VietNamNet Bridge – A more transparent legal framework and improved administrative procedures are needed to attract more investment in waste and water treatment services, according to experts.

A worker operates a waste treatment machine at the Hoang Hai Ha Green Environment Company in the central province of Thanh Hoa. More investment is needed for waste treatment services – Photo: VNA/VNS

Dr. Nguyen The Chinh, head of the Institute of Strategy and Policy on Natural Resources and Environment, said that Viet Nam's political stability had been a major factor in attracting investors in recent years.

The number of FDI enterprises investing in the waste treatment field had also increased over the years, from eight in 2005 to more than 40 this year.

Of this figure, the number of FDI businesses investing in waste and wastewater treatment now accounts for 31 per cent and for sanitary services 24 per cent.

Policies and incentives for investment in the field have improved, while business demand for environmental services has also helped improve product quality.

The costs for investment, particularly low labour costs in Viet Nam, have helped to attract foreigners as well.

Chinh said the government was focusing on restructuring the economy to improve quality and competitiveness, and apply high technology in many fields, including environmental services.

He said the country's legal framework, however, was still not transparent.

According to Lai Van Manh, of the Institute of Strategy and Policy of the Natural Resources and Environment Department, FDI enterprises continue to complain about the lack of legal transparency.

This makes it difficult to develop long-term plans.

The procedures for tax exemption, for example, are different in each locality and require many administrative procedures.

Most enterprises have proposed that laws and regulations be drafted in a simple, coherent manner.

The bidding for environmental protection projects, especially public projects, must be transparent, many companies have urged.

Businesses have also called for a reduction in corporate income tax, according to Manh.

Chinh said that to attract more FDI investors in the environmental services field, administrative procedures related to investment must be further simplified or eliminated.

Infrastructure around the country must be improved, especially technical facilities.

Manh said the population boom and an increase in the number of industrial zones had contributed to environmental pollution.

According to statistics, Viet Nam now has 15 urban areas, 298 industrial parks and 878 industrial complexes.

However, up to one third of the export processing zones, industrial parks and industrial complexes do not have sufficient waste treatment systems.

Some industrial parks and industrial complexes have wastewater treatment systems that do not operate efficiently.

More than 13 industrial complexes in HCM City do not have waste collection and treatment facilities.

In Viet Nam, up to 80 per cent of the total 12 million tonnes of urban solid waste generated annually is buried. This type of treatment consumes a large amount of land and has a high risk of secondary contamination.

More than 1 million tonnes of solid waste and urban water, as well as more than 100,000 cubic metres of urban wastewater, are discharged directly into the environment every day.

Source: VNS