LEGAL RULES ON ENVIRONMENTAL PROTECTION APPLICABLE TO PETROL AND OIL BUSINESS IN VIETNAM

VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM JAPAN UNIVERSITY NGUYEN TA BINH DUONG LEGAL RULES ON ENVIRONMENTAL PROTECTION APPLICABLE TO PETROL AND OIL BUSINESS IN VIETNAM MASTER'S THESIS PUBLIC POLICY Hanoi, 2020 VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM JAPAN UNIVERSITY NGUYEN TA BINH DUONG LEGAL RULES ON ENVIRONMENTAL PROTECTION APPLICABLE TO PETROL AND OIL BUSINESS IN VIETNAM MAJOR: PUBLIC POLI CY CODE: 8340402.01 RESEARCH SUPERVISOR: Dr BUI HAI THIEM Prof NAOHISA OKAMOTO Hanoi, 2020 ACKNOWLEDGEMENT Firstly, I would like to thanks to my supervisors, Prof Naohisa Okamoto and Dr Bui Hai Thiem Both of them have kindly guided me in the learning process as well as in completing the thesis These are very valuable guidelines not only in the process of doing this thesis but also for my steps in the process of learning and career later I would like to express my gratefulness to the teachers at Vietnam Japan University, the Office of Master of Public Policy, for creating favorable conditions for me during my study and research Sincere thanks to my colleagues at the Department of Legal Affairs of Ministry of Industry and Trade (MOIT) and other people for providing data and documents to help me complete my thesis Thanks to everyone for in-depth interviews Finally, I would like to thank my family and my friends, who are always willing to share and help with learning and life Sincerely Hanoi, 2020 Nguyen Ta Binh Duong i TABLE OF CONTENTS ACKNOWLEDGEMENT i LIST OF TABLES iv LIST OF FIGURE v LIST OF ABBREVIATIONS vi ABSTRACT vii CHAPTER 1: INTRODUCTION 1.1 The rational of research 1.2 Research questions 1.3 Literature view 1.3.1 International research 1.3.2 Domestic research 1.4 Research objective and tasks 1.5 Scope of research 1.6 Research methods 1.6.1 Data collection source 1.6.2 Data collection methods .6 1.7 Theoretical and practical meanings of the research 1.8 Thesis structure CHAPTER 2: RATIONALE AND PRACTICAL BASIS OF LEGAL RULES ON EP APPLICABLE TO PETROL AND OIL BUSINESS IN VIETNAM 11 2.1 Rationale of legal rules on EP applicable to petrol and oil business in Vietnam11 2.1.1 Basic concepts related to legal rules on EP applicable to petrol and oil business in Vietnam 11 2.1.2 The role of petrol and oil 14 2.1.3 The need to promulgate environmental and EP regulations in the petrol and oil business .16 2.1.3 Influential factors and criteria for assessing the formulation and promulgation of legal provisions on EP in petrol and oil trading 20 2.2 International experience on the legal rules on EP in petrol and oil business 23 2.2.1 Philippines 24 2.2.2 Thailand .25 2.2.3 The United States 27 2.2.4 Japan 30 2.2.5 Lesson for Vietnam .31 2.3 Conclusion Chapter 31 CHAPTER 3: LEGAL RULES ON EP APPLICABLE TO PETROL AND OIL BUSINESS IN VIETNAM AND THEIR IMPLEMENTATION 32 3.1 The system of legal documents on EP currently applicable to petrol and oil business in Vietnam 32 ii 3.2 Contents of legal rules on EP in petrol and oil business 35 3.2.1 State management agencies on EP in petrol and oil business in Vietnam 35 3.2.2 Legal rules on responsibilities for conducting EIA .37 3.2.3.EP responsibilities of petrol and oil production and business establishments 37 3.2.4 Legal rules on EP fee 38 3.2.5 Legal rules on Preventing and responding to environmental emergencies and Oil spill incident response plan 38 3.2.6 Legal rules on responsibility to pay taxes for EP 39 3.3 The environmental management tools ensure the implementation of the Law on EP in petrol and oil business in Vietnam 41 3.3.1 Legal tool for EP 42 3.3.2 Economic tool for EP 42 3.3.3 Technical tool for EP 43 3.3.4 Educational tool for EP .44 3.4 The application of legal rules on EP in petrol and oil trading activities in Vietnam 45 3.4.1 Advantages in implementing the legal rules on EP applicable to petrol and oil business in Vietnam 45 3.4.2 Limitations of the legal rules on EP in petrol and oil business in Vietnam 47 3.5 Conclusion Chapter 51 CHAPTER 4: RECOMMENDATIONS FOR IMPROVING THE LEGAL RULES ON EP APPLICABLE TO PETROL AND OIL BUSINESS IN VIETNAM 52 4.1 The context and requirements for the improvement of legal rules on EP applicable to petrol and oil business in Vietnam 52 4.2 General direction for improving the legal rules on EP applicable to petrol and oil business in Vietnam 53 4.3 Basic solutions to improve the legal rules on EP applicable to petrol and oil business in Vietnam 54 4.4 Recommendations to improve the legal rules on EP applicable to petrol and oil business in Vietnam 57 CHAPTER 5: CONCLUSION 58 REFERENCES 59 ANNEX 62 ANNEX 64 iii LIST OF TABLES Table 1.1 The In-depth interview plan …………………………….…… … Table 2.1 Petrol and oil exports in the first 11 months of 2019 …………… 15 Table 2.2 Rate of fuel loss incurred in the petrol and oil storage …………… 17 Table 3.1 Tariff table from 2012 …………………………………………… 39 Table 3.2 Tariff table from 2019…………………………………………… 40 iv LIST OF FIGURE Figure 3.1 The system of legal documents On ep currently applicable to petrol and oil business in Vietnam ……………………………………………………… 32 v LIST OF ABBREVIATIONS EIA EP MOF MOIT MONRE MOST UNEP USEPA VEA Environmental Impact Assessment Environmental Protection Ministry of Finance Ministry of Industry and Trade Ministry of Natural Resources and Environment Ministry of Science and Technology United Nations Environment Programme United States Environmental Protection Agency Vietnam Environment Administration vi ABSTRACT Petrol and oil are the main fuel for all activities of the economy Meanwhile, they are substances potentially causing environmental pollution and high fire and explosion Recognizing the importance as well as the dangers of this item, Vietnam has classified petrol and oil as one of the commodities subject to business conditions In order to participate in petrol and oil business, it is necessary to comply with different legal rules In addition to the legal rules on construction, technology, fire and explosion prevention and fighting, petrol and oil business entities must comply with the legal rules on environmental protection (EP) This thesis provides a critical review of legal rules on EP applicable to petrol and oil business in Vietnam It analyzes limitations of these rules and argues for major changes of these rules for the improvement in EP vii CHAPTER 1: INTRODUCTION 1.1 The rational of research The environment has an important influence on everyone's life, living things and the economic, cultural and social development of a country Protection of the environment has become a global concern and one of Vietnam's most current concerns with a guiding view throughout the legal development and enforcement that protection of people's health is a top priority, ensuring that everyone can live in a clean environment Vietnam has been accelerating industrialization and modernization of the country at an increasing pace Along with socio-economic development, the environmental quality has deteriorated due to production and business activities, including factors from petrol and oil trading Recognizing that, Vietnam has been promoting EP in various ways Among the important measures taken has been the development of a legal system on EP in the petrol and oil business Petrol and oil are the main fuel for the economy's activities While these is a limited resource and cannot be replaced In Vietnam, petrol and oil are the kind of commodities subject to business conditions The management and operation of petrol and oil facilities are large and complex with potential risks and tremendous impacts on the environment If any negligence in petrol and oil activities happens, there will be environmental disaster, affecting human health, life, property, security and order, and the environment of the community After recent efforts by the Government to cut down the conditions for business investment, petrol and oil business has started to increase significantly with a variety of participants Therefore, in order to participate in petrol and oil trading activities, it is necessary to comply with different regulations In addition to the legal rules on construction, technology and fire and explosion prevention and fighting, petrol and oil business entities must comply with the legal rules on EP Environmental pollution due to petrol and oil business activities in Vietnam is now increasing due to many different reasons A major contributing factor to that the common goal of ensuring better and better human rights, including the right to live in a clean environment In addition to the improvement of the law, special attention should be paid to the implementation and their effectiveness 4.2 General direction for improving the legal rules on EP applicable to petrol and oil business in Vietnam By evaluating the achievements as well as limitations of the legal system on EP in general and in the petrol and oil business in particular, the improvement of legal system on EP should follow general direction as below: Firstly, the legal system on EP must be promulgated that ensuring the unanimous consistency between regulations and must be updated regularly in accordance with practice Secondly, there are specific policies to encourage the application of clean technologies and clean materials and to take pollution prevention measures Thirdly, the changes should also aim to formulate and promulgate national regulations on technicality on environment in the field of petrol and oil business, which are suitable to the situation of Vietnam but not cause barriers for Vietnam’s has participated in national integration The legal rules should fully institutionalize Vietnam's commitments in the international treaties on the environment to which Vietnam is a party, contributing to proactive international economic integration The system of environmental standards and regulations must be formulated according to the general principle that must be suitable to the development level, the intellectual level, suitable to the current state of the economy, thus creating favorable conditions for state management of the environment and ensuring sustainable socio-economic development Fourthly, the revised legal rules shall redefine clear functions, duties and responsibilities among the EP authorities in the field of EP, as well as relevant agencies, to avoid overlaps 53 4.3 Basic solutions to improve the legal rules on EP applicable to petrol and oil business in Vietnam  Laws and policies solutions Focus on innovating, completing policies and laws on EP applicable to petrol and oil trading Strengthening coordination mechanism between state management agencies Amending and supplementing the Law on EP and related laws in the direction of clearly stipulating the State's rules, policies, contents, mechanisms, and criteria evaluation and responsibility for EP consistent with the current context Speed up the inspection, handling of violations of law, strengthen the implementation of policies and legal rules on EP applied in petrol and oil trading Besides, it is required to strengthen the close and effective cooperation between competent agencies Promote socialization of EP activities; adopt policies to promote participation and promote the role of organizations, individuals in protecting the environment in the field of petrol and oil business  Technical and technological solutions Pay attention to invest in study and application of technologies on EP, strengthen international cooperation to catch up and apply advanced environmental and technical technologies suitable to the conditions of enterprises and institutions, production facility Invest, innovate production technology towards modernization, environmental friendliness and resource saving (For example, installing modern technology systems and equipment for petrol and oil production and establishments in order to minimize environmental pollution and prevent leakage Researching and applying technology and science (on EP has always been focused and successfully implemented many projects and items such as investing in waste water treatment systems to meet environmental requirements in all warehouses and petrol and oil shops); building systems for collecting and treating oil-contaminated wastes ) 54 Especially, at petrol stations, the oil must have a vapor recovery system during the import process, while reducing the loss of petrol and oil while ensuring the environment without pollution) Enterprises should proactively develop internal standards for safety, fire prevention, and environmental safety  Economic and financial solutions Among the EP instrument groups, the economic and financial instruments always bring about great environmental and economic effects, especially the tax tools The EP tax is based on basic principle: "polluters-pay principle" For EP in the field of petrol and oil business, tax plays an important role: - Contribute to sustainable economic development: In recent years, Vietnam has achieved many achievements in economic development, hunger eradication and poverty reduction, and the living standards of ethnic people have been significantly improved The statistics show that, Vietnam's GDP has continuously grown rapidly during the past 20 years, with an average annual growth rate of about 7%, the highest in the world From a low-income country of about 98 USD/person/year in 1999, it has increased to 400 USD/person/year in 2000 and 1,200 USD/person/year in 2010; In 2015, GDP/capita is approximate 2,200 USD/person/year (An, N 2015), average income per capita in 2016 reached 2,215 USD/person/year (General Department of Customs, 2016) Besides the positive impacts, economic development also brings negative impacts on life, culture and society, especially on the environment Among the issues that Vietnam is facing, environmental pollution is a particularly serious problem Therefore, to ensure sustainable development, Vietnam as well as other countries must implement a lot of plans and strategies, using a lot of different tools to manage and protect the environment Law on EP tax was established in 2010, including the legal rules on EP tax for the petrol and oil sector also aims to encourage economic development in parallel with reducing environmental pollution, 55 while limiting negative behaviors of organizations and individuals in the course of production and use, causing adverse consequences to the ecological environment - Regulating commodity production relations EP tax also increases goods and services, thereby using tax to adjust production and consumption towards EP For consumers who want to buy at a reasonable price and business people want to sell many products with low costs and high profits, the EP tax will have many incentives to adjust the production orientation and consumption towards environmentally friendly At that time, consumers will have to consider more when deciding on products that are not environmentally friendly At the same time, businesses also have to recalculate production plans, choose cleaner production technology, less waste, reduce waste disposal costs to the environment and bring the best efficiency This will promote research to find new energy sources and new production technologies However, price is only one of many factors affecting the behavior of the economy The success of EP taxes in adjusting economic behavior also depends on each specific market for each tax subject - Contribute to building a green economy in Vietnam and ensure environmental commitments The EP tax on petrol and oil is also identified as one of the important measures to implement “the National Green Growth Strategy for the period of 2011-2020 and vision to 2050” issued by the Government This strategy affirms that in order to achieve the goal of green growth, Vietnam needs to apply market tools to promote structural changes and improve “energy efficiency, and encourage the use of clean energy, support the development of renewable energy, have a roadmap to eliminate subsidies for fuel fuels, ensure the principle of competition, transparency and efficiency”  Education solutions It is necessary to further promote propaganda and education in order to raise awareness and form a sense of self-awareness to protect the environment in the society In addition, it is necessary to continue dissemination and propaganda in 56 combination with strengthening inspection and supervision to raise awareness about EP in general, especially for key staff in order to create radical changes of the sense of responsibility and initiative in EP Create a legal corridor for social organizations and people to take part in EP activities, reflect violations of EP in the process of implementing investment, development, distribution and transportation petrol and oil system of businesses Regularly organize training courses, training courses, updating knowledge for the contingent of legal content on EP and drafting skills to develop legal documents 4.4 Recommendations to improve the legal rules on EP applicable to petrol and oil business in Vietnam - Regularly update feedback to improve legal documents that are particularly important for state management of EP Many legal provisions related to the environment such as the Criminal Code, the inspection and examination work also need to be researched and revised to suit practical requirements In addition, regulatory agencies should be aware of the right, sufficient and harmonious balance between EP with economic development and social balance - Putting used petrol and oil into the entities of management in petrol and oil business field - Proposing a uniform review of regulations on administrative violations of the law on EP applicable to petrol and oil trading In case of discrepancies, the regulations need to be determined and agreed upon - There are policies, regulations to attract the business and use of fuel to protect the environment - Strengthen the inspection, examination and propaganda, dissemination and education of laws on EP applicable to the petrol and oil business 57 CHAPTER 5: CONCLUSION The thesis examines the legal rules on EP in the petrol and oil business in Vietnam to recommend some solutions to improve the legal rules in this field Those factors other than the legal aspect have not be mentioned or mentioned with a scant attention in this thesis Analyzing the existing legal rules on EP applicable to petrol and oil trading and drawing lessons learned, the thesis proposes solutions to improve the legal rules on EP for petrol and oil business in Vietnam Due to constraints of resources and time, the research only focuses on analyzing the main regulation groups currently applied in EP in the petrol and oil business field There are still some regulations that have not been included in specific studies such as indicators of technical regulations and standards on EP in the field of petrol and oil trading, relevant regulations such as specific regulations on fire prevention and fighting, chemicals, The international agreements on environment to which Vietnam is a member are also not mentioned in the thesis because the legal rules in Vietnam are subject to international commitments unless otherwise stipulated by the Constitution 2013 It can be seen that the petrol and oil business has a great impact on the environment Even a small incident in this sector also can greatly affects the environment However, at present, the regulations on Vietnam's laws on protection for petrol and oil trading are not comprehensive and reveal many shortcomings in implementation Therefore, it is necessary to take measures to gradually improve the effectiveness of the implementation of legal rules on EP applicable to petrol and oil trading in Vietnam It is necessary to have a complete EP policy, which enables the national sustainable economic development 58 REFERENCES An, N (2015) GDP per capita of Vietnam lost to the world 8000USD 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1, Ask about individual information of the interviewee 2, Could you talk about the responsibilities of MONRE and other Ministries on EP? 3, Could you please tell me what the legal rules applicable to petrol and oil in Vietnam? 4, Could you please tell me which tools the State can manage the environment? 5, Could you explain about the meaning of above tools? 6, Could you tell me about the advantage and limitation of legal system on EP? 7, In the future, what legal rules does the State need to amend? Interview question for The official of MOIT (3 officials) 1, Could you please tell me about responsibilities of MOIT on EP on the field of petrol and oil business? 2, Could you overview EP on petrol and oil business in Vietnam? 3, Could you please tell me what the legal rules applicable to petrol and oil business in Vietnam? 4, Could you please tell me the coordination mechanism between the ministries on protecting the environment in the petrol and oil business? 5, Could you please tell me about the advantage and limitation of legal documents on EP? And what are the reasons? 62 6, In the future, which legal rules does the State need to amend? Interview questions for Representatives of some petrol and oil business enterprises (5 person) 1, Ask about the information of the interviewee 2, Which legal rules are your business currently applying in protecting the environment for petrol and oil trading? 3, How you assess the current state of the legal rules on EP in the petrol and oil business? 4, Can you please tell me the legal rules on EP that your business has difficulty implementing? 5, What is the reason for difficulty? 6, Can you please tell me the recommendations for completing the legal rules on EP applicable to petrol and oil? 63 ANNEX Summary all answers of interviewees Interviewees Main content of answers The official of MONRE Question Officials from Vietnam Environment Administration Question MONRE is mainly responsible for EP For each specific sector, the line ministries will be responsible for EP in that sector and report back to the MONRE Question EIA and EP plans; EP of water, soil and air; EP in production, business and service activities; Waste management; Urban environment and residential areas protection; Waste management; Pollution treatment, restoration and environmental improvement; Technical regulations, information, indicators, statistics and reports of environment; The responsibility of the community in EP; Resources for EP; Compensation for environmental damage,… Question Including: legal tool, economic tool, technical tool, educational tool Question Environmental management tools are measures to implement the environmental management activities of the State, combination of measures to protect the environment Each type of tool itself must be systematic and interdisciplinary with multi-sectoral approaches and 64 Interviewees Main content of answers coordinated implementation Question Beside advantages, the legal system has limitation such as lack of definition of used petrol and oil, consistency, relevance, feasibility and quality of formulation legal documents is limited The reasons are the rapid change of market, many state agencies manage to EP, the awareness of people about EP is not good, drafting legal documents skill of officials has not met requirement Question Focus on encouraging the application of clean technologies and materials, promulgating consistent regulations, define clear functions, responsibilities among state agencies in EP The official of MOIT Question Officials from Industrial Safety Techniques and Environment Agency, Department of Legal Affairs, Department of Domestic Market Question In 2003, the first time petrol and oil business was regulated on Prime Minister’s Decision No 183 But this does not mention about EP In 2007, the first time petrol and oil business associated with EP was mentioned as a mandatory rules Question Legal rules environmental on responsibilities impact assessment for conducting report, EP responsibilities of petrol and oil production and business establishments, preventing and responding to environmental emergencies and oil spill incident response 65 Interviewees Main content of answers plan, EP fee, responsibility to pay taxes for EP Question The management of EP in the petrol and oil business is still under the control of a number of ministries and agencies, resulting in a coordination mechanism in state management that is not really comprehensive and effective Question The legal system on EP has developed but still has limitation such as lack unity, relevance, feasibility and quality of formulation legal documents is limited The reasons are the change of market, many state agencies manage to EP, the awareness of people about EP is not good, drafting legal documents skill of officials has not met requirement… Question supplement the definition of petrol and oil, portal on legal rules on EP in petrol and oil business, coordination mechanism between state management agencies, invest in research and application of technologies on EP, strengthen the inspection and propaganda law on EP in petrol and oil business Representatives of some petrol and oil business enterprises Question Representatives from Vietnam Petroleum Corporation, Petroleum Vung Tau Joint Stock Company, Petroleum Company B12 Question Legal rules on responsibilities for conducting environmental impact assessment report, EP responsibilities of petrol and oil production and business establishments, preventing and responding to environmental emergencies and oil spill incident response 66 Interviewees Main content of answers plan, EP fee, responsibility to pay taxes for EP Question Quite complete but still inconsistent, the overlap inspection between state agencies makes it difficult for businesses, many regulations have the same content in different documents issued by different agencies Question preventing and responding to environmental emergencies and oil spill incident response plan, EP fee Question regulations are not clear, and there is overlap between documents Question Regularly update feedback to improve legal documents on EP, propose a uniform review of legal rules, support enterprises who apply technical technologies on EP 67 ... OF LEGAL RULES ON EP APPLICABLE TO PETROL AND OIL BUSINESS IN VIETNAM 2.1 Rationale of legal rules on EP applicable to petrol and oil business in Vietnam 2.1.1 Basic concepts related to legal rules. .. in implementing the legal rules on EP applicable to petrol and oil business in Vietnam 45 3.4.2 Limitations of the legal rules on EP in petrol and oil business in Vietnam 47 3.5 Conclusion... factors and criteria for assessing the formulation and promulgation legal rules on EP in petrol and oil trading Chapter 3: Legal rules on EP applicable to petrol and oil business in Vietnam and