At a recent seminar on amending Decree 15/2018/ND-CP that guides the implementation of the Food Safety Law, a representative of a foreign invested enterprise warned that the new tentative provisions, if approved, will overshadow all the achievements of Decree 15/2018/ND-CP, and even lead to greater costs.

The draft of the amended decree stipulates a total of 31 items that businesses must make declarations about, far more than the five items stipulated in the current Decree 15.

Under Decree 15, businesses can start their operation immediately after submitting their documents. In contrast, the draft amendment requires that after submission, the managing agency will post the documents on its official website for seven days, and will consider the dossier within three months. This means that businesses can only begin production after three months and seven days.

Before Decree 15 was promulgated, the food safety management was implemented in accordance with Decree 38 which required businesses to obtain a Certificate of Declaration Acceptance or a Confirmation of Declaration before they could proceed with production and business.

Previously, Decree 38/2012/ND-CP on food safety, under the Ministry of Health’s authority, required businesses to obtain a Certificate of Declaration Acceptance or a Confirmation of Declaration before they could proceed with production and business.

The Central Institute of Economic Management (CIEM) estimated that each year, 35,000-45,000 businesses had to go through this process. On average, it took businesses about four months and cost VND10 million for regular food products and VND30 million for functional foods to complete the certification and declaration of conformity procedures.

After significant efforts, Decree 15/2018/ND-CP was issued to replace Decree 38 which faced frustration from businesses, shifting the food safety management approach from pre-inspection to post-inspection.

Decree 15 is estimated by EuroCham to help cut 90 percent of administrative costs, and save 10 million working days and VND3.7 trillion a year.

Business conditions disguised as standards and regulations

Businesses have to have specific physical facilities, meet requirements in a minimum area for production sites, or mandate professional certifications for personnel in certain departments when producing or trading products and services.

These “disguised” standards are, in essence, business conditions. For instance, there was once a proposal to regulate conditions on area and facilities for mini-supermarkets, convenience stores, and shopping centers.

The Vietnam Chamber of Commerce and Industry (VCCI) estimated that 20 laws, 150 decrees and 600 circulars are released each year. There are also thousands of dispatches issued, including those containing articles violating the laws.

Party Chief To Lam emphasized in his article, "Developing the private economy - a level for a prosperous Vietnam”, that the private economy must be a pioneering force in the new era, successfully implementing the industrialization and modernization of the economy, and enhancing national competitiveness.

The private economy should strive to become a leading force in adopting technology and driving innovation, aiming to contribute 70 percent of GDP by 2030.

He said that this requires a fundamental shift in policy planning. The State needs to adopt management methods suited to market mechanisms, ensuring the freedom to do business, have property ownership rights, and have equal competition rights in the private economy.

Lam has made many statements that are driving significant changes as the country enters a new era, including:

First, the current system is “the bottleneck of all bottlenecks” for development, and institutional breakthroughs are “the breakthrough of all breakthroughs.”

Second, it is a must to abandon the “if it can’t be managed, ban it” mindset in lawmaking; should prioritize the “results-based management” approach; and shift from “pre-inspection” to “post-inspection,” creating new space and momentum for development.

Third, laws should not only used to manage but also to encourage innovation, creativity, and development, creating opportunities and expanding development space.

Fourth, it is necessary to improve the legal system, quickly address overlaps and shortcomings in the current system, and establish a stable, easy-to-comply legal foundation. 

Fifth, decentralize to localities under the approach of “localities decide, localities act, localities take responsibility.”

Business freedom

Business conditions are, in essence, barriers limiting market entry. Lam has requested to review all regulations on conditional business sectors and their corresponding conditions in the Investment Law and specialized laws. 

He has asked to retain only those conditional business sectors regulated under Clause 2, Article 14 of the 2013 Constitution and to manage them through licensing or certification; and implement a “revolutionary” program to streamline legal regulations and enhance transparency.

Tu Giang - Lan Anh