Thematic Information

Home > International Economic Cooperation

Party works out drastic measures to raise SOE efficiency (part 2)

By VNA 12/28/2017 10:19 |

The 12th Central Committee of the Communist Party of Vietnam on June 3 issued Resolution 12 on continued restructuring, renewal and raising of the efficiency of state-owned enterprises_Photo: Internet


When equitizing enterprises assigned to manage and operate state-invested infrastructure facilities and projects important to the economy, society, national defense or security, the State will exercise control on the following principles: The State uniformly owns important infrastructure facilities, while the equitized enterprises and investors that are transferred the operation right will only manage and operate such facilities; the selection of investors and enterprises must comply with the Law on Bidding and be carried out in a public and transparent manner; the national defense and security, national sovereignty and territorial integrity must be guaranteed.

To complete legal dossiers of assets prior to the re-arrangement or equitization of SOEs or divestment of state capital from these enterprises. To strictly implement the land lease mechanism under law. To efficiently use tax and charge policies in connection with stably enhancing the effectiveness of land planning work. To increase the management and strict control to ensure that investors fully perform their financial obligations toward the State when changing land use purposes after equitization.

To improve the effectiveness of existing institutions to support the restructuring and equitization of SOEs and divestment of state capital in these enterprises. To raise the capacity and operation efficiency of the State Capital Investment Corporation (SCIC), Vietnam Asset Management Company (VAMC), Debt and Asset Trading Corporation (DATC) and the Enterprise Arrangement and Development Support Fund under the market mechanism and law.

To encourage and attract strategic investors to participate in purchasing shares of, and contributing capital to, enterprises equitized or having state capital divested. To complete criteria of major and strategic shareholders that have financial, technological and governance capacities to restructure and develop enterprises.

To properly arrange, allocate and use employees; to train and deal with redundant laborers. To ensure the lawful rights of laborers, especially redundant laborers, stabilizing their livelihood and ensuring social security for them. To bring into full play the role and responsibilities of laborers as shareholders in participating in the management and supervision of SOEs, while adopting appropriate mechanisms to protect minority shareholders’ interests.

To drastically and effectively arrange, renew and develop, as well as raise the operational efficiency of, agricultural and forestry companies in light of the Political Bureau’s Resolution  30-NQ/TW of March 12, 2014. To properly organize the equitization and dissolution of agricultural and forestry companies, ensuring the rights of those who are contracted with land, water surface, perennial orchards and forests.

To implement in a synchronous manner solutions and adopt appropriate mechanisms and policies to make the financial status of SOEs healthy, thoroughly overcome their financial problems, non-performing loans and unprofitable assets.

To speed up the divestment of capital in non-core business lines, putting an end to thinned-out and scattered investment. To restructure SOEs based on their assigned tasks, core business lines, making the fullest use of their potentials and advantages; to thoroughly cut costs and improve the quality of their goods, services, reputation and brand names in the market. 

To increase investment in and raise the capacity of SOEs to innovate, research, apply and transfer modern, energy-efficient and environment-friendly production technologies and techniques, considering this a decisive factor for higher productivity, quality, efficiency and competitiveness of SOEs.

To manage in a centralized manner proceeds from the equitization and state capital divestment and use them only for development investment, not for regular spending.

To further renew policies for SOEs to truly operate under the market mechanism

SOEs will participate in the performance of socio-political tasks assigned by the State under the mechanism in which the State places orders, selects SOEs in a competitive and public manner and clearly determines costs and funds for the performance, and responsibilities and benefits of the State and SOEs without affecting the business efficiency of SOEs.

The economic and financial relations between the State and SOEs, especially their rights and obligations, must be fully and transparently realized under law and the market mechanism.

To abolish direct administrative intervention and subsidy mechanisms applicable to SOEs and do away with discrimination against enterprises from other economic groups, especially in accessing state resources, credit, land, natural resources, investment and trading opportunities, finance and taxation, etc.

To bring into play the pioneering and leading role of SOEs in establishing and expanding production, supply and value chains in the country, region and world. To restrict closed, sectional and non-transparent production and trading activities of SOEs, especially state economic groups and corporations.

To renew the governance system and increase the capacity of SOE managers

To develop and apply a business governance framework up to international standards to SOEs, especially state groups and corporations; and concurrently organize training and  re-training to increase the governance and management capacity and moral qualities of SOE managers, and create a healthy and effective business governance environment.

To strengthen and develop a number of large-sized and efficiently operating multi-owner state economic groups, which are capable of competing in the region and world in some key sectors and fields of the economy on the basis of improving the state economic group model in line with international practices; to clearly identify their operation scale and scope in compatibility with their governance and management capacity; to restructure their organization and personnel apparatus to be neat, effective and efficient; to perform clear assignment and decentralization.

To resolutely fight, and establish effective internal governance and control systems to prevent, detect, stop and handle illegal acts and conflicts of interests; and the connivance between SOE leaders and managers and state officials and private businesses to form “interest groups” and “backyards” and abuse their positions and powers to manipulate operations of SOEs for self-interests and corruption, causing losses to the State and enterprises.

To clearly define the tasks, powers and responsibilities of managerial titles in the governance apparatus of SOEs; to ensure responsibility in tandem with power. To raise the criteria, conditions and responsibilities of independent members of boards of directors.- (to be continued)