Directive No. 03/2003/CT-TTg on handling debts of commune budgets.

DIRECTIVE

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

Pursuant to Resolution No. 3 of the Third Plenary Session of the Central Committee of the Communist Party of Vietnam (Ninth Congress) on continuing to restructure, reform, develop, and enhance the efficiency of state-owned enterprises, the Government has issued 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 for restructuring state-owned enterprises was formed; the operational efficiency of State Corporations was improved; the overall plans for restructuring state-owned enterprises were basically completed;...

However, the process of institutionalizing Resolution No. 3 of the Third Plenary Session of the Central Committee of the Communist Party of Vietnam (Ninth Congress) is still slow; the overall plans for restructuring state-owned enterprises of many ministries, sectors, and localities do not closely follow the Resolution of the Central Committee and the Government's Action Program; coordination in restructuring enterprises by sector and region is still lacking; restructuring and transferring ownership of loss-making state-owned enterprises with small capital and where the State does not need to hold 100% of the shares 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 Resolution No. 3 of the Central Committee. In 2003, there must be a focus on directing efforts to make significant progress in restructuring and reforming state-owned enterprises, with the emphasis on improving the production and business efficiency of State Corporations and implementing shareholding, leasing, contracting, selling, merging, dissolving, and bankruptcy of small, loss-making enterprises and those where the State does not need to hold 100% of the shares. The Prime Minister issues the following Directive:

1. Ministries, ministerial-level agencies, agencies under the Government, People's Committees of provinces and centrally-administered cities, and Boards of Directors of State Corporations must consider the concentrated direction to promote the implementation of Resolution No. 3 of the Central Committee and the Government's Action Program on restructuring, reforming, developing, and enhancing the efficiency of state-owned enterprises as a key task for 2003. They must complete the overall restructuring plan for state-owned enterprises to submit to the Prime Minister for approval and have programs, plans, and proactive measures to implement them. Focus on promoting the transfer of ownership of small, loss-making state-owned enterprises where the State does not need to hold 100% of the shares according to the approved plan; promptly resolve difficulties and obstacles in restructuring and reforming enterprises. Strengthen the Reform Steering Committee, allocate sufficient specialized staff with enthusiasm and expertise. Resolutely replace General Managers of enterprises who do not strictly implement the enterprise restructuring plan. New establishment of state-owned enterprises must be strict, ensuring effectiveness, in accordance with the spirit of Resolution No. 3 of the Central Committee 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 authorities of the Board of Directors - direct representatives of the owner at State Corporations, deciding all important matters in the development strategy and operations of State Corporations; Plan for establishing economic groups (second quarter of 2003), Decree amending and supplementing Decree No. 56/CP on state-owned enterprises operating public services, Decree on State Corporations (fourth quarter of 2003).

b) Ministry of Finance: Decision on establishing a financial investment company; Decision on issuing the Supervision and Evaluation Regulation for the operation efficiency of state-owned enterprises; Decree on Financial Management and Business Accounting Regulations for 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 on issuing standards and Examination Regulation for management cadres of state-owned enterprises; Decision on issuing Training and Utilization Regulation for management cadres of state-owned enterprises; policy for General Managers, Deputy General Managers, and Chief Accountants who will no longer work in state-owned enterprises undergoing restructuring.

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 Directors of State Corporations must concentrate on strengthening management organizations, resolving difficulties, and enhancing the production and business efficiency of State Corporations, striving to ensure that by 2005 there are no weak, loss-making member enterprises.

State Corporations meeting the criteria stipulated in Resolution No. 3 of the Central Committee and the Prime Minister's regulations must focus on strengthening organizational structures, management mechanisms, accelerating investment development in accordance with the strategic plan and planning, especially major projects mentioned in the five-year plan (2001-2005); improving production and business efficiency; striving to exceed the 2003 annual plan and the five-year plan.

State Corporations operating in sectors and fields where the State needs to organize State Corporations but the State capital is insufficient compared to the regulations, while simultaneously strengthening organizational structures, management mechanisms, accelerating investment development, and improving production and business efficiency, must also have specific plans and timelines to ensure full capital by 2005.

State-owned corporations that fail to meet the prescribed criteria, incur losses, or operate in a purely administrative manner without product, brand, financial, or technological integration between member enterprises and between the corporation and its member enterprises shall be resolutely dissolved. At the same time, measures shall be taken to improve the dynamism, accountability, and business efficiency of the enterprises.

For enterprises with competitive products and brands in the market, support should be encouraged to promote investment development, expand production and business scope, and form corporations operating under the parent company-subcompany model.

Ministries and localities must submit to the Prime Minister for approval before March 30, 2003, plans for state-owned corporations and state-owned enterprises within the pilot program transitioning to the parent company-subcompany model, and strictly organize and implement them without widespread expansion.

The Steering Committee for Enterprise Reform and Development shall take the lead, coordinating with the Posts and Telecommunications Ministry, Industry Ministry, Construction Ministry, Posts and Telecommunications Corporation, Vietnam Oil and Gas Corporation, and Vietnam Electricity Corporation to advance research, survey, and develop proposals for economic groups. Simultaneously, they shall coordinate with the Ministry of Transport, the Board of Directors of the Vietnam Shipbuilding Industry Corporation, and the Vietnam Mechanical Transport Construction Corporation to draft proposals to submit to the Prime Minister regarding the pilot implementation of the Board of Directors entering into contracts with the General Director.

To rigorously and effectively implement the privatization of state-owned enterprises, for state-owned enterprises with capital of 5 billion VND or more that are currently profitable, when selling shares for the first time, the State must retain at least 51% of the shares.

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 practical distinctions in credit, investment, land, and entry-exit 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.