Vietnam Vietnam’s MOIT submits opinion on draft decree to implement Law on Environmental Protection

On September 21, 2021, the Ministry of Industry and Trade (MOIT) of Vietnam submitted an official document (No. 4720/BCT-ATMT) providing its official opinion on the Draft Decree on Detailed Provisions of the Law on Environmental Protection (hereinafter “the draft decree”) to the Ministry of Natural Resources and Environment (MONRE). This document reflects the comments collected from various businesses and associations by MOIT on various aspects of the draft decree including the prevention and response plans for environmental incidents, environmental licensing, and provisions on the management of persistent organic pollutants (POPs). The draft decree contains much ambiguity in terms of the responsibilities of each governmental agency.

Environmental Incident Prevention and Response Plans

Article 127 of the Environmental Protection Law stipulates that each governmental agency shall provide guidance, inspection and capacity building on the prevention and warning of environmental incidents in the agency’s responsible area. In accordance with the draft decree, the MOIT is responsible for providing technical guidance on drilling rigs, oil and gas pipeline explosions and fires, oil spills, chemical spills, etc. However, in practice, there are still many unregulated areas in the scope of MOIT’s administration.

Environmental Licensing Procedures

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), although the updated version of the draft decree published on September 16 has been greatly simplified compared to the first version by reducing the number of items to be included in the application documents for environmental licenses from 15 to 8, but there are still 5 items that overlap with those in the environmental impact assessment (EIA) application documents. The Vietnam Textile Association (VITAS) has also claimed that it is not appropriate to apply for the environmental license before conducting some pilot operation of waste treatment system. The rule that mandates obtaining environmental license in advance should be reconsidered because it is not clear whether the waste treatment system would be compliant or not until it is actually operated and then inspected. It is also pointed out that there is a contradiction in requiring an environmental license even for projects that will not install waste treatment systems.

In addition, in the official document, MOIT calls for simplification of the procedures for re-application and renewal of environmental licenses because they are very complicated and almost the same as those for new applications. The document also says that it is inappropriate to require regeneration of EIA reports and re-application for environmental licenses when adding investment projects that have no environmental impact.

Production and Use of POPs

This draft decree has provisions on POPs, but the procedures for applying for production and use thereof are complicated. Specifically, the draft decree requires documentation and on-site inspections for such activities, but it does not provide the content of those inspections. Various industry groups have expressed their opinion that MONRE should simplify the procedures for companies wishing to manufacture and use POPs and revise the draft decree to require prior notification. The industry groups have also suggested to make a rule that companies wishing to manufacture and use POPs for exempted applications shall apply to MONRE for an exemption, and MONRE will give responses to the applicants within 15 days.

In addition, the document has pointed out that implementation of the mandated labeling on raw materials, fuels, materials, products and equipment containing POPs would be very burdensome for businesses. There has been a concern regarding the lack of regulatory harmonization with international conventions and the Decree No. 43/2017/ND-CP on Goods Labeling because there are no such rules in these international and domestic regulations.

Ban on the use of plastic packaging materials

The draft decree stipulates that the use of single-use plastic products and packaging materials will be banned in all shopping malls, supermarkets, hotels and travel facilities beginning in 2025. According to a representative of the food and beverage division of the American Chamber of Commerce (AmCham) Vietnam, this provision is inconsistent with free trade agreements such as the EVFTA. In fact, plastic materials including PVC and PET are widely used in cosmetics, food and beverage products, so the lack of alternative packaging materials after 2026 may cause many factories to close in Vietnam. It has been emphasized that no other country has such a strict ban on the use of plastics.