The 2023 law building program was implemented in full, ensuring compliance with regulations on the Law on the Promulgation of Legal Documents, but there remains a need for further improvements to Vietnam’s legal framework given that businesses in different sectors continue to be beset by obstacles in regard to legal issues, administrative procedures, and business conditions.

Sixteen laws were issued by the National Assembly last year and 99 decrees by the government, while the Prime Minister issued 33 decisions and relevant ministries and sectors ten circulars, according to the Business Law Flow Report 2023 released recently by the Vietnam Chamber of Commerce and Industry (VCCI). The figures are roughly equal to those in 2022.

Inappropriate regulations

The report states that there was much improvement seen in law building in 2023, such as boosting the number of human resources involved and speeding up processing times, together with the organizing of many conferences on law building and the collecting of opinions from various stakeholders. The building of laws was conducted more stringently and promptly, with contributions sought and secured from relevant ministries and agencies.

However, Mr. Nguyen Minh Duc from the Legal Department at VCCI, speaking on behalf of the research team behind the report, said certain existing regulations were no longer appropriate and need reassessment and further amendment. Vietnam urgently issued a raft of policies last year on green transition, for example, but some triggered major concerns within the business community.

One such policy measure was a regulation on Extended Producer Responsibility (EPR), issued in a bid to promote the circular economy and boost environmental protection. The regulation will, however, impact many businesses in key production sectors and see them incur additional costs. Though enterprises support environmental protection regulations, they are nonetheless concerned that policies are being applied without careful preparation.

The regulation also lacks specific information, especially in regard to products to be recycled, enterprises covered, its operating mechanism, and its anticipated impact, creating various implementation difficulties for enterprises, according to Mr. Duc.

Simplified regulations required

The VCCI report notes that, over the past three years, as part of the implementation of Government Resolution No. 68/NQ-CP dated May 12, 2020, on the program to reduce and simplify business regulations in the 2020-2025 period, ministries and sectors reviewed and compiled plans to simplify or remove regulations relating to business activities within their jurisdiction. From 2021 to the end of November 2023, ministries and sectors simplified or removed 2,483 such regulations in 201 legal documents.

The Prime Minister, meanwhile, approved a plan to simplify or remove 1,191 business regulations in 221 legal documents.

Such efforts have clearly helped improve the business environment and created the conditions necessary for enterprises to meet their responsibilities in completing administrative procedures.

However, efforts to simplify or remove business regulations still fell short of expectations, according to the report. Many major regulations that impact enterprises were left untouched, such as those regarding fire prevention and control and others containing unreasonable business conditions.

VCCI conducted a survey in 2023 to gather opinions from the business community on the difficulties and obstacles in legal documents. Businesses and associations reported that there remain many shortcomings, with issues previously raised going unaddressed. This reveals that the process of simplifying or removing business regulations is still to meet the expectations of those most affected.

Additionally, the report noted that the thinking of policymakers still leans more towards “management” than “service”. Within the existing legal framework are certain management measures that are inappropriate without clearer goals and simply add to businesses’ cost burden.

For example, too many licenses are still required for a single business activity. Some procedures, meanwhile, are overly complex and impose many procedures upon business owners, costing them time and effort.

Innovation needed

According to Mr. Dinh Dung Sy, former Director of the Legal Department at the Office of the Government, shortcomings remain in the legal framework and the implementation of existing laws is quite poor at times, with significant gaps between law building and legal enforcement.

An examination of the annual legislative programs of the National Assembly and the government reveal that there are still a significant number of amendment and supplementation projects in the pipeline. There remain laws, decrees, and circulars in need of amendment or supplementation several years after issues were first identified and moves made to remedy the situation. This reflects limitations in terms of content, unity, and coordination within the legal system. Many regulations simply lack practicality due to a lack of understanding about their actual application. Therefore, according to Mr. Sy, innovation in law building is required now more than ever.

“There are often different viewpoints when drafting legal documents, and consultation and consensus must be secured,” he said. “To minimize further disagreements, it is necessary to introduce a specific mechanism on policy consultation and agreement.”

He also suggested amending the Law on the Promulgation of Legal Documents, to cut all unnecessary, unreasonable, unscientific, and unfeasible procedures and processes.