-
Some general principles should be followed when developing
regulations related to conditional business lines, licensing,
etc. First, the drafting agencies must study thoroughly whether:
i) these tools are the best method for controlling a particular
business sector; ii) they are suited to business practices in
Vietnam; and iii) they are compatible with international and
regional agreements on economic integration and free trade.
Second, the licensing procedures should be simplified through
the elimination of administrative procedures and requirements
that are unnecessary, impractical, and costly for businesses.
Third, legal documents should be issued in a consistent way so
that businesses, especially small and medium enterprises with
limited human resources capacity and legal competence, can
easily follow up and comply with them.
Mr. Nguyen Tham, Vice President,
Vietnam Freight Forwarders Association (VIFFAS)
-
International experience shows that license reduction programs
can bring about preliminary results. However, over the long
term, it is critical to adopt an explicit policy on the use of
business licenses and conditions and to set up a mechanism for
overseeing implementation of that policy. A more specific degree
addressing governmental agencies' development, promulgation and
implementation of business licensing is indeed an important
element in re-catalyzing efforts to detect and annul
unreasonable licenses.
The main objectives of the Decree on State Management of
Business Licenses are: i) to establish a standard concept of
business licenses in Vietnam; ii) to develop consistent
methodologies in and effective supervision of the drafting,
issuing and implementing of business license regulations; iii)
to standardize the format and content of such regulations; and
iv) to create a framework that enables all stakeholders to
participate in and contribute to such regulations in an active,
transparent and objective way. This decree strengthens quality
control as it relates to the issuance of business licenses
without conflicting with the Law on the Issuance of legal
documents.
For the first time in Vietnam, international lawmaking
practices, such as regulatory impact assessments, public
consultation and petition of drafting institutions are being
used to develop business license regulations. The aim is to
obtain objective, professional and independent opinions and
judgments from stakeholders for each regulation issued by
governmental authorities.
The drafting team notes that in order for this decree to be
enforceable, it is critical to form a National Council for
Business Licenses (similar to the Regulatory Reform Commission
in South Korea). The main functions of this Council would be to
oversee the drafting and issuing of business license regulations
and to challenge the necessity, effectiveness, and coverage of
each upcoming licensing regulation. The Council would also
ensure that the public consultation process is conducted in an
objective, fair and effective manner. The Council's work would
be independent of Ministry of Justice's appraisal function and
of those of other authorities. Ultimately, the benefits of such
a Council would be greater than its costs (in terms of the
public budget). Administrative reform does not merely involve
the reduction of public headcounts but also reinforces an
efficient and effective administrative mechanism, which can
contribute to socio-economic development.
When this Decree is approved, it will be necessary to conduct a
systematic assessment and analysis of currently effective
licenses so that their costs, benefits and effectiveness as well
as the extent to which related documentation and procedures are
reasonable can be clear.
Mr. Nguyen Dinh Cung, Director of the Macroeconomic Policy
Department,
Central Institute for Economic Management (CIEM)
-
 I
want to share a number of lessons learned for developing
countries in implementing regulatory reform. First, in
implementing regulatory reform to make the reform more effective
and successful, the government should focus on reducing
compliance costs and regulatory burden from the point of view of
businesses, and prioritize the reform agenda by compliance costs
of regulations. Second, the government should try to improve the
quality of regulations rather than reduce the number of
regulations and paper works. Rules and procedures should be made
more transparent and predictable. Compliance rate of regulations
should be improved. Overlapping regulations should be combined
into a single regulation. Third, the government should introduce
a permanent system of regulatory quality. And let an independent
body in the government monitor and control the quality of
regulations, and make regulatory quality control a part of
government administrative function. In Korea, to have sufficient
political and bureaucratic strength to lead the reforms, the
Presidential Regulatory Reform Committee (RRC) is an official
government body directly under the President, and is co-chaired
by the Prime Minister. Members of the committee comprise of both
governmental officials and the civilians including academicians,
industry leaders, and representatives from consumer groups.
Fourth, the government should consider a radical approach (such
as a “Regulatory Guillotine”) to reduce total number of
regulation. In this scheme, regulators are required to prove the
need and effectiveness of their regulations in front of an
independent committee; if they fail, those regulations should be
abolished. Ministries should not be allowed to evade this
requirement. Introduction and revision of regulations should no
longer be an exclusive right of regulating agencies.
Dr. Jong Seok Kim, Director,
Jacobs & Associates
-
 This
Decree will help initiate a public campaign and strong pressure
for: i) regulatory reform and ii) enhanced accountability of
governmental agencies when it comes to responding to public
opinions and complaints. However, the drafting team of this
decree should also consider the following issues:
First, in terms of legal effectiveness, this Decree may not be
able to remove all officially imposed business licenses,
conditions, ordinances, or even other decrees. Many licenses and
conditions are regulated by specialized laws, e.g., the tour
guide license by the Tourism Law and the real estate broker
license by the Law on Real Estate Business.
Second, establishing a National Council for Business Licenses
may be an immediate solution to the current business licensing
system. We can learn from South Korea's creation of an
institution to review all the licenses and conditions that are
imposed on businesses. Such an agency should be authorized to
set the criteria for using licenses (e.g., the benefits of a
license must be greater than the costs it imposes on businesses)
and to determine the procedures for issuing licenses (e.g.,
public consultation). The agency should also have the authority
to review the existing stock of licenses and conditions and take
the necessary actions to abolish those that are unnecessary and
unreasonable. However, the most important success factor for any
reform is a government that has strong commitment. In Vietnam,
most reforms are bottom-up (i.e., carried out as a result of
public pressure). In this sense, it would be very difficult for
issuing agencies and the affected parties to reach an agreement
on abolishing licenses. It also should be noted that in order to
achieve similar success, our country needs strong political will
and commitment to reform, as was the case in South Korea.
Third, the public consultation process for pieces of legislation
allows different interest groups to negotiate and compromise
with each other on different issues. In order for this process
to be effective, there need to be strong business associations
to represent different interest groups, as well as a mechanism
through which independent experts can review drafts and submit
comments to a National Assembly that listens.
Fourth, in the long run, a national council for business
licenses does not have enough capacity to review the legal
eligibility and requirements for each license. As many as ten
thousand new legal documents are issued every year (the National
Assembly makes around 23-24 laws every year; the government
issues approximately 200 decrees; and Ministries and People's
Committees provide thousands of circulars). It is necessary to
set up a mechanism through which people can advocate for their
interests and rights and, if needed, force the Government to
review regulations and respond to them. After all, the main
purpose of any legislative piece is to create a framework in
which public institutions serve the people and based on which
the public can monitor and complain when their rights are
violated.
Mr. Pham Duy Nghia, Head of Business Law Division,
Law Faculty, Vietnam National University
-
 Consultation
with stakeholders, including business associations, in the
drafting and issuing business license regulations is very
important, as it allows the various affected parties to
challenge the necessity and effectiveness of each potential
license and to prevent unjustified licenses from coming into
force. Otherwise, businesses can only start complaining after a
bad regulation has come into force, which is too late. For
example, VAFI, which represents the financial investors'
community in Vietnam, has actively contributed to a number of
important legislative pieces, such as the Enterprise Law 2005
and the Investment Law 2005. In the case of the Law on
Securities, VAFI has successfully advocated for the removal of
at least 17 of the 36 unnecessary licenses affecting the
establishment and operations of fund management and securities
firms, as these licenses are not compatible with international
practices, seriously infringe the freedom of investors, and may
have negative impacts on the development of our stock market.
Mr. Nguyen Hoang Hai, General Secretary
of Vietnam Financial Investors Associations (VAFI)
>> More...
|
