Identifier
Created
Classification
Origin
06HANOI835
2006-04-13 04:18:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Hanoi
Cable title:  

HANOI DISCUSSES NEW LAW ON ASSOCIATIONS

Tags:  PREL PGOV PHUM ETRD EINV ECON VM 
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INFO RUEHHM/AMCONSUL HO CHI MINH CITY 0920
RUEHZS/ASEAN REGIONAL FORUM COLLECTIVE
UNCLAS SECTION 01 OF 06 HANOI 000835 

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TAGS: PREL PGOV PHUM ETRD EINV ECON VM
SUBJECT: HANOI DISCUSSES NEW LAW ON ASSOCIATIONS

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UNCLAS SECTION 01 OF 06 HANOI 000835

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TAGS: PREL PGOV PHUM ETRD EINV ECON VM
SUBJECT: HANOI DISCUSSES NEW LAW ON ASSOCIATIONS

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1. (SBU) Summary and Comment: On April 3, the GVN presented
its ninth draft of a New Law on Associations to donor
community Ambassadors, representatives of Vietnam's
associations and international NGOs and other interested
parties. Follow-on discussion was open and pointed.
Controversial elements in the latest draft include the
retention of redundant State management of associations by
line ministries and the Ministry of Home Affairs (MOHA),
vague definitions of proscribed activities, cumbersome
registration procedures and lack of a clear prohibition of
commercial activity under the law's new favorable tax regime
for associations. The Danish Ambassador subsequently sent a
letter on behalf of donors outlining these reservations.
The new draft will be debated by the National Assembly in
its upcoming special session in May. A more liberal, rival
draft written by civil society promoters may also be
debated. The GVN is hesitant to promulgate this civil
society version of the law because it rightly recognizes
that, depending on how it is done, legalizing associations
could be like opening Pandora's Box. Vietnam's leadership
is likely to remain very skittish about the potential this
law has to open up society, and thus further debate and foot-
dragging is likely in the cards. End Summary and Comment.

Draft Nine
--------------


2. (SBU) On April 3, MOHA held an open discussion on the
ninth version of its draft Law on Associations.
Approximately fifty outside representatives participated in
the discussion, including Ambassador Marine, the Head of
Delegation of the European Commission, a representative of
the United Nations Development Program, the Ambassadors of
Denmark, France, Sweden and Bulgaria, as well as
representatives from other donors, Vietnamese associations
and foreign NGOs.


3. (SBU) The discussion was led by Vice Minister Dang Quoc
Tien and Nguyen Ngoc Lam, Director General of MOHA's
Department of NGOs. Lam began the session with an extensive

history of the latest draft of the Law on Associations.


4. (SBU) Lam noted that as of a June 2005 statistical
survey, Vietnam had 320 nationwide associations and 2,150
provincial and municipal associations. In addition, there
were "tens of thousands" of rural and district-level
associations, with a greater concentration in economically
developed locations. The current legal status for these
associations depends on a 1957 decree (No. 102/SL/L004) and
the July 2003 decree (No. 88/2003/ND-CP). The draft law
aims to address "mismatches and difficulties" in
associations management stemming from "shortage of
quantity," "poor alignment of policies and coordination" and
"poor division of labor regarding management." The law
drafters also seek to specify new procedures for "redressing
complaints and denunciations about associations." Lam
further admitted that current procedures for establishing an
association are cumbersome, that the process for admitting
foreign members to associations needs to be clarified, that
responsibility for "State management" of associations has
not been assigned and that associations operating under
current decrees are ineffective and inefficient because of a
"trend to bureaucratize them."


5. (SBU) Lam explained that MOHA's drafters were given new
guidelines to develop a Law on Associations in 1992 so
"citizens can directly participate in the national
reconstruction." Their operating principles are: 1) to
institutionalize guidelines and principles for associations
that are part of the Communist Party of Vietnam (CPV);
2) to elucidate "stipulations of the Constitution" regarding
associations; 3) to ensure that socialist democracy is
strengthened; 4) to create an "enabling and conducive" legal
framework for associations; 5) to incorporate the legacy of
previous legal decrees governing associations; 6) to
incorporate practical experience and lessons learnt into the
new law; and, 7) to "critically adapt" international
experience concerning associations into the new law. The
project to develop this new law is part of the official
legislative agenda for the 2006 National Assembly. In
preparation for this, MOHA's drafters have undertaken a
general review of the GVN's experience with associations,
reviewed current legal documents governing associations,
participated in domestic seminars on associations, conducted
overseas study tours and "collected practical ideas for
operation, assent and accommodation," Lam said.


6. (SBU) Lam noted that the ninth draft of the Law on
Associations has nine chapters comprising sixty-two separate

HANOI 00000835 002.2 OF 006


articles. Chapter I (Articles 1-8) outlines general
provisions of the law including: the right to create
associations, the scope of the law, principles for
organization and operation of associations, proscribed
activities and "behaviors" and the responsibilities of State
agencies charged with management of associations.


7. (SBU) Chapter II (Articles 9-19) defines eligibility and
procedures for establishing associations. According to
these articles, an association is "eligible for creation"
(i.e., licensing) if it provides a legal statement of goals
and objectives, has an appropriate organizational structure
and number of members, has a charter, has a head office,
owns property and does not have a "coincidence of names"
(NFI). The chapter also states that a campaign committee
for the creation of an association must have five members,
and defines nomenclature, logos, seals and the requirements
for documentation of registration, as well as the major
required provisions of a charter. Certificates licensing
the creation of associations must be granted within sixty
days of application. The association must hold its
inaugural congress within ninety days of receiving the
certificate, although this deadline may be extended by
thirty days. Chapter II also defines what must happen at
the congress, as well as the required reports of its results
and the authorized means for announcing establishment of the
association. Finally, the chapter states that MOHA has the
national-level authority to grant certificates of
establishment while Provincial People's Committees (PPCs)
are responsible at the local level.


8. (SBU) Lam stated that Chapter III (Articles 20-25)
defines membership for official, associate and honorary
members of associations, and defines admission, expulsion,
obligations and rights of members under its charter.
Associates and honorary members have the same rights as
official members, but are barred from voting (or running)
for leadership positions and from voting on association
business, he said.


9. (SBU) Chapter IV (Articles 26-39) defines the parameters
for the organization and operation of an association. An
association is comprised of a congress, a board of
management, an inspection board and other structures defined
by its charter. "In the interests of democracy," a congress
must have the participation of two-thirds of the
association's total membership and must be held every five
years and must address specific issues for each term, Lam
said. Voting principles for participants and parameters for
"ad hoc" congresses are also defined. Reports on the
congress must be available within thirty days of its
conclusion. Both the management and inspection boards of
associations also have delineated responsibilities and
authorities, and the head of the Management board must meet
certain qualifications. The chapter also authorizes an
association to establish representatives and branch offices
in foreign countries, though legal membership is qualified
and association responsibilities and authorities defined in
the law, he added.


10. (SBU) Lam noted that Chapter V (Articles 40-52)
describes procedures for uniting, splitting or dissolving
associations, as well as management board and State agency
responsibilities in cases of dissolution. Associations may
unite if they operate in the same field and area, and union
promotes "coordination, harmonization and organization" of
common activities, he said.


11. (SBU) According to Lam, Chapter VI (Articles 53-55)
governs foreign associations and foreign organizations
operating in Vietnam. Foreigners residing permanently in
the country for more than twenty-four months, and foreign-
based organizations, may form associations, under specific
procedures and defined areas of operation.


12. (SBU) Chapter VII (Articles 56-58) authorizes ownership
of property and codifies the finances of an association.
Associations are permitted to raise revenues through
membership fees, support from the State budget, individual
and organization contributions and from "legal incomes."
Expenditures must follow the rules of an association's
charter. Management of property and finances is also
subject to the association's charter and the laws of
Vietnam. Associations that "operate for the public good" as
charity or humanitarian organizations are entitled to
preferential taxation, he said.


13. (SBU) Lam noted that Chapter VIII (Articles 59-60) deals
with commendations and awards for good associations and

HANOI 00000835 003.2 OF 006


delineates procedures for "dealing with violations."
Chapter IX (Articles 61-62) lays out the process for the law
to be implemented under governmental decree.


14. (SBU) In conclusion, Lam explained that there are still
three areas to be resolved, "subject to differing points of
view," concerning the draft Law on Associations. First,
there is still debate about the scope of the law, i.e.,
whether the Vietnam Fatherland Front (VFF),the Ho Chi Minh
Communist Youth Union (HCMC CYU),the Vietnam Federation of
Trade Unions (VFTU),the Vietnam Women's Association (VWA),
the Vietnam Farmers' Association (VFA) and the Vietnam War
Veterans' Association (VWVA) should fall within its purview.
In addition, some people argue that associations of
foreigners and foreign organizations should not be covered
by the law. Secondly, there is still disagreement
concerning whether ministries and sectoral agencies should
be allocated responsibility for managing the operation of
associations that fall under their jurisdiction. Finally,
Lam acknowledged that "further considerations are needed to
simplify the procedures for the establishment of
associations."

Discussion
--------------


15. (SBU) Ambassador Peter Hansen of Denmark noted that the
donor community welcomed the opportunity to openly discuss
this draft law and thanked MOHA for arranging the dialogue
session. The law is an important step for citizen
involvement in Vietnam's social and economic development.
He noted, however, that international concerns remain about
how the draft gives discretionary powers to State officials
under Article 8, point 3. Assigning such poorly defined
powers undermines the rule of law and is not in accordance
with good governance. "A good law is a clear law," he
added. The Law on Associations should clearly state what a
citizen can or cannot do. Hansen also noted that the draft
assigns two separate institutions: MOHA and a responsible
agency at the national level, and the PPCs and agency
departments at the provincial level. This system of
"redundant management" means that associations will "never
know who they are actually working with," he said. Under the
registration process as written, NGOs or associations must
make at least two applications to register with the
different management entities. In addition, the
registration process is needlessly complicated and
cumbersome, which increases the likelihood of "rent-seeking"
and corruption, which is particularly dangerous as Vietnam
tries to establish a new system under the rule of law. A
rule-of-law system is the most conducive to facilitating
growth of civil society in Vietnam, he said.


16. (SBU) Ambassador Markus Cornaro, Head of the European
Commission Delegation, noted his appreciation that the draft
law addresses how foreigners, NGOs and international
organizations may register associations. However, he noted
that it is not clear how NGOs that have already been
established in Vietnam will be affected. He also noted that
in the sixth draft of the law, associations were allowed to
comment and advise the GVN on national policy; however, this
provision was struck from the latest draft. Permission for
associations to delve into national policy is important
because "it strengthens associations' participation in
national politics," he said. Finally, he observed that the
current draft law also "tends to bureaucratize" civil
society despite MOHA's stated intention to move away from
such a framework.


17. (SBU) Ambassador Marine noted that the United States
believes that a Law on Associations is important for
empowering an increasingly vibrant civil society. He agreed
with the comments voiced by his colleagues and noted that
Lam had acknowledged many of them in his presentation. The
new law should be drafted through a process of continued
consultation and dialogue with the donor, NGO and Vietnamese
association communities and with the input of the Vietnamese
people. The Law on Associations should also be as simple,
open and non-intrusive as possible to remove the burden of
Government micro-management. The United States stands ready
to provide any technical assistance or professional
expertise required to facilitate the expeditious drafting
and promulgation of this new law, he said.


18. (SBU) A representative from a civil society association
(NFI) asked why some organizations were included in the law
and some were not, namely VFF, HCMC CYU, VFTU, VWA, VFA and
VWVA, as well as religious organizations. She noted that
community-level organizations are also not covered by the

HANOI 00000835 004.2 OF 006


law. The UNDP representative asked why the current draft
did not include changes recommended by a recent UNDP study
comparing MOHA's draft with a draft law written by the
Vietnam Union of Scientific and Technical Associations
(VUSTA). (NOTE: A previous MOHA draft was widely criticized
on December 13, 2005, by representatives of various
associations. On December 23, VUSTA released its own draft
highlighting inadequacies in the MOHA draft. End Note).


19. (SBU) In his response, Vice Minister Tien did not
comment on specific issues, but addressed general areas of
concern. Regarding NGOs, he noted that the GVN always tries
to encourage people to participate in the policy of "Doi
Moi" (renovation) and the transformation of Vietnam into a
market economy. "The Law on Associations was drafted in
that spirit," he said. Regarding State management, he noted
that MOHA has been assigned the responsibility of managing
associations in certain areas by the GVN, including the
responsibility for granting certificates of establishment.
However, other ministries will also be responsible. This
does not mean that line ministries will handle day-to-day
management, but associations will have to ask for approval
for activities from them. Associations will be subject to
the law and ministries will have to manage the sectors under
which they operate. Associations will have to follow
regulations in each sector.


20. (SBU) Regarding exclusion of the six "mass
organizations" from the purview of the law, Tien noted that
this must be viewed in the "context of Vietnamese history."
These organizations all existed before the establishment of
the Communist Party of Vietnam and before the establishment
of the Socialist Republic of Vietnam. They worked with the
GVN to develop the State. Nevertheless, the draft is "still
being consulted" in this area. Tien also noted that a legal
document will eventually be promulgated to facilitate the
formation of international organizations in Vietnam.
Regarding community-based associations, MOHA will take
public concerns into account; however, the law won't cover
small groups like clubs and other community groups.


21. (SBU) Ambassador Jean-Francois Blarel of France observed
that Vice Minister Tien did not address the Danish
Ambassador's concerns about discretionary powers. He also
noted that the French Embassy organized a 2004 seminar for
MOHA drafters, but very few of the ideas developed in that
seminar were incorporated into this draft. The
recommendation to exclude associations from the normal
taxation regime will lead to problems without the inclusion
of the recommended provision to prevent commercial
organizations from utilizing association status to profit
improperly from business conducted under this favorable
regime. Ambassador Cornaro seconded this point.


22. (SBU) Ambassador Hansen reiterated that the draft law
appears to mandate unified management of associations under
MOHA; however, line ministries are also tasked with
management. The term "management" itself suggests control
rather than regulatory supervision. Organizations and
associations by definition shouldn't be managed by the
State; rather, they should be self-governing institutions
that are subject to law. As written, the Law on
Associations is completely counter to MOHA's stated goal to
allow the establishment of as many associations as possible.


23. (SBU) Tien responded that the draft incorporates some
international advice; however, drafters took into account
the context of Vietnam. "We had a long war and were subject
to a centrally planned economy for a long time so we have to
be judicious in what experiences we draw on as we
integrate," he said. He added that associations are subject
to the tax law, which is why MOHA did not include the French
ideas in the current draft. Improper business practices are
covered under the tax law.


24. (SBU) Regarding management, Tien explained that under
Articles Six and Seven, there is no confusion over areas of
responsibility. MOHA will issue certificates of
establishment while line ministries will regulate sectors in
which associations operate. For example, an association
related to pharmaceuticals would be subject to Ministry of
Health regulations, but would not be managed by the ministry
on a day-to-day basis. The drafters "are trying to end the
traditional system of ministry patronage," he said. The GVN
is trying to facilitate citizen participation in civil
society so it won't interfere in the management of
associations.


25. (SBU) Regarding national policy, Tien noted that Vietnam

HANOI 00000835 005.2 OF 006


is no longer a centrally planned economy, and thus
associations are already able to advise the Government about
policy. For example, many different groups recently
registered their opinions and ideas with the GVN about the
Son La Dam project in Son La Province.


26. (SBU) Ambassador Marine noted that use of the term
"management of associations" is the root of the problem.
What MOHA describes is a legal framework. The law should
not talk about management at all. Associations should be
simply told to obey national law. There is no need for line
ministries to be given management responsibilities. The law
should also spell out that associations have the right to
advise on national policy, he added.


27. (SBU) Ambassador Hansen stated that the issue of State
employee discretion in interpreting the law has still not
been addressed. Under the draft as written, any State
official could decide whether an association can be formed,
but if they don't like the association or decide that it is
"immoral," they can prevent its establishment until the
right bribe is made. MOHA must clarify limitations for
associations to avoid running the great risk of expanding
corruption, and damaging movement toward rule of law in
Vietnam.


28. (SBU) The PPWT (NFI) representative noted that under the
draft law, associations that have not been officially
established have no legal status and thus no rights under
law. This could be especially problematic for community
associations. She also seconded Ambassador Marine's point
that an association's right to comment and advise on policy
should be spelled out in the law.


29. (SBU) Director General Lam responded that all
associations should be able to establish legal status
because all groups of more than two people must register. In
any event, small groups should not be concerned about their
legal status because the draft law only talks about groups
with legal status (sic). There is also no regulation in the
draft regarding associations that have no members, e.g.,
foundations. The drafting committee will recommend that the
GVN establish a separate foundations law to cover these
groups.


30. (SBU) The Program Officer of the Swiss Embassy noted
that once the law is promulgated, it will affect many
existing organizations. VUSTA has come up with an alternate
draft. How was the VUSTA law taken into account in the
draft? Also, the Swiss representative seconded the UNDP
representative's points and asked why the documentation
needed to apply for establishment was not explicitly
defined. She also noted that previous drafts of the law
prescribed a minimum membership for establishment; however
the present draft only states that "an association must have
a large enough membership."


31. (SBU) Lam recommended that dialogue participants compare
and contrast the VUSTA and MOHA drafts on their own. In any
event, VUSTA associations will not be affected by the Law on
Associations. He also noted that Decree 31 and Decree 65
already spell out the necessary documents for applying to
establish an association. Further implementing decrees will
also cover this issue.


32. (SBU) Ambassador Hansen reiterated the donor community's
appreciation for the opportunity to comment on the draft law
and asked that MOHA's drafters continue this dialogue after
they have had a chance to discuss the issues raised in this
session. Tien responded that after the law is promulgated a
number of decrees will be passed with further guidance on
the meaning of the law.

Donor Follow-up
--------------


33. On April 7, Ambassador Hansen sent a letter drafted with
input from the rest of the donor community to Tien
reiterating concerns voiced during the open session. In
particular, at our urging, he reiterated concerns about the
explicit use of the term "State management" in the draft.
The letter suggested that the law use the terms "regulatory
authority" and "registering responsibility" to define the
roles of line ministries and MOHA, and drop the term
"management" entirely. This would clarify concerns about
redundant management.

Comment
--------------

HANOI 00000835 006.2 OF 006




34. The GVN is hesitant to promulgate this civil society
version of the law because it rightly recognizes that,
depending on how it is done, legalizing associations could
be like opening Pandora's Box. Vietnam's leadership is
likely to remain very skittish about the potential this law
has to open up society, and thus further debate and foot-
dragging is likely in the cards. After all, the first draft
of this law surfaced in 1992.

MARINE