Directive No. 1617/CT-TTg 2011 on foreign direct investment in the coming days

THE PRIME MINISTER

Directive No. 1617/CT-TTg of September 19, 2011, on increasing and redressing the management of foreign direct investment in the upcoming time

On April 7, 2009, the Government promulgated Resolution No. 13/NQ-CP on orientations and solutions for attracting and managing foreign direct investment funds in the upcoming time (below referred to as Resolution No. 13/NQ-CP). The implementation of the Resolution in the past time has contributed to making positive changes in foreign direct investment activities. In 2010, despite complicated world and domestic economic fluctuations, foreign direct investment activities gained encouraging results in capital disbursement, export, tax payment and employment generation, contributing to improving the payment balance and fulfilling the objectives and tasks of the 2006-2010 socio-economic development plan.

Nevertheless, together with these results, delays remain in addressing problems in the attraction and management of foreign direct investment over the past time. The grant of investment certificates unconformable with planning was seen in some localities, especially for golf course, forestation, steel and mining projects. Many projects had not been thoroughly verified and considered in terms of technical, technological, environmental and labor criteria, resulting in low quality of projects and lack of link between foreign-invested and domestic enterprises. In addition, examination and supervision of investors in fulfilling their obligations in capital contribution, fund raising, construction, environmental and technology transfer activities, obligations toward employees and financial obligations toward the State remain poor with lack of coordination among ministries, sectors and localities. On the other hand, poor infrastructure facilities, especially electricity shortage, incompatibility of the port system and related infrastructure facilities, and serious shortage of skilled labor, engineers and managers, are barriers to foreign direct investment activities.

In order to enhance and raise the effectiveness of the implementation of Resolution No. 13/NQ-CP, the Prime Minister instructs ministers, heads of ministerial-level agencies and government-attached agencies and chairpersons of provincial-level People’s Committees to thoroughly grasp and concentrate on the following tasks:

I. OBJECTIVES AND ORIENTATIONS FOR ATTRACTING AND MANAGING FOREIGN DIRECT INVESTMENT DURING 2011-2020

1. To improve the quality and effectiveness of foreign direct investment in line with Vietnam’s strategy for socio-economic development during 2011-2020 toward encouraging development of the foreign-invested sector in conformity with planning; prioritizing projects with modern and environmentally friendly technology and efficiently using natural, mineral and land resources; and increasing partnership with domestic enterprises; to focally attract investment in support industries, agricultural-support industries, advantageous and knowledge-based services, information technology; science and technology, and education and training services, infrastructure development; to selectively attract investment in processing, manufacture, hi-tech, energy, metallurgy and chemical industries; to prioritize development of projects with highly competitive products and products capable of joining the global manufacture network and value chain.

To restrict investment projects in the non-manufacture sector and those increasing trade deficit, consuming a lot of energy or exploiting natural resources without processing. Not to grant investment certificates to projects which wastefully use energy or natural resources or use outdated or polluting technologies.

2. To raise the effect and effectiveness of the state management of foreign direct investment activities to ensure their quality in the new situation.

3. To improve the state management mechanism for foreign direct investment in order to increase and improve the effectiveness of coordination between the Ministry of Planning and Investment and ministries, sectors and provincial-level People’s Committees in the process of granting investment certificates, managing projects and supervising investment activities.

II. MAJOR SOLUTIONS

1. To elaborate investment incentive policies in conformity with the orientations for attracting foreign direct investment during 2011-2020.

2. To raise the quality and effectiveness of planning work, from elaboration, appraisal, approval to management of master plans.

3. To improve and raise the effectiveness of the decentralization of foreign direct investment management, including decentralization of the grant of investment certificates, management of foreign direct investment activities and management of some fields (environment, land, construction, mining, technology, trade, education and training, health), toward decentralization combined with close and effective management through examination and supervision mechanisms.

4. To raise the effectiveness of the management of foreign direct investment flows (fund transfer into Vietnam, overseas loan borrowing and payment, foreign-invested enterprises’ borrowing from domestic credit institutions).

5. To study, elaborate and improve mechanisms and policies in order to restrict and stop transfer pricing by foreign-invested enterprises.

6. To increase the state management of foreign direct investment activities, especially inspection, examination and supervision under the investment law and specialized laws of large-scale and land-intensive foreign-invested projects, mining, real estate, energy-intensive or potentially polluting projects, etc; to review and handle under law delayed or unimplemented projects; to examine and supervise investment-certificate granting agencies in granting, modifying and withdrawing investment certificates and performing the state management of foreign direct investment activities in their localities under law.

7. To improve the quality of the verification, grant and modification of investment certificates on the principles of:

- Conforming with regional and provincial-level socio-economic development master plans and development master plans of industries, sectors and key products.

- Complying with processes and procedures for the grant and modification of investment certificates (regarding licensing conditions, collection of verification opinions of concerned ministries and sectors).

- Attaching importance to considering and evaluating socio-economic benefits of projects, especially issues related to technology, eco-environment, human resource development, impacts on communities, association with domestic enterprises, markets, partners, etc.

- Increasing coordination between investment certificate-granting agencies and the Ministry of Planning and Investment and line ministries in the project verification process.

8. To promulgate criteria and technical standards as a basis for the grant of investment certificates and monitoring, examination and supervision (minimum investment rate for land-intensive projects; scientific, technological and environmental standards; and mining standards and conditions).

III. ORGANIZATION OF IMPLEMENTATION

1. Ministries, ministerial-level agencies and provincial-level People’s Committees (below referred to as local People’s Committees) shall, within the scope of their assigned functions and tasks, thoroughly grasp and disseminate this Directive to its attached units and perform their assigned tasks:

a/ The Ministry of Planning and Investment:

- To assume the prime responsibility for, and coordinate with concerned ministries and sectors and local People’s Committees in, completing in the 2nd quarter of 2012 a scheme on orientations for improvement of effectiveness of the attraction, use and management of foreign direct investment during 2011-2020, proposing specific orientations for investment incentive policies based on sectors and localities of investment.

- To assume the prime responsibility for, and coordinate with concerned ministries and sectors and local People’s Committees in, completing in the 2nd quarter of 2012 a scheme on improvement of quality and effectiveness of the state management of planning work.

- To assume the prime responsibility for, and coordinate with the Ministry of Finance, the Ministry of Industry and Trade and local People’s Committees in, completing in the 4th quarter of 2011 a scheme on prevention and restriction of transfer pricing by foreign-invested enterprises.

- To assume the prime responsibility for, and coordinate with concerned ministries and sectors in, reviewing, summarizing and announcing in the 3rd quarter of 2012 specific conditions for conditional investment projects.

- To assume the prime responsibility for, and coordinate with concerned ministries and sectors and local People’s Committees in, promulgating in the 2nd quarter of 2012 a mechanism on coordination among ministries, sectors and localities in the management of foreign direct investment activities.

- To assume the prime responsibility for, and coordinate with concerned ministries and sectors in, completing in the 4th quarter of 2011 a study on a scheme to build a modern and synchronous infrastructure system.

b/ The Ministry of Industry and Trade:

- To assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment and local People’s Committees in, completing in May 2012 a scheme on improvement of investment quality and state management effectiveness and orientations for foreign direct investment in support industries, electricity and trade during 2011-2020.

- To assume the prime responsibility for, and coordinate with concerned ministries and sectors in, completing in May 2012 a scheme on increased state management of the grant of certificates of origin.

- To review production master plans and announce orientations for attracting foreign direct investment by industry, sector and locality/territory.

c/ The Ministry of Finance:

- To assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment and the Ministry of Industry and Trade in, completing in May 2012 proposals on incentive and support measures for investors in replacement of measures to be removed under Vietnam’s WTO admission commitments.

- To coordinate with the Ministry of Planning and Investment and local People’s Committees in completing in the 4th quarter of 2011 the examination and supervision of capital disbursement and production and business effectiveness of large-scale projects.

d/ The Ministry of Construction:

To assume the prime responsibility for, and coordinate with the Ministry of Natural Resources and Environment, the Ministry of Planning and Investment and local People’s Committees in, completing in May 2012 a scheme on improvement of investment quality and state management effectiveness and orientations for foreign direct investment in real estate business during 2011-2020.

e/ The Ministry of Natural Resources and Environment:

- To assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment, the Ministry of Industry and Trade and local People’s Committees in, completing in May 2012 a scheme on improvement of effectiveness of state management of foreign-invested projects in land, environment and use of natural resources and minerals.

- To review, modify and supplement the set of national technical regulations on environment in the 1st quarter of 2012.

f/ The Ministry of Science and Technology:

To assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment in, completing in May 2012 a scheme on improvement of effectiveness of technology transfer by foreign-invested projects.

g/ The Ministry of Labor, War Invalids and Social Affairs:

- To assume the prime responsibility for, and coordinate with the Ministry of Education and Training, the Ministry of Planning and Investment and local People’s Committees in, completing in May 2012 a scheme on improvement of human resource quality of the foreign-invested sector during 2011-2020.

- To assume the prime responsibility for, and coordinate with concerned agencies in, evaluating the implementation of policies to improve human resource quality.

- To promptly implement the scheme on renewal and development of vocational training to 2020.

- To further direct the implementation of the Prime Minister’s Decision No. 1129/QD-TTg of August 18, 2008, promulgating the plan to implement the Party Secretariat’s Directive No. 22-CT/TW of June 5, 2008, on increased leadership and direction of the development of harmonious, stable and progressive labor relations in enterprises.

- To coordinate with ministries and sectors in implementing the Prime Minister’s Decision No. 31/2009/QD-TTg of February 24, 2009, approving the scheme on dissemination, popularization and education of the labor law for employees and employers in enterprises of different types, and proposing the Prime Minister to promulgate the program on law dissemination and popularization during 2013-2015.

h/ The Ministry of Education and Training:

To assume the prime responsibility for, and coordinate with the Ministry of Labor, War Invalids and Social Affairs, the Ministry of Planning and Investment and local People’s Committees in, completing in May 2012 a scheme on improvement of effectiveness of foreign direct investment in the education and training sector during 2011-2020.

i/ The Ministry of Health:

To assume the prime responsibility for, and coordinate with the Ministry of Planning and Investment and local People’s Committees in, completing in May 2012 a scheme on improvement of state management quality and effectiveness and orientations for foreign direct investment in the health sector during 2011-2020.

j/ The Ministry of Transport:

To assume the prime responsibility for, and coordinate with concerned ministries and sectors and local People’s Committees in, completing in May 2012 a scheme to attract foreign direct investment in transport infrastructure development during 2011-2020.

k/ The Ministry of Agriculture and Rural Development:

To assume the prime responsibility for, and coordinate with concerned ministries and sectors and local People’s Committees in, completing in May 2012 a scheme to attract foreign direct investment in agriculture-fisheries-forestry during 2011-2020.

l/ The State Bank of Vietnam:

To assume the prime responsibility for, and coordinate with the Ministry of Finance, the Ministry of Planning and Investment and local People’s Committees in, completing in May 2012 a scheme to raise the effectiveness of the management of foreign direct investment flows.

m/ Provincial-level People’s Committees:

- To complete and promulgate in the 1st quarter of 2012 mechanisms on coordination among functional agencies in the verification, grant, modification and withdrawal of investment certificates and in the state management of foreign direct investment activities in their localities.

- To assume the prime responsibility for reviewing the master plan on and announcing orientations for locality- or territory-based foreign direct investment during 2011-2020, to be completed in 2012.

- To closely examine and supervise investment certificate-granting agencies in complying with the processes and procedures for granting investment certificates, and in performing local state management agencies’ tasks and responsibilities during the project implementation (land assignment, land lease, ground clearance, construction implementation).

- To direct functional agencies in making careful consideration in verifying and granting investment certificates, increasing examination and supervision of the implementation of projects having obtained investment certificates, ensuring lawful implementation of projects as scheduled and committed and avoiding overlapping and inconsistent handling among local functional agencies.

- To proactively detect and settle issues prone to complaints or disputes; to promptly coordinate with the Ministry of Planning and Investment, the Ministry of Justice and concerned ministries, sectors and agencies in early settling these issues to prevent complicated developments.

- In case of arising disputes or complaints with investors, to act as the focal point for settling such disputes or complaints (even in case investors lodge appeals at international arbitration).

- To assume the prime responsibility for, and coordinate with the Ministry of Natural Resources and Environment, the Ministry of Planning and Investment, the Ministry of Finance and the Ministry of Agriculture and Rural Development in, promulgating regulations on the minimum investment rate/ha of land for land-intensive investment projects, especially those using land under rice cultivation.

n/ Concerned ministries and sectors shall, within the ambit of their functions and tasks, study and consider promulgating technical indicators and standards as a basis for the grant of investment certificates and inspect and supervise foreign-invested enterprises or projects in complying with these regulations (scientific, technological and environmental standards; standards and conditions for mining, etc).

2. Ministries, sectors and provincial-level People’s Committees shall report implementation results to the Prime Minister according to schedule and concurrently to the Ministry of Planning and Investment for summarizing and proposing to the Prime Minister  policy orientations in order to raise the effectiveness of the attraction, management and use of foreign direct investment funds during 2011-2020.

3. The Ministry of Planning and Investment shall monitor, summarize and promptly report to the Prime Minister problems arising in the implementation of this Directive.-

Prime Minister
NGUYEN TAN DUNG