Draft decree for stricter supervision of FDI projects

Shoe production at Pou Yuen Viet Nam Co.Ltd. Supervision over foreign-invested projects in Viet Nam will be tightened if a draft decree of the planning and investment ministry is approved. Photo TTXVN

The existing Decree No. 113/2009/ND-CP applies only to projects with State funding, which accounts for at least 30 per cent of the total investment capital and projects using other sources of capital.

However, the draft, which is designed to replace this decree, will not only govern projects funded by State budget but foreign direct investment (FDI) projects, offshore investment projects, public-private partnership (PPP) projects, as well as State-funded projects other than public investment projects.

The changes are expected to create uniformity in the state management of all investment activities, said Nguyen Xuan Tu, director of the Ministry of Planning and Investment's Department of Supervision and Evaluation of Investment.

For public investment projects, the draft decree says that in addition to state management agencies in charge of public investment, agencies and persons authorized to make investment decisions or investment policy decisions will also be required to supervise and examine investment processes so as to ensure the objectives and efficiency of investments.

The draft also adds provisions on the supervision and evaluation of the process of elaborating, appraising, and approving investment policies. This means, investment projects using State capital will be supervised right from the preparation stage.

FDI projects, PPP projects, and offshore investment projects will also be supervised in the same manner.

For FDI projects, supervision will be carried out not only while granting investment certificates but also during the process of capital contribution and project implementation, focusing on projects' compliance with regulations on environmental protection, the use of land and natural resources, application of investment incentives, and business conditions, etc.

As for PPP projects, supervision will be conducted throughout the process of project elaboration, appraisal, approval, and implementation. Agencies assigned to make investment preparation; investors and state agencies competent to sign project contracts; persons authorized to make investment decisions; agencies granting investment certificates; and public investment management agencies will be jointly responsible for investing, supervising, and evaluating the effectiveness of PPP projects.

Offshore investment projects, especially those using State capital, will also be closely managed. Project owners will be required to make monthly or quarterly reports to management agencies on project implementation and other issues such as the transfer of investment capital abroad and profits back to Viet Nam, use of State capital, if any, the operation of projects and fulfilment of financial obligations toward the Vietnamese State.