NATIONAL ASSEMBLY FOCUSES ON CORRUPTION, WTO

UNCLAS SECTION 01 OF 02 HANOI 001604

SIPDIS

SENSITIVE

STATE FOR EAP/BCLTV

E.O. 12958: N/A
TAGS: PGOV PINR ETRD VM WTO DPOL
SUBJECT: NATIONAL ASSEMBLY FOCUSES ON CORRUPTION, WTO
ACCESSION


1. (SBU) Summary: The National Assembly (NA) ended its
longest ever session June 15 after passing a record number
of bills and considering several others. The primary focus
of this session was passage of new and amended laws related
to Vietnam's WTO accession efforts. The NA also introduced
a fast-track procedure that will allow further WTO-related
bills to be passed before the end of the year. Other legal
changes shortened the length of mandatory military service
and transferred the State Audit Office to Assembly, rather
than Government, control. Discussions on a draft anti-
corruption law attracted considerable public attention,
especially after a former Party chairman admitted having
been offered bribes. End Summary.


2. (U) The 7th session of the current 11th National Assembly
ran from May 5 to June 15. Previous sessions had never gone
longer than 30 days. During this session, delegates
discussed and passed fifteen laws and commented on twelve
other bills, record numbers for a single session. The laws
passed included the revised Civil Code, the revised
Commercial Law, the Law on Import and Export Tariffs, the
Law on Tourism, the revised Maritime Code, the
Pharmaceutical Law, the Law on Signing, Joining and
Implementing International Conventions, the National Defense
Law, the Law on State Audits, the revised Customs Law, the
revised Law on Education and a law amending and
supplementing some articles of the Law on Military Service.
Delegates also commented on several bills, including those
on environmental protection, intellectual property,
electronic transactions, housing, youth, the people's
police, anti-corruption and practicing thrift and fighting
wastefulness. These will be passed in subsequent sessions.
For the first time ever, discussions on certain high-profile
bills, including the ones on anti-corruption, on practicing
thrift and fighting wastefulness and on the revised Civil
Code, were televised live.


3. (SBU) The NA also introduced, but did not use, a new fast-
track law-making procedure. Under the procedure, when they
deem it necessary, delegates can discuss and approve bills
in a single session. Previously, any bill had to first be
commented on at one session before being discussed again and
approved at the following session. The fast-track process
was authorized in 2003, but the NA never discussed the
process by which it could be implemented. (Comment: We
expect that this was put in place so that remaining WTO-
related laws can be passed in the fall session, in the hope
that Vietnam can reach its goal of accession this year. End
comment.)


4. (SBU) The primary focus of the session was on issues
related to Vietnam's efforts to join the WTO. On the first
day of the session, delegates made a special amendment to
the NA's legislative calendar for 2005. Under the revised
program, during the autumn Assembly session in October, the
NA will discuss and approve the draft Enterprise Law and
draft Investment Law earlier than initially scheduled. The
debate and approval process will also be sped up for the
bill on Amending and Supplementing a number of articles of
the Law on Value Added Tax, the Law on Special Consumption
and the Law on Complaints and Denunciations. According to
press reports, amendments to the Law on Value Added Tax will
likely eliminate discriminatory VAT rates between
domestically produced cotton and imported cotton, while the
special consumption rate for automobiles would be amended.
On April 4, Prime Minister Phan Van Khai issued instructions
to ministries and government agencies to finish drafts for
22 laws and ordinances to be submitted to the NA and its
Standing Committee for approval within 2005 in order to
facilitate Vietnam's efforts to accede to the WTO.


5. (SBU) The NA continued its focus on fiscal accountability
and anti-corruption measures during the session. The new
Law on State Audits requires that the State Audit Office,
which previously answered to the Prime Minister, become an
autonomous institution reporting directly to the National
Assembly. This potentially allows the State Audit Office to
audit more effectively Governmental agencies. The Office's
audits are also to be openly released, and its
"recommendations" to be considered binding.


6. (SBU) The Government presented its draft anti-corruption
law to the NA this session. The GVN initially said it would
present the draft in October, but the Chairman of the NA,
Nguyen Van An, prioritized the issue and demanded it in May.
The bill requires greater transparency on infrastructure
development projects, public expenditures, land planning and
management and management of State-owned enterprises. It
requests that "civil servants holding titles and powers"
declare their assets as well as those of their dependants.
The bill also proposes that anti-corruption steering
committees be set up at the central and provincial level.
The central steering committee is charged with leading and
supervising national efforts on anti-corruption, while at
the same time providing guidance on specific cases. The
Prime Minister himself would be the head of the central
steering committee, and the Ministers of Public Security,
Home Affairs and Finance, chief of the central State Audit
Office, chairmen of the Party Control Commission and
Internal Affairs Commission, President of the Vietnam
Fatherland Front, General Procurator of the Supreme People's
Procuracy, Presiding Judge of the Supreme People's Court and
chief of the Government's Inspectorate would serve as
members. The chairman of each provincial People's Committee
would head the provincial steering committee, while the head
of the provincial inspectorate would serve as vice chairman.


7. (SBU) NA contacts said the Assembly had planned to pass
the anti-corruption law during the session using the fast-
track procedure, but this was derailed by disagreements
among delegates over specific provisions of the bill. Many
delegates did not support the establishment of Government
anti-corruption steering committees, believing that
oversight for anti-corruption efforts should reside in the
Assembly, not the Executive Branch. Outside the session
there was a great deal of public discussion on corruption-
related problems. The Fatherland Front released a report
that characterized corruption as among the most worrisome
issues to ordinary people. Former Communist Party General
Secretary Le Kha Phieu sensationally stated to the press

SIPDIS
that several individuals had attempted to bribe him.


8. (SBU) The amended Law on Military Service shortened the
length of compulsory military service to 18 months from 24
months. The Defense Law, which is the first of its kind for
Vietnam, serves largely to consolidate a variety of
previous, lower-level ordinances and decrees dealing with
various aspects of defense issues, NA contacts reported.
The text of all the new laws passed will begin to be printed
in the Official Gazette starting in July.


9. (U) During this session, a record number of ten cabinet
members, including Deputy Prime Minister Nguyen Tan Dzung
and Public Security Minister Le Hong Anh, stood for
questions from delegates during a three-day hearing that was
televised live. Industry Minister Hoang Trung Hai was
grilled on possible corruption related to the seven-year
delay of the Dung Quat oil refinery project. Health
Minister Tran Thi Trung Chien faced strong criticism in a
report of the NA Committee for Social Affairs, which
declared the current public health system only "benefits the
wealthy."


10. (SBU) Comment: Beyond the immediate matter of Vietnam's
WTO aspirations, the NA has sunk its teeth into the issue of
corruption above all others. Moving the State Audit Office
to its own control and demanding a draft anti-corruption law
from the Government suggests both frustration with the way
the Government is handling the corruption problem and a
willingness by the Assembly to exert some of its steadily
growing influence. Ultimately, however, it is difficult to
know whether the Assembly is tackling corruption because it
see this as the most critical issue in the daily lives of
its constituents, or because the Party has allowed -- or
encouraged -- it to do so.

BOARDMAN