Directive No. 03/CT-TTg 2012 on stepping up the restructuring of State enterprises

DIRECTIVE

ON STEPPING UP THE RESTRUCTURING OF STATE ENTERPRISES

In the past ten years, the renewal of state enterprises has received constant attention and direction by the Government and the Prime Minister and achieved important results.

Comprehensive institutions and mechanisms on management and transformation of state enterprises have been adopted. State enterprises have numbered down while those in important sectors have increased their capital and operated more effectively, basically fulfilling their core role of the state economy and serving as a material instrument for the State to orientate and regulate the macro-economy, ensure social security, accelerate economic growth and lay foundations for national industrialization and modernization.

However, there remain many state enterprises operating in the sectors which the State needs not to hold. State-run economic groups and corporations have not yet concentrated on their main production and business lines. The production and business efficiency and competitiveness of state enterprises have not been commensurate to their assigned resources; their business administration has failed to meet development requirements under the market mechanism. The state management and the performance of the rights and obligations of the state-owners over state enterprises remain weak.

In furtherance of the resolutions of the Party, the National Assembly and the Government, the task set for the 2011-2015 period is to restructure state enterprises with a more rational structure and higher efficiency and competitiveness so that they properly fulfill their role and assigned tasks, the Prime Minister directs ministries, ministerial-level agencies, government- attached agencies, provincial-level People’s Committees, state-run economic groups and corporations to properly perform the following tasks:

1. To complete synchronous mechanisms and policies on state enterprises; at the same time, to create a legal framework more favorable for the renewal of the operation, management, restructuring and ownership transformation of state enterprises; in the first quarter of 2012, ministries shall submit to the Prime Minister for promulgation or promulgate according to their respective jurisdiction:

a/ For the Ministry of Finance:

- Regulations on the management of finance, investment and dealing in state capital at state enterprises.

- Regulations on financial management and supervision at single-member limited liability companies with the State acting as their owner and on management of state capital invested in other enterprises.

- Criteria and guidelines for state enterprises to correctly and objectively evaluate their operation effectiveness, clarify mechanisms and policy tasks (if any) affecting their overall performance.

- A mechanism for management of equitized enterprises still having state capital.

- Guidance on the implementation of the Government’s Decree No.59/2011/ND-CP of July 18, 2011, on transformation of enterprises with 100% state capital into joint-stock companies. At the same time, appropriate adjustments and supplements to regulations in order to step up the equitization of enterprises with 100% state capital which the State needs not hold, especially state-run economic groups and corporations, in an effective manner under the market mechanism; to attract strategic shareholders with managerial experience and financial and technological capability; and to quickly reduce state capital at state enterprises in which the State does not need to hold dominating share.

- Guidance on the transfer of capital and transformation of enterprises.

- A decree on the functions, tasks, organization and operation of the State Capital Investment Corporation and its organization and operation charter.

b/ For the State Bank of Vietnam:

- Amendments and supplements to the regulations on foreign investors’ purchase of shares of Vietnamese commercial banks.

- Regulations on the organization and operation of financial companies and financial leasing companies.

c/ For the Ministry of Planning and Investment:

- Mechanisms and models for the performance of the rights and obligations of the state-owner of state enterprises, focusing on clarifying the functions and tasks of ministries managing their main business lines and the Members’ Councils of state-run economic groups or corporations.

- Amendments and supplements to the regulations on experimental establishment, management and operation of state-run economic groups in accordance with the Enterprise Law, meeting the requirements of development and practical management of state-run economic groups.

- Guidance on the sale and transfer of projects in association of the sale and transfer of capital (if any) between enterprises when restructuring state enterprises.

d/ For the Ministry of Labor, War Invalids and Social Affairs:

- Regulations on the management of wages of managers in single-member limited liability companies owned by the State.

- A mechanism on the management of wages in single-member limited liability companies owned by the State.

e/ For the Ministry of Natural Resources and Environment: the guidance or proposal on revision of the Land Law, regarding the management of land use in state-run agricultural or forestry farms, including land areas with their use rights contributed by farmer households to equitized agricultural companies; (contracted or not yet contracted) land areas not yet handled in equitized state-run agricultural or forestry farms; and cases of using land for improper purposes at state-run agricultural or forestry farms.

f/ For the Ministry of Home Affairs: regulations studied in cooperation with the Organization Commission of the Party Central Committee and the Party Committee of Central Enterprises on personnel work in state enterprises, especially economic groups and corporations.

2. Line ministries should review and assess the rationality, capability, conditions and methods of reorganization to formulate plans for restructuring state enterprises operating in the sectors under their respective management, regardless of management levels and agencies, in the first quarter of 2012, and submit them to the Prime Minister for approval before organizing their implementation to create substantial improvements in the restructuring of state enterprises.

3. The Ministry of Agriculture and Rural Development shall prepare a review of the reorganization and renewal of state-run agricultural and forestry farms under Political Bureau Resolution No. 28/NQ-TW, and the experimental equitization of orchards and planted forests in association with processing establishments for report to the Political Bureau; and at the same time formulate plans on models and mechanisms for management of state-run agricultural and forestry farms.

4. To complete the approval of plans for reorganization, renewal and equitization of state enterprises of ministries, localities, state-run economic groups and corporations in January 2012. Ministries, localities and state- run economic groups and corporations should draw up programs, plans and specific measures and resolutely direct the realization of the approved plans.

5. In the first quarter of 2012, line ministries and state-run economic groups and corporations 91 submit to the Prime Minister and corporations 90 and enterprises with 100% state capital shall submit to line ministries or provincial-level People’s Committees their restructuring plans for approval. Particularly, attention should be paid to restructuring their production and business lines, concentrating on their main production and business lines and assigned tasks; development strategies in the 2011-2015 period with a vision toward 2020; plans on production and business reorganization; development investment plans; the restructuring of member units and human resources; plans to withdraw capital amounts invested outside their main production and business lines through capital sale or transfer or enterprise transfer.

6. Ministries, sectors and localities shall expeditiously transfer the right to represent the state capital owner at equitized or transformed enterprises to the State Capital Investment Corporation; and study and submit to the Prime Minister for decision the transfer of state capital at a number of equitized parent companies and corporations to the State Capital Investment Corporation.

7. Ministries, localities and state-run economic groups and corporations shall restructure agricultural or forestry companies (state-run agricultural or forestry farms) toward maintaining and contracting under Decree No.135/2005/ND-CP of November 8, 2005, agricultural or forestry farms planting rubber, coffee, tea, fruit trees, production forests or raw-material forests; maintain the management units of protection forests and special- use forests transferred from state-run forestry farms, and transform state- run forestry companies managing protection or special-use forests and forestry companies (state-run forestry farms) managing natural forests into non-business units and the tending and protection of forests will be contracted to people; study and prepare conditions for the equitization of agricultural or forestry farms planting rubber, coffee, tea, fruit trees, production forests or raw-material forests after completing the review of land, the grant of land use right certificates and the shift to land lease.

8. The Ministry of Home Affairs shall coordinate with ministries assigned to represent the state-owner at many enterprises with 100% state capital in studying the establishment of a focal point under its management to assist the Ministry’s leadership in performing the rights and obligations of the state-owner at state enterprises.-