It’s impossible to control the
exploited output

Vietnam is considered a rich country in natural
resources, with more than 60 kinds of minerals with big reserves, including
bauxite, titan, rare earths. Especially, oil and gas has the total estimated
reserves of 4.3 billion tons.

The mining
industry’s contribution to the national economy has been increasing year after
year, from 4.81 percent of GDP in 1995 to 9.5-10.59 percent in the years from
2000 to 2008. In 2008, the oil and gas industry made up 24.37 percent of the
state budget, while in 2009, the industry brought 8.5 billion dollar from exports.

However,
Thoi bao Kinh te Saigon has quoted the
Development Research Institute as saying that “the percentage of coal lost in
the process of pit mining is very high at 40-60 percent. This has been
attributed to the backward mining technology.” However, experts say there are
many other reasons behind the high loss percentage.

Under the
current laws, the State’s main source of collection from mining activities
comes from the natural resource tax. Currently, mining enterprises declare the
exploited output themselves to the state management agencies which then
calculate the tax sums enterprises have to pay.

“The
problem is that except the oil and gas exploited output, it is now impossible
to supervise and control the actual exploited volumes of enterprises,” said Lai
Hong Thanh, Deputy Chief Inspector of the Ministry of Natural Resources and the
Environment.

Thanh said
that “in reality, for many reasons, the declared figures, based on which
taxation agencies calculate the tax sums enterprises have to pay, are not the
actual figures.”

“This is
one of the main reasons which leads to the loss in tax collection. It is
necessary to apply a mechanism which allows making information transparent,”
Thanh said.

EITI the solution

Experts
believe that in order to settle the current problem, Vietnam should join EITI.

The
Extractive Industries Transparency Initiative (EITI) increases
transparency  in overpayments by
companies to governments, and to government-linked entities, as well as
transparency over revenues by those host country governments.

There are two
main rules in EITI: 1) requiring mining companies to expose the information
relating to the expenses to the governments and vice versa, requiring
governments to expose the information relating to the receipts they get from
mining companies; and 2) there must be an independent governance unit which is
in charge of checking the collected figures. The unit must be supervised by a
committee with the members from different sectors.

By October
2010, 31 countries in the world have joined EITI, while more than 50 leading
oil and gas and mining companies in the world, including Alcoa, BHP Billiton
have made the commitments at the international level and industrial
associations.

A survey
has found out that 66.7 percent of enterprises have got ready to join EITI.

“The
transparency will help attract long term investors and avoid the investors, who
just want to earn money quickly and then leave away,” said Tran Huu Huynh,
Deputy Secretary General of the Vietnam Chamber of Commerce and Industry
(VCCI).

Pham Quang
Tu, Deputy Head of the Development Consultancy Institute, stressed that the
transparency in the mining industry is a very important factor to manage and
use the natural resources in the most effective way for the development of a
nation.

Experts say
they do not see any obstacles to the implementation of EITI. “There is no risk
in joining EITI,” Huynh said.

Yen Le