The Investment Law, effective from July 1, 2006 put an end to the MPI's status as an FDI licencing agency and gave full power to local governments, plus industrial park and export processing zone local management authorities.
Rehanding the reins of power back to the MPI is one of three options made by the draft decree's author, the MPI's Legislation Department.
If the first option gets the green light, the MPI would be in charge of granting investment certificates to strategic FDI projects, projects requiring prime ministerial approval and FDI projects to be implemented in more than one locality.
In accordance to Decree 108's Article 37 issued on September 22, 2006, FDI projects to be approved by the prime minister are those in the aviation, ports, mineral exploitation, broadcasting, casino, cigarettes production, university, industrial park, export processing zone and hi-tech park construction segments. Prime ministerial approval is also needed for FDI projects with investment capital in excess of VND1.5 trillion ($78.9 million), if they are in the power, mineral processing, infrastructure, beer and wine sectors.
The draft decree adds that FDI projects covering 100 hectares in delta regions and 200ha in mountainous regions or reclaimed land accommodating more than 20,000 people would also need prime ministerial approval. "Tightening the rights of local authorities in FDI attraction will be a suitable movement to control investment quality," said Hong Sun, secretary of the Korean Chamber of Commerce and Industry in Vietnam.
It would also guarantee all FDI projects were invested under the country's master plans, he said. Hong is also the chief executive officer of Hermes & Sun Development and Construction Company - which has invested in an industrial park project in Thuong Tin district, Hanoi. Suwes Wangrungarun, deputy general director of Thailand-based Charoen Pokphand Group, said licencing agencies' ability to appraise quality FDI projects was essential.
The draft decree's other options, are for FDI projects belonging to the mentioned-above categories to be appraised by the MPI before local authorities grant them investment certificates. The third option is the MPI to lead a taskforce representing concerned state agencies for appraising those FDI projects before investment certificates are issued by local authorities.
The draft decree is expected to take effect in the second half of 2010. Professor Nguyen Mai, chairman of Vietnam Association of Foreign Invested Enterprises, said the decentralisation policy to simplify administrative procedures for investors when setting up investment projects had actively contributed to booming FDI projects in Vietnam in last few years. "But some local authorities do not have enough appraising ability to ensure projects' quality," he noted.
