HCM City (VNS/VNA) - With Vietnam signingmany multilateral and bilateral trade agreements and attracting more and moreforeign investment, it is hard to avoid grievances and disputes, a workshopheard in Ho Chi Minh City.

Speaking at the workshop “Preventing andminimising international investor grievances and disputes,” Deputy Minister ofPlanning and Investment Vu Dai Thang said most foreign investors’ complaintsrelated to issues like land lease, licence issuance, relocation of land owners,exploitation of natural resources, and environmental impacts.

The number of grievances and disputes hasincreased recently and they are also becoming increasingly complex, he added.

One of the country’s most attractive destinationsfor foreign investment, HCM City faces challenges in settling complaints anddisputes involving foreign investors, according to Le Thi Quynh Mai, Deputy Directorof the municipal Department of Planning and Investment.

At the moment her department is handling eightcases which could possibly turn into international disputes, she said.

One of the challenges is convincing investors tomove out of their project zone after the city’s plans changed since the timetheir projects were licensed a few decades ago, she said.

Another challenge arises from the fact thatinvestors can sue Government agencies, she said.

“However, central and local government agencieshave not provided much training to investment management officials ininternational regulations and laws. This can be seen as one of the causes ofinternational disputes.”

Lack of close collaboration between variousState agencies in settling investors’ grievances is also a reason for investorsto resort to legal action against the Government, she said.

Each agency handles just one aspect of a projectsuch as land use, licence or construction, and there is no overarching bodythat hears and resolves all the complaints, she said.

To avoid international business disputes, shesaid relevant agencies should always support investors during theirimplementation of projects and intervene promptly to resolve theirdifficulties.

“This is an important stage because if foreigninvestors can see their legitimate rights and interests are protected, nodispute will arise.”

Nguyen Hung Quang of NHQuang & Associateslaw firm, said to prevent investor-State disputes, Vietnam should considersetting up a Systemic Investment Response Mechanism (SIRM) for disputeprevention.

SIRM provides the legal and institutionalinfrastructure that enables governments to identify, track and manage seriousgrievances arising between investors and public agencies as early as possible.

“It would help the Vietnamese Government reactin a coordinated manner to investor grievances at an early stage, well beforethe aggrieved investor submits a legal claim for compensation.”

An SIRM has a lead agency that is anadministrative body responsible for co-ordinating information and leadingresponses to investor grievances.

It also has information-sharing and early alertmechanisms and problem-solving methods to help settle conflicts to safeguardboth the State’s and investors’ interests, he said.

When setting up an SIRM, Vietnam should alsobuild capacity for all agencies involved in handling investors’ grievances toenable them to offer legally sound solutions to disputes, he added.

Deputy Minister of Justice Nguyen Khanh Ngocsaid local administrations should be careful when selecting foreign investorssince there have been cases where investors got licenses but did not starttheir projects.

That is also a cause for dispute between foreigninvestors and the hosts, he said.

“We need to choose investors who have thefinancial capacity, credibility and a good track record of investing in othermarkets since foreign investment projects usually last dozens of years and arenot a one-off deal.”-VNS/VNA