Enhancing supervisory activities of the national assembly at state owned economic groups

1 INTRODUCTION MINISTRY OF EDUCATION AND TRAINING NATIONAL ECONOMICS UNIVERSITY TRINH NGOC TUAN ENHANCING SUPERVISORY ACTIVITIES OF THE NATIONAL ASSEMBLY AT STATE-OWNED ECONOMIC GROUPS Major: Economic Management Code: 62.34.01.01 ECONOMICS DOCTORAL THESIS Science instructors: Assoc.Prof., Dr Pham Hong Chuong Assoc.Prof., Dr Dang Van Thanh Hanoi - 2013 The necessity of the thesis Implementing the guidelines and policies of the Party and the State, the Government has set up 13 pilot state-owned economic groups based on restructuring some state-owned general companies State-owned economic groups can held and are given priority to significant capital resources and fields of operation to function as the motive force of the country’s economy, to promote economic growth, to regulate macroeconomy, to stabilize prices and to provide essential products for the economy Up till now, state-owned economic groups are able to raise capital, expand business lines and exploit the material and technical foundation associated with their core businesses better, thereby improving their competitivenes and confirming their positions and brands in the process of international integration Along with the execution of economic objectives, these groups also ensure the implementation of the other goals of security, defense and social welfare for the country However, after the experimental period, the economic group model has revealed inadequacies in organization and decentralization Regulations of organization and operation in economic groups shows inconsistency leading to overlapping and reducing the performance efficiency of member enterprises in particular and the whole group in general Besides, the way economic groups use state funds and assets is ineffective and unparallel to their given missions; the proportion of capital invested in non-core fields is high and posing potential risks Some mistakes at state-owned economic groups have caused great loss and social unrest According to current legal documents, the use of state funds is regulated by the Law of State Budget and other relevant legal documents The Government and governmental agencies are responsible for the use of state funds but the allocation and monitoring of them are performed by the National Assembly and the National Assembly's authorities The position and role of state-owned economic groups have been confirmed but at present supervisory activities of the National Assembly and the National Assembly’s agencies at these groups to ensure that their operations are in accordance with guidelines and policies of the Party and the State are facing difficulties because it is the pilot model, there are many new problems for both the legislature and the executive authorities At the same time, the system of criteria for performance efficiency has not been finalized The supervision of the National Assembly is largely based on the report of the State Audit Office, the Government, related Ministries and the corporations Moreover, with the current member structure of the National Assembly, the ability to capture, understand and analyze financial information is uneven This is the reason why supervisory activities of the National Assembly of state-owned economic groups are not as expected Currently, the number of state-owned eonomic groups has risen to 13, all of which are pilot model without any laws to regulate their operation, while supervisory activities of the National Assembly are retricted with low efficiency In fact, since the pilot establishment of state-owned enterprises began in 2005, the National Assembly made only one supreme supervision in 2008, then issued a resolution with specific requirements for the Government to perform and report to the National Assembly in 2009 Since then, the National Assembly has not performed any supreme or specialized supervision on this economic sector Impacts after the supervision are worth attention because after the National Assembly issued a resolution, execution of the Government and its effectiveness not receive adequate care from the National Assembly Therefore, the improvement and enhancing monitoring effectiveness of the National Assembly is an urgent need because the National Assembly plays an important role in establishing legal frameworks for the operation of economic groups and supervising their foundation, operation and performance in order to ensure their efficiency Due to the above analysis, the research student selects the topic of Enhancing supervisory activities of the National Assembly at state-owned economic groups Overview of research The economic group model has been applied in some countries For further comparable basis, the thesis will research into the operating model, organizational structure and the management and supervision of corporations in the Republic of France, South Korea and China In Vietnam, as this is the pilot model, it should be analyzed to clarify the legal basis related to the group's activities, review current regulations for the operation of the group, and to compare with practical activities to analyze the positive aspects and limitations The thesis focuses on collecting documents and reports with contents of the roles, scale of operation, main business lines and external sectors, management and use of capital, management mechanism, the implementation of social objectives of state-owned economic groups based on financial statements (assured by audit results) and different sources of information (supervision reports of the National Assembly, agencies of the National Assembly, works of scientists and economists, etc.); supervision activities of the National Assembly will be explored and analyzed by method, level of supervision, contents should be mainly based on the reporting system, exchanging contents and recent practices of supervision of the National Assembly at state-owned economic groups On this basis, research student will also synthesize based on the main contents as above, however, in order to evaluate closely the real research situation and to be in accordance with the scope of the study, the authors will summarize by two research groups: studies of domestic authors and studies of foreign authors 2.1 Research by domestic authors Currently, there have been a number of studies related to state-owned economic groups and supervision activities of the National Assembly on different aspects Each work lies in a different aspect and only solves part of the problems related to stateowned economic groups Referring to the theoretical and practical development of state-owned economic groups in Vietnam, there have been a number of elaborate research projects on this issue, such as the scientific research by PhD Vu Thi Dau and her associates on "Developing state-owned economic groups of Vietnam during the period of international economic integration" (2010), the scientific study by MSc Ho Thi Huong Mai on 'Developing economic groups in Vietnam - Theory and practice "(2010) or the scientific research by PhD Tran Tien Cuong on "Economic groups - Theory and international experience applied in Vietnam (2005)" In these studies, the authors have analyzed specific rationale and practicality of the establishment and development of state-owned economic groups as well as assessed the impact of international economic integration on the development of state-owned economic groups in Vietnam (from 2005 to 2010) On this basis, the authors have proposed orientation and solutions to develop state-owned economic groups when Vietnamese Government implement fully WTO commitments Besides, when referring further to the organizational and operating model of Vietnamese economic groups, there are articles by experts and researchers like "Legal framework for the formation and operation of the state-owned economic groups in Vietnam (2011)” by Assoc.Prof Dr Le Xuan Ba, "Some problems arising from the pilot establishment of state-owned economic groups in Vietnam (2011)" by Prof Dr Nguyen Ke Tuan, "Discussing the organizational model of state-owned economic groups in Vietnam (2011)" by Prof Dr Nguyen Dinh Phan, "The legal status of stateowned economic groups (2011)" by Assoc.Prof., Dr Nguyen The Quyen and Assoc.Prof., Dr Tran Van Nam, "The bottlenecks in the development of state-owned economic groups (2011)" by Dr Nguyen Minh Phong Articles by experts and researchers present an overview of the process of formation, the real situation of legal framework for the establishment and operation of state-owned economic groups as well as to make recommendations and proposals to complete the legal framework in the future Notably, in 2010, the Central Institute for Economic Management (CIEM) published "General report and analysis of international experience in reforming administration at state-owned enterprises in accordance with international rules and in monitoring economic corporations and lessons for Vietnam" This report indicated an overview of reforming administration at state enterprises, experience in supervising groups in developed countries such as the Republic of France, Germany and other countries in the Organization for Economic Cooperation and Development (OECD), China, etc Through analysis, the report has drawn lessons of experience for Vietnam in establishing and monitoring state-owned economic groups Regarding this problem, research student published an article on "Separating state ownership function and state management function: Towards a unified and transparent mechanism" - Economics and Forecasting Magazine No 24 (2011) In this study, research student analyzed the necessity to separate the function of state ownership from state management of state government agencies for state-owned enterprises for the purpose of removing the problems related to the mechanisms and policies, thereby creating unity and transparency and improving the efficiency and effectiveness of state management as well as enhancing autonomy for this economic sector This is an important basis to help the National Assembly and National Assembly agencies to oversee the use of state funds and properties Referring to studies of functions of the National Assembly including overseeing functions, in addition to provisions in Constitution (1992) and legal documents such as the Law of Organization of the National Assembly (2001), Law of supervision of the National Assembly (2003), etc., there are many studies on this issue such as "The right of supreme supervision of the National Assembly and the right of supervision of the National Assembly agencies (2003)” by Prof Tran Ngoc Duong, "Supervisory activities of the National Assembly in other countries and Vietnam, Vietnam National Assembly – Theoretical and Practical issues (2005)" by PhD Le Thanh Van, "Functions of the National Assembly and the implementation of functions (2011)" by Assoc.Prof., PhD Dang Van Thanh, etc In these studies, the authors provides an overview of the functions of the National Assembly and the implementation of these functions, with particular emphasis on the overseeing function and analysis of strengths and weaknesses and the need for innovating this activity of the Vietnam National Assembly Further research also includes "Renew and strengthen supervising activities of the National Assembly (2011)" by PhD Truong Thi Hong Ha The author focuses on analyzing the perspective of enhancing supervisory activities of Communist Party of Vietnam in the process of renovating the country, and based on that basis, assesses the situation and offer solutions to enhance the Party's leadership in supervisory activities of the National Assembly The research student also have a study on "Improving the effectiveness and efficiency of the National Assembly in supervisory activities during the integration period" (2008), in this study, the author has systemized the basic theoretical issues of the supervisory activities of the National Assembly in previous period, assessed the real situation of supervisory activities of the National Assembly, pointed out the limitations and their causes that reduce the effectiveness and efficiency of supervisory activities Through perspectives, orientation and limitations, the authors have proposed solutions to improve the efficiency and effectiveness of the supervision of the National Assembly in the near future About research related to supervision activities of the National Assembly at state-owned enterprises in general, including state-owned economic corporations, there is not much research regarding this issue because economic corporations are newly established in pilot models, studies mainly focused on the legal status and group model building The National Assembly and National Assembly agencies have recently made a supreme supervision on "The implementation of the policies and laws in the use of capital and assets at state-owned groups and general companies (2009) This report clearly shows the rea situation of executing policies and laws in managing and using capital and assets at state-owned corporations and general companies, as well as problems in implementing pilot stat-owned economic group model in the country At the same time, the report makes recommendations concerning improving efficiency of using capital and assets at state-owned corporations and general companies Then, after their supervision, the National Assembly issued Resolution No 42/2009/QH12 of the National Assembly on "Enhancing the effectiveness and efficiency in implementing policies and laws in managing and using capital and assets at state-owned corporations and general companies" (2009) This resolution is a step to specify the requirements and recommendations of the National Assembly members regarding supervision of implementing policies and laws in managing the use of capiatal and assets at state-owned groups and general companies, through groups of tasks and specific measures the National Assembly requires the Government to implement and report the results to the National Assembly A research result of the Central Institute for Economic Management (2005) in "Report on the survey results of economic groups in Malaysia and Thailand", experience to effectively monitor the performance of economic groups in Malaysia showed that in order to separate government from enterprises - a key objective to improve corporate governance, Malaysia has implemented a number of innovations such as turning groups into companies and making them operate in accordance with corporate law, hiring representatives from external, non-governmental agencies to hold positions in the management board or other senior management positions, including general manager positions and reducing state capital at enterprises The research student has articles related to the research topic such as: "From the proposal to restructure of Vinashin Group: How to monitor the activities of stateowned economic groups?" - Economic Development Magazine, No 167 (2011) and "Discussion of monitoring mechanism for the operation of state-owned economic groups" - Scientific Conference on "Organizational structure and operation of stateowned economic groups (2011)” Research student has assessed the supervisory activities of the National Assembly at groups, pointed out the limitations of the existing supervising activities, and proposed solutions to improve supervisory activities of the National Assembly at these enterprises Besides, there are many articles and conferences mentioning this problem However, studies only solve part of the problem related to the development of state-owned economic corporations, raise some solutions to complete the operating model as well as to monitor the operation of state-owned economic groups in Vietnam without any criteria for evaluating the supervisory activities explicitly 2.2 Research by foreign authors Research on the model of economic groups and monitoring mechanism for such groups shows that some countries perform monitoring groups including the the parent company through monitoring mechanisms and audit Some countries have established a special committee of the National Assembly to monitor the parent company when the parent company is owned by the state A study of author Anjali Kumar (1992), in the report "The State Holding Company: Issues and Options, World Bank" indicated that India applied many auditing and monitoring mechanisms to supervise the operation of parent companies owned by the state In general, works of domestic and foreign scientists related to supervisory activities of the National Assembly at state-owned economic groups have helped to complete the system of theories and practices of supervision by the National Assembly at state-owned economic groups The above studies also showed realities and causes of limitations and shortcomings in the implementation of pilot groups as well as in the monitoring of the National Assembly, but there has been no study concerning the criteria for supervisory activities of the National Assembly at state-owned economic groups Due to the actual requirements as well as the integration process innovation, it is the inevitable trend of Vietnam today to renew and complete the theories and practices in strengthening congressional supervision of state-owned economic groups Objectives of the study (i) The thesis focuses on developing a theoretical framework for analyzing supervision activities of the National Assembly at state-owned economic groups; (ii) Assesses the real situation of supervision of the National Assembly at state-owned economic corporations (iii) Develops proposals and recommendations to improve supervision activities of the National Assembly at state-owned economic groups to ensure the effectiveness and efficiency of state capital and asset resources at economic groups Object and scope of research - Subject of research: Supervisory activities of the National Assembly at stateowned economic groups - Scope of research: Supervisory activities of the National Assembly since the beginning of establishing pilot model of state-owned economic groups from 2005 to 2013 Research contents With such goals, the thesis will focus on specific research contents as follows: First, systemize theoretical basis for supervision of the National Assembly at state-owned economic groups Second, study international monitoring experience of state-owned economic corporations and draw lessons for Vietnam Third, reflect the real situation of congressional supervision of state-owned economic groups with focus on these contents: Contents of monitoring; Tools and resources for monitoring; Forms and methods to organize supervisory activities Fourth, evaluate supervisory activities of the National Assembly according to criteria, identify strengths, weaknesses and causes Fifth, propose measures to strengthen supervisory activities of the National Assembly at state-owned economic groups Research methods 6.1 Method of data collection Database and secondary data are collected from the monitoring results of the Standing Committee of the National Assembly, the National Assembly agencies, reports of some relevant ministries, information on websites and information synthesized by the author of the following contents: - The real situation of pilot implementation and performance results of stateowned economic corporations; - The real situation of supervisory activities of the National Assembly at stateowned economic groups Primary data in the thesis is obtained from the survey papers of members of the National Assembly involved in the supervision of state-owned economic groups Details are as follows: - The author of the thesis has issued 100 survey papers and collected 95 survey papers Among that, the number of papers sent to National Assembly members is 80 (the number of specialized National Assembly members at central level is 40, at local level is 10, and other National Assembly member is 30); the number of papers sent to economic groups is 05 and to staff directly advising and assisting committees of the National Assembly is 10 - The survey paper includes 35 closed questions divided into groups: • Group 1: Questions on assessment of the supervisory activities of the National Assembly (10 questions) • Group 2: Questions on assessment of the pilot establishment of stateowned economic corporations (5 questions) • Group 3: Questions on assessment of the supervisory activities of the National Assembly at state-owned economic groups (20 questions) For each question, there are levels to respond, including the level of strongly agree, agree, relatively agree, disagree and strongly disagree Based on the data collected, the author has synthesized and analyzed them in details 6.2 Method of analysis and data processing • Theoretical framework for analyzing the situation: - The thesis is based on the model of organizational management and supervision of enterprises in general and economic groups in particular, with focus on core issues such as comparing results with objectives/standards, combining administrative control and self-discipline - Financial supervision will be based primarily on a system of financial indicators (financial ratio) to evaluate the efficiency of capital usage at state-owned economic corporations - Use a system of criteria to assess the general supervisory activities of the National Assembly at state-owned economic groups: relevance, effectiveness, efficiency, sustainability and equity Also use the SWOT model to assess opportunities and threats, strengths and weaknesses of the supervisory activities of state-owned economic corporations in the context of international economic integration ● The specific methods used to study the situation: research, survey, comparison, analysis, synthesis and processing data Based on the theoretical framework outlined above, the thesis focuses on analyzing the status of the supervisory activities of the National Assembly at state-owned economic groups The authors also investigated as described in Section 6.1 Based on theoretical and practical basis, the author will propose and justify his solutions Outcomes Based on the research objectives and contents, the thesis provides a system of criteria to evaluate supervisory activities of the National Assembly; solutions and proposals to ensure the effectiveness and efficiency of the National Assembly’s supervisory activities at state-owned economic corporations These solutions focus on the contents: completing legal framework, monitoring tools, forms and ways of organizing supervisory activities, supervision criteria for state-owned economic groups This will be the author's contribution in scientific aspect to put theories into practice for supervisory activities of the National Assembly Layout of the thesis Besides the introduction, conclusion, appendices and reference list, the thesis is structured into three chapters: Chapter 1: Theoretical basis for the National Assembly’s supervision of state-owned economic groups Chapter 2: Analysis of supervisory practice of the National Assembly at state-owned economic groups Chapter 3: Solutions to enhance supervision of the National Assembly at state-owned economic groups CHAPTER THEORETICAL BASIS FOR THE NATIONAL ASSEMBLY’S SUPERVISION OF STATE-OWNED ECONOMIC GROUPS 1.1 General theoretical basis for supervisory activities 1.1.1 The concept of supervision Supervision is the monitoring and review of the management subject that has the right to monitor other entities to make judgement and assessment of their activities or can be understood as monitoring and checking for proper implementation of regulations 1.1.2 Characteristics of supervision First, supervision is always an activity of power (execute power) and always brings legal consequences Second, supervision is always a purposeful activity Third, supervision is always associated with a certain subject Fourth, supervision is always associated with a specific subject Fifth, supervision should be conducted on the basis of mutual rights and obligations of both the subject and the monitored object Sixth, supervision should be conducted based on certain grounds Seventh, supervision should be carried out continually, regularly and receive continual feedback to improve the implementation of goals 1.1.3 Classification of supervision - Supervision with state power: This type of supervision is carried out by authorized state agencies based on the principles of state power division - Supervision with no state power: This type of supervision is carried out by non-state agencies 1.1.4 Distinguish supervision, checking and inspection Supervision, checking and inspection all employ state power These activities are inevitable and objective in all states of all eras 1.1.5 Principles of supervisory activities (i) The principle of ensuring the leadership of the Communist Party of Vietnam in supervisory activities, (ii) The principle of democratic centralism, (iii) The principle of socialist legislation, (iv) The principle of accuracy, objectiveness (v) The principle of ensuring to ensure openness and (vi) The supervisory system should be designed simply and easy to perform at all levels and ensure effectiveness 1.1.6 Forms of supervision Forms of supervision are the outward expression of supervisory activities There are many different forms of supervision depending on ways of classification or also called bases of classification, for example, based on scope and scale, there are comprehensive supervision, specialized supervision and incident supervision; based on plan, there are scheduled supervision and unscheduled supervision 1.1.7 Methods of supervision (i) Collect information, records, documents and other related documents, (ii) Research, compare and statistic, (iii) Collect opinions from organizations and individuals; (iv) Consult experts, (v) Convince monitored objects to co-operate with monitoring subjects 1.1.8 Content monitoring (i) Review of legal documents, (ii) Review and evaluate capacity, qualifications and responsibilities of individuals elected and ratified by the National Assembly, (iii) Review, monitor the implementation of policies and laws, (iv) Resolve complaints and denunciations of people; (v) review the resolution of petitions 1.1.9 Tools of supervision (i) Legal documents, (ii) supervisory plan, (iii) Records and documents on supervisory contents, (iv) Minutes, document samples in the implementation process of supervision 1.1.10 The supervisory process Step 1: Collect information → Step 2: Develop supervisory program and plan → Step 3: Analyze the legality and reasonableness of the incident → Step 4: Reflect to the monitored object → Step 5: Write report of supervisory results → Step 6: Enhance checking and monitoring the implementation of supervisory results 1.2 The supervisory function of the National Assembly 1.2.1 The National Assembly and its functions The National Assembly of all countries in the world despite of bicameral or single model has basic functions, namely legislation, supervision and decision of important issues of the country 1.2.2 Supervision of the National Assembly 1.2.2.1 Objectives of supervision of the National Assembly Supervisory objectives of the National Assembly are to ensure that the activities of law enforcement agencies can meet the regulations set by the National Assembly 1.2.2.2 Basic characteristics and contents of the right to supreme supervision of the National Assembly - Basic characteristics: (i) Supreme supervision of the National Assembly is supervision with state power; (ii) Only the National Assembly is single authority with the right to supreme supervision - Objects being supervised: The highest authorities in the state apparatus - Contents of the right to supreme supervision of the National Assembly: (i) Monitor and check the constitutionality of legal documents and activities of the President, the Standing Committee of the National Assembly, the Government, the Supreme People's Court, the Supreme People’s Procuracy, (ii) Handle violations of the Constitution and laws 1.2.2.3 Means of implementation and results of supreme supervision of the National Assembly Examine reports of the President, the Standing Committee of the National Assembly, the Government, the Supreme People's Court, the Supreme People's Procuracy; National Assembly members question the President, the Chairman of the National Assembly, the Prime Minister, ministers and other members of the Government, Chief Justice of the Supreme People's Court, Head of the Supreme People's Procuracy with presence of the National Assembly at sessions of the National Assembly or with presence of the Standing Committee of the National Assembly in the period between two sessions (if assigned by the National Assembly) In addition, the right to supreme supervision of the National Assembly is guaranteed through supervisory activities of the National Assembly agencies and its members - Monitoring Results of Congress (i) Suspend, cancel documents issued by the above agencies that are against Constitution, laws and resolutions of the National Assembly, (ii) Decide the amendment, supplement, issue new documents to meet the requirements of state and socio-economic management, (iii) Consider the responsibilities of those holding positions elected or approved by the National Assembly - Forms of exercising supreme supervision Examine reports of the President, the Standing Committee of the National Assembly, the Government, the Supreme People's Court, the Supreme People's Procuracy; execute the right to question of the National Assembly members during each session and between two sessions of the National Assembly; supervise the actual compliance of the Constitution, laws, ordinances, resolutions when necessary; consider complaints and denunciations of citizens at National Assembly sessions 1.3 Some basic features of state-owned economic groups 1.3.1 The concept of economic group and state-owned economic group 1.3.1.1 The concept of economic group Economic group is a collection of companies operating in different markets under the same financial or administrative control, in which its members are bound together by the tie of mutual trust based on the basis of race or commercial context 1.3.1.2 State-owned economic group State-owned economic group is understood as a group of large-scale companies connected in the form of parent company - subsidiary and other forms, creating a combination of enterprises closely related in the long term State-owned economic group contains factors of economic groups and the state, including: (1) The parent company (Level I enterprise) is an enterprise whose charter capital are owned 100% or dominated by the State; (2) Subsidiaries of level I enterprise (level II enterprises) are enterprises dominated by the level-I firm and are organized in forms of joint stock companies, limited liability company of one or two members, general companies in the form of parent company - subsidiary, joint venture; (3) Subsidiaries of level-II and other leveled enterprises; (4) Associated enterprises of the group 1.3.2 Roles of state-owned economic groups 10 11 (i) Allow the promotion of large- scale economy advantage, (ii) Hold the key role of state economics in the economy, (iii) The important tool of the state in regulating market (iv) Implement major policies to address social issues 1.4 Monitoring of Congress for the State economic groups through research, direct survey and collected from financial statements, audit reports or other sources of information 1.4.5.3 Forms of supervision of the National Assembly at state-owned economic groups a) Examine reports, b) Monitor according to specialized topics and organize supervisory delegation, c) Questions and answer questions, d) Examine legal texts, e) Confidence vote, f) Establish Interim Committee 1.5 International experience of supervising state-owned economic groups and lessons for Vietnam Through study of state-owned economic group model and supervisory mechanism of this type of enterprise in the Republic of France, South Korea and China, the author can draw some experience for Vietnam as follows : - State-owned economic group's activities need to be placed under strict supervision of the National Assembly to ensure that the group's activities are transparent, open and efficient - Study to establish a specialized ministry or agency of the Government to perform the function of state capital owner at large-scale state general companies, groups and enterprises - Closely manage the process of expansion to avoid risks if the Government are unable to control the excessive expansion of corporations - Handle the relationship between competition and monopoly 1.4.1 The concept of supervision of the National Assembly at state-owned economic groups To better the business operations and financial performance of economic groups, the National Assembly plays an important role in creating legal framework for economic groups to operate, and at the same time supervise closely the process of formation, operation and executing functions of economic groups and ensure that they operate effectively 1.4.2 The inevitability of supreme supervision of the National Assembly at state-owned economic groups First, issue legal framework to regulate the activities of state-owned economic groups in accordance with guidelines, policies and laws of the State Second, adjust the activities of state-owned economic groups in a timely manner as a tool to regulate macroeconomy which other economic sectors are unwilling or unable to perform Third, supervision of the National Assembly at state-owned economic groups is one of the tools for the State to manage macroeconomics at this economic sector to ensure that the management and use of state capital is efficient and up to expected objectives 1.4.3 Objectives and evaluation criteria of the National Assembly supervision at state-owned economic groups 1.4.3.1 Supervisory objectives of the National Assembly at state-owned economic groups Develop a policy and legal framework suitable with state-owned economic groups and state management bodies; ensure that policies and laws are implemented effectively and efficiently to improve the performance of state-owned economic groups and state management capabilities 1.4.3.2 Evaluation Criteria for Congressional oversight of state corporations Enforceability - Suitability – Equality - Compatibility - Sustainability 1.4.4 Supervisory contents of the National Assembly at state-owned economic groups - Examine the system of legal documents related to state-owned economic groups - Examine action contents of state-owned economic groups - Examine the efficiency of business performance at state-owned economic groups - Examine the implementation of political tasks and the management of state capital and properties of state-owned economic groups - Examine other tasks such as human resource and labor management 1.4.5 Methods, tools, forms and organization of supervisory activities of the National Assembly at state-owned economic groups 1.4.5.1 Methods of supervisory activities of the National Assembly at state-owned economic groups - Supreme supervision: This is the method that the National Assembly will exercise its right to supreme supervision with state-owned economic groups at plenary sessions of the National Assembly - Supervision of specialized topics or through agencies of the National Assembly 1.4.5.2 Supervisory tools of the National Assembly at state-owned economic groups First, legal framework for supervisory activities of the National Assembly at state-owned economic groups Second, supervisory plan Third, records and systems of data about state-owned economic groups obtained CHAPTER ANALYSIS OF SUPERVISORY PRACTICE OF THE NATIONAL ASSEMBLY AT STATE-OWNED ECONOMIC GROUPS 2.1 The real operating situation of state-owned economic groups 2.1.1 Guidelines of the Party and the State of state-owned economic groups Session of the Communist Party Central Congress, Term VII confirmed “the establishment of some major economic organizations for the purpose of high accumulation and concentration of capital to build competitiveness in the world market" Session of the Communist Party Central Congress, Term VIII determined the duty of "Summarizing the model of state-owned general companies, based on that design a plan to turn general companies into strong economic groups with high efficiency and competitiveness, making them the real spine of the economy " The 9th National Congress of the Party advocated to "Build some strong economic groups on the basis of state-owned general companies with the participation of all economic sectors" To specify this policy, Resolution of Session of the Communist Party Central Congress, Term IX oriented to "establish some powerful economic groups on the basis of state-owned general companies with the participation of all economic sectors, diversify businesses, highly specialize the core business and play a dominant role in the national economy with large-scale capital, pilot some economic groups in some potential areas that have strength and ability to compete and integrate into the international economy " This view is confirmed again in the 10th National Congress and at the 12th National Congress, it is clearly stated that: "Promote innovation, equitization, improving the efficiency of state-owned enterprises; build some strong economic groups with multi-ownership, of which state ownership remains dominant, restructure business lines 12 13 of state-owned economic groups and general companies so that state-owned enterprises actually become the core factor of the state economy" This is an important basis to guide the formation and development of state-owned economic groups 2.1.2 Legal framework for the operation of state-owned economic groups In the system of legal documents related to the operation of economic corporations, there are two important laws, namely the Law of Enterprise and the Law of StateOwned Enterprise Law of State-owned Enterprise 1995 (out of effect from 1/7/2010) marked an important innovation in the management of state-owned enterprises and created a higher legal basis for the operation of state-owned enterprises After Law of State-Owned Enterprise 2003 and Law of Enterprise 2005, the Government issued a number of decrees on the duties and rights of state management bodies for state-owned enterprises On 5/11/2009, the Government issued Decree No 101/2009/ND-CP on piloting the establishment, organization, operation and management of state-owned economic groups 2.1.3 The number and scale of economic groups in Vietnam By the end of 2012, there are 13 state-owned economic corporations established in pilot model, including 12 state-owned economic groups decided to be established by the Prime Minister and economic groups whose project of equitization and pilot model was approved by the Prime Minister, the Ministry of Finance is authorized to establish the parent company (Bao Viet Finance – Insurance Group) Table 2.2: Ownership structure and industry characteristics of state-owned economic groups State No Group ownership at the parent Core businesses company Vietnam National Coal and Mineral Holding Corporation 100% Vietnam Post and Telecommunications Group 100% Vietnam Rubber Group 100% 100% Vietnam Shipbuilding Industry Group Vietnam Oil and Gas Group 100% Vietnam National Textile & Garment Group 100% Coal and mineral industry, metallurgy, electricity, explosive industrial materials, mechanics, shipbuilding and automobile Telecommunications and information technology Planting, harvesting, exploiting and processing rubber Building, repairing, ships and marine transport Explore, exploit, process and distribute oil and gas Textile and garment Vietnam Electricity Group Bao Viet Group Viettel Group 100% 74,17% 100% 10 Vietnam National Chemical Group 100% Vietnam Housing and Urban Development Group 100% 12 Vietnam Industrial Construction Corporation 100% 13 Vietnam National Petroleum Group 75% 11 Electricity, telecommunications and electric mechanics Financial services Telecommunications and information technology Chemical industry Investment in housing and urban development Construction and general contractor Petroleum export, import and sales, oil refinery Source: Synthesized from websites of the Government and groups On 2/10/2012, the Prime Minister issued Decision No 1428/QD-TTg identified the end of the pilot models of Vietnam Industrial Construction Corporation (VNIC) and Vietnam Housing and Urban Development Group (HUD) because they did not achieve expected objectives 2.1.4 Overall assessment of state-owned economic groups 2.1.4.1 Positive aspects The implementation of state-owned economic group model with combinations of large-scale enterprises has shown that this is a correct policy of the Party and the State and is an appropriate step to enhance the capacity of accumulation, concentration, competition and maximize the benefits of affiliated groups and general companies State-owned economic groups are enterprises operating in key sectors, playing a leading role in ensuring major balances, production and supply of essential products and services in the economy Besides innovating state management method for enterprises, regulations of financial management at state-owned economic groups have also changed so that the efficiency of scale and business performance of corporations are gradually improved over the years 2.1.4.2 Limitations and Causes Legal framework related to state-owned economic groups is not unified and consistent yet and is unsuitable with characteristics of state-owned economic groups The model and method of operation of state-owned economic groups though has progress but there are still some shortcomings that limit the quality of management and use of state capital and assets at groups The function of ownership representation is fragmented and overlapping so responsibilities in management are unclear The mobilization of too much capital for investment and diversification of business lines, the establishment of too many subsidiaries, associated companies operating in many areas and business lines of some groups, while management and 14 15 financial capacity are limited has led to high debt/equity proportion, negatively affecting the financial capacity and the efficiency of capital at groups Some groups still spread their investment without focusing on their core businesses or mainly make capital contribution to joint-stock commercial banks, securities companies, securities investment funds, insurance and real estate companies with large amount of money, leading to the risk of state capital loss 2.2 Status of organizing supervisory activities of the National Assembly at stateowned economic groups The Standing Committee of the National Assembly has written supervisory report and it was presented in front of the National Assembly by the leader of the supervisory delegation of the Standing Committee of the National Assembly 2.3 Results of supervisory activities of the National Assembly at state-owned economic groups 2.2.1 Supervisory objectives of the National Assembly at state-owned economic groups To evaluate the promulgation and implementation of policies and laws on the management and use of state capital and assets at state-owned groups and general companies; thus, see the results achieved in business activities of state-owned groups and general companies, problems in the system of legal documents and the difficulties, limitations, weaknesses in implementation; clarify the causes and responsibilities of all levels, the ministries/sectors and economic groups; thereby offer suggestions and recommendations to improve the system of laws, implement policies and laws on the management and use of state capital and assets more strictly and effectively, consolidate and improve the operational efficiency of economic groups and make recommendations to improve the system of laws and strictly implement more effective policies and laws on the management and use of state capital and assets 2.2.2 Status of the implementation of supervisory activities 2.2.2.1 Organizating supervisory delegation based on the Resolution of the National Assembly At the 4th session of the National Assembly, Term XII, the National Assembly approved Resolution of supervisory program in 2009, including supreme supervisory contents of compliance in mechanism, laws and policies of the use of capital and assets at state-owned economic groups and general companies Based on the Resolution of the National Assembly, the Standing Committee of the National Assembly issued a Resolution on establishing supervisory delegation to monitor the activities of state-owned economic groups 2.2.2.2 Organizing supervisory delegation to work with monitored objects being stateowned economic groups and write supervisory reports a) Examine reports At the request of the supervisory delegation, there were 11 ministries, ministerial-level agencies, localities and pilot economic groups sent their reports to the supervisory delegation Reports of ministries, ministerial-level agencies and economic groups sent to the supervisory delegation draw a relatively comprehensive picture of the implementation of mechanisms, policies and laws in the use of state capital, assets at economic groups b) Organizing supervisory delegation The supervisory delegation has worked with some ministries such as the Ministry of Planning and Investment, Ministry of Finance, Ministry of Transport, Ministry of Industry and Trade, the State Bank, State Capital Investment Corporation (SCIC), PetroVietnam, EVN, Vinashin and at the same time, establish groups to monitor in localities, survey and monitor in depth some specific contents based on the requiremnets of the supervision and the guidance of the supervisory delegation’s leader c) Write supervisory report and present supervisory results at sessions of the National Assembly 2.3.1 Key findings from supervision 2.3.1.1 Legal framework of policies related to capital and asset management at stateowned economic groups since the pilot establishment has been initially completed Supervision showed that the promulgation of legal documents related to the implementation of policies and laws on state capital and asset management at groups has received attention from the government and related agencies They have been designed relevant to guidelines, policies and resolutions of the Party to form a legal framework for corporations and geneeral companies to operate and manage state capital and assets However, apart from the positive sides, there are limitations and shortcomings; for example, some legal documents are slow in issuance, amendament and supplement to be suitable, consistent and uniform, at the same time they have not caught up with the real development of the market; the assignment of rights and obligations of state ownership at corporations are fragmented, yet fully separate ownership function and state administrative function in accordance with Enterprise Law; models and methods of internal management within the group have made progress but there are still shortcomings that limit the quality of management and use of state capital and assets; slow in building a system of safety criteria in terms of finance in business performance of groups and general companies to lay the foundations for state supervision and management 2.3.1.2 Most state-owned economic corporations have preserved state capital and assets and contributed significantly to socio-economic development of the country 2.3.1.3 Financial structure of some state-owned economic groups is not really sustainable 2.3.1.4 Efficiency of capital use in some state-owned economic groups is low and affects the overall performance of the state economic sector, particularly there is the situation of corporations investing outside their industries too much resulting in a loss of state capital and assets 2.3.1.5 These groups are currently assigned to hold a large volume of state assets, which is land but usage efficiency is not high 2.3.1.6 Some economic corporations are in jeopardy and financially alarmed 2.3.1.7 Methods of managing state capital is inadequate due to slowliness in building a system of safety criteria in terms of finance in the operation of groups to function as the basis for state supervision and management 2.3.1.8 The implementation of the tasks of ensuring major balances of the economy, social security, politics and defense is done positively 2.3.1.9 Transparency of information at state-owned economic groups reveals shortcomings and fails to meet the requirements 2.3.2 Recommendations and suggestions are made after supervisory activities of the National Assembly at state-owned economic groups - Increase the accountability of state management agencies for capital and assets at state-owned economic groups; - Perform thorough separation of state administrative function from ownership right implementation function; 16 17 - Review and evaluate the operation of corporations and general companies to take measures reorganize and strengthen economic groups that have difficulties or operating weakly; - Develop a system of effective testing and monitoring of capital and asset management at corporations and general companies, and at the same time improve the responsibility of management agencies; - Specify the responsibilities of efficiency in business performance at enterprises; - Complete the legal framework for the operation of groups 2.3.3 Results of implementing recommendations after the supervision At Session of the National Assembly, Term XII, the National Assembly issued Resolution No 42/2009/QH12 dated 27/11/2009 on improving the effectiveness and efficiency when executing policies and laws of management and use of capital and assets at state-owned corporations and general companies At Session of the National Assembly, Term XII, the Government announced Report No 163/BC-CP dated 1/11/2010 on the following contents: Improving the effectiveness and efficiency of implementing policies and laws of management and use of state capital and properties at state-owned corporations and general companies The Economic Committee of the National Assembly also had some ideas about the organization and implementation of Resolution 42 of the National Assembly, with emphasis on proactiveness and positivity of the Government, ministries, localities and enterprises Then, on 23/11/2011, the Government had Report No 262/BC-CP on the operating status of state-owned economic groups and general companies between 2006 and 2010 and orientations, duties and solutions for the 2011-2015 period according to some of the contents in Resolution No 42 of the National Assembly The report states clearly the results of financial position, production and business performance, investment in non-core businesses, reorganization and innovation within enterprises , shortcomings and difficulties with specific measures to restructure state-owned enterprises with focus on state-owned economic groups and general companies 2.4 Assess the supervisory activities of the National Assembly at state-owned economic groups based on monitoring criteria 2.4.1 The efficiency of supervision Through survey data on compliance and implementation of the conclusions and recommendations after supervision (also called supervisory efficiency), it shows that the total number of ”strongly disagree” and ”disagree” opinions accounts to 47.4% (”strongly disagree” ratio is 7.9% and ”disagree” is 39.5%) when assessing the implementation of recommendations after supervision by the National Assembly Thus, the effectiveness of current supervision is not high, the survey results also reflect that the reality of monitoring efficiency is a weak point in supervisory activities 2.4.2 Suitability of supervision The suitability of supervisory activities of the National Assembly shall consider the compatibility between supervision compared and existing regulations and compare between supervisory objectives and the addressed problems and needs By analyzing the survey results, it shows that the rate of “relatively agree”, “agree” and “strongly agree” with the supervisory contents of the National Assembly focusing on policies and laws, and operating fields and business performance is really high, specifically the ratios of legal system, operating field and business performance are 94.7%, 84.3% and 89.6% respectively Results obtained from supervisory activities are consistent with the objective of further improving the system of policies and laws on the management and use of state capital and properties However, considering the time organizing supreme supervisory activities in 2008 and then the Government reported on the implementation of the National Assembly’s Resolution in 2009, though it is necessary, ever since then there has been no supervisory mission This shows that supervisory activities have not met the requirements of reality 2.4.3 Equity of supervision Initial supervision ensures fairness through the introduction of judgement, evaluation and conclusion for monitored objects, namely the policies and laws on the management and use of state capital and assets, the state administration (ministries) and the observance of policies and laws at state-owned economic groups 2.4.4 Compatibility of supervision Supervisory goals of the National Assembly at state-owned economic groups lie in a unified system and are closely related to each other, low-level goals are a means to achieve higher goals Through the survey, 71.1% of respondents agree and 13.2% strongly agree with the goal of the National Assembly's supervision, which is to focus on monitoring the implementation of policies and laws on the management and use of state capital and assets However, judging related policies and laws, 26.4% of the respondents disagree on this content This shows that, after monitoring, the improvement of policy and laws on the management and use of state capital and assets is just the beginning, it does not cover all the contents related to the operation of corporations 2.4.5 Sustainability of supervision The ultimate goal of supervision is to ensure completing policies and laws on the management and use of state capital and assets at state-owned economic groups and supervision should be considered as one of the tools to manage macroeconomy of the state Survey results show that supervisory targets and recommendations have been implemented and have positive influence in a certain period of time after the end of supervision 2.5 Success and limitations in supervisory activities of the National Assembly at stateowned economic groups 2.5.1 Success in the National Assembly’s supervision at state-owned economic groups and causes 2.5.1.1 Success in the National Assembly’s supervision First, having supervised the whole system of legal documents related to stateowned economic groups Second, having performed overall supervision of operating fields of stateowned economic groups Third, having performed thorough supervision of effectiveness and business performance of state-owned economic groups Fourth, having proposed judgement as well as conclusions and recommendations after supervision in a timely, objective, suitable and feasible manner 2.5.1.2 Causes of success in the supervision of the National Assembly at state-owned 18 economic groups Causes of this success comes from practical requirements, particularly from the selection of supervisory contents, implementation of supervision, making conclusions and monitoring the execution of recommendations after supervision 2.5.2 Limitations in the National Assembly’s supervision at state-owned economic groups and causes 2.5.2.1 Limitations in the National Assembly’s supervision First, limitations in supervisory resources Second, limitations in methods and forms of supervisory organization According to survey data, the proportion of “disagee“ opinions on form of confidence vote is 26.3% and the proportion of „disagree“ opinions on the establishment of an Interim Committee is 39.4% Third, limitation in capacity of National Assembly deputies in understanding and catching up with specialized problems in economics is different Fourth, limitation in monitoring recommendations after supervision This is still a weak chain in the National Assembly supervisory activities as the monitoring of supervisory objectives has not been carried out drastically 2.5.2.2 Causes of limitations in the National Assembly’s supervision at state-owned economic groups Causes of limitations in the National Assembly’s supervision at state-owned economic groups mainly arise from the representative mechanism of the National Assembly at present Besides, regulations related to resources have not met requirements in the implementation of supervisory activities and there is a lack in bonding and monitoring mechanism for the execution of supervisory conclusions Analysis and assessment of success and limitations in supervisory activities of the National Assembly at state-owned economic groups show that in order to improve supervisory activities of the National Assembly with this economic sector, it is necessary to solve the following fundamental problems: First, make an assessment and summary of the group model, based on that, make solutions to tackle weaknesses and promote strengths that are suitable with Vietnam Promote the process of economic structure associated with innovating growth model with one of key focuses being restructing state-owned economic groups and general companies Second, complete the legal framework related to the operation of groups Third, build criteria for the business performance of groups such as core businesses, efficiency of capital usage This is an important basis for the National Assembly to supervise the operation of state-owned economic groups Fourth, continue to research and innovate methods and forms of the National Assembly’s supervision at state-owned economic groups Fifth, enhance adequate resources for National Assembly agencies and deputies in organizing supervision CHAPTER 19 SOLUTIONS TO ENHANCE SUPERVISION OF THE NATIONAL ASSEMBLY AT STATE-OWNED ECONOMIC GROUPS 3.1 The system of views on supervisory activities of the National Assembly at state-owned economic groups 3.1.1 Orientations for the development of state-owned economic groups between 2011 and 2020 Documents of the 11th Congress of the Party confirmed that: It is necessary to restructure business lines of state-owned economic groups and general companies with focus on some core areas of the economy[12] Socio-economic development plan from 2011 to 2020 approved at the 11th Congress of the Party states clearly that: Continue to innovate and improve the efficiency of business performance at state-owned enterprises, especially economic groups and general companies Quickly complete the institution to manage operation of state-owned groups and general companies Speed up the equitization in stateowned enterprises; build some strong economic groups with diversified ownership, of which state ownership is dominant Encourage the private sector to contribute capital in state-owned economic groups Resolution of the National Assembly on socio-economic development plan in years from 2011 to 2015 issued at Session of the National Assembly Term XIII confirmed that: Focus on restructuring the economy in important fields including restructuring investment emphasizing on public investment; restruturing the financial market emphasizing on commercial banks and financial institutions; restructuring enterprises emphasizing on state-owned economic groups and general companies, prepare necessary conditions in 2012 to make strong and clearly effective transformation from 2013 to 2015 [24] With the above meaning, management authorities have guidelines to continue completing state-owned economic groups between 2011 and 2015 with vision of 2020 At the moment, all operating state-owned economic groups have been built and the Prime Minister have examined and approed restructuring project for the 2011 – 2015 period 3.1.2 View 1: Supervisory activities have to be conducted base on the basis of jurisdictional state Innovating the National Assemblly in general and supervisory activities of the National Assembly in particular is not a subjective intention of the National Assembly, it arises from objectives requirements suitable with objective rules With that perception, innovating supervisory activities of the National Assembly at state-owned economic groups arises from requirements of building socialist jurisdictional state of the people, by the people and for the people 3.1.3 View 2: Supervisory activities should ensure socio-economic development in the period of enhancing industrialization and modernization of the country Economic development has been determined by the Party and the State as the central duty in the construction of the country Supervisory activities of the National Assembly, along with checking and inspection, are important factors contributing to the establishment of favourable legal environment for economic development 3.1.4 View 3: Supervisory activities should be associated with the determination to renovate politics 20 21 Innovating supervisory activities of the National Assembly is an important factor contributing to the successs of socio-economic development plan in the 2011 – 2020 period With the current political institution in Vietnam, the condition to renovate this activity is the determination of the political system starting from the thinking of leaders of the Party about supervisory activities of the National Assembly 3.2 Solutions to improve supervisory activities of the National Assembly with state-owned economic groups 3.2.1 Completing legal framework related to state-owned economic groups In order to optimize advantages of forming state-owned economic groups, in the coming time, to construct model suitable with our country, some core solutions as below should be taken: 3.2.1.1 Completing the model of state-owned economic groups Make profound and comprehensive summary and assessment of strengths and weaknesses of the state-owned economic group model, particularly with currently operating state-owned economic groups, thereby, decide whether to allow the esblishment of new state-owned economic groups 3.2.1.2 Enhance the legal status of state-owned economic groups With limitations in the pilot establishment of state-owned economic groups resulting from legal problems, it is an objective requirement to complete legal framework 3.2.1.3 Complete legal documents related to the management and use of state capital at state-owned economic groups Research to construct an act on the investment and trading of state capital and assets at state-owned enterprises This is an important issue to create the maximum legal basis for the use of state capital and assets at state-owned economic groups National Assembly Organization 3.2.4 Renovate contents, forms and methods of supervision of the National Assembly at state-owned economic groups First, the National Assembly needs to implement supervisory activities, make serious and objective assessment and judgement of the path and method to establish state-owned economic groups in our country to withdraw lessons and make proper adjustment and policies Second, the National Assembly needs to strengthen their supervision of the development of state-owned economic groups by their protective policy and mobilized and borrowed funds Third, the National Assembly needs to monitor the process of restructuring groups under various forms Enhance and control the equitization of state-owned economic groups and promote their listing on securities market Fourth, continue to improve awareness and method of implementing supervision so as to enhance quality and ensure that laws are obeyed strictly in the field of usage of state capital and assets at state-owned economic groups Fifth, tackle the situation of broad supervision lacking depth; promote specialized supervision and supervision of state agencies Sixth, continue to innovate questioning activity in the orientation of solving each questioned problem in depth Under the circumstance that the National Assembly hold only session/year, it is necessary to enhance explanatory session at the Standing Committee of the National Assembly, Ethnic Board and Committees of the National Assembly on problems related to the use of state capital and assets at state-owned economic groups Seventh, study and complement regulations of authority, order and procedure of confidence vote for positions appointed or approved by the National Assembly In the aspect of state management, faults at economic groups are associated with the responsibilities of agencies in each field Eighth, renovate and enhance the effectiveness of supervisory activities of the National Assembly such as innovating the method of supervison, the mechanism to attract experts in order to enhance supervisory results 3.2.5 Enhance supervisory capacity of the National Assembly’s agencies and deputies A strong National Assembly is a National Assembly with two strong pillars, National Assembly agencies and deputies, that are able to perform functions of the National Assembly Supervisory capacity includes factors of organization, spirit and skills of deputies To enhance supervisory capacity of National Assembly agencies and deputies is to improve the quality of organizing supervisory activities and improve spirit and skills of supervision of deputies 3.2.6 Improve resources for supervisory activities - Ensure that the structure of National Assembly deputies is renovated in the direction of increasing the number of specialized deputies in the National Assembly agencies and delegations - Complement mechanism to monitor the implementation of supervisory conclusions and recommendations on the operation of economic groups - Improve the organization and operation of agencies assisting National Assembly agencies and delegations in terms of human resources and capabilities of staff directly assisting agencies and delegations - Enhance budget for activities of National Assembly deputies: Form proper 3.2.2 Enhance awareness of supreme supervisory function of the National Assembly The National Assembly executes its supreme supervisory right with all state actitivities to ensure their effectiveness and efficiency, plays an important role in avoding right abuse of authorized state agencies, enhances the responsibilities and capabilities of each individual appointed and approved by the National Assembly; ensures state power in execution and jurisdiction, belongs to people and better its service for people At the same time, supervisory activities have positive effects on the execution of the National Assembly’s obligations and duties on legislation and decision of important issues of the country with better quality and more suitable with the will and expectation of people It can be confirmed that if supervisory activities of the National Assembly tend to be formal without effectiveness and efficiency, the National Assembly will not fully execute its obligations and rights of supervison and also affect the quality of legislation and decision of important issues of the country assigned by the people 3.2.3 Enhancing supervisory activities of the National Assembly should be synchronized with the innovation of organization and activities of the National Assembly in legislation and decision of important issues of the country Supreme supervision of all state activities is just one of the three fundamental functions of the National Assembly Therefore, renovating supervisory activities must be carried out synchronically with the innovation of organization and operation of the National Assembly In order to renovate supervisory activities of the National Assembly to improve effectiveness and efficiency of supreme supervision, it is necessary to build a strong National Assembly with complete and adequate implementation of rights and obligations as regulated in the Constitution and Law of 22 financial mechanism to help deputies employ experts to serve supervisory works, thereby, mobilize social intellectuals to serve supervisory activities of the National Assembly 3.2.7 Provide criteria to supervise the operation of state-owned economic groups KPI is the abbreviation of Key Performance Indicator This is a management instrument to control, measure and analyze the probability of achieving goals of stateowned economic groups The National Assembly should provide criteria to monitor and measure the level of goal achieving at state-owned economic groups KPI - Key Performance Indicator is a management instrument to measure and analyze the probability of achieving goals of state-owned economic groups Two important requirements of determining and establishing KPI are reflecting the goals of state-owned economic groups and being quantitative (measurable) KPI in the National Assembly’s supervision can be indexes related to financial efficiency, market, competition, human resources management, quality, environment and especially state capital at state-owned economic groups When forming such indexes, it is necessary to ensure the SMART principle: Simple - Measurable - Agreed-upon -Relevant - Timely 23 CONCLUSION Supreme supervision of the National Assembly in the establishment of a socialist jurisdictional state of the people, by the people and for the people in Vietnam is an important content that is being studied and made clear in both theoretical and practical aspects Due to practical requirements, the National Assembly has supervised operation of the state apparatus in various socio-economic aspects, including enhancing supervision at state-owned economic groups – this pilot model is the object of supervision and the problem is how the National Assembly will supervise such enterprises, which solutions to take and what conditions are necessary to ensure the real effects of supervisory activities However, problems mentioned in the thesis are just the beginning and cannot be considered as complete reflection Based on using synthetic research methods and theories, the thesis has achieved research objectives and duties First, present an overview of problems related to theoretical basis for supervisory activities of the National Assembly at state-owned economic groups; international experience of supervision at state-owned economic groups in the Republic of France, South Korea and China and lessons for Vietnam At the same time, confirm the inevitability of National Asssembly’s supervision at state-owned economic groups and present the system of tools, forms and methods of criteria to assess the National Assembly’s supervision Second, analyze the real situation of state-owned economic groups and supervisory activities of the National Assembly at state-owned economic groups, point out achievements, limitations and causes in supervision at these groups Thereby, withdraw problems that need to be solved in supervision at state-owned economic groups This is an important basis to suggest solutions to renovate supervisory activities at state-owned economic groups Third, propose solutions and recommendations to ensure effectiveness and efficiency of the National Assembly with the operation of state-owned economic groups according to the guidelines and policies of the Party and the State, focusing on the following contents: completing legal framework; supervisory tools, mechanism and ways to organize supervisory activities of the National Assembly; criteria to supervise state-owned economic groups Supervision of the National Assembly at state-owned economic groups is a problem attracting care of the National Assembly, its agencies and deputies It develops in both theoretical and practical bases Research results of the thesis are just minor contribution and cannot cover every aspect and field Therefore, it is certain that there are other problems in need of in-depth research in order to enhance supervisory activities and ensure that state laws are implementd strictly [...]... inevitability of National Asssembly’s supervision at state- owned economic groups and present the system of tools, forms and methods of criteria to assess the National Assembly s supervision Second, analyze the real situation of state- owned economic groups and supervisory activities of the National Assembly at state- owned economic groups, point out achievements, limitations and causes in supervision at these groups. .. profound and comprehensive summary and assessment of strengths and weaknesses of the state- owned economic group model, particularly with currently operating state- owned economic groups, thereby, decide whether to allow the esblishment of new state- owned economic groups 3.2.1.2 Enhance the legal status of state- owned economic groups With limitations in the pilot establishment of state- owned economic groups. .. related to the management and use of state capital at state- owned economic groups Research to construct an act on the investment and trading of state capital and assets at state- owned enterprises This is an important issue to create the maximum legal basis for the use of state capital and assets at state- owned economic groups National Assembly Organization 3.2.4 Renovate contents, forms and methods of. .. guidelines and policies of the Party and the State, focusing on the following contents: completing legal framework; supervisory tools, mechanism and ways to organize supervisory activities of the National Assembly; criteria to supervise state- owned economic groups Supervision of the National Assembly at state- owned economic groups is a problem attracting care of the National Assembly, its agencies and... enhance explanatory session at the Standing Committee of the National Assembly, Ethnic Board and Committees of the National Assembly on problems related to the use of state capital and assets at state- owned economic groups Seventh, study and complement regulations of authority, order and procedure of confidence vote for positions appointed or approved by the National Assembly In the aspect of state management,... rights of supervison and also affect the quality of legislation and decision of important issues of the country assigned by the people 3.2.3 Enhancing supervisory activities of the National Assembly should be synchronized with the innovation of organization and activities of the National Assembly in legislation and decision of important issues of the country Supreme supervision of all state activities. .. methods and theories, the thesis has achieved research objectives and duties First, present an overview of problems related to theoretical basis for supervisory activities of the National Assembly at state- owned economic groups; international experience of supervision at state- owned economic groups in the Republic of France, South Korea and China and lessons for Vietnam At the same time, confirm the inevitability... supervision of the National Assembly at state- owned economic groups First, the National Assembly needs to implement supervisory activities, make serious and objective assessment and judgement of the path and method to establish state- owned economic groups in our country to withdraw lessons and make proper adjustment and policies Second, the National Assembly needs to strengthen their supervision of the development... just one of the three fundamental functions of the National Assembly Therefore, renovating supervisory activities must be carried out synchronically with the innovation of organization and operation of the National Assembly In order to renovate supervisory activities of the National Assembly to improve effectiveness and efficiency of supreme supervision, it is necessary to build a strong National Assembly. .. these groups Thereby, withdraw problems that need to be solved in supervision at state- owned economic groups This is an important basis to suggest solutions to renovate supervisory activities at state- owned economic groups Third, propose solutions and recommendations to ensure effectiveness and efficiency of the National Assembly with the operation of state- owned economic groups according to the guidelines