Workers process high-tech electronics accessories at Nidec Sankyo Vietnam Co Ltd’s plant in HCM City. (Source: VNA)Hanoi (VNA) -Japanese enterprises raised four problems they face while doing business inVietnam in a dialogue with theAdvisory Council for Administrative Procedure Reform onDecember 13.
The four issues include foreign workers’ compulsory social insurance participation,waste treatment regulations in the draft Law on Environmental Protection,regulations on the import of used machinery and equipment, and the import ofautomobiles regulated by the Government’s Decree 116/2017/NĐ-CP.
Chairman of the Japan Business Association in Vietnam (JBAV) Hiroshi Karashimasuggested the Vietnamese Government revise regulations on compulsory socialinsurance for foreign employees.
The purpose of the insurance scheme is to prevent employees from avoidingtaking part in the social insurance, but this regulation forces many foreignworkers to pay insurance premiums twice, in both their home country and inVietnam, Hiroshi said.
He called on the Government to allow exemptions for people that have paidcompulsory insurance in Japan.
The mandatory insurance participation reduces the attractiveness of the countryas an investment destination, the chairman highlighted.
In response to this recommendation, a representative of the Ministry of Labour,Invalids and Social Affairs (MOLISA) said that the payment of social insurancepremiums is meant to protect the legitimate rights and interests of workers inVietnam.
Many countries have a similar issue and the common solution is to negotiatebilaterally, the representative said.
Many Japanese firms are concerned of the provision of Circular 23/2015/TT-BKHCNrelating to the import of secondhand machinery.
Satoru Wachi, head of the group dealing with the issue, said that when Japaneseenterprises relocate their production facilities overseas, they will also movetheir machines and equipment to the host country in order to shorten the timeit takes to begin production.
According to Satoru, Vietnamese support industries are not as strong as Japan’ssmall and medium-sized enterprises (SMEs), so Japanese companies must assistwith production in Vietnam.
Restrictions on importing old machinery could hinder large investment flow intoVietnam by Japanese SMEs.
The Japanese business association suggested that machinery and equipmentimported for Japanese production activities should not be restricted in termsof the age of the equipment and should not be subject to the importregulations.
Deputy Minister of Science and Technology Pham Quy Duong said that Circular 23was formulated with the main purpose of limiting the import of old machines toensure quality and productivity and to avoid the energy waste caused by the useof old machinery.
The Ministry of Science and Technology has recognised firms’ difficulties withCircular 23 and made amendments, Duong said.
He said that the Law on Foreign Trade Management will come into force onJanuary 1. Article 9 of the decree guiding this law’s implementation will haveregulations related to the age of machinery and equipment imported into Vietnamand the process for special cases.
The deputy minister insisted that imported equipment must meet the standards ofsafety, energy efficiency and environmental protection in accordance withstandards of Vietnam and some G7 countries.
Decree 116/2017/ND-CP on automobile production, assembly and import andmaintenance services for automobiles causes problems for importers, said ToruKinoshita, a member of JBAV. The decree requires some certificates provided byforeign authorised agencies.
However, in practice, the government of each country only tests and certifiesaccording to that country’s regulations for domestic use. Vehicles manufacturedfor export are beyond their scope, he said.
Toru said that the decree also requires exhaust emission testing and technicalquality assurance for each batch of completely built up (CBU) vehicles, buteach test takes about two months and costs up to 10,000 USD. If car importerscomply with this rule, they will waste a lot of time and money.
The association recommends that the Government apply only the model test foreach vehicle type of the first shipment and accept the test report forsubsequent shipments over a six-month period.
Minister and head of Government Office Mai Tien Dung, who is also Chairman ofthe Advisory Council for Administrative Procedure Reform,explained that Decree 116 is intended to protect producers and consumers.
The minister said it is important to inspect each batch of goods to assesscompliance with the law.
However, Dung asked the Ministry of Transport to cooperate with the Ministry ofJustice and the Ministry of Industry and Trade to revise the regulations.
He affirmed that the recommendations and questions from the Japaneseenterprises will be considered by Vietnam’s authorised agencies.
The official emphasised that the Vietnamese Government will continue to createa clear business environment for foreign investors.-VNA
VNA
