Chỉ thị 04/CT-TTg

DIRECTIVE

ON STEPPING UP THE REORGANIZATION AND RENEWAL OF STATE ENTERPRISES DURING 2016-2020[1]

Over the past years, especially during 2011-2015, the reorganization and renewal of state enterprises have achieved many important results; state enterprises have significantly decreased in number, concentrated more on key sectors and fields, basically fulfilled their role and assigned tasks, acting as the mainstay for the state economy to orient, regulate and stabilize the macro economy; the operational efficiency of state enterprises and equitized enterprises has improved. Mechanisms and policies on renewal of organization and management, reorganization and equitization of state enterprises and disinvestment of state capital have been adopted, amended, and supplemented in a fairly complete and synchronous manner.

However, generally speaking, the pace of reorganization and renewal of state enterprises remains slow. The State still holds dominant shares at enterprises in many sectors and fields in which the State does not need to hold 100% of capital or own dominant holdings; particularly, at state economic groups and corporations; the sold state capital amount accounts just for 8% of the total state capital at these enterprises; the production and business efficiency of state enterprises remains low compared to the resources they are holding. A number of mechanisms and policies on renewal of organization and management, reorganization and equitization of, and disinvestment of state capital at, state enterprises were promulgated behind schedule; there are no regulations to improve the quality of consultancy services and hold responsible consultancy institutions engaged in valuating state enterprises and determining reserve prices for these enterprises upon equitization; the handling of land-related issues arising upon equitization of state enterprises remains problematic. The exercise of rights and fulfillment of responsibilities and obligations of the state owner toward state enterprises and state-invested enterprises remain ineffective; and state agencies’ functions of acting as the state owner and performing state management have not yet been separated.

In order to step up the reorganization and renewal of state enterprises during 2016-2020, the Prime Minister directs ministries, ministerial-level agencies, government-attached agencies, provincial-level People’s Committees, and state economic groups and corporations to concentrate on properly performing the following tasks:

1. Improving mechanisms and policies:

a/ The Ministry of Finance:

- In the first quarter of 2017:

+ To submit to the Government for promulgation a decree replacing Decrees No. 59/2011/ND-CP of July 18, 2011, No. 189/2013/ND-CP of November 20, 2013, and No. 116/2015/ND-CP of November 11, 2015, on transformation of wholly state-owned enterprises into joint stock companies, which will seek to improve the quality of consultancy services and bind the responsibility of consultancy institutions in the valuation of state capital and assets at enterprises to serve the equitization of state enterprises and disinvestment of state capital; regulate the hiring of international consultants to valuate enterprises and sell state-held shares at enterprises on the international market; to adopt mechanisms to attract strategic investors, determining the responsibility of strategic holders as well as introducing penalties to secure their fulfillment of commitments; to study and formulate regulations on lease of land areas in advantageous locations in order to raise land use efficiency, increasing state budget revenues.

+ To submit to the Government for promulgation decrees on the financial mechanisms applicable to the Vietnam Oil and Gas Group and the Electricity of Vietnam.

+ To submit to the Government for promulgation a decision providing the conditions, order and procedures for sale of shares through whole-lot auction.

- In the second quarter of 2017:

+ To submit to the Government for promulgation a decree amending and supplementing the Government’s Decree No. 91/2015/ND-CP of October 13, 2015, on investment of state capital in enterprises and management and use of capital and assets at enterprises in accordance with the Law on Management and Use of State Capital Invested in Production and Business at Enterprises through adding new modes of disinvestment such as auction or whole-lot sale of state capital at listed public companies within the trading ranges at the time of sale; adding regulations on determination of reserve prices of state capital before offering for sale by the mode of order-matching transactions on the stock exchanges.

+ To study, and propose competent authorities to promulgate, regulations on sale of whole state economic groups and corporations.

b/ The Ministry of Planning and Investment:

- In February 2017, to submit to the Government a scheme on establishment of an agency acting as the representative of the state owner at state enterprises and of state capital at enterprises.

- In the first quarter of 2017, submit to competent authorities for promulgation criteria for classification of public non-business units and a list of public non-business units of ministries, sectors, localities, and state economic groups and corporations to be transformed into joint stock companies.

- In the second quarter of 2017:

+ To study and propose to competent authorities for promulgation a system of indexes for evaluation of the efficiency of production and business activities and performance of public tasks by enterprises.

+ To draw up a list of state-invested enterprises subject to disinvestment during 2017-2020 for submission to the Prime Minister for consideration and approval.

c/ In the second quarter of 2017, related ministries and sectors shall submit to the Government amendments and supplements to regulations concerning the organization and operation of state enterprises in conformity with the new laws (the Enterprise Law, the Investment Law and the Law on Management and Use of State Capital Invested in Production and Business at Enterprises) and reality.

2. Organization of implementation:

a/ Ministries, sectors, localities and state economic groups and corporations:

- To thoroughly grasp and effectively implement the Party’s resolutions, conclusions of the Party Committee and Political Bureau, resolutions of the National Assembly, and instructions of the Government and the Prime Minister. To identify the reorganization, renewal and equitization of state enterprises as a key political mission in the annual and five-year socio-economic development of each administration, sector, locality and state enterprise; to promulgate and implement specific action programs and plans.

- In the first quarter of 2017, based on Decision No. 58/2016/QD-TTg of December 28, 2016, on criteria for classification of state enterprises and state-invested enterprises, to draw up a list of state enterprises to be reorganized or equitized in each year during the 2017-2020 period, clearly identifying the roadmap for valuating to-be-equitized enterprises, for submission to the Prime Minister for approval; to review, amend and supplement such list on a regular basis.

- To adopt appropriate mechanisms to attract capable strategic investors, reduce the state holdings to a level sufficient for changing business governance; to formulate business strategies for each enterprise; to study the inclusion of brand value into enterprise value upon equitization.

- To direct enterprises under their management to properly implement approved plans on reorganization, renewal and equitization of state enterprises and disinvestment of state capital so as to ensure maximum interests of the State and promptly remit proceeds to the Enterprise Reorganization and Development Support Fund under regulations. Equitized state enterprises shall register for trading and listing on the stock exchange after meeting all required conditions within one year since the date of initial public offering.

- To increase examination, inspection, supervision and audit to prevent loss of state capital and assets in the course of reorganization, equitization and disinvestment; to resolutely handle loss-suffering enterprises and inefficient or low-efficient projects according to the market mechanism; to adopt appropriate mechanisms to control the funding sources for enterprise acquisition and merger.

- To ensure publicity, transparency and law compliance in investment, financial management, procurement, income distribution, personnel work, equitization, and disinvestment.

- To direct the proper implementation of policies toward laborers and redundant laborers, including managers and executives, of enterprises undergoing reorganization or renewal.

- To direct the application of business governance principles according to international practices; to improve internal control and audit mechanisms, to comply with regulations on financial supervision, evaluation of operational efficiency and publicization of financial information.

- To adopt policies to link the recruitment, appointment, dismissal of, and incentives for, enterprise leaders and employees with enterprises’ production and business results.

- To promptly strengthen the managerial apparatuses and representatives of state capital at loss-making and inefficiently operating enterprises; to enhance training and retraining to increase qualifications for enterprise managers; to arrange qualified and capable officials to meet requirements. To increase the capacity, powers and responsibilities of internal controllers and auditors.

- To determine personal responsibility for reorganization and equitization of, and disinvestment of state capital at, enterprises. Line ministers, provincial-level People’s Committee chairpersons and chairpersons of Members’ Councils of state economic groups shall bear administrative responsibility before the Prime Minister. To strictly handle leaders of state enterprises and representatives of state capital at enterprises who fail to properly implement or ineffectively implement the reorganization and equitization of, and disinvestment of state capital at, enterprises, as well as other tasks related to the management and administration of enterprises; those who fail to comply with regulations or the purposes of reorganization and equitization of, and disinvestment of state capital at, enterprises, causing loss of state capital or assets shall pay compensation and bear full responsibility before law.

- To separate results of production and business and results of performance of political and public tasks of enterprises.

b/ The Ministries of Finance; Planning and Investment; Labor, War Invalids and Social Affairs; Home Affairs; and Justice, the State Bank of Vietnam and the Steering Committee for Enterprise Renewal and Development shall closely coordinate with other ministries, sectors, localities, and state economic groups and corporations in, directing, inspecting, urging, guiding, and removing difficulties arising in the course of implementing, the plans on reorganization and renewal of state enterprises during 2016-2020 and the scheme on reorganizations, renewal, development and improvement of efficiency of agricultural and forestry companies already approved by the Prime Minister;

c/ Chairpersons of Members’ Councils, company presidents, directors general and directors of state economic groups and corporations, state enterprises and representatives of state capital at state-invested enterprises shall formulate plans and schedules for reorganization and renewal of state enterprises according to approved plans. Quarterly and annually, to report implementation results to the Ministry of Finance and the Steering Committee for Renewal and Development of Enterprises (quarterly reports shall be submitted before the 10th of the first month of the subsequent quarter and annual reports before February of the subsequent year) and report to related agencies problems and difficulties arising in the course of implementation. Such a report must clearly state the implementation status, results, advantages, difficulties, problems and recommendations, if any. The Ministry of Finance shall sum up these reports on a quarterly and annual basis for reporting to the Prime Minister.

d/ The Steering Committee for Renewal and Development of Enterprises:

- To monitor and direct; and quarterly and annually report to the Prime Minister on the implementation of this Directive; to coordinate with related agencies in identifying arising issues for reporting to the Prime Minister for consideration and decision.

- To organize regular meetings with ministries, sectors, localities and state economic groups and corporations managing a large number of state enterprises subject to reorganizations and renewal so as to promptly remove difficulties and problems arising in the course of implementation.-