Vietnam feasibility study - EITI

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EITI because it would benefit as follows:
• Maximize the revenues generated from the extractive sector to the state;
• Build citizen trust in public institutions and reduce conflicts amongst stakeholders;
• Build investor trust and, therefore, attract more foreign investment capital in the extractive
industry;
• Increase national credit in transparency;
• Fight more efficiently against corruption; and
• Create an equal environment for competition among all business entities.
The extractive companies would also benefit from implementing the EITI, including:
• Reduce informal payments and, hence, increase profits;
• Increase accountability of the company, especially in cooperating with international partners
who require a high level of transparency;
• Increase credit and reputation of the company, particularly with the big companies who invest
overseas; and
• Increase competitiveness amongst the business sectors, and reduce possible conflicts and
tensions between local communities and companies.
The international experience, typically in the African resource rich countries, indicates that the EITI is
an effective tool in preventing the resource curse as well as in mitigating the adverse effects caused
by the resource curse to the resources dependent countries, especially in nonrenewable resources like
oil and gas. In the coming time, the EITI principles could be broadened to other different processes in
the value chain of the extractive industry, like licensing, contracting, bidding, budget management; as
well as extended to other sectors, like energy, forestry and agriculture areas in which Vietnam is also
facing with much difficulty.
In principle, once implementing the EITI, a multi-stakeholder group will be established. Most
respondents claim that if Vietnam implements the Initiative, the representatives of the relevant
governmental authorities including the Ministry of Finance, the Ministry of Natural Resources and
Environment, the Ministry of Industry and Trade, the National Steering Committee on Anti-corruption,
among others; and extractive companies, civil society organizations and independent scientists and
experts should be involved in the Vietnam EITI Board. Of these, either the Ministry of Finance or the
Ministry of Industry and Trade should lead and coordinate the EITI program.
Nevertheless, the implementation of EITI in Vietnam will face some barriers and challenges, including
the gap between regulations and law enforcement, including compliance with EITI principles; the
regulation on confidential information in the oil and gas sector; and initial difficulties in securing
financing and human resources to implement the EITI. Therefore, in the initial period, the scope of
the EITI program should focus on some big enterprises including the state, privately owned and
foreign-invested enterprises in some important minerals, such as oil and gas, coal and titanium. All
are appropriate for the EITI regulations because the threshold of the EITI program is determined by
each country. The study also figured out that many of these enterprises are willing to participate the
EITI. The scope of the EITI program can be extended to other types of minerals in the next step when
Vietnam has sufficient experience and capacity to efficiently implement the EITI; the perception of the
public about transparency is enhanced and the benefit from EITI implementation is proved.
The Extractive Industries Transparency Initiative and the Implementation Perspective of Vietnam