VietNamNet Bridge – Vietnam should implement the Extractive Industries Transparency Initiative (EITI) to fight corruption in the mining industry, currently representing over 10% of the nation’s GDP.

Such a view was shared by international experts and policymakers who attended a workshop on Vietnam’s possible participation in EITI organized by the Ministry of Industry and Trade in Hanoi on Thursday.

EITI was initiated in 2002 by Tony Blair, the then-Prime Minister of the UK, at the World Summit on Sustainable Development in Johannesburg, South Africa. It is considered as a useful tool for resource-rich countries to better manage their natural resources and ensure that the extractive industries make positive contributions during the development process.

Speaking at the workshop on Thursday, British Ambassador to Vietnam Antony Stokes said: “We think Vietnam should become an EITI candidate, the first country in Southeast Asia to implement this initiative.”

When undertaking EITI, Vietnam will enjoy a lot of benefits because corruption and tax evasion will be restrained and more FDI will be lured into the mining industry, he said.

If Vietnam did not exploit natural resources effectively, the future would be at risk, said the ambassador. He added 37 countries and 70 oil and mining groups had adopted EITI with an aim of combating corruption and boosting transparency.

Jerymy Weate from the international consulting firm Adam Smith said that as an EITI compliant country, Indonesia had been ranked higher by Moody’s and Fitch and Nigeria had recovered US$442 million of tax payments.

In Vietnam, about 30% of the total payment by the mining industry is submitted to the State budget, including corporate income tax, value-added tax and export-import tax payments. The remainder consisting of natural resource tax, licensing fee, environment protection fee, land or water surface use fee and other fees and charges is paid to local budgets.

However, Weate said transparency over such tax and fee payments was really poor. Mining companies complain they do not know how those sums are used, whereas the authorities always say they are not enough.

In addition, quite a few enterprises have to bear informal costs to get information about planning and licensing, especially at the local level.

Weate stressed information about payments by enterprises to the budgets should be disclosed. When Vietnam becomes an EITI implementing country, a fair playground in the mining industry will be established, the licensing process will be more transparent and information access will be easier.

Dau Anh Tuan, deputy head of the Legal Department under the Vietnam Chamber of Commerce and Industry (VCCI), said a number of State groups and corporations did not report on their tax payments and revenues even to their owner, the State. Some State-owned enterprises did make reports, but their statements were unreliable and were not publicized.

Making the mining industry transparent is an important task in line with developing the economy in a sustainable way, stated Deputy Minister of Industry and Trade Nguyen Duong Quang.

He told the workshop that there were now over 5,000 mines across the country. The mining industry has badly affected the environment, harming soil and vegetation and emitting polluting wastes and exhaust fumes.

The trade ministry is assigned to study the participation in EITI, said the deputy minister.

The mining industry has made a 10-11% contribution to the nation’s GDP since 2000. Mineral exports in 2009 brought in some US$8.5 billion, including US$6.2 billion from crude oil, accounting for 25% of the State budget revenue.

Currently, minerals are being extracted by over 2,000 enterprises in all economic sectors, with 90% of them small-sized enterprises.

Source: SGT