September 20, 2014
– Decree 52/2010/ND-CP by the Government on fishing boat import and Decree 53/2012/ND-CP on the amendment of and supplement to Decree 52 stipulate that fishing boats can be imported only when they meet a certain conditions, one of which is that the ships to be imported must not be older than eight years.
The regulation is self-assertive and quite comprehensible. Yet it came as a surprise recently when several enterprises sent petitions to the Government and other relevant agencies requesting permission for importing used fishing boats which are 15 or even 30 year old. The “abnormality” occurred in the context that Sino-Vietnamese relations became tense because of island and marine sovereignty disputes.
In its latest response, the Ministry of Agriculture and Rural Development, the administering agency in charge of this issue, gave a clear answer to reject the proposal, citing several reasons, including the seniority of the ships in question.
Prior to this incident, the Government had also given a flat no to a petition for unprecedented incentives proposed by Formosa, the Taiwanese steel giant which is developing a mega project in Vung Ang, Ha Tinh Province. The reason was also self-evident: the incentives are not in line with current laws. Notably, Formosa’ proposals were put forward in a special background following riots relevant to island sovereignty, and, at the same time, the project under construction in Vung Ang was gaining certain sympathy from both the authorities and the public as the developer was seriously affected.
Even when the actual aims behind the fishing boat importing projects and rumors behind Formosa’s proposed incentives are set aside, the key question is that why although fully aware that their suggestions do not comply with current laws, the applicants still boldly submitted them. The main reason may lie with how the applicants perceive the efficiency of the law.
A couple of years ago, rumors were spreading among the foreign investment circle that a certain multinational or another had been granted by the authorities’ generous incentives which went beyond effective framework. Once there was a “race” among local governments that raised the bar for incentives to compete with others in attracting foreign investment. In this case, foreign investors took advantage of the need for big projects or those with high technology or a shortage of projects in provinces in the process of “bargaining” with the State for extra-generous incentives which are occasionally not in line with the law. Such practices have set a precedent for certain concessions by the authorities. They have also caused some enterprises to believe that State agencies may endorse extra incentives if the State receives considerable benefit from their projects or proposals.
It seems that many enterprises reckon that laws are only stipulations included somewhere in documents instead of bans or obligations which must be strictly complied with. Also, they think that State agencies can provide unlimited incentives if those preferential treatments can bring certain benefit to the State. To put it differently, quite a few enterprises believe that they are able to negotiate with the State without full observation of legal stipulations. In short, it seems that enterprises do not have much confidence in the efficiency of the law.
Contrarily, the onus should not fall completely on enterprises. Aside from the fact that the precedents are created by State agencies as mentioned above, the business circle has to face day in day out a kind of law which are apparently adjustable at will or even “bent” at times by related State agencies.
Hopefully, in any circumstance, the State will consistently behave the way adopted recently when it rejected absurd incentives or projects. Such attitude will eliminate proposals which go beyond the boundary of the law. More significantly, such consistency will not only usher in a fair business playground for all enterprises but also raise the awareness of law observance among the business circle as well as citizens.
(By Ngo Viet Hoa – Russin & Vecchi law firm)