Overview of Investment Legal Support Forum 2023
On the morning of 12th December 2023, under the direction of the Ho Chi Minh City People's Committee, the Vietnam International Arbitration Centre (VIAC) cooperated with the Investment and Trade Promotion Centre Ho Chi Minh City (ITPC) to hold the annual Investment Legal Support Forum (ILSF). The forum was attended by more than 300 delegates from local state agencies, businesses, media, and press units. The forum also had the presence of Mr. Vo Van Hoan – Vice Chairman of the Ho Chi Minh City People’s Committee.
Mr. Vo Van Hoan - Vice Chairman of Ho Chi Minh City Peoples’s Committee
In the opening speech, Mr. Vo Van Hoan - Vice Chairman of Ho Chi Minh City Peoples’s Committee – commended the initiative of VIAC and ITPC in providing legal support and promoting investment in the city, which has now been materialized into action. He highlighted that Ho Chi Minh City is actively implementing a number of policies consistent with the Central Government's directives on the development of the Southeast region and Ho Chi Minh City. Notably, Resolution No. 98/2023/QH15, which came into effect on 01st August 2023, encompasses a range of specific policies aimed at attracting strategic investors. These policies cover investment management, financial and budgetary management, as well as land management. However, from the standpoint of the city’s authorities, the investment environment in Ho Chi Minh City still needs to be improved to ensure that investors can feel confident when carrying out their activities. Therefore, it is essential to organize a forum for communication and discussion involving not only investors but also state agencies. This initiative aims to increase the publicity and transparency of the information and handling mechanisms, as well as to listen to and address the difficulties and existing problems.
Dr. Vu Tien Loc – Chairman and President of the Vietnam International Arbitration Centre (VIAC)
Dr. Vu Tien Loc – Chairman & President of the Vietnam International Arbitration Center (VIAC) – delivered his assessment of the current investment environment and the role of foreign investment in Vietnam's integration process. In Ho Chi Minh City, attracting investment and improving the investment environment are considered to be key priorities of the city’s authorities. The issuance of Resolution No. 98 is seen as necessary for Ho Chi Minh City to unleash its dynamism and ultimately achieve its goal of fully exploiting its position as an “economic locomotive” in a sustainable manner. Dr. Vu Tien Loc also noted that, as the head of an organization that specializes in legal coordination and dispute resolution, he believes that the implementation of legal regulations is one of the key factors contributing to the growth of investment activities. This is the basis for VIAC and the Investment and ITPC to establish the annual Investment Legal Support Forum, which aims to provide a close-knit discussion platform for the investment community, specifically foreign investors, as well as to receive professional opinions and legal recommendations from experts, thereby contributing the solutions for local state agencies to support businesses. Cooperation among governmental agencies, groups, and legal support units is critical in making the forum a "key" to overcome the obstacles encountered by investors. In the context of the recent promulgation of Resolution No. 98, the Investment Legal Support Forum is expected to be a starting point for the development of an effective mechanism for Ho Chi Minh City to create a stable and legally efficient investment climate.
Mrs. Cao Thi Phi Van - Deputy Director of Investment and Trade Promotion Center Ho Chi Minh City
With many years of experience in investment and trade promotion in Ho Chi Minh City, Ms. Cao Thi Phi Van - Deputy Director of the Ho Chi Minh City Trade Promotion and Investment Center - emphasized the importance of having a forum where investors who are interested and has been engaging in investment activities in Ho Chi Minh City can be noticed and assisted directly. Ms. Van also shared about the forum's model, which inherited the strengths of previous programs and supplemented by many initiatives to leverage and create a synergistic effect from the participants in the forum in improving the investment climate in the city. At the same time, the forum marks a milestone in the cooperation between ITPC and VIAC. Their dynamic, creative, and enthusiastic team had opened up a new promising era between the two organizations. Regarding the model, the Investment Legal Support Forum (ILS Forum) focuses on two main topics, including (i) Gathering opinions of domestic and foreign investor groups in Ho Chi Minh City and (ii) Providing Short-term or long-term legal solutions from experts from the competent authorities, legal consulting organizations, and legal experts.
As an opening for the annual Investment Legal Support Forum, the 2023 Investment Legal Support Forum with the topic “Open up golden opportunities for investors in Ho Chi Minh City under the context of the Resolution No. 98/2023/QH15" focused on exploiting the new points and modifications set out in the resolution related to two major issues: (i) Investment in the form of Public-Private Partnership (PPP); (ii) Attracting investors into "green" projects. The forum would be conducted in the form of a presentation of professional reports and direct dialogue and Q&A sessions between investors and legal experts.
Dr. Tran Du Lich - Chairman of the Advisory Council for the Implementation of Resolution No. 98, Vice Chairman of the Vietnam International Arbitration Center (VIAC)
At the Forum, Dr. Tran Du Lich - Chairman of the Advisory Council for Implementation of Resolution No. 98, Vice Chairman of the Vietnam International Arbitration Center (VIAC) - provided an overview of the implementation of Resolution No. 98 and its impact. According to Dr. Tran Du Lich, the resolution is an efficient legal tool for tackling two major obstacles that have slowed the city's development for many years: the legal framework and infrastructure. This is the first time that the city has been given a resolution with many breakthroughs, paving the way for reforms plan. He evaluated that many specific policies have been effective after 4 months of implementation. However, to ensure that the resolution is legitimately implemented and fulfilled its role as expected, events such as the Investment Legal Support Forum are essential and play an effective role as a bridge connecting the investment community, legal consulting units, and competent state agencies.
Mr. Pham Trung Kien - Deputy Director of Ho Chi Minh City Department of Planning & Investment and Mr. Do Van Su - Deputy Director of the Foreign Investment Department, Ministry of Planning and Investment
Mr. Pham Trung Kien, Deputy Director of the Ho Chi Minh City Department of Planning and Investment, presented the report on the topic of "Investment in the form of Public-Private Partnership (PPP in the context of Resolution No. 98 - Opportunities and challenges for the City and Investors". Currently, the State has issued the Law on PPP and a number of other legislations governing investment activities in this form. In Ho Chi Minh City, the application of Resolution No. 98 lays an important legal foundation that allows the city to be proactive in selecting, calling and implementing PPP projects. Mr. Kien assessed that the implementation of PPP projects in practice still faces many difficulties and obstacles. Although legal regulations are constantly being supplemented and improved, they still cannot keep up with practice. In addition, both the government and the private sector are still confused about how to select and determine the type of contract (BOT, BTO, BLT, BTL, BOO, O&M, BT) that is suitable for each sector and the nature of the project. Therefore, the lack of specific guidance and clear regulations in the law and other legal documents can be seen as confusing to both government agencies and investors when participating in PPP contracts.
Next, Mr. Do Van Su, Deputy Director of the Foreign Investment Department, Ministry of Planning and Investment, presented to the forum a report on the issue of attracting strategic investors into green projects. According to Mr. Su, Vietnam, in general, and Ho Chi Minh City, in particular, are entering a time of opportunity to receive investment flows from many countries around the world. However, in order to benefit from this opportunity, we need to have a clear strategy and plan and be prepared to meet the requirements of investors, specifically those related to green economy and circular economy. Accordingly, to achieve net zero emissions by 2050 - the inevitable development goal of the world, we need to quickly adapt to many new concepts and industries. Currently, the legal framework related to issues of the green economy and circular economy, including those of energy, emissions, etc., has not been specifically regulated. In addition, many government policies are not yet attractive to investors. Therefore, we need to quickly formulate and promulgate relevant Laws and Decrees to provide investors with the legal basis and confidence to implement projects.
The discussion session was conducted in a Q&A format between two groups: the Working Group and the Specialist Group. The Working Group comprises representatives from business associations and investors, while the Specialist Group includes legal experts who are reputable and have profound research experience in the topic under discussion. The objective was to collect opinions and recommendations on Resolution No. 98.
Mr. Ngo Thanh Tung – Partner of Vietnam International Law Firm (VILAF), Arbitrator of VIAC and Mr. Vu Tu Thanh - Deputy Regional Managing Director & Vietnam Chief Representative of US - ASEAN Business Council, Arbitrator of VIAC
Opening the discussion session, Session 1 with the topic of “Investment in the form of Public - Private Partnership" was moderated by the Head of the Working Group, Mr. Vu Tu Thanh - Regional Executive Director, the US-ASEAN Business Council, and the Head of the Specialist Group, Mr. Ngo Thanh Tung - Partner of the Vietnam International Law Firm. The session also had the participation of representatives of business associations, foreign investors, and experts with many years of legal experience in the field of PPP, including:
The session focused on discussing the regulations related to the implementation of PPP projects within the framework of Resolution No. 98, which included the following matters:
As one of the most important investment contract forms and being applied in many major projects, PPP is viewed as an area that requires investment in research to maintain a balance of interests for both the government and investors. However, at the discussion session, experts assessed that despite the significant progress Resolution No. 98 has made over the PPP legal framework, many articles are still unclear and lack detailed instructions.
For example, Resolution No. 98 stipulates the application of the PPP contract form to new areas such as sports and culture. However, according to Clause 1, Article 4 of the Law on Investment 2020, the application of PPP does not include the two aforementioned sectors. Therefore, the application of PPP to these two areas is likely to cause some obstacles for investors in the construction and operation of the project. In addition, capital returns from the project are also facing many difficulties which affect the investors' decisions.
In addition, the issue of applying the BOT and BT model contract in the Resolution is causing some controversies related to the inconsistencies with the current legal framework, payment methods, and payment capabilities... Investors and legal experts assess that Resolution 98 has opened up many new opportunities, helping the government and investors to solve the existing problems in the projects and expand the PPP’s scope of implementation. However, the instructions on procedures, payment activities, and even risk control need to be issued so that the Resolution can be effective.
Besides the above issues, the factor of risk and profit sharing between the City and Investors was also raised for comments at the Discussion session. It is said that revenue-sharing or profit-sharing conditions are extremely necessary when operating a PPP project. According to experts, the success of a project and investors' trust in local authorities will fairly depend on this factor. Therefore, the City should supplement or provide clearer instructions to investors on the risk and profit - sharing mechanism when applying Resolution No. 98; learn from the experiences of other countries to establish an effective financial risk management system for PPP projects. Finally, the issue of legal risk assessment, dispute resolution proposal and prevention mechanisms were heavily discussed with many opinions from the experts. Accordingly, investors believe that PPP disputes arise from many reasons, but most of them are due to overlapping legal frameworks, multi-layered and complicated procedures.
On the assessment of Resolution 98, experts said that the scope of application of the Resolution is still broad, and the model contract or contract application guidelines have yet to be mentioned. Through these difficulties, experts have made recommendations, specifically to allow the use of foreign law to interpret PPP contract regulations if national law is not yet complete or does not regulate, adding provisions related to dispute resolution for projects with public bodies, and having effective policies on land, licensing, and payment field to create more favorable conditions and attract more investment into the City's PPP projects.
Mr. Nguyen Duc Minh - Foreign Attorney of Kim & Chang (Vietnam) Company Limited and Mr. Giandomenico Zappia - EuroCham's Board Member, Vice Chairman of the Green Growth Sector Committee, Chairman of Sustainable Finance Sector Committee
Following Session 1, Session 2 was held with the topic "Attracting strategic investors for green projects” , with the coordination of the Leader of Sub-group 2 of the Working Group, Mr. Giandomenico Zappia - EuroCham's Board Member, Vice Chairman of the Green Growth Sector Committee, Chairman of the Sustainable Finance Sector Committee and the Leader of Sub-group 2 of the Specialist Group - Mr. Nguyen Duc Minh – Foreign Attorney at Kim & Chang Law Firm. The discussion session also had contributions from representatives of business associations, foreign investors, and experts with extensive research in the field of energy and promoting green economy, including:
In this session, the experts not only made recommendations on promoting investment in clean energy projects but also provided a lot of valuable information that contributes to the effective green transition for Ho Chi Minh City. Specifically, investors made assessments on investment conditions and procedures for clean energy projects stated in Resolution No. 98. They supposed that the Resolution demonstrated the City's determination in raising high-quality capital sources as well as encouraging investment in clean energy projects. However, there are still many matters in Resolution No. 98 that confuse the Investors, even making them be anxious about potential obstacles that may arise in the future, especially when it is not possible to meet the criterias required by the Resolution.
The financial issues related to the development of the clean energy industry were also discussed at the Forum. Regarding this issue, the Experts all agreed that Resolution No. 98 has many bright spots when regulating the issues related to financial sources for energy projects, which can be referred to Article 5, Article 7, Article 10 of this Resolution. However, from another perspective, these regulations may not be enough; a separate green credit funds to develop energy projects should be paid more attention to in order to achieve sustainability and great expansion of this sector in Ho Chi Minh City in the future.
After discussions on Resolution No. 98, as well as the comparison with the current legal framework, the Experts also listed a number of legal risks that strategic investors may face when investing in energy projects. Accordingly, in order for Resolution No. 98 to become more feasible and practical, Ho Chi Minh City needs to prepare specific plans on implementation, finance, plans on land fund and compensation, land acquisition & use, all of them needs to be adjusted to suit the City's environment. Along with that, Ho Chi Minh City needs to coordinate with competent central levels agencies to quickly amend legal documents and create a stronger legal corridor in operating clean energy projects.
The Discussion session of Investment Legal Support Forum 2023
After two discussion sessions, Dr. Vu Tien Loc – Member of the National Assembly of Vietnam, Chairman and President of VIAC summarized and gave a closing remark for the Investment Legal Support Forum 2023. In his speech, Dr. Vu Tien Loc hoped that the results achieved through the ILS Forum 2023 will effectively contribute to the execution of Resolution No. 98 as expected by the government and investors, making the ILS Forum an effective information platform and a place providing legal support for businesses community.
>>> For more information about the 2023 Investment Legal Support Forum and the survey of business opinion on issues arising in the implementation of Resolution No.98/2023/QH15, please visit the official website of the Investment Legal Support Forum: https://www.ilsforum.vn/
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