Directive No. 01/2003/CT-TTg On further promoting the restructuring, reforming, development, and enhancing the efficiency of state-owned enterprises

DIRECTIVE

On further promoting restructuring, reforming, developing, and enhancing the efficiency of state-owned enterprises

Pursuant to the Resolution of the Third Plenary Session of the Central Committee of the Party (Term IX) on continuing to restructure, renovate, develop and enhance the efficiency of state-owned enterprises, the Government has developed an action program and directed ministries, sectors, localities, and state-owned enterprises to implement it. In 2002, there were initial changes and a relatively coherent system of legal documents was formed for restructuring state-owned enterprises; enhancing the operational efficiency of state-owned corporations; basically completing the development of comprehensive projects to restructure state-owned enterprises;...

However, the process of institutionalizing the Resolution of the Third Plenary Session of the Central Committee of the Party (Term IX) is still slow; many ministries, sectors, and localities' comprehensive restructuring projects for state-owned enterprises do not closely adhere to the Central Resolution and the Government's action program; coordination in restructuring enterprises by industry and territory is still lacking; the timely completion of the organizational restructuring of state-owned corporations has not been achieved; the progress in restructuring and transferring ownership of loss-making state-owned enterprises, small enterprises, and those where the State does not need to hold 100% capital is still very slow,...

The requirement set for the five-year period (2001-2005) is to basically complete the restructuring of state-owned enterprises in accordance with the spirit of the Central Resolution 3. In 2003, there must be a focused directive to create significant changes in the restructuring and renovation of state-owned enterprises, with a focus on enhancing the production and business efficiency of state-owned corporations and implementing shareholding, leasing, merging, dissolving, bankruptcy of small, loss-making enterprises, and those where the State does not need to hold 100% capital. The Prime Minister instructs:

1. Ministries, ministerial-level agencies, government-affiliated agencies, provincial People's Committees under the central government, and Boards of Management of state-owned corporations must consider the concentrated direction to accelerate the implementation of the Central Resolution 3 and the Government's action program on restructuring, renovating, developing, and enhancing the efficiency of state-owned enterprises as a key task for 2003. They must complete the comprehensive restructuring project for state-owned enterprises to submit to the Prime Minister for approval and have active programs, plans, and solutions to implement it. Focus on accelerating the transfer of ownership of small, loss-making state-owned enterprises where the State does not need to hold 100% capital according to the approved project; promptly resolve difficulties and obstacles in restructuring and renovating enterprises. Strengthen the Board of Enterprise Renovation, allocate sufficient specialized staff with enthusiasm and expertise. Resolutely replace General Directors of enterprises who do not strictly implement the enterprise restructuring project. New establishment of state-owned enterprises must be strict, ensuring effectiveness, in accordance with the spirit of the Central Resolution 3 and the Government's regulations.

2. By the first quarter of 2003, ministries must submit to the Government and the Prime Minister for promulgation legal documents according to the Government's and the Prime Minister's work programs. Specifically as follows:

a) Ministry of Planning and Investment: Decree on exercising ownership rights over state-owned enterprises, clarifying the functions, tasks, and powers of the Board of Management - direct representative of the owner at the Corporation, deciding all important issues in the strategic development and operation of the Corporation; Project to establish economic groups (second quarter of 2003), Decree amending and supplementing Decree No. 56/CP on state-owned enterprises operating public services, Decree on state-owned corporations (fourth quarter of 2003).

b) Ministry of Finance: Decision to establish a financial investment company; Decision to issue the Supervision and Evaluation Regulation on the operational efficiency of state-owned enterprises; Decree on Financial Management and Business Accounting Regulations for Loss-Making State-Owned Enterprises replacing Decree No. 59/CP and Decree No. 27/1999/NĐ-CP (fourth quarter of 2003).

c) Ministry of Home Affairs: Decision to issue standards and Recruitment Examination Regulations for state-owned enterprise management personnel; Decision to issue Training and Utilization Regulations for state-owned enterprise management personnel; policies for General Directors, Deputy General Directors, and Chief Accountants who will no longer work in restructured state-owned enterprises.

Along with preparing the above draft documents, ministries should actively draft guidelines to issue before the Government's and the Prime Minister's legal documents take effect.

3. Ministries, provinces, centrally-administered cities, and Boards of Management of state-owned corporations must concentrate on improving organizational management, resolving difficulties, enhancing the operational efficiency of state-owned corporations, striving to eliminate weak and loss-making member enterprises by 2005.

State-owned corporations that fully meet the criteria stipulated in the Central Resolution 3 and the Prime Minister's regulations should focus on improving organizational structure, management mechanisms, promoting investment development in line with strategies and planning, especially large and important projects mentioned in the five-year plan (2001-2005); enhancing production and business efficiency; striving to exceed the 2003 annual plan and the five-year plan.

For state-owned corporations operating in industries and fields requiring corporation organization but lacking state capital as required, with limited budget contributions, while improving organizational structure, management mechanisms, promoting investment development, and enhancing production and business efficiency, specific plans and timelines must be established to ensure adequate capital by 2005.

State-owned corporations that fail to meet the prescribed criteria, operate at a loss, or function in an administrative manner without product, brand, financial, or technological connections between member enterprises and between the corporation and its member enterprises must have their leadership bodies dissolved resolutely; simultaneously, measures to improve dynamism, responsibility, and production and business efficiency of enterprises must be strengthened.

For enterprises with competitive products and brands in the market, support and encouragement should be provided to promote investment development, expand production and business scope, forming corporations operating under the parent-subsidiary model.

The ministries and localities shall submit to the Prime Minister for approval before March 30, 2003, plans concerning state-owned corporations and enterprises under pilot programs transitioning to operate under the parent company-subcompany model and organize strict implementation, avoiding widespread adoption.

The Steering Committee for Enterprise Reform and Development shall take the lead, coordinating with the Ministries of Posts and Telecommunications, Industry, Construction, the Vietnam Posts and Telecommunications Corporation, the Vietnam Oil and Gas Corporation, and the Vietnam Electricity Corporation to advance research and surveys to develop a proposal for economic groups. At the same time, they shall coordinate with the Ministry of Transport, the Board of Directors of the Vietnam Shipbuilding Industry Corporation, and the Vietnam Transportation Construction Corporation to draft a proposal to be submitted to the Prime Minister regarding the pilot program for the Board of Directors to enter into contracts with the General Director.

4. To strictly and effectively implement the corporatization of state-owned enterprises, for state-owned enterprises with capital of 5 billion VND or more that are currently operating profitably, when conducting the initial public offering, the State must retain at least 51% of the shares.

5. The Ministry of Finance shall take the lead, coordinating with relevant agencies to study and submit to the Prime Minister mechanisms and policies aimed at continuing to eliminate actual discrimination in credit, investment, land, and immigration areas between state-owned enterprises and state-owned enterprises after conversion, contributing to accelerating the restructuring of state-owned enterprises.

The Steering Committee for Enterprise Reform and Development shall be responsible for urging, monitoring, and periodically reporting to the Prime Minister on the implementation of this Directive.