At a recent conference of the Vietnam Chamber of Commerce and Industry (VCCI), a review was made over the practicality of 16 law codes.
When mentioning some of the insufficiencies of the Law on Investment and other laws, Dr. Le Net, LNT & Partners Law Firm, said: “Where will it go if we continue making laws through patchwork and groping around? The wheels have been made – is it necessary to “re-create” something? Do we have enough time to do that?”
Keep being amended
Dr. Le Net’s concern is a common one regarding the quality of law and practices, as well as the current lawmaking methods. It has been said that laws have never been issued as much as in recent years. Each year, dozens of laws and thousands of by-laws are produced, contributing to the adjustment of social relations. Simultaneously, the law has never been continuously modified to the extent as is currently experienced now.
Perhaps the first example to which this can be drawn is the legal system regulating land. The Law on Land has been amended six times (1987, 1993, 1998, 2001, 2003 and 2009), meaning that it takes 3.6 years on average for one modification. After each amendment, millions of people suffer “a cold sweat” due to a change, especially changes related to pink books and red books, which have caused controversy during the years. As expected of the National Assembly, this law is going to be amended and supplemented again!
In relation to foreign investment, in 18 years, 6 issues and amendments of the law were made (1987, 1990, 1992, 1996, 2000 and 2005). The current Law on Investment (2005), which was considered as a “breakthrough innovation” to form the mutual space for domestic and foreign investment enterprises, also faces the pressing proposal for amendments or abolishment. The longevity of the law, according to experts, is only 4-5 years or even lower. For instance, the Law on Complaints and Denunciations was issued in 1998 and amended in 2004, then immediately amended once again in 2005.
Similarly, the Ordinance on Public Employees was produced in 1998, amended in 2000, amended again in 2003 and by 2008, it was replaced by the Law on Cadres and Civil Servants. There are even some cases where the law has just been enacted, but then immediately becomes obsolete and unenforceable because of “encroachments” against other laws. The Law on Intellectual Property (contrary to Vietnam – U.S. Bilateral Agreement on Term of Copyright Protection) and the Law on Housing (contrary to Law on Land regarding housing documents) are just come examples. In order to be implemented, these laws must be amended again.
With by-laws, the situation is more tragic. “A lot of Government decrees or circulars and decisions of ministries have to be modified, replaced only after one or two years, or even several months. We, the lawyers, cannot update them all”, lawyer Nguyen Thanh Tam said.
According to Dr. Le Net, the current manner of making law in our country is like “changing horses in midstream”. We grope around and create laws “in accordance with the Vietnamese circumstances”. However, as mentioned, most of the laws have problems in the implementation. The laws are then amended, “to be carved” through time and “peculiar” final products are finally made.
Experts suppose that the fastest and most cost-effective way to improve the legal system is to absorb the legal achievements of the world. Even in some cases, it is acceptable to “import” a particular law for application. “Previously, Cambodia was laughed at due to their entire application of the U.S. Corporate Law excepting the red seal of the National Assembly of Cambodia. However, not only Cambodia but also Singapore, Malaysia, Japan, Korea did it”, Dr. Le Net demonstrated.
Dr. Nguyen Van Nam stated that the famous Civil Code of Germany (Bürgerliches Gesetzbuch – BGB) has been voluntarily acquired by many Asian countries such as Japan, South Korea and Thailand, because they acknowledge the enormous benefits of this code. “Particularly, Japan has acquired a nearly complete draft of BGB. They just slightly modified it to accommodate its national identity based on saving the nation’s philosophy”, said Mr. Nam. According to Mr. Nam, Vietnam is building its market economy and integration to the world, there is no reason to “create” one that were preceded for hundreds of years on. “Most of the legal issues and problems we are experiencing nowadays have been settled by laws of many countries long time ago”, said Mr. Nam.
In agreement to the comments as above, Dr. Nguyen Quoc Vinh, who used to work at a legislative drafting agency, also warned of a possibility of failure if we only acquire without a thorough understanding about the spirit and roots of the law. “Japan had built its Civil Code on the basis of the French one, and then had to throw it away shortly afterwards. Likewise, during the Asian financial crisis 1997-1998, under pressure from the IMF, Indonesia built a new Law on Bankruptcy with foreign expert consultancy only in a few dozen days. Consequently, this law also fell into “bankruptcy”.
Dr. Vinh said that in legislative activity, Vietnam actually acquires legal documents of the world. However, for various reasons, this acquisition is unsystematic and lacks an obvious philosophy. For instance, the Civil Code is influenced by Soviet law (in connection with the administrative rules in the code), has some details of the French Civil Code and has a bit influence from Japan and Germany. The patchwork causes not only conflict among the laws but also the self-destruction of different provisions in the same law.
According to Mr. Vinh, it cannot be said that Vietnam has no competent and dedicated professionals in making law. However, there are many cases where their drafts could not retain the “soul” of legal thought due to being cut and modified through a number of layers of submission and approval procedures. Vietnam should avoid administrative interference in professional work. Apart from this, taking the experience from Japan, in the formulation of law, Vietnam should change from a passive to active status. That means, Vietnam should take the initiative to invite Vietnamese and foreign experts to be drafters for practice. We should avoid making and amending laws as proposed by foreign donors. Finally, when the law is enacted, it must be enforced, not be regarded as ornaments.
Do not assume that it is “creative”!
Another example of the patchy and halfway acquisition was offered by Dr. Nguyen Van Nam, commenting on the Law on Competition.
For example, the Act Against Unfair Competition of Germany and many European countries makes regulations of unfair competition as follows: “Everyone in business transactions for the purpose of competition that makes unmoral acts may be forced to cease such acts and to indemnify for damages”.
Our Law on Competition also contains similar provisions but with additional conditions that such acts of competition must “cause damage or have the possibility to cause damage”. “We think of this as creativity, but it turned out to encourage acts of unfair competition, since the acts of unfair competition are settled only when the damage is proved. In other words, the acts of unfair competition are allowed if damage has not occurred or has not been determined yet”, said Mr. Nam.
By Vietnam Law Insight, LNT & Partners.
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