Hanoi (VNS/VNA) - Vietnam must continue to improve on its Law onEnterprises, experts and researchers said at a law conference in Hanoi onNovember 18.

The business code, since its formation in 1999 and two major reforms in 2005and 2014, still has numerous shortcomings and limitations, according to theexperts.

Compliance costs – expenses incurred to keep up with industry regulations –remained high. Notably, decreases in compliance, if any, were often results ofGovernment directives or reform programmes when what the country desperatelyneeds is a framework to reduce such costs systematically, said Nguyen Dinh Cung,former head of the Central Institute for Economic Management (CIEM).

Ministries and agencies tend to over-regulate the business sector, especiallyfirms specialised in legal services, finance and banking. Technical barriersoften proved to be significant hurdles to starting operations in such fields.Level of policy risk and legal complication remained high. Businesses oftenfound themselves without reliable means to protect their legitimate interests,said Cung.

Ministries were slow to push for legal reforms thanks to both red tape and alack of incentives.

“One cannot expect changes to come from within the ministries. If what we arehoping for are swift legal reforms we must find the strength to push for themin the private sector,” said Cung.

On the other hand, according to Cung, the law has been getting more lax when itcomes to State-owned-enterprises (SoEs). Regulatory oversights and poorlaw-enforcement have resulted in many SoEs being unable to establish anefficient management framework or fail to adhere to good management practices.

Pham Duc Trung, head researcher of CIEM’s business reform and development, saidthe country has been struggling with the implementation of the Organisation forEconomic Cooperation and Development (OECD) 39 principles for corporategovernance as a standard for business management.

For example, the State has yet to define its strategy and function in many SoEseven after the formation of the Committee for Management of State Capital atEnterprises – a central body responsible for the management of a massive amountof assets owned by the State in SoEs.

A lack of autonomy has resulted in SoEs being unable to adopt modern managementstandards because SoEs cannot make important decisions without approval fromthe State, Trung said.

Trung called for greater autonomy be granted to SoEs along with accountabilityfor their performance. The State must build a system of performance criteriafor SoEs to follow and they must be made to publicise financial information andtheir management board selection./.