A new decree, set to clarify and streamline processes by which State-owned enterprises (SOEs) can assign or sell assets, is expected to boost restructuring of the State-owned sector - an urgent issue in developing the economy - said head of the Central Institute for Economic Management (CIEM) enterprises department and a member of the decree drafting team, Tran Tien Cuong.

According to the Government website, the draft decree, currently being circulated for public comment before being submitted to the Prime Minister for his approval in September, would replace the previous ordinance announced in 2005 which regulates acts of assigning, selling, contracting or leasing SOEs.

Regulations, over workers' rights will be tightened under Article 19, which stipulates that SOE assignees must be responsible for current SOE employees pursuant to legal regulations on labour issues, ensuring worker's proper rights upon restructuring.

In cases where labour contracts are terminated, current legal regulations apply in cases where SOE restructuring means there is an over-abundance of workers.

For those who continue employment in the restructured enterprises, the old director must be responsible for all necessary procedures to pave the way for employees' insurance rights (transferring the lists and documents of workers to the new enterprises for example).

Also under the article, social insurance due to employees must be paid in full before restructuring work begins.

Marking a development in the field, the new decree will only deal with cases of assignment or sale, said Cuong,

"The change is attributed to the fact that business contracting and leasing have not proven popular and do not have any substantial impact on enterprise development," Cuong said.

He explained that business contracting and leasing, which have been applied since 1999, together with assignment and sale of assets, do not absolutely change the nature of an enterprise's ownership.

Therefore, the measures are an alternative to equatisation for those SOEs that do not qualify due for their small size, lack of profitability or heavy debts. Instead of restructuring, such enterprises would be able to simply transfer their assets to new owners.

SOEs seeking to transfer land use rights worth more than a certain value, yet to be determined, would be subject to separate regulations.

However, the draft decree doesn't mean a total rehaul as it reserves Article 21 of the old decree regulating the sale of enterprise assets by auction if at least two bodies register for assignment.

Two types of auction have been proposed including auctioning enterprises with their employees and auctions without. The latter case applies only when all employees have been let go following all legal regulations on employee rights.

Auctions of assets worth in excess of VND30bil (US$1.8mil) will have to be conducted through securities trading centres.

Source: Viet Nam News