Decision No. 782/2003/QĐ-BTNMT On the Issuance of the Charter on Organization and Operation of the Vietnam Environment Protection Fund

Pursuant to …;

Regarding the issuance of the Charter on Organization and Operation

of the Vietnam Environmental Protection Fund

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MINISTER OF NATURAL RESOURCES AND ENVIRONMENT

On the basis of the Environmental Protection Law dated December 27, 1993;

Pursuant to the Government Decree No. 175/CP dated October 18, 1994, guiding the implementation of the Law on Environmental Protection;

Pursuant to Decree No. 91/2002/NĐ-CP dated November 11, 2002 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Natural Resources and Environment;

Pursuant to Decision No. 82/2002/QĐ-TTg dated June 26, 2002 of the Prime Minister on the establishment, organization, and operation of the Vietnam Environmental Protection Fund;

At the proposal of the Chairman of the Management Council of the Vietnam Environmental Protection Fund, the Director of the Environmental Protection Department, and the Head of the Cadre and Civil Servant Organization Department,

Pursuant to …;

Article 1. This Decision promulgates the Charter on Organization and Operation of the Vietnam Environmental Protection Fund.

Article 2. THIS DECISION SHALL TAKE EFFECT 15 DAYS AFTER ITS PUBLICATION IN THE OFFICIAL GAZETTE.

This Decision replaces Decision No. 53/2002/QĐ-BKHCNMT dated July 16, 2002 of the Minister of Science, Technology, and Environment on the issuance of the Charter on Organization and Operation of the Vietnam Environmental Protection Fund.

Article 3. The Director of the Environmental Protection Department, the Head of the Cadre and Civil Servant Organization Department, the Chairman of the Management Council of the Vietnam Environmental Protection Fund, the Director of the Vietnam Environmental Protection Fund, and the Heads of related units are responsible for implementing this Decision.

 

CHARTER

ORGANIZATION AND OPERATION OF THE VIETNAM ENVIRONMENTAL PROTECTION FUND
(Annexed to Decision No. 782/2003/QĐ-BTNMT dated June 23, 2003 of the Minister of Natural Resources and Environment).

Chapter 1:

GENERAL PROVISIONS

Article 1. Legal Status of the Vietnam Environmental Protection Fund

1. The Vietnam Environmental Protection Fund is a state financial organization performing the function of providing financial support in the field of environmental protection, established, organized, and operated according to Decision No. 82/2002/QĐ-TTg dated June 26, 2002 of the Prime Minister, and subject to management by the Ministry of Natural Resources and Environment under Decree No. 91/2002/NĐ-CP dated November 11, 2002 of the Government.

2. The Vietnam Environmental Protection Fund has legal personality, registered capital, its own balance sheet, seal, and bank accounts at the State Treasury and domestic and foreign banks.

3. The Vietnam Environmental Protection Fund has the English trading name Vietnam Environment Protection Fund, abbreviated as VEPF.

Article 2. Purpose of Activities

The activities of the Vietnam Environmental Protection Fund aim to provide financial support for programs, projects, activities, and tasks of environmental protection throughout the country. The Fund's operations are not for profit.

The Fund is obligated to ensure the return of the registered capital, manage and use the capital in accordance with the provisions of this Charter and current laws. The Fund covers its own administrative expenses.

Article 3. Headquarters and Representative Office

The headquarters of the Vietnam Environmental Protection Fund is located in Hanoi; the representative office of the Fund is located in some provinces and centrally-administered cities; the transaction office of the Fund is located abroad as prescribed by the Government.

Chapter 2:

TASKS AND POWERS

OF THE VIETNAM ENVIRONMENTAL PROTECTION FUND

Article 4. Tasks of the Vietnam Environmental Protection Fund

The Vietnam Environmental Protection Fund performs the following tasks:

1. Mobilizing domestic and foreign financial resources in accordance with the law to create investment capital for environmental protection;

2. Providing financial support to organizations and individuals with programs and projects aimed at preventing, controlling, and remedying national, inter-sectoral, inter-regional environmental pollution, degradation, and emergencies, or resolving localized environmental issues but with significant impact;

3. Receiving and managing entrusted funds from domestic and foreign organizations and individuals to provide financial support for environmental protection programs, projects, activities, and tasks;

4. Taking the lead and coordinating with relevant agencies to evaluate and select environmental protection programs, projects, activities, and tasks proposed for funding or financial support by the Fund in accordance with the law;

5. Using idle funds not derived from the state budget to purchase government bonds in accordance with the law based on the agreement of the fund providers;

6. Managing the Fund’s capital and assets in accordance with the law.

Article 5. Powers of the Vietnam Environmental Protection Fund

The Vietnam Environmental Protection Fund shall have the following powers:

1. Organizing management agencies and business units to operate in accordance with the objectives, tasks, and provisions of this Charter;

2. Periodically and randomly inspect organizations and individuals using financial support capital of the Fund in implementing programs, projects, activities, and environmental protection tasks;

3. Inviting experts from Ministries, sectors, and related organizations to participate in specialized advisory councils, appraising programs, projects, activities, and environmental protection tasks proposed for financial support from the Fund, and serving other related activities of the Fund;

4. Suspending financial support or interest rate subsidies, withdrawing loan capital; initiating legal proceedings against organizations and individuals who breach commitments with the Fund or violate relevant state regulations concerning the Fund's activities;

5. Refusing requests from organizations and individuals for information provision and other resources of the Fund if such requests contravene laws and this Charter;

6. Directly relating with domestic and foreign organizations and individuals to mobilize, attract, and accept financial support for the Fund or raise capital for environmental protection projects, activities, and tasks according to the assigned operational plan of the Fund;

7. Deciding on dispatching Fund staff abroad for work, study, research, reference, and survey in accordance with the law.

Chapter 3:

SOURCES OF CAPITAL AND OPERATIONS

OF THE VIETNAM ENVIRONMENTAL PROTECTION FUND

Article 6. Registered Capital

The registered capital of the Vietnam Environmental Protection Fund is 200 billion VND, which will be fully provided by the state budget within two years from the date of the decision establishing the Fund. Any changes to the registered capital of the Fund shall be decided by the Prime Minister based on the proposal of the Ministry of Natural Resources and Environment, the Ministry of Finance, and the Ministry of Planning and Investment.

Article 7. Capital Raised from Other Sources

The operating capital from other sources of the Vietnam Environmental Protection Fund includes:

1. Compensation payments for environmental damage (revenue collected into the state budget) from organizations and individuals whose activities cause harm to the environment as stipulated in Articles 7 and 53 of the Environmental Protection Law;

2. Fifty percent of environmental protection fee revenue;

3. Ten percent of annual state budget funds allocated for national environmental management activities;

4. Voluntary contributions, aid, and sponsorships for the Fund from domestic and foreign organizations and individuals;

5. Entrusted capital from domestic and foreign organizations and individuals supporting environmental protection activities;

6. Other revenues as prescribed by law.

Article 8. Activities of the Vietnam Environmental Protection Fund

The activities of the Vietnam Environmental Protection Fund include:

1. Mobilizing financial resources;

2. Providing loans at preferential interest rates;

3. Subsidizing interest on loans;

4. Granting and co-granting;

5. Accepting and entrusting;

6. Purchasing government bonds.

Article 9. Recipients of Financial Support from the Fund

The recipients of financial support from the Vietnam Environmental Protection Fund are organizations and individuals with national, inter-sectoral, inter-regional programs, projects, activities, and tasks for environmental protection, or addressing localized environmental issues with significant impact areas in pollution prevention, remediation, degradation, and environmental emergencies. The Management Board of the Vietnam Environmental Protection Fund (hereinafter referred to as the Management Board) decides the list of recipients and priority support categories during each period.

Recipients of financial support must comply with the provisions for each support method stipulated in this Charter.

Article 10. Lending at Preferential Interest Rates

1. The objects eligible for loans at preferential interest rates are organizations and individuals from all economic sectors with the need and request to borrow funds for environmental protection activities in accordance with the provisions of Article 9 of this Charter.

Annually, based on the Fund's capital availability for lending activities, the Management Board decides on the priority loan list for each group of borrowers and programs/projects.

2. The Fund lends on the principle of repayment. Borrowers must have the financial capacity to fully and timely repay the borrowed capital.

3. Conditions, procedures, and documentation for borrowing, monitoring of the borrowing process, debt repayment, extension of debt, conversion of overdue debt shall be carried out in accordance with the regulations of the Fund's operational charter issued by the Management Board.

4. The amount of lending and authority to decide on the amount of lending:

a) The Fund’s lending amount does not exceed 70% of the total costs of investment programs and projects for environmental protection.

b) The Management Board sets the lending amount for each group of borrowers and the Director's authority to decide on lending during each period.

The Management Board decides on lending for amounts exceeding the Director's decision-making authority.

5. The lending term is determined in accordance with the Fund's capital availability, specific conditions of the borrowing program/project, and the borrower's ability to repay, but not exceeding five years. In special cases decided by the Management Board, it shall not exceed seven years.

6. The Fund's lending interest rate is a preferential rate with a maximum not exceeding 50% of the average lending interest rate of credit institutions. The Management Board decides on the specific lending interest rate during each period and for each group of borrowers.

7. Guarantee for Loans:

a) The Fund lends on the basis of collateral security through pledge, mortgage, third-party guarantee, or using assets formed from borrowed capital as security. Procedures and formalities for securing loans and handling collateral assets are carried out in accordance with the law on loan guarantees.

b) In special cases, lending without asset security for each program/project is considered and decided by the Management Board.

8. Provision for Loan Risk:

a. The Vietnam Environmental Protection Fund annually establishes a risk reserve calculated as a percentage of the total outstanding loan balance of the Fund to address risks in lending. The establishment of the risk reserve is recorded as an operating expense of the Fund.

b. The Management Board decides on the ratio of the risk reserve extracted from the Fund's revenue and expenditure difference during each period.

9. Handling Risks and Authority to Handle Risks.

The risk reserve fund is used to offset non-recoverable loans due to borrowers encountering objective and force majeure risks that prevent them from repaying part or all of the borrowed capital.

The Management Board decides on debt extension based on the Director's proposal. The maximum extension period equals one-third of the repayment period stipulated in the credit contract. Debt write-off is decided by the Minister of Natural Resources and Environment based on the Management Board's proposal. Debt cancellation is decided by the Ministers of Natural Resources and Environment and Finance upon the Prime Minister's approval based on the Management Board's proposal.

Article 11. Interest Rate Subsidy Support.

1. The subjects eligible for interest rate subsidy support are organizations and individuals with projects as specified in Article 9 of this Charter.

2. Conditions for environmental protection investment projects to be eligible for interest rate subsidy support include projects that borrow from other credit institutions, have been completed, put into use, and can repay loans to credit institutions. The provision of interest rate subsidy support funding will be conducted once a year based on the principal and interest of the project repaid to credit institutions without borrowing from the Vietnam Environmental Protection Fund.

3. The Management Board decides the list of projects, total amount of support, and annual interest rate subsidy support level.

4. The maximum level of interest rate subsidy support shall not exceed 50% of the interest rate stipulated in the loan agreement signed with credit institutions. The specific level of support for each project is decided by the Management Board. The total amount of interest rate subsidy support funding provided by the Fund in a year shall not exceed 20% of the additional capital.

Article 12. Sponsorship and Co-sponsorship.

1. The Vietnam Environmental Protection Fund sponsors organizations and individuals with programs, projects, and activities related to environmental protection as follows:

a. Propaganda, education to raise awareness about the environment; popularize environmental protection knowledge to the community and award commendations;

b. Projects to treat waste and improve the environment;

c. Building, testing, promoting, and expanding community models participating in environmental protection;

d. Designing programs and projects aimed at soliciting sponsorship from domestic and foreign organizations and individuals for environmental protection;

e. Training and transferring environmentally friendly technology, cleaner production, and solutions to prevent, limit, and mitigate environmental incidents.

2. The Fund may cooperate with domestic and foreign organizations and individuals to co-finance tasks and activities related to environmental protection according to this charter and in accordance with the co-sponsor's commitments.

3. The Fund may use up to 30% of its annual additional capital for sponsorship and co-sponsorship.

4. The maximum non-reimbursable capital sponsorship equals 50% of the total cost to implement environmental protection activities and tasks of the sponsored project.

The list and level of sponsorship for environmental protection activities and tasks annually are decided by the Management Board.

Article 13. Entrustment and Delegation.

1. Acceptance of Entrustment:

a. The Fund accepts entrustment for lending, debt recovery, and sponsorship from domestic and foreign organizations and individuals according to the entrustment acceptance contract.

b. The Fund enjoys service fee levels for accepting entrustment. The service fee level for accepting entrustment is agreed upon and recorded in the entrustment acceptance contract.

2. Delegation:

a. The Fund has the right to delegate to credit institutions and financial organizations to carry out lending and debt recovery according to the delegation contract.

b. Organizations accepting entrustment enjoy service fee levels for accepting entrustment. The service fee level for accepting entrustment is agreed upon and recorded in the delegation contract.

Article 14. Purchase of Government Bonds.

1. The Fund is permitted to use idle funds not originating from the state budget to purchase government bonds according to the law, subject to the consent of the organization or individual providing such funds.

2. The total amount of funds allocated for purchasing government bonds as stipulated in Clause 1 of this Article shall not exceed 50% of the total idle funds.

Chapter 4:

ORGANIZATION AND ADMINISTRATION OF THE VIETNAM ENVIRONMENTAL PROTECTION FUND

Article 15. Organizational Structure.

1. The management and operation machinery of the Vietnam Environmental Protection Fund includes the Management Board, the Supervisory Board, and the operational management body. The Management Board, the Supervisory Board, and the operational management body of the Fund operate in accordance with the Charter of this Fund and current laws.

2. The Vietnam Environmental Protection Fund may establish specialized advisory boards to assist the Management Board in reviewing and determining programs and projects proposed for financial support.

Specialized advisory boards operate under regulations issued by the Management Board.

Article 16. Management Board

1. The Management Board consists of the Chairman and members of the Board. The Chairman of the Management Board is a Deputy Minister of the Ministry of Natural Resources and Environment; members are authorized representatives of the Ministries of Natural Resources and Environment, Finance, Planning and Investment, and the State Bank of Vietnam.

Members of the Management Board operate on a part-time basis.

2. Working System of the Management Board

The Management Board operates collectively, deciding issues based on majority rule. The Management Board convenes regularly once every three (3) months to review and decide matters within its jurisdiction; extraordinary meetings may be convened if necessary. The Chairman of the Management Board has the authority to request members to provide written opinions on decisions in certain specific cases.

3. Responsibilities of the Management Board

a. Deciding the direction, plans of activities, capital mobilization, financial support, approval of financial plans, and final accounts reports of the Fund;

b. Monitoring the operational management body of the Vietnam Environmental Protection Fund in compliance with policies, regulations, and laws, and implementation of Management Board decisions. Approving the activity programs of the Supervisory Board; reviewing the results of supervision and financial settlement audit reports of the Supervisory Board;

c. Approving the list, criteria for selection, and procedures for loan and financial support consideration by the Fund;

d. Submitting to the Minister of Natural Resources and Environment proposals for amendments and supplements to the Charter of the Organization and Activities of the Fund.

4. Powers of the Management Board

a. Determining the level and authority of the Fund Director to decide on loans, support, and financial assistance;

b. Resolving complaints from organizations and individuals borrowing funds or receiving support from the Fund according to the law;

c. Appointing and dismissing heads and members of the Supervisory Board, submitting to the Minister of Natural Resources and Environment proposals for appointment and dismissal of the Director, Deputy Director, and Chief Accountant of the Fund;

d. Determining the organizational structure, deciding on the establishment and operation of the Fund's representative offices in provinces and centrally-administered cities and transaction offices abroad in accordance with the law;

đ. Deciding on the establishment of specialized advisory boards;

e. Utilizing the machinery of the operational management body of the Fund and the Fund's seal in performing its duties and powers as stipulated in this Charter;

g. Receiving state-owned capital assigned to the Fund by the Ministry of Finance.

5. Operating expenses of the Management Board are included in the Fund's operating costs.

Article 17. Supervisory Board

1. The Environmental Protection Fund's Supervisory Board consists of three members. The Chairperson is appointed and dismissed by the Management Council. Other members are appointed and dismissed by the Management Council upon the recommendation of the Chairperson.

Members of the Supervisory Board operate on a part-time basis.

2. The Supervisory Board has the following tasks and authorities:

a. Develop work plans to be submitted to the Management Council and independently organize their implementation;

b. Inspect and monitor the activities of the Fund in accordance with the law, charter, and decisions of the Management Council;

c. Perform other tasks within the functions of the Supervisory Board as required by the Management Council;

d. Assist the Management Council in examining and resolving complaints from organizations and individuals regarding issues related to the Fund's operations.

3. The Chairperson of the Supervisory Board or a member authorized by the Chairperson may attend and express opinions at Management Council meetings but have no voting rights.

4. The Chairperson of the Supervisory Board establishes the operational regulations of the board and submits them to the Management Council for decision.

5. The operating expenses of the Supervisory Board are included in the Fund's operating costs.

Article 18. Operational Management Agency

1. The organizational structure of the Operational Management Agency of the Environmental Protection Fund includes the Director, Deputy Directors, Chief Accountant, and specialized departments.

2. The Director of the Environmental Protection Fund is a leader of the Environmental Protection Department proposed by the Management Council and appointed and dismissed by the Minister of Natural Resources and Environment; the Director of the Environmental Protection Fund works on a part-time basis.

3. The support unit of the Environmental Protection Fund includes the Fund Office and some specialized departments proposed by the Fund Director and decided by the Management Council.

Article 19. Fund Director

1. The Director of the Environmental Protection Fund represents the Fund in its domestic and international activities and is responsible before the law and the Management Council for all operational activities of the Fund.

2. The Fund Director has the following tasks and authorities:

a. Organize and manage the operational activities of the Fund's Operational Management Agency according to the charter, Management Council decisions, and legal provisions;

b. Develop annual financial income and expenditure plans and financial support plans for submission to the Management Council for approval and organize the implementation of these plans;

c. Regularly report on capital mobilization, financial support, and annual financial reports of the Fund to the Management Council;

d. Propose the establishment of specialized advisory boards, invite experts, and compile advisory opinions for submission to the Management Council for consideration and decision;

đ. Issue operational regulations for the support unit and submit procedural guidance documents to the Management Council for approval;

e. Propose to the Management Council to submit to the Minister of Natural Resources and Environment for the appointment and dismissal of Deputy Directors and Chief Accountants of the Fund; Appoint and dismiss Heads and Deputy Heads of specialized departments of the Fund after obtaining the approval of the Management Council Chairman; Decide on recruitment and management of Fund staff;

g. Manage and utilize the Fund's capital, assets, and other resources in accordance with the law and this charter;

h. Carry out tasks assigned by the Management Council;

i. Participate in Management Council meetings.

Article 20. Conditions for staff working for the Fund.

1. Staff and civil servants of the Vietnam Environmental Protection Fund shall enjoy salaries, bonuses, and welfare benefits according to current regulations applicable to state-owned enterprises.

2. Part-time staff working for the Fund shall enjoy part-time conditions according to current regulations.

Article 21. Advisory Councils

1. The specialized advisory councils shall advise the Fund on evaluating, selecting, and appraising environmental programs, projects, tasks, and activities proposed for financial support.

2. Members of the specialized advisory councils must have the capacity, integrity, and professional qualifications appropriate to the content of the financial support requested.

3. The specialized advisory councils shall operate under regulations established by the Management Board.

4. Costs for the operations of the specialized advisory councils shall be included in the Fund's management expenses.

Chapter 5:

FINANCIAL REGIME, ACCOUNTING, AND AUDITING

Article 22. Budget Planning

1. Annually, the Vietnam Environmental Protection Fund shall be responsible for establishing and developing plans regarding capital and its utilization.

2. The preparation of the Fund’s annual financial budget shall follow the guidelines of the Ministry of Finance.

Article 23. Financial Regime

1. The financial regime of the Vietnam Environmental Protection Fund shall be implemented according to the guidelines of the Ministry of Finance.

2. The Vietnam Environmental Protection Fund is a state financial organization with independent accounting. Expenses for managing and operating the organizational structure shall be sourced from the Fund's revenues. The fiscal year of the Fund begins on January 1 and ends on December 31 of that year.

3. The Vietnam Environmental Protection Fund may establish a risk reserve fund and record it as an operational expense of the Fund.

4. The financial performance results of the Vietnam Environmental Protection Fund are determined by the difference between total income and total expenses incurred during the year.

Article 24. Establishment of Funds

The Vietnam Environmental Protection Fund may establish a risk reserve fund, a reward fund, and a welfare fund from the annual financial surplus of the Fund.

Article 25. Accounting and Auditing Work

1. The accounting system of the Vietnam Environmental Protection Fund shall be implemented according to the guidelines of the Ministry of Finance.

2. The Vietnam Environmental Protection Fund shall organize internal financial audits or hire independent auditors. Audit results must be promptly reported to the Director, Supervisory Board, and Management Board.

Article 26. Final Accounts Reporting and Approval of Final Accounts Reports

1. At the end of each operational year, the Vietnam Environmental Protection Fund must prepare and submit final accounts reports no later than March 31 of the following year, including the following reports:

a. Final accounts report on the operational capital of the Fund;

b. Final accounts report on the use of capital by the Fund;

c. Final accounts report on the financial income and expenditure of the Fund;

2. The annual final accounts report of the Vietnam Environmental Protection Fund shall be prepared by the Fund's business operation agency, with comments from the Supervisory Board, and submitted to the Management Board for approval, then reported to the Minister of Natural Resources and Environment and sent to the Ministry of Finance for review and approval within their authority.

Chapter 6:

IMPLEMENTING PROVISIONS

Article 27. Implementation Provisions

These bylaws shall take effect fifteen days after being published in the Official Gazette.

Amendments and supplements to the organizational and operational charter of the Fund shall be proposed by the Management Board and decided upon by the Minister of Natural Resources and Environment.

The Chairman of the Management Board and the Director of the Fund are responsible for organizing the implementation of these bylaws.