.

3. Investors in industrial clusters shall report on their production and business to the local statistics offices in accordance with the Statistics Law. Quarterly and annually, the local statistics offices shall summarize information on production and business activities in industrial clusters and send it to the district-level People’s Committees and provincial-level Departments of Industry and Trade for coordinated management.

Chapter V

INCENTIVES AND SUPPORTS FOR INDUSTRIAL CLUSTER DEVELOPMENT

Section 1

INCENTIVES AND SUPPORTS FOR INDUSTRIAL CLUSTERS

Article 27.Investment incentives for production and business investment projects in industrial clusters

Production and business investment projects in industrial clusters are entitled to land rental exemption for 7 years and other incentives as prescribed by law. In case they are eligible for different incentive levels, the highest one shall be applied.

Article 28.Investment incentives for investment projects on commercial operation of industrial cluster technical infrastructure

1. Investment projects on commercial operation of industrial cluster technical infrastructure are entitled to land rental exemption for 11 years and eligible to borrow investment credit funds of the State not exceeding 70% of their total investment amounts and are entitled to other incentives as prescribed by law. In case they are eligible for different incentive levels, the highest one shall be applied.

2. Projects on construction of industrial cluster technical infrastructure may be considered for investment in the form of public-private partnership.

Article 29.Investment supports for construction of industrial cluster technical infrastructure

1. The scope, subjects, contents and levels of investment supports from the central budget for the construction of industrial cluster technical infrastructure to serve the relocation of enterprises and production facilities that cause or are likely to cause pollution in craft villages, residential areas, urban centers and industrial clusters in geographical areas with difficult or extremely difficult socio-economic conditions or geographical areas incapable of attracting enterprises to invest in technical infrastructure must comply with the target program on investment in industrial cluster technical infrastructure approved for each period.

2. Provincial-level People’s Committees shall balance local budget funds for supporting the investment in and development of technical infrastructure systems inside and outside industrial clusters in their localities.

Article 30.Supports for industrial cluster development activities

1.  The central budget shall cover funds for industrial cluster development activities carried out by the Ministry of Industry and Trade, including:

a/ Conducting surveys, building and operating databases; organizing conferences and workshops on and coordinating investment promotion activities; disseminating information and printing and publishing documents on, and  organizing training in skills, laws and policies on industrial cluster development;

b/ Conducting surveys, assessing and formulating policies and models of management and experiences on industrial cluster development at home and overseas.

2. Local budgets shall cover funds for industrial cluster development activities carried out by localities, including:

a/ Industrial cluster development activities specified in Clause 1 of this Article;

b/ Organizing investment promotion activities; surveying organizations and individuals that wish to invest in or be relocated into industrial clusters; establishing, and appraising the establishment and expansion of, industrial clusters; formulating detailed plans on construction of industrial clusters; supporting the performance of administrative procedures related to industrial clusters;

c/ Providing financial support for the formulation of investment projects by enterprises and production facilities that are cause or are likely to cause pollution in craft villages or residential areas to be relocated into industrial clusters.

3. Funds for industrial cluster development activities are regarded as non-business funds which shall be managed and used in accordance with the Law on the State Budget and guiding documents.

Section 2

INCENTIVES AND SUPPORTS FOR CRAFT VILLAGES INDUSTRIAL CLUSTERS

Article 31.Conditions for craft village industrial clusters to enjoy incentives and supports

1. Craft village industrial clusters are included in the master plan, and are established and operate in accordance with regulations on management of industrial clusters.

2. The number of enterprises, cooperatives, cooperative teams, production facilities of households and individuals in the craft village account for over 60% of the number of enterprises and production facilities already relocated or having registered for relocation into the craft village industrial cluster.

3. By the time of considering incentives and supports, the registered occupancy rate is over 80%, with over 60% of which occupied by enterprises, cooperatives, cooperative teams, production facilities of households and individuals in the craft village as certified by the district-level People’s Committee.

Article 32.Incentives and supports for craft village industrial clusters

1. Investment incentives:

a/ Investment projects on production and business in craft village industrial clusters are entitled to land rental exemption for 11 years and eligible to borrow investment credit funds of the State not exceeding 70% of their total investment amounts;

b/ Investment projects on commercial operation of industrial cluster technical infrastructure are entitled to land rental exemption for 15 years and eligible to borrow investment credit funds of the State not exceeding 70% of their total investment amounts.

2. Investment supports:

a/ The local budget shall provide financial supports for the relocation of enterprises, cooperatives and production facilities of households and individuals in craft villages into craft village industrial clusters; the specific financial support levels shall be decided by provincial-level People’s Committees;

b/ The central and local budgets shall consider prioritizing supports for investment in the construction of technical infrastructure of craft village industrial clusters.

3. In addition to the incentives and supports specified in Clauses 1 and 2 of this Article, investment projects on commercial operation of technical infrastructure and production and business in craft village industrial clusters are also entitled to the incentives and supports specified in Articles 27, 28, 29 and 30 of this Decree and relevant laws. In case they are eligible for different incentive levels, the highest one shall be applied.

Chapter VI

STATE MANAGEMENT OF INDUSTRIAL CLUSTERS

Article 33.Contents of state management of industrial clusters

1. Promulgating, and organizing the implementation of, master plans, plans, programs, laws, mechanisms, policies and technical standards and norms on management and development of industrial clusters.

2. Granting, modifying and revoking licenses and certificates related to the investment in and commercial operation of industrial clusters; building and operating databases, supporting the performance of administrative procedures and provision of public services and utilities for industrial clusters.

3. Organizing the apparatus for and providing training in industrial cluster management and development.

4. Inspecting, examining, evaluating investment effectiveness, settling complaints and denunciations, performing commendation work, handling violations and matters related to industrial clusters.

Article 34.State management powers and responsibilities for industrial clusters

1. The Government shall perform the uniform state management of industrial clusters nationwide; assign specific responsibilities and powers to each ministry, sector, provincial-level People’s Committee and related agency; and promulgate policies and legal documents on industrial clusters.

2. The Prime Minister shall approve target programs on investment in industrial cluster technical infrastructure for each period to be funded by the central budget; direct the handling of violations and settlement of problems beyond the competence of ministries, sectors and provincial-level People’s Committees.

3. Ministries, sectors and provincial-level People’s Committees shall, in addition to their powers and responsibilities defined in Articles 35 thru 42 of this Decree, perform the state management of their sectors or fields or localities regarding industrial clusters; conduct examinations and inspections and sanction administrative violations according to their competence; guide, decentralize or authorize provincial-level Departments of Industry and Trade or district-level People’s Committees to perform a number of state management tasks in accordance with this Decree and relevant laws.

Article 35.Powers and responsibilities of the Ministry of Industry and Trade

Acting as the state management agency in charge of industrial clusters nationwide, the Ministry of Industry and Trade has the following powers and responsibilities:

1. To formulate and promulgate or propose competent agencies to promulgate programs, plans, mechanisms, policies, laws and certificates related to industrial clusters; to give agreements on master plans and opinions on proposals on investment in industrial clusters in the form of public-private partnership.

2. To provide training and retraining in industrial cluster development and management skills.

3. To prepare annual plans and cost estimates for industrial cluster development activities funded with the central budget, submit them to competent agencies for approval and organize the implementation after they are approved.

4. To assume the prime responsibility for formulating and submitting to the Prime Minister for approval, and organize the implementation of, the target program on investment in industrial cluster technical infrastructure for the post-2020 period to be funded with the central budget; to prepare annual and five-year plans on central budget supports for investment in industrial cluster technical infrastructure and send them to the Ministry of Planning and Investment for summarization and reporting to the Prime Minister for decision.

5. To inspect, examine, and periodically or extraordinarily evaluate the implementation of master plans, policies and laws and operation effectiveness of industrial clusters; to settle recommendations of localities on industrial clusters and report them to the Prime Minister.

6. To issue the model regulation on management of industrial clusters and forms of reports on industrial clusters; to build and operate a database on industrial clusters nationwide.

Article 36.Powers and responsibilities of the Ministry of Planning and Investment

1. To summarize annual and five-year plans on central budget supports for investment in the construction of industrial cluster technical infrastructure at the proposal of the Ministry of Industry and Trade.

2. To assume the prime responsibility for, and coordinate with the Ministry of Industry and Trade in, guiding the management of the implementation of investment projects on construction of industrial cluster technical infrastructure in the form of public-private partnership.

3. To summarize and add industrial clusters (except industrial clusters in geographical areas with favorable socio-economic conditions which are inner districts of urban centers of special category or centrally run urban centers of category I) to the list of geographical areas eligible for investment incentives, and investment in the construction of industrial cluster technical infrastructure to the list of sectors and trades eligible for special investment incentives in accordance with the investment law and issue guidance on the implementation.

Article 37.Powers and responsibilities of the Ministry of Finance

1. To balance central budget funds for industrial cluster development activities.

2. To summarize and add and guide enterprise income tax incentives for investment projects on commercial operation of technical infrastructure and production and business in industrial clusters in accordance with law.

Article 38.Powers and responsibilities of the Ministry of Construction

To guide the implementation of construction regulations, and the process of formulation and approval of detailed construction plans and licensing of construction in industrial clusters.

Article 39.Powers and responsibilities of the Ministry of Natural Resources and Environment

1. To monitor, urge and guide ministries, sectors and localities in performing environmental protection work in industrial clusters.

2. To review, summarize and announce the list of seriously polluting industrial clusters nationwide.

Article 40.Powers and responsibilities of the Ministry of Home Affairs

To coordinate with the Ministry of Industry and Trade in guiding the organization and operation of district-level industrial cluster development centers and industrial cluster management units and public non-business units attached to the provincial-level Departments of Industry and Trade that are assigned to invest in the construction of industrial cluster technical infrastructure.

Article 41.Powers and responsibilities of the Ministry of Public Security

To guide the performance of the state management function to ensure security, order and fire prevention and fighting in industrial clusters under regulations.

Article 42.Powers and responsibilities of provincial-level People’s Committees

1. To approve the planning, establishment and expansion of industrial clusters, mechanisms, policies and plans on industrial cluster development activities, propose investment in industrial clusters in the form of public-private partnership after consulting the Ministry of Industry and Trade; to submit to their People’s Councils for approval the programs on supports for investment in industrial cluster technical infrastructure funded with local budgets.

2. To promulgate regulations on coordination among provincial-level departments, sectors and district-level People’s Committees in the management of industrial clusters; to settle procedures for implementing investment projects on technical infrastructure construction and production and business in industrial clusters under the single-window or inter-agency single-window mechanism.

3. To direct lower-level administrations, sectors and units in their localities to guide and support enterprises, cooperatives and production facilities in implementing investment projects on technical infrastructure construction and production and business in industrial clusters; to support the ground clearance, compensation and resettlement, construction of transport, power supply, water supply and drainage, post and telecommunications systems and worker condominiums.

4. To direct inspections and examinations and handling of violations in industrial clusters; to direct examinations and strict supervision of seriously polluting industrial clusters in their localities.

5. To periodically or extraordinarily report to the Ministry of Industry and Trade on the situation of industrial clusters in their localities; to perform other tasks and powers related to industrial clusters in accordance with law.

Article 43.Powers and responsibilities of provincial-level Departments of Industry and Trade

Acting as local focal agencies performing the state management of industrial clusters in their localities, provincial-level Departments of Industry and Trade have the following powers and responsibilities:

1. To formulate and submit, and organize the implementation of, master plans, regulations, policies and programs on supports for investment in technical infrastructure and prepare cost estimates for industrial cluster development activities in their localities after they are approved by competent agencies.

2. To receive and settle or coordinate and propose competent agencies to decide on investment policy and grant investment registration certificates for investment projects on technical infrastructure construction and production and business in industrial clusters and settle procedures for investment in the construction of industrial cluster technical infrastructure (including land recovery, land lease, approval of detailed plans, approval of public investment projects, approval of environmental impact assessment reports, and approval of fire prevention and fighting plans) as prescribed or as decentralized or authorized by provincial-level People’s Committees.

3. To assume the prime responsibility for inspecting, examining and evaluating the implementations of master plans, policies and laws and operation effectiveness of industrial clusters; to handle or propose provincial-level People’s Committees to handle violations and arising matters related to industrial clusters.

4. To periodically or extraordinarily report to the Ministry of Industry and Trade and provincial-level People’s Committees on the situation of industrial clusters; to register land use needs of industrial clusters in each period with competent agencies; to build and operate databases on local industrial clusters.

Article 44.Powers and responsibilities of district-level People’s Committees

1. To propose the planning, establishment and expansion of industrial clusters in their localities; to ensure necessary conditions for the effective operation of district-level industrial cluster development centers or industrial cluster management units.

2. To direct commune-level People’s Committees and attached specialized agencies to carry out the land recovery, land lease, compensation and ground clearance, resettlement and construction of houses for workers, and procedures for investment in industrial clusters.

3. To act as focal points in receiving and settling or coordinating and proposing competent agencies to settle procedures for implementation of investment projects in industrial clusters (including land recovery, land lease, construction licensing, approval of fire prevention and fighting plans, certification of environmental protection plans or approval of environmental impact assessment reports) as prescribed or as decentralized by provincial-level People’s Committees.

4. To invest or propose competent agencies to decide on investment in technical infrastructure inside and outside industrial clusters; to approve and implement plans on relocation of enterprises and production facilities and carry out industrial cluster development activities in their localities.

5. To inspect, examine and evaluate the implementation of laws and policies on industrial clusters according to their competence; to periodically or extraordinarily report to provincial-level People’s Committees and Departments of Industry and Trade on the situation of industrial clusters in their localities.

Chapter VII

IMPLEMENTATION PROVISIONS

Article 45.Commendation, and handling of violations

1. Organizations and individuals that record achievements in investment in the construction of technical infrastructure or production and business in industrial clusters shall be commended and rewarded in accordance with law.

2. Violators of this Decree shall, depending on the nature and severity of their violations, be disciplined, administratively sanctioned or examined for penal liability; if causing any damage, they shall pay compensation in accordance with law. Investment projects on construction of technical infrastructure and production and business in industrial clusters which operate ineffectively, are not executed or are executed behind schedule with multiple extensions and violate law shall be handled under regulations.

Article 46.Transitional handling

1. Industrial clusters smaller than 10 hectares or industrial clusters in mountainous districts and craft village industrial clusters smaller than 5 hectares which have been established and/or expanded or are in the process of appraisal for establishment or expansion under the Prime Minister’s Decision No. 105/2009/QD-TTg of August 19, 2009, promulgating the Regulation on management of industrial clusters, may continue operating and shall be managed under this Decree.

2. Industrial clusters that were established before the effective date of the Regulation on management of industrial clusters promulgated together with the Prime Minister’s Decision No. 105/2009/QD-TTg of August 19, 2009, shall be further handled under Joint Circular No. 31/2012/TTLT-BCT-BKHDT of October 10, 2012, of the Ministry of Industry and Trade and the Ministry of Planning and Investment, and Circular No. 17/2016/TT-BCT of August 30, 2016, of the Ministry of Industry and Trade, amending and supplementing Article 10 of Joint Circular No. 31/2012/TTLT-BCT-BKHDT.

Article 47.Effect

1. This Decree takes effect on July 15, 2017.

2. This Decree annuls the Prime Minister’s Decision No. 105/2009/QD-TTg of August 19, 2009, promulgating the Regulation on management of industrial clusters.

Article 48.Implementation responsibility

1. The Ministry of Industry and Trade shall assume the prime responsibility for, and coordinate with related ministries, sectors and localities in, guiding the implementation of this Decree.

2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees and related organizations and individuals shall implement this Decree.-

On behalf of the Government
Prime Minister
NGUYEN XUAN PHUC