VietNamNet Bridge - Importers have to make a deposit for scrap materials imported from June 15, 2015 as per government decree No 38. This will place a heavy financial burden on enterprises.

 

The decree aims to prevent enterprises from importing hazardous waste and discharging it into the environment.  The required deposit will ensure that importers will take responsibility for any risks caused by scrap material imports.

Those who import more than 500 tons of waste materials will have to pay a deposit equal to 10 percent of the total value of the import consignments. The deposit of 15 percent will be required for the 500-1,000 ton consignments. If enterprises import more than 1,000 tons, they will have to make a deposit of 20 percent.

As for scrap paper and plastics, the deposit levels are 15 percent, 18 percent and 20 percent for imports of less than 100 tons, 100-500 tons and over 500 tons, respectively.

Tran Hoang Nguyen, secretary general of the HCM City Plastics Association, said the new requirement has displeased businesses because their capital will be “frozen”.

Nguyen said the majority of Vietnamese businesses are small scale, and have been relying heavily on bank loans with the lending interest rate of 7 percent on average. If they have to ‘bury’ money at banks for deposit, they will not have capital to operate.

According to Pham Thanh Tuy, project management director of Newtoyo, a paper packing manufacturer, 70 percent of the company’s is scrap paper imports. Under the new decree, the company would have to make a deposit of $20 million.

“The requirement on making a deposit will bleed businesses’ capital dry,” he said.

Tran Minh Chi, a renowned scientist, noted that it is unreasonable to force all enterprises, including those that break environment protection laws to persistent violators of the laws, to make the same deposits.

Chi pointed out that import enterprises will become more frustrated if there are more procedures.

“It will take time to make a deposit and then get the deposit back,” he noted, adding that while waiting to get a deposit back, enterprises would not have capital to optimize their production and investment.

An analyst noted that in principle, it is management agencies, not enterprises, which have to be responsible for controlling waste material imports. However, it seems that the agencies try to “pass the buck” to businesses.

“Therefore, what is needed to be done is to improve the agencies’ capability, not to create new regulations to place difficulties for enterprises,” he said.

Thien Nhien