Circular No. 55/2002/TT-BKHCNMT guiding the technological and environmental evaluation of investment projects

No. 44 (10-9-2002) CIRCIJLA,R No, 56/2002/TT~BKHCNMT OF JULY · 23, . .. ·· 2002 GUIDING THE TECHNC>LOGICAL. 0 AND ENVIRONMENTAL EVAl.U,i\TJON OF INVESTMENT PROJECTS Pu,;uantfo the Government's Decree No. 22/CP of M~/ 22,! f993 '0/1 Jhe tasks, powers and organizational structure.of the Ministry of Science, Technolqgy andEn\iiipnrrient; . Pu~uarit td the Government's Decree No. 24/2000/ ND-CP6f July 31, 2000 di:!tail/ng the implementation of the La won ·Fote(gn In.vestment in Vietnam; Pursuant to the Government's Decroe No. 5,111999/ ND-GP of July B;· 1999 detailing the implementation of the Law on Domestic fnvestment Promotion (hereinafter called Decree No.5111999/ND~CP) and Decree No.35/2002/ND•CP of March 29, 2002 amending and supplementing Lists A, 13 · and C promulgated in the Appendix to Decree No. 51/19991 ND-GP; Pursuant to the Government's Decree No. 52119991 ND-CP of July 8, 1999 issuing the Regulation on Investment and Construction Management and De9ree No. 1212000/ND--CP of May 5, 2000 amending and supplementing a number of articles thereof,· Pursuant to the Governrmmt's Docree No. 175/CP of October 18, 1994 guiding the implementation of the Law on Environment Protection, The Ministry of Scif111co For;hnotogy fl/I(/ Of·HC;IAI b/v'.LI lf: Environment issues this Circular yuiding the Jec/111ological and enviromnental evaluation of i11vestmont projects being at the stage of consideration for investment licenses. I. GENERAL PROVISIONS 1. Technological and environmental evaluation of investment projects a/ Technological evaluation of investment projects means the process of examining and assessing the compatibility oftechnologies mentioned in the projects With their objectives and contents on the basis of the State's undertaking~,policies and p!annings available at the time of project eVa!uation. b/ E nvb,nfT" ,ca, ,r:,i hvali 1hlion of i nvestrnent projects means the examtna(ion arid assessment of the projects' impacts on the erwironm:ent, and measures to minimize the advers,e ,irripcicts on the environment according to the State's: current regulations on environment protection: • ·. •- · ·· Based on the', resu It~ o.f ex:~lm i nation and assessment mentioned ~t • Poirits a· and b above, to propose the compefontagendes to grant or not to grant investment lfcenses (for foreign investment projects) or to ·decide on or accept the investment (for domestic inv·estment projetts.).' and other matters (ifany) which should benotifiedto the project owners. 2. Evaluation objects; .· ·· a/ Foreign investment projects defined in the Government's Decree Nq:24/2000/ND-CP of July 31, 2000 detailing the implementation of the Law on Foreign Investment in Vietnam. b/ Domestic investment projects defined in the Government's Decree No.51/1999/ND--CP of July 8, 1999 detailing the implementation of the Law on Domestic Investment Promotion, Decree No.52/1999/ ND-CP of July 8, 1999 issuing the Regulation on Investment and Construction Management and Decree No.12/2000/ND-CP of May 5, 2000 amending and supplementing a number of articles of the Regulation on Investment and Construction Management. 3, Contents of the technological and environment.al evaluation of investment projects a/ Products of technologies ancl their outlets. or llCl1\l. GAL[TT[ No. 44 ('I 0-9-2002) b/ Ter:hnology :,election. c/ Equipment ir1 the tech1iolo9ica! chciin!.>. di Raw materi~ils, fuel, materials, components and spare part~; for production. e/ Location selection. fl Teclinology transfer. gl The projects' impacts on the env/mnmenl. hi The projects' efficiency. i/ Other relevant matters (if any). II. DETAILS OF THE TECHNOLOGICAL AND ENVIRON MENTALEVALUATI0N OF INVESTMENT PROJECTS In a project dossier, theJqllowing contents should be evaluated: 1. Product$ oftechnolog,Y{ies) and their outlets .·.·: . . :: . al Forecasts ori the mar/<et·(domestic and overseas) demand, taking into/aCcount products of the same kind· and the foreca~ts' re!iabiiftY:, ·.· bl Foreca~ts 011 'the :market shares of the technology's products, their, export percsntages and marketing methods. cl The technological scs/e's fationa/ity and equipment's required capacity,·. . .. · d/ The products' quality sfandard/3 .. . . . ( . . e/ The competitivene~s {!n terms of,quality, design and price) of the technolqgy!s products. 2. Technology selectlon a/ Examining the perfection of technology(ies): The applied technology(ies) must show their stability and have already been commercialized. Depending on the kinds of product and production methods, the technological diagrams may vary but must fully demonstrate an processes of the production chain aiming to create products with expected quantity and quality. b/ Examining the modernity of the technolorc1ical chain: A modern technological chain is a specialized production cheiin organized by U1e mechanization method, in which at least 1/3 (one third) of automatic equipment is pronram~controlled and exist no hmrl manual-labor processes; the production chain ii; arrnnged in -:l f;pace ensuring industrial lly~Jiene, labor safoty and environmental :,wiitation standards. The enterprise management system must be an advanced ::,ystcm (whern a number of jobs are computerized, such as: tcc.hnology ;.ind matert"Jls management, marketing ... ). cf Encou r·aging the up plication of modern technologies based on the above-mentioned concept of a modem technological chain. However, Jn a number of particular cases, technologies may be applied in compatibility with the production level and conditions .. of our country or localities where the projects are carried out. When such technologies are applied, their advantages and compatibility should be clearly explained. d/. Selecting technology(ies): Ill an .. investment project, there may be one or many 'technological options. If there are many technDlogiqa l'options, adv~ntages and disadvantages·of each6Pt(on should · be compared, and the perfection ortedhnoi~\9Y(ies), the modernity of the tech nologlcalchaM)i:s:we,ILas the technological compatibility should be',exaHriA,ed;-:v\'hich . . ·. . ·, ;, 1 = ·;~ i. ::= ·: ~ ·: . . shalt serve as basis for commenting, on :tne::$e!Elcted techno!9gical option. 3. Equipment in technological cha:l•nr .. ·· a/ Evaluation of the equipment's suitabillty: .·. ' ' ' · - l'he equipment iOa technologicarchaii(1'!1'ust be examined on the basis of their specif/Cfjtions and quality, which must meet the techno!ogical:reqoirements in order to create products· with expected: quantity and quality. "l'he equipment must be complete/-that is the list of equipment must demonstrate the capability of implementing the processes in the technological diagram, meeting the quantitative and qualitative requirements of products. Attention should be paid to av6iding the !ack of equipment necessary for the production chain or the inclusion of unnecessary equipment into the list (which may happen when one of the parties contributes capital to the project with equipment). bf Asse%ment of the eq1.1ipment's quality: On the basis of tile list of equipment of an investment project, it is necessary to examine: The equipmfmf's orif1in (the manufacturing country ancl company). The (oquipnient'~, year of rmmufacture, sign and No. 44 (10-9-2002) OFl"ICl/\l G/\/LTTr~ code. Its specifications and technical properties. The quality criteria of products turned out by the equipment. cl The equipment procurement method: bidding or not? reasons therefor? di Assessment of the equipment's novelty: To encourage the use of brand-new equipment in the investment projects. Where it is necessary to import used equipment, such must striCtly comply with the current \aw provisions,' 4. Raw mat~rial$, fuel, ·materials, components and spare partsfo'i'production ..: .--".,:.;-·: ·.· ";· /" :· . . : al ExamtningJhe capability of exploiting, transporting and pr~serving • taw .materials and materia!s to be supplied. to, ~rcijects.- · bl :Exa'rtiining 'the types, volume and value of com~onents;: s~a'rer P?rts or semi-finished products which:tnuei'bsi. imp9rted for product p·rocessing, asskrn tir/9r,111an~facture. Examining' the localization rat~ ari q)lari,tti' rais,e tbis rate. · · cl E:X~hlln:in(f th~ type{ volume and value of raw materials, fuel and materials, which must be imported, and the possibiltty 6f4sin'g local and dom~stic raw materi1.1Js as weUas raw'materials which scarcely cause pollutioh 'ta' the,environrnent. •. •"•: ·.. . , ·· .. 5. Loc·attori $el~etirin ·.·· ... .. · .. a/ Examining the p~ojecfimplementation lo'cation's suitability with the concerned technological chain. bl Examlnlng and assessing the environmental advantages and disadvantages for the project implementation location. cf Advantages of the selected location compared to others. 6. rechnology transfer lf an investment project covers one or some of the following contents ( called technology transfer contents), the project owner shall be requested to compile a technolo.gy transfer contract according to law provisions (the Government's Decree No.4::i/1998/ND--CP of July 1, 1998 detailing the technology transfer: a/ Transfer of the rinht to own or use industrinl property object:;. !J/Tmw,fcr of technological secrets and l<now--hows i r I form of tectmological options, tech nica I solutions, tcchriological processes, p1·elirninary and technical det;igns, formulas, technical parameters, drawings, technologirnl diagrams, computer software (under tedmology transfer contracts), information and data on the transferred technology with or without accompanied machinery and equipment. c/ Transfer of solutions to production rationalization and technology renewal. di Provision of seNices in support of technology transfer: Providing technicalsupport in technology selection, guiding equipment .insfallaJion and trial operation of equipment chains, ' · Providing cpnsi.lftai; cy on tech no logy management, business:rri~riagem ent, and guiding the implementation of ·t .1ejr~'n\ferred technological processes. Training and fost~rfng :wotkers','technicians and managerial cadres to 'raise tfieir,professional and managerial ski\\s so. th~t \he-/ 'may: firmly grasp the transferred technology{ies),/,, .···· ... el Supply of ma.cn•in~ry; ~quipment and technical facilities toge~herWitlf one or some of the above mentioned contents. , 7. The proj~ct'~ impabu1 6~ 0 the environment: al Examining factcirSv-.'.hiph may adversely impact the environment Poliu~ing ~ources from production stages; solid, liquid andgaseous wastes discharged the production process: etc. b/ Examining the latent danger of environmental incidents. cl Examining handling measures to minimize adverse impacts on the environment as well as measures to prevent environmental incidents. di Categmizing projects for which reports on UKi assessment of environmental impacts must be elall0rated (category-I projects) or written registration of compatibility with environmental standards must be made (category-II projects), on the basis of the Science, Technology and Environment Ministry's Circular No.'190/TT-Al(HCNMT of April 79, 1998 guiding the e la bo ration and evaluation of re ports on the assessment of environmental impacts for investment im,jecls. OFFICIAJ. GALETTI.: No. 44 {10-9--200?) 8. Tim projects' efficiency When as~essin~J a project',;; efficiency, taking into account the technology's contributions, it is necessary to examine the following aspects: a/ The socio-economic benefits brought about by the project (tt1e possibilitie$ of generating new production capacity, new production and business lines and new products; expanding markets, creating jobs for laborers and remittances to the State budget, and economic benefits at the project owner, etc.) bl Examining the project's financial feasibility: The time for capital recovery. The net present value {NPV). The internal rate of return (IPR). 9. Other relevant mattets {if any) Apart from the 111ain task of technological and environmental evaluation,. attention shou Id also be paid to considering and i::ommenting on other relevant . matters, such as: al The project:s:~bjeclive~:. , ' ' Examining the investment's necessity. Examining the compatibility of the .projects' objectives with the State's undertakings, policies and plilnnings. b/ Labor and training; Examining the enterprlses' ernployrnent plans. Giving priotity to the recruitment of Vietnamese laborers (except for special positions wh!ch reqWre forei9n laborers). Encouraging projects, which create more jobs tor Vietnamese laborers. Examining training plans ( domestic and overseas) for Vietnamese la borers according to the contents and requirements of each position in the technological chain. cl Labor safety and hygiene, fire and explosion prevention and fighting: Examining labor safety an<.l hygiene: 1abor protection equipment and devices, labor safely and hygiene, suited to each position in the technologiwl chain. Examining fire and explosion prevention ~ind fighting; equipment and devices for fire and explosion prevention, and uH1er relevant necessary equipnwnC which mu:,t comply with t1·1c designs under currfJnt regulations. di The µl"(Jject owner's professional and financial capacities c1s well as legal person status, etc. Ill. METHODS OF EVALUATING INVESTMENT PROJECTS Depending on the requirements for each project, the evalu a lion rnay be conducted by one of the following methods: al Evaluation by experts: Thi$ method shall apply to the following cases: The investment project' technological contents are clear. ~ The project falls in a specific domain or the concemed branches' opinions thereon:are quite clear. . ~ The evaluators are knowledgeabf e about the field ,of operation of the investment project. · bl C,onsulting specialists: · · This method shall apply to the foUowl~g;Qases: The evaluators are knowtedgeab~~tiQJf.the field. of operation of the in vestm erit pr,ojeqt-;hut' ·iack information, thereby needing ·to cpnsul(Spe¢falists in order to update information; · ·. .· .· · ·· · The technological contents require profound . profes~lonaf knowledge and consultation with specialists 'in the relevant :fields for ade~uate and accurate comments on the project. :, cl Organizing consultancy conferenc:.es: . This method shalt apply to the fol!owing cases: r The project is an interrbranch one or has wide• ranging impacts. r The project involves complicated matters on whfch opinions• remain divergent. \V. ORGANIZATION OF IMPLEMENTATION 1. The Ministry of Science, Technology and Environment shall organize the technological and environ mental evaluation of group-8 and -C investment projects (except for the decentralized group-B projer;ts). The Office in charge of technological and environmental evaluation of investment projects shal\ be the major unit to organize tile evaluation. 2. The science, techn olouv and envirnnrnent rnm1aginf] orgrn1iwtions of the mi11i~;tr ir:i, and branches, and t\1e Science. Technolo(JY and E11wonrnent Services No. 44 (10-9-2002) of the provinces and centrally-ru11 cities shall organize the techno!ogical and environmental evaluation of group s and -C investment projects as decentralized or authorized. 3. Industrial parks, export-processing zones, high tech parks, corporations 90 and 91 shall conduct the technolog ica/ and environm enta I evaluation of group s and -C investment projects as decentralized or authorized to license the investment. V. IMPLEMENTATION PROVISIONS 1. This Circular takes effect 15 days after its signing and replaces Circular No. 1940/TT -B KH C N MT of November 15, 1997 of the Ministry of Science, Technology and En\Jironment guiding the technological evaluation of Investment projects being at the stage of consideration for Investment licenses, · 2. If any prpbls.~s; difficulties or obstacles arise in. the courseoffn,p'leme,ntation, they should be promptly repoct~Jithe.Minist,yof Science, Technol09y and Environmerif for study .and. settlement. ':·.: ..... · ... , .· .. ' ... ·. Minis,Mr:61 Science, Technology :-and Environment CHUTUANNHA