The Ministry of Planning and Investment sent a message to the southern province of Long An last week, urging the provincial authorities to take stronger actions to reassure foreign investors following a dispute over fee payments between a Japanese firm and a local industrial park developer, which caused concerns about Vietnam’s investment climate.

In the document, the ministry (MPI) stated that an agreement must be made regarding fee payments between Tan Duc Investment Corporation, the developer of Tan Duc industrial park (IP) and Japan’s Tango Candy Co. Ltd, a tenant of the park.

The MPI requested that Tan Duc must register its IP fee framework with the Long An Economic Zones Management  Authority, showing clear policies on park infrastructure fees that are compliant with Vietnamese laws.

“Fees should be collected only after IP developers and their users make an agreement in writing,” the MPI’s document noted.

The guiding document is favourable towards Tango Candy and several other firms at the IP, such as KSA Polymer, and YSG Apparel, which had their factory entrances blocked by Tan Duc.

It is also a useful guideline for other IPs on a national scale.

The dispute between the two companies centred on unpaid infrastructure maintenance fees that Tan Duc asked Tango Candy to pay starting in 2013, at a rate of VND10,018 ($0.45) per square metre per year.

The Japanese firm refused to pay, arguing that the rate was exorbitantly high.

Two weeks ago, the IP developer went as far as blocking the entrance to Tango Candy’s factory and even temporarily turned off the electricity and water supply at the plant.

Tan Duc’s unscrupulous actions received strong criticism from the public, and may have negatively affected the investment climate and the operation of firms in the IP.

The MPI asked Long An authorities and relevant management agencies to deal with Tan Duc’s unprofessional behaviour in order to ameliorate the investment climate.

According to the ministry’s message, “Tan Duc IP has not complied strictly with the provisions of laws,” as it did not register an infrastructure fee framework with the local authorities, and set high fees without first getting written agreements from its tenants.

“Cases like this must not happen again,” read the document, adding that all further negotiations between the two parties should be reported directly to the ministry.

Tan Duc also sent a petition to the government in late March explaining that the infrastructure fee was fairly applied to both foreign and domestic firms within the park.

“Vietnamese firms have paid the fees we asked for, while many foreign companies have repeatedly delayed payments for years,” said Brent Thomas Beachler, general director of Tan Duc.

Meanwhile, Tango Hirosuke, general director of Tango Candy, wrote to VIR two weeks ago, stating “In order to not damage the friendship between Vietnam and Japan, I still hope that we, Tango and Tan Duc, can have legitimate and intelligent discussion and agree to solve this problem as soon as possible.”