Decree No. 31/2005/ND-CP on the production and supply of public goods and services

DECREE OF THE GOVERNMENT

Regarding the production and supply of public goods and services

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the State Enterprise Law dated November 26, 2003;

At the proposal of the Minister of Planning and Investment,

DECREE:

PART I
GENERAL PROVISIONS

Article 1. Scope of application

This Decree provides for:

1. Criteria, list of public goods and services.

2. The establishment, restructuring, management organization, and operation of state-owned enterprises directly serving national defense and security.

3. The restructuring, management organization, and operation of state-owned enterprises performing public service tasks.

4. Participation in the production and supply of public goods and services by enterprises under various economic sectors and cooperatives.

Article 2. Applicability

This Decree applies to state-owned enterprises, enterprises under various economic sectors, and cooperatives that have been registered for business in accordance with the law and engage in the production and supply of public goods and services.

Article 3. Criteria for determining public goods and services

Products and services are determined as public goods and services when they simultaneously meet the following conditions:

1. They are essential products and services for the economic and social life of the country, community of a specific territorial area, or ensure national defense and security.

2. Production and supply of these products and services through market mechanisms are unlikely to cover costs.

3. They are ordered, planned, or tendered by state agencies with authority at prices or fees set by the State.

Article 4. List of public goods and services

1. The list of public goods and services prescribed in the Appendix attached to this Decree.

2. In each period, the Ministry of Planning and Investment shall take the lead and coordinate with relevant agencies to submit to the Prime Minister for decision on amending and supplementing the list of public goods and services.

Article 5. Methods of supplying public goods and services and principles of selection

1. The production and supply of public goods and services specified in Appendix A of this Decree shall be carried out by state-owned enterprises directly serving national defense and security (hereinafter referred to as defense and security enterprises) through ordering or planning.

2. The production and supply of public goods and services specified in Appendix B of this Decree:

a) Shall be carried out by state-owned enterprises performing public service tasks through ordering or planning;

b) Shall be carried out by state-owned enterprises not falling under point a of Clause 2 of Article 17 of this Decree, enterprises under various economic sectors, and cooperatives through ordering.

3. The production and supply of public goods and services specified in Appendix C of this Decree shall be carried out by state-owned enterprises, enterprises under various economic sectors, and cooperatives through tendering or ordering.

4. For public goods and services that can be implemented through two methods, the selection of the method of supplying public goods and services shall be prioritized in the following order:

a) Tendering;

b) Ordering;

c) Planning.

Article 6. Rights and obligations of enterprises participating in the production and supply of public goods and services

1. For enterprises under all economic sectors and cooperatives:

a) To conclude contracts and record economic transactions in accordance with the law; to bear responsibility before customers and the law for public goods and services supplied by themselves;

b) To provide sufficient quantities of public goods and services, ensuring quality, correct target groups, and timely delivery;

c) To be paid by the State according to prices or fees approved by competent state agencies;

d) To receive support and favorable conditions for producing and supplying public goods and services in accordance with state regulations.

2. For state-owned companies:

In addition to the rights and obligations of enterprises participating in the production and supply of public goods and services stipulated in Clause 1 of this Article, state-owned enterprises shall enjoy the rights and obligations prescribed in Clauses 1, 2, 3, 4, and 5 of Article 19 of the Law on State-Owned Enterprises and the Financial Management Regulations of State-Owned Enterprises and State Capital Investment in Other Enterprises.

PART II
NATIONAL DEFENSE AND SECURITY ENTERPRISES

Article 7. National defense and security enterprises

1. National defense and security enterprises are state-owned enterprises established and invested in by the State to directly perform stable and regular tasks in areas and regions directly serving national defense and security and ensuring national secrets, ordered or planned by the State.

2. Criteria for recognition as national defense and security enterprises

National defense and security enterprises must meet the following criteria:

a) Established by competent state agencies in accordance with the law on state-owned enterprises;

b) Ordered or planned by the State to regularly produce and supply one or more public goods and services, perform national defense and security tasks specified in Appendix A of this Decree.

Article 8. Establishment of new national defense and security enterprises

The establishment of new national defense and security enterprises shall be carried out in accordance with the Government's regulations on establishing new, restructuring, and dissolving state-owned enterprises and related guiding documents.

Depending on the nature and assigned tasks, the Minister of Defense, the Minister of Public Security, and the Director of the Government Office for Official Communications shall decide on the members of the Appraisal Board for the Project to establish new national defense and security enterprises.

Article 9. Restructuring national defense and security enterprises

1. Based on the criteria prescribed in Clause 2 of Article 7 of this Decree, the Minister of Defense, the Minister of Public Security, and the Director of the Government Office for Official Communications shall examine and decide to recognize each enterprise under their management as a national defense and security enterprise, and then annually review and re-recognize those already recognized as national defense and security enterprises, report to the Prime Minister, and notify the Ministry of Planning and Investment and the Ministry of Finance.

2. For enterprises not recognized as national defense and security enterprises, they shall be restructured according to the criteria and classification lists of state-owned enterprises and independent accounting subsidiaries of state-owned holding companies issued by the Prime Minister and the restructuring plan for state-owned enterprises approved by the Prime Minister.

3. The merger, consolidation, division, or dissolution of defense and security companies shall be carried out in accordance with the provisions of the Government.

Article 10. Management organization of defense and security companies

Defense and security companies have a management organizational structure consisting of a General Director or Director and a supporting staff.

The General Director or Director, Deputy General Director or Deputy Director, Chief Accountant, and other important managerial positions, as well as positions directly responsible for performing defense and security tasks and national secrets within defense and security companies are included in the establishment of the Ministry of National Defense, the Ministry of Public Security, and the State Cryptographic Committee.

The Minister of National Defense, the Minister of Public Security, and the Head of the State Cryptographic Committee shall guide the implementation of the provisions of this Article.

Article 11. Ordering or assigning plans to defense and security companies

The Minister of National Defense, the Minister of Public Security, and the Head of the State Cryptographic Committee shall order or assign production and supply plans for public goods and services, and perform defense and security tasks for defense and security companies.

Article 12. Rights and obligations of defense and security companies

In addition to the rights and obligations of enterprises participating in the production and supply of public goods and services as stipulated in Clause 1 and Clause 2 of Article 6 of this Decree, defense and security companies also have the following rights and obligations:

1. To receive from the State sufficient capital to form assets serving the direct operational objectives of defense and security.

2. To comply with decisions of competent state agencies regarding the transfer of part of the capital or assets serving the direct operational objectives of defense and security of the company to fulfill defense and security tasks at another company when necessary.

3. To have the right to transfer, lease, or mortgage assets serving the direct operational objectives of defense and security under the company's management when permitted by the agency that established the company. The mortgage of land use value and assets attached to the land use rights serving the direct operational objectives of defense and security shall be carried out in accordance with the laws on land.

4. To use assigned resources to organize the production and supply of public goods and services outside the assigned plan, and engage in supplementary business activities when:

a) Permission is granted in writing by the person who established the company;

b) It does not affect the fulfillment of assigned direct defense and security tasks;

c) Supplementary business activities are registered according to the law;

d) Separate accounting is maintained for business operations and tax obligations are fulfilled according to the law.

Article 13. Financial support for defense and security companies

During the course of operation, in addition to general provisions on encouraging and supporting investment as prescribed by law, defense and security companies are entitled to:

1. Exemption from land rental fees, land use fees, and land use taxes for areas of land necessary for direct service of defense and security purposes during the period of such service.

2. Allocation of funds for the maintenance and repair of production lines directly implementing defense and security tasks, and support for wages for skilled workers determined in the staffing of those production lines, in cases where production is temporarily halted and the company lacks the ability to cover costs.

3. Defense and security companies operating in strategically important areas combining economy with defense may be considered for support of two reward and welfare funds equivalent to two months' salary, in cases where there are insufficient sources to establish these funds.

4. Defense and security companies located in remote, border, island, or particularly difficult strategic areas may be considered for support of childcare and education funding in areas without schools or classes according to the educational system, and healthcare funding for places where hospitals and clinics must be maintained due to special conditions.

Additionally, special defense and security companies and defense and security companies operating in strategic areas combining economy with defense may enjoy other incentives and support as decided by the Prime Minister.

Article 14. Organization for inspection and supervision of implementation

1. Defense and security companies shall report periodically or ad hoc upon request of the Minister of National Defense, the Minister of Public Security, and the Head of the State Cryptographic Committee on the situation and results of fulfilling defense and security tasks; the situation and results of other production and business activities of the company.

2. The Ministry of National Defense, the Ministry of Public Security, and the State Cryptographic Committee shall prescribe reporting systems for defense and security companies; they shall be responsible for organizing inspections, monitoring, and supervising the companies under their management in the performance of defense and security tasks and other production and business activities in accordance with the law.

Article 15. Rights and obligations of the state owner towards defense and security companies

1. The Ministry of National Defense, the Ministry of Public Security, and the State Cryptographic Committee are representatives of the state owner for defense and security companies established by them and authorized by the Prime Minister to exercise certain rights and obligations of the state owner towards defense and security companies established by the Prime Minister.

2. The Minister of National Defense, the Minister of Public Security, and the Head of the State Cryptographic Committee shall decide on the appointment, dismissal, commendation, and disciplinary action of General Directors or Directors of defense and security companies; they shall decide on the appointment, dismissal, commendation, and disciplinary action of Deputy General Directors, Deputy Directors, and Chief Accountants of defense and security companies based on the recommendations of the General Director or Director of the company.

The General Director or Director of a defense and security company shall decide on the appointment, dismissal, commendation, and disciplinary action of other managerial positions within the company.

CHAPTER III
STATE ENTERPRISES PERFORMING PUBLIC TASKS

Article 16. State enterprises performing public tasks

1. State enterprises performing public tasks are state enterprises designed and invested in to establish with the main, regular, and stable objective being the production and supply of public goods and services ordered by the State or assigned through plans.

2. A state-owned enterprise shall be recognized as a state-owned enterprise performing public service tasks when it meets the following criteria:

a) Established by competent state agencies in accordance with the law on state-owned enterprises;

b) Being commissioned by the State to produce or supply one or more public goods or services listed in Appendix B attached hereto on a regular basis.

Article 17. Assigning plans and settling accounts for state-owned enterprises performing public service tasks

1. State-owned enterprises performing public service tasks shall establish separate performance indicators in their annual plans regarding production and supply of public goods and services.

The consolidation and assignment of plans shall be carried out in accordance with current regulations.

2. Settlement of accounts for public goods and services funded from the State budget through commissioning or assigning plans shall be conducted as follows:

a) Provincial People's Committees (hereinafter referred to as Provincial People's Committee) shall settle accounts for public goods and services commissioned or assigned to state-owned enterprises under their jurisdiction that perform public service tasks.

b) The Ministry of Finance, in coordination with the relevant ministries, shall settle accounts for public goods and services commissioned or assigned to state-owned enterprises under their jurisdiction that perform public service tasks.

Article 18. Reorganizing state-owned enterprises performing public service tasks

1. Based on the criteria stipulated in Clause 2 of Article 16 of this Decree, the Minister, the Chairman of the Provincial People's Committee shall examine and decide to recognize each state-owned enterprise under their management as a state-owned enterprise performing public service tasks, and thereafter annually review and re-recognize those already recognized as such enterprises, report to the Prime Minister, and notify the Ministry of Planning and Investment and the Ministry of Finance.

2. For state-owned enterprises not meeting the criteria set forth in Clause 2 of Article 16 of this Decree, they shall be reorganized according to the criteria and classification list of state-owned enterprises and independent accounting enterprises under state-owned corporations issued by the Prime Minister and in accordance with the restructuring plan approved by the Prime Minister.

Article 19. Rights and obligations of state-owned enterprises performing public service tasks

In addition to the rights and obligations of enterprises participating in the production and supply of public goods and services as stipulated in Clauses 1 and 2 of Article 6 of this Decree, state-owned enterprises performing public service tasks have the following rights and obligations:

1. To receive sufficient capital investment from the State to form assets serving the goal of producing and supplying public goods and services.

2. To comply with decisions of competent state authorities regarding the transfer of part of the capital or assets serving the goal of producing and supplying public goods and services of the company to achieve the goal of producing and supplying public goods and services at another company if necessary.

3. To have the right to transfer, lease, or mortgage assets serving the goal of producing and supplying public goods and services under their management when permitted by the authority deciding to establish the company. The mortgage of land use value and assets of the company attached to land use rights serving the goal of producing and supplying public goods and services shall be carried out in accordance with the laws on land.

4. To utilize allocated resources to organize production and supply of public goods and services outside the assigned plan and engage in supplementary business activities when:

a) Permission is granted in writing by the person who established the company;

b) It does not affect the fulfillment of assigned public service tasks.

c) Supplementary business activities are registered according to the law;

d) Separate accounting is maintained for business operations and tax obligations are fulfilled according to the law.

PART IV
IMPLEMENTING PROVISIONS

Article 20. Effectiveness

1. This Decree takes effect fifteen days after its publication in the Official Gazette and replaces Government Decree No. 56/CP dated October 2, 1996 on state-owned enterprises engaged in public service activities.

2. The Ministry of Finance and the Ministry of National Defense are responsible for guiding the implementation of this Decree.

3. The ministers, heads of ministerial-level agencies, heads of government-affiliated agencies, and chairpersons of provincial people's committees under central cities shall be responsible for enforcing this Decree.

ANNEX

LIST OF PUBLIC GOODS AND SERVICES

(annexed to Government Decree No. 31/2005/NĐ-CP dated March 11, 2005)
LIST A

Public goods and services, defense and security tasks performed by companies

under defense and security sectors according to commissioning or planning methods

1. Production of explosives for defense purposes.

2. Production of chemicals for defense purposes.

3. Production of radioactive materials.

4. Production, repair of weapons, equipment; technical equipment for defense and security; technical equipment, secret code materials.

5. Printing political and military literature specifically for defense and security.

6. Performing special defense and security tasks as decided by the Prime Minister.

Public goods and services performed by state-owned enterprises, enterprises

LIST B

belonging to other economic sectors, and cooperatives according to commissioning or planning methods
1. Printing money, certificates of value, and producing metallic currency.
2. Air traffic control services.

3. Maritime safety services, including: pilotage, coastal information, maritime safety assurance.

4. Management and maintenance of national railway infrastructure, including: bridges, tracks, stations, railway signaling systems.

5. Management and maintenance of civil aviation airports, including: runways, air traffic control systems.

6. Publishing textbooks, books, and magazines for teaching and learning; publishing political books, maps, newspapers; publishing magazines, pictures, books and newspapers for ethnic minorities; producing newsreels, educational materials, scientific films, children's films.

7. Management and exploitation of large-scale water conservancy projects, including: inter-provincial and inter-district water conservancy projects; rock revetment water conservancy projects.

8. Management and maintenance of dikes, flood diversion works, and disaster prevention works.

9. Planting and protecting upstream forests, special-use forests, protective forests, ecological forests, mangrove forests reclaiming sea areas.

10. Producing and preserving original crop and livestock seeds; producing vaccines for disease prevention.

11. Services for protecting aquatic resources.

12. Urban drainage.

13. Public lighting.

14. Supplying electricity to remote, border, and island areas.

15. Management and maintenance of urban roads, deep inland roads.

16. Management and maintenance of inland waterways.

17. Basic geological, meteorological, hydrological surveys, and mapping activities.

16. Management and maintenance of inland waterways.

17. Basic geological, meteorological, hydrological, and cartographic survey activities.

18. Activities related to surveying, exploring, and investigating land resources, water, minerals, and other natural resources.

19. Universal postal services, mandatory postal services.

20. Other important areas as decided by the Prime Minister.

LIST C

belonging to other economic sectors, and cooperatives according to commissioning or planning methods
1. Printing money, certificates of value, and producing metallic currency.
through bidding or ordering

1. Management and operation of medium and small-scale irrigation works systems.

2. Public bus transport services in urban areas.

3. Public services: public environmental sanitation; park management; planting and maintenance of green trees and ornamental flowers on sidewalks, streets, median strips, roundabouts; cemetery and crematorium management.

4. Feature film production ordered or funded by the state.

5. Management and maintenance of road systems.

6. Management and maintenance of important ferry and bus stations.

7. Transportation and supply of essential goods and services for mountainous regions, remote and far-flung areas.

8. Other important products and services as decided by the Prime Minister.