Resolution 68/NQ-CP 2022 mobilize resources of State-owned enterprises for socio-economic development

RESOLUTION

On further renewing, raising operational efficiency and mobilizing resources of state-owned enterprises, with economic groups and corporations being the focus, in socio-economic development^[1]

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THE GOVERNMENT

Pursuant to the June 19, 2015 Law on Organization of the Government; and the November 22, 2019 Law Amending and Supplementing a Number of Articles of the Law on Organization of the Government and the Law on Organization of Local Administration;

Pursuant to Resolution No. 12-NQ/TW of June 3, 2017, of the 5^th Plenum of the Party Central Committee, the 12^th Congress, on further restructuring, renewing and improving the efficiency of state-owned enterprises;

At the proposal of the Minister of Planning and Investment and based on unanimous opinions of members of the Government,

RESOLVES:

State-owned enterprises (SOEs) constitute an important material force of the state economy. Over the past years, SOEs have made great contributions to socio-economic development, assurance of national defense-security and social security, good performance of political tasks assigned by the Party and the State, acting as the core in a number of sectors and fields and generating a significant source of state budget revenues. Particularly, against the backdrop of the Covid-19 pandemic and changes in the region and the world, SOEs have actively performed and fulfilled their assigned tasks, maintained production and business activities, and contributed to macroeconomic stabilization.

In addition to the achieved results, some shortcomings and limitations remain to be seen in SOEs’ production and business as well as resource mobilization activities as mentioned below.

The role of leading, motivating, finding the path for, and promoting, other economic sectors has not been brought into full play. Innovation capacity remains limited, especially in the industries capable of leading the economic restructuring process such as core technologies and digital technologies in Industry 4.0; new energy and clean energy industries; and industries containing high scientific, technological and innovative values, etc.

The operational efficiency of SOEs is not commensurate with the resources they are holding; there remain enterprises and projects that poorly perform production and business activities with prolonged losses. In the 2016-2020 period, virtually, economic groups and corporations did not kick-start new projects and works, as a result, investment resources gradually reduced. SOEs have neither closely linked with one another nor created the most favorable conditions for sole proprietorships, including small- and medium-sized ones, to participate in the supply chain and value chain. The equitization and divestment work is still behind the set schedule, and the restructuring of SOEs remains incomprehensive and impractical. The renewal of corporate governance is still at a slow pace and fails to keep up with changing requirements of the market. Investment management, financial management, risk management, thrift practice and waste combat and loss prevention remain loose; production and business costs are still high and the quality of human resources remains poor. Many enterprises have not thoroughly applied information technology in business administration activities, leading to failure to detect problems arising in business activities. The regime of remuneration and examination of responsibility of enterprise managers is basically the same as that applicable to state employees, thus failing to create the motivation associated with responsibility according to the market mechanism.

The above-mentioned limitations and weaknesses of SOEs are attributed to both objective reasons and subjective reasons of which subjective reasons are the prime ones. Regarding objective reasons, many changes are seen in the world’s economic-political situation, the Covid-19 epidemic sees complicated and unpredictable developments, seriously affecting production and business activities of SOEs. Most SOEs undergoing rearrangement or renewal in this period are large-sized enterprises facing numerous financial problems and have the right to use large land areas, thus prolonging the rearrangement or renewal process. Regarding subjective reasons, limitations are still seen in the institutionalization and implementation of the Party’s guidelines on SOEs, while mechanisms and policies are not promptly revised to remove administrative barriers and encourage enterprises to take the initiative in investing in business expansion and innovation. It remains unclear about the mechanism for coordination in, and the focal-point agency in charge of, summing up information on operation of SOEs to promptly advise the Government and Prime Minister on comprehensive and effective solutions regarding the operation of SOEs. SOEs have neither tried their best to grasp opportunities and attract resources of the market nor participated intensively and extensively in the international economic integration process and failed to create a high added value. The role, awareness and responsibility of the heads of SOEs are still limited.

In order to further improve the operational efficiency of SOEs, and promptly remove difficulties and obstacles, especially in investment activities, in order to free up resources and promote the role of SOEs in socio-economic recovery and development, the Government requests ministries, ministerial-level agencies, government-attached agencies, People’s Committees of provinces and centrally run cities (below collectively referred to as localities), and Members’ Councils of, and the representatives of the State’s capital portions at, enterprises to urgently grasp and drastically and effectively implement the following tasks:

I. VIEWPOINTS

1. To deeply grasp the viewpoints, objectives, tasks and solutions on SOE development which are set in Resolutions of the Party, National Assembly and Government; to regard SOEs as an important material force of the state economy performing the leading role, proactively participating in national construction and development, contributing to economic development and social progress and justice, playing the pioneering role in key and essential fields, deep-lying, remote and border areas, islands, areas of national defense and security importance, and fields in which enterprises of other economic sectors do not invest.

2. To concentrate investment in new fields and modern sciences and technologies, form value chains, promote cooperation and association with domestic enterprises so as to build an independent, self-reliant economy which relies on both internal resources (human resources, natural conditions, culture and history, etc.) and external resources (technology, capital, labor force, governance, etc.).

3. To inherit and promote achieved results and overcome limitations, weaknesses and inadequacies. To continue to consolidate, and improve the operational efficiency and competitiveness of, SOEs on the basis of modern technology and innovation and governance capacity according to international standards. To effectively manage, preserve and develop state capital and assets at enterprises. To build business ecosystems, taking the lead in implementing Vietnam’s emission reduction commitments at COP26, shifting to clean energy and reducing carbon emissions in Vietnam.

4. To bring into full play the position, role and mission and uphold the autonomy and accountability of SOEs in production and business activities in line with the 2021-2015 five-year socio-economic development plan, the 2021-2015 economic restructuring plan and the program on socio-economic recovery and development.

5. To focus on immediately implementing measures to remove bottlenecks in investment, production and business activities of SOEs with the motto “soonest- most effective” in order to bring into the fullest play the role and mission of SOEs in socio-economic recovery and development.

6. To minimize direct administrative interference in management and administration work of enterprises; to strongly delegate powers in the exercise of rights and discharge of responsibilities of the representative of the state owner in association with implementation of a comprehensive supervision, inspection and evaluation regime. To separate and clearly define the function as the owner of the State’s assets and capital from the function of state management; to separate the exercise of the right to represent the owner of state capital from performance of the task of production and business development and, at the same time, ensure a harmonious connection in the relationship between the State and SOEs. Accordingly, the State shall create a business ecosystem and environment conformable with the principles of a socialist-oriented market economy; SOEs shall take the initiative in their activities, compete equally and responsibly, and make determined efforts to fulfill their position, role and mission, commensurate with the resources they are holding and effectively use the ecosystem created by the State.

II. OBJECTIVES

1. To improve mechanisms and policies so as to focus on removing difficulties and obstacles, creating favorable conditions for, and increasing proactiveness of, SOEs in production and business activities.

2. To focus on improving the operational efficiency of the SOE sector, taking production and business efficiency and observance of the laws on investment and management and use of state capital as the main evaluation criteria; to attach importance to business ethics and corporate culture, resolutely reduce costs, streamline the apparatus, improve managerial capacity and the spirit of “dare to think, dare to do, dare to bear responsibility” of heads of enterprises; to regularly foster professional qualifications and ensure the material and spiritual lives of officials, public employees and workers.

3. To improve productivity, quality, efficiency and competitiveness of enterprises through promoting digital transformation and application of science and technology, encouraging the formation of innovation centers at enterprises.

4. To consolidate and develop a number of large-scale economic groups and corporations with technological and innovation capacity for development investment in a number of new or important sectors and fields of the economy such as energy (with priority given to renewable energy and clean energy), national infrastructure, finance, telecommunications industry, semiconductor industry, and core technology, etc.

5. By the end of 2025, to strive to achieve the following specific objectives and targets:

a/ All state economic groups and corporations will apply governance on the digital platform and implement corporate governance approaching the OECD’s principles of corporate governance;

b/ All economic groups and corporations will have new projects, including a number of typical investment projects that have the leading and spillover effects and bear the brand name of SOEs;

c/ There will be at least 25 SOEs that have an equity of or are capitalized on the securities market at over USD 1 billion, of which at least 10 SOEs surpass the level of USD 5 billion;

d/ All SOEs will set orientations for and realize investment shifting toward investment projects using green and clean technologies and reducing carbon emissions;

dd/ The average contribution of state economic groups and corporations to the state budget in the 2021-2025 period will increase by 5%-10% compared to the 2016- 2020 period.

III. TASKS AND SOLUTIONS

1. Continuing to improve institutions and policies:

a/ To expeditiously review and synchronously revise legal provisions governing the operation of SOEs such as the Law on Management and Use of State Capital Invested in Production and Business at Enterprises, Law on the State Budget, and Bidding Law, etc., in the direction of:

- Delegating more powers to the owner-representing agencies in exercising some rights and discharging some responsibilities of the Prime Minister, creating autonomy and accountability, and enhancing responsibilities of the owner-representing agencies in assigning targets in enterprises’ production and business plans and conducting target-based management, enhancing the accountability of Members’ Councils and representatives of the state capital portions at enterprises so as to ensure that SOEs operate according to market principles.

- Studying and formulating a mechanism for oversight by owner-representing agencies over groups and corporations through encouraging the hiring of large audit firms that are capable, experienced and prestigious to conduct oversight so as to promptly give warnings in parallel with the state management role of ministries, sectors and owner-representing agencies; accelerating the application of information technology and digital transformation in management of information on SOEs, adhering to the principles of measurability, objectivity, timeliness and transparency, in order to early detect violations and give warnings about risks that may cause business losses or loss of state capital to SOEs; and building and developing a synchronous national database system on SOEs serving assessment, monitoring and supervision activities.

- Studying and developing salary mechanisms and policies according to market principles, associated with productivity and production and business efficiency, especially for persons holding titles and positions and representatives of the state capital portions at enterprises, ensuring compatibility with production and business results and conditions, business lines, and nature of operations of enterprises.

- Renewing the mechanism for management of persons holding titles and positions at enterprises so as to be able to recruit or hire high-quality personnel; to appoint independent members to Members’ Councils (qualified and capable experts in the fields of finance, governance, etc.) to join management and administration work; studying mechanisms and policies on selection of managing leaders, and promoting recruitment through open and transparent recruitment exams.

- Studying and proposing appropriate mechanisms to increase resources for SOEs from the sources of after-tax profits and other lawful funding sources in order to invest in important and effective projects and improve production and business capacity.

- Revising regulations on repurposing the Science and Technology Development Funds of enterprises to perform the tasks of investing in incubators in the fields related to science, technology and innovation; placing orders for innovative products; and investing in innovative startups, etc.

b/ To study and formulate separate management and development mechanisms and policies for a number of large-scale economic groups and corporations to promote the position and role of SOEs as the pathfinder and instructor for socio-economic development.

c/ To study and propose a mechanism for close and effective coordination among related agencies, including the focal-point agency in charge of monitoring and summing up information on the operation of SOEs so as to promptly propose to the Government and Prime Minister comprehensive solutions to promote the operational efficiency of SOEs and contribute to preserving and developing state capital at enterprises.

d/ To study a mechanism to encourage SOEs to invest in improving their competitiveness to keep up with the pace of science and technology development and application on the principle of efficiency and the change of the business model of the global economy and development trends in the world, taking into account the form of selecting organizations and individuals to manage and operate SOEs or part of assets or projects of SOEs (which operate in a number of sectors and fields) for a certain period of time (possibly between 5 years and 10 years) in order to create resources for development investment or social security.

dd/ To study, review and remove difficulties and obstacles in the allocation of public assets for effective use, especially in a number of specific fields (such as railway infrastructure and aviation infrastructure).

e/ To finalize the overall strategy for investment in development of enterprises managed by the Commission for the Management of State Capital at Enterprises which shall serve as a basis for implementation by SOEs.

g/ To expeditiously conduct final review and evaluation and propose an effective operating model to be applied to the Commission for the Management of State Capital at Enterprises.

2. Stepping up the restructuring and renewal of SOEs:

a/ To expeditiously implement enterprise restructuring according to the Prime Minister’s Decision No. 360/QD-TTg of March 17, 2022, approving the Scheme on restructuring state-owned enterprises with state economic groups and corporations being the focus in the 2021-2025 period, and the Prime Minister’s Decision No. 22/2021/QD-TTg of July 2, 2021, on criteria for classification of state-owned enterprises and state-invested enterprises undergoing ownership transformation, rearrangement or divestment in the 2021-2025 period.

b/ To regularly review the observance of regulations on depository registration, trading registration and listing on the securities market applicable to equitized enterprises; to promptly propose appropriate solutions and strictly handle violations.

3. Intensifying the mobilization of resources of SOEs for participation in the national socio-economic development:

a/ To accelerate the formulation of strategies and master plans for development of sectors and fields; to link development strategies of SOEs with the development of sectors and fields so as to promote important resources of the country.

b/ To expeditiously formulate and submit to competent authorities strategies and plans on production, business and development investment of SOEs, with economic groups and corporations being the focus, in conformity with socio-economic development master plans, strategies and plans, assigning SOEs to conduct research and investment in a number of important projects serving  sustainable socio-economic development, industrialization and modernization such as energy (with priority given to renewable energy and clean energy), semiconductor industry, national important transport infrastructure facilities (expressways, railways, airports, seaports, etc.), infrastructure facilities for digital transformation and climate change response, supply of important input materials for production activities (such as steel milling, petrochemistry), etc., on the basis of strengths and main business lines of enterprises.

c/ To formulate a mechanism to promote coordination and cooperation among SOEs and between SOEs and sole proprietorships to implement large-scale projects, improve the overall efficiency of project chains with a view to developing the value chain of sectors and fields and expanding the business space on the principle of mutual benefit.

d/ To improve the role of the State Capital Investment Corporation, especially the Government’s role as an investor, to attract more financial resources into large and important enterprises and projects.

4. Improving capacity and efficiency of production and business activities of SOEs:

- To scrutinize and streamline the apparatus; to establish an effective governance and internal control system; to resolutely prevent and promptly detect violations, conflicts of interest, and formation of collusion, “group interests”, and “backyard”, and abuse of positions and powers to manipulate the operation of SOEs, seek personal gain, commit corruption, cause waste, and inflict harms to the State and enterprises.

- To attach importance to improving brand value, business ethics, and corporate culture; to cut to the utmost costs and optimize capital and land resources of SOEs, improve the quality of goods and services, and promote the building of SOEs’ reputation and brands in the domestic and international markets.

- To intensify the application of new energy-efficient and eco-friendly business models to improve productivity, efficiency and competitiveness.

- To resolutely address the situation of thinned-out investment outside the main business lines of enterprises through divestment, ensuring that SOEs focus on their main business domains.

5. Promoting the role of Party organizations; attaching importance to inspection and examination in SOEs:

- To improve the effectiveness and comprehensive leadership role of Party organizations in observing the guidelines of the Party and policies and laws of the State, setting out and performing business and production tasks of enterprises; to adhere to the principle of following the Party’s leadership and direction in performing political tasks and managing officials.

- To clearly define the responsibilities of Party committees and heads of Party organizations in SOEs in case business losses, asset loss or violations occur during the operation of SOEs.

- To seriously and effectively implement inspection, examination, and corruption prevention in order to properly grasp, report on and accurately evaluate the situation of law observance, early detect violations, thereby promptly rectifying or applying appropriate measures to help enterprises remedy shortcomings and limitations in order to improve the efficiency of their production and business activities.

IV. ORGANIZATION OF IMPLEMENTATION

1. Ministers, heads of ministerial-level agencies and government-attached agencies, and chairpersons of provincial-level People’s Committees, within the ambit of their assigned functions and tasks, shall:

- Proactively amend or propose competent agencies to amend relevant regulations in order to solve difficulties and obstacles in investment, production and business activities of SOEs.

- Expeditiously formulate master plans and strategies on development of sectors and fields; link development strategies of SOEs with development strategies of relevant sectors or fields; carry out inspection and supervision, step up anti-corruption, practice thrift, combat waste, and create breakthroughs in administrative reform; study the application of information technology in inspection and supervision of activities of SOEs.

- Direct economic groups, corporations and SOEs under their management to formulate development strategies and 5-year and annual production, business and development investment plans, concretizing the objectives, viewpoints, tasks and solutions stated in this Resolution.

- Organize the implementation of plans on rearrangement of enterprises under their management in the 2021-2025 period immediately after such plans are approved by competent authorities.

- Direct SOEs, with economic groups and corporations under their management being the focus, to formulate and submit to competent authorities for approval or approve according to their competence a Scheme on restructuring of enterprises in the 2021-2025 period, putting forward specific solutions to achieve the objectives set in this Resolution, which must be completed in the second quarter of 2022.

- Speed up the work of ground clearance and compensation so as to soon hand over grounds for construction, ensuring project implementation schedules according to plans approved by competent authorities.

- Direct economic groups and corporations under their management to apply digital platform-based governance solutions and develop modern standards on corporate governance, approaching the OECD’s principles of corporate governance.

2. The Ministry of Planning and Investment shall:

- Coordinate with the Party Central Committee’s Economic Commission and the Office of the Party Central Committee in reporting to competent authorities on the organization of preliminary review and comprehensive assessment of the implementation of Resolution No. 12-NQ/TW of June 3, 2017, of 5^th Plenum of the 12^th Party Central Committee, on continuing to restructure, renew and improve the efficiency of state-owned enterprises, for reporting to the Party Central Committee’s Political Bureau for consideration and submission to the 13^th Party Central Committee.

- Study and propose the Government to report to competent authorities for consideration the revision of current legal regulations and mechanisms to encourage SOEs to invest in improving competitiveness to keep pace with science and technology development and application, change of the business model of the global economy, and development trends in the world, taking into account the mechanism for selecting organizations and individuals to manage and operate SOEs or part of assets and projects of SOEs in a certain period of time.

- Study and propose a mechanism for close and effective coordination among related agencies, including the focal-point agency in charge of monitoring and summing up information on operation of SOEs to promptly propose to the Government and Prime Minister comprehensive solutions to promote the operational efficiency of SOEs, contributing to preserving and developing state capital at enterprises.

- Study and develop separate management and development mechanisms and policies for a number of large-scale economic groups and corporations operating in a number of sectors and fields in order to promote their role as the pathfinder and instructor for enterprises of other economic sectors to perform some important tasks of the country.

- Concentrate on effectively implementing regulations on information disclosure in accordance with the Government’s Decree No. 47/2021/ND-CP of April 1, 2021, detailing a number of articles of the Law on Enterprises, attaching importance to information on investment situation to enhance transparency and supervisory capacity for SOEs.

- Assume the prime responsibility for monitoring and coordinating with ministries, agencies and localities to periodically report to the Government and Prime Minister on implementation results of, and propose, amend and supplement, this Resolution.

3. The Ministry of Finance shall:

- Draft the (revised) Law on Management and Use of State Capital Invested in Production and Business at Enterprises for submission to the National Assembly under Resolution No. 50/NQ-CP of April 8, 2022, taking into account the contents specified at Point a, Clause 1, Section III of this Resolution, ensuring the schedule approved by the National Assembly.

- Assume the prime responsibility for, and coordinate with the Ministry of Transport and related agencies in, reviewing and handling according to their competence or proposing competent authorities to remove difficulties and obstacles in the management, exploitation and use of public assets, ensuring efficiency, especially in such fields as railway infrastructure and aviation infrastructure.

- Monitor and sum up information on compliance with regulations on depository registration, trading registration and listing on the securities market by equitized enterprises, promptly propose appropriate solutions, and periodically report thereon to the Prime Minister.

4. The Ministry of Labor, Invalids and Social Affairs shall study and propose the Government to amend regulations on labor management, wages and bonuses for managers and employees in SOEs according to market principles, associated with productivity and production and business efficiency of enterprises (amending, supplementing or replacing the Government’s Decrees No. 51/2016/ND-CP, 52/2016/ND-CP, and 53/2016/ND-CP) in the second quarter of 2022.

5. The Ministry of Science and Technology shall study and submit to the Government a Decree amending and supplementing Decree No. 95/2014/ND-CP of October 17, 2014, on investment in, and financial mechanism applicable to, science and technology activities, in the second quarter of 2022, so as to implement the provisions at Point a, Clause 1, Section III of this Resolution.

6. The Government Inspectorate shall accelerate the inspection of implementation of the law on prevention of and fighting against corruption and negative practices in SOEs; study and renew regulations on inspection of SOEs, contributing to ensuring efficiency in the management and use of state capital and assets in enterprises; promptly detect and strictly handle violations, negative practices, corruption and waste in SOEs; and study and apply information technology in inspection work.

7. The Commission for the Management of State Capital at Enterprises shall:

- Coordinate with related agencies to expeditiously evaluate and conduct final review of the implementation of the Party Central Committee’s Political Bureau’s conclusions on the Scheme on forming a full-time agency to act as the representative of the owner of SOEs and state capital at enterprises.

- Finalize and submit in the fourth quarter of 2022 to the Prime Minister the overall strategy for investment in development of enterprises under the Commission’s management.

8. SOEs shall formulate their action plans to effectively implement the solutions specified at Points 4 and 5, Section III of this Resolution; particularly, state economic groups and corporations shall focus on performing the following tasks:

- Formulate their development strategies for the 2021-2030 period, with a vision toward 2035; and 5-year production, business and development investment plans in the second quarter of 2022.

- Formulate their restructuring schemes in the 2021-2025 period for submission to competent authorities for approval in the second quarter of 2022, paying attention to issues relating to increase of investment, improvement of innovation capacity, shifting to green and clean investment toward reduction of carbon emissions, and building of energy storage systems; reform corporate governance models toward applying digital transformation and approaching the OECD’s principles of corporate governance; and use high quality human resources, etc.

- Thoroughly handle shortcomings and problems, speed up the investment progress, complete unfinished projects and put them into use, especially projects that have been delayed for many years; review, extend or postpone investment projects that are not urgent, fail to meet conditions for implementation, or have not been thoroughly evaluated in terms of their efficiency in order to concentrate resources on new investment projects that have the leading or spillover effects and bear the brand names of SOEs; and conduct account finalization of projects completed on time.

9. In the course of implementing this Resolution, ministries, agencies and localities shall promptly report arising problems that fall beyond their competence to the Government, Prime Minister and competent agencies according to regulations.

V. EFFECT

1. This Resolution takes effect on the date of its signing.

2. Ministers, heads of ministerial-level agencies, heads of government-attached agencies, and chairpersons of provincial-level People’s Committees shall be held responsible before the Government and Prime Minister for the organization and results of implementation of this Resolution.-

On behalf of the Government
For the Prime Minister
Deputy Prime Minister
LE MINH KHAI