The State should apply the criteria of the Extractive Industries Transparency Initiative (EITI) to ensure transparency in mineral mining activities, said experts and managers at a workshop held in Hanoi on Tuesday.
Transparency a must
Trinh Dinh Thang, deputy head of the International Cooperation Department under the Ministry of Industry and Trade, underscored his ministry backed the idea for Vietnam to carry out EITI.
“The ministry finds it necessary to enhance transparency and accountability of relevant parties in the mining industry. We think Vietnam should join EITI,” said Thang at the workshop organised by the Consultancy on Development (CODE).
“Mining companies should publicise their payments, the authorities publicise revenue and there needs to be an independent agency to supervise such revenue and expenditure. EITI is a minimum standard for transparency in the mining industry,” he said.
He admitted the mining industry of Vietnam had exposed many shortcomings, creating low economic efficiency, distributing profits unevenly and causing severe environmental consequences.
Localities uneasy to please
A representative of Phuoc Son Gold Co., a gold miner listed on the bourse, stressed there were inadequacies in revenue and expenditure of local governments.
He said the government of the district where his company is operating complained that the district did not benefit from the company’s gold mining, even though the company had made great contributions to the province’s budget as well as the central budget.
He informed the current regulations did not specify the responsibility of businesses towards localities. Therefore, although the gold mining company has contributed much, it fails to meet the expectation of local residents.
Meanwhile, Dau Anh Tuan from the Vietnam Chamber of Commerce and Industry (VCCI) proposed the authorities should review its management and spending of the revenue from mining companies.
He demonstrated: “Businesses say they pay fees sufficiently, but have no idea how the authorities use their payments. For example, businesses say they have properly paid environmental protection fees, but when the environment is polluted, they are often the ones to blame while it is unknown how the local authorities use their fee payments to tackle environmental pollution.”
Tuan stated this process must be transparent and EITI would help accelerate this process.
EITI is not a story of only the authorities or enterprises, but of the entire society and civil institutions. Joining EITI will prove Vietnam is a transparent country, said Tuan.
According to a report delivered at the workshop, the State giants like PVN and Vinacomin are dominating the mining industry of Vietnam.
Vietnam has great potential in oil and minerals with around 5,000 mines and 60 different types of minerals. The mining industry’s contribution to the GDP has risen from 4.6 percent in 1995 to 11 percent in 2009.
EITI was announced by Tony Blair, then-Prime minister of the U.K, at the World Summit on Sustainable Development in Johannesburg, South Africa in September 2002. It is seen as a useful tool for resource-rich countries to better manage their natural resources, ensuring that the mining industry makes positive contributions to economic development.