The State''''s role in provision of testing service for food safety in Vietnam: From socialization perspective

V(.'C-

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UPPSALA UNIVERSITET
UNIVERSITY OF ECONOMICS & BUSINESS,VNUH
UPPSALA
UNIVERSITET

MASTER THESIS OF MPPM

The State's role in provision
of testing service for food safety in Vietnam:
From socialization perspective

Authors:

Le Ba Anh
Pham Thi Ngoc Dung
Le Yen Oanh

Supervisor:

Prof. PhD. Sven-Erik SvSrd
PhD. Nguyen Manh Hung

mm nrvucE -GIW i

p

UPPSALA UNIVERSITET (SWEDEN) «&
UNIVERSITY OF ECONOMICS AND BUSINESS,VNUH
MASTER PROGRAMME OF PUBLIC MANAGEMENT

Le Ba Anh & Pham Thi Ngoc Dung & Le Yen Oanh
MPPM -Uppsala -Intake 1

The State's role in provision
of testing service for food safet> in Vietnam:
From socialization perspective

Supervisor:

Prof. PhD. Sven-Erik Svard
PhD. Nguyen Manh Hung

I i »•

Hanoi, Ma> -2011

ii<


ACKNOWLEDGEMENT
The thesis is completed in the scope of the Master Program of Public Management Uppsala University by Le Ba Anh, Pham Thi Ngoc Dung, and Le Ydn Oanh. Certainly, the
thesis will impossibly be well completed without the valuable support of the Swedish and
Vietnamese instructors as well as the leaders and employees of the agencies selected for
the two case studies of the research.
We would like to express the gratitude to Prof. Dr. Sven-Erik Svard - Head of Political
Sciences, University of Uppsala Sweden, for his orienting instruction in the process of

topic selection, especially in limiting the scope of the research: to Dr. Nguyen Manh Hung
- Director of Center for International Security and Strategic Studies, Institute of World
Economics and Politics, Vietnam Academy of Social Sciences, who has accompanied and
guided the research process and provided the group with \aluable knowledge and research
materials.
We sincerely thank the lecturers who enthusiastically imparted useful knowledge on public
management during the master program to all class attendants. We also thank the support
of the University of Economics and Business, the coordinators and program managers for
their support and assistance.
We would like to thank the National Agro Forestry Fisheries Quality Assurance
Department (NAFIQAD) - Ministr\ of Agriculture and Rural Development, Committee on
Science 1 echnology and Environment of the National Assembly. Department of I-ood
Hygiene and Safety - Ministry of Health, Sub-branch of NAFIQAD Region 6 - Can Tho,
Intertek Vietnam Co., Ltd for providing the group with references, inter\ iews and creating
favorable conditions for our group to access data sources: and informants involved in this
research.
Thanks for the support of our classmates, friends, and colleagues who have contributed
ideas and information to the thesis.

Respectfully.

Le Ba Anh

Pham Thi Ngoc Dung

Le Yen Oanh

III

ABSTRACT
Topic:
The State's role in provision of food safety testing service in Vietnam - From socialization
perspective
Level of thesis:

Master of Public Management

Authors:

Le Ba Anh, Pham Thi Ngoc Dung, Le Y^n Oanh

Instructors:

Prof. Dr. Sven-Erik Svard and Dr. Nguyen Manh Hung

Master defense day:

17/5/2011

Objective:
In Vietnam, food contamination has led to thousands people suffering from food
poisoning and an average of 60 deaths per year. Consumption of unsafe food has an
adverse impact on health and life quality of people. Production of unsafe food also
prevents the producers from entering the food market. This creates an urgent need for
strengthening the management of food safety, in which food safety testing plays an
important role.
In the current context of Vietnam's increased economic integration, the provision of
public services in general, and food safety testing service in particular has been
liberalized in line with the market mechanism and reform requirements. As a result,

there are two viewpoints on liberalization of Vietnam's food safety testing service:
1) The traditional viewpoint argues that because food safety testing sen ice has a
direct impact on life and health ol the people, it must be directly provided by the
State agencies.
2) The second viewpoint stales that food safety testing service should be provided by
the private sector, as long as the latter can meet the State's standard, and this has
been done in man\ countries. The State will focus only on some types of testing
service such as verification, not-for-profit ser\ices, and services in the
disadvantageous areas.
Vietnamese term of "public service socialization" has recently appeared in this context
of liberalization. The meaning of "socialization" should not be similarly interpreted in
English. Rather, it means the State retreat from pro\iding public services in areas
where the non-public sector can undertake. Vietnam's Law on Food Safet\ affirms
socialization of food safet\ testing service as a long-temi measure to mobilize more
resources for food safety management activities. Ne\ertheless. up to now, there is not
adequate research on socialization of food safety testing service, particularly the role oi
the State in this process.

IV


Our research is to study State's role on the provision of food safetv testing service and
change of this role in the socialization process. Our research question is: ''How does
the State's role change in the socialization of FS testing service?" Findings of our
research will supplement available researches on reform of public management model,
and provide the evidence-based reference for relevant policy makers.
Methodology:
Methods used in the research include: Literature review, case study, comparison and
in-depth interview. Data used in the research include the system of current policies,
regulations of Vietnam, primary and secondary data from relevant survey, fieldwork

data collection and in-depth interviews.
We have developed a model of public services socialization in Vietnam with 3 major
stages based on existing theories of public management, public services and the reality
of socialization in health and education sectors. This model was tested against the case
of food safety testing service provision by analyzing the changes of State's role in the
socialization process.
We then analyzed the secondary data from the survey conducted by National AgroForestry-Fisheries Quality Assurance Department. The data covers 4 groups of testing
service providers, corresponding to different degree of socialization, to compare the
efficiency, performance and capacity among different groups of providers. From the
results, we examine the room for further socialization in each group of providers.
Next we examined two case studies: 1) a State-owned agency and 2) a private
establishment (in the same geographic area) to compare the efficiency in the use of
investment capital, and human resources, speed of investment for capacity building and
service quality.
Findings and Conclusions:
1. Findings of the research allow us to conclude that food safety testing senice falls in the
category of extended public services (as defined by the \V'orld Bank) of which State is
not the only provider. This conclusion is iu line with the 2""^ viewpoint mentioned
above. Even though in principle, food safety testing service should be socialized in line
with the market mechanism, some special kinds of testing service may not be provided
by the private sector, either because the latter is not readv to assume this role or
because the pro\ ision of those services are too risky for them.
2. The State's role in providing food safety testing service has undergone in 3 stages: 1)
the stage of direct State delivery: 2) the transitional stage: and 3) the socialization
stage).
3. In-depth analvsis of two case studies indicated that the private sector had more
advantages than the public sector in terms of investment efficiency, use of human
resources, the speed of quality improvement and development motivation. Therefore,
there is a need to help the private sector to enhance investment on service delivery in
both quantity and quality. In contrast, there is no need to increase the number of the

State-owned establishments, but to improve their service quality and the scope of
autonomy.
4. Findings in the research allowed us to strengthen the original model of public services
socialization with regard to the role of State in terms of: supply-demand assessment:
planning of service provision and establishment of output-based monitoring system of
services quality.
5. In our new model, the State is identified in the process of socialization of food safety
testing service as having the following roles :
( H T o identify core and extended public services, and from this, identifving its
responsibility and role towards each group of public services, the management and
provision mechanism of public services;
(2) To assess supply-demand and plan the provision of public services, to identify
targets, itinerary and solutions for socialization oi food safety testing service in
each specific stage.
(3) To promulgate management tools for food safety testing service, including policies
and conditions to deliver services - the necessary condition to assure service
quality.
(4) To extend the scope and enhances the autonomy of public service providers and
designs the itinerary to transform these establishments into the model of service
delivery enterprises.
(5) To promulgate preferential policies on investment, taxes, land and loans to
facilitate the development of non-public models:
(6) To generate a fair competition environment based on the four pillars of governance:
accountability, transparency, participation and predictability together with the
reforms of administrative procedures and improvement in the responsiveness of
responsible indiv iduals and organizations.
(7) '\o develop a system of criteria, outpul-based monitoring and evaluation about
quality of the services.

(8) To facilitate service users to give feedback on quality, and balance
delivery so that the State can refine policies appropriately.

services

Limitations and recommendations for further studies
Our research has a limited scope. Because of time and resource constraint, we were
not able to conduct the survey and evaluation of service quality from the user
perspective. Our two case studies have not dealt with wide-ranged comparative criteria
(e.g. price, quality...).
The further studies should increase the number of case studies and broaden the scope of
study to not-for-profit and public-private-partnership models in service provision. They
should also develop evaluation indicators on quality of services by clients' perspectives
to have overall assessment of efficiency oi different models of public services
provision.

VI


Contribution of the thesis:
Our thesis is one of few primary studies in the field of socialization of food safety
testing service. It has strengthened the theoretical basis of public management and
specifically, of the changing role of the State in providing public services. It has
developed the model and identified the State role in provision of food safety testing
service. It also provides policy implications for the two models of public and nonpublic service providers.
Our research results have helped the public sector managers see the current situation
and the impact of State policies on food safety testing service provision and quality
assurance. Our research findings also figure out the State's role in socialization of
public services, and identify some aspects that need State intervention but not yet
addressed in the existing researches.

Key words:
provision.

Food safety, food testing, socialization. State, public services, service

VII


TABLE OF CONTENTS

1.

INTRODUCTrON

2

2.

LITERATURE REVIEW

5

2.1.

PUBi ICSFRVICE-S

5

2.2.

THE S T A T E ' S ROLE IN PROVISION OF PUBLIC SERVICES

5

3.

SOCIALIZATION OF PUBLIC SERVICES
3.1.

SOCIAIJZAMON OK PUBLIC SIRVIC liS IN VlI-TNAM

3.2.

STAGES OF PL'BLIC SERVICE SOCIALIZATION IN VIETNAM

4.

9

MANAGEMENT AND PROVISION OF FS TESTING SERVICE IN VIETNAM

10

13

4.1.

THE STAGE OF STATE DIRECT PROVISION OF TESTING SERVICE FOR FS

13

4.2.

TRANSITIONAL PERIOD IN MANAGEMENT OF FS TESTING SERVICE

14

4.3.

THE PERIOD OF ENHANCING SOCIALIZATION OF FS TESTING PROVISION

16

4.4.

CHANGE OF THE S T A T E ' S ROLE IN PROVIDING FS TESTING SERVICE

18

5.

FINDINGS FROM SURVEY AND CASE STUDIES
5.1.

FINDINGS FROM SURVEY OF I HE TESTING SYSTEM BY

20
NAFIQAD

20

5.2.

C A S E STUDY 1:

22

5.3.

C A S E STUDY 2

24

5.4.

SOME EVALUAI IONS FROM n i E CASE STUDII;S

26

6.

CONCLUSIONS

29

6.1.

Wn H REGARDS TO THE VIEWPOINT FOR SOCIALIZATION OF F S TESTING SERVICE

29

6.2.
6.3.
6.4.

Till ROLF OF THE STATE TOWARDS SOCIALI/ATKW OF TESTING SERVICI: FOR FS
Willi REGARDS 10 POM-NTIALS OF SOCIALIZATION OF TESTING SI;R VICE FOR FS
LIMITATIONS AND PROPOSED FUTURE RESEARCHES

29
3I
31

7.

8.

9

REFERENCES

32

7.1.

FOREIGN DOCUMENTS:

32

7.2.

DOMESTIC DOCUMENTS:

32

APPENDICES
8.1.
8.2.
8.3.
8.4.
8.5.

APPENDIX L G U I D I L I N I IOK !N-DF.i>m INIERVILWS
APPENDIX 11: LlSIOF IN ILRVIEWEES
APPENDIX Ml: LIST OF SOME POLICIES ON SOCIALIZATION OF PUBLIC SERVICES
APPENDl X IV: LIST OF SOME DOCUMENTS ABOUT FOOD SAFETY MANAGEMENT
APPENDIX V: DATA ABOUT TESTING CAPACITY OF THE TWO CASE STUDIES

^^^
33
34
35
35
36

vni


TABLES AND FIGLRES

TABLES
Table 5.1: Groups of testing labs for FS

21

Table 8.1: Results of capacity development of regional center No. 6 - Can Tho

36

Table 8.2: Result of testing capacity progress of INTERTEK Can Tho

36

FIGURES
Figure 2.1: Model of public services provision

7

Figure 3.1: Socialization process of public service provision

11

Figure 4.1: Organization chart of NAFIQACEN

13

Figure 4.2: Organization chart of NAFIQAVED

15

Figure 4.3: Total volume of export goods tested through NAFIQAVED 1996 - 2006

16

Figure 5.1: Distribution of testing labs of different areas throughout the countrv'

20

Figure 5.2: Comparison of investment efficiency based on the testable targets

26

Figure 5.3: Comparison of efficiency of human resources use per testing target/year

26

Figure 5.4: Comparison of development speed of testing capacity

27

Figure 5.5: Comparison of improvement speed of testing service quality

28

Figure 6.1: The State's role in socialization of testing service of food safety

30

IX

ACRONYMS AND ABBREVIATIONS
1.

, FS

Food safety

2.

Codex

Codex Alimentarius. international org. for food standards

3.

NAFIQAD

National Agro-Forestry-Fisheries Quality Assurance Department

4.

DANIDA

Danish International Development Agency

5.

EU

European Union

6.

FAO

Food and Agricuhure Organization

7.

FDA

Food and Drug Administration of the U.S.

8.

FSPS

Fisheries Sector Program Support

9.

HACCP

Hazards Analysis and Critical control points

10.

ISO

International Organization for Standardization

11.

MARD

Ministry of Agriculture and Rural Development

12.

MOH

Ministry of Health

13.

NAFIQACEN

National Fisheries Quality Assurance Center

14.

NAFIQAVED

National Fisheries Quality Assurance and Veterinary Directorate

15.

NAFIQAD

National Agro-Forestry-Fisheries Quality Assurance Department

16.

SPS

Sanitary and Phytosanitary

17.

TBT

Technical barriers to Trade

18.

VASEP

Vietnam Association of Seafood Exporters and Producers

19.

WTO

World Trade Organization


L

INTRODUCTION

In Vietnam, food contamination has made thousands of people suffered from acute food
poisoning. On average, more than 60 people die each year. Each person experiences
gastrointestinal tract infection about 1.5 times per year. Abuse of plant protection chemicals is
one of the causes of cancer, brain damage, leukemia, kidney failure... and even death.
Consumption of unsafe food has negative effects on health, work capacity and qualitv of life of
people. Absence of FS assurance also limits market access of high value agricultural products of
Vietnam. This poses a pressing demand to strengthen the FS testing service in Vietnam. If
public services are regarded as "activities to serve the basic needs of the society, the common
interests of the community, the society" (Le Chi Mai, 2003), then like health and education, FS
testing is considered a form of public service, not only because of its broad social impact, but
also because it originally was provided and strictly managed by the State during the period of
the commanded economy.
The traditional viewpoint, which is strongly infiuenced by the centralized subsidy mechanisms,
argues that provision of FS services, including testing service, is the responsibility of the State
and it must be directly supplied through State agencies, using State budget and is not-for-profit.
This view also suggests that the nature of the private service provision is to earn profit, so it is
dil'ficult to control the quality of service and therefore fairness for users is not guaranteed (since
u.sers have to bear costs for profits of the business). Moreover. FS is an important aspect, closely
linked with the social security and directiv related to people's health. This is a core service, and
accordingly must be directly provided by the Stale.
However, in today context of increased international economic integration, the public services
such as FS testing service must be provided in a more competitive and efficient way. in line
with the market mechanism. In this regard, the second viewpoint, which is more popular in
many countries such as USA, Japan. EU. considers that this kind of service should be provided
by the private sector (e.g. the Association for Protection of Consumers, the Food Standards
Association...), or the Public Private Partnership model (PPP) on the basis of meeting the
standards set by the State. The State still provides FS testing service, but focuses on verification,
non-profit, free of charge services or in disadvantageous areas. Furthermore, while the State is
responsible for ensuring FS, it uses food testing as a management tool. Testing service is viewed

as not having the characteristics of a core public service, such as market failures, demand to be
fairly supplied, political control, being uncompetitive, outputs are unidentified...
In view of new public management school, the Government's role changes from "rowing" to
"sailing". The State does not need and should not deliver all kinds of services. In many countries
in the \vt)rld. public services provision role has been transferred to the private sector. Range of
transferred public services is expanded in the principle that what the other economic sectors
may deliver, the State shall not participate. For the services that other economic sectors do not
want or not yet participate, the State shall take the full responsibility to provide.
In Vietnam, along with the transition to the market mechanism, the State has socialized the
provision of certain public services. This is considered a typical process of Vietnam.
Socialization oi public services does not only mean that the public services provision is
transferred to the non-public sector, but also refers to the proactive participation of non-public
sector into the devcKipment. and diversification of the service provision. Eventually, quality of
service through competition will be enhanced and people can benefit from better quality
services.


In that trend, the Law on Food Safety No. 55/2010/OH12 of Vietnam does not onlv regulate FS
management in the entire process of food production and consumption, but also stales the policy
of socialization of FS testing service as a solution to increase investment resources to overcome
various existing weaknesses. However, until now, there is not any research about the
socialization of FS testing services in general and FS testing service in particular, especially the
State's role in that process.
This research explores change of the State's role in providing FS testing service during the
socialization process.
It aims to answer the question:
''How has the State's role changed in the socialization of FS testing service?"'
To answer this question, the research has verified the specific characteristics of socialization as
the process of gradually releasing the monopoly of the State hut not totally eliminating the
State 's involvement in the provision of public services.

The research develops a socialization model of public services based on the theoretical
framework and practices in health and education services. This model is then tested against the
I S testing service by examining the change ol Slate's role in different stages of socialization.
The above process leads to the appearance of different kinds of public services providers.
However, the important issue is not the number of service providers, but the quality and
efficiency of service provision. Therefore, comparing the performance of different kinds of
service providers is important to help finding out the strengths and overcoming the weaknesses.
To compare the performance of FS testing service providers, this research used the survey
results of NAFIQAD about four FS testing service groups, corresponding to four different levels
of socialization, from low to high, including:
(>roup A: Testing labs of the State agencies under Ministries with managerial functions for FS.
Group B: Testing Labs of Research Institutes, Universities.
(•roup C: resting Labs being State service delivery agencies in charge of FS.
(iroup I): Testing Labs being non-public sector facilities (private companies, joint-stock
companies, foreign invested companies, association).
The research also conducted in-depth analysis of two case studies of the laboratories of Group C
and n. including:
1) NAFIQAD Branch
towards autonom>;

6 - Can Tho. State senice delivery unit in the transitional process

2) Can Tho INTERIl K Compan\. an establishmeni invested and managed by a private
investor in line with the socialization policy.
These two case studies are selected on the basis of the following criteria:


-

The State-owned provider of testing service: to explore the stages of transition towards

autonomy and the State's role during the time of FS crisis.

-

The private provider: to analyze the impact of socialization policy on provision of FS
testing service

-

One belongs to the public sector and one belongs to the private sector: to compare and
evaluate the benefits of socialization, (i.e. in term of efficiency of investment, and service
quality...).
Same location (both in Can Tho city) to rule out the effects of geographical difference. Can
Tho City is chosen because of its activeness in food production and trading with great
testing demand, allowing justifying the balance in service demand-supply.

-

Two providers are in Group C and D, being the potential and capable labs to facilitate the
socialization process.

In-depth interview in the study field is used for these two case studies.
The next sections of the thesis are structured as followings:
Part 2 - Literature review: This section reviews the works on public management, public
service, and public service provision in Vietnam.
Part 3 - Socialization of public services: This section provides a theoretical and practical basis
of socialization of public service in Vietnam. The authors' views on classification of FS testing
service are also presented in this section.
Part 4 - Management and provision of FS testing ser\ice in Vietnam: This section presents
the changing role of the Slate towards the provision of testing serv ice for FS through three

phases: From State direct provision (1) to State's management of the supply through State
services delivery establishments (2) to socialization of service provision together with
management (3) in Vietnam.
Part 5 - Results of data analysis: Results of a survey conducted by NAFIQAD in 2010 on the
existing system of FS testing service in Vietnam; and findings of the two case studies.
Part 6 - Conclusion: Research findings on the changing role of the State to provide FS testing
service in particular and public services management in general; Contribution, limitations and
further research.


2. LITERATURE REVIEW
2.L

Public services

Ihe public services have a close connection with the category of public goods. They are
always associated with the role of government in providing them.
From the economics perspective, based on the main characteristics, there are different
approaches to classify pure and impure public services. From State management approach, one
can emphasize the role and responsibility of the State in delivering the public goods and
services. From the beneficiaries approach, one can emphasize the essence of public services to
meet the needs of society and communities, therefore public services can be provided by both
the State and the private sector.
According to the World Development Report - World Bank (1997)':
-

The core public sector includes the services (mainly pure public goods and services) that
the government is the sole provider and all citizens are asked to receive when they are in
need of such services. Government provides this service based on a legal basis and
principles of basic state management. Such services can include law. security, national

defense and social welfare, environment, epidemic prevention services, property
certification (properly, real estate), identification ( passports, visas, identity cards),
certificates (birth, death, marriage), establishment registration (enterprises, associations and
organizations)'.
The extended public sector includes public services (mainly impure goods and services) of
which providers may be the Slate and non State establishments (private, civil society,
communities). Ihe provision oi these services is fiexible. depending on the needs of
consumers, non-monopoly, and this process can be free or not. These services include
health, education, urban transportation, information, infrastructure ...

The concept and scope of public services, even approached in different ways, are of a common
nature, which is to serve the needs and common interests of society and the State is responsible
for ensuring the prov ision of this service to society. Even if the State transfers partly the
provision of public services to the private sector, it still plays a regulatory role to ensure
fairness in the distribution and overcome the inadequacies of the market.
From ihe above characteristics, public services can be understood as the necessary activities to
serve the needs and common interests of the community and societ)\ directly delivered by the
State or by authorized non-public partners.
2.2.

The State's rnle in provision of public serv ices

Depending on the nature and type, public service can be delivered directly b> the Stale agencies
or b) non-Stale sector. Over time, the role of the Stale and other actors in the provision of
public services has been significantly changed with the existence of different service providing
models:
-

The Slate agencies directly provide the public services: The Slate takes direct responsibility
to provide the public services relating to national security and common interests ot the

' Source: World Bank, World Development Report 1997


country that only public authorities have adequate legal status to do. State also provides
direct services in the sectors that are not favorable for market investment because of high
costs or low profit.
The State partly transfers the provision of services to non-State sector, including:

+ Delegating to private companies or non-governmental organizations to provide

some services and the State is responsible for ensuring the quality and often use
funds allocated from the State budget for support.

•f

Forming joint-venture between the State and its partners to provide public services
on the basis of resources contribution, risks and profits sharing. This form allows the
State to reduce the investment budget and still participate in the direct management
to ensure common interests.

-h Transferring responsibility of public services provision to non-state organizations
for the services that these organizations are capable of delivering effectively. These
organizations are encouraged to operate with not-for -profit mechanism.
-I- Privatizing public services, where State sells facilities to the private sector but still
supervises and ensures the equality under the laws among the private providers, or
the State outsources services to private sector that can perform well and eventually
reduce number of staff in the public^
Fhe Slate must determine types of services it should lake the leading role in delivery: tvpes of
services can be provided by the private sector and services can be jointly provided by Slate and

private sector. If State is overloaded in the provision of public serv^ices, the efficiency of public
services provision will decline, creating negative impacts on the lives of people and social
development...

v»

' Retbnn ofpuhlic services in Vietnam (Ac Chi Mai. ^APA. 2003) Public services, management reform and
provision in Vietnam loda> {Ian Thanh Chu. \APA. 200')


Graph 2.1: Model of public services provision
Senite^

I

1

Service*
- Market failure
- Need equal supply

Other l e n i c e s

I
ln(er\eiition
No intenention

i
I I S e n Ices
* ' - Needs political control

- Uncompetitive
- Outputs uiudcntjliod

Other »en ice*

Need to
cnsufc
cqiialrtN

I
I )ircct supph

I

Suhsid\

kcquircmcnb
about
clTiciencN

i

Rcguliitin^
regulations

1
''iihlu sccliM

l*nvatc sector

Source: Le Chi Mai, Lecture in the Senior Administration management course, NAPA, 2010

Before the 1980s, the role of the State and the public sector (e.g. law enforcement and provision
of public services to society) focused on ''ruling", with limited attention to performance.
Since the 1990s, there were quite a few researches on public management and Government
reform (ADB, 2003; Boyle, 1995, Hood, 1995; Humphreys, 1998, Osborne and Gaebler, 1993;
World Bank, 1997) including the issues of new public management, improving public service
provision, management and public services. There are also other practical works on public
services provision in Europe, Australia and New Zealand (Anttonen, 1996; Boston, Jonathan et
al. 1996; Pollit, and Bouchaert, 1995). These studies discussed the mode of the new public
management, including the changing role of government from "rowing" to "sailing" or the State
does not need and should not do everything but should decentralize to enhance the quality and
efficiency of its
on public mMUfaflMnt from the views of State reform,
!• piMic adiiiiiiitirtiwi ftform in Vtcttani'* by
(Miniitry oT HofM Afhtri) in 2004,

In Vietnam, there are some
ht tatfifli, ^ Public

or
HI aflaaiQM ID
l M i ' > rat* i« p ^ i

'•iMftaMloa jHirf ht EXMOMMIU^ Eaoaoariii oi TkiraklcSartor. 7aa K0WK
kywfr itsfolf


sector management and the role of State'^ by Vu Huy Tu (1999) and "Transferring the public
services to non-state institutions - Problems and Solutions" by Le Chi Mai (2001).

Additionally, there are quite a lot of works relating to the public services, public finance reform,
administration modernization, transferring public services to non-state institutions (Le Chi Mai,
2002; Dinh Van An, Hoang Thu Hoa, 2006: Dinh Van Mau. 2002; Vu Huy Tu, Le Chi Mai, Vo
Kim Son, 1998; Chu Van Thanh, 2004, Nguyen Ngoc Hien, 2002. Vo Kim Son. 2002).
Besides, there are some papers of new public management in socialization of services in health,
education, cultural and sports, services of common good (water supply and drainage, wastes and
garbage collection...). Ministry of Finance of Vietnam is currently conducting a master project
about socialization of some public services and continuity of reformed operation mechanism of
public service delivery units . However, we have not been able to access this project document.
The above researches have initially examined the new public management model and its
application in the Stale administration and public service provision in Vietnam. For example,
the book "Reforming public services in Vietnam." Le Chi Mai (2003) addressed that, in the
process of globalization, along with the developed market economy, the public sector has faced
major challenges in using efficiently the State resources to meet the demand of citizens. State
management model reveals the traditional disadvantages:
The Government apparatus is cumbersome, fhe maintenance cost increased while
operational efficiency reduced. Therefore, it is necessary to review the scope and role of the
Government.
Public services are of low quality, types are less diversified and prices are higher than those
delivered by the private sector. The strong development of science and technology requires
adjustment and development of the administration.
The democratization trend forced the Slate on one hand to accept the participation of the
public into Slate management task, and on the other hand to intervene more deeply into the
process of socio-economic, public sector reform and improvement of services qualitv .
In other words, the internal and external social context requires the coordination and regulation
of personal aspirations to be in line with the interests of the communiiv. The Stale and the
public sector cannot act alone and solves all the social problems, but it must promote
democratization associated with decentralization, to focus on p>erforming well the role of
"sailing".

^Source: hitp: vNww.xaliian.cpm niodulcsj>!iiVZmitlie.JS^Ai^
Reform of public services in Vietnam (Le Chi Mai, NAPA, 2003)


3. SOCIALIZATION OF PUBLIC SERVICES
3.1.

Socialization ofpuhlic services in Vietnam

Even though the terms "public management and "new public management were not directly
mentioned in the State official documents, the reform targets, specific policies in the master
program of Administrative reform 2001-2010^ were towards the public management model
through narrowing the State apparatus, replacing direct management by indirect management
through regulation, ^'transfer some work and services not necessarily to be delivered bv fhe
State to the hand of enterprises, social organizations, non-governmental organizations/' Decree
No. 73/1999/ND-CP dated 08/19/1999 also stressed ''the State and social respect and treat
equally towards products and services delivered by both public and non-public facilities'';
Term "Socialization" appeared in Vietnam recently in the context of reform initiated in
1986. "Socialization" is used in Vietnamese with the following meanings^:
-

The Slate retreats relatively its role in providing public services in areas where the nonpublic sector can undertake: the society or the private sector takes the responsibility to
provide the services. In general, people have the opportunity to use public serv ices delivered
by both the public and non-public sectors.
Public service provision is affected by the supply - demand principle. Since costs are shared
between public and private sector, it leads to the trend that users (people) may use or deny a
service.
The state monopoly in service provision is reduced:

Socialization ofpuhlic services is a common trend in service areas such as health and education

in Vietnam today.
In the education training sector: The State continues to fund universal education, and invest in
manpower training for targeted disciplines and careers that are difficult to mobilize social
resources, or in disadvantageous and ethnic minority areas. The Stale encourages establishing
non-public educational and training institutions to convert public establishments into non-public
ones. It also encourages cooperation and joint training programs with high quality foreign
training institutions and opening of the training institution with 100% foreign capital. Ihe
overall target is that, the majority of vocational training institutions and a part of training
institutions that are not in charge of ensuring universal education will operate under the service
delivery mechanism.

In the health sector: The State continues to invest in health, ensuring the budget for the public
health facilities, basic health care policy for the poor and children under 6 years old. Investment
is prioritized for preventive health system, and health facilities, especially in remote and
disadvantaged areas. 1 he State aims to strengthen and expand health insurance system. Health
insurance payers select the appropriate clinics b\ themselves: Pri\ate hospitals and clinics are
encouraged to develop. The Stale aims to eliminate monopoly in the export and import,
manufacturing and supply of medicines. Universal health insurance will be implemented.
'^ Decision No. I36'200] ^QD-TTg dated 17 September 2001 of Prime Minister
' Reference from the Article: Socialization in education and the State's role (Dr. Hoang Ngoc Vinh, Director of
Department, Ministr> of t ducalion and Irainmg). source: hup: pda.\ictbao.\n Iran^j-ban-doc Xa-hoi-hoa-uiao
duc-vu-\ai-tto-cua-Nha-nuoc 20727765 478


transferring most of the public hospitals to operate under the form of service deliver}'. Province:
will have non-public hospitals.

Thus, socialization is essentially a process of mobilizing resources in society to develop public
services and make more people benefit from those serv^ices as well as be more responsible
when using services. Socialization carries the signs of a market economy in terms of demand supply relationship. Regarding the social meaning, socialization improves the quality, fairness

and equality in society. Socialization can be considered as a form of privatization, which means
the participation of non-public partners.
Mechanism and solutions of socialization include the followings:
-

Stale creates and facilitates a healthy competitive environment in light of the law (to
promulgate rules and standards about service quality, to supervise, evaluate the quality of
services) to promote both public and non-public institutions to develop. The beneficiaries
are able to choose the appropriate service providers.

To shift the operation paradigm ofpuhlic establishments toward public services provision,
to improve efficiency and quality of services and products:
lo transform a number of public establishments into non-public forms: and to develop nonpublic facilities with two basic types: public-private partnership and private-owned. The
State encourages the development of not-for-profit establishments.
3.2.

Stages ofpuhlic service sociali/aticm in \'ietnam

From the theoretical basis for public management, public services, socialization policies and
social practices of a number of fields, it is possible lo generalize the process of socialization ol
public service in Vietnam as follows:
The first stage (prior to socialization period, before the 1980s), the State undertook direct
responsibility for providing all public services to society. Public services, regardless of being
core or expanded, were deliv ered bv state agencies.
77?^' second phase (transition phase of socialization, in the 1990s). Vietnam started the
administrative reform program and began separating the bodies of stale administration
(providing core public services - public administration) and public service units (providing
essential services of the extended public service group - public business - to the society).

Third phase (implementation of socialization ofpuhlic services, during and after the 1990s).

Vietnam continues lo boost the administrative reform program and extensively integrate into the
world economy. The separalivMi between state administrative agencies and public service units
was clearer. Ihe Slate diminished control over the public senice deliverv' agencies through self
financine management mechanisn/ and then the auUMiomv about oreanization. personnel and
finance*^. The policies on encouragement o\ tlie non-public sector's involvement were enacted
For testing labs, in addition to tcstius: labs of Group A, B. C the testing labs of Group D startea
to appear and rapidly developed.

* Decree 10 2002MD-CP in 2002 about the self-financing mechanism for public service delivery agencies
" Decree 43/2006/1^0-0? dated 25 04/2006 of the Ciovemment regulating autonomy, accountability mission
completion, organization, personnel and llnance for the public service deliveo agencies.
U'
Master plan of adminisuation reform 2001-2010 and Decree No. -^3 W9PND-CP dated 19'8 1999.

10


l-ff

Based on the theoretical framework and practices about socialization in two common areas of
services of health and education, we develop the theory on the socialization of public service
provision in Graph 3.1
Graph 3.1: Socialization process ofpuhlic service provision
State

A l l kinds o f public services

I>ircct Suite pTOMSion

Relative subgroup of pubbc serMces

Separation of public
administration and business units

Core public senice

i director state provisitm

Intended public services

Public scTMce lacilitics

Core public service

Direct Stiitc provision
Slate niunagcnicnl

*

I-.xtendcd public service

O

Subgroup public services need socialization

Issuance of conditions, standards
for serMCCs pro\ision

I
State services facilitio

l^nvalc services tacilities

Autonomy. seIf-responsibilit>

d,
Preferential policies on ta\, land,
loans

Generation of fairl> compeua\e environ t

A
y

J

J)

policies tnd iiituiMi inckKfe tht MtowMf


.it

fllMHBfd plDO0«Mi W
;' tnori\ 1" icrrin

ihc esttbltshmenl
nWBgemcni to

it


-

To encourage the development of private service providers. PPP, not-for-profit civil society
through appropriate support mechanisms.
The State ensures fair distribution of services and provides an environment for fair
competition. The State shall continue to directly provide services in areas that are
disadvantageous or too costly for market investment.
Customers give feedback on service quality so that the State can adjust policies to suit the
requirements of each period.

In order to verify the theoretical frame about socialization ofpuhlic services, the next part of
the thesis will focus on analysis of management and provision of FS testing service in Vietnam
in different periods.

1


4. MANAGEMENT AND PROVISION OF FS TESTING SERVICE IN VIETNAM

In Vietnam, FS management is assigned to the Ministry of Health (management of fooc
circulation and consumption stages) and to the Ministry of Agriculture and Rural Development
MARD, (managing throughout the process of production, pre-processing, processing, trading
export and import of food original of agriculture, forestry, fishery products). According to FS
management practices "fi-om farm to fork", the responsibility of MARD accounts for 90% o]
total volume and have a decisive role in effective FS management. The next part of this thesi;
will focus on analyzing the operation of the National Fishery (Quality Assurance Departmen
(NAFIQAD) as an agency to manage the provision of testing service for FS in order to secure <

comprehensive perspective on the management of FS testing in Vietnam, through which tc
clarify the role of the State in this practice.
4.L

The stage of direct State provision of FS testing service

After the initiation of international integration, seafood exports increased rapidly. However
until the 1990s, export market for Vietnam's seafood products was mainly Asian countries
accounted for more than 80%, while the new EU market reached approximately 1%. During thi;
period, Vietnam's fisheries have not directly penetrated the U.S. market and Canada due to \hi
sanctions. Throughout the worid, this was the period of strong reform methods to control FS
Many technical barriers (TBT) and the sanitary and phytosanitary measures and FS (SPS) wert
built.

In 1991, the European Committee (EC) issued Directive 91/493/EEC pioneering ways to control
FS in the process "from farm to fork". From May 7/ 1994, only the countries with FS control
principles and Hazard Analysis and Critical Control Points (HACCP) and a designated state
agency with fttll authorized responsibility for safety control of aquatic food are permitted tc
export to EU.

In 1994Choosing EU markets as an obstacle to overcome and to penetrate into other markets
the Ministry of Fisheries set up the National Fisheries Inspection and Quality Assurance Centei
(NAFIQACEN). The fimctions of the Center include state management and provision ofpuhlic
services on quality inspection and certification of aquatic goods for export, import and domestic
consumption, and testing service for food and gcxxls safety and quality.
Figure 4.1: Organization chart of NAFIQACEN

13

NAFIQACEN based in Hanoi and 6 branches located at key fishing areas
Those branches included laboratories (LAB) which provided FS testing upon the Stale orders;
and FS testing for quality certification for other clients.

In 1999, the EU recognized NAFIQACEN as the only authorized state agency in Vietnam's FS
control in the manufacture and export of seafood products to the EU (Decision 1999/813/EC or
16/11/1999). Overcoming these barriers, the market share and turnover of seafood expor
rapidly increased. For EU only, the total seafood export value increased to 40% in 2000. Ir
1996, only 36,046 tons of fisheries were tested, accounting for 26.5% of seafood exports, ir
1999, this figure was 170,148 tons, equivalent to 85-86% of total exports.

The so-called "food safety crisis" led to basic change of the system during this period. Ir
9/2001. Vietnam's fishery products were repeatedly warned lo be detected with residues ol
banned antibiotics. On 09/19/2001, the EU issued Decision 2001/699/EC enhanced inspectior
Chloramphenicol (CAP) 100% of all seafood products originating from Vietnam. CAP is th(
EU banned substances. If it is delected, products will be banned lo reach consumers. The cast
quickly causes a chained reaction from other markets.

In parallel with measures to prevent the use of CAP in production, the imperative requiremeni
set forth was the capacity of CAP lesling corresponding lo the EU slandard (0.1 parts pci
billion, ppb). lo have this capacity, equipment and trained personnel were needed. Facing lh<:
urgent crisis. Slate was required lo act promptly. A State budgel amount was approved to invesi
for six labs under NAFAQACEN branches in 2002. After the inveslmenl. laboratories basicalK
met the requiremenls. The situation of CAP infections in fisheries was controlled. Or
02/10/2002, the EC issued Decision No. 2002/770/EC lifting control for residues of Vielnam's
fisheries. Compelenl bodies in other countries also abolished Vietnam's seafood check-up

During the crisis period, for the common interests of the country, consumers and the foo
business, the role of the State is very important. At those moments, it is impossible to rely on priva
investors because they normally invest only when profit is visible. The State shall provide timely

testing service when privatization is not ready and in the context of a crisis.
(Mr. Nguyen Tu Cuong, Fomer Director of NAFIQAVED)

The State's role in providing FS testing service in this period is typically characterized by direci
State inveslmenl, managemenl and provision. This problem can be displayed on two aspects;

1) Provision of FS testing service is the responsibility of the Stale, in the context where the
private sector is not yet willing to invest; the testing service for FS is tended to meet ihe
requiremenls more than meelim: the society's demand.

2) The Slate must lake the ijL\sponsibililj| for inveslmenl on the testing sen ice because it is not
'*• yet readv aboul policies to* invtilve other players (non-public sector) to participate into
public service provision of food testing, vviiich are basic public services.
4.2.

1 ransitional period in management of FS testing senice

In the 2003 - 2007 period, fislicry business increasing!) developed, the expon turnover
exceeded US$ 1 billion, and production of fisheries faced many new challenges of integration

14


process. The markets continue to place great demands on food safety with the application of
stnct measures to control food imports to protect the health of consumers. Domesticallv the
reforms require separating administrative role of state management and public career (actuallv
classifying the core public services with extended ones). In 2003, NAFIQACEN was
transformed into National Fisheries Quality and Vetennarv Directorate Assurance
(NAFIQAVED). The main functions moved from direct service supply to service provision
management. The organizational structure of NAFIQAVED includes a newly set up Department

of testing service management. Branches of NAFIQACEN were converted to Department for
fishery safety and quality assurance.
Graph 4.2: Organization chart of NAFIQAVED

£
Dept
Admin &:
External
relations

I
Quality
Assurance
Dept

ser\ires
ma 1121 semen t

Depi of
hishery
and

Adnun Dept

vetennan,

Branch '>
Can Tho

LAB

However, the model of the Sub-Department under the Department existed only during a short
time. After more than a year. Ministry of Fisheries decide to transform the regional Subdepartment into Regional Center for Fisheries Quality and Veterinar>' Directorate operating as a
public service delivery agency that is also in charge of the function of state management.
Actually, the role of the department was moved from direct provision to management of the
testing service provision.

Administratizing the provision of testing service and the monopoly mechanism of the t
service provision hindered production and business activities, causing losses to the busin
community, the damage lo national interests ".
(Mr. Nguyen Huu Dung. Vice Charman of VASEP)

-J
^ ^
A 00
I9d«
.0

D«ii« this p « « H iitaoe and mchaokofff for FS contuuied to timvc
*fVomfiMpIDfoHc"ha5 been widel^
' >yed mound the
"' The Inhaintl taniin
^ bf ii(PNi ^ ifee
n mtuMmc tf^oiiag OMMIM a
''-f nrast K ....n^leMd in h&tk IOK u i p s t
qtmlttv

IS

Graph 4.3: Total volume of export goods tested through NAFIQAVXD 1996 - 2006
Total volume of export goods tested through NAFIQ AMID 1996- 2006

3n

600
500
1000 Ton

400
300
200
100
0

^jiriH
1996

1997 1998 1999 2000

2001 2002

2003

2004

2005

2006

Source: NAFIQACEN-NAFIQAVED

In 2003, the State continues to invest in laboratories to meet the market requirements Even
year, these the labs participated in the joint testing programs with the mtemational labs. In 2003
the laboratories of 6 Centers were accredited ISO / lEC 17025.

Not only management requirements increased (90% of the sample to be tested), but testms
demand of production and trading facilities also grew. However, system capacity could mee
only 50-60% of the service samples. Testing system becomes overloaded, the service qualir
reduced. More State budget investment was not approved because of limited resources.
Characteristics of the FS testing service provision at this stage indicate the followings:
-

The establishment of NAFIQAVED is an appropriate step in the administrative refom
process, initially separating the State management and ser\'ice delivery In terms o
organization, opening a Testing Management Dept. represented the viewpoint of changin;
from direct delivery to management of the testing service provision.

-

Organizational model of service providers in the transitional process: The branch mode
which was totally dependent on the parent organization was shifted to the model of regiom
Department (state management agencies), an independent management unit with th
expectation to be more proactive in meeting the social demand. However, Sub regiom
model was quickly replaced by the regional center acting as a business unit with mai
function to provide services. This is crucial inevitability of a reform process, showing th
ineffectiveness of state intervention.
For PS

AX

Iht SMe'i rok apved from meeting thereqwrementsto ptrti

FS

TlM|wrM«r

MiiMry of Fisheries was merge

la 2007, in m tttmift to
with MARD NAFIQAVED
OIAFIQAD). Ap«l

16