VINACHEM

HA NOI (VNS) — Viet Nam is determined to participate in the Extractive Industries Transparency Initiative (EITI) in 2015 as a way to improve the efficiency of mineral resource governance and ensure a harmonised benefit to people, enterprises and the State.

The information was released yesterday in a conference on extractive industry governance jointly held by the Ministry of Natural Resources and Environment, the Viet Nam Chamber of Commerce and Industry, and the National Assembly's Committee for Science, Technology and Environment.

Chairman of the chamber Vu Tien Loc said EITI has become a trend that many countries in the world were promoting and implementing.

The initiative was considered a useful tool for the nation to better manage natural resources and ensure the extractive industries' active and effective contributions to the national development.

In Viet Nam, since 2000 to date, the industries have contributed 11 per cent of its GDP and 25 per cent of the State budget every year, and created 430,000 jobs.

However, the lack of transparency and accountability in industry governance has resulted in the low economic efficiency of the sector, serious social and environmental impacts, and unequal benefit sharing, Loc said.

Mai Xuan Hung, deputy chairman of the NA Economics Committee, agreed, saying that currently, wherever mineral resources were exploited, the poverty rate was high, the environment was polluted and the infrastructure was destroyed.

Andy Baker, chief representative of Oxfam in Viet Nam, said more than 60 per cent of the world's poorest are living in the countries that were rich in natural resources.

A study of the organisation also shows that the more a country depends on mineral exploitation, the higher the poverty rate.

Besides, without proper management, the extractive industries would cause deforestation, destroy the biodiversity and pollute the soil and water environment.

Pham Quang Tu, deputy director of the Consultancy on Development Institute, said that admission to the EITI could help Viet Nam limit losses to State budget, improve the competitiveness of Vietnamese extractive industry, prevent corruption and minimize benefit conflicts.

However, experts urged many things needed to be done before Viet Nam could join the initiative.

Hung from the Economics Committee stressed that the exploration activities must be boosted to define potential reserves of minerals so that the Government could have proper planning for each type of mineral.

So far, there is no official figures of potential reserves as well as the exploited volume of minerals.

Le Dang Doanh, former Director of Viet Nam's Central Institute for Economic Management, said "If we do not know exactly how much we have, we cannot manage it."

In fact, there were situations where enterprises could declare the scale of a mine smaller than its actual reserves to avoid petitioning the environment ministry and easily ask permission from localities.

He said licensing too many small projects had caused difficulties for State agencies to control and supervise, while they often ignored requirements of sustainable development such as environment protection and social responsibility.

Lai Hong Thanh, director of the ministry's mineral activities controlling division, said as of May this year, central authorities have granted more than 500 licences for mineral exploitation while provinces and cities issued 4,200 such licences.

Sharing experiences of Timor Leste in implementing the EITI, Alfredo Pires, Minister of Petroleum and Natural Resources, said the Eastern Asian country had implemented the EITI since 1993.

He said that when a country planned to join the initiative, it should have a strong commitment and spend at least 18 months to prepare a detailed working plan, funds and human resources for the establishment of an EITI board.

Local people should also be well aware of the significance of EITI implementation, he added.

Pires also stressed that the EITI participation did not only contribute to the enhancement of socio-economic and environmental management, but also helped consolidate people's trust in the Government.

Baker from Oxfam suggested that Viet Nam comply with some principles when building management policies such as ensuring transparency in the decision-making process and respecting the right to Free, Prior and Informed Consent (FPIC) of communities affected by the exploitation.

The initiative, launched by former British Prime Minister Tony Blair in 2002, is based on a mechanism that mining companies must make comprehensive reports on expenditure for governments, while governments must publicise the revenue it receives from the companies, said an independent agency then compares the data.

As of this May, there are 39 countries taking part in the initiative. — VNS