Vietnam feasibility study - EITI

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vI.4 - cOnclusIOn
In recent years, mineral resources, especially oil and gas, have greatly contributed to the economy
(accounting for 11% of GDP) and created more employment for society. The extractive industry not
only provides essential inputs for other industries but also stimulates many ancillary industries and
ensures national energy security. Contribution of the extractive industry continues to increase with
the high growth rate of the national economy and an increasing globalization.
Vietnam has been discovering many large mineral reserves, which are not only positive for the
development of the extractive industry but also the national economy. However, along with this
development, mineral extraction activities cause significant negative impacts to the environment,
culture and society, especially in mining areas. Moreover, the State has suffered significant revenue
losses because the management of mineral resource and as well as of the extractive industry has been
poor throughout the years. Illegal exploitation, mineral smuggling, and tax evasion also commonly
occur in many areas. On the other hand, the management and use of revenues has many constraints
and lacks transparency. To assure benefits from mineral resources (including oil and gas) contributing
to national wealth, Vietnam should strengthen its supervision and management and be more
transparent in the EI sector.
Vietnam has recognized the importance of transparency to the development of the country. The
openness and transparency of information in Vietnam has been mentioned in many legal documents
and policies of the Party and State, as well as in the international commitments of Vietnam, such
as in the Law on Enterprises, Law on Prevention of Corruption and Anti-Corruption, Conventions
of the United Nations and so on. However, corruption is still complicated and there is no trend
in remission 14 . To prevent corruption as well as minimize the influence of interest groups in the
extractive industry, apart from state management tools, the extractive industry needs to apply new
management tools, in which the participation of stakeholders, especially communities, needs to be
strengthened. That “mineral resources belong to the people” has been recognized in the national
Constitution and the Law on Minerals, so that people must be involved in the oversight and decision
making to ensure the benefits from “nature’s gift” for the common development of the nation. One
of the approaches being applied by 35 countries around the world, which has initially obtained
positive results, is the Extractive Industries Transparency Initiative.
The implementation of EITI has brought many benefits to the implementing countries such as drawing
a huge amount of money, reducing social tensions and conflict between relevant bodies through
dialogue mechanisms, creating a fair competitive investment environment between the parties, and
strengthening national credit ratings in the eyes of the international investors. The lessons about the
benefits of implementing EITI are reflected quite clearly in some very different countries like Nigeria,
Ghana and Norway. Commitment and support from many countries and organizations around the
world has shown that EITI is one of the most effective and useful approaches in mineral resource
management. Transparency is an urgent need for a flat world 15 where the globalization process is
rapidly taking place and countries must follow the global rules of integration and development.
Vietnam has reached the threshold of a middle-income country whose average GDP growth is above
7% per year over the past decade. An increasing demand for minerals to serve domestic consumption
*14: According to the Transparency International, Vietnam was ranked as 116th in 178 countries/territories about Corruption
Perception Index in 2010. Source: http://www.transparency.org/policy_research/surveys_indices/cpi/2010/results
*15: The term Flat world is coined by Thomas L. Friedman in the book The World is Flat: A Brief History of the Twenty-First Century
implying a rapid globalization in the modern world in which the countries around the world are getting more dependent on each
other in the global economy.
The Extractive Industries Transparency Initiative and the Implementation Perspective of Vietnam