Responded by units: ThePeople's Committee in Lao Cai Province

Official letter: No 4772/UBND - TNMT, dated: 2018-10-09

Responded contents:

1. Regarding the implementation of policies to support and develop enterprises:

Implementation of the Government's Resolution No. 35 / NQ-CP dated May 16, 2016 on supporting and developing enterprises by 2020; The Directive No. 26 / CT-TTg dated June 6, 2017 and the Directive No. 07 / CT-TTg dated 5 March 2018 of the Government’s Prime Minister on continuing to effectively implement Resolution No. 35 / NQ-CP; with the consistent point: "enterprises are prosperous and Lao Cai Province are development” have been developed in the past years, Lao Cai Province has supported and created maximum conditions for enterprises to invest in the province.

However, in the process of operation, there are some enterprises that have not strictly abided by the laws on investment, construction and environmental protection, causing environmental pollution, greatly affecting production and life of the people, causing annoyance to the people and public opinion, potential risks to cause social hot spots, ... In which, there was a project to expand Lao Cai Color Metallurgy plant in Ban Lau Commune , Muong Khuong District, Lao Cai Province of the Tu Dinh Joint Stock Company.

2. Overview of the Lao Cai Color Metallurgy Expansion Project of Tu Dinh Joint Stock Company:

2.1 Project reception process:

The project expanding the color metallurgy factory in Lao Cai in Ban Lau Commune, Muong Khuong District, Lao Cai Province was previously invested by Vidifi Investment Joint Stock Company, granted the Investment Certificate No 12 121 000 123 by Lao Cai Provincecertified on December 22, 2008 with the following contents:

• The objective of the project was to process deep minerals to achieve the final types of products including: lead, zinc and antimony sorting factories with a capacity of 5000 tons / year (refined zinc lead oreZn> 50%, Pb> 50 %, Sb> 50%). The copper firefighting factory had a capacity of 5000 tons / year (98.5% raw copper). Workshop of copper oxide hydrolysis (CuO) with a capacity of 5000 tons / year (99.95% Cu copper crystal), Factory producing sulfuric acid with a capacity of 35,000. tons / year 98% H2SO4. Zinc oxide rotary kiln workshop with a capacity of 4,500 tons / year zinc oxide powder 85-90% ZnO (phase 2 investment).

• Scale of project products:

+ Non-ferrous metals of all kinds: 7,820 tons / year, including: 99.95% crystal: 500 tons / year (phase 1). Raw copper 98.50%: 5000 tons / year (stage 1: 2,500 tons / year). Raw lead 98.00%: 1,570 tons / year (stage 1). Raw antimony 98.00%: 750 tons / year (stage 1).

+ Sulfuric acid 98.00%: 35,000 tons / year (stage 1).

+ Zinc oxide powder 85-90% ZnO: 4,500 tons / year (phase 2).

+ Refined lead and zinc ore: 5,000 tons / year (stage 1: 2,500 tons / year).

•           Project implementation schedule

+ Stage 2: From March 2011 to December 2011.

On April 25, 2011, the project was granted by the Provincial People's Committee to adjust the Investment Certificate No. 12 121 000 123 for the first time on December 22, 2008 with the following contents:

• Adjusting the objectives and scale of the project:

+ Objectives of the project: Copper smelter workshop with a capacity of 10000 tons / year (98% copper). The copper oxide hydrolysis workshop with a capacity of 500 tons / year (99.95% pure copper). Factory producing sulfuric acid with capacity of 35,000 tons / year H2SO4 98%. Workshop of training lead, zinc, antimony ingots: 5000 tons / year. Refined electrolytic workshop with a capacity of 10,000 tons / year (VND 99,995%). Lead, zinc and antimony sorting factories with a capacity of 5000 tons / year.

+ Product scale of the project:

Phase 1 (from December 2012). Positive copper plate (<98% Cu): 10,000 tons / year. Hydraulic plate (99.95%): 500 tons. Acid sunfunc 35,000 tons / year 98% H2SO4.

Phase 2 (from January 2014): Producing refined copper sheet products (99,995% tick) 10,000 tons / year and other auxiliary products from refined fertilizers (wine, silver ...); Sulfuric Acid 98.00% 35,000 tons / year; refined lead and zinc ore 5000 tons / year; 5000 tons of lead, zinc, antimony ingots / year.

+ Product scale of the project:

Phase 1 (from December 2012). Positive copper plate (<98% Cu): 10,000 tons / year. Hydraulic plate (99.95%): 500 tons. Acid sunfunc 35,000 tons / year 98% H2SO4.

Phase 2 (from January 2014): Producing refined copper sheet products (99,995% tick) 10,000 tons / year and other auxiliary products from refined fertilizers (wine, silver ...); Sulfuric Acid 98.00% 35,000 tons / year; refined lead and zinc ore 5000 tons / year; 5000 tons of lead, zinc, antimony ingots / year.

- Project implementation schedule:

+ Compensation for site clearance for the entire scope of the project, including the occupied area for plant and belt plant construction before June 2011. Investment in infrastructure construction for the whole factory from December 2008 - December 2012.

Phase 1 to December 2012 produced products including: positive copper plate (<98% Cu): 10,000 tons / year. Hydraulic plate (99.95%): 500 tons. Sulfuric acid 35,000 tons / year 98.00%.

Phase 2 (from January 2014 onwards): Have produced to products including: Refined copper sheet (99,995% Cu): 10,000 tons / year and other by-products from refined electrolysis (gold, silver ...). Sulfuric Acid 98.00% 35,000 tons / year; refined lead and zinc ore 5000 tons / year. Lead, zinc, antimony metal bars 5000 tons / year.

On May 26, 2014, the Tu Dinh Joint Stock Company and Lao Cai Vidifi Investment Joint Stock Company signed a contract No. 06/2014 / HDCN / VIDIFI / TD to transfer the whole project of Lao Cai Color Metallurgy Plant. Total transfer value was  VND 63,861,000,000.

On August 25, 2014, the Lao Cai Provincial People's Committee issued a Decision No. 2400 / QD-UBND on the transfer of investment projects to expand Lao Cai Color Metallurgy Plant in Ban Lau Commune, Muong Khuong District, Lao Cai Province from Cong. Lao Cai Vidifi Investment Joint Stock Company to the Tu Dinh Joint Stock Company.

Considering the report No. 116 / BC-SKH dated March 19, 2015 of the Department of Planning and Investment on adjusting the Investment Certificate for the Lao Cai Color Metallurgy Plant expansion project in Ban Lau Commune, Muong Khuong District , Lao Cai Province. On March 25, 2015, the Provincial People's Committee allowed to amend the Investment Certificate No. 12.121.000.123 (issued for the first time on December 22, 2008) for the second time. With the adjusted contents include:

• Adjusting the legal status of the project implementation for Tu Dinh Joint Stock Company

• Adjusting the project scale: The period of continuous investing in basic construction projects: From January 2015 to the end of September 2016, this period produced products: the Copper hydrolyzed copper powder (99 , 95% Cu): 2000 tons / year; by-products from copper production, including powder: copper, lead, zinc, tin, antimony, iron ore to pellets. After the project was completed (from October 2016), it has produced products such as refined copper plate (99.95% Cu) 1000 tons / year; copper hydrated powder (> 99.95% Cu): 2000 tons / year; Sulfuric Acid 98.00% 35000 tons / year; metals lead, zinc, antimony ingots (metal content> 95%) 5000 tons / year.

• Adjusting the project schedule:

+ March 2016 completed construction of all works items of the project including: Sulfuric H2SO4 Acid production workshop, copper smelter workshop + dust treatment system, lead and atimon refining workshop; disposal sites; circulating water tank; copper refining electrolytic workshop; Lead, zinc sorting workshop and other items.

+ September 2016 completed the installation of equipment.

+ In the process of investment in construction projects, investors were allowed to use the items invested to produce products: Copper hydrolyzed copper powder (> 99.95 / 0 Cu): 2000 tons / year; by-products from copper production include: copper, lead, zinc, tin and antimony powders; Iron slag pellets.

+ In October 2016, the project would be completed and production would be produced. Products: Concentric refining (99.95% Cu) 10,000 tons / year; copper hydrated powder (> 99.95% Instrument): 2000 tons / year; 98% Sulfuric Acid 35,000 sheets / year; metals lead, zinc, antimony ingots (metal content> 95%) 5000 tons / year.

On May 15, 2015, the Department of Natural Resources and Environment had a Report No. 181 / TTr-STNMT to submit to the Provincial People's Committee for the Tu Dinh Joint Stock Company to lease 212,987.0 m2.

On May 22, 2015, the Provincial People's Committee issued a Decision No. 1433 / QD-UBND for the Tu Dinh Joint Stock Company to lease land with a total area of ​​212,987.0 m2.

2.2 Organizing implementation of the project:

During the investment and operation of the project mentioned above, the Tu Dinh Joint Stock Company has been facilitated by the Provincial People's Committee to support and remove difficulties. However, the company has not completed the construction items under the certificate of investment, has not completed the construction process, environmental protection and. not eligible to go into production.

Meanwhile, after receiving the project, the Tu Dinh Joint Stock Company signed a contract to buy and import copper ore production materials from domestic and foreign partners. This job does not violate the provisions of the Law on Venture, but not in accordance with the objectives, the production scale of the project that has been approved. Since the project has not yet finished construction and is not eligible to go into production, the amount of imported materials is in large inventory, making it difficult for enterprises. Facing this situation, The Tu Dinh Joint Stock Company had a written request to the Ministry of Industry and Trade to consider and facilitate the removal of difficulties by allowing the Company to invest in construction, production and consumption of middle products. The space copper Sten on the rotary kiln system installed. According to the written approval of the Ministry of Industry and Trade, the People's Committee of Lao Cai Province agreed to let the Tu Dinh Joint Stock Company produced copper sten, with a total volume of materials of 35,480.62 tons (period from 2014 to 2018). ). As of March 2018, the Tu Dinh Joint Stock Company produced and consumed copper Sten products that exceeded the volume approved by the Ministry of Industry and Trade and Lao Cai Province 5,774,316 tons.

Although the People's Committee of Lao Cai Province created conditions to remove difficulties, however, since taking over the project until now, the Tu Dinh Joint Stock Company does not focus resources to invest and build the project items according to Investment certificate issued. In the process of implementation, the Company also had many mistakes and exists in all fields, which were inspected, guided and requested by the provincial specialized agencies, but the Company did not overcome, particularly : The company did not adjust investment certificates; arbitrarily building a number of works but without construction permits; technology was not assessed; failed to strictly abide by the regulations on environmental protection (not fully investing in environmental protection works, did not confirmthe completion of  environmental protection works).

Due to unsatisfactory environmental treatment system of the factory, in March 2017, the factory polluted the environment, causing trees and crops wereburned leaves and pineappleswere rotted, causing damage to the local people.The Tu Dinh Joint Stock Company was dealt with administrative violations with the amount of VND 100 million and required to compensate the people with the price of over VND 2.6 billion (the Decision 45 / QD -XPHC on April 26, 2017 by the Chief Inspector of Department of Natural Resources and Environment. After the above incident, the Company complied with fines and compensated fully for the people.

From December 2017 to March 2018, the Provincial People's Committee continuously received feedback from Ban Lau Commune People's Committee regarding the plant's activities affecting people's lives and production activities as trees andcrops wereburnt leaves and pineapples were rotted, whichcause damage for the locality and suggested the provincial People's Committee to stop the operation and moved the factory.The peak was March 6, 2018, more than 100 households gathered at the citizen's Headquarters to be dialoged tothe province about the Lao Cai Color Metallurgy Plant affected people's crops and directly Lao Cai People's Committee' dialoged with the people to listen to their thoughts and aspirations of people. On March 10, 2018 and on March 20, 2018, 100 households continued to dragge to the gate of the ferrous metallurgy factory in Lao Cai to protest that the factory was still operating. In addition, a part of the People pulled back to the central agencies to complain with crowded and complicated circumstances ... causing disorder and social safety.

Facing to complicated situation mentioned above, the Lao Cai Province had many documents requesting to stop operation, but the Company did not comply (specifically, CUND TINH had its own records: A Notice No. 416 / TB- Date People's Committee November 24, 2017 of the Office of the National People's Committee on the conclusions of Mr. Le Ngoc Hung - Vice President of the Provincial People's Committee at the meeting on November 23, 2017 on the handling of a part of ore in stock, evaluating the operational efficiency of the emissionstreatment system of the Lao Cai Color MetallurgyPlant, A Document No. 3126 / UBND-TNMT dated July 4, 2017 on suspension of operation of the Lao Cai Color Metallurgy Plant, A Document No. 383 / UBND-TNMT on January 30, 2018 on suspension of operation of Lao Cai Color Metallurgy Plant).

In order to ensure the security situation, order and solve people's petitions and the Provincial People's Committee issued a Decision 711 / QD-UBND dated March 7, 2018 on suspending production of Lao Cai Color Metallurgyl plants. at km 14 + 500, Highway 4D, Ban Lau Commune, Muong Khuong and the Decision No. 1488 / QD-UBND on May 18, 2018 by the Provincial People's Committee on the cessation of production Sten bronze at the project to expand the Lao Cai Color Metallurgy Plant in Ban Lau Commune, Muong Khuong District.

Lao Cai People's Committee directed the Department of Agriculture and Rural Development to chair and coordinate with the concerned branches to determine the cause of the burning of trees andcrops as well as  fruiswere rotted. Through the results of sampling and evaluation of the Department of Agriculture and Rural Development in collaboration with the Institute of Agricultural Environment under the Ministry of Agriculture and Rural Development, determined the causes of burning trees and crops. The leaves and pineapples were rotten in Ban Lau Commune, Muong Khuong District were caused by the impact of H2SO4, Cu + acid deposition and while SO2 according to the results of the Working Group was established by the Provincial People's Committee in the Decision No. 773 / QD- UBND dated March 13, 2018, in addition to the time that the Provincial People's Committee allowed the company to produce from May 1, 2017 to the end of January 2018, the Tu Dinh Joint Stock Company still maintained its operation ofproducting copper, in addition the company also operated vertical kilns to produce iron ore to pellets, this line only had dust collecting equipment, no works, no treatment measures of emissions, not yet approved by competent authorities (the Report No. 138 / BC.TCT dated May 3, 2018 of the Working Group under the Decision No. 773). From the report identifying the causes of the Department of Agriculture and Rural Development and the report of the Working Group 773 / QD-UBNND, the Department of Natural Resources and Environment made conclusions 1489 / KL-STNMT on July 25, 2018, in which, the waste generating agent (H2SO4, Cu + and gas SO2) caused burnt crops, burnt leaves and pineapples because of the Lao Cai Color Metallurgy Plant - the Tu Dinh Joint Stock Company who was the investment owner caused damage to the crops of 317 households in Ban Lau Commune, Muong Khuong District, the total damage was VND 14,241,297,189. On the basis of the report of the Department of Natural Resources and Environment on July 30, 2018, the provincial People's Committee held a press conference to announce the results of determining causes and subjects of waste generation, causing the plants and pineapplesof the people leading Ban Lau Commune, Muong Khuong District were burnt and rotted  .

While waiting for the above situation to be resolved, in order to ensure the security and stabilize the life of the affected households, the Provincial People's Committee agreed to grant the People's Committee of Muong Khuong a temporary loan from the Environmental Protection Fund of Lao Cai Province to pay damages to the People with the total amount paid was VND 14,241,297,189.

Although, professional agencies conducted inspection, took and analyzed samples, collected evidence and data to conclude, took responsibility and provide measures to resolve the problem honestly, objectively and scientificly.However, up to now, the Tu Dinh Joint Stock Company continues sending complaints and sues to agencies in the province and the central agencies to abolish responsibility.

3. About complaints of the Tu Dinh Joint Stock Company:

3.1 Concerning complaints of the Decision No. 711 / QD-UBND on March 7, 2018 of the Provincial People's Committee about the production operation of the Lao Cai Color Metallurgy Plant at km 14 + 500, 4D National Road, Ban Lau Commune, Muong Khuong District, Lao Cai Province and the Decision No. 1488 / QD - UBND dated May 18, 2018 of the Provincial People's Committee on stopping the production of copper in the project of expanding Lao Cai Color Metallurgy Plant in Ban Lau Commune, Muong Khuong District.

The Provincial People's Committee directed the settlement of complaints of the Tu Dinh Joint Stock Company in accordance with the order prescribed: Assigning the provincial inspectorate to settle complaints and the provincial People's Committee of Lao Cai Province held a dialogue with the company, but the Tu Dinh Joint Stock Company did not agree with the resolution of the province about decidsionstopping sten production at the Lao Cai Color Metallurgy Plant with the following reasons: The company still believes that the decision stops the production of copper sten at Lao Cai Color Metallurgy Plant is not in accordance with regulations, The Decision No. 1488 / QD-UBND is the decision to handle administrative violations.

3.2 On petitions related to land disputes:

3.2.1 Implementation process, project transfer and land lease:

• In June 2004, the Thang Long Import-Export Construction Joint Stock Company was leased land by the Provincial People's Committee to implement the project of building a metallurgical factory in the Decision No. 1573 / QD-CT dated June 23, 2004., total area is 30,0 ha

• In March 2008, the Thang Long Import Export Construction Joint Stock Company transferred the project to the Cuong Linh Construction Company Ltd and was leased land by the Provincial People's Committee in the Decision No. 512 / QD-UBND dated March 7 / 2018 and granted the land use right certificate No. AK 981666 on March 7, 2008. The adjusted area is 21.3 ha.

• In September 2008, Cuong Linh Co., Ltd transferred the project to VIDIFI Lao Cai Investment Joint Stock Company and was leased land by the Provincial People's Committee in the Decision No. 2415 / QD-UBND dated September 1, 2008 and granted land use right certificate No. AK 824721 dated September 1, 2008.

• In 2015, VIDIFI Lao Cai Investment Joint Stock Company transferred the project to the Tu Dinh Joint Stock Company and was leased land by Lao Cai Provincial People's Committee and granted the land use right certificate No. BY 086250 on June 16, 2015. .

3.2.2. About Site clearance work:

Land clearance and approval for investors (the Thang Long Import-Export Construction Joint Stock Company, the Cuong Linh XL Co., Ltd. and the VIDIFI Lao Cai Investment JSC) rent land implemented under the Land Law in 2003 (according to Clause 3, Article 122 of the 2003 Land Law), in cases where the land is allocated or leased by the State but not yet cleared, then after the decision, land allocation, land lease,the district People's Committee is responsible for organizing the compensation and site clearance according to regulations.

However, so far, the investors and the People's Committee of Muong Khuong District have just cleared ground clearance of 6.22 hectares (the area of ​​construction of factories and other auxiliary works).The remaining land area. 15.08 ha has been allocated land for the project but has not yet cleared the ground and households and individuals are still using it.

Due to the difficulties of the Tu Dinh Joint Stock Company in site clearance, the Provincial People's Committee issued a Decision No. 2788 / QD-UBND dated August 31, 2016 to establish a Business Support Task Force to carry out site clearance work (the working group was led by Mr. Dinh Trong Khoi - Vice Chairman of Muong Khuong District People's Committee, Mr. Le Ngoc Duong - Deputy Director of Department of Natural Resources and Environment as Deputy Head  hadresponsibility to research, guide and help the Tu Dinh Joint Stock Company to implement site clearance. The group had a meeting to discuss the resolution, accordingly the People's Committee of Muong Khuong District, Dien Ban commune of Ban Lau hired a consultant to measure and made a statistic of the area of ​​land which has not been cleared 15.08 ha of 13 households (in which: Land for planting rice: 0.19 ha annual crop land: 2.86 ha, perennial crop land: 4.19 ha, Aquaculture land: 0.24 ha, production forest land: 7.60 ha).

At the same time, applying compensation price at the time of June 2016 with the total amount of VND 6,020,446,824 (in which: Land value: VND 1,273,662,900; Value of assets and crops on the land: VND 825,788,774 'support for career transfer, job search: VND 3,641,995,150; support to stabilize the export floor: VND 279,000,000.

According to statistics and tally results, the Muong Khuong District People's Committee instructed to organize a meeting to collect opinions and get approval from households and agree on plans and compensation prices. However, due to the time of transferring money to pay for the poor people, it was slow and prolonged; In the process of implementing site clearance, there have been environmental pollution incidents, causing damage to the crops of households around the factory, the situation of security becomes complicated so the Provincial People's Committee  issued a decision to stop the production of copper sten at the project and the clearance of the site still could not be solved.

3.2.3 On granting Certificate of land use right to 04 households and individuals overlapping with area allocated with land use right certificate for the Color Metallurgy Plant:

Through reviewing the project file, from 2007 to 2011, the Muong Khuong District People's Committee approved land allocation and land use right certificates.

• For 04 households and individuals with an area of 3.07 ha in the area of land: Granted a certificate of land use right for a Color Metallurgy Plant Project (within 15.08 ha yet) Clearance). Although there was overlap in the paperwork, it did not affect the order, procedures and value of compensation and ground clearance because if the ground clearance is carried out, it  will revoke the overlap grant.  .

3.3 On financial compensation claims  request and direct work arrangements with the Company's partners:

Investment project to expand color metallurgy plant in Lao Cai, Ban Lau Commune, Muong Khuong District of Tu Dinh Joint Stock Company so far has not been qualified to go into production, but the Company still deliberately put into operation. causing environmental pollution. Therefore, the People’s Committee of Lao Cai Province issued a Decision No 711 / QD-UBND on March 7, 2018 and a decision No1488 / QD-UBND on May 18, 2018 on the cessation of production of copper Sten in this projectthat is correct as stipulated and do not cause damage such as Complaints of the Tu Dinh JSC complained.

Problems related to land and site clearance, The Lao Cai People's Committee directed and taken measures to remove; completed the statistics, applied prices, meeting people to agree to pay. However, because the Company has not allocated funds to pay the people, so it has not completed the clearance work.

According to the project file, there is no content related to the foreign factor, so the Company's reflection on this issue is unfounded and unrelated to the project in Lao Cai.

4. Some contents of Lao Cai Province implemented in the coming time:

Completing dossiers of handling administrative violations, requesting theTu Dinh Joint Stock Company to be responsible for finalizing the amount of VND 14,241,297,189, Muong Khuong District borrowed the provincial Environmental Protection Fund to pay compensation amount due to damages for the citizen.

Review and implement procedures to terminate investment activities of the Lao Cai Color Metallurgy Plant expansion project if it meets the conditions prescribed by law.

Conside and resolve arisen issues for the land area (15.08 ha) that has been allocated to the project but it has not yet cleared, currently households and individuals are still using and overlapping with the area of land to make a road to the border from Highway 4D - Nam Siu village.

Continue reviewing and resolving complaints and suggestions of Tu Dinh Joint Stock Company according to regulations.

Lao Cai People's Committee sent documents related to the investment project to expand Lao Cai Color Metallurgy Plant as the Investor of Tu Dinh Joint Stock Company in the attached Appendix:

Above is the content to resolve the facts, recommendations and complaints of the Tu Dinh Joint Stock Company related to the investment project to expand Lao Cai Color Metallurgy Plant in Ban Lau Commune, Muong Khuong District. The People's Committee of Lao Cai Province would like to report to the Government’s Office and the Vietnam Chamber of Commerce and Industry (VCCI) to summarize and report to the Government’s Prime Minister.