Author:

Le Nguyen Mien Thao

Student at Ho Chi Minh City University of Law

Tel: 0163 640 7336

Topic:

Recently, the issue of environmental pollution has been gaining increasing attention in Vietnam resulting in significant damage and losses due to violations by corporate entities. Vietnam has environmental laws and regulations on the books, but are they sufficient to provide any real deterrence and enforcement? Citing laws, regulations, and other sources, what actions, regulations, enforcement procedures need to be considered to prevent and end current corporate environmental pollution in Vietnam?

In recent years Vietnam has experienced rapid economic growth enhanced by domestic corporations and especially by foreign direct investment (FDI) enterprises. However, the economic gains have come at a cost. The country’s environment has constantly been polluted due to violations in discharging wastewater, exhaust gases, dust, solid wastes and other pollutants by corporations in industries such as textile, metallurgy, shipbuilding, etc. Some of the most significant cases include violations of Vedan Vietnam Enterprise Corporation, Ltd. in 2008, Mei Sheng Textiles Vietnam Corporation, Ltd. and Formosa Ha Tinh Steel Corporation, Ltd. (Formosa) in 2016, etc. Environmental issues in Vietnam have not only resulted in losses on people’s health, natural resources, and environmental charges but also affected the national economy. Vietnamese government now takes it more seriously the importance of sustainable development and starts refraining from growing the economy at any cost.

Notably, follow the 2014 Law on Environmental Protection[1] (LEP) many new regulations on environmental protection have been enacted. Although growing, the new regulations have revealed many shortcomings in practicing through the whole process from verification to operation of projects.

The environmental impacts assessment before granting permission to projects

Pursuant to the 2014 Law on Investment and the 2014 LEP, investors of certain projects[2] shall submit the project dossier containing preliminary environmental impacts assessment (EIA).[3] An EIA provides the analysis and prediction of environmental impacts which may occur during the implementation of a project. The requirement of such environmental report is of importance for pollution prevention. However, under the 2014 LEP and Decree 18/2015/ND-CP on environmental protection planning, strategic environmental assessment, environmental impact assessment and its guideline Circular No. 27/2015/TT-BTNMT, still such reports are considered as formality resulted from the inappropriate process of making the EIA and appraising the EIA.

The making of the EIA

An EIA for projects in Vietnam is not being taken seriously. An EIA report could be carried out in a very short time and investors are allowed to hire specialized organizations or even conduct the EIA themselves.[4] Furthermore, despite being an important requirement in the EIA process[5], the public consultation is quite forgotten.[6] Due to its ambiguous regulation regarding the term “directly affected by the project”, current regulation on public consultation is being applied without specific procedures and the community subject to the consultation is very limited. These rules have resulted in several EIA reports whose content is copied from others or poorly prepared, for which Formosa’s report is a prime example.[7]

The appraisal and verification of the EIA

When it comes to the appraising and verifying step, the unclear regulations on authority and responsibility of government agencies have appeared to cause problems in implementing these regulations.

Under current regulations, along with The Ministry of Natural Resources and Environment (MONRE), other certain government agencies shall inspect the EIA if the project is subject to their decision. Pursuant to this rule, the EIA appraisal and verification in some cases will be conducted by the same agency, which make it falls short of independence. On the other hand, the laws are still vague about legal liabilities for violations during the appraising and verifying process, as no administrative penalty for agencies’ violations described in Decree 155/2016/ND-CP on administrative penalties on environmental violations. Notably, when the project has been granted permission and about to come to operation, the Law requires government agencies to examine project’s environmental works only in a short period of 15 to 30 days despite the fact that environmental impacts take a long time to be noticed.

Demand for improving regulations on EIA

Regarding environmental long-term effects, a good environmental law system should protect the national environment by preventing any harm from occurring in the first place. EIA reports are of importance to get that prevention. More precise regulations should be enacted considering the procedures of public consultation. Accordingly, the community subject to public consultation should involve not only residences and agencies surrounding the projects but also environmental scientists, institutes and whoever concerns about it. The consultation is not about objecting the projects but for providing investors with multisite opinions and helping mitigate risks of causing pollution when conducting projects. As EIA is still a new concept in Vietnam, more research on developed EIA process around the world should be done to improve EIA appraising process under current regulations of Vietnam.

More importantly, the laws should be clearer about legal liabilities of investors and government agencies regarding violations relating to EIA process. With large-scale projects, the administrative penalties provided in Decree 155/2016/ND-CP are not strict enough to force investors to fulfill the conducting EIA obligation. The lawmakers should have different levels on penalties in direct ratio to the scale of the project. Also, administrative penalties for irresponsible government agencies in EIA appraisal and verification should be added follow the same methods suggested for investors’ penalties, higher penalties for those in charge of larger projects. On the other hand, time given for examining investors’ environmental protection works should be extended up to three months for agencies to obtain the most adequate appraisal.

Pollution control during the operation of projects

By granting project permission, government has responsibility for not only pollution prevention but pollution control also. Vietnam’s regulations on pollution control have been changed over time. Currently, the 2014 LEP and its implementing guideline Decree 19/2015/ND-CP; Decree 80/2014/ND-CP on the drainage and treatment of wastewater; etc. as well as certain Circulars containing technical regulations on environment issued by the MONRE are taking enforcement. Regulations on pollution control have been growing but not yet completed. In the near future, regulations on technical standards and pollution management in industrial parks/economic zones ought to be revised.

Technical regulations on environment

Technical regulations on environment contain several parameters which set the basic standards for pollution control. The MONRE has issued various technical regulations on waste water, air emissions, noise standards, hazardous waste, etc. However, according to environmental experts,[8] Vietnam’s current standards are not based on environmental bearing capacity, therefore still lower than they should be. Low standards welcome investors to reuse technology which creates more pollution, which badly affect the pollution control process.

Updated international environmental standards should be taken into account when revising current standards of Vietnam. On the other hand, government should assist investors to conform to higher environmental standards by tax promotion on investment for new technology with low level of causing pollution,[9] meanwhile apply strict penalties on investors that fail to fit into those standards.

Management boards of industrial parks/economic zones

Supervising environmental protection activities is of the utmost importance in pollution control. Under Decree 29/2008/ND-CP on industrial parks export processing zones and economic zones and its supplementing Decree 164/2013/ND-CP as well as guideline Circular No. 06/2015/TTLT-BKHĐT-BNV, the Management board of industrial park/economic zone (the Board) will be in charge of supervising environmental activities of corporations under its authority. Due to significant duties of the Board, relevant regulations should make sure that its members are independent persons to the project and investors in industrial parks/economic zones will not be appointed as members of the Board. Moreover, more funds should be raised to train adequate staffs and equip the Board with technologies for the supervising works. On the other hand, levels of legal liability for the Board should be provided clearly and in direct ratio to the scale of the project under their supervision.[10]

Penalties for corporate violations causing environmental pollution

Corporate violations causing environmental pollution are described in Article 104 of the 2014 LEP and Article 33 under Decree 19/2015/ND-CP. Legal liabilities for violations regarding pollution control are provided under the 2012 Law on Handling Administrative Violations; Decree 155/2016; the 1999 Penal Code Amending and supplementing by Law No. 37/2009/QH12 (the 1999 Penal Code) and 2015 Civil Code. But still, legal liabilities for such violations have their shortcomings.

Administrative penalties

Under Decree 155/2016/ND-CP, administrative penalty level for corporations is doubled that for individuals and the maximum level of administrative penalty for corporations is VND 2.000.000.000. Such maximum level might be a huge deal to small corporations but definitely not when it comes to large corporations whose capital is up to millions of dollar. In order to effectively prevent corporations from causing pollution, lawmakers should increase the penalties to make them more severe compared with the profits that corporations might get when they disobey regulations. For instant, the fines corporations have to pay for discharging wastewater without treatment should be higher than the profits they get from not installing wastewater treatment technology.

Criminal liabilities

Due to the postponement of the 2015 Penal Code, current criminal cases will be regulated by 1999 Penal Code. Notably, in the 1999 Penal Code, only individuals may be subject to criminal liabilities while the 2015 Penal Code contains the extension of criminal liability to commercial legal entities for certain crimes including the field of environment.[11] Regarding its negative and long-term impact on human health, the act of causing environmental pollution by corporations is undeniably dangerous to the society and must be subject to criminal liability. Lawmakers therefore should make every effort to bring the new Penal Code into effect as soon as possible.

Tort liabilities

In terms of pollution prevention, tort liability is not the priority remedy as tort liability arises when the environment has been already damaged. However, under certain aspects, through strict and specific regulations on tort liability for polluting the environment, corporations will be forced to pay more attention in their environmental protection works. Currently, this issue is regulated under the 2015 Civil Code[12]and Decree 03/2015/NĐ-CP providing the assessment of environmental damages.[13] Nonetheless, due to the complicated character in assessing environmental damages and current limited technology in Vietnam, it is necessary that environmental agencies conduct more research to implement and complete this regulation.