Enhancing supervisory activities of the national assembly at state owned economic groups

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INTRODUCTION
MINISTRY OF EDUCATION AND TRAINING
NATIONAL ECONOMICS UNIVERSITY

TRINH NGOC TUAN

ENHANCING SUPERVISORY ACTIVITIES OF
THE NATIONAL ASSEMBLY AT
STATE-OWNED ECONOMIC GROUPS

Major: Economic Management
Code: 62.34.01.01

ECONOMICS DOCTORAL THESIS
Science instructors:

Assoc.Prof., Dr. Pham Hong Chuong
Assoc.Prof., Dr. Dang Van Thanh

Hanoi - 2013

1. The necessity of the thesis
Implementing the guidelines and policies of the Party and the State, the
Government has set up 13 pilot state-owned economic groups based on
restructuring some state-owned general companies. State-owned economic groups
can held and are given priority to significant capital resources and fields of
operation to function as the motive force of the country’s economy, to promote
economic growth, to regulate macroeconomy, to stabilize prices and to provide
essential products for the economy. Up till now, state-owned economic groups are

able to raise capital, expand business lines and exploit the material and technical
foundation associated with their core businesses better, thereby improving their
competitivenes and confirming their positions and brands in the process of
international integration. Along with the execution of economic objectives, these
groups also ensure the implementation of the other goals of security, defense and
social welfare for the country.
However, after the experimental period, the economic group model has revealed
inadequacies in organization and decentralization. Regulations of organization and
operation in economic groups shows inconsistency leading to overlapping and
reducing the performance efficiency of member enterprises in particular and the whole
group in general. Besides, the way economic groups use state funds and assets is
ineffective and unparallel to their given missions; the proportion of capital invested in
non-core fields is high and posing potential risks. Some mistakes at state-owned
economic groups have caused great loss and social unrest.
According to current legal documents, the use of state funds is regulated by the
Law of State Budget and other relevant legal documents. The Government and
governmental agencies are responsible for the use of state funds but the allocation and
monitoring of them are performed by the National Assembly and the National
Assembly's authorities. The position and role of state-owned economic groups have
been confirmed but at present supervisory activities of the National Assembly and the
National Assembly’s agencies at these groups to ensure that their operations are in
accordance with guidelines and policies of the Party and the State are facing
difficulties because it is the pilot model, there are many new problems for both the
legislature and the executive authorities. At the same time, the system of criteria for
performance efficiency has not been finalized. The supervision of the National
Assembly is largely based on the report of the State Audit Office, the Government,
related Ministries and the corporations. Moreover, with the current member structure
of the National Assembly, the ability to capture, understand and analyze financial
information is uneven. This is the reason why supervisory activities of the National
Assembly of state-owned economic groups are not as expected.

Currently, the number of state-owned eonomic groups has risen to 13, all of which
are pilot model without any laws to regulate their operation, while supervisory activities
of the National Assembly are retricted with low efficiency. In fact, since the pilot
establishment of state-owned enterprises began in 2005, the National Assembly made
only one supreme supervision in 2008, then issued a resolution with specific requirements
for the Government to perform and report to the National Assembly in 2009. Since then,
the National Assembly has not performed any supreme or specialized supervision on this
economic sector. Impacts after the supervision are worth attention because after the


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National Assembly issued a resolution, execution of the Government and its
effectiveness do not receive adequate care from the National Assembly. Therefore, the
improvement and enhancing monitoring effectiveness of the National Assembly is an
urgent need because the National Assembly plays an important role in establishing legal
frameworks for the operation of economic groups and supervising their foundation,
operation and performance in order to ensure their efficiency.
Due to the above analysis, the research student selects the topic of Enhancing
supervisory activities of the National Assembly at state-owned economic groups.
2. Overview of research
The economic group model has been applied in some countries. For further
comparable basis, the thesis will research into the operating model, organizational
structure and the management and supervision of corporations in the Republic of
France, South Korea and China.
In Vietnam, as this is the pilot model, it should be analyzed to clarify the legal basis
related to the group's activities, review current regulations for the operation of the group,
and to compare with practical activities to analyze the positive aspects and limitations.

The thesis focuses on collecting documents and reports with contents of the
roles, scale of operation, main business lines and external sectors, management and
use of capital, management mechanism, the implementation of social objectives of
state-owned economic groups based on financial statements (assured by audit results)
and different sources of information (supervision reports of the National Assembly,
agencies of the National Assembly, works of scientists and economists, etc.);
supervision activities of the National Assembly will be explored and analyzed by
method, level of supervision, contents should be mainly based on the reporting system,
exchanging contents and recent practices of supervision of the National Assembly at
state-owned economic groups.
On this basis, research student will also synthesize based on the main
contents as above, however, in order to evaluate closely the real research situation
and to be in accordance with the scope of the study, the authors will summarize by
two research groups: studies of domestic authors and studies of foreign authors.
2.1 Research by domestic authors
Currently, there have been a number of studies related to state-owned economic
groups and supervision activities of the National Assembly on different aspects. Each
work lies in a different aspect and only solves part of the problems related to stateowned economic groups.
Referring to the theoretical and practical development of state-owned economic
groups in Vietnam, there have been a number of elaborate research projects on this
issue, such as the scientific research by PhD. Vu Thi Dau and her associates on
"Developing state-owned economic groups of Vietnam during the period of
international economic integration" (2010), the scientific study by MSc. Ho Thi Huong
Mai on 'Developing economic groups in Vietnam - Theory and practice "(2010) or the
scientific research by PhD. Tran Tien Cuong on "Economic groups - Theory and
international experience applied in Vietnam (2005)". In these studies, the authors have
analyzed specific rationale and practicality of the establishment and development of
state-owned economic groups as well as assessed the impact of international economic
integration on the development of state-owned economic groups in Vietnam (from
2005 to 2010). On this basis, the authors have proposed orientation and solutions to

develop state-owned economic groups when Vietnamese Government implement fully

WTO commitments.
Besides, when referring further to the organizational and operating model of
Vietnamese economic groups, there are articles by experts and researchers like "Legal
framework for the formation and operation of the state-owned economic groups in
Vietnam (2011)” by Assoc.Prof. Dr. Le Xuan Ba, "Some problems arising from the
pilot establishment of state-owned economic groups in Vietnam (2011)" by Prof. Dr.
Nguyen Ke Tuan, "Discussing the organizational model of state-owned economic
groups in Vietnam (2011)" by Prof. Dr. Nguyen Dinh Phan, "The legal status of stateowned economic groups (2011)" by Assoc.Prof., Dr. Nguyen The Quyen and
Assoc.Prof., Dr. Tran Van Nam, "The bottlenecks in the development of state-owned
economic groups (2011)" by Dr. Nguyen Minh Phong. Articles by experts and
researchers present an overview of the process of formation, the real situation of legal
framework for the establishment and operation of state-owned economic groups as
well as to make recommendations and proposals to complete the legal framework in
the future. Notably, in 2010, the Central Institute for Economic Management (CIEM)
published "General report and analysis of international experience in reforming
administration at state-owned enterprises in accordance with international rules and in
monitoring economic corporations and lessons for Vietnam". This report indicated an
overview of reforming administration at state enterprises, experience in supervising
groups in developed countries such as the Republic of France, Germany and other
countries in the Organization for Economic Cooperation and Development (OECD),
China, etc. Through analysis, the report has drawn lessons of experience for Vietnam
in establishing and monitoring state-owned economic groups.
Regarding this problem, research student published an article on "Separating
state ownership function and state management function: Towards a unified and
transparent mechanism" - Economics and Forecasting Magazine No. 24 (2011). In this
study, research student analyzed the necessity to separate the function of state
ownership from state management of state government agencies for state-owned
enterprises for the purpose of removing the problems related to the mechanisms and

policies, thereby creating unity and transparency and improving the efficiency and
effectiveness of state management as well as enhancing autonomy for this economic
sector. This is an important basis to help the National Assembly and National
Assembly agencies to oversee the use of state funds and properties.
Referring to studies of functions of the National Assembly including overseeing
functions, in addition to provisions in Constitution (1992) and legal documents such as
the Law of Organization of the National Assembly (2001), Law of supervision of the
National Assembly (2003), etc., there are many studies on this issue such as "The right
of supreme supervision of the National Assembly and the right of supervision of the
National Assembly agencies (2003)” by Prof. Tran Ngoc Duong, "Supervisory
activities of the National Assembly in other countries and Vietnam, Vietnam National
Assembly – Theoretical and Practical issues (2005)" by PhD. Le Thanh Van,
"Functions of the National Assembly and the implementation of functions (2011)" by
Assoc.Prof., PhD. Dang Van Thanh, etc. In these studies, the authors provides an
overview of the functions of the National Assembly and the implementation of these
functions, with particular emphasis on the overseeing function and analysis of
strengths and weaknesses and the need for innovating this activity of the Vietnam
National Assembly. Further research also includes "Renew and strengthen supervising
activities of the National Assembly (2011)" by PhD. Truong Thi Hong Ha. The author


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focuses on analyzing the perspective of enhancing supervisory activities of
Communist Party of Vietnam in the process of renovating the country, and based on
that basis, assesses the situation and offer solutions to enhance the Party's leadership in
supervisory activities of the National Assembly. The research student also have a
study on "Improving the effectiveness and efficiency of the National Assembly in

supervisory activities during the integration period" (2008), in this study, the author
has systemized the basic theoretical issues of the supervisory activities of the
National Assembly in previous period, assessed the real situation of supervisory
activities of the National Assembly, pointed out the limitations and their causes that
reduce the effectiveness and efficiency of supervisory activities. Through
perspectives, orientation and limitations, the authors have proposed solutions to
improve the efficiency and effectiveness of the supervision of the National Assembly
in the near future. About research related to supervision activities of the National
Assembly at state-owned enterprises in general, including state-owned economic
corporations, there is not much research regarding this issue because economic
corporations are newly established in pilot models, studies mainly focused on the legal
status and group model building. The National Assembly and National Assembly
agencies have recently made a supreme supervision on "The implementation of the
policies and laws in the use of capital and assets at state-owned groups and general
companies (2009). This report clearly shows the rea situation of executing policies and
laws in managing and using capital and assets at state-owned corporations and general
companies, as well as problems in implementing pilot stat-owned economic group
model in the country. At the same time, the report makes recommendations concerning
improving efficiency of using capital and assets at state-owned corporations and general
companies. Then, after their supervision, the National Assembly issued Resolution No.
42/2009/QH12 of the National Assembly on "Enhancing the effectiveness and
efficiency in implementing policies and laws in managing and using capital and assets at
state-owned corporations and general companies" (2009). This resolution is a step to
specify the requirements and recommendations of the National Assembly members
regarding supervision of implementing policies and laws in managing the use of capiatal
and assets at state-owned groups and general companies, through groups of tasks and
specific measures the National Assembly requires the Government to implement and
report the results to the National Assembly.
A research result of the Central Institute for Economic Management (2005) in
"Report on the survey results of economic groups in Malaysia and Thailand",

experience to effectively monitor the performance of economic groups in Malaysia
showed that in order to separate government from enterprises - a key objective to
improve corporate governance, Malaysia has implemented a number of innovations such
as turning groups into companies and making them operate in accordance with corporate
law, hiring representatives from external, non-governmental agencies to hold positions
in the management board or other senior management positions, including general
manager positions and reducing state capital at enterprises.
The research student has articles related to the research topic such as: "From the
proposal to restructure of Vinashin Group: How to monitor the activities of stateowned economic groups?" - Economic Development Magazine, No. 167 (2011) and
"Discussion of monitoring mechanism for the operation of state-owned economic
groups" - Scientific Conference on "Organizational structure and operation of stateowned economic groups (2011)”. Research student has assessed the supervisory

activities of the National Assembly at groups, pointed out the limitations of the
existing supervising activities, and proposed solutions to improve supervisory
activities of the National Assembly at these enterprises. Besides, there are many
articles and conferences mentioning this problem. However, studies only solve part of
the problem related to the development of state-owned economic corporations, raise
some solutions to complete the operating model as well as to monitor the operation of
state-owned economic groups in Vietnam without any criteria for evaluating the
supervisory activities explicitly.
2.2. Research by foreign authors
Research on the model of economic groups and monitoring mechanism for such
groups shows that some countries perform monitoring groups including the the parent
company through monitoring mechanisms and audit. Some countries have established
a special committee of the National Assembly to monitor the parent company when
the parent company is owned by the state. A study of author Anjali Kumar (1992), in
the report "The State Holding Company: Issues and Options, World Bank" indicated
that India applied many auditing and monitoring mechanisms to supervise the
operation of parent companies owned by the state.
In general, works of domestic and foreign scientists related to supervisory

activities of the National Assembly at state-owned economic groups have helped to
complete the system of theories and practices of supervision by the National Assembly
at state-owned economic groups.
The above studies also showed realities and causes of limitations and
shortcomings in the implementation of pilot groups as well as in the monitoring of the
National Assembly, but there has been no study concerning the criteria for supervisory
activities of the National Assembly at state-owned economic groups. Due to the actual
requirements as well as the integration process innovation, it is the inevitable trend of
Vietnam today to renew and complete the theories and practices in strengthening
congressional supervision of state-owned economic groups.
3. Objectives of the study
(i) The thesis focuses on developing a theoretical framework for analyzing
supervision activities of the National Assembly at state-owned economic groups; (ii)
Assesses the real situation of supervision of the National Assembly at state-owned
economic corporations (iii) Develops proposals and recommendations to improve
supervision activities of the National Assembly at state-owned economic groups to ensure
the effectiveness and efficiency of state capital and asset resources at economic groups.
4. Object and scope of research
- Subject of research: Supervisory activities of the National Assembly at stateowned economic groups.
- Scope of research: Supervisory activities of the National Assembly since the
beginning of establishing pilot model of state-owned economic groups from 2005 to 2013.
5. Research contents
With such goals, the thesis will focus on specific research contents as follows:
First, systemize theoretical basis for supervision of the National Assembly at
state-owned economic groups.
Second, study international monitoring experience of state-owned economic
corporations and draw lessons for Vietnam.
Third, reflect the real situation of congressional supervision of state-owned
economic groups with focus on these contents: Contents of monitoring; Tools and

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resources for monitoring; Forms and methods to organize supervisory activities.
Fourth, evaluate supervisory activities of the National Assembly according to
criteria, identify strengths, weaknesses and causes.
Fifth, propose measures to strengthen supervisory activities of the National
Assembly at state-owned economic groups.
6. Research methods
6.1 Method of data collection
Database and secondary data are collected from the monitoring results of the
Standing Committee of the National Assembly, the National Assembly agencies,
reports of some relevant ministries, information on websites and information
synthesized by the author of the following contents:
- The real situation of pilot implementation and performance results of stateowned economic corporations;
- The real situation of supervisory activities of the National Assembly at stateowned economic groups.
Primary data in the thesis is obtained from the survey papers of members of the
National Assembly involved in the supervision of state-owned economic groups.
Details are as follows:
- The author of the thesis has issued 100 survey papers and collected 95 survey papers.
Among that, the number of papers sent to National Assembly members is 80 (the number of
specialized National Assembly members at central level is 40, at local level is 10, and other
National Assembly member is 30); the number of papers sent to economic groups is 05 and
to staff directly advising and assisting committees of the National Assembly is 10.
- The survey paper includes 35 closed questions divided into 3 groups:
•
Group 1: Questions on assessment of the supervisory activities of the
National Assembly (10 questions).

•
Group 2: Questions on assessment of the pilot establishment of stateowned economic corporations (5 questions).
•
Group 3: Questions on assessment of the supervisory activities of the
National Assembly at state-owned economic groups (20 questions).
For each question, there are 5 levels to respond, including the level of strongly
agree, agree, relatively agree, disagree and strongly disagree. Based on the data
collected, the author has synthesized and analyzed them in details.
6.2. Method of analysis and data processing
• Theoretical framework for analyzing the situation:
- The thesis is based on the model of organizational management and
supervision of enterprises in general and economic groups in particular, with focus on
core issues such as comparing results with objectives/standards, combining
administrative control and self-discipline.
- Financial supervision will be based primarily on a system of financial
indicators (financial ratio) to evaluate the efficiency of capital usage at state-owned
economic corporations.
- Use a system of criteria to assess the general supervisory activities of the
National Assembly at state-owned economic groups: relevance, effectiveness,
efficiency, sustainability and equity. Also use the SWOT model to assess opportunities
and threats, strengths and weaknesses of the supervisory activities of state-owned
economic corporations in the context of international economic integration.

● The specific methods used to study the
situation:
research,
survey,
comparison, analysis, synthesis and processing data. Based on the theoretical
framework outlined above, the thesis focuses on analyzing the status of the
supervisory activities of the National Assembly at state-owned economic groups. The

authors also investigated as described in Section 6.1. Based on theoretical and practical
basis, the author will propose and justify his solutions.
7. Outcomes
Based on the research objectives and contents, the thesis provides a system of
criteria to evaluate supervisory activities of the National Assembly; solutions and
proposals to ensure the effectiveness and efficiency of the National Assembly’s
supervisory activities at state-owned economic corporations. These solutions focus on
the contents: completing legal framework, monitoring tools, forms and ways of
organizing supervisory activities, supervision criteria for state-owned economic
groups. This will be the author's contribution in scientific aspect to put theories into
practice for supervisory activities of the National Assembly.
8. Layout of the thesis
Besides the introduction, conclusion, appendices and reference list, the thesis is
structured into three chapters:
Chapter 1: Theoretical basis for the National Assembly’s supervision of
state-owned economic groups
Chapter 2: Analysis of supervisory practice of the National Assembly at
state-owned economic groups
Chapter 3: Solutions to enhance supervision of the National Assembly at
state-owned economic groups

CHAPTER 1
THEORETICAL BASIS FOR THE NATIONAL ASSEMBLY’S
SUPERVISION OF STATE-OWNED ECONOMIC GROUPS
1.1. General theoretical basis for supervisory activities
1.1.1. The concept of supervision
Supervision is the monitoring and review of the management subject that has the
right to monitor other entities to make judgement and assessment of their activities or can
be understood as monitoring and checking for proper implementation of regulations.
1.1.2. Characteristics of supervision

First, supervision is always an activity of power (execute power) and always
brings legal consequences.
Second, supervision is always a purposeful activity.
Third, supervision is always associated with a certain subject.
Fourth, supervision is always associated with a specific subject.
Fifth, supervision should be conducted on the basis of mutual rights and
obligations of both the subject and the monitored object.
Sixth, supervision should be conducted based on certain grounds.
Seventh, supervision should be carried out continually, regularly and receive
continual feedback to improve the implementation of goals.
1.1.3. Classification of supervision
- Supervision with state power: This type of supervision is carried out by authorized


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state agencies based on the principles of state power division.
- Supervision with no state power: This type of supervision is carried out by non-state agencies.
1.1.4. Distinguish supervision, checking and inspection
Supervision, checking and inspection all employ state power. These activities are
inevitable and objective in all states of all eras.
1.1.5. Principles of supervisory activities
(i) The principle of ensuring the leadership of the Communist Party of Vietnam
in supervisory activities, (ii) The principle of democratic centralism, (iii) The principle
of socialist legislation, (iv) The principle of accuracy, objectiveness (v) The principle
of ensuring to ensure openness and (vi) The supervisory system should be designed
simply and easy to perform at all levels and ensure effectiveness.
1.1.6. Forms of supervision

Forms of supervision are the outward expression of supervisory activities. There
are many different forms of supervision depending on ways of classification or also
called bases of classification, for example, based on scope and scale, there are
comprehensive supervision, specialized supervision and incident supervision; based on
plan, there are scheduled supervision and unscheduled supervision.
1.1.7. Methods of supervision
(i) Collect information, records, documents and other related documents, (ii)
Research, compare and statistic, (iii) Collect opinions from organizations and
individuals; (iv) Consult experts, (v) Convince monitored objects to co-operate with
monitoring subjects.
1.1.8. Content monitoring
(i) Review of legal documents, (ii) Review and evaluate capacity, qualifications
and responsibilities of individuals elected and ratified by the National Assembly, (iii)
Review, monitor the implementation of policies and laws, (iv) Resolve complaints and
denunciations of people; (v) review the resolution of petitions.
1.1.9. Tools of supervision
(i) Legal documents, (ii) supervisory plan, (iii) Records and documents on supervisory
contents, (iv) Minutes, document samples in the implementation process of supervision.
1.1.10. The supervisory process
Step 1: Collect information → Step 2: Develop supervisory program and plan →
Step 3: Analyze the legality and reasonableness of the incident → Step 4: Reflect to
the monitored object → Step 5: Write report of supervisory results → Step 6: Enhance
checking and monitoring the implementation of supervisory results.
1.2. The supervisory function of the National Assembly
1.2.1. The National Assembly and its functions
The National Assembly of all countries in the world despite of bicameral or
single model has 3 basic functions, namely legislation, supervision and decision of
important issues of the country.
1.2.2. Supervision of the National Assembly
1.2.2.1. Objectives of supervision of the National Assembly

Supervisory objectives of the National Assembly are to ensure that the activities
of law enforcement agencies can meet the regulations set by the National Assembly.
1.2.2.2. Basic characteristics and contents of the right to supreme supervision of the
National Assembly
- Basic characteristics: (i) Supreme supervision of the National Assembly is
supervision with state power; (ii) Only the National Assembly is single authority with the

right to supreme supervision.
- Objects being supervised: The highest authorities in the state apparatus.
- Contents of the right to supreme supervision of the National Assembly: (i) Monitor
and check the constitutionality of legal documents and activities of the President, the
Standing Committee of the National Assembly, the Government, the Supreme People's
Court, the Supreme People’s Procuracy, (ii) Handle violations of the Constitution and laws.
1.2.2.3. Means of implementation and results of supreme supervision of the National Assembly
Examine reports of the President, the Standing Committee of the National
Assembly, the Government, the Supreme People's Court, the Supreme People's
Procuracy; National Assembly members question the President, the Chairman of the
National Assembly, the Prime Minister, ministers and other members of the
Government, Chief Justice of the Supreme People's Court, Head of the Supreme
People's Procuracy with presence of the National Assembly at sessions of the National
Assembly or with presence of the Standing Committee of the National Assembly in
the period between two sessions (if assigned by the National Assembly).
In addition, the right to supreme supervision of the National Assembly is guaranteed
through supervisory activities of the National Assembly agencies and its members.
- Monitoring Results of Congress
(i) Suspend, cancel documents issued by the above agencies that are against
Constitution, laws and resolutions of the National Assembly, (ii) Decide the
amendment, supplement, issue new documents to meet the requirements of state and
socio-economic management, (iii) Consider the responsibilities of those holding
positions elected or approved by the National Assembly.

- Forms of exercising supreme supervision
Examine reports of the President, the Standing Committee of the National
Assembly, the Government, the Supreme People's Court, the Supreme People's
Procuracy; execute the right to question of the National Assembly members during
each session and between two sessions of the National Assembly; supervise the actual
compliance of the Constitution, laws, ordinances, resolutions when necessary; consider
complaints and denunciations of citizens at National Assembly sessions.
1.3. Some basic features of state-owned economic groups
1.3.1. The concept of economic group and state-owned economic group
1.3.1.1. The concept of economic group
Economic group is a collection of companies operating in different markets under
the same financial or administrative control, in which its members are bound together
by the tie of mutual trust based on the basis of race or commercial context.
1.3.1.2. State-owned economic group
State-owned economic group is understood as a group of large-scale companies
connected in the form of parent company - subsidiary and other forms, creating a
combination of enterprises closely related in the long term. State-owned economic
group contains factors of economic groups and the state, including: (1) The parent
company (Level I enterprise) is an enterprise whose charter capital are owned 100% or
dominated by the State; (2) Subsidiaries of level I enterprise (level II enterprises) are
enterprises dominated by the level-I firm and are organized in forms of joint stock
companies, limited liability company of one or two members, general companies in the
form of parent company - subsidiary, joint venture; (3) Subsidiaries of level-II and
other leveled enterprises; (4) Associated enterprises of the group.
1.3.2. Roles of state-owned economic groups


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(i) Allow the promotion of large- scale economy advantage, (ii) Hold the
key role of state economics in the economy, (iii) The important tool of the state in
regulating market (iv) Implement major policies to address social issues.
1.4. Monitoring of Congress for the State economic groups

through research, direct survey and collected from financial statements, audit
reports or other sources of information.
1.4.5.3. Forms of supervision of the National Assembly at state-owned economic groups
a) Examine reports, b) Monitor according to specialized topics and organize
supervisory delegation, c) Questions and answer questions, d) Examine legal texts, e)
Confidence vote, f) Establish Interim Committee
1.5. International experience of supervising state-owned economic groups
and lessons for Vietnam
Through study of state-owned economic group model and supervisory
mechanism of this type of enterprise in the Republic of France, South Korea and
China, the author can draw some experience for Vietnam as follows :
- State-owned economic group's activities need to be placed under strict
supervision of the National Assembly to ensure that the group's activities are
transparent, open and efficient.
- Study to establish a specialized ministry or agency of the Government to
perform the function of state capital owner at large-scale state general companies,
groups and enterprises.
- Closely manage the process of expansion to avoid risks if the Government are
unable to control the excessive expansion of corporations.
- Handle the relationship between competition and monopoly.

1.4.1. The concept of supervision of the National Assembly at state-owned economic groups
To better the business operations and financial performance of economic
groups, the National Assembly plays an important role in creating legal framework

for economic groups to operate, and at the same time supervise closely the process of
formation, operation and executing functions of economic groups and ensure that
they operate effectively.
1.4.2. The inevitability of supreme supervision of the National Assembly at state-owned
economic groups
First, issue legal framework to regulate the activities of state-owned economic groups
in accordance with guidelines, policies and laws of the State.
Second, adjust the activities of state-owned economic groups in a timely manner as a tool to
regulate macroeconomy which other economic sectors are unwilling or unable to perform.
Third, supervision of the National Assembly at state-owned economic groups is one
of the tools for the State to manage macroeconomics at this economic sector to ensure that
the management and use of state capital is efficient and up to expected objectives.
1.4.3. Objectives and evaluation criteria of the National Assembly supervision at
state-owned economic groups
1.4.3.1. Supervisory objectives of the National Assembly at state-owned economic groups
Develop a policy and legal framework suitable with state-owned economic
groups and state management bodies; ensure that policies and laws are implemented
effectively and efficiently to improve the performance of state-owned economic
groups and state management capabilities.
1.4.3.2. Evaluation Criteria for Congressional oversight of state corporations
Enforceability - Suitability – Equality - Compatibility - Sustainability
1.4.4. Supervisory contents of the National Assembly at state-owned economic groups
- Examine the system of legal documents related to state-owned economic groups
- Examine action contents of state-owned economic groups
- Examine the efficiency of business performance at state-owned economic groups
- Examine the implementation of political tasks and the management of state
capital and properties of state-owned economic groups
- Examine other tasks such as human resource and labor management
1.4.5. Methods, tools, forms and organization of supervisory activities of the
National Assembly at state-owned economic groups

1.4.5.1 Methods of supervisory activities of the National Assembly at state-owned
economic groups
- Supreme supervision: This is the method that the National Assembly will
exercise its right to supreme supervision with state-owned economic groups at plenary
sessions of the National Assembly.
- Supervision of specialized topics or through agencies of the National Assembly.
1.4.5.2. Supervisory tools of the National Assembly at state-owned economic groups
First, legal framework for supervisory activities of the National Assembly at
state-owned economic groups.
Second, supervisory plan.
Third, records and systems of data about state-owned economic groups obtained

CHAPTER 2
ANALYSIS OF SUPERVISORY PRACTICE OF THE NATIONAL
ASSEMBLY AT STATE-OWNED ECONOMIC GROUPS
2.1. The real operating situation of state-owned economic groups
2.1.1. Guidelines of the Party and the State of state-owned economic groups
Session 7 of the Communist Party Central Congress, Term VII confirmed “the
establishment of some major economic organizations for the purpose of high
accumulation and concentration of capital to build competitiveness in the world market".
Session 4 of the Communist Party Central Congress, Term VIII determined the
duty of "Summarizing the model of state-owned general companies, based on that
design a plan to turn general companies into strong economic groups with high
efficiency and competitiveness, making them the real spine of the economy ... ".
The 9th National Congress of the Party advocated to "Build some strong economic
groups on the basis of state-owned general companies with the participation of all
economic sectors". To specify this policy, Resolution of Session 3 of the Communist
Party Central Congress, Term IX oriented to "establish some powerful economic groups
on the basis of state-owned general companies with the participation of all economic
sectors, diversify businesses, highly specialize the core business and play a dominant role

in the national economy with large-scale capital, ... pilot some economic groups in some
potential areas that have strength and ability to compete and integrate into the
international economy... ".
This view is confirmed again in the 10th National Congress and at the 12th
National Congress, it is clearly stated that: "Promote innovation, equitization, improving
the efficiency of state-owned enterprises; build some strong economic groups with
multi-ownership, of which state ownership remains dominant, restructure business lines


12

13

of state-owned economic groups and general companies so that state-owned
enterprises actually become the core factor of the state economy". This is an important
basis to guide the formation and development of state-owned economic groups.
2.1.2. Legal framework for the operation of state-owned economic groups
In the system of legal documents related to the operation of economic corporations,
there are two important laws, namely the Law of Enterprise and the Law of StateOwned Enterprise. Law of State-owned Enterprise 1995 (out of effect from 1/7/2010)
marked an important innovation in the management of state-owned enterprises and
created a higher legal basis for the operation of state-owned enterprises.
After Law of State-Owned Enterprise 2003 and Law of Enterprise 2005, the
Government issued a number of decrees on the duties and rights of state management
bodies for state-owned enterprises. On 5/11/2009, the Government issued Decree No.
101/2009/ND-CP on piloting the establishment, organization, operation and
management of state-owned economic groups.
2.1.3. The number and scale of economic groups in Vietnam
By the end of 2012, there are 13 state-owned economic corporations established
in pilot model, including 12 state-owned economic groups decided to be established by
the Prime Minister and 1 economic groups whose project of equitization and pilot

model was approved by the Prime Minister, the Ministry of Finance is authorized to
establish the parent company (Bao Viet Finance – Insurance Group).
Table 2.2: Ownership structure and industry characteristics of
state-owned economic groups
State
No.

Group

ownership at
the parent

Core businesses

company

1

Vietnam National Coal and Mineral Holding
Corporation

100%

2 Vietnam Post and Telecommunications Group

100%

3 Vietnam Rubber Group

100%

4

100%

Vietnam Shipbuilding Industry Group

5 Vietnam Oil and Gas Group

100%

6 Vietnam National Textile & Garment Group

100%

Coal and mineral
industry, metallurgy,
electricity, explosive
industrial materials,
mechanics,
shipbuilding and
automobile.
Telecommunications
and information
technology
Planting, harvesting,
exploiting and
processing rubber
Building,
repairing,

ships and marine
transport
Explore, exploit, process
and distribute oil and gas
Textile and garment

7

Vietnam Electricity Group

8

Bao Viet Group

9

Viettel Group

100%
74,17%
100%

10 Vietnam National Chemical Group

100%

Vietnam Housing and Urban Development
Group

100%

12 Vietnam Industrial Construction Corporation

100%

13 Vietnam National Petroleum Group

75%

11

Electricity,
telecommunications
and electric mechanics
Financial services
Telecommunications
and
information
technology
Chemical industry
Investment
in
housing and urban
development
Construction
and
general contractor
Petroleum
export,
import and sales, oil

refinery

Source: Synthesized from websites of the Government and groups
On 2/10/2012, the Prime Minister issued Decision No. 1428/QD-TTg identified
the end of the pilot models of Vietnam Industrial Construction Corporation (VNIC)
and Vietnam Housing and Urban Development Group (HUD) because they did not
achieve expected objectives.
2.1.4. Overall assessment of state-owned economic groups
2.1.4.1. Positive aspects
The implementation of state-owned economic group model with combinations of
large-scale enterprises has shown that this is a correct policy of the Party and the State
and is an appropriate step to enhance the capacity of accumulation, concentration,
competition and maximize the benefits of affiliated groups and general companies.
State-owned economic groups are enterprises operating in key sectors, playing
a leading role in ensuring major balances, production and supply of essential products
and services in the economy. Besides innovating state management method for
enterprises, regulations of financial management at state-owned economic groups have
also changed so that the efficiency of scale and business performance of corporations
are gradually improved over the years.
2.1.4.2. Limitations and Causes
Legal framework related to state-owned economic groups is not unified and
consistent yet and is unsuitable with characteristics of state-owned economic groups.
The model and method of operation of state-owned economic groups though
has progress but there are still some shortcomings that limit the quality of management
and use of state capital and assets at groups. The function of ownership representation
is fragmented and overlapping so responsibilities in management are unclear.
The mobilization of too much capital for investment and diversification of
business lines, the establishment of too many subsidiaries, associated companies
operating in many areas and business lines of some groups, while management and

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financial capacity are limited has led to high debt/equity proportion, negatively
affecting the financial capacity and the efficiency of capital at groups.
Some groups still spread their investment without focusing on their core
businesses or mainly make capital contribution to joint-stock commercial banks,
securities companies, securities investment funds, insurance and real estate companies
with large amount of money, leading to the risk of state capital loss.
2.2. Status of organizing supervisory activities of the National Assembly at stateowned economic groups

The Standing Committee of the National
Assembly
has
written
supervisory report and it was presented in front of the National Assembly by the leader
of the supervisory delegation of the Standing Committee of the National Assembly.
2.3. Results of supervisory activities of the National Assembly at state-owned economic groups

2.2.1. Supervisory objectives of the National Assembly at state-owned economic groups
To evaluate the promulgation and implementation of policies and laws on the
management and use of state capital and assets at state-owned groups and general
companies; thus, see the results achieved in business activities of state-owned groups
and general companies, problems in the system of legal documents and the difficulties,
limitations, weaknesses in implementation; clarify the causes and responsibilities of all
levels, the ministries/sectors and economic groups; thereby offer suggestions and
recommendations to improve the system of laws, implement policies and laws on the
management and use of state capital and assets more strictly and effectively,

consolidate and improve the operational efficiency of economic groups and make
recommendations to improve the system of laws and strictly implement more effective
policies and laws on the management and use of state capital and assets.
2.2.2. Status of the implementation of supervisory activities
2.2.2.1. Organizating supervisory delegation based on the Resolution of the National Assembly
At the 4th session of the National Assembly, Term XII, the National Assembly
approved Resolution of supervisory program in 2009, including supreme supervisory contents
of compliance in mechanism, laws and policies of the use of capital and assets at state-owned
economic groups and general companies. Based on the Resolution of the National Assembly,
the Standing Committee of the National Assembly issued a Resolution on establishing
supervisory delegation to monitor the activities of state-owned economic groups.
2.2.2.2. Organizing supervisory delegation to work with monitored objects being stateowned economic groups and write supervisory reports
a) Examine reports
At the request of the supervisory delegation, there were 11 ministries, ministerial-level
agencies, 6 localities and pilot economic groups sent their reports to the supervisory
delegation. Reports of ministries, ministerial-level agencies and economic groups sent to the
supervisory delegation draw a relatively comprehensive picture of the implementation of
mechanisms, policies and laws in the use of state capital, assets at economic groups .
b) Organizing supervisory delegation
The supervisory delegation has worked with some ministries such as the Ministry
of Planning and Investment, Ministry of Finance, Ministry of Transport, Ministry of
Industry and Trade, the State Bank, State Capital Investment Corporation (SCIC),
PetroVietnam, EVN, Vinashin... and at the same time, establish groups to monitor in
localities, survey and monitor in depth some specific contents based on the requiremnets
of the supervision and the guidance of the supervisory delegation’s leader.
c) Write supervisory report and present supervisory results at sessions of the
National Assembly

2.3.1. Key findings from supervision
2.3.1.1. Legal framework of policies related to capital and asset management at stateowned economic groups since the pilot establishment has been initially completed.

Supervision showed that the promulgation of legal documents related to the
implementation of policies and laws on state capital and asset management at groups has
received attention from the government and related agencies. They have been designed
relevant to guidelines, policies and resolutions of the Party to form a legal framework
for corporations and geneeral companies to operate and manage state capital and assets.
However, apart from the positive sides, there are limitations and shortcomings; for
example, some legal documents are slow in issuance, amendament and supplement to be
suitable, consistent and uniform, at the same time they have not caught up with the real
development of the market; the assignment of rights and obligations of state ownership at
corporations are fragmented, yet fully separate ownership function and state
administrative function in accordance with Enterprise Law; models and methods of
internal management within the group have made progress but there are still shortcomings
that limit the quality of management and use of state capital and assets; slow in building a
system of safety criteria in terms of finance in business performance of groups and general
companies to lay the foundations for state supervision and management.
2.3.1.2. Most state-owned economic corporations have preserved state capital and assets
and contributed significantly to socio-economic development of the country.
2.3.1.3. Financial structure of some state-owned economic groups is not really sustainable.
2.3.1.4. Efficiency of capital use in some state-owned economic groups is low and affects the overall
performance of the state economic sector, particularly there is the situation of corporations
investing outside their industries too much resulting in a loss of state capital and assets.
2.3.1.5. These groups are currently assigned to hold a large volume of state assets,
which is land but usage efficiency is not high
2.3.1.6. Some economic corporations are in jeopardy and financially alarmed.
2.3.1.7. Methods of managing state capital is inadequate due to slowliness in building
a system of safety criteria in terms of finance in the operation of groups to function as
the basis for state supervision and management
2.3.1.8. The implementation of the tasks of ensuring major balances of the economy,
social security, politics and defense is done positively.
2.3.1.9. Transparency of information at state-owned economic groups reveals

shortcomings and fails to meet the requirements.
2.3.2. Recommendations and suggestions are made after supervisory activities of
the National Assembly at state-owned economic groups
- Increase the accountability of state management agencies for capital and
assets at state-owned economic groups;
- Perform thorough separation of state administrative function from
ownership right implementation function;


16

17

- Review and evaluate the operation of corporations and general
companies to take measures reorganize and strengthen economic groups that have
difficulties or operating weakly;
- Develop a system of effective testing and monitoring of capital and asset
management at corporations and general companies, and at the same time improve
the responsibility of management agencies;
- Specify the responsibilities of efficiency in business performance at enterprises;
- Complete the legal framework for the operation of groups.
2.3.3. Results of implementing recommendations after the supervision
At Session 6 of the National Assembly, Term XII, the National Assembly
issued Resolution No. 42/2009/QH12 dated 27/11/2009 on improving the effectiveness
and efficiency when executing policies and laws of management and use of capital and
assets at state-owned corporations and general companies.
At Session 8 of the National Assembly, Term XII, the Government announced Report
No. 163/BC-CP dated 1/11/2010 on the following contents: Improving the effectiveness and
efficiency of implementing policies and laws of management and use of state capital and
properties at state-owned corporations and general companies. The Economic Committee

of the National Assembly also had some ideas about the organization and implementation
of Resolution 42 of the National Assembly, with emphasis on proactiveness and positivity
of the Government, ministries, localities and enterprises.
Then, on 23/11/2011, the Government had Report No. 262/BC-CP on the
operating status of state-owned economic groups and general companies between 2006
and 2010 and orientations, duties and solutions for the 2011-2015 period according to
some of the contents in Resolution No. 42 of the National Assembly. The report states
clearly the results of financial position, production and business performance,
investment in non-core businesses, reorganization and innovation within enterprises...,
shortcomings and difficulties with specific measures to restructure state-owned
enterprises with focus on state-owned economic groups and general companies.
2.4. Assess the supervisory activities of the National Assembly at state-owned
economic groups based on monitoring criteria
2.4.1. The efficiency of supervision
Through survey data on compliance and implementation of the conclusions and
recommendations after supervision (also called supervisory efficiency), it shows that
the total number of ”strongly disagree” and ”disagree” opinions accounts to 47.4%
(”strongly disagree” ratio is 7.9% and ”disagree” is 39.5%) when assessing the
implementation of recommendations after supervision by the National Assembly.
Thus, the effectiveness of current supervision is not high, the survey results also reflect
that the reality of monitoring efficiency is a weak point in supervisory activities.
2.4.2. Suitability of supervision
The suitability of supervisory activities of the National Assembly shall consider the
compatibility between supervision compared and existing regulations and compare between
supervisory objectives and the addressed problems and needs. By analyzing the survey
results, it shows that the rate of “relatively agree”, “agree” and “strongly agree” with the
supervisory contents of the National Assembly focusing on policies and laws, and operating
fields and business performance is really high, specifically the ratios of legal system,

operating field and business performance are 94.7%, 84.3% and 89.6% respectively.

Results obtained from supervisory activities are consistent with the objective
of further improving the system of policies and laws on the management and use
of state capital and properties. However, considering the time organizing supreme
supervisory activities in 2008 and then the Government reported on the
implementation of the National Assembly’s Resolution in 2009, though it is
necessary, ever since then there has been no supervisory mission. This shows that
supervisory activities have not met the requirements of reality.
2.4.3. Equity of supervision
Initial supervision ensures fairness through the introduction of judgement,
evaluation and conclusion for monitored objects, namely the policies and laws on the
management and use of state capital and assets, the state administration (ministries)
and the observance of policies and laws at state-owned economic groups.
2.4.4. Compatibility of supervision
Supervisory goals of the National Assembly at state-owned economic groups
lie in a unified system and are closely related to each other, low-level goals are a
means to achieve higher goals. Through the survey, 71.1% of respondents agree
and 13.2% strongly agree with the goal of the National Assembly's supervision,
which is to focus on monitoring the implementation of policies and laws on the
management and use of state capital and assets. However, judging related policies
and laws, 26.4% of the respondents disagree on this content. This shows that,
after monitoring, the improvement of policy and laws on the management and use
of state capital and assets is just the beginning, it does not cover all the contents
related to the operation of corporations.
2.4.5. Sustainability of supervision
The ultimate goal of supervision is to ensure completing policies and laws on
the management and use of state capital and assets at state-owned economic
groups and supervision should be considered as one of the tools to manage
macroeconomy of the state. Survey results show that supervisory targets and
recommendations have been implemented and have positive influence in a certain
period of time after the end of supervision.

2.5. Success and limitations in supervisory activities of the National Assembly at stateowned economic groups

2.5.1. Success in the National Assembly’s supervision at state-owned economic groups
and causes
2.5.1.1. Success in the National Assembly’s supervision
First, having supervised the whole system of legal documents related to stateowned economic groups.
Second, having performed overall supervision of operating fields of stateowned economic groups.
Third, having performed thorough supervision of effectiveness and business
performance of state-owned economic groups.
Fourth, having proposed judgement as well as conclusions and recommendations
after supervision in a timely, objective, suitable and feasible manner.
2.5.1.2. Causes of success in the supervision of the National Assembly at state-owned


18
economic groups
Causes of this success comes from practical requirements, particularly from the
selection of supervisory contents, implementation of supervision, making conclusions
and monitoring the execution of recommendations after supervision.
2.5.2. Limitations in the National Assembly’s supervision at state-owned economic
groups and causes
2.5.2.1. Limitations in the National Assembly’s supervision
First, limitations in supervisory resources.
Second, limitations in methods and forms of supervisory organization.
According to survey data, the proportion of “disagee“ opinions on form of confidence
vote is 26.3% and the proportion of „disagree“ opinions on the establishment of an
Interim Committee is 39.4%.
Third, limitation in capacity of National Assembly deputies in understanding
and catching up with specialized problems in economics is different.
Fourth, limitation in monitoring recommendations after supervision. This is still

a weak chain in the National Assembly supervisory activities as the monitoring of
supervisory objectives has not been carried out drastically.
2.5.2.2. Causes of limitations in the National Assembly’s supervision at state-owned
economic groups
Causes of limitations in the National Assembly’s supervision at state-owned
economic groups mainly arise from the representative mechanism of the National
Assembly at present. Besides, regulations related to resources have not met
requirements in the implementation of supervisory activities and there is a lack in
bonding and monitoring mechanism for the execution of supervisory conclusions.
Analysis and assessment of success and limitations in supervisory activities of
the National Assembly at state-owned economic groups show that in order to
improve supervisory activities of the National Assembly with this economic sector,
it is necessary to solve the following fundamental problems:
First, make an assessment and summary of the group model, based on that,
make solutions to tackle weaknesses and promote strengths that are suitable with
Vietnam. Promote the process of economic structure associated with innovating
growth model with one of key focuses being restructing state-owned economic
groups and general companies.
Second, complete the legal framework related to the operation of groups.
Third, build criteria for the business performance of groups such as core
businesses, efficiency of capital usage. This is an important basis for the National
Assembly to supervise the operation of state-owned economic groups.
Fourth, continue to research and innovate methods and forms of the National
Assembly’s supervision at state-owned economic groups.
Fifth, enhance adequate resources for National Assembly agencies and deputies
in organizing supervision.

CHAPTER 3

19

SOLUTIONS TO ENHANCE
SUPERVISION OF
THE NATIONAL ASSEMBLY AT STATE-OWNED
ECONOMIC GROUPS
3.1. The system of views on supervisory activities of the National Assembly at
state-owned economic groups

3.1.1. Orientations for the development of state-owned economic groups between 2011
and 2020
Documents of the 11th Congress of the Party confirmed that: It is necessary to
restructure business lines of state-owned economic groups and general companies with
focus on some core areas of the economy[12].
Socio-economic development plan from 2011 to 2020 approved at the 11th
Congress of the Party states clearly that: Continue to innovate and improve the
efficiency of business performance at state-owned enterprises, especially economic
groups and general companies. Quickly complete the institution to manage operation
of state-owned groups and general companies. Speed up the equitization in stateowned enterprises; build some strong economic groups with diversified ownership, of
which state ownership is dominant.... Encourage the private sector to contribute capital
in state-owned economic groups.
Resolution of the National Assembly on socio-economic development plan in 5
years from 2011 to 2015 issued at Session 2 of the National Assembly Term XIII
confirmed that: Focus on restructuring the economy in 3 important fields including
restructuring investment emphasizing on public investment; restruturing the financial
market emphasizing on commercial banks and financial institutions; restructuring
enterprises emphasizing on state-owned economic groups and general companies,
prepare necessary conditions in 2012 to make strong and clearly effective
transformation from 2013 to 2015 [24].
With the above meaning, management authorities have guidelines to continue
completing state-owned economic groups between 2011 and 2015 with vision of 2020. At

the moment, all operating state-owned economic groups have been built and the Prime
Minister have examined and approed restructuring project for the 2011 – 2015 period.
3.1.2. View 1: Supervisory activities have to be conducted base on the basis of
jurisdictional state
Innovating the National Assemblly in general and supervisory activities of the
National Assembly in particular is not a subjective intention of the National Assembly, it
arises from objectives requirements suitable with objective rules. With that perception,
innovating supervisory activities of the National Assembly at state-owned economic
groups arises from requirements of building socialist jurisdictional state of the people, by
the people and for the people.
3.1.3. View 2: Supervisory activities should ensure socio-economic development in
the period of enhancing industrialization and modernization of the country
Economic development has been determined by the Party and the State as the
central duty in the construction of the country. Supervisory activities of the National
Assembly, along with checking and inspection, are important factors contributing to
the establishment of favourable legal environment for economic development.
3.1.4. View 3: Supervisory activities should be associated with the determination to
renovate politics


20

21

Innovating supervisory activities of the National Assembly is an important
factor contributing to the successs of socio-economic development plan in the 2011 –
2020 period. With the current political institution in Vietnam, the condition to renovate
this activity is the determination of the political system starting from the thinking of
leaders of the Party about supervisory activities of the National Assembly.
3.2. Solutions to improve supervisory activities of the National Assembly with

state-owned economic groups
3.2.1. Completing legal framework related to state-owned economic groups
In order to optimize advantages of forming state-owned economic groups, in
the coming time, to construct model suitable with our country, some core solutions as
below should be taken:
3.2.1.1. Completing the model of state-owned economic groups
Make profound and comprehensive summary and assessment of strengths and
weaknesses of the state-owned economic group model, particularly with currently
operating state-owned economic groups, thereby, decide whether to allow the esblishment
of new state-owned economic groups.
3.2.1.2. Enhance the legal status of state-owned economic groups
With limitations in the pilot establishment of state-owned economic groups
resulting from legal problems, it is an objective requirement to complete legal framework.
3.2.1.3. Complete legal documents related to the management and use of state capital
at state-owned economic groups
Research to construct an act on the investment and trading of state capital and
assets at state-owned enterprises. This is an important issue to create the maximum
legal basis for the use of state capital and assets at state-owned economic groups.

National Assembly Organization.
3.2.4. Renovate contents, forms and methods of supervision of the National
Assembly at state-owned economic groups
First, the National Assembly needs to implement supervisory activities, make
serious and objective assessment and judgement of the path and method to establish
state-owned economic groups in our country to withdraw lessons and make proper
adjustment and policies.
Second, the National Assembly needs to strengthen their supervision of the
development of state-owned economic groups by their protective policy and mobilized
and borrowed funds.
Third, the National Assembly needs to monitor the process of restructuring

groups under various forms. Enhance and control the equitization of state-owned
economic groups and promote their listing on securities market.
Fourth, continue to improve awareness and method of implementing supervision
so as to enhance quality and ensure that laws are obeyed strictly in the field of usage of
state capital and assets at state-owned economic groups.
Fifth, tackle the situation of broad supervision lacking depth; promote specialized
supervision and supervision of state agencies.
Sixth, continue to innovate questioning activity in the orientation of solving each
questioned problem in depth. Under the circumstance that the National Assembly hold
only 2 session/year, it is necessary to enhance explanatory session at the Standing
Committee of the National Assembly, Ethnic Board and Committees of the National
Assembly on problems related to the use of state capital and assets at state-owned
economic groups.
Seventh, study and complement regulations of authority, order and procedure of
confidence vote for positions appointed or approved by the National Assembly. In the
aspect of state management, faults at economic groups are associated with the
responsibilities of agencies in each field.
Eighth, renovate and enhance the effectiveness of supervisory activities of the
National Assembly such as innovating the method of supervison, the mechanism to
attract experts in order to enhance supervisory results
3.2.5. Enhance supervisory capacity of the National Assembly’s agencies and deputies
A strong National Assembly is a National Assembly with two strong pillars,
National Assembly agencies and deputies, that are able to perform functions of the
National Assembly. Supervisory capacity includes factors of organization, spirit and
skills of deputies. To enhance supervisory capacity of National Assembly agencies and
deputies is to improve the quality of organizing supervisory activities and improve
spirit and skills of supervision of deputies.
3.2.6. Improve resources for supervisory activities
- Ensure that the structure of National Assembly deputies is renovated in the
direction of increasing the number of specialized deputies in the National Assembly

agencies and delegations.
- Complement mechanism to monitor the implementation of supervisory
conclusions and recommendations on the operation of economic groups.
- Improve the organization and operation of agencies assisting National
Assembly agencies and delegations in terms of human resources and capabilities of
staff directly assisting agencies and delegations.
- Enhance budget for activities of National Assembly deputies: Form proper

3.2.2. Enhance awareness of supreme supervisory function of the National Assembly
The National Assembly executes its supreme supervisory right with all state
actitivities to ensure their effectiveness and efficiency, plays an important role in
avoding right abuse of authorized state agencies, enhances the responsibilities and
capabilities of each individual appointed and approved by the National Assembly;
ensures state power in execution and jurisdiction, belongs to people and better its
service for people. At the same time, supervisory activities have positive effects on the
execution of the National Assembly’s obligations and duties on legislation and
decision of important issues of the country with better quality and more suitable with
the will and expectation of people. It can be confirmed that if supervisory activities of
the National Assembly tend to be formal without effectiveness and efficiency, the
National Assembly will not fully execute its obligations and rights of supervison and
also affect the quality of legislation and decision of important issues of the country
assigned by the people.
3.2.3. Enhancing supervisory activities of the National Assembly should be
synchronized with the innovation of organization and activities of the National
Assembly in legislation and decision of important issues of the country
Supreme supervision of all state activities is just one of the three fundamental
functions of the National Assembly. Therefore, renovating supervisory activities must
be carried out synchronically with the innovation of organization and operation of the
National Assembly. In order to renovate supervisory activities of the National
Assembly to improve effectiveness and efficiency of supreme supervision, it is

necessary to build a strong National Assembly with complete and adequate
implementation of rights and obligations as regulated in the Constitution and Law of


22
financial mechanism to help deputies employ experts to serve supervisory works,
thereby, mobilize social intellectuals to serve supervisory activities of the National
Assembly.
3.2.7. Provide criteria to supervise the operation of state-owned economic groups
KPI is the abbreviation of Key Performance Indicator. This is a management
instrument to control, measure and analyze the probability of achieving goals of stateowned economic groups.
The National Assembly should provide criteria to monitor and measure the level
of goal achieving at state-owned economic groups. KPI - Key Performance Indicator
is a management instrument to measure and analyze the probability of achieving goals
of state-owned economic groups.
Two important requirements of determining and establishing KPI are reflecting the
goals of state-owned economic groups and being quantitative (measurable). KPI in the
National Assembly’s supervision can be indexes related to financial efficiency, market,
competition, human resources management, quality, environment and especially state
capital at state-owned economic groups. When forming such indexes, it is necessary to
ensure the SMART principle: Simple - Measurable - Agreed-upon -Relevant - Timely.

23

CONCLUSION
Supreme supervision of the National Assembly in the establishment of a socialist
jurisdictional state of the people, by the people and for the people in Vietnam is an
important content that is being studied and made clear in both theoretical and practical
aspects. Due to practical requirements, the National Assembly has supervised
operation of the state apparatus in various socio-economic aspects, including

enhancing supervision at state-owned economic groups – this pilot model is the object
of supervision and the problem is how the National Assembly will supervise such
enterprises, which solutions to take and what conditions are necessary to ensure the
real effects of supervisory activities.
However, problems mentioned in the thesis are just the beginning and cannot be
considered as complete reflection. Based on using synthetic research methods and
theories, the thesis has achieved research objectives and duties.
First, present an overview of problems related to theoretical basis for
supervisory activities of the National Assembly at state-owned economic groups;
international experience of supervision at state-owned economic groups in the
Republic of France, South Korea and China and lessons for Vietnam. At the same
time, confirm the inevitability of National Asssembly’s supervision at state-owned
economic groups and present the system of tools, forms and methods of criteria to
assess the National Assembly’s supervision.
Second, analyze the real situation of state-owned economic groups and
supervisory activities of the National Assembly at state-owned economic groups, point
out achievements, limitations and causes in supervision at these groups. Thereby,
withdraw problems that need to be solved in supervision at state-owned economic
groups. This is an important basis to suggest solutions to renovate supervisory
activities at state-owned economic groups.
Third, propose solutions and recommendations to ensure effectiveness and
efficiency of the National Assembly with the operation of state-owned economic
groups according to the guidelines and policies of the Party and the State, focusing on
the following contents: completing legal framework; supervisory tools, mechanism
and ways to organize supervisory activities of the National Assembly; criteria to
supervise state-owned economic groups.
Supervision of the National Assembly at state-owned economic groups is a
problem attracting care of the National Assembly, its agencies and deputies. It
develops in both theoretical and practical bases. Research results of the thesis are just
minor contribution and cannot cover every aspect and field. Therefore, it is certain that

there are other problems in need of in-depth research in order to enhance supervisory
activities and ensure that state laws are implementd strictly.