Decree No. 12-CP Issuing Regulations on Reorganizing Organizations and Reforming Management Mechanisms for State Agricultural Enterprises

DECREE

Issuing regulations on restructuring organizations and reforming management mechanisms for state agricultural enterprisesbalancing and ensuring cash between the banking system and the National Treasury.

THE GOVERNMENT

Pursuant to the Government Organization Law dated September 30, 1992;

To enhance the role and economic efficiency of state agricultural enterprises in the national economy;

At the proposal of the Ministers of the Ministries of Agriculture and Food Industry, Forestry, Fisheries, and Water Resources;

DECREE:

Article 1. This Decree promulgates the Regulations on restructuring organizations and reforming management mechanisms for state agricultural enterprises.

Article 2. The ministers, heads of ministerial-level agencies, heads of government-affiliated agencies, chairpersons of provincial people's committees under central jurisdiction shall be responsible for implementing this Decree.

Article 3. This Decree takes effect from the date of signature, all previous provisions contrary to this Decree are abolished./.

REGULATIONS

ON RESTRUCTURING AND

REFORMING MANAGEMENT MECHANISMS FOR

STATE AGRICULTURAL ENTERPRISES.

(Issued together with Decree No. 12-CP dated March 2, 1993 of the Government).

REORGANIZING STATE AGRICULTURAL ENTERPRISES

Article 1. State agricultural enterprises include state-owned units engaged in agricultural, forestry, aquaculture, water resources production and services, factories, stations, experimental centers established, funded, and managed by the State as the owner, operating under a market mechanism with state guidance and implementing the principle of economic accounting, responsible for preserving and developing capital.

Article 2. Reorganizing existing state agricultural enterprises in the following manner:

1. Enterprises currently undertaking important production and business activities, producing export products in concentrated specialized areas, linked with processing and business operations that are economically efficient, capable of reinvestment and good development shall be registered again according to Decree No. 388-HĐBT dated November 20, 1991 and continue to develop according to their capacity.

Enterprises that have not yet achieved high economic efficiency but hold significant positions in the socio-economic development of regions, capable of overcoming difficulties to achieve high economic efficiency shall be registered again according to Decree No. 388-HĐBT.

2. Enterprises that are weak, losing money, and unable to innovate and develop shall be dissolved according to general state regulations. Enterprises must inventory and strictly manage all capital, assets, and land according to current regulations and complete procedures to transfer land back to local authorities for long-term stable allocation to worker and farmer households for production.

3. Transfer the majority of state agricultural enterprises currently managed by the Central Government to local management; only retain a number of large-scale enterprises tied to processing and export or tasked with scientific research and seed production, which require Central Government management.

4. Enterprises mainly providing technical services such as water resources management, seed production, etc., shall be registered to operate according to the regulations of enterprises building infrastructure for production, receiving state investment and other conditions to operate; at the same time, encourage enterprises to diversify business operations to increase income for the unit and workers. Water conservancy enterprises need to be reorganized towards streamlining management structures, ensuring the systematic nature and watershed characteristics of projects, eliminating mechanical administrative divisions; improving the effectiveness of organizational systems as well as the utilization of facilities.

5. Enterprises tasked with both production and maintaining national defense security in critical areas will have separate regulations.

Article 3. After restructuring and registering business operations according to Decree No. 388-HĐBT, state agricultural enterprises must focus on innovation and strengthening relationships between enterprises and production areas, specifically:

1. Alongside organizing production and business within their management scope, enterprises must actively contribute to creating a favorable production environment for the region, such as providing technical services, supplying materials, processing and marketing products, accepting commissions to build infrastructure in the area, and quickly becoming a center promoting comprehensive regional socio-economic development.

2. For planned resettlement projects, long-term plantation projects, forest planting, aquaculture projects forming new economic zones implemented in areas where state agricultural enterprises directly operate, these enterprises may be assigned by the state as project leaders to undertake service technical work, construction of infrastructure, and organization of manpower to implement the projects.

INNOVATING INTERNAL MANAGEMENT MECHANISMS OF ENTERPRISES

Article 4. State agricultural enterprises must innovate internal management mechanisms to fully exploit the potential of the enterprise as well as the potential of worker households and farmer households. The main activities of enterprises should focus on technical service sectors, product processing and marketing, creating favorable economic conditions and environments for rapid production development and achieving high socio-economic efficiency:

1. Enterprises must adjust their production structure to align with market requirements and the advantages of the enterprise, transferring direct land-based, water-based, crop, and livestock production activities to household economies of workers, including farmers outside the enterprise, including unused land in firing ranges, warehouses, military camps.

2. State agricultural enterprises must inventory and report comprehensively on land usage situations to the supervising agency to fully implement the policy of transferring unused or inefficiently used land areas to local authorities for allocation to farmers.

3. Land managed by enterprises shall be allocated stably and long-term to workers or enterprise member households for production and business organization; enterprises organize good service activities. Implement cost and output quotas based on economic contracts, excess over quotas shall be enjoyed by the contractor.

For perennial orchards and livestock herds where collective development is difficult: it is necessary to conduct a summary of various forms such as lump-sum contracts, leasing, selling orchards and livestock to worker households and farmer households to gradually expand effective forms with the aim of recovering capital early for reinvestment in new land reclamation. The relevant ministries and related sectors must urgently prepare guiding documents to expand pilot programs of selling orchards and livestock to member households and farmer households through immediate payment or installment payment methods. The sale of orchards and livestock to households must be carried out step-by-step based on accurate valuation and public, democratic pricing under strict supervision by state management agencies over enterprises, without allowing state assets to be lost. The Ministry of Agriculture and Food Industry, the Ministry of Forestry, the Ministry of Finance, and the Government Price Board must strictly direct this work and report the results by the end of 1993 for the Government's consideration to approve further expansion.

4. For centralized processing activities, various forms of contracting can be implemented such as revenue-sharing combined with production volume and product quality contracting, linking workers' and officials' salaries and bonuses with the final income of the enterprise... In regions with concentrated raw materials linked to large processing facilities, the form of organizing factories to be connected with raw material producing households should be expanded, with the factory responsible for developing a stable long-term raw material supply area, ensuring the interests of the factory and the producers in the raw material region.

5. For basic construction, transportation, repair, commerce... tendering should be conducted by project, by task, by shipment, or revenue-sharing down to specific tasks.

6. State-owned agricultural service enterprises shall implement appropriate contracting forms according to the characteristics of each unit such as lump-sum service and task contracting or stage-by-stage contracting... aiming to link the responsibilities and benefits of the performers with the final results.

Article 5. The state agricultural enterprise management structure needs to be streamlined to be truly lean, with each enterprise having a Director and 1-2 Deputy Directors, a Chief Accountant, and assistants to the Director consisting of several specialists proficient in their fields.

For large enterprises with organized teams or production workshops, the management staff of each unit shall only include a team leader (or workshop manager) and an accountant.

The enterprise director is responsible for creating favorable conditions for the Party organization within the enterprise to play its leading role in all areas of enterprise activity, particularly in selecting, nurturing, and training a cadre capable of managing the enterprise under the new mechanism.

IMPLEMENTING PROVISIONS

Article 6. This Regulation applies to all state-owned agricultural enterprises managed by ministries and localities.

Ministers, heads of ministerial-level agencies, and heads of government-affiliated agencies shall issue Circulars to guide the implementation of this Regulation in accordance with their functions, duties, and scope of responsibility./.