NA member reviews procurement law

You proposed the scope of the law be greatly expanded at the National Assembly meeting in May, but this new law is nearly identical, why?

The revised law clarifies use of the state budget and capital garnered from budget investments and public procurement by state agencies, social-political organisations, professional organisations, units of the armed forces, non-business public units, and state-owned enterprises’ development projects.

I think it would be better if the scope was even greater, but the new law states that projects with less than 30 per cent of state capital but more than VND500 billion ($23.8 million) in total investment capital are subject to the law. This is suitable for now.

You have suggested the law not only apply to SOE’s development projects, but also to procurement of materials for their production and performance. Can you elaborate on this?

Management of investment projects does not mean management of construction and purchase of machinery and equipment needed for the end-to-end production process. I suggested procurement for these be included to prevent leaders of SOE’s from purchasing materials at higher than market prices, and to protect from embezzlement, which takes a heavy toll on performance.

However, at this time this is too broad for the law to cover, so enterprises are just being encouraged to follow these standards. Another possible solution would be for the government to require contractors to take over material procurement bidding.

Encouragement is far off from requirement. Do you think this will become a loophole for enterprises’ leaders to act as mercenaries in the procurement process?

That’s why we need a law on the management and usage of state capital invested into enterprises to be enacted soon. To fight embezzlement, corruption, and wastefulness, a series of new legal documents should be applied.

But these documents would only be applied to SOEs. What would happen if public and joint stock companies were not regulated in their bidding activities?

Many National Assembly deputies were in two minds on this before approving the revised law. I think if it is further amended in the future, it is likely it will encompass public and joint stock companies.

Would this be the state interfering in enterprises’ production and performance?

Vietnam’s legal documents are quite open-minded, enabling all organisations and individuals to engage in production and business activities. But there should also be regulations protecting investors and stakeholders, and that spur sustainable development.