Directive No. 15/1999/CT-TTg on improving the organizational and operational activities of State-owned Corporations

DIRECTIVE OF THE PRIME MINISTER

Regarding the completion of the organization and operation of State Corporations

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Implementing the Resolution of the Seventh National Congress of the Party, the Resolution of the Seventh Plenum of the Central Committee, and Resolution No. 10/NQ-TW of the Politburo (Seventh Term), dated March 7, 1994, the Prime Minister issued Decisions No. 90/TTg and 91/TTg to create a legal basis for the establishment of State Corporations. To date, many State Corporations have been established in key economic sectors.

Generally, State Corporations operate effectively, with continuous growth, fulfilling their obligations to the state budget, stabilizing employment, and improving the living standards of employees, playing a significant role in the growth of the national economy. However, State Corporations still exhibit many weaknesses and shortcomings: the organizational system mainly formed through administrative measures has not yet created comprehensive strength; many issues related to mechanisms and policies are no longer appropriate but have not been timely revised... directly affecting the business efficiency and competitiveness of State Corporations; the management functions of the Board of Directors and the operational role of General Managers, the state management role of Ministries, People's Committees of provinces and centrally governed cities are unclear; the guidance of the Party organizations and mass organizations within State Corporations lacks uniformity.

The current task is to consolidate and enhance the business effectiveness of State Corporations, improve their competitiveness, implement capital accumulation and concentration, deepen specialization and broaden cooperation, laying the foundation for transitioning from State Corporations to strong economic groups; accelerate the process of abolishing the Ministry management system, administrative management levels, and distinctions between central and local enterprises, fulfill the function of leading small and medium-sized enterprises, and complete the mission of taking the lead in the industrialization and modernization of the country. To accomplish these tasks, the Prime Minister instructs Ministries, sectors, and levels to promptly carry out the following actions:

I- Completing the development strategy for production and business operations of State Corporations until 2010, considering up to 2020:

1.Under the guidance of the Ministries of Planning and Investment, Finance, Industry and Trade, Science and Technology, and the Environment, and with the opinions of scientists, managers, and leading experts in the field, State Corporations need to urgently adjust and concretize their existing strategic plans and development planning for production and business operations, and specialized economic and technical fields, to be consistent with the international context and new business environment. In the strategic plan and development planning, based on forecasts of the world and regional economies, trends in scientific and technological development, international trade conditions, requirements for integration into the global economy, progress in joining international trade and economic organizations, comparative advantages, priorities, specialized areas, and key products must be identified for rapid and stable development at a pace ahead of others to participate in international and regional markets. Additionally, multi-sector business directions should be selected based on inter-industry calculations regarding market, technology, final products, and socio-economic benefits according to the principles of deep specialization and broad cooperation with all economic entities both domestically and internationally.

2.State Corporations should proactively cooperate with state management agencies to develop their own international integration strategies with strict timelines, consistent with the overall national commitments, specific product classifications, and guarantee measures, thereby formulating action programs for the period 2000-2005.

3.Ministries and sectors are responsible for guiding State Corporations to develop strategic plans and development planning for production and business operations, and international integration until 2010, considering up to 2020, consistent with the national economic and social development orientation for the period 2001-2010, the science and technology strategy until 2020, and the technology roadmap until 2005 as directed by the Government.

II- Improving the organization of State Corporations:

1.Ministers, Heads of ministerial-level agencies under the Government, Chairmen of People's Committees of provinces and centrally governed cities, and Boards of Directors of State Corporations shall base their work on the results of the mid-term review meeting on the organization and operation of State Corporations organized by the Government on March 1-2, 1999, and evaluate the specific aspects of the activities of State Corporations over the past three years (1996-1998). On this basis, they should proceed with classifying and arranging enterprises according to Directive No. 20/1998/CT-TTg dated April 21, 1998, of the Prime Minister. Proposals for enterprise classification and arrangement of each Ministry, sector, and State Corporation 91 must be submitted to the Prime Minister for approval before June 30, 1999.

2.The Central Enterprise Management Reform Board will take the lead in reviewing and presenting to the Prime Minister the reorganization of the State Corporation system based on the assessment of their operations and development strategies and planning for production and business operations from now until 2010, considering up to 2020, with the goal of forming several strong economic groups.

The Central Enterprise Management Reform Board will direct pilot projects involving State Corporations participating in capital with member enterprises, implementing primarily financial relationships between State Corporations and member enterprises. Supplemental management mechanisms for member enterprises of State Corporations that have been privatized but where the state retains controlling shares will still be considered member enterprises of State Corporations. Pilot projects will include the Chairman of the Board of Directors and General Manager being one person; the Chairman of the Board of Directors and Secretary of the Party Committee of the State Corporation being one person, and within the Board of Directors structure, there will be some full-time positions such as the Chairman of the Board of Directors and Head of the Supervisory Board, as well as some part-time members兼任。

3. The Ministry of Planning and Investment shall take the lead, together with the Central Enterprise Management Reform Board and the Ministry of Finance, to study and submit to the Prime Minister criteria for establishing and organizing the structure and operation of economic groups in the third quarter of 1999. Based on this, the Government will select a number of State-owned Joint Stock Companies to pilot their reorganization into strong economic groups in the direction of creating conditions to promote capital accumulation and concentration, forming key units of the economy engaged in diversified business operations with international scale; enhancing reputation and competitiveness in both domestic and foreign markets; implementing the policy of gradually abolishing the system of sectoral management and administrative management for state-owned enterprises and the distinction between central and local enterprises.

III. Improving the operational mechanism of State-owned Joint Stock Companies:

1. Ministries and sectors, within the scope of their functions, duties, and authorities, shall promptly organize the implementation of the Government's Action Program to continue implementing Resolution No. 4 and Resolution No. 6 (2) of the Eighth Plenum of the Party Central Committee on enterprise reform and restructuring to truly transform State-owned Joint Stock Companies into strong state-owned enterprises. They shall promptly submit to the Government for consideration and supplementation or amendment of mechanisms and policies that are no longer appropriate, and timely resolve difficulties in investment, production, and business activities of State-owned Joint Stock Companies.

2. The Ministry of Finance shall take the lead and guide State-owned Joint Stock Companies to accurately determine the value of assets under their control based on market prices, thereby determining the capital of the companies (the portion of member enterprises' capital shall be determined by the State-owned Joint Stock Company itself), and allocate capital on the principle that the State-owned Joint Stock Company is responsible for preserving and developing its capital. The Ministry of Finance shall establish regulations on allocating, preserving, and developing capital for State-owned Joint Stock Companies and economic groups, and at the same time study the transition from the current administrative method of managing state-owned capital to a financial company form for managing state-owned capital, to be submitted to the Prime Minister for consideration and decision in the third quarter of 1999.

3. From now until the end of 1999, the Government Organizational and Cadre Affairs Commission, sector management ministries, provincial and municipal people's committees directly under the central government with State-owned Joint Stock Companies, shall conduct evaluations and categorizations of the leadership cadre teams of State-owned Joint Stock Companies based on new cadre standards and the business performance of the companies, serving as a basis for proactively building cadre planning and training to meet the development requirements of State-owned Joint Stock Companies in the future. The Government Organizational and Cadre Affairs Commission shall study and supplement the cadre management content of ministries over State-owned Joint Stock Companies, including issues such as cadre delegation levels, term appointments, dismissals, rewards, and punishments for leaders of State-owned Joint Stock Companies.

4. The Ministry of Planning and Investment shall take the lead in studying amendments to the Law on Enterprises according to the prescribed schedule, and simultaneously work with the Ministry of Finance and relevant ministries and sectors to prepare supporting documents for the implementation of the Law on State-Owned Enterprises once it is approved by the National Assembly.

5. The Ministry of Labor, Invalids, and Social Affairs shall promptly submit to the Government a proposal on addressing surplus labor during the restructuring of enterprises within State-owned Joint Stock Companies.

Ministers of ministries, heads of agencies equivalent to ministries, heads of government-affiliated agencies, Chairpersons of provincial and municipal people's committees directly under the central government, and Boards of Directors of State-owned Joint Stock Companies are responsible for implementing this Directive./.