The one-and-a-half-day seminar was attended by more than 90 domestic participants from various sectors, viz. enterprises (both state-owned and private, in several industries), business associations, law firms, universities (law and economics faculties and students), the media and research groups in Vietnam. 

Dinh Thi My Loan, Head of the Vietnam Competition Administration Department (VCAD) chaired a panel of three international experts: S Chakravarthy, Senior Consultant on Competition Policy and Law, CUTS Fellow; Joseph Seon Hur, Director General of the Competition Policy Bureau, Korean Fair Trade Commission (KFTC); and Howard Hollow, Consultant, Australia National University, Regulatory Institutions Network. 

Other attendees included Barbara Jaeggin, Embassy of Switzerland in Vietnam, SECO Representative; Alain Chevalier, Technical Advisor of the Mekong Trade Promotion Project, 7Up2 Project Advisory Committee member; and Alice Pham, 7Up2 Project Coordinator and CUTS representative. 

Some areas which need further exploration and study in the future were identified, for example the issue of cartels, and peaceful settlement. 

The 7Up2 project was introduced on the background of the policy promulgation and implementation process vis-à-vis competition in Vietnam. 

The Competition Law of Vietnam was promulgated in late 2004, expected to be effective from 1^st July 2005 onwards. The VCAD, as assigned by the Ministry of Trade of Vietnam – the State agency responsible for implementing the Competition Law, is currently engaged in drafting all the subordinate regulations as specific guidance for the enforcement of the Law and setting up institutions necessary for future implementation. In particular, the VCAD is now focusing on drafting four Decrees:

• Decree setting forth detailed regulations for implementing the Competition Law; (the subject discussion of the seminar)

• Decree on administrative fines and penalties under the Competition Law; (planned to be ready for similar discussions and consultation at national level by end May 2005)

• Decree on illegal multi-level marketing practices (submitted to the Government of Vietnam for approval); and

• Decree on the establishment and organisation of the Competition Council under the Competition Law.

Notably, the VCAD is under severe resource constraints, especially human resource, and under high pressure in terms of schedule and workload. They are trying to generate support from both domestic and international institutions. One such support, which is most appreciated by the VCAD, is from the civil society, especially from organisations with expertise and network like CUTS. 

Highlights of the Seminar

• Preparation for the seminar was quite good. Reference materials were printed in both English and Vietnamese to facilitate discussions during the course of the seminar. Simultaneous interpretation facilitations were available to convey the experts’ comments to the Vietnamese participants.

• Many valid, specific, and constructive comments from all the experts as well as other participants were made and recognised by the VCAD. Some comments have been suitably incorporated into the new version of the draft Decree, as well as considered for future planned activities by the VCAD, for example the points on defining relevant markets, competition advocacy and case-handling charge.

General comments on the Competition Law and the Decree

The comments on “competition advocacy” by all experts were well received by the VCAD. The VCAD recognised the value of the recommendation and said that the VCAD would take up this issue in the near future, at least as a feasibility study and recommendation to the Government for approval. 

The Law, as well as the Decree, is quite big in size and complicated. Though there have been several unofficial briefs (mostly in English) on the Law prepared and released by law firms working in Vietnam, there is a need to have official summaries (in Vietnamese) made by the competition authorities themselves on these legal documents, to aid understanding, boost familiarity and compliance of enterprises in this field. 

Moreover, recognising that the Law has a quite ambitious scope and purview, the competition authorities need to adopt a pragmatic, practical plan in administering the Law so as to best utilise the limited resources available, for optimal results. 

The Law and this Decree are very specific/definitional in addressing every competition issue/practice. This might help facilitating the competition authorities’ work in the future, as well as help businesses to understand the law and its subordinate regulations more easily, aiding compliance. However, Vietnam needs to recognise that market changes constantly, and so do technologies. Competitive patterns, and enterprises’ competitive strategies and practices, therefore, also change accordingly at a fast pace. On the other hand, it always takes a long time to amend or revise any law or regulation, which essentially means the laws or regulations adopted today would soon become outdated and unsuitable for regulating the market. Vietnam might be better off by adopting a law or regulations which only map out the broader basic principles, then develop them, fill in the regulatory gap by more detailed guidelines, and notifications addressing various issues. This way will allow more flexibility for the law and regulations, more discretionary power for the competition authorities and allow both, the policy-making process and the law-enforcers, to respond more rapidly and timely to market changes. 

Competition law and policy in Vietnam is still at the initial stage. And Vietnam is under severe human resource constraints and work pressure, lacking necessary expertise and experiences, which means that the competition authorities of the country should prioritise their work programme in the most careful manner. Having too detailed, strict and ambitious work programme might turn out to be very expensive, and might deprive the competition authorities of a safe harbour to ignore small cases or unimportant issues which render more benefits (efficiency and public respect) to save and best utilise resources. The Competition authorities should also focus on specific markets in this direction and target cases where there is a high chance of enforcement success, as well as keep the consumers and the business aware of their actions, to increase credibility and deterrent effects against likely anti-competitive practices. For this purpose, some resources should be devoted to publicising the competition authorities’ actions and images. 

As for prioritising enforcement activities, looking at the situations in the Vietnamese market, M&As are not likely to cause much concern in the future. Instead, more focus should be put into detecting anticompetitive practices, unfair trade practices and abuse of dominance.   

Regarding special and preferential treatment for the development of small and medium enterprises (SMEs) (stipulated as exemptions and exceptions for SMEs in the Competition Law as well as the Decree), there were somewhat different opinions. Some thought that SMEs should be given exemptions and exceptions under the Law since they are already at disadvantageous competitive positions as compared to big companies. Some were of the opinion that SMEs should be subject to the same competitive pressures as larger enterprises, and that they should receive incentives and encouragement, not protection as such.

For more details, please contact:
Alice Pham
CUTS Centre for Competition, Investment & Economic Regulation (C-CIER)
D–217, Bhaskar Marg,
Jaipur 302 016, India,
Ph: 91.141.2282733
Fax: 91.141.2282485, 91.141.2282733
Email: c-cier@cuts.org