VIETNAM – DIRECT POWER PURCHASE AGREEMENT PILOT PROGRAM – LATEST UPDATE: WHAT YOU MUST KNOW

This May 2022, the Ministry of Industry and Trade (MOIT) publishes the second draft Decision for DPPA Pilot Program on its website for stakeholders’ review and comments. It is planned that in the last quarter of 2022, MOIT will submit the final draft for the Prime Minister’s approval. Consequently, it is expected that the Decision will be approved by the Prime Minister in 2023.

Key points under the second draft DPPA Decision

Mandatory Eligibility Criteria:
1. Tariffed Customers: existing industrial customers taking service at 22kV or higher
2. Project Size: larger than 30 MW
3. Technology Type: wind or solar PV
4. Renewable Energy Generating Company: owns power plants that are either (i) ready to COD but are not eligible for FiT mechanism or (ii) under construction, included in Power Development Plan and identified investor and will achieve COD within 270 working days
5. Commercial Agreements: project parties directly negotiate and sign a contract for differences (CfD) which dictates a strike price, an amount of power, and duration of the agreement

Participants Selection Criteria:
1. Satisfy mandatory eligibility criteria,
2. Has no generation capacity limitation due to grid overload as of the registered COD,
3. Has no PPA with EVN, which is still valid at the time of registration for participation, and
4. Has a binding in-principle agreement with consumer.

Within 60 working days from the effective of the Decision (estimated in 2023), interested parties can apply to join the DPPA pilot program. Duane Morris could assist interested parties to join the program, please let us know if you require our assistance.

We will keep you updated of any new development in this regard. Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

VIETNAM – ENERGY – Power Development Master Plan 8 – Latest Update

The Prime Minister (PM) had issued Official Letter no. 182/LDCP (“OL182”) on 10th June 2022 for his guidance on the approval of PDP8.

Context:
The Ministry of Industry and Trade (MOIT) has developed a plan to submit to the Prime Minister under two scenarios including the basic scenario and the high scenario (towards Zero Carbon 2050). This structure aims to drastically reduce coal power, sharply increase onshore and offshore wind power; No solar power development: Developing LNG to replace polluted coal power and hydroelectric power sources meeting due.

The Prime Minister basically agreed to bring the contents of the Power Development Plan VIII to the meeting of the Permanent Government as soon as possible so that this plan is to be released soon in June. However, before the meeting of the Permanent Government, Prime Minister Pham Minh Chinh asked Deputy Prime Minister Le Van Thanh to direct the Ministry of Industry and Trade to clarify the following key concerns:

1. Feasibility of PDP8: MOIT to clarify whether the latest draft PDP8 proposal sync with the electricity generation and demand parameters.
MOIT is requested to clarify the feasibility of the planning, the most important of which from now to 2030 must ensure the balance of electricity for electricity demand, resolutely not to let electricity shortage happen.

2. Solar Power development: MOIT to substantiate with clear basis on its opinion in relation to capacities and delaying solar power generation sources development to 2030, and its alignment with the Resolution 55-NQ/TW of the Politburo (“Resolution 55”).

According to the draft Power Development Plan VIII, in 10 years (2021 – 2030) there will be no further development of solar power, keeping the current 8,736MW. The remaining number of projects already in the revised Power Development Plan VII, with a total capacity of 6,200MW, the progress will be extended until after 2030.

However, at the end of May 2022, the Ministry of Industry and Trade issued a written request for comments on the direction of treatment with the number of solar power projects that must be extended until after 2030. Accordingly, the number of these projects is divided into two parts: 1,925MW already included in the expanded Power Development Plan VII has been approved for investment and 4,120MW of solar power projects is included in the expanded Power Development Plan VII but has not been approved for investment.

This request is different from previous reports of the Ministry of Industry and Trade, so the Prime Minister asked this ministry to have a clear position on the proposed treatment direction of 6,200MW of the above solar power projects before consulting the Government and the Prime Minister.

On the other hand, the Prime Minister also asked the Ministry of Industry and Trade to clarify whether the non-development of solar power until 2030 is contrary to Resolution 55 of the Politburo and to the trend of falling solar power price, the development of integrated battery technology at a more reasonable cost, so the non-development of solar power really makes sense?

3. LNG import: MOIT to clarify its explanations and calculations for LNG fuel import to align with the goal in the Resolution 55. Also, ongoing war scenario in different parts of the world may affect LNG fuel import and electricity pricing, making it volatile. MoIT to clarify on the plan to tackle such aspects for LNG power sources development.

MOIT is required to carefully consider the feasibility and effectiveness of LNG power development to 2030. Currently, the draft Power Development Plan VIII proposes the plan to develop this type of energy by 2030 is 23,900MW, accounting for 16.4% of the total power source.

According to calculations of the Ministry of Industry and Trade, the need to import LNG as drafted Power Development Plan VIII will be about 14-18 billion m3 by 2030 and about 13-16 billion by 2045, higher than the specific target in Resolution 55 of the Politburo stated that “Enough capacity to import LNG of about 8 billion m3 by 2030 and about 15 billion m3 by 2045.”

On the other hand, due to the Russo-Ukrainian war, the price of imported LNG inputs ranges from 15-20 cents/kilowatt, while our commercial electricity price is currently only 6-7 cents/kilowatt is a future obstacle to the signing of Power Purchase Agreements between the investor and Electricity Vietnam Group (EVN) because it will be buying expensive – selling cheap.

Besides, the dependence of up to 16.4% on imported LNG by 2030 will put us at risk of importing high gas prices when there is any volatility of regional and international geopolitics between now and 2030.
In addition, LNG is still fossil energy by nature, only CO2 deflation by 50% compared to coal-fired power. And according to the trend of the 26th United Nations Climate Change Conference (COP26), the financial institutions after 2025 will tend to stop funding for LNG power projects.

Therefore, the Government leaders request the Ministry of Industry and Trade to consider and carefully deliberate the proportion of imported LNG electricity of 16.4%.

Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

VIETNAM – POWER MASTER PLAN 8 TO BE FINALIZED IN JUNE 2022

The national electricity development plan for the period of 2021-2030, with a vision to 2045 (Power Master Plan 8) is a particularly important national sector planning.

On 31 May 2022, Minister of Industry and Trade Nguyen Hong Dien said that the draft PDP 8 has been approved by the Appraisal Council and submitted to the Prime Minister for consideration and approval. It is expected that in June 2022, Power Master Plan 8 can be approved.

The draft PDP 8 was first submitted to the Prime Minister by the Ministry of Industry and Trade on 26 March 2021. After analyzing and evaluating, it was found that several issues still need to be corrected, such as the scale of power source development, the structure of power sources, and the unreasonable regional balance, leading to the requirement for investment in the transmission grid. inter-regional is very large as well as a number of problems in terms of policy mechanisms and solutions to manage the implementation organization…

After that, the Government and Prime Minister focused on directing and perfecting the PDP8 to overcome the remaining shortcomings as well as follow up with Vietnam’s commitments at the COP26 Conference to “reach the level net emissions of “zero” by 2050″.

Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

VIETNAM – THE NEXT WORLD’s FACTORY? – Lawyer in Vietnam Dr. Oliver Massmann in interview with Caijing Magazine Beijing

1. How do you assess Vietnam’s general economic performance? Besides manufacturing, are there any other sectors worth investing in or have huge potential?

Vietnam’s economic performance has been impressive. In 2020, while major global economies suffer from the Covid-19 pandemic, Vietnam posed the highest GDP growth in South East Asia, higher than China, Singapore, and Japan. In 2021, when Covid-19 resulted in almost nation-wide lockdown for almost the whole year, the country still posed a positive GDP growth of 2,68%.
Sectors with huge potential: water and waste treatment, clean energy development (biomass, LNG, offshore wind…), agriculture products processing, healthcare equipment

2. How have CPTPP and other major trade agreements benefited Vietnam? What difference will RCEP make?

The CPTPP and the EVFTA have made trading between Vietnam and the signatory countries cheaper and more efficient thanks to the reduced tariff schedule as well as administrative procedures. During the worst period of the Covid-19 pandemic, Vietnam’s export remains outstanding thanks to these free trade agreement. Vietnam foresee similar benefits coming from the RCEP. Additionally, the RCEP brings about a huge political benefit of strengthening ties between Vietnam and other countries in the region, which can result in a more stable and connected political scene in the region.

3. When Vietnam went into lockdown in the third quarter of last years, some productions moved back to China. Was this just temporary and moving manufacture out of China has become an irreversible trend?

In my opinion, the move is temporary. As in a supply chain, it is usually more cost effective for business to move production, as long as production still going on, rather than to stop production for any reason. So it’s not a surprise that when businesses in Vietnam were suspended in the last year for Covid-19 protection, companies had to seek solution elsewhere.

I think that once China recovers from the current Covid situation and issues more policies favorable for foreign investors, the flow may be reversed.

4. Do you think the structure of China-Vietnam trade is more complementary or more competitive? How do you see their positions in the global supply chain?

I see the structure is more complementary, where both countries export to the other products that they need. China closed its border last years due to Covid-19, the global supply chain suffered heavily. I think that’s enough to describe the importance of China in the world’s supply chain. If the flow of business moving production from China to Vietnam continues, Vietnam will very soon become a key player in the global supply chain.

5. Have you seen a major increase in foreign investment recently? Where are they mainly from and which sectors they are investing in?

In 2021, despite the complicated development of the Covid-19 epidemic, FDI inflows into Vietnam reached 31.15 billion USD, up 9.2% compared to 2020. Total foreign investment capital registered in Vietnam as of March 20, 2022 reached US$8.91 billion.
Among 35 countries and territories with newly licensed investment projects in Vietnam in the first three months of 2022, Denmark is the largest investor with $ 1.32 billion, accounting for 41.1% of the total capital. new level registration; followed by Singapore with 626.6 million USD, accounting for 19.5%; China $ 379.5 million, accounting for 11.8%; Taiwan 219.9 million USD, accounting for 6.8%; Hong Kong Special Administrative Region (China) $ 191.7 million, accounting for 6%. Sectors: processing and manufacturing industry, real estate

6. Is Vietnam ready to be the next world’s factory?

Yes. Vietnam now has the human resources, technology, government support, foreign investment to become the next world’s factory. Vietnam has grown so fast, economically and politically, in the last 5 years, that in 5 years to come, we may see something we wouldn’t even be able to foresee from today.

Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.comif you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

VIETNAM – ENERGIEENTWICKLUNGSPLAN 8 VERÖFFENTLICHT – NEUESTER INHALT DES ENTWURFS DES NATIONALEN ENERGIEPLANS 8

Am 26. April 2022 leitete der stellvertretende Premierminister Le Van Thanh eine Sitzung des Bewertungsrats zur Beurteilung des Entwurfs des Nationalen Energieentwicklungsplans 8, wobei der Entwurf gebilligt wurde. Das Industrie- und Handelsministerium arbeitet nun mit den zuständigen Regierungsstellen zusammen, um den endgültigen Entwurf im Mai 2022 dem Premierminister zur Genehmigung vorzulegen.

Laut dem Plan soll im Jahr 2025 die Gesamtkapazität der Kraftwerke etwa 93.862 – 98.394 MW (ohne Energie durch Solaranlagen auf Dächern und Kraft-Wärme-Kopplung) betragen. Diese Kapazität setzt sich zusammen aus:

-Wasserkraft 25.779 – 26.795 MW, was einem Anteil von 27,2 – 27,5% entspricht;

-Kohlekraftwerke 28.867 MW, was einem Anteil von 29,3 – 30,8% entspricht;

-Gas-Wärmekraftwerke (einschließlich LNG) 14.947 MW, was einem Anteil von 15,2 – 15,9% entspricht;

-erneuerbare Energiequellen außer Wasserkraft (Windkraft, Solarenergie, Biomasse, etc.) 20.416 – 23.332 MW, was einem Anteil von 21,8 – 23,7% entspricht; und

-Stromimporte 3.853 – 4.453 MW, was einem Anteil von 3,4 – 4,1% entspricht.

Der Nationale Energieentwicklungsplan 8 fördert die Entwicklung von Windenergie, autarker Solarenergie. Dies bezieht sich nur auf den Verbrauch vor Ort, nicht die Stromerzeugung im nationalen Netz. Zudem wird die Produktion neuer Energieformen wie die von Wasserstoff, grünen Ammoniak usw. unterstützt. Solche Formen werden ohne Kapazitätsbegrenzung entwickelt, nicht durch die Quellenstruktur im Plan begrenzt und mit der Planung ergänzt, wenn es einen umsetzbaren Vorschlag gibt.

– Entwicklung der Solarenergie

Hinsichtlich der Entwicklung von Solarenergiequellen, einschließlich konzentrierter Quellen, die auf dem Boden und Seeoberflächen installiert sind, und verteilter Quellen, die auf dem Dach installiert sind soll die Gesamtkapazität der Solarenergiequellen 2025 etwa 16.491 MW betragen und bis 2030 unverändert bleiben. 2045 soll sie etwa 74.741 – 96.666 MW betragen. Es wird erwartet, dass die aus Solarenergie erzeugte Elektrizität im Jahr 2025 einen Anteil von etwa 6,8 bis 7,0 %, im Jahr 2030 etwa 4,5 bis 4,8 % und im Jahr 2045 11,1 bis 12,1 % haben wird.

– Entwicklung der Windenergie

Die Gesamtkapazität der Onshore- und Nearshore-Windenergie soll bis 2025 etwa 10.700 – 13.616 MW, bis 2030 etwa 11.700-16.121 MW und bis 2045 etwa 36.170 – 55.950 MW betragen. Die Gesamtkapazität der Offshore-Windenergie ist 2030 mit 7.000 MW oder möglicherweise mehr angesetzt, wenn die wirtschaftlichen und technischen Bedingungen es erlauben. Im Jahr 2045 soll diese Kapazität bei 30.000 – 64.500 MW liegen. Es wird erwartet, dass die gesamte Stromerzeugung aus Windenergie im Jahr 2025 etwa 14,4 – 15,7%, im Jahr 2030 etwa 10,3 – 15,6% und im Jahr 2045 etwa 31,2 – 43,2% betragen wird.

– Entwicklung von LNG-Strom

Projekte in Hai Phong wurden aus der Planung gestrichen.

Für Wärmekraft unter Verwendung von im Inland erzeugtem Gas (dies umfasst Gasturbinen-Wärmekraftwerke) und LNG (ohne flexible Gasturbinen-Kraftwerke, die LNG verwenden) wurde festgelegt, dass bis 2030 die installierte Gesamtkapazität etwa 29.730 – 38.830 MW betragen wird. Es sollen 133,1 – 172,3 Mrd. kWh erzeugt werden, was 24,1 – 28,9% der gesamten Stromerzeugung entspricht. 2045 wird die installierte Gesamtkapazität etwa 43.330 – 46.330 MW betragen und 233,6 – 246,0 Mrd. kWh erzeugen, was 20,1 – 23,9% der gesamten Stromerzeugung entspricht.

Liste der LNG-Wärmekraftwerke

– Entwicklung der Kohlekraftwerke

Im Nationalen Entwicklungsplan 8 wurde die Ersetzung von Kohlekraftwerksprojekten angesichts der Verpflichtungen Vietnams im Rahmen der UN-Klimakonferenz 2021 geprüft. Die Planung von Kohlekraftwerksprojekten, die im Nationalen Energieentwicklungsplan genehmigt sind, aber von der Gemeinde nicht unterstützt werden oder nicht für die Entwicklung in Frage kommen, wurde nicht mehr berücksichtigt.

Einige Projekte, die für die Umstellung auf LNG vorgeschlagen wurden, wie z.B.: Vung Ang III, Quang Trach II, Quynh Lap I, II, und Long Phu II, III wurden gestrichen. Die BOT-Projekte Nam Dinh 1 und Quang Tri I bleiben jedoch in der Planung.

Wenn Sie Fragen haben oder weitere Einzelheiten zu den oben genannten Punkten erfahren möchten, zögern Sie bitte nicht, sich mit Dr. Oliver Massmann unter omassmann@duanemorris.com in Verbindung zu setzen.
Dr. Oliver Massmann ist General Director bei Duane Morris Vietnam LLC.

VIETNAM – POWER DEVELOPMENT PLAN 8 PUBLISHED – LATEST CONTENT OF THE DRAFT NATIONAL POWER PLAN 8

On 26 April 2022, Deputy Prime Minister Le Van Thanh chaired a meeting of the Appraisal Council to appraise the draft National Power Development Plan 8. The Appraisal Council approved the Draft. The Ministry of Industry and Trade is working with relevant government agencies to submit the final draft for the Prime Minister’s approval in May 2022.

By 2025, the total capacity of power plants is about 93,862-98,394 MW (excluding rooftop solar power and cogeneration sources), of which:
-hydroelectricity reaches 25,779-26,795 MW, accounting for 27.2-27.5%;
-coal-fired power plants 28,867 MW, accounting for 29.3-30.8%;
-gas thermal power (including LNG) 14,947 MW, accounting for 15.2-15.9%;
-renewable energy sources other than hydroelectricity (wind power, solar power, biomass power, …) 20,416-23,332 MW accounting for 21.8-23.7%; and
-electricity imports 3,853-4,453 MW, accounting for 3.4-4.1%.

The PDP 8 encourages the development of wind power, self-sufficient solar power for loads (on-site consumption, not generating electricity on the national grid) and promotes the production of new forms of energy such as hydrogen, green ammonia, etc.. Such forms are developed without capacity limit, not limited by the source structure in the plan, and supplemented with the planning when there is a feasible proposal.

• Solar power development:

Regarding development of solar power sources, including concentrated sources installed on the ground, lake surface and distributed sources installed on the roof: The total capacity of solar power sources is about 16,491 MW in 2025 and will remain unchanged until 2030 and about 74,741-96,666 MW in 2045. Electricity produced from solar power is expected to reach a proportion of about 6.8- 7.0% in 2025, about 4.5-4.8% in 2030 and 11.1-12.1% in 2045.

• Wind power development:

Total onshore and nearshore wind power capacity is about 10,700-13,616 MW by 2025, about 11,700-16,121 MW by 2030 and about 36,170-55,950 MW by 2045. Total offshore wind power capacity is about 7,000 MW or possibly higher when economic and technical conditions allow in 2030 and about 30,000- 64,500 MW in 2045. Total electricity produced from wind power types is expected to account for about 14.4-15.7% in in 2025, about 10.3-15.6% in 2030 and about 31.2-43.2% in 2045.

• LNG power development:

Projects in Hai Phong were removed from the Planning.

Thermal power using domestically produced gas (including gas turbine thermal power plant) and LNG (excluding flexible gas turbine power sources using LNG): By 2030, the total installed capacity will be about 29,730-38,830 MW, producing 133.1-172.3 billion kWh, accounting for 24.1-28.9% of total electricity production; in 2045, the total installed capacity will be about 43,330- 46,330 MW, producing 233.6-246.0 billion kWh, accounting for 20.1-23.9% of total electricity production.

List of LNG thermal power plants;

• Coal-fired power development:

PDP 8 has considered the replacement of coal-fired power projects in light of Vietnam’s commitments under COP26. Planning for coal-fired power projects which are approved in the National Power Development Plan but are not supported by the locality or are not eligible for development has been ceased consideration.
Some projects proposed to convert into LNG such as: Vung Ang III, Quang Trach II, Quynh Lap I, II; Long Phu II, III were canceled. However, Nam Dinh 1 and Quang Tri I BOT projects remain in the Planning.

Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

Lawyer in Vietnam Dr. Oliver Massmann in interview with Vietnam Express International – What investment fields in Vietnam are offering the biggest investment opportunities to foreign investors and how can foreign investors achieve maximum of legal certainty for their investments?

Despite complicated Covid-19 situation in Vietnam that resulted in almost nation-wide lockdown, foreign direct investment in Vietnam reached USD 31,15 billion, an increase of 9.2% compared to 2020 (figures from the General Department of Statistics). This 2022, with all Covid-19 restrictions removed, Vietnam is ready to fully welcome foreign investors. As of March 2022, the processing and manufacturing industry leads the chart of attracting the most foreign direct investment. Other investment fields offering investment opportunities to foreign investors include generation and distribution of electricity, mining, logistics and textile.

Beside government-issued incentives like reduced land levy, tax, allowance for 100% ownership… foreign investors must make use of benefits available for them under bilateral and multilateral agreements. As of now, Vietnam has concluded 15 free trade agreements, the most recent being the CPTPP and the EVFTA.

Some notable provisions under the CPTPP and EVFTA that foreign investors should know:

Government procurement

Vietnam has one of the highest ratios of public investment-to-GDP in the world (39 per cent annually from 1995). However, until the enforcement of the EVFTA, Vietnam has not agreed to its government procurement being covered by the Government Procurement Agreement (GPA) of the WTO.

Vietnam’s commitments on Government procurement mainly deal with the obligation to treat EU bidders, or domestic bidders with EU investment capital, equally with Vietnamese bidders when the Government purchases goods or requests a service worth over the specified threshold. Vietnam undertakes to follow the general principles of National Treatment and Non-discrimination. The EVFTA also requires its parties to assess bids based on fair and objective principles, evaluate and award bids only based on criteria set out in notices and tender documentation and create an effective regime for complaints and settling disputes. These rules require parties to ensure that their bidding procedures match the commitments and protect their own interests, thus helping Vietnam to solve its problem of bids being won by cheap but low-quality service providers.

Investment Dispute Settlement

In disputes regarding investment (for example, expropriation without compensation or discrimination of investment), an investor is allowed to bring the dispute to the Investment Tribunal for settlement. To ensure the fairness and independence of the dispute settlement, a permanent Tribunal will be comprised of nine members: three nationals each appointed from the EU and Vietnam, together with three nationals appointed from third countries. Cases will be heard by a three-member Tribunal selected by the Chairman of the Tribunal in a random manner. This is also to ensure consistent rulings in similar cases, thus making the dispute settlement more predictable.

In case either of the disputing parties disagrees with the decision of the Tribunal, it can appeal to the Appeal Tribunal. While this is different from the common arbitration proceeding, it is quite similar to the two-level dispute settlement mechanism in the WTO (Panel and Appellate Body). We believe that this mechanism could save time and costs for the whole proceedings.

The final settlement is binding and enforceable from the local courts regarding its validity, except for a five-year period following the entry into force of the EVIPA.

Vietnam’s obligations on Trade in Services and Investment under CPTPP

– Minimum standard of treatment: Each Party shall accord to covered investments treatment in accordance with applicable customary international law principles, including fair and equitable treatment and full protection and security.

– Expropriation: When necessary, for example, for a public purpose, government of one country has the right to expropriate foreign investors. Nonetheless, such right must be applied on a non-discriminatory manner and on payment of prompt, adequate and effective compensation in accordance with due process of law and provisions of CPTPP.

– Transfer: Foreign investors have the rights to freely transfer their capital contributions or profit of investment. Nonetheless, in some cases, governments of CPTPP member countries can prevent or delay such transfers of foreign investors for the purpose of control capital in case of balance of payment crisis or economic crisis.

– Not impose “performance requirement” (PR): One country shall not maintain performance requirements as a condition for investors to gain investment licenses or other preferential investment treatment.

– Not impose requirement on appointing senior management position (SMB): One country shall not require an enterprise to appoint to a senior management position a natural person of any particular nationality.

Free Trade Agreements create sustainable growth and mutual benefits for parties involved, and foreign investors should understand what they are entitled to under the Agreements to achieve the maximum level of legal certainty when investing in Vietnam.

Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

VIETNAM – NATIONAL POWER MASTER PLAN 8 TO BE FINALIZED IN MAY 2022

On 26 April 2022, Deputy Prime Minister Le Van Thanh chaired a meeting of the Appraisal Council to appraise the draft National Power Development Plan 8. The Appraisal Council approved the Draft. The Ministry of Industry and Trade is working with relevant government agencies to submit the final draft for the Prime Minister’s approval in May 2022.

The latest draft is the sixth draft of the Power Master Plan 8. Under which, the total capacity of power sources is expected to reach 146,000 MW by 2030, a decrease of about 35,000 MW compared to the previous plan. This latest draft overcame the shortcomings of the power source structure, reduce coal power, increase renewable energy (especially offshore wind energy), and postpone the development of inter-regional transmission system until 2030.

Duane Morris provides you with in-time updates on the Power Master Plan 8.

Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

VIETNAM – WORK PERMITS – APPLICATION PROCESS AND REQUIRED DOCUMENTS – WHAT YOU MUST KNOW:

As you may know, the Work Permit application process often appears as time consuming and cumbersome. Nevertheless, appropriate scheduling and thoughtful preparation of the required documents will make the licensing procedure smoother and ultimately successful.

We would like to summarize below the step by step action plan for obtaining a Work Permit for an expat to legally work in Vietnam together with our ‘DO and DON’T’ notes, for your kind reference.

Work Permit application process;

Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

VIETNAM – INFRASTRUCTURE AND PUBLIC PRIVATE PARTNERSHIPS – THE EVFTA AND CPTPP – MAKING USE OF VIETNAM’S COMMITMENTS TO MODERNIZE VIETNAM’S INFRASTRUCTURE: WHAT YOU MUST KNOW

Public-Private Partnership (PPP) has been the cornerstone for infrastructure development and has been utilized in the past in Vietnam with varying degrees of success. Those agreements were often legally cumbersome and were put together largely on faith that both the government and investor would live up to their end of the agreement. With the implementation of the CPTPP and EVFTA/IPA and the new Law on Investment in the form of PPP 2020, the regulatory environment has shifted towards favorable conditions for PPP to become a bedrock of Vietnam’s development.

The Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) came into force on 14 January 2019 for Vietnam and currently include the following signatories: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. In addition, China, Ecuador, Taiwan and United Kingdom applied and awaiting result on their accession to the CPTPP. The EU-Vietnam Free Trade Agreement (EVFTA) came into force on 1 August 2020 between the European Union countries and Vietnam.

Public Procurement:
Vietnam has one of the highest ratios of public investment-to-GDP in the world (39 per cent annually from 1995). However, Vietnam did not agree to its Government procurement being covered by the Government Procurement Agreement (GPA) of the WTO until the EVFTA
The FTA commitments on Government Procurement mainly deal with the requirement to treat EU bidders, or domestic bidders with EU investment capital, equally with Vietnamese bidders when the Government purchases goods or requests a service worth over the specified threshold. Vietnam undertakes to follow the general principles of National Treatment and Non-discrimination. It will publish information on intended procurement and post-award information in Bao Dau Thau (Public Procurement Newspaper) and information on the procurement system at muasamcong.mpi.gov.vn and the official gazette in a timely manner. It will also allow sufficient time for suppliers to prepare and submit requests for participation in responsive tenders and maintain the confidentiality of bidders
The FTA also requires its parties to assess bids based on fair and objective principles, evaluate and award bids only based on criteria set out in notices and tender documentation, and create an effective regime for complaints and settling disputes. These rules require parties to ensure that their bidding procedures match the commitments and protect their own interests, thus helping Vietnam to solve its problem of bids being won by cheap but low-quality service providers.
Dispute Resolution:
An often overlooked but critical aspect from the investor’s perspective has been the dispute resolution process before these trade agreements were in-force. Generally speaking, before CPTPP and EVFTA/IPA, most foreign investors only had the Vietnamese courts to address any dispute.
To protect interests of foreign investors, CPTPP allows foreign investors to initiate a lawsuit in International Arbitration center in case interests of foreign investors are infringed by one member country (for example, expropriation, nationalization, minimum standard of treatment…), except in case disputes arising from the implementation of commitments or obligations of investment agreements and investment authorization.
This is also covered in the EU-Vietnam Investment Protection Agreement (EVIPA). The EVIPA is a sister agreement of the EVFTA and is pending ratification by EU member states before it can come to force, expectedly by 2023. In disputes regarding investment (for example, expropriation without compensation or discrimination of investment), an investor is allowed to bring the dispute to the Investment Tribunal for settlement. To ensure the fairness and independence of the dispute settlement, a permanent Tribunal will be comprised of nine members: three nationals each appointed from the EU and Vietnam, together with three nationals appointed from third countries. Cases will be heard by a three-member Tribunal selected by the Chairman of the Tribunal in a random manner. This is also to ensure consistent rulings in similar cases, thus making the dispute settlement more predictable. The EVIPA also allows a sole Tribunal member where the claimant is a small or medium-sized enterprise, or the compensation of damaged claims is relatively low. This is a flexible approach considering that Vietnam is still a developing country.
In case either of the disputing parties disagrees with the decision of the Tribunal, it can appeal to the Appeal Tribunal. While this is different from the common arbitration proceeding, it is quite similar to the two-level dispute settlement mechanism in the WTO (Panel and Appellate Body). We believe that this mechanism could save time and costs for the whole proceedings.
The final settlement is binding and enforceable from the local courts regarding its validity, except for a five-year period following the entry into force of the EVIPA (please refer to further comments in the Legal Sector Committee’s chapter on Judicial and Arbitral Recourse).
Vietnam’s other specific commitments under the CPTPP:
Regarding telecommunication services: Allow CPTPP countries to set up joint ventures with a capital contribution of not more than 49% for basic telecommunications services attached to the network infrastructure. With value-added telecommunication services attached to the network infrastructure, we agree to allow the establishment of a joint venture with a capital contribution not exceeding 65% after 5 years after the date of entry into force of the Agreement. With services not attached to the network infrastructure, open to CPTPP countries to invest and set up enterprises with 100% foreign capital after 5 years from the date of entry into force of the Agreement.

Vietnam’s other specific commitments under the EVFTA:
Regarding Engineering services (CPC 8672) and Integrated Engineering Services (CPC 8673): for commercial presence, the supply of services related to topo¬ graphical, geotechnical, hydro geological and environmental surveys and technical surveys for urban-rural development planning, sectoral development planning are subject to the authorization of the Government of Viet Nam.

Regarding Construction and related engineering services (CPC 514-518): cross border supply of services is fully open and foreign investors can open their branched in Vietnam, though the chief the each branch must be a resident in Vietnam.

Please do not hesitate to contact Dr. Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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