EVALUATION OF RIA IMPLEMENTATION IN VIETNAM, 2009 - 2010 · process of evidence-based law making...

EVALUATION OF RIA

IMPLEMENTATION IN VIETNAM,

2009 - 2010

By CIEM &

USAID/VNCI

August, 2011

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Executive Summary

The number of legal normative documents (“LNDs”) in Vietnam has increased very fast in

recent years. However, Vietnam is in lack of a systematic tool to ensure that LNDs bring

about more benefits than costs to the society. To maintain the efficiency and effectiveness of

LNDs there needs to be a mechanism to control the quality of the legal development process.

Regulatory Impact Assessments (“RIA”) is a tool that can serve that role. The Socialist

Republic of Viet Nam is the first country in the ASEAN region to officially adopt and

implement RIA after the Law on Promulgation of Legal Normative Documents (effective as

of 1 January 2009) was passed. In comparison to international practices, RIA has not been in

existence in Viet Nam for very long and it has also not been implemented fully. Nonetheless,

there has been some important experience in doing RIA that can help to find ways of

improving and strengthening the current implementation of RIA. This has been the rationale

and focus of conducting this evaluation report which examines the implementation of RIA in

the 2009 to 2010 period.

Key Findings

The evaluation report has found some noteworthy findings about the opinions from drafting

and appraising officials:

• 90% of all ministry officials are aware of RIA, but only 55% actually knew that RIA is the

process of policy analysis. Only 43% of drafting officials said they had been trained in

RIA. 87% of drafting officials would like either basic (83%) or advanced (91%) training

in RIA.

• 100% of appraising officials and 93% of drafting officials feel that RIA is necessary in

Viet Nam. However, as much as 72% of ministry officials feel it is difficult or very

difficult to implement RIA in Viet Nam.

• 90% of ministry officials feel that RIA improves the quality of legal instruments.

• In general, ministry officials said the most critical factors affecting the implementation of

RIA are financial resources and the analysis skills of officials. Other critical factors

included the commitment of top leadership, the need for an independent quality

monitoring agency, and propaganda and dissemination of RIA.

With regard to compliance and quality of RIAs, this report shows both encouraging results

and areas that needs improving. Compliance of RIA requirement improved from 2009 to 2010

with the number of RIA reports vis-à-vis the number of law projects increased from 1/20 to

22/25. However, the quality of RIA reports are alarmingly low with an average score of just

over 1 on the scale of 0-4 (4 means maximum possible score).

The report also identifies major factors affecting the implementation of RIA in Vietnam

currently, namely: (i) staff’s capacity; (ii) financial resources; and (iii) leaders’ commitment.

As such, pivotal elements in successful implementation of RIA in Vietnam are appropriate

political and financial investments, and the rewards usually outweigh the costs. The

Organization for Economic Cooperation and Development (OECD), in the report on

Vietnam’s administrative and regulatory reform, “Cutting Red Tape, Administrative

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Simplification in Viet Nam: Supporting the Competitiveness of the Vietnamese Economy”,

estimates that for every VND spent on RIA, VND 100,000 of costs will be saved for

Vietnamese enterprises.

Recommendations

In order to address some of the concerns and challenges found during this evaluation exercise

there are four areas where improvements have been identified to strengthen the

implementation of RIA;

1. Improve the legal requirements for RIA

� The requirements for simple and full RIA should be revised or abolished.

� The number of days a RIA should be consulted on should be the same as for the draft

law.

� Impact assessment in the RIA should be streamlined to only economic, social and

environmental impact, to follow international norms.

� Require LNDs of lower ranks, such as circulars and decisions, to conduct preliminary

RIA.

2. Greater capacity building for increased awareness, skills and knowledge

� Compulsory basic RIA training for civil servants.

� Provision of in-depth RIA training for at least a group of key policy analysts in each

ministerial agency.

� Creation of an advisory board of officials and deputies involved in RIA to share

experience and disseminate good practice in Viet Nam.

3. Increasing compliance and driving quality

� Establish a central, specialized agency in charge of enforcing compliance of RIA with

the following functions: (i) provide independent quality assessment of RIAs to help

educate and raise standards of policy analysis; (ii) monitor the compliance of RIA in a

more transparent manner; and provide capacity building services to drafting agencies

as well as appraisal and verification agencies.

� Establish a new central mechanism responsible for quality checking RIAs before they

are submitted to the Government or National Assembly should be established,

preferably as part of the said agency.

� Increasing access to RIA for citizens and business by posting them on a single web

portal for all stakeholders to view and provide comments, and thereby allowing for

greater public engagement in the policy making process.

4. Enabling RIA to be effective

� Increase the budget for conducting RIA, but focus this on data collection and evidence

gathering activities.

� Streamline dossier of documents that are presented to decision makers so that they are

of higher quality and lower quantity – to improve decision making process. For

example, the report on the implementation of existing provisions can be integrated in

the RIA report.

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� Drafting team need to consider RIA as not just a legal requirement but a substantial

process of evidence-based law making tool.

� Appraising and verification agencies to be more demanding for higher quality RIAs

and publicly make use of them in debates and discussions.

Final word

The continuous challenge for governments is to find ways to regulate better. Changes in the

situation of the economy, the needs of society or environment require a change in government

intervention. RIA is a tool that should be fully implemented in Viet Nam to ensure that only

the best government interventions that will have the most positive outcomes for whole society

are implemented.

Table of Contents

Executive Summary .............................................................................................................. i

I. Introduction to evaluation ........................................................................................... 1

II. Introduction to Regulations and Regulatory Impact Assessments (RIA) .................. 1

2.1. Regulations as tools to govern .................................................................................. 1

2.2. The role of RIA ....................................................................................................... 2

III. RIA in Vietnam ............................................................................................................ 3

3.1. Legal requirements for RIA ..................................................................................... 3

3.2. Institutional implementation of RIA in Vietnam ....................................................... 5

IV. Evaluation of the implementation of RIA in Vietnam ................................................ 6

4.1. Assessment of the Legal Requirements for RIA in relation to implementation ......... 6

4.1.1. Applicability of RIA on legal instruments ......................................................... 6

4.1.2. Preliminary RIA ............................................................................................... 7

4.1.3. Simple and full RIA .......................................................................................... 7

4.1.4. Public consultation ............................................................................................ 7

4.1.5. Impacts to be assessed ...................................................................................... 7

4.1.6. Post-implementation RIA.................................................................................. 8

4.1.7. Quality assurance of RIA .................................................................................. 8

4.2. Assessment of awareness of RIA and need for capacity building on RIA ................. 8

4.3. Assessment of compliance with RIA requirements ................................................... 9

4.4. Assessment of Quality of RIA ................................................................................ 10

4.5. Assessment of the factors affecting RIA implementation ....................................... 11

V. Recommendations and conclusions ........................................................................... 13

Appendix 1 .......................................................................................................................... 16

Appendix 2 .......................................................................................................................... 17

Appendix 3 .......................................................................................................................... 20

Appendix 4 .......................................................................................................................... 22

Evaluation of RIA Implementation in Vietnam, 2009 – 2010

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I. Introduction to evaluation

Regulatory Impact Assessment (“RIA”) has been a legal requirement in Vietnam since 2009

following the enactment of the 2008 Law on Promulgation of Legal Normative Documents

(“Law on Laws”) effective from 1 January, 2009 and the 2009 Decree 24/2009/ND-CP on the

Details and Implementation Measures of the Law on Promulgation of Legal Normative

Documents effective from 20 April, 2009 (“Decree 24”). These two pieces of legislation were

an effort to improve the quality of legal normative documents (“LNDs”) because the rate of

introducing new government documents has increased markedly since the mid 2000s.

Between 2005 and 2008, the number of new documents, both non-LNDs and LNDs1,

introduced in Vietnam by central government agencies averaged at almost 860 per annum. In

2009 this rose to almost 1500 LNDs2.

This report is a joint effort between the Central Institute for Economic Management (CIEM)

and the United States Agency for International Development’s Vietnam Competitiveness

Initiative (USAID/VNCI) to evaluate the implementation of the legal RIA requirements in

Vietnam during the 2009-2010 period. It will assess the following elements of RIA

implementation:

(1) The legal requirements for RIA;

(2) The awareness and understanding of RIA;

(3) The compliance of RIA;

(4) The quality of RIAs being produced; and

(5) Factors affecting the implementation of RIA in Vietnam.

Finally, this evaluation provides recommendations for improving the implementation of RIA

in Vietnam in the future.

Methodology

This evaluation has used a combination of desk research, expert interviews, scorecard analysis

and a survey to assess the six areas of this evaluation, as described above.

This evaluation was conducted over a 4 month period from 1 March 2011 to 30 June 2011,

and was designed to provide a practical assessment of the implementation results and find out

causes of success and failure to enhance effective implementation of this policy/law making

tool (see Appendix 1 for more details of the methodology).

II. Introduction to Regulations and Regulatory Impact Assessments (RIA)

2.1. Regulations as tools to govern

Across the world governments have the responsibility to govern the nation’s needs and

deliver protection, security, stability, growth and prosperity. In order to fulfill their

responsibility and deliver these outcomes, governments can choose to define their role in

1 Legal Normative Documents are Laws, Ordinances, Decrees, Circulars, Inter-circulars, PM decisions, National Assembly resolutions, and resolutions issued by NA’s Standing Committee.

2 “Regulatory Reform not Administrative Reform”, Faisal Naru & Dr. Nguyen Dinh Cung, 2010. It should be noted that most of the documents are LNDs, except for a small number of Prime Minister’s ministers’ decisions.


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different ways according to their situation and context. However defining the government’s

role is critical toward achieving the important services and objectives to the country and its

citizens. With increasing pressures on resources and a more complex environment,

governments are seeking smarter ways to achieve their outcomes and are redefining their role

and relationship with society and the economy. In a market economy an “enabling” approach

toward governance is employed that is built on key principles of transparency, accountability,

open and fair competition, etc. The government then strategically chooses when and how to

intervene in order to regulate the activities within the country to uphold these principles.

Traditionally, governments intervene through issuing LNDs which are usually called

regulations3. Government, however, can intervene and regulate in other ways apart from

issuing LNDs, in order to achieve the intended outcome. The regulations are a tool and are not

the end outcome. For instance, having a law will not guarantee that people’s behavior will

change or business activity will follow a certain way. Sometimes there are better and more

appropriate ways to achieve the outcome. Whether, how and most importantly why a

government intervenes must be clear in order to govern effectively and efficiently.

2.2. The role of RIA

The Regulatory Impact Assessment (RIA) is a feasibility test of a proposed LND before it is

approved by the Government and National Assembly, and ultimately before it is

implemented. It asks the important questions that forces LND drafters to consider before

regulating whether government intervention is needed and how the government should

intervene. It helps law appraisal officers ask the critical questions about a proposed

regulation, in order to prevent bad regulations from being implemented and potentially

causing more harm than good.

RIA is a useful policy and law making tool for both government policy drafters and decision

makers. Its purpose is to improve the overall regulatory quality within a country and help to

manage the regulatory environment so that it limits the negative impacts and maximizes the

benefits for society, the environment and the economy. It is also a useful communication and

consultation tool for stakeholders in the private sector, civil society and non-governmental

sectors.

RIA is above all a tool for improving the governance of a country. In particular, it is applied

in many countries across the world (see Appendix 2 for International experience of RIA) to

improve the economic governance and ensure that governments reduce regulatory-related

costs, risks and barriers to competition, so that firms are able to operate in a climate which is

positive for investment. Better regulation also means effective and efficient use of state

resources to implement laws that actually achieve the outcomes they were designed for and

have better results for Viet Nam. There are numerous cases in Viet Nam of regulations being

passed that do not meet their objective or in some cases make the situation even worse. This

has many consequences including the waste of state resources that could be used better

elsewhere to help protect citizens or create jobs.

3 Regulations are defined as “Any government intervention that has an impact on individuals, institutions, organizations or groups within the private or public sector and in general on society” (F. Naru, RBP Program – DFID, 2006).


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III. RIA in Vietnam

3.1. Legal requirements for RIA

The Law on Laws and Decree 24 – the legal framework for RIA in Vietnam

The legal requirements for conducting RIA in Vietnam became effective from the 2008 Law

on Laws and 2009 Decree 24 on 1 January, 2009 and 20 April, 2009 respectively. The

requirements for conducting RIA are contained in Article 33 of the Law on Laws and then

detailed in Articles 37 to 40 of Chapter III in the Decree 24. The Law on Laws and the Decree

24 require that preliminary RIA be conducted on proposals for LNDs to be included in the

annual law, ordinance and decree making programs of the National Assembly and the

Government respectively. RIA must also be conducted at the outset of the drafting phase on

draft laws, ordinances and decrees before actual drafting begins. Though not subject to formal

RIA requirements, draft Prime Minister Decisions and Ministerial circulars are required by

the Decree 24 to have dossiers that include documents that reflect a policy analysis similar to

RIA including policy objective, policy options and the costs and benefits of the policy.

Figure 1: Requirement for RIA in the Law-making Process

Types of RIA report (Preliminary, simple and full RIA)

The Decree 24 provides for 3 kinds of RIA: “preliminary”, “simple” and “full”. Preliminary

and simple RIAs are similar and can be done relatively easily and quickly, since


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comparatively little data collection or quantitative analysis is required. A full RIA involves

more extensive data collection and quantitative analysis would only be undertaken if the

Preliminary or simple RIA indicates the likelihood that the LND could have one of the

significant impacts described in the Decree 24. The preliminary, simple and full RIAs are

designed to be built upon each other and are not separate documents. However they are

conducted at different times during the drafting of the legal instrument and have different

depths of analysis.

Figure 2: The Difference and Inter-relation between Preliminary, Simple and Full RIA

According to Article 37 and 38 of Decree 24, the contents of the RIA reports are similar and should contain the following sections:

• Issues to be resolved (problem definition);

• Objectives of the proposed policy;

• Approaches for resolution of such issues (policy options proposed); and

• Optimal solution (recommended option) based on:

o assessment of impacts (for preliminary RIA)

o specific impact assessment of solutions for implementation of underlying policies of the draft legal instrument on the basis of qualitative and quantitative analysis of costs and benefits, and the positive and negative impacts of each solution (for simple and full RIA).

However the level of detail in the simple and full RIA for each of these sections is greater than that in the preliminary RIA. And the full RIA contains greater quantitative assessment of impacts than the simple RIA, which largely has qualitative assessment of impacts (See detailed legal requirements for RIA in Annex 3).


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Requirements for public consultation

Regarding public consultation in the law-making process, the Law on Laws also mandates

that all draft central level LNDs be posted on websites of both the drafting agency and the

Government for at least 60 days for public comment and that the drafting agencies must

“study to absorb the comments” and prepare a “summary of opinions from agencies,

organizations and individuals” regarding the draft and produce an “explanation report on the

absorption of comments into the draft.” RIA and public consultation assist each other, indeed

public consultation is a vital element of RIA. The RIA itself must be posted on websites of

both the drafting agency and the Government for at least 20 days during the Preliminary RIA

stage, and for at least 30 days for a simple or full RIA stage.

Requirements for ensuring accountability and quality of RIA

According to Article 40 of the Decree 24, the RIA must be considered and signed by the Minister or head of the ministerial agency before submitting the proposal documentation or dossiers for drafting or evaluating a LND to the Ministry of Justice for compilation and submission to the Government and National Assembly. The Minister or head of the ministerial equivalent body or of a governmental body shall be responsible for the objectiveness and accuracy of the contents of the RIA report.

3.2. Institutional implementation of RIA in Vietnam

The Law on Laws and the subsequent Decree 24 give the Ministry of Justice the

responsibility of appraising draft LNDs with support of other related documents, including the

RIA report. The Ministry of Justice must collect preliminary RIA reports and submit them for

consideration to the Government and National Assembly as part of the overall dossier of

submission documents. It also provides for a “post-implementation” RIA to be conducted by

the relevant Ministries. The responsibility for drafting the RIA is with the Ministry who is

proposing the LND.

The task of training and capacity building of RIAs has been conducted in some way by the Ministry of Justice through legal departments in line ministries.

However, some tasks that are part of a RIA system have not been fulfilled or allocated to an institution. For instance “compliance enforcement” and “quality control” of RIAs have not been conducted by the Government. This drawback has been noticed by the public, such as the comment by a famous intellectual, Mr. Nguyen Quang A, that the draft Capital law should fully reflect and be consistent the analytical results of RIA4.

4 Báo Lao động cuối tuần, “Dự thảo luật thủ đô”, 28/2/2011 (Labor Newspaper Weekend Edition, “Draft Capital Law, 28/2/2010).


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Figure 3. Formal Stages in Vietnam law making process according to the Law on the Promulgation of Legal Normative Documents

IV. Evaluation of the implementation of RIA in Vietnam

4.1. Assessment of the Legal Requirements for RIA in relation to implementation

The legal requirements for RIA were developed to provide a system of assessing the impacts of draft laws, ordinances and decrees. This section provides an analysis of the design and contents of the legal requirements and any issue with their implementation over the past two years.

4.1.1. Applicability of RIA on legal instruments

The RIA is currently only required for upper-tier LNDs (law, decree and ordinance) and is not

required for other types of legal instruments. This is partly due to the fragmentation of

Vietnam’s legal system and the authority of multiple bodies in Vietnam under differing

jurisdictions to make and pass legal instruments. It is also because of the understanding that

by getting the upper-tier of legal instruments correct, from which all other legal instruments

stem, it is sufficient or easier to manage the overall flow of regulations in a targeted manner

given the limited capacity and resource to conduct impact assessments. However, there is also

an argument for a level of rigor and accountability to be added to lower-tier legal instruments

(circulars, official letters, decisions, notices, etc) which can often contain burdens for

officials. Current provisions may create perverse incentives in the legal system for lower-tier


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instruments to be used in order to circumvent the requirements for greater transparency and

quality in the upper-tier instruments5.

4.1.2. Preliminary RIA

The purpose of the preliminary RIA is to test the need for regulating. The requirements in the

Decree 24 are clear about this and provide a good framework and timing for conducting this.

However, the requirement that the preliminary RIA should make impact assessment on some

options seems quite heavy for this early stage, which only needs to answer the question of

whether a law is needed.

4.1.3. Simple and full RIA

In theory, the concept of a simple and full RIA adds a layer of sophistication in the RIA set up

in Vietnam. However, in practice it has faced some problems during implementation. The first

problem is the proposed difference between a simple and full RIA. Many stakeholders,

including ministry officials who have never conducted any policy or impact analysis, failed to

see the difference between the two types of RIA due to an unclear distinction between them.

The explanation of the difference being in terms of depth of quantitative/qualitative impact

assessment is incomprehensible for a system that conducts virtually zero impact analysis at

the moment.

The second problem that may have compounded the confusion between simple and full RIA

is the threshold criteria of quantitative impact in the Decree 24 for completing a full RIA. A

full RIA is required for proposals that have an impact of or higher than VND 15 billions or

USD 750,000 on the state, citizens or businesses. The current threshold is set too low and is

too ambiguous, meaning that practically ALL legal instruments would require a full RIA

based on this criteria, thus making simple RIA redundant.

4.1.4. Public consultation

The requirements for public consultation in the Law on Laws and the Decree 24 are a

welcome step towards greater transparency and accountability. However there is a difference

in the consultation requirements in timeframe for the draft legal instrument and the draft RIA

which should be examined. Draft legal instruments require at least 60 days public consultation

while a draft RIA requires at least 30 days. This does not encourage the two processes of

drafting a legal instrument and drafting a RIA to be integrated. Contrarily, the gap in number

of public consultation days between draft LND and RIA even leads to the view that RIA can

be completed after the draft LND has been finalized. In addition, it shows that the importance

of RIA is under-estimated while it is actually the ‘soul’ of the draft LNDs.

4.1.5. Impacts to be assessed

According to international standards, the numbers of impacts that are required to be

conducted under the Decree 24 are ambitious and far reaching. The international norm is to

concentrate on only three impacts: economic, social and environmental. If there are any others

that are particular to a proposal then they can be assessed as well. However these three

5 The number of new non-normative regulatory instruments issued more than doubled in 2009 compared to the period of 2005 – 2008, “Regulatory Reform not Administrative Reform”, Faisal Naru & Dr. Nguyen Dinh Cung,

2010.


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impacts are the main considerations in most RIA systems across the world, with a priority on

the economic impacts.

As a result of this, ministry officials have commented that the requirements for impact

assessment are too academic and burdensome, and are not targeted enough with due

consideration for the limited capacity of ministry officials in Vietnam.

4.1.6. Post-implementation RIA

The requirements for post-implementation have not been implemented in Vietnam yet, given

it is required 3 years after a legal instrument comes into effect, while the Law on Laws has

come into effect since the beginning of 2009.

4.1.7. Quality assurance of RIA

The requirement for quality assurance is a good and critical element of the Decree 24. It

requires leaders of relevant government agencies to sign the RIA report. This ensures there is

accountability of the RIA with decision makers in the drafting organization. However it is not

clear what repercussions there are for those decision makers who do not follow these legal

requirements.

4.2. Assessment of awareness of RIA and need for capacity building on RIA

Regarding the awareness of officials, most of the survey respondents say they have heard of

RIA (95% of drafting officials and 86% of appraising officials). For those who have never

heard of RIA, causes that are mostly marked are: (i) too little information available on the

Internet; (ii) no brochures, guiding manuals of RIA provided; and (iii) no attendance in a RIA

training course. While most surveyed officials have heard of RIA, their knowledge about RIA

is not yet complete. Only 65.2% of drafting officials and 76.3% of appraising officials

answered correctly the multiple choice question about “RIA as a document”6 while only

51.1% of drafting officials and 59.5% of appraising officials correctly answered the question

about RIA as a process of policy research and analysis 7. The low level of awareness about

RIA as an analytical process has confirmed the fact that drafting agencies make a habit of not

using a structured analytical tool such as RIA in their law drafting process. This practice

explains a widely-recognized observation of the low quality of Vietnamese LNDs.

Regarding the role of RIA, most of the participants consider RIA necessary (100% of

appraising officials and 93% of drafting officials). Only one (out of 86) drafting official

thinks that RIA is not necessary. In respect of specific impacts, most of the drafting officials

think that RIA implementation has positive impacts on law-making: it improves the quality of

draft LNDs (89%); facilitates decision-making on policy selection (82%); and facilitates

persuasion of appraising agencies. In respect of negative impacts, 19,3% of drafting officials

think that RIA places more burden and 8.4% think that RIA causes delays to the law

development activity. Two drafting officials (out of 86) think that RIA does not have any

positive impacts. This coincides a reality that the quality of RIA is very low and many

6 RIA is a structured document in order to produce high quality regulations basing on all three factors: (i) cost-benefit analysis; (ii) evidence-based analysis; and (iii) public consultation.

7 RIA is also a study and analysis process in order to provide evidence-based policy solutions to address problems in a transparent and accountable way.


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drafting teams only produce procedural RIA reports to submit to appraising agencies. The

appraising officials think that RIA helps improve the quality of LNDs (92%), helps them

understand explanations for the policy selection (89.4%) and helps the LND issuing agency to

come up with different options (76.3%). Regarding negative impacts, only two (out of 86)

appraising officials think that RIA causes delays to the law development activity.

Staff capacity is always considered an obstacle in RIA implementation at present. We study

this issue in three ways: staff being trained on RIA, perception of drafting officials of the

difficulty levels of RIA and demand for use of independent consultants for RIA

implementation. Less than a half (43%) of the drafting officials participating in the survey

said that they had been trained about RIA. However, most of them desire to participate in an

advanced RIA training course (91%). Of those who have not received training on RIA, the

majority (83%) want to participate in a basic training course on RIA.

This survey shows that the concern about RIA implementation capacity is reasonable. The

majority (72%) of the participants think that it is difficult or very difficult to implement RIA.

Only two (out of 86) people think that it is easy or very easy to implement RIA. These figures

demonstrate the demand for capacity building in policy analysis in general and RIA process

implementation in particular.

The use of independent consultants to assist the drafting team in conducting RIA is also an

effective way to compensate for the inadequate capacity of the drafting team. This survey

shows that 25% of respondents said that their drafting teams hired an independent consultant

to conduct a RIA report. However, as RIA has been introduced in Vietnam lately, it is

difficult to find consultants with extensive knowledge of policy analysis in general, RIA in

particular and the policy issue being looked at. The international experience shows that it is

not good practice to hire a consultant to solely conduct RIA, because no one could understand

the policy issue better than the drafting team and editing team. In addition, recommendations

made by commissioned RIA experts may not be well integrated into the draft LNDs, even if

they are effective and efficient suggestions.

4.3. Assessment of compliance with RIA requirements

To assess compliance with RIA regulations, we considered some key requirements for RIA,

including: RIA report (if a RIA report is included in the set of documents submitted to the

National Assembly), public consultation and quality of RIA report submitted to the National

Assembly (“NA”). Although RIA is also required for ordinances and decrees, we only

considered RIA of law projects due to time constraints and because RIA has just been

introduced in Vietnam. First of all, we based on the NA’s resolutions on legislative program

of each NA meeting session to find responding RIA reports of each draft law posted on the

NA website.

In 2009, the National Assembly passed 20 law projects but we could only find one with a

RIA report on the NA website, which is the Law on Health Examination and Treatment. 2010

witnessed an improvement in compliance with RIA regulations when almost all NA-passed-

laws were accompanied with a RIA report. Out of 25 draft laws ratified by the National

Assembly in 2010, we could not find RIA reports of only 3 laws, including: Law on

Enforcement of Criminal Sentences, Law on Commercial Arbitration and Law on the

Disabled People. Public consultation requirement for RIA report is also not yet fully met for


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law projects that are being posted on the National Assembly website as of May 2011 while

this report was conducted. 6 out of these 18 draft laws have no RIA report attached. It should

be noted that draft laws are found with other documents attached such as the Government’s

justification document and the NA’s appraisal report. There are many reasons to justify why a

RIA report for these laws were not found. These reasons can be named such as: (1) drafting

agencies are incapable of doing RIA due to lack of resources or knowledge; and (2) drafting

agencies choose not to do RIA. This fact poses the following questions: How come the

appraisal and verifying agencies tolerate the missing of RIA reports? Are there any problems

with the implementation of the legal mandate defined in the Law on Laws, Article 36 and

Article 43? If the lack of capacity in doing RIA is an issue, is there any assisting mechanism

available to drafting agencies?

We also assessed the RIA compliance by comparing number of LNDs drafted by survey

respondents and number of RIA reports that they or their drafting team had conducted. The

survey result shows that drafting teams have not fully complied with RIA regulations. Only

68% drafting officials say they had prepared RIA for every law project that they participated

in drafting. We have no comments on RIA compliance for ordinances as few drafting officials

provide information on the number of ordinances that they participated in developing. For

decrees, only 53% of respondents say that the number of RIAs that their drafting/editing team

prepare is as many as the number of draft decrees. The compliance figures for laws,

ordinances and decrees can be understood in 2 ways: (i) drafting/editing teams do not prepare

RIAs during drafting LNDs as prescribed in the Law on Laws and the Decree 24; (ii) the RIA

team is separated from the drafting/editing team. Draft agencies often do not have resources to

establish a separate RIA team. Usually, the people having a good command of law areas are

all drafting/editing team members, however the task of drafting a RIA may be delegated to

members of the team who are junior or least appropriate for the task.

Under the provisions of the Decree 24, RIA must be prepared before drafting a LND. RIA,

which is a tool for policy analysis and options, will become meaningless if it is not done

before drafting the LND. For evidence based law-making, the draft LND is just a document

reflecting policy options that are already analyzed in the RIA report. If RIA is conducted at

the same time or after the document is drafted, RIA then will just act as a tool to justify a

policy that has already been chosen, not a tool to help policy makers to obtain sufficient

information and evidence to choose the best policy. In fact, USAID/VNCI has been

repeatedly approached for assistance in doing RIA when drafting teams already have many

draft LNDs in hand. Only 23% respondents say they conduct RIA before drafting LNDs. So

requirement stated in Article 38 of Decree 24 in terms of timing, as revealed by the survey,

has not yet been strictly complied with.

4.4. Assessment of Quality of RIA

To assess the quality, we randomly took a sample of some RIA reports of passed law projects

or bills in the public domain. Under the time constraints, we only assessed 18 RIA reports of

18 draft laws. A RIA scorecard is employed to assess the RIA report. The Scorecard is

developed based on Vietnamese regulations on RIA, international theory and experience of

RIA. Contents being scored include the following sections: (i) problem definition; (ii) policy

objectives; (iii) options; (iv) impact assessment of options; (v) compliance arrangements; (vi)

public consultation; (vii) summary and recommendations; (viii) certification by head of


11

drafting agency. In the scorecard, we provide detailed standard for individual components of

each section mentioned above. Each component of one section of RIA is marked on a scale of

0-4 points, where 0 points means no substantive content compared with the expected standard

set out in the scorecard guidance and 4 points means fully sufficient content (See Annex 4 for

details of scorecard).

On the whole, the quality of RIA reports is very poor, except for a negligible portion. These

RIA reports lack a coherent structure. Many reports copy similar contents, such as

explanation about significance and process of RIA and almost have no discussion of the 4

sections from (v) to (viii). The average score is 1 point with 0.72 the lowest and 1.08 the

highest. Weaknesses of each section can be generalized as follows:

Problem definition: the RIA reports do not point out real problems needed to be

addressed, and their consequences to the society and economy. Instead, many reports

allege that “absence of LND” is a problem, or fail to differentiate between “problem”

and “symptom”. The RIA reports do not fully specify causes of these problems and do

not explain why current regulations cannot solve these problems. This section of many

RIA reports duplicate the necessity of issuing an LND section of submission

document;

Policy objectives: Objectives of RIA reports are too broad, ambiguous, ad vocative

and not really associated with addressing problems; objectives do not specify

indicators and timelines for good organization of implementation and supervision.

Common mistakes are found, such as suggesting policy option while setting objective,

considering “implementation of stage management role” or “improvement of legal

system” as a goal, etc.

Options: Many RIA reports do not present any options other than the options included

in the draft LND, which limits the ability to analyze and select the optimal options. In

addition, the “maintaining status quo” option is often missed. The options presented in

RIA and draft LND shows that the drafting team still tends to use direct intervention

measures instead of indirect ones that can help achieve objectives at lower costs to the

society.

Impact assessment of options: RIA reports just present general comments and do not

go deep into specific impacts for each subject concerned; important data to assist

assessment are missing; no synthesized comparison table is provided to facilitate

readers’ comparing and choosing options. Arguments for chosen options in RIA

reports are found advocative and unpersuasive.

4.5. Assessment of the factors affecting RIA implementation

To find out what factors affect RIA implementation in Vietnam, we asked respondents about

their perceptions of the importance of five factors: 1) financial resource; 2) analysis skill of

officials; 3) reinforced commitments of top leadership; 4) establishment of an oversight body;

and 5) reinforced propaganda and dissemination of RIA. In general, drafting officials

appreciate the following success factors in implementing RIA of “top leadership

commitments”, “independent quality monitoring agency”, and “propaganda and dissemination

of RIA”. On the contrary, appraising officials place more importance on “financial resource”

and “analysis skill of officials” than drafting officials. Figure 4 shows the two factors that are

most appreciated by both drafting officials and appraising officials, namely “financial


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resource” and “analysis skill of officials”. Once again the survey highlights the demand for

training and improving policy analysis and RIA implementation skills. Regarding financial

resource, 80% of answerers say that the budget allocated for RIA implementation is not

sufficient. Actually, certain drafting teams said that the funds allocated for RIA

implementation is minimal, which makes it very difficult to ensure the quality of RIA reports.

According to Circular 192/2010/TTLT-BTC-BTP-VPCP dated December 2, 2010, the budget

allocation for conducting RIA and drafting LNDs is:

Type of document Budget allocation (VND)

Preliminary RIA 4 million

Simple RIA 5 million

Full RIA 6 million

Draft law or ordinance 8 million

Our survey results indicate that this may result from insufficient funds and inadequate training

to improve officials’ capacity. A good RIA report inevitably requires financial and human

resource but international experience demonstrates that investment in RIA will help the

Government to select effective policies at the lowest costs. Studies in OECD countries show

that the RIA tool has helped these countries to save huge amounts of money. The OECD

Report on the Project 308 also estimates that for every VND spent on RIA, 100,000 VND of

cost is saved for Vietnamese enterprises. Normally, RIA implementation is considered as a

part of the LND drafting task and also funded by the law development budget. Such allocation

demonstrates that RIA has not been appreciated as a policy analysis and orientation defining

tool. This serves as evidence to indicate that the State should invest more on the policy

analysis task in order to find the best policies before LNDs are drafted.

8 OECD (2011), Administrative Simplification in Viet Nam: Supporting the Competitiveness of the Vietnamese Economy, Cutting Red Tape, OECD Publishing.


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Experience of many advanced countries shows that for RIA to be implemented fully and

effectively, it is necessary to form an independent agency responsible for coordination,

propaganda, and control of quality9. The need for capacity building services and greater

resource allocation to implement RIA is also most efficiently achieved through the

establishment of an independent agency. The support from officials for the establishment of

such an independent agency demonstrates the demand of many officials for an independent

agency specialized in RIA to provide them with assistance and guidance in RIA

implementation, and at the same time to assure the quality of RIA reports in order to ensure

that the best policies are implemented and the State’s resources are used the most effectively.

Top level leaders’ commitment is also regarded as an important factor by almost all the

officials (Figure 5). Most of the answers show there is proper awareness of RIA’s role and

expectation for good RIAs among the leaders of drafting teams. The survey found that in

general the leaders of drafting teams do not impose their subjective opinions on policy

analysis and the LND drafting process. However, the survey results also show that the

problem still exists somewhere in the drafting process of some LNDs.

V. Recommendations and conclusions

In general, assessment results of RIA implementation through survey statistics, and

scorecards indicate that the RIA requirements are gradually being implemented better. RIA

compliance was significantly improved in 2010 in comparison with 2009. RIA

implementation has been accepted in the state apparatus, and RIA is used by the some

drafting bodies as an effective tool for policy analysis and options. However, due to its

9 In United States, there is the Office of Information and Regulatory Affairs (OIRA), under the Office of Management and Budget, President Office. In the United Kingdom, there is the Better Regulation Executive (BRE), which was established in UK Cabinet Office. In Korea, there is the Presidential Committee for Regulatory Reform.


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novelty, early stage of implementation and various objective difficulties, the implementation

of regulations on RIA has neither satisfied the requirements nor helped to completely change

the law-making culture and improve quality of LNDs in general in order to improve the

overall regulatory quality in Vietnam. Although RIA has received attention from leaders of

drafting teams in general, its result and the quality of LNDs are still not as good as expected.

Based on the assessment in this evaluation report we recommend the following to be

implemented in order to improve RIA in Vietnam:

Recommendations for the legal requirements of RIA

� The requirement for Simple and Full RIA should EITHER:

i) be changed with a more meaningful threshold criteria for Full RIA so that it does

not capture all proposals; and suspend the implementation of Full RIA at the moment

for a period of 2 – 4 years until there is sufficient capacity to conduct Full RIAs; OR

ii) remove the requirements for Simple and Full RIA and only have the requirement to

do a RIA report that is as detailed as required according to the importance of the

proposal.

� Require that in order to conduct public consultation, each draft LND must have a RIA

attached to it for the entire duration of its public consultation. Change the consultation

period of RIAs so that all RIAs should be consulted on for the same period of time as

the LND, i.e. a minimum of 60 days.

� Reduce the number of impacts that must be mandatorily assessed impacts in any RIA

to economic, social and environmental for each draft LND. Any other relevant impacts

may also be assessed but are not mandatory.

� Require that all lower-tier legal instruments (circulars, official letters, decisions, etc)

with an economic impact must conduct Preliminary RIA, and if it is shown that there

will be a significant impact then it must be approved at Cabinet level and be subject to

the same level scrutiny and requirements as a higher-tier draft LND.

Capacity Building for increased awareness, skills and knowledge

� Basic training on RIA should be prescribed as one of the compulsory training courses

for civil servants of all levels as part of the ministerial and provincial training budgets,

to increase awareness further.

� There should be the provision of in-depth RIA training courses to increase capacity to

conduct RIA, at least for a group of key policy analysts at each ministry and

ministerial agency.

� Creation of an advisory board of officials and deputies involved in RIA to share

experience and disseminate good practice in Viet Nam.

Increasing compliance and driving quality

� A new central agency in charge of enforcing compliance of RIA requirements should

be established so that it can work across ministries.

� A new central mechanism responsible for quality checking RIAs before they are

submitted to the Government or National Assembly should be established, preferably

as part of the new agency.


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� Increasing access to RIA for citizens and business by posting them on a single web

portal for all stakeholders to view and provide comments, and thereby allowing for

greater public engagement in the policy making process.

� Provide independent quality assessment of RIAs by the new agency to help educate

and raise standards of policy analysis.

� Monitor the compliance of RIA in a more transparent manner through the new central

agency.

� The new central agency should provide capacity building services to drafting agencies

as well as appraisal and verification agencies.

Enabling RIA to be effective

� Increase the budget for conducting RIA, but focus this on data collection and evidence

gathering activities.

� Streamline dossier of documents that are presented to decision makers so that they are

of higher quality and lower quantity – to improve decision making process. For

example, the justification paper can be integrated in the RIA report.

� Leaders/head of drafting team or editing board to consider RIA as a substantial

process of evidence-based law making tool, but not a legal requirement.

� Appraising and verification agencies to be more demanding for higher quality RIAs

and publicly make use of them in debates and discussions.

These recommendations may be implemented in a phased manner and in accordance with

other legal and reform activities in Viet Nam, in which, capacity building is the most urgent

and important activity in this stage. The legal requirements for RIA may be addressed through

the coming review of the Law on Laws. The other recommendations should be considered

and discussed within the Government of Vietnam.

Conclusions

Implementation of RIA is very early in Vietnam. The resources that are usually required to

implement RIA also have been very limited compared to other countries. The key priority for

Vietnam is to build the capacity and support for conducting RIA. However it is important to

stress that RIA is not just a report and that the real benefit of RIA is from conducting the

process that involves engaging other stakeholders and continually ask questions whether

regulating is required and what will be the best way to regulate if it is. It is through this

continual self-assessment and consultation that the quality of draft laws and regulations can

be improved. RIA is a tool and an opportunity to get laws right before they are implemented.

Therefore, this opportunity should be afforded the best chance of success.


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Appendix 1

METHODOLOGY FOR CONDUCTING THE REPORT

The evaluation team conducted desk research to find out the compliance levels of RIA and

the legal requirements for RIA. A scorecard analysis of a random sample of RIAs was

conducted to assess the quality of RIAs being produced. In addition, some detailed interviews

were held with key actors in the RIA system to find out more about the legal requirements for

RIA and the factors affecting implementation of RIA in Vietnam.

The survey of 135 ministry officials (86 drafting officials and 49 appraising officials,

including National Assembly members was jointly conducted by CIEM and USAID/VNCI

with the cooperation of Ministry of Justice, Office of the Government and National

Assembly. The survey contents include: awareness of RIA; compliance with RIA regulations;

their views on the need for capacity building and the factors affecting the RIA

implementation.

Methodology for assessing the six areas of evaluation

Research

(paper

records,

Internet, etc)

Survey Interview Score cards

A1 Legal Requirements

for RIA

� �

A2 Awareness of RIA �

A3 Compliance with

RIA requirements

� �

A4 Quality of RIA � �

A5 The need for

capacity building on

RIA

�

A6 Factors affecting

RIA implementation

� �


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Appendix 2

INTERNATIONAL EXPERIENCE IN REGULATORY IMPACT ASSESSMENT

As a key tool in managing the flow of new regulations within a government, RIA is

implemented in more than 60 countries across the world, such as Australia, Canada, Czech

Republic, Finland, Germany, Ireland, Japan, Korea, Mexico, Moldova, Netherlands, New

Zealand, Norway, Poland, Serbia, Turkey, United Kingdom, and the United States.

A form of RIA was first introduced in the United States of America in the 1970s by President

Ford. These were inflation/economic impact statements and were to assess the impact of new

regulations on the economy. The role of RIA has evolved and strengthened and is still

practiced in the United States today under the Office of Management and Budget in the White

House. Forms of RIA were also introduced early within Australia, Canada and the United

Kingdom who have also institutionalized RIA into the government system.

Australia, Victoria State: RIA and Cost Savings

Between 2005-2006 and 2009-2010, the RIA process achieved estimated gross savings of $902

million (in present value terms) over the 10 year life of the regulations.

For every dollar invested in the RIA process, gross savings of between $28 and $56 were

identified.

Source: Victorian Competition and Efficiency Commission, Cost-effectiveness of regulatory impact assessment

in Victoria. Sam Abusah and Catherine Pingiaro, Staff Working Paper, February 2011.

The OECD’s “Building an Institutional Framework for RIA, 2008 states that “since 1974, the

use of RIA has become widespread among OECD member countries. Figure 5 illustrates that

30 years later the number of OECD countries that require RIA of new regulatory proposals

had grown to 26 out of 30 member countries. Furthermore the adoption of RIA in emerging

and developing countries has been increasing since the 1990s (see figure 6). The approach of

each country to RIA will vary to some extent; however, there are certain elements that remain

consistent to the methodology and that should be understood when considering the

implementation of a RIA programme.


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Figure 5. Trend in RIA adoption across OECD countries (1974-2005)

Source: OECD (2007d), Indicators of Regulatory Management Systems, OECD Working Papers on Public

Governance, 2007/4, OECD.

Figure 6. Trend in the Adoptions of RIA in OECD and non-OECD countries


19

The lessons from the OECD and other countries in implementing RIA are that there are ten

key elements towards introducing RIA effectively. These are:

Introducing effective RIA

The following ten key elements are based on good practices identified in OECD

countries:

1. Maximize political commitment to RIA.

2. Allocate responsibilities for RIA programme elements carefully.

3. Train the regulators.

4. Use a consistent but flexible analytical method.

5. Develop and implement data collection strategies.

6. Target RIA efforts.

7. Integrate RIA with the policy-making process, beginning as early as possible.

8. Communicate the results.

9. Involve the public extensively.

10. Apply RIA to existing as well as new regulation.

Source: OECD (1997), Regulatory Impact Analysis: Best Practice in OECD Countries,

Paris.

In particular the OECD and international experience has shown that a central oversight body

that champions RIA is one of the success elements of introducing RIA. These bodies should

be provided the mandate and resources to effectively implement RIA across the Government

system10.

10 OECD “Building an Institutional Framework for RIA”, 2008


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Appendix 3

LEGAL REQUIREMENTS FOR PRELIMINARY, SIMPLE AND FULL RIA

Requirements for Preliminary RIA according to Decree 24 (Article 37)

Timing of drafting RIA

Body responsible for drafting RIA

Purpose/Goal of RIA Impacts to be assessed

Public consultation

Upon preparation of proposal for drafting a legal instrument

Government agencies at ministerial level

Identify social issues to be governed by legal instrument

Provide basic grounds for selecting underlying policies of legal instrument

Ensure promulgation of legal instrument is the optimal solution

Economic; social; environmental; legal system; basic rights and obligations of citizens; compliance ability of entities; any other.

Posted on drafting body’s website for at least 20 days with:

Data of cost/benefit analysis; and Description of proposal for drafting legal instrument.

Requirements for Simple and Full RIA according to Decree 24 (Article 38)

Timing of drafting RIA

Body responsible for drafting RIA

Purpose/Goal of RIA

Impacts to be assessed

Public consultation

Carry out drafting of RIA before beginning to draft legal instrument.

Finalize simple RIA during drafting process.

Ministry, Ministerial equivalent body or government body.

To conduct proper assessment of various options both quantitatively and qualitatively;

To propose a draft legal instrument based on results of RIA which are the optimal, most economical option in order to achieve policy objectives.

Economic;

Social;

Environmental;

Legal system;

Basic rights and obligations of citizens;

Compliance ability of entities; any other.

Posted on Government and drafting body’s website for at least 30 days with:

Data of cost/benefit analysis; and

Draft legal instrument.


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Full RIA Threshold Criteria

If a proposed legal instrument meets any of the following cases then a full RIA is required:

� The legal instrument may cause cost of fifteen (15) billion Dong or more on an annual

basis for the State, government bodies, entities, businesses or individuals; � The legal instrument may cause material negative impact on groups of subjects in

society; � The legal instrument may cause impact on a great number of enterprises; � The legal instrument may cause a material increase in prices of consumer goods; � There remain different opinions on the legal instrument, the public is interested in the

legal instrument and the legal instrument has material impact on public interests.


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Appendix 4

Scorecard for the Preliminary RIA

Scoring

Title Standard 0 1 2 3 4

Provide the official title of the proposal Clear, consistent, concise and easily understood.

Section 1: Problem Definition Standard 0 1 2 3 4

Identify the problem in terms of the

impacts of interest

Clearly explain the problem of real concern that government intervention will try to

improve (for example, “people are dying in road accidents”, not “roads are unsafe”)

Provide information on the size and

trend of the problem

Provides evidence of the problem including its size and scale of magnitude, and

trends over time. Is the problem getting better or worse?

Identify the causes of the problem Shows why the problem has arisen, and identifies the causes, including whether there

are government or market failures

Explain why the problem cannot be

resolved with existing regulations (if

any)

Provide information about the existing regulatory/legal framework and explains why

it is not successful at addressing the problem.

Section 2: Objective or Aim Standard 0 1 2 3 4


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State the broad objective or aim of the

proposal, and/or detailed objectives of

each individual issues/problems for a

complex proposal.

Explains the intended outcome or effect that the proposal will have in Vietnam

Provide performance indicators or

targets that the proposal should be

achieved, with the timing of outcomes

(if possible).

Provides measurable targets and a deadline for when targets will be met.

Section 3: Options Standard 0 1 2 3 4

Detail the ‘do nothing’ option. Explains what will happen if the government does nothing.

Detail possible alternatives to drafting an

LND. (Non-regulatory options or

alternatives to regulation)

Explains why a LND is required. What current or existing powers and regulations

exist? Can they be simplified? What non-regulatory options or alternatives to

regulation can address the problem?

Detail different regulatory designs for an

LND.

Explains how different regulatory solutions that will be efficient and effective in

addressing the problem and achieving the objective have been considered.

Section 4: Impact Assessment Standard 0 1 2 3 4

Identify negative impacts (costs) for

each option

Identify the major direct costs for businesses and citizens and those on the state

budget. Other major negative impacts (social, environmental) are presented as far as

possible.

Identify positive impacts (benefits) for

each option

Identify the major direct benefits (cost-savings) for businesses and citizens and those

on the state budget. Other major positive impacts (social, environmental, economic)

are presented as far as possible.


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Compare options Options should be presented in tables showing their negative and positive impacts

clearly, so they can be compared.

Recommend options For each issue analyzed, the preferred option should be identified and justified as the

way to reach results in the most effective and efficient way.

Section 5: Compliance Standard 0 1 2 3 4

State the compliance arrangements for

the preferred or recommended option

Provides details of how the preferred or recommended option will be complied with

including any enforcement and sanction arrangements

Indicate the compliance cost for the

preferred or recommended option

Identify the costs involved with ensuring compliance. This includes the cost for state

budget and businesses.

Section 6: Consultation Statement Standard 0 1 2 3 4

When published before consultation

Identify the key stakeholders Include the list of stakeholders that will be consulted and how the consultation will

occur.

Identify key questions where stakeholder

responses would be most useful.

Make it easy for stakeholders to respond: Highlight key questions such as gaps in

data, information, assumptions that you require a response about.

Highlight areas of the RIA where you require a response.

When finalized after consultation

State who was consulted and which key

target groups did not participate

Include a list of the stakeholders that were actually consulted.


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State how the consultation happened.

State the time period that public consultation was conducted and the methods for

consulting e.g. posting on which website, workshops, etc.

Summarize the consultation responses. Give a summary of the responses and comments that were received.

Give a summary of responses to the

consultation.

Provide a summary of how the comments and suggestions from the consultation have

been used in finalizing the proposal and RIA. If suggestions were rejected, explain

why

Section 7: Summary and

Recommendation

Standard 0 1 2 3 4

Summarize the impacts of the options

considered in the RIA.

Provide a summary of the costs and benefits of the options considered in a table.

Include any other considerations within the impact analysis.

Justify the recommended action based

on the evidence in the RIA.

Evidence in the impacts section provides a justification that the recommendation

option is the most effective and efficient solution the defined problem and in

achieving the stated objective.

Section 8: Certification Standard 0 1 2 3 4

The RIA and its quality are certified by

the Minister of the Agency proposing

the LND.

The Minister must certify and read the RIA Report that he or she is satisfied that the

negative and positive impacts of the options have been analyzed and that the

recommended option is the most effective solution.

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