Report on Summary and evaluation of recommendations settlement of the business community for the period 2016-2019

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CHAMBER OF COMMERCE &

INDUSTRY OF VIETNAM

No: 0036/PTM – KHTH

 

THE SOCIALIST REPUBLIC OF VIETNAM

                  Independence - Freedom - Happiness 

 

Hanoi, 8th January 2020

To: The Government’s Prime Minister

 

REPORT ON

Summary and evaluation of recommendations settlement

of the business community for the period 2016-2019

 

In furtherance of the guidance of the Government’s Deputy Prime Minister Vuong Dinh Hue in Official Letter No. 9218 / VPCP-DMDN dated October 9, 2019 of the Government’s Office on the assignment of the Vietnam Chamber of Commerce and Industry (VCCI), summarizing, assessing the implementation of resolving recommendations of the business community in the 2016-2019 period of state management agencies in the spirit of the Government's Resolution No. 35 / NQ-CP dated May 16, 2016 on support and business development to 2020, The VCCI would like to report as follows:

I.  RESOLUTION RESULTS OF BUSINESS’S RECOMMENDATIONS

1. Implementation of receiving and resolving businesses recommendations

From October 1, 2016 to December 31, 2019, there were 3,287 recommendations of businesses were received through information channels (the Government’s Office, the VCCI, business associations) and transferred to ministries, sectors, localities that considered, solved and answered businesses, in which 2,582 recommendations were answered and solved (accountfor 78.5%) and 705 recommendations were unanswered (accounting for 21.5%) (details in table 1).

Table 1: Summary of business recommendations 2016-2019

STT

Criteria/year

From 10/2016 – 12/2016

2017

2018

2019

Total

1

Total recommendations of the businesses

489

1.152

701

936

3.287

2

Number of recommendations of ministries/branches were resolved

372

954

546

710

2.582

 

Percentage (%)

76.1%

82.4%

77.9%

75.9%

78.5%

 

Number of recommendations of ministries/branches were not resolved

117

198

155

 

253

705

 

Percentage

23.9%

17.6%

22.1%

24.1%

21.5%


 From the results of receiving and summarizing recommendations of
businesses, it showed that:

The number of business recommendations tended to decrease over time. The number of recommendations in 2018 had been 61% and in 2019 was 81% compared to 2017. This showed that the resolution of recommendations were more effective and difficulties and obstacles of businesses tended to decrease.

- The rate of recommendations resolution reached nearly 80% that is quite a high level. However, there were still over 20% of businesses’ recommendations were not answered, requiring ministries and localities to be more active, and clarify the causes affecting this existence.

- The system to receivehandle feedback and recommendations of businesses on the Government’s Web Portal operated by the Government’s Office. (www.doanhnghiep.chinhphu.vn) is the main information channel for receiving opinions. recommendations of businesses, accounting for 86% gathered through information channels to be transferred to ministries and localities to resolve [1].

- The ministries received many recommendations of businesses are: The Ministry of Planning and Investment, The Ministry of Finance, The Ministry of Construction, The Ministry of Industry and Trade, The Ministry of Natural Resources and Environment, The Ministry of Labor, War Invalids and Social Affairs. [ 2] In particular, two ministries: the Ministry of Finance, The Ministry of Planning and Investment were account for nearly 50% of the total annual recommendations.

2. Evaluation of the receipt and recommendation settlement by businesses

2.1. Positive points:

- With the drastic direction of the Government’s Prime Minister through the Government’s Prime Minister's Meetings with businesses in 2016, 2017 and 2019 with the issuance of Directive 26 / CT-TTg dated June 6, 2017 on “continuing effective implementation of Resolution No. 35 / NQ-CP in the spirit of the Government accompanying businesses, ”Resolution No. 110 / NQ-CP dated August 25, 2018 on" a number of major tasks and solutions to remove solving difficulties and problems related to mechanisms and policies on construction investment”, The conclusions of Government’s Prime Minister at the Symposiums in the areas of businesses facing many difficulties, such as logistic and investment, capital construction, import and export, ASEAN one stop shopping and trade facilitation, investment in agriculture and rural areas, land accumulation and concentration, supporting industry development, etc., receiving and resolving recommendations of ministries and localities have made positive changes.

Before the Government’s Prime Minister issued Directive 11 / CT-TTg dated May 21, 2014 on solving difficulties, problems and recommendations, promoting production and business of enterprises, including assigning tasks to VCCI on "Summary of difficulties, obstacles and recommendations of businesses and transfer them to state management agencies for handling and settlement; monthly report to the Government’s Prime Minister, the quarterly report to the Government", the resolution of difficulties, problems and recommendations of businesses completely depends on" the goodwill "of ministries and localities. According to the businesses' feedback, it was quite difficult to answer or solve recommendations of businesses, there were very few cases answered in writing by ministries and localities. After the meeting of the Government’s Prime Minister with businesses in early 2016 (the first time), the rate of responding to recommendations of businesses transferred by the VCCI reached 45%. After putting into operation, the system of receiving, handling feedbacks and petitions of businesses on the Government Web Portal (at the end of 2016), the rate of replying to businessres recommendations of ministries and localities reached 76.1% and after 4 years (2016-2019) the rate of responding to business recommendations of ministries and agencies has reached nearly 80%. Raising publicly posting of the recommendations and the responsible ministries, branches and localities have worked well in raising the response rate and solving difficulties for businesses. This is also a testament to the positive change of Government agencies in the spirit of " government creating ".

Ministries and agencies actively received and timely addressed the recommendations of businesses transferred by the Government’s Office and the VCCI transfered quite fully, timely and on time according to the Office's transfer slip. Typical ministries are: the Ministry of Finance, the State Bank of Vietnam, the Ministry of Construction, the Ministry of Transport, The Ministry of Planning and Investment, the Ministry of Industry and Trade, The Hanoi People's Committee, the People's Committee of Thua Thien Hue Province (2017); the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Transport, the  Ministry of Construction, the Ministry of Agriculture and Rural Development (2018); the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Transport, the Ministry of Construction, the Ministry of Agriculture and Rural Development, the State Bank of Vietnam, the Ministry of Justice, the Ministry of Foreign Affairs (2019).

- How to receive and transfer recommendations of businesses through the Government Web Portal, the recommendations of the Government’s Office and the close monitoring of VCCI's recommendations to ministries branches and localities exerted a clear effect, making an important contribution to increasing the number of recommendations from businesses/ business associations and creating administrative "pressures" for ministries and localities to seriously study and answer recommendations of businesses.

- Effective and in-depth operation of the Working Group on reforming administrative procedures of the Government’s Prime Minister for ministries and localities, especially for the "hot" areas of administrative procedures created positive changes of ministries and localities in reforming administrative procedures, modes and service attitudes of cadres and civil servants in the direction of creating favorable conditions for production and business activities of businesses.

2.2. The limitations and exists

- A number of ministries and agencies answer and resolve business recommendation in a timely manner according to the Government's Office's transfer form. Typically the ministries: Health; Labor, War Invalids and Social Affairs; the Natural Resources and Environment; the Public Security (2018); the Ministry of Health; Labor, War Invalids and Social Affairs; The Natural Resources and Environment; the Public Security (2019). Although the two ministries received many recommendations, answered and basically resolved the recommendations of businesses, the number of unresponsive and unsatisfactory ones of the Ministry of Finance and the Ministry of Planning and Investment was still quite a lot. The main reason was because of many complicated, long-lasting cases and related inadequacies in legal documents that need to be considered and amended.

- A number of recommendations were answered by ministries and agencies, but the answers were in favor of legal interpretation and did not specify the direction for resolving the recommendations of the business. For example, in 2018, the General Department of Taxation and the Ministry of Finance answered to exporters of construction materials in Nghe An Province about problems in implementing Circular 130/2016 / TT-BTC dated August 12, 2016 in the official dispatch. No. 2972 / TCT-CS dated July 6, 2017. However, the content of the answers only explained the law but did not answer directly to the recommendations and recommendations of the business about 10 months after the Circular toke effect, businesses only had access information on policies. During this time, businesses still applied the VAT law, Circular 26-2015 / TT-BTC dated May 27, 2015 to implement. When completing the procedures at the Tax Department of Nghe An Province to refund VAT for the business, the Tax Department replied that it must comply with Circular 130/2016, leaded to very slow tax refund, the business was suffered losses; The Ministry of Transport repeatedly answered recommendations of Vietnam - Czech Company about canoe registration (production codes H30 and H38 of Viet Czech Technology Joint Stock Company) with a capacity of over 12 people but they still disorientated and did not have  definitive solution for the business to encourage the application of new technologies and materials in cano production.

- In general, People's Committees of provinces and cities directly under the Central Government answered to recommendations more slowly than ministries and agencies according to the deadline. The main reason is that the recommendations of the business were transferred to many levels. The process was usually assigned by the provincial People's Committee to one or more Departments and branches to solve and then report back to the People's Committee to answer businesses ... On the other hand, the cases that businesses proposed under the jurisdiction of the provincial People's Committee were often complicated and prolonged complaints., Ho Chi Minh and Hanoi City are the two localities with the largest number of unresolved recommendations compared to other localities.

- The rate of unsatisfied businesses was still high for answering and resolving recommendations of ministries and localities.

In 2019, VCCI conducted two quick surveys for nearly 1,000 businesses that submitted recommendations to ministries and localities in 2018 and 2019. The survey results showed that:

 Regarding answering the recommendations of ministries and agencies, 37.9% of businesses responded satisfactorily, 17.7% of businesses responded very satisfied, 40.7% of businesses answered that were not satisfied and 3.7% of businesses responded did not evaluate.

Regarding the resolution of the recommendations of the People's Committees of provinces and cities directly under the Central Government: 27.7% businesses responded satisfactorily, 9.6% businesses responded very satisfied, 31.6% of businesses answered that were not satisfied and 31.1% businesses did not evaluate.

+ Regarding the reasons that businesses were not satisfied with the response and resolution of recommendations: up to 41.4% businesses evaluated that the answer content was general, heavy on explanation but they did not solve the problem proposed by businesses; 14.7% businesses said that it was necessary to amend the provisions of the law to solve, but the amendment proceeded slowly; 11% businesses reflected that authorities only recorded recommendations but they did not resolve them. In addition, 8.9% businesses responded that authorities answered incorrect recommendations: over 30% of businesses stated other reasons ...

The survey results also showed that: Businesses/business associations assessed that they were not satisfied with responding to recommendations of ministries, branches and localities that tended to increase. At the same time, the reason that the businesses/business associations evaluated that the answers were too general, just explained, but not solve sharply increasing (48.5% of the last 6 months of 2019 compared to 34.29% of the first 6 months. 2019). The rate of businesses / business associations reflecting that the authorities did not respond to recommendations was also increasing (12.1% in the last 6 months of 2019 compared to 5.71% in the first 6 months of 2019. ). This situation showed that the task of resolving recommendations of ministries, branches and localities needed to continue to improve in quality in order to promptly solve difficulties and problems of businesses in order to create environment for businesses becoming more and more convenient for businesses as the Government has set out.

2.   Some basic content in the recommendations of the business

The main recommendations of the business community were focused on the following issues:

3.1. About administrative reform to create favorable conditions for businesses:

The recommendations of businesses were mainly focused on improving tax procedures, customs, land access, inspection and environment; The spirit and service attitude of civil servants working in the field; State agencies were also required to comply with the law, equality with businesses.

The outstanding content was the recommendations for the specialized inspection of ministries and branches. While the administrative procedures of the Customs sector were remarkably improved, the specialized inspection of ministries and branches was slow to be improved, many of the specialized inspection were unnecessary or too long, causing waste. time and money for businesses. Moreover, the law of specialized management of Vietnam is not a single legal system but a collection of regulations related to management of imported and exported goods in many specialized legal systems of various branches. Although from 2017, the Government, the Government’s Prime Minister and the Working Group of the Government’s Prime Minister directed and urged ministries and agencies to accelerate the reduction and elimination of specialized inspection procedures but in the past year, businesses still have many recommendations to promote the simplification of specialized inspection procedures, eliminate unnecessary inspection procedures and recommend the need for drastic guidance and regular inspection, urge the Government’s Prime Minister and the Government towards the ministries. For example: Many business associations in the field of food processing (the ietnam Association of Seafood Exporters and Producers, the Vietnam Dairy Association, the Transparent Food Association, the Ho Chi Minh Food Association, Phu Quoc Fish Sauce Association, American Trade Association in Vietnam, European Business Association in Vietnam) and businesses in this field make recommendations about problems in implementing Circular No. 12/2017 / TT -BKHCN of the Ministry of Science and Technology such as: the right to lodge complaints about goods quality testing results; the request for re-testing of goods quality at designated testing establishments for cases where the first-time goods testing results not meet up to quality .... So far, the Ministry of Science and Technology has explained in terms of the provisions of Circular No. 12, but its content has not yet been amended.

3.2. Regarding creating a favorable environment to support businesses in innovation:

The content of the recommendations is focused on promoting the effectiveness of the National Science and Technology Development Fund; the National Technology Innovation Fund, the Small and Medium Enterprise Development Assistance Fund ...; It is necessary to continue conducting regular review and evaluation of conditional business lines in order to accurately identify conditional business lines and trades suitable to the objectives specified in the Investment Law, ensuring the State management has just realized the business freedom of businesses. A prominent issue that has been recommended by businesses/business associations in the transport industry in the past 3 years is the Draft Decree replacing Decree No. 86/2014 / ND-CP dated September 10, 2014 of the Government about conditions for transport business by auto. Although the draft decree has been submitted to the Government many times by the Ministry of Transport, it has not yet been issued and continued to receive many recommendations from Business Associations (Hanoi, Danang and  Ho Chi Minh City Taxi Associations,) and transport business.

Many businesses reflected on the unreasonability when applying Circular No. 43/2012 / TT-BYT dated November 24, 2018, guiding Decree 38/2012 / ND-CP, which has expired to guide Decree 15/2018 / ND-CP (Decree 15 is issued to replace Decree 38). This application caused difficulties for businesses to label goods for food products. If the promulgation of Decree 15 to replace Decree 38 is considered as a bright spot of the Ministry of Health in reforming administrative procedures to facilitate businesses, the competent authorities still apply Circular 43 / 2012 / TT-BYT dated November 24, 2012 guiding Decree 38/2012 / ND-CP is typical for obstructing and making business activities of many businesses congested in goods circulation.

Also recommending to the Ministry of Health, the American Business Association in Vietnam (AmCharm Vietnam) reflected that on April 19, 2019, the Department of Food Safety - Ministry of Health issued Document No. 1234 / TB- Food safety guidelines for supplementing GMP Certificates in production, business and registration of health food products announcements, and in May 2019, issuing a draft Circular guiding GMP in manufacturing and trading health food business with a comment deadline dated July 17, 2019. Both of these documents had a lot of practical and legal inadequacies, which could greatly affect the operation of health food business businesses in Vietnam. After receiving the recommendations, the Ministry of Health organized a seminar to collect comments on the Draft Circular with the participation of AmCharm representatives. This cooperation of the Ministry of Health was highly appreciated by AmCharm.

 

3.3. Regarding ensuring the right to business and equal access to business resources and opportunities:

Recommendations related to the request for serious implementation of consultations with affected subjects and consultation with experts in the process of developing and implementing laws and policies; Enhancing the quality and participation of legislative officials at all levels in law development; Conflicts, overlap between legal provisions.

Representing the business community, in 2019, the VCCI submitted to the Government’s Prime Minister a report on reviewing 20 major overlaps in laws and legal documents in the fields that have a great impact on businesses and the business environment. businesses such as investment, land, construction, environment, housing, real estate business ... (in Official Letter No. 1739 / PTM-PC dated August 1, 2019). This summary and analysis is drawn from over 200 issues reflected from practice, reviewing the legal system to point out the overlap conflicts of the Investment Law, the Enterprise Law, the Bidding Law, the Construction Law, the Land Law, the Housing Law, the Environmental Protection Law, Urban Planning Law, Water Resources Law and many decrees and guiding documents.

The amendment of the Enterprise Law and the Investment Law has received great attention from the business community. In 2019, there were many comments from businesses, business associations and experts with the draft Enterprise Law and Investment Law. The comments include: a new portfolio with a small number of industries restricting foreign ownership; reforming state-owned enterprises; legal institutions for individual business households; General Meeting of Shareholders; mechanism of operation of the Control Board in the enterprise ...

3.4. About reducing business costs for businesses:

Focused on ensuring appropriate interest rate ground; Reduced employer contributions; Reduced land rent, reduced fee levels in some BOT projects, some other fees and charges.

 Prominent is the recommendation to reduce the cost of using works, infrastructure, service facilities, public utilities in the Hai Phong seaport area in accordance with Resolution No. 148/2016 / NQ-HDND of the Hai Phong City People's Council and asking to reduce fees at some BOT projects across the country. In addition, logistics costs account for a very high proportion of business costs of businesses (20% of GDP as reported by the World Bank), mainly due to complicated customs clearance (customs and specialized inspection). Industrial zones and clusters have not been well integrated with transport infrastructure planning; insufficient and weak warehouse infrastructure services ...

3.5. Protection of legitimate rights and interests of businesses:

Recommendations addressing the issues of protecting the rights of businesses when resolving disputes at the Court; business bankruptcy procedures and Civil enforcement; There are penalties strong enough to deter unfair competition acts and infringe upon the copyright of the IP; Protection of businesses in labor relations; inspecting and checking are not in compliance with regulations.

Many businesses / business associations recommended that the state should have an overall strategy on judicial reform to support the business environment. This strategy should focus on shortening the time to adjudicate business-related disputes and the time to resolve bankruptcy of businesses. Regarding civil judgment execution, the recommendations also expect the government to set goals and solutions to shorten the time and increase the effectiveness of the judgment execution.

According to a VCCI survey, nationwide, the number of business inspections in 2018 tended to decrease compared to 2017. In particular, the percentage of businesses that were inspected twice or more in a year decreased sharply from 39.8% to 18.9%. This is a relatively strong reduction, indicating that on the general level, the state agencies have complied with the Prime Minister's Directive 20 and Resolution 35. However, 18.9% of businesses said that they were liquidated. If counting the total number of inspections per total business, there are about half of million of businesses were inspected inspections from second time or more. For example: The Huynh Tran Liability Co; Ltd reported that Customs Sub-Department CK CSG KV4 (ICD1) checked after customs clearance from March 15, 2019 to April 29, 2019 but received again on May 13, 2019. One more notice No. 659 / STQ-ĐSTQ (April 25, 2019) on post-clearance inspection from April 2014 to 2019 ...

1.   SOME PROPOSALS AND RECOMMENDATIONS

From the perspective of the agency assigned to synthesize the situation of resolving proposals of state agencies as well as summarizing the opinions of the business community, The VCCI proposed some solutions to improve the quality of the solution. The recommendations are as follows:

Summarizing the implementation of the Government's Resolution No. 35 / NQ-CP dated May 16, 2016 on supporting and developing businesses till 2020. Promulgating new resolutions in the spirit of the results of implementation of Resolution 35 / NQ -CP on support and business development for the period 2020-2025 and the Government's orientation to support and facilitate the operation of businesses in the coming period.

Regarding the resolution of recommendation of businesses

- Besides strengthening the supervision of the strict implementation of Regulation No. 11-QÐ / TW dated February 18, 2019 of the Central Executive Committee on the responsibility of the head of the Party Committee in receiving people and direct dialogues meeting with the people and dealing with the people's feedbacks and recommendations as well as the State's regulations on the resolution of recommendations and complaints of the people and businesses, the Government also needed to stipulate more responsibilities for with the heads of Government agencies in the work of answering and settling recommendation of businesses.

- Promulgated criteria for evaluating the quality of replies and businesses’s  recommendations of ministries and localities. Every year, the the Government’s Office acted as a focal point to assist the Government and the Government’s Prime Minister in resolving recommendations of the people and businesses to lead or assign tasks to the VCCI for assessment and announcement of classification. rank ministries, branches and localities in receiving, responding to and settling businesses recommendations. At the same time, there are corresponding forms of reward and discipline.

- Continued assigning tasks to the VCCI and business associations in receiving and monitoring responses and resolving recommendations of business.

- Improved the quality of the System of receiving and responding to recommendations of businesses on the Government Web Portal.

+ Currently, the Government has just opened the National Public Service Portal, which integrated both the System of receiving and responding to recommendations of businesses into the National Public Service Portal. However, the new interface on the National Public Service Portal is relatively difficult to use compared to the website interface: https://doanhnghiep.chinhphu.vn. The search for recommendations by ministries, branches and localities is not carried out as before. It is also more difficult for businesses to track the progress of resolution of submitted recommendations. Proposing the Government’s Office to continue studying and improving to create favorable conditions for businesses to send and search recommendations.

+ Searched engine recommendations on both the previous and current websites are quite inadequate. The search for recommendations by official dispatches is not possible. The search for recommendation based on the name of the business or the person who sent the recommendations gave results sometimes that are incorrect. Therefore, the Government’s Office should continue studying technical solutions to improve the efficiency and simplicity of the way to seek recommendations.

+ The system for receiving and responding to recommendations needed to be connected with the ministries and agencies in order to ensure that when the Government’s Office posted the recommendations on the system, the ministries, branches and localities also received them on their System and toke responsibility for responding / resolving recommendations. It was not necessary for the Government’s Office to send copies of both the recommendations and the dispatch documents. This was also not consistent with the goal of building e-government.

The above is a summary of the general report, assessing the situation of resolution of recommendations of the business community in the 2016-2019 period of state management agencies in the spirit of Resolution No. 35 / NQ-CP dated 16 May 5, 2016 of the Government on supporting and developing businesses until 2020.

Vietnam Chamber of Commerce and Industry respectfully reports.

 

C/C:

- As above;

- The Direction Committee for Enterprise Development and Innovation

- The Standing Committee (for report);

- Saved by the Archives and the Admin Dept. (for synthetics)   

 

 

 

By: Translator: HaiYen - Business Information Center (BIZIC)

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