Indecon Consulting

[Vietnam] – Reform of Public Corporate Governance

Assignment Name

Reform of the Public Corporate Governance legal framework and reporting mechanism of SOEs

Location

Vietnam

Consortium

N/A

Description

In order to reverse the problems obstructing Vietnam’s growth (among other due to inefficiencies in the large state sector, i.e. SOEs, state owned banks, and public investments), the Government of Vietnam has prioritized reforms in these areas. The project consisted in advising the Vietnamese Ministry of Finance in drafting the Law on Investment and Management of State Capital in Enterprises, a law which is meant to enhance the legal and institutional framework for managing the large number of state owned enterprises (SOEs), dramatically reducing its number and thus safeguarding the state budget against fiscal risks stemming from SOEs, introducing competition in sectors closed for private enterprises, introducing corporate governance measures as we as providing senior staff of MoF with a detailed overview and insight on international best practice in managing natural monopolies, amongst other the rail and the power sectors. According to the new law, approved by the National Assembly in December 2014, all SOEs will have to follow similar reporting mechanisms and disclosure requirements as listed enterprises. Furthermore, the classification of SOEs shall be based on the nature of their activities, their role in the economy, which in turn will determine the desired level of state ownership and the legal framework within which SOEs are governed and operate shall be improved.

Type of Services Provided

  • Support on drafting the Law on Investment of State Capital in Enterprises (State Property Management) and providing comments to intermediary drafts;
  • Reviewing the commercial and corporate legislation incl. corporate governance legislation and practices;
  • Identifying deficiencies with regard to rights and obligations of owners and their representatives;
  • Reviewing the State budget legislation and procedures identifying possibilities to fence-off state obligations towards SOEs’ liabilities;
  • Developing recommendations and providing advice for renewing public corporate systems, strengthening the management of SOEs, their supervisory and enforcement systems;
  • Developing recommendations and providing advice for introducing transparency and accountability with regard to the central state budget and procedures for state investments;
  • Design, developing and implementing capacity building measures at the MinFin and SOEs to disseminate and implement guidelines for corporate governance structures and workshops to share international experiences;
  • Supporting strategy development to define the state’s role in the economy, thus the level of SOEs;
  • Advising on the strategy development for industries regarded as natural monopolies with regard to their suitability for privatisation;