The Problems Of Joint Venture Under Vietnam Competition Law

The Competition Law 2018 defines a joint venture between enterprises (JV) as a transaction where “two or more enterprises together contributes a portion of their lawful assets, rights, obligations, and interests to form a new enterprise” (JV Definition). The Competition Law 2018 requires a JV satisfying certain notification thresholds to be notified to the competition authority for review. However, the application of the JV concept under the Competition Law 2018 is problematic because:

  • First, the JV Definition does not take into account the element of “joint control”; and

  • Second, the JV Definition does not accurately reflect the sequence of actions in the formation of a JV company under the Enterprise Law 2020.

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Written by Nguyen Quang Vu On In ,

Allocating Sea Area for Offshore Wind Power Projects In Vietnam

Applicability of Decree 11/2021

It is likely that an offshore wind power project (Offshore WPP) will need to follow the procedures under Decree 11/2021 in order to be allocated with the necessary sea area for development and operation of the Offshore WPP. This is because:

  • Under the current wind power development regime of Vietnam, an Offshore WPP is defined as a grid-connected wind power project with wind power turbines constructed and operated “from the average lowest seawater line over several years off the coast” (nằm ngoài đường mép nước biển thấp nhất trung bình trong nhiều năm ra ngoài khơi);

  • Decree 11/2021 applies to the allocation of certain sea area “from the average lowest seawater line over several years off the coast” for exploitation and use of “sea resource” (tài nguyên biển); and

  • Sea resource is defined to include biological and non-biological resource of the water mass, the [sea] bed and the soil beneath the seabed.

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Written by Nguyen Quang Vu On In , ,

The Institutional Representative of the State in a Vietnamese State-owned Enterprise (SOE)

Decree 47/2021 implementing the Enterprise Law 2020 and Decree 10/2019 implementing the Law on Management State Capital 2014 provide helpful clarification on (1) the entities who can act as the owner representative agency (cơ quan đại diện chủ sở hữu) of the State in a SOE, and (2) calculation of State shareholding in an enterprise. In particular,

  • Under Decree 10/2019, the Institutional Representative only include (i) the Commission for the Management of State Capital at Enterprises (CMSC); (ii) Ministries, Ministry-equivalent agencies, Governmental agencies, provincial People’s Committee; and (iii) the State Capital Investment Corporation (SCIC). Accordingly, other SOEs such as EVN or PVN are not regarded as an Institutional Representative. In the past, it is not clear an SOE can be regarded as the Institutional Representative in another SOE.

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Written by Nguyen Quang Vu On In ,

Offshore Wind Development in Vietnam – Legal Issues Relating to the Use of Sea Area

Vietnam appears to have great potential to develop offshore wind. And recently, many foreign investors are interested in developing large offshore wind farms in Vietnam. Unfortunately, except for regulations on offshore oil and gas development under the Petroleum Law, Vietnam does not have adequate regulations to develop a large offshore infrastructure project such as offshore wind farms. This starts with inadequate legal framework on the use of sea under the Law on Sea 2012 and Decree 11/2021. In particular,

  • The Law on Sea 2012 and Decree 11/2021 allow certain sea areas (khu vực biển) to be allocated for exploitation and use of “sea resources” (tài nguyên biển). While the term “sea resources” is not clear, it appears to include offshore wind farm development. Decree 11/2021 requires a project developer of an offshore wind farm to pay from US$ 125/ha/year to US$300/ha/year for the sea area allocated to the project. Payment for the allocated sea area could be a substantial amount since an offshore wind farm could require significant sea area for not only the wind turbines and the floating sub-station but also the sea area for the undersea transmission line and other protective area/corridor. On the other hand, sea area allocated to offshore oil development is exempt from payment under Decree 11/2021.

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Written by Nguyen Quang Vu On In , ,