Abtract of doctoral dissertation of jurisprudence the law on the enterprises righr to equal treatment in vietnam

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ministry of education &training ministry of justice
ha noi university


®o thi kim tien



the law on the enterprises' righr
to equal treatment in vietnam

Speciality : Economic Law
Code : 62 38 01 07




ABTRACT OF DOCTORAL DISSERTATION OF JURISPRUDENCE



Ha noi - 2014

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The dissertation is completed at Hanoi Law University

Supervisor: Assoc. Prof. Dr. Duong Dang Hue



Reviewer 1: Prof. Dr. Nguyen Thi Mo

Reviewer 2: Assoc. Prof. Dr. Nguyen Minh Man

Reviewer3: Dr. Dong Ngoc Ba



The thesis is protected at the Council level thesis dot
School, meeting at Hanoi Law University
.
The last hours, days, months, 2014
.


Thesis can be found at the National Library
and the Library of Hanoi Law University





THE AUTHOR'S PUBLISHED WORKS RELEVANT TO
THE DISSERTATION

1. Do Thi Kim Tien (2011), "To make to leading role of the state sector
more transparent to promote economic growth", State
Management,, (184), Pp. 42-46.
2. Do Thi Kim Tien (2013), " Major issues of equality among
enterprises", Inspectorate, (9), Pp. 17-19.
3. Do Thi Kim Tien (2013), "Building equal market economic
institution in consistence with the leading role of the state
sector", Legislative Research, 12(244), Pp. 7-12, 29.
4. Do Thi Kim Tien (2013), " Reality and causes of inequality among
Viettnamese businesses", People's Court, (18),Pp. 10-14.
5. Do Thi Kim Tien (2013), "Improving the legislation to ensure
equality among Vietnamese enterprises, ", Magazine of
Democracy & Law, (258), Pp. 39-43.


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INTRODUCTION

1. Research rationale
Most countries opt for the model of market economy to take advantage
of the law of competition as an engine for economic development. The
precondition for smooth operation of the law of competition is to ensure
free and equal competition among business entities, including enterprises,
to facilitate business operation on their own capacity and remove ailing
enterprises as a way to make the economy healthier for better
development. Therefore, an environment for equal competition is both a
principle and a universal value in a market economy. An unresolved
problem in the development of socialist - oriented market economy in both

theoretical and practical terms is how to promote the leading role the state
sector while ensuring equal competition among state-owned enterprises
(SOEs) and non – state businesses ad how to address the ailing operation of
SOEs. In addition, thorough integration into the international market by
Vietnam requires it to comply with the inherent market laws as well as
treaties to which it has subscribed.
Since the VI Party Congress, the Party has paid adequate attention to
enterprises’ right to equal treatment in different sectors. This guideline has
been institutionalized by the 1992 Constitution and laws. Contrary to the
State goals, however, far from being relieved, inequality among enterprises
tends to worsen. This problem becomes widespread and occurs in a variety
of complicated forms and in all a stages: market entry, business operation,
and dissolution, which has blocked investment and reduced economic growth.
In response to economic requirements and international commitments,
research into the legal framework and assessment of law enforcement are
required to find out the causes and recommend solutions to enterprises’ right
to equal treatment. This research assumes both theoretical and practical
significance. Therefore, the topic “Improving legislations to promote
enterprises’ right to equal treatment in Vietnam” is selected for the dissertation.
2. Research object and scope
- Research object: The system of legislations and enforcement of laws
on enterprises’ right to equal treatment in Vietnam.
- Research scope:
+ Thorough research into the legal framework of Vietnam, and full and
objective assessment of applicable legislations on enterprises’ right to equal
treatment in Vietnam.
+ Research into enterprises covered by the Law on Enterprises 2005,
exclusive of other types of businesses (cooperatives or individual businesses )
+ Research into enterprises’ right to equal treatment from stages of
business establishment and operation to dissolution, including: (i) equality in

terms of business registration; (ii) equality in business operation; (iii)
equality in business dissolution and bankruptcy.
3. Research objectives and missions
The dissertation is aimed to form scientific foundation for the
improvement of the legal framework to promote enterprises’ right to equal
treatment in Vietnam. The dissertation assumes the following tasks:
- Analyzing and clarifying theoretical issues on enterprises’ right to
equal treatment, the significance for ensuring enterprises’ right to equal
treatment. Assessing the extent to which the law has effects on ensuring
enterprises’ right to equal treatment and elements that govern enterprises’
right to equal treatment.
- Reviewing the entire legal system of Vietnam and conducting
objective assessment of the strengths and weaknesses of legislations relevant
to enterprises’ right to equal treatment.
- Collecting data and information on the enforcement of laws relevant to
enterprises’ right to equal treatment in Vietnam to form a basis to assess the
strengths and weaknesses and finding out the underlying causes and effects
of inequality among enterprises.
- Raising comprehensive solutions to the improvement of legislations
on enterprises’ right to equal treatment and institutional improvement to
ensure enterprises’ right to equal treatment in Vietnam.
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4. Theoretical basis and scientific hypothesis
4.1. Theoretical basis
The research is conducted into improving legislations to promote
enterprises’ right to equal treatment in Vietnam by referring to Marxist –
Leninist dialectical materialism and Ho Chi Minh’s ideology as well as the
Party’s guidelines and State laws on justice, equality, rule - of - law, market
economy, Government to Business relation, ownership and sectors. In addition,

the dissertation also refers to theories and views held by foreign and domestic
economists, politicians and legalists as well as other countries’ laws on economic
regime, market economy system, and Government to Business relation.
4.2. Research questions, scientific hypothesis and intended research
findings
Research questions 1
- What is equality and equality among enterprises?
- Research hypothesis: Is equality among enterprises confused with
equality among economic sectors.
- Intended research findings: The dissertation will clarify the nature of
equality among enterprises. Accordingly, equality among enterprises must
satisfy two conditions concurrently: (i) to ensure the proportionate
contribution and remuneration by businesses, violation and liability; and (ii)
equal legal treatment without exception to all enterprises operating in the
same conditions.
Research questions 2
- What is enterprises’ right to equal treatment?
- Research hypothesis: In the market economy, there exist a multitude
of business entities, including enterprises. For viable operation, market
players, including enterprises, should be treated equally by the law in the
transaction with partners and the State (i.e. enjoying equal terms and equal
standards in borrowing loans, treatment, tax liabilities…) Therefore, equality
among enterprises is an inherent characteristics and requirement by the
market economy.
- Intended research findings: The dissertation clarifies and distinguishes
enterprises’ right to equal treatment in legal terms from that in practical terms.
Research questions 3
- Why does equality among enterprises signify? Why should enterprises’
right to equal treatment be ensured?
- Research hypothesis: Freedom in business operation, competition and

equality among enterprises are market principles, enabling the full operation
of the law of competition to generate an engine for economic development.
- Intended research findings: Demonstrating the relation between
ensuring enterprises’ right to equal treatment and the improvement of market
institution, fair competition. Assessing the significance for ensuring
enterprises’ right to equal treatment.
Research questions 4
- Does inequality exist among different enterprises in Vietnam?
- Research hypothesis: Inequality exists among different enterprises in
Vietnam. It generates negative socio - economic consequences.
- Intended research findings: In the dissertation, review and assessment
of the legal system and law enforcement will be conducted with aims to
demonstrate the existence of inequality among enterprises in Vietnam.
Research questions 5
- What cause inequality among enterprises in Vietnam?
- Research hypothesis: There exists discriminatory treatment to
enterprises by legislations as well as violation of laws relevant to enterprises’
right to equal treatment.
- Intended research findings: Identifying regulations that induce
inequality among enterprises and the causes of inequality among enterprises.
Research questions 6
- What solutions can help ensure enterprises’ right to equal treatment in Vietnam?
- Research hypothesis: Improving the legal framework providing for
enterprises’ right to equal treatment and ensuring law enforcement on that
matter to enable enterprises to operate in an equal environment.
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- Intended research findings: (i) Proposal for elimination of legislations
of discriminatory nature; revising ambiguous or poorly articulated
regulations; enabling transparency of policies that offer preferential

treatment, exemption or investment restraints; improving regulations as
applied to SOEs; and (ii) improving institutions on the agency in charge;
enhancing the capacity, service ethics, and corporate culture; transforming
the attitude towards law observance and enforcement of laws relevant to
enterprises’ right to equal treatment in Vietnam.
5. Methodology and research method
On the basis of dialectical materialism and historical materialism and
employing the approach to motion and development of the market economy
in the new context, the dissertation has adopted methods of synthesis and
analysis, comparative method, statistical method with focus on system
method in order to learn and combine publicized research findings by
organizations and researchers. The dissertation also conducts in – depth
interview made available through face – to – face meetings with researchers
for consultation for new ideas and facts.
6. Contributions and scientific significance
The dissertation contributes following findings:
Firstly, the dissertation has clarified the nature of equality among
enterprises and enterprises’ right to equal treatment. At the same time, it has
clarified how to ensure enterprises’ right to equal treatment in harmony with
other preferential or discouraging treatment policies on business and investment.
Secondly, the dissertation has come up to a comprehensive outlook by
raising the concept and identifying the significance for ensuring enterprises’
right to equal treatment. It has assessed elements that govern enterprises’
right to equal treatment.
Thirdly, the dissertation has stated the shortcomings of the existing legal
framework relevant to enterprises’ right to equal treatment and major causes
for inequality among enterprises in Vietnam.
Fourthly, the dissertation has raised overall solutions to improve
applicable legislations by learning and domesticating foreign policies to
accommodate to the context of Vietnam in the course of integration and

development.
7. Theoretical and practical significance
Researching findings has helped clarify the theoretical aspect of
jurisprudence on enterprises’ right to equal treatment.
Facts and scientific reasoning will demonstrate arguments which are
raised in the research. In addition, the dissertation will serve as a helpful
reference document for researchers, trainers and policy makers to help
respond to requirements by the economy and international integration.
8. Research structure
The dissertation is structured into 4 chapters made up of 15 sections in
addition to the introduction, conclusion and references.

RESEARCH CONTENTS
Chapter 1
LITERATURE REVIEW
Chapter 1 is aimed for review and assessment of relevant international
and domestic research works to further find out and resolve remaining
problems. Towards that end, the dissertation has adopted an approach to
study issues in groups, sort them into order: theory, reality and solutions to
the improvement of the legal framework relevant to enterprises’ right to
equal treatment.
1.1. Theoretical research on enterprises’ right to equal treatment
In this section, two issues are mentioned:
First, research in the concept of equality, equality among businesses
and the right to equality by businesses
Enterprises’ right to equal treatment has not been the direct research
object. However, some research works mentioned the concept of social
equality which is used for reference in the dissertation. Typical research
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works include: On the Social Contract b J.J. Rousseau published by
Publishing House of Social – Political Theory in 2004; Capitalist and
Proletarian Conception of Freedom and Equality translated by To Hong
Quan in 1946; Doctoral dissertation by Vu Anh Tuan on the legal effects on
ensuring social justice, and Textbook on Economic Law (2003) by the Law
University of Hanoi.
Secondly, research works relevant to the legal effects on ensuring
enterprises’ right to equal treatment
No research works have been reported to mention the role of the law on
ensuring enterprises’ right to equal treatment. However, the role of the law
has been analyzed in theoretical terms in the Textbook of State and Law
(2003) by the Law University. Author Vu Anh Tuan refers to the role of the
law in general to analyze the law on ensuring social equality.
1.2. Research in the reality of existing legislations and law
enforcement on enterprises’ right to equal treatment
In this section, two issues are mentioned:
Research in the reality of existing legislations on enterprises’ right to
equal treatment
Many research works have been conducted into existing legislations
providing for various aspects relevant to enterprises’ right to equal
treatment: “Comments on the Law on Enterprises (unified)” by Assoc. Prof.
Dr. Nguyen Nhu Phat; "Investment Law 2005 – Some adequacies” by MA.
Dao Trung Kien; colloquium speech “Assessment of land policies and
recommendations on calling for foreign investment in the current time” by
Dr. Pham Tuan Khai; "Improvement of legislations on partnerships in
Vietnam” by Dr. Vu Dang Hai Yen, All research works share the same idea
by Dr. Nguyen Chi Thanh raised in the book Business Environment –
Theoretical and practical issues, arguing that “Although the legal
framework to establish an environment for equal competition has been set
up, the enforcement in reality still contains unresolved problems. State

monopoly and special privileges afforded to SOEs have all distorted the
playing field of enterprises".
Research in the inequality among enterprises arising from law enforcement
International and domestic analysis has been made on the inequality
among enterprises. Colloquium discussion “Inadequacies and requirements
for development and state management of enterprises regardless of
economic sector” by Dr. Nguyen Minh Phong in the seminar on
"Renovation of state management over enterprises regardless of ownership”
argues that there exists bias in terms of economic sectors and bias against the
private sector. In this seminar, in his speech “Renovation of state
management and enabling an environment for equal competition among
enterprises” Dr. Nguyen Ke Tuan raises comments as follows “In the
market economy, enabling an facilitative environment for equal competition
among businesses of different economic sectors is regarded as one of top
priorities of the state in economic management”. However, in reality the
state treats enterprises of different sectors differently. In addition, the
research "Renovation of state management over businesses of various types
in Vietnam regardless of economic sector” by Dr. Tran Tien Cuong as well
as other international research works have mentioned the inequality among
enterprises. Such international research works include "The Private Sector in
Development "; "From State To Market: A Survey of Empirical Studies on
Privatization " by Will L. Meggison and Jeffry M. Netter,…
1.3. Research works that provide solutions to ensuring enterprises’
right to equal treatment
To various extents, many research works have assessed the nature,
scope and severity of inequality among enterprises and raised solutions to
addressing certain aspects of enterprises’ right to equal treatment. Typical
works include: colloquium discussion by Dr. Nguyen Minh Phong; Thematic
topic "Renovation of state management over các enterprises regardless of
economic sector” by Dr. Tran Tien Cuong; “Beyond individual success

stories: Promoting entrepreneurship though institutional reform";
"Competition, Corporate Governance, and Regulation in Central Asia'' by
Harry G. Broadman; "Corporate Governance of Public Enterprises in
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Transitional Economies" by Dominiquer Pannier and other relevant
documents originated from OECD such as: "OECD Corporate Governance
Working Papers, No. 1", on the issue of "Competitive Neutrality and State-
Owned Enterprises: Challenges and Policy Options ", by Capobianco, A.
and H. Christiansen,…
1.4. General assessment of research works relevant to the
dissertation issues
1.4.1. Resolved issues to be learnt by the author
First, there exist various forms of inequality among enterprises in
Vietnam and in the world.
Secondly, many factors are blamed for the inequality among enterprises,
including an underlying cause, i.e. discriminatory legislations on enterprises
and law enforcement officers not abiding by the law.
Thirdly, ensuring enterprises’ right to equal treatment is a principle of
the market economy.
Fourthly, in many cases state intervention into the market with aims to
address market failure may result in inequality among enterprises.
Fifthly, SOE reform should be promoted to eliminate preferential
treatment and privileges afforded to SOEs. There should be relevant
mechanism to control monopoly enterprises.
Sixthly, there exists a relation between corruption and discriminatory
treatment on enterprises in many countries, including Vietnam.
Seventhly, priority and exemption, in certain cases, may be afforded to
enterprises entrusted with operation of services of national interests.
1.4.2. Unresolved issues by relevant research works

First, most aforesaid research works are limited to addressing the
inequality between SOEs and private enterprises, between domestic and FDI
enterprises. They fail to address the inequality among various types of
business entities. There exists inequality among enterprises under the same
ownership or between domestic enterprises or FDI enterprises.
Secondly, relevant research works are limited to mentioning certain
aspects of inequality among enterprises without providing a comprehensive
view to reflect true nature of inequality among enterprises.
Thirdly, relevant research works tend to reflect the reality without
finding out the underlying causes of inequality among enterprises and causes
for the existence of discriminatory legislations.
Fourthly, relevant research works have not mentioned the effects
caused by inequality among enterprises on the economy and society as a
way to recognize the significance for ensuring enterprises’ right to equal
treatment.
Fifthly, no research works have clarified the nature, concept,
characteristics and assessment criteria of equality among enterprises and
enterprises’ right to equal treatment.
Sixthly, no research works have raised directions and comprehensive
solutions to ensuring enterprises’ right to equal treatment.
1.4.3. Issues to be further addressed by the dissertation
- The dissertation will clarify the nature of equality and enterprises’
right to equal treatment to form a basis to assess the significance for ensuring
enterprises’ right to equal treatment;
- The dissertation will provide research and assessment of legal effects
on ensuring enterprises’ right to equal treatment and elements that govern
enterprises’ right to equal treatment;
- The dissertation will provide research and assessment of the reality of
the existing legal system and law enforcement relevant to enterprises’ right
to equal treatment in Vietnam, identify causes and effects of inequality

among enterprises in Vietnam;
- The dissertation will provide research and solutions to the
improvement of the legal system relevant to enterprises’ right to equal
treatment in Vietnam.
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Chapter 2
THEORY ON ENTERPRISES’ RIGHT TO EQUAL TREATMENT
Chapter 2 is aimed to address the general theoretical issue of the right to
equality by businesses. Towards that end, the chapter is focused on the
following matters:
2.1. Concept of equality among businesses
In this section, the dissertation is focused on three issues:
2.1.1. Concept of equality
There exist different concepts of the emergence and rationale for the
existence of equality. The dissertation makes an approach to equality in
different perspectives: political, linguistic and sociological, whereby forming
general statements.
Influenced by different socio-economic conditions, researchers have
different views on the causes for the emergence and rationale for the
existence of social inequality and equality. However, their views are getting
improved towards further clarification of issue of social equality.
Equality and justice are not exactly the same. Equality is a broader
concept and encompasses justice. Social justice is a precondition for social
equality. In terms of meaning, social justice means corresponding status and
role, not equal positions or proportional correlation between rights and
obligations. Meanwhile social equality both ensures the proportionality
between rights and obligations and equal treatment among different entities.
To clarify the nature of equality, it is necessary to subject this concept to
systematic analysis. In terms of content, the concept of equality is developed

from the concepts of evenness and justice in the following level:
Evenness: Social entities are subject to even interests and obligations in
mathematical terms (absolute evenness).
Justice: Social entities are treated relevantly. This relevancy means
proportionality between social obligations, i.e contribution to the society,
and interests, i.e. benefit from the society.
Equality: Social entities are treated on equal terms without exception.
That means all entities, in the same condition and context, are subject to the
same rights and obligations. By contrast, in different condition and context,
they are treated differently in accordance with the principle of
proportionality between right and obligation, without discrimination.
Given such analysis, equality is a concept that refers to social relations
assuming following characteristics:
First, equality expresses the proportionality between rights and obligations.
Secondly, equality requires equal treatment to all entities that are under
the same condition, without exception.
Thirdly, equality is a concept with relativity nature (it reflects social
conceptions in particular stages, measuring the rights and obligations in
social relations. It is not an absolute concept).
2.1.2. Concept of equality among enterprises
The term equality among enterprises is defined to be limited to the
business circle, not to include (cover) other social entities. Equality among
enterprises is not exactly the same as equality in certain business operations.
Instead, it is the equality throughout the life cycle of an enterprise, i.e. equality in
business registration, business operation and dissolution or bankruptcy.
In terms of content, equality among enterprises does not mean that all
enterprises are subject to the same rights and obligations in any conditions
but that in the same conditions they are treated the same. In the context
where different entities contribute at different levels and have different
effects on the society, equality among enterprises means proportionality

between rights and obligations. Therefore, equality among enterprises is
interpreted as all businesses, in the same condition, being subject to the
same rights and obligations.
Equality among enterprises is identified with two criteria as follows:
First, proportionality between rights and obligations afforded to enterprises.
Secondly, non-exemptibility. Any businesses enjoying the same
condition are subject to the same rights and obligations.
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2.1.3. Characteristics of equality among enterprises
Like social equality, equality among enterprises denotes a social
conception and governed by certain socio-economic conditions. Therefore,
equality among enterprises is characterized as: (i) not being the same as
equality in business, (ii) universality (equality at any time, anywhere, and in
any relation); and (iii) relativity nature.
2.2. Concept of enterprises’ right to equal treatment
Characterized by the operation for profit, enterprises should be
subjected to healthy competition in accordance with the market law. Fair
competition induces enterprises to rely on their own capacity to run business.
Business operation has multiplying effects: not only on the enterprise itself
but also on other entities. The state benefits from profitable business
operation by taxes. Laborers benefit by being employed. Consumers benefit
in that their demands are met with high quality and cheap commodities and
services. Therefore, in a society where enterprises are operating, other social
entities advocate enterprises’ right to equal treatment to serve their own
interests. However, public opinions only can not bring about equality for
enterprises at anytime, anywhere. Therefore, enterprises’ right to equal
treatment should be recognized and protected by the state and laws. Once
recognized, enterprises have the right to operate in accordance with the law
and request their rights to be respected by other social entities.

Components of enterprises’ right to equal treatment: Enterprises’ right
to equal treatment is judged and recognized by the society and the State by
means of law. Enterprises’ right to equal treatment includes following
components: (i) Equality in business registration (in terms of procedure,
condition, time…); (ii) Equality in business operation: access to capital,
land, natural resources, labor, contract settlement, and dispute settlement;
(iii) Equality in the dissolution and bankruptcy: procedure, condition, time…
2.3. Significance of enterprises’ right to equal treatment
Enabling the right to equal treatment is essential for enterprises to
operate in accordance with the law of free business and fair competition. In
social and economic terms, enabling enterprises’ right to equal treatment
will: (i) help form a healthy competition environment; (ii) facilitate
enterprises autonomy; (iii) promote economic development and (iv) help
enterprises’ capacity be truly assessed by the society.
2.4. The role of the law on equality among enterprises
2.4.1. Concept of the law on equality among enterprises
The law on equality among enterprises in Vietnam does not exist as an
independent institution but is present in many legislations.
The law on equality among enterprises is the combination of
legislations that regulate enterprises’ operation in accordance with the
principle of equal right and obligation among all enterprises. Contribution
is proportional to benefit and violation is proportional to liability.
Contents of the law on equality among enterprises include:
- Regulations on the principle for ensuring the right to equal treatment
among enterprises;
- Regulations on the scope in which the right to equal treatment among
enterprises is ensured: equality is ensure throughout the process of
establishment, operation (after establishment) and dissolution, bankruptcy
and withdrawal from the market;
- Regulations on equal sanctions on violating enterprises (the same

sanction is imposed on the same violation without prejudice against private
enterprises or in favor of SOEs);
- Regulations on equal measures that can be used by enterprises to
protect their own legitimate right and interest (court, arbitration, solicitor or
self defense);
In addition, the law on equality among enterprises includes regulations
that settle common requirements for ensuring the right to equal treatment
among enterprises as well as justice in economic development and support
to SMEs,…
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2.4.2. Legal effects on ensuring enterprises’ right to equal treatment
The role of the law in ensuring enterprises’ right to equal treatment is
seen from two perspectives: Law as a tool to recognize enterprises’ right to
equal treatment and as a tool to provide for means to ensure enterprises’
right to equal treatment.
2.5. Factors that govern the legal system and law enforcement
relevant to enterprises’ right to equal treatment
Whether enterprises’ right to equal treatment is exercisable or not rests
with many factors. However, identifying factors that govern the legal system
and law enforcement relevant to enterprises’ right to equal treatment will act
as a basis to analyze the reality and find out causes, whereby realistic
solutions can be raised.
2.5.1. Factors that govern the legal system relevant to enterprises’
right to equal treatment
Development of legislations on enterprises’ right to equal treatment is
governed by both objective and subjective factors. Major factors that govern
enterprises’ right to equal treatment include: (i) Characteristics of the
economy; (ii) Economic development level; (iii) The level of international
integration and (iv) The qualifications of businesspeople.

2.5.2. Factors that govern law enforcement relevant to enterprises’
right to equal treatment
Law enforcement is human activity. How legislations on enterprises’
right to equal treatment are enforced rests with factors that can govern the
behavior of executive agencies (enterprises, management agencies,
enterprises association…). Major factors that govern law enforcement
relevant to enterprises’ right to equal treatment include (i) Capacity of public
officials in charge of state management; (ii) Service ethics acquired by
public officials in charge of state management; (iii) Sense of responsibility
by enterprises in upholding enterprises’ right to equal treatment and (iv)
Participation by organizations, individuals and the society in safeguarding
enterprises’ right to equal treatment.
Chapter 3
EXISTING LEGAL FRAMEWORK AND LAW ENFORCEMENT
RELEVANT TO ENTERPRISES’ RIGHT TO EQUAL TREATMENT
IN VIETNAM
Chapter 3 is focused on the analysis and assessment of applicable
legislations and law enforcement relevant to enterprises’ right to equal
treatment in Vietnam, whereby detecting problems as well as causes and
effects of inequality among enterprises.
3.1. Existing legal framework relevant to enterprises’ right to equal
treatment in Vietnam
The dissertation reviews the legal system of Vietnam providing for
enterprises’ right to equal treatment from the VI Party Congress.
Legislations governing enterprises’ right to equal treatment in Vietnam
include: Constitution (1992) and revised Constitution in 2013, Law on
Enterprises (1999), Competition Law (2004), Law on Enterprises (2005),
Investment Law (2005), Commerce law (2005), Bankruptcy Law (2004),
specialized laws and by-laws. Upon general review of the legal system, the
dissertation assesses existing legislations on enterprises’ right to equal

treatment from two perspectives: strengths and weaknesses.
3.1.1. Strengths of existing legislations on enterprises’ right to equal
treatment
In this section, the dissertation restates the Party’s guidelines on
developing the market economy and creating an equal competition
environment among business entities. These guidelines have been
institutionalized by the State. Noteworthy strengths of the legal system are
expressed in the following terms:
+ Existing legislations provide for basic principles of enterprises’ right
to equal treatment.
+ Existing legislations provide for basic components of enterprises’
right to equal treatment.
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+ Existing legislations provide for priorities and exemption in lines with
principles of equality among enterprises.
3.1.2. Weaknesses of existing legislations on enterprises’ right to
equal treatment
In addition to strengths, the existing legal system still contains some weaknesses:
+ Legislations give inconsistent provisions for enterprises’ right to
equal treatment.
+ Legislations on enterprises’ right to equal treatment have not been
compatible with the reality of economic development.
+ Legislations on enterprises’ right to equal treatment have not been
transparent.
+ Legislations on enterprises’ right to equal treatment have not been
aligned with international commitment.
3.2. Law enforcement relevant to enterprises’ right to equal
treatment
To ensure impartial assessment of law enforcement relevant to

enterprises’ right to equal treatment, the dissertation has raised both
strengths and weaknesses in this respect.
3.2.1. Strengths in law enforcement relevant to enterprises’ right to
equal treatment
Research findings show that all types of enterprise have benefited from
business registration, market surveillance, competition management, and
investigation, prosecution and trial by judicial organs.
3.2.2. Weaknesses in law enforcement relevant to enterprises’ right to
equal treatment
In addition to strengths, law enforcement relevant to enterprises’ right to
equal treatment still contains many weaknesses in many aspects:
+ Violation of enterprises’ right to equal treatment tends to worsen.
+ Violation of enterprises’ right to equal treatment tends to become
more diverse in form.
3.3. Causes for inequality among enterprises in Vietnam
Analysis of the legal framework and law enforcement relevant to
enterprises’ right to equal treatment has revealed many causes for inequality
among enterprises. However, underlying causes include:
+ Existing legislations have not fully reflected enterprises’ right to equal
treatment
+ Public officials have not acquired proper capacity and service ethics
to be able to ensure enterprises’ right to equal treatment.
+ Corporate culture has not been formed.
+ Poor coordination among management agencies and between
individuals, mass organizations and management agencies to ensure
enterprises’ right to equal treatment.
3.4. Effects of inequality among enterprises
Inequality among enterprises manifests a negative phenomenon of the
economy and has socio-economic effects to different extents. Assessment of
the effects of inequality among enterprises may vary according to different

research objectives. The dissertation will assess the effects of inequality
among enterprises on the enterprises and economy as well as external
relations of Vietnam.
3.4.1. Effects on the enterprises
In an unequal competition environment, some enterprises win while
others lose. In the long run, however, they will all be faced with
disadvantages. For prioritized or subsidized enterprises (mainly SOEs), they
will become more reliant on the state and less self-autonomous, less
innovative and less competitive. When a legally operating enterprise is not
enabled to compete in a healthy way, it will become corruptible, ready to
give bribe to lobby for policies conducive for it.
3.4.2. Effects on the economy
In an unequal competition environment, the economy is distorted,
exposing itself to high risk. Unequal competition environment may hinder
capital attraction and retard economic development.
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3.4.3. Effects on external relations
With respect to external relations, countries that nurture an unequal
competition environment and discriminatory policies will be called to account
once they are subject to anti-dumping examination. At the same time,
business inequality may stain the country’s image in foreign investors’ eyes.

Chapter 4
SOLUTIONS TO IMPROVING ENTERPRISES’ RIGHT TO EQUAL
TREATMENT IN VIETNAM
Together with business freedom, ensured equality among enterprises is
a precondition for a healthy competition environment. Therefore, it is
necessary to develop and improve the legal framework relevant to
enterprises’ right to equal treatment to respond to economic requirements

and international integration. Chapter 4 is aimed to address two basic issues:
First, to further clarify the contents of enterprises’ right to equal treatment;
Secondly, to improve the institutions to ensure enterprises’ right to
equal treatment;
4.1. To further clarify the contents of enterprises’ right to equal
treatment
To further improve the legal framework relevant to enterprises’ right to
equal treatment in Vietnam towards: revising incomplete legislations and
restraints on enterprises’ right to equal treatment, eliminating legislation of
discriminatory nature to enterprises. To do this, the law must be developed:
(i) to reflect the nature of equality among enterprises and enterprises’ right to
equal treatment ; (ii) set clear limit to priorities and exemptions; (iii) clearly
define monopoly and renovate SOE management mechanisms in lines with
the principles of equal competition.
4.1.1. The law must reflect the nature of enterprises’ right to equal treatment
+ Revising legislations to define the nature and concept of enterprises’
right to equal treatment in a clearer manner.
To make this right a universal principle, the dissertation recommends
amendment to Article 8 of the Law on Enterprises to include following
provision: Enterprises are equal before the law.
+ Make priority policies as applied to enterprises more transparent.
Priority or restraint policies adopted by a state may vary according to
their strategies and targets of socio-economic development. These policies
may be developed to respond to the need for economic stimulus or economic
restructuring. However, priority and restraint measures must be closely
associated with certain fields or areas, and aimed to address pressing demand
of the economy (economic stimulus). In other words, priorities or restraints
should not be imposed on particular enterprises to conflict with enterprises’
right to equal treatment and the law of competition.
4.1.2. Improving legislations on SOEs to ensure enterprises’ right to

equal treatment
SOE is a profit-making entity set up by and working for the state,
subject to state management. Inequality between SOEs and other types of
enterprise is caused by privileges afforded by the state to SOEs. Therefore,
the role of macro state regulation should be distinguished from ownership. In
addition, ownership of SOEs should be restructured by means of corporatization.
Some monopolistic SOEs should be subjected to strict price control.
4.1.3. Eliminating legislations of discriminatory nature to enterprises
Given the existing weakness in applicable legislations, the improvement
of the legal framework relevant to enterprises’ right to equal treatment
should: (i) eliminate registration procedures of discriminatory nature; (ii)
revise some regulations on access to resources (land, capital…), contract
signature, dispute settlement, tax policies and (iii) revise regulations on
dissolution and bankruptcy.
4.2. Improving the institutions to ensure enterprises’ right to equal
treatment
Weaknesses of the management apparatus and managers, poor
coordination and distribution in management, and lenient sanctions can
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render the enforcement of relevant laws ineffective. Therefore, in addition to
law improvement, complete solutions are needed to improve managerial
agencies and strengthen managers’ capacity and service ethics. These actions
should be carried out in combination with strict sanctions against violation
of enterprises’ right to equal treatment.
4.2.1. Improving the apparatus in charge of management and
protection of enterprises’ right to equal treatment
There exist many agencies to govern enterprises’ right to equal
treatment. However, three of them are faced with weaknesses and need
improving to be able to undertake the mission of management and control

over enterprises: (i) Business registration agency; (ii) Competition
management agency and (iii) Market surveillance agency.
4.2.2. Strengthening the capacity and service ethics for public officials
in charge of enterprise management and market surveillance
Strengthening the capacity and service ethics is necessary for all
activities of state management. However, to deal with sentimental decision
making that prioritizes SOEs and discriminates against private enterprises, it
is necessary to further clarify the nature and significance of enterprises’ right
to equal treatment so that managers will take into account enterprises’ right
to equal treatment when making decision.
4.2.3. Providing for strict sanctions against violation of enterprises’
right to equal treatment
Lenient sanctions and lax laws will give rise to illegal acts such as
smuggling, corruption, bribery, counterfeit production, limited competition… In
that context, strict sanctions are needed to exert the full deterrent effects on
enterprises, associations and state management agencies. These sanctions
should be specified against particular acts such as illegal trading, bribery,
corruption… The enforceability and effectiveness of laws should be taken
into account in the formulation of legislations. Provisions that have
discouraging effects on complaining and denunciation should be avoided and
replaced by the encouraging ones.
4.2.4. Promoting the combat against corruption
Corruption that causes investment distortion in enterprises can result
from various sources. Public officials commit corrupt acts by taking bribe or
soliciting for money while enterprises induce corruption by giving bribe.
Enterprises give bribe for various reasons: to avoid harassment, to settle
problems, to lobby for policies conducive to them, or to evade the liability.
In both cases, the enterprise is blamed for corrupting public officials by
giving them incentives to become corrupt. Therefore, the combat against
corruption should start with having enterprises’ behavior changed. First of

all, such corporate culture should be built so that enterprises say no to
corruption. At the same time, actions should be taken to influence the
audience prone to corruption by means of education and communication
about service ethics. Moreover, public officials should be held accountable.
Indirect measures such as involving the entire society in the combat against
corruption are needed.

CONCLUSION

Competition is essence of the market economy, acting to boost the
productivity of enterprises and the economy. The rationale for competition is
that all business entities are entitled to free operation and equality. However,
the state neither always acquires full awareness of the significance for equal
competition nor is always capable of formulating a legal framework to
protect enterprises’ right to equal treatment. During the course of developing
a socialist - oriented market economy in Vietnam, the state has afforded
SOEs too many priorities and subsidies in form of access to capital, land and
natural resources and used them as a tool for macro economic regulation.
Other problems such as discrimination in favor of domestic businesses and
against FDI enterprises, counterfeit trading, smuggling, bribery and
corruption to lobby, have given rise to severe inequality among enterprises.
This is in contravention of the law of competition and results in both
theoretical and practical problems in the formulation and improvement of the
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socialist - oriented market economy in Vietnam. In addition, inequality among
enterprises in Vietnam has given rise to WTO and TPP members’ concern.
Therefore, the dissertation improving legislations to promote enterprises’ right
to equal treatment in Vietnam is focused on addressing theoretical issues and
assessing the existing legal framework and the enforcement of laws relevant

to enterprises’ right to equal treatment. It is aimed to raise solutions as a
response to demands by the market and economy.
The dissertation has raised basic theoretical issues on equality, equality
among enterprises and enterprises’ right to equal treatment. On that basis,
the dissertation has clarified the nature and significance for ensuring
enterprises’ right to equal treatment as well as the role of the law and other
factors that govern enterprises’ right to equal treatment.
By referring to criteria of equality among enterprises and enterprises’
right to equal treatment as developed in chapter 2 and chapter 3, the
dissertation has made research into the existing legal system and the
enforcement of laws relevant to enterprises’ right to equal treatment in
Vietnam. In this chapter, strengths and weaknesses in relevant laws have
been found to have effects on enterprises’ right to equal treatment in
Vietnam. With regard to strengths, the legislations have recognized basic
principles and contents of enterprises’ right to equal treatment and provided
for priorities and exemptions in lines with the principle of equality among
enterprises. With regard to weaknesses, the legislations have been rendered
inconsistent, conflicting, less transparent and outdated by the reality and
requirements for integration and development. With respect to law
enforcement, management agencies have afforded all types of enterprise
facilitative registration procedures and strictly handled smuggling and
counterfeit trading… Particularly, acts violating economic disciplines,
mainly illegal trading and bribery, have been punished strictly. However,
there exist some weaknesses in the enforcement of laws relevant to
enterprises’ right to equal treatment : rising corruption cases relevant to
bribery for privileges, illegal trading, copyright violation… On the other
hand, violation of enterprises’ right to equal treatment exists in diverse and
complicated form. Having analyzed the realities and stated causes for
inequality among enterprises, the dissertation comes up to effects of
inequality on enterprises, the economy and external relations, whereby

proposing recommendations.
Recommendations for the improvement of the legal framework relevant
to enterprises’ right to equal treatment are categorized into two sets:
First, improving the legislations relevant to enterprises’ right to equal treatment;
Secondly, improving the institutions to ensure enterprises’ right to equal
treatment.
Accordingly, the first set of solutions (improving the legislations
relevant to enterprises’ right to equal treatment) requires resolution of three
issues: (i) to amend regulations to further clarify the nature of enterprises’
right to equal treatment; (ii) to renew the policies as applied to SOEs and
(iii) to eliminate discriminatory regulations as applied to enterprises. The
second set of solutions (improving the institutions to ensure enterprises’
right to equal treatment) is focused on the improvement of the management
apparatus, strengthening the capacity and service ethics for public enterprise
managers and market surveillance officials, strictly handling acts violating
enterprises’ right to equal treatment, and promoting the combat against
corruption to ensure enterprises’ right to equal treatment.
Ensuring enterprises’ right to equal treatment assumes significance over the
improvement of the market economy. It is because enterprises are the main
market players. Improved legislations relevant to enterprises’ right to equal
treatment will help form an environment for equal competition among most
market players, including individual businesses and other business entities.
However, this issue has not been addressed adequately to ensure the equality
among business entities in case of bankruptcy. Accordingly, bankrupt
enterprises are regulated by the Bankruptcy Law relevant to debt payment
while individual businesses are not. Is this discrimination justifiable or
whether not equality among business entities should be subjected to further
research are the questions to be answered in future study.