National Assembly discusses draft law on management and use of state capital

On the afternoon of June 5, National Assembly deputies worked in the hall to listen to the President's Report, the Government's report and the National Assembly's Foreign Affairs Committee's examination report on joining the Convention on International Interests in Mobile Equipment and the Protocol on Matters Specific to Aircraft Equipment (Cape Town Convention and Protocol); and discussed in the hall the draft Law on Management and Use of State Capital Invested in Production and Business.

National Assembly delegate of Hanoi city Tran Thi Quoc Khanh speaks. Photo: VNA

Increasing competitiveness of Vietnam's air transport market

The report on joining the Convention on International Interests in Mobile Equipment and the Protocol on Matters Specific to Aircraft Equipment (Cape Town Convention and Protocol) presented by President Truong Tan Sang stated: The Convention and Protocol were signed in Cape Town, South Africa on November 16, 2001, as a result of the Diplomatic Conference in Cape Town (South Africa) co-organized by the International Civil Aviation Organization (ICAO) and the International Institute for the Unification of Private Law (UNIDROIT).

The Cape Town Convention and Protocol are designed to facilitate the efficient financing and leasing of aircraft equipment, bringing economic benefits to member countries, especially developing countries; to create a legal framework to protect the rights of creditors in member countries, as well as to encourage the granting of credit and facilitate access to preferential loans for airlines.

Joining the Cape Town Convention and Protocol is a condition for Vietnamese airlines to enjoy incentives from aircraft manufacturing countries and credit institutions, meeting the needs and development planning of Vietnam's aviation industry and economic development.

Considering that joining the Cape Town Convention and Protocol is extremely necessary, the Government's report and the review report of the National Assembly's Foreign Affairs Committee affirmed: Joining the Convention and Protocol will facilitate capital funding and leasing of aircraft equipment, thereby bringing benefits to Vietnamese airlines; increasing the competitiveness and attractiveness of the Vietnamese air transport market; benefiting consumers; reducing business costs; creating favorable conditions for the Vietnamese legal system to access the international commercial business legal system...

There is no consensus on the name and scope of the draft law.

The majority of opinions agreed with the Government's Proposal on the necessity of promulgating the Law on Management and Use of State Capital Invested in Production and Business in order to contribute to perfecting and unifying the legal framework regulating investment activities and State capital management; overcoming current shortcomings and ensuring legal consistency with relevant laws. At the same time, the promulgation of the Law will contribute to improving the efficiency of State capital invested in production and business of enterprises, serving the process of restructuring State enterprises, restructuring the economy as well as actively contributing to the work of preventing and combating corruption and waste in economic management.

According to Resolution No. 23/2012/QH13 of the National Assembly, the name of the Law project is "Law on management and use of State capital invested in production and business," but according to the proposal in the Government's Submission, the name of the Law project is "Law on investment and management of State capital in enterprises".

Regarding this issue, delegate Le Dac Lam (Binh Thuan) agreed with the Government's proposal to change the name of the draft law to "Law on Investment and Management of State Capital in Enterprises." With the revised name, the scope of regulation of the draft law will be broader, regardless of investment objectives, State capital investment in enterprises is not only for profit but also for non-profit purposes. The scope of regulation of the law will focus on regulating State capital investment in enterprises, State capital management in enterprises and supervision of investment activities, State capital management in enterprises.

Agreeing with the above opinion, delegate Vu Viet Ngoan (Khanh Hoa) said that the name "Law on investment and management of State capital in enterprises" would be suitable for the subject of regulation of the draft Law because most of the contents of the draft Law refer to the responsibility of the management agency deciding on capital investment and the responsibility of that capital management agency after deciding on investment.

However, delegate Tran Thi Quoc Khanh (Hanoi) commented that the name "Law on management and use of State capital invested in production and business" will avoid overlapping with other laws such as the Investment Law, Public Investment Law; consistent with the Law on Practicing Thrift and Combating Wastefulness, the Budget Law... The content is essentially the management of State capital in production and business activities.

It is necessary to tighten the scope and fields of operation of enterprises receiving State capital investment.

Regarding the scope of State capital investment in enterprises in various forms of investment, according to delegate Phung Duc Tien (Ha Nam), one of the reasons for promulgating the law is to strengthen management and improve the efficiency of State capital and assets invested in enterprises, limiting loss and waste.

To do so, the law needs to tighten the scope and fields of operation of 100% state-owned enterprises, and the types of enterprises in which the State participates in capital investment. Meanwhile, State capital investment in enterprises according to the investment forms stipulated in the draft Law is relatively broad, general, and lacking in specificity. Regulations like the draft Law do not tighten but also create loopholes, legalizing the investment race.

Delegate Do Van Ve (Thai Binh) proposed to add to the draft Law provisions on the efficiency of using State capital invested in enterprises, with distinction between enterprises performing public political tasks and enterprises performing business tasks. The delegate analyzed that in capital investment in enterprises, the most important operational indicator is the efficiency of capital use, which is calculated by indicators, of which the commonly used indicator is the after-tax profit on equity.

However, the draft Law does not have any provisions on this issue. The question is how much of the equity capital the board of members or the company chairman is responsible for? If it is not clarified, an enterprise only needs to have a profit of 1-2% of the equity capital to be considered to have fulfilled its task, so the State should not invest in the enterprise in this case. Furthermore, if there is a state-owned enterprise under the management of capital efficiency, the board of members or the company chairman will not be responsible for this issue, delegate Do Van Ve emphasized.

Also at the meeting, delegates discussed and gave opinions on restructuring State capital in enterprises; on the rights and responsibilities of State ownership representatives; on supervising investment activities and managing State capital in enterprises.

According to Vietnam+