Chapter9

DevelopmentofEnvironmentalPolicyinVietnam
9.1Introduction
After the countrys reunication in 1975, Vietnam was governed as a centrally planned (command) economy in which environmental issues were almost totally ignored. In 1986, Vietnam started a new economic strategy, the so-called economic reform policy (Doi Moi policy). It has changed the Vietnamese economic system from a purely command economy to a market-oriented economy. Vietnam has welcomed all types of economic organization such as state-owned business enterprises, private enterprises, and foreign direct investments. Since then, the economy has been developing rapidly and the urban population has risen quickly. Parallel with industrial and urban development, environmental degradation increasingly became a problem and environmental policy appeared on the political agenda. The rst environmental protection laws were enacted in 1993 and went into effect in 1994. This chapter will discuss the development of environmental policy in Vietnam in general and go more deeply into policies to control air pollution of both stationary and mobile sources. Section 2 will give an overview of industrial development in Vietnam in order to have a picture of how technology has developed in Vietnam. Section 3 describes the environmental pollution situation in Vietnam. Section 4 describes the public bodies on the national and local levels which plan and implement environmental regulations. Section 5 and 6 will discuss the development of environmental legislation from the moment the environmental issues started to become a political concern to the present time. The sections will focus on the major characteristics of environmental legislation, its implementation in practice and national planning for the next 5 to 10 years. The major components of the national policy approach are presented and assessed: in section 5 and 6, there is a discussion of the instruments that should reduce air pollution from stationary sources (section 5) and from mobile sources (section 6). In section 7 air pollution control policy on the regional and local levels is discussed, using HoChiMinh City as an example. Finally, the summary and conclusion of the chapter is presented in section 8.

9.2IndustrialDevelopmentinVietnam
The development of industry in Vietnam can be divided into ve periods, separated by important historical events. The rst period runs from the beginning of industrialization to 1954. Before 1945 domestic industry developed on a small scale, and depended on colonial power. Between 1945 and 1954, these small industries developed further, not only to provide goods for the population but also to support the resistance against the French, as was the case with the defense industry (Hanoi Architectural Institute, 1995).

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The second period from 1955 to 1975 covers the time the country was divided into two regions the North and the South with different political and economic regimes. North Vietnam adhered to Socialism in which industrial policy was strongly based on the Soviet model of a centrally planned economy. Heavy industry was given a high priority and all production facilities in this sector were owned by the state. The quantitative output targets of state-owned enterprises were xed by the state planning authorities. The rst Five Year Plan (19611965) assigned priority to heavy industry, particularly to steel and engineering while neglecting foreign trade and light industry. Industrial zones were developed in some provinces and some factories were established very close to big cities like Hanoi and Haiphong. The facilities in these factories were not up to international standards but still better than the ones developed in the period before 1955 because the technology in this period was not only inherited from the French colonizers but also imported from other centrally planned economies like Russia, Central Europe, and China. Industrial areas were often established or expanded without specic planning or a long-term view. One of the main features of the centrally planned economy was highly bureaucratic administration and management which presented a barrier to further economic growth of the North. This resulted in economic stagnation and regression at the end of this period (Phung Thuy Phuong, 2002). In the South, industry developed under the capitalist regime with a more decentralized and market-oriented strategy. In contrast with the heavy industrial orientation in the North, light industry dominated, with a share of 90 percent in the South and it depended strongly on foreign support. Most technologies were imported from the United States and Europe. Industrial zones were established mainly near big cities such as Saigon, Bien Hoa, Da Nang, Nha Trang, Can Tho. In addition, some industrial clusters, with factories located together, developed without planning within residential areas in the Thu Duc district and Tan Binh district of (former) Saigon. The industries played a signicant role in the development of the economy of the South (Hanoi Architectural Institute, 1995; Ministry of Construction, 1998). Even though the political regime and features of industries differed between the North and the South, there was one thing in common: industries developed without consideration to the environment. There was no pollution control policy and consequently pollution treatment facilities did not exist. The third period runs from 1976 to 1985. In 1975, the North and the South were united under a Socialist regime with the Communist Party in power. The Second Five Year Plan, also referred to as the First National Plan, started in 1976 in order to extend the central planning approach to the South. Heavy industry was the rst priority in the First National Plan and it expanded to become the main sector in the whole country. There were no private rms, only state-owned enterprises in both the north and the south of the country. The achievements of the heavy industry policy were very far below the First National Plans target: an annual average growth rate of only 0.6 percent of heavy industrial output compared with the targeted annual 16 to 18 percent increase during the plan period (Reinhardt, 1993). In other sectors there were also problems: 1979 and 1980 were years of crisis because of severe shortages of food, basic consumer, and intermediate goods. State-owned enterprises overall in the country experienced difculties, such as the lack of energy and raw materials, inadequate infrastructure, obsolete equipment, and out-of-date technology (Ministry of Construction, 1998). Reacting to the crisis, the government undertook an overall review of its industrial 232

policy. The Second National Plan (19811985) was issued, in which industrial policy shifted from heavy to light industries; the need to promote an export-oriented manufacturing capacity was also recognized by the government (Reinhardt, 1993). Environmental policy was not on the political agenda yet in these years. The fourth period covers 1986 to 1990. Learning from the experiences of period 3, an additional economic reform policy, the so-called Doi Moi, started in 1986. It changed the centrally planned economy to a market-oriented economy: private rms and foreign investments were allowed in addition to the state-owned enterprises, except for the key industrial sectors such as coal, electricity, steel, chemicals, fertilizers, transport and communication. And in several light consumer goods, the government still maintained direct control (Reinhardt, 1993). For state-owned enterprises, government control was reduced by giving enterprises the freedom to recruit workers, set wages, purchase raw materials, attract capital through borrowing and investment, and sell their own products. Privatization and private rms were promoted. Next to that, the recognition that foreign direct investment could play a signicant role in Vietnams industrialization was one of the main elements of the reform policy. The new Law on Foreign Investment became valid in January 1988. However, the economic reform policy was implemented without any external nancial assistance from industrialized capitalist countries or from multinational institutions like the International Monetary Fund, the World Bank, or the Asian Development Bank. The legislative and institutional frameworks were not adequate to serve the economic reform policy. There was much trial and error during its implementation, leading to poor results during this period (Phung Thuy Phuong, 2002). The fth and most recent period from 1991 to the present, has seen a rapid development of the industrial sector in Vietnam. Privatization of state-owned enterprises continued. Firms operating at a loss were either shut down or transferred to another form of ownership. Private, joint-venture, and foreign direct investment companies exist beside state-owned enterprises, but essential industrial sectors are still wholly owned by the government. Industry has been growing quickly. The industrial sector accounted for 25% of Gross National Product (GNP) in 1996, and according to the projections of the Ministry of Planning and Investment, it will account for 35% in 2010 (Mol and Frijns, 1997). Light industries such as food processing, textiles and footwear dominate industrial development. Next to that, industries in the oil, gas, steel, and chemicals sectors have been growing over 20% each year and are expected to become an even larger percentage of GDP in the years to come. However, most of existing manufacturers in both light and heavy industry still have to operate with old equipment, outdated machinery and technology. The rate of equipment replacement is only 7% per annum, which is only half of the minimum rate in more developed countries (Hanoi Architectural Institute, 1995). Rapid industrialization, which increases the number of factories and total volume of industrial output and the intensity of trafc and transport, has increasingly negative environmental effects if pollution remains uncontrolled. Therefore, environmental policy was seriously considered for the rst time in 1993 with the result that the Environmental Protection Law was enacted in 1994. Thus, since the Doi Moi period different types of rms exist in Vietnam: state-owned enterprises (SOEs) (which are owned and operated by either the central government or by 233

governments on a provincial, district, or local level), joint state-private rms, cooperatives, privately-owned rms, individual household businesses, foreign investment rms with 100 percent foreign capital, and joint-venture companies. Looking at the scale of operation, two kinds of industries can be distinguished: large-scale industries and small/medium-scale industries (SMIs). In Vietnam, 90 percent of all industries are SMIs. The environmental policy is meant to be applied equally to all different types of rms. Although the current national policy encourages the privatization of state-owned enterprises, the process of privatization has been slow and very selective; basic industries still belong to the state, with prices for products xed by the state rather than through the market. The state still holds a strong position in economic and societal development. It plays a leading role in planning and prioritizing economic development in the process of industrialization. The state subsidizes the energy inputs for SOEs such as electric power, fuel as well as other inputs and also subsidizes their losses (if any). In addition, all SOEs have very old equipment and outdated technology. These factors create one of the biggest bottlenecks in enforcement of environmental pollution control policies on SOEs. In contrast, foreign and joint-venture companies in Vietnam, especially foreign companies from OECD states, have more advanced technology compared to domestic rms and they do not hesitate to comply with national environmental regulations because of their competition on the global market and also because they do take care of their public image (Phung Thuy Phuong, 2002). Some of them also help to raise environmental awareness by funding activities, like the support for Green Day and the phase-out of lead. Unilever in Vietnam has invested VND 2.5 billion in environmental protection for its Hanoi site. The Ford Visiting Engineer and Scientist Program, which supports the training of engineers and scientists on safety, environmental regulations, etc. was implemented with the help of some foreign companies.

9.3AirpollutioninVietnam
Air pollution is generated by stationary sources and mobile sources. They will be surveyed in subsection 3.1 and 3.2. The air quality that results is presented in 3.3. Reliable data on air pollution are of a rather recent date and reect the situation around the year 2000, about ve years after the formal start of environmental policy in air pollution in 1994. 9.3.1IndustrialPollutionControlTechnology Old industrial plants, built before the 1994 Law on Environmental Protection was in place, are often of a medium and small size, with old production technologies. Only a few facilities have lters and most of the old factories have not installed any equipment for treating pollution. Due to expanding urbanization and growth of urban centers most of these old factories are located within urban areas. For example, HoChiMinh city (HCMC) has about 700 factories, of which 500 are located within city limits. The capital city Hanoi has 300 factories, including 200 factories located within city limits (UNEP, 2001). Plants which were built after 1994 (the so-called new industries) are mainly located in 66 industrial zones. According to the Law on Environmental Protection, an Environmental Impact Assessment must be approved by authorities before the construction of a project can start in order to ensure that the new plant meets the emission standards set by law. However, 234

in reality, many new enterprises with a potentially high pollution load have not installed technology for controlling air pollution, or have not applied the proper technology to control air pollution (e.g. the electricity rms and cement factories), or they have very out-of-date equipment (Saigon cement factory). Yet the capital investment required for installing equipment to control air pollution is low because technology requirements are modest (UNEP, 2001). Besides the emissions from industries, a lot of pollutants are discharged into the air by construction activities. In Vietnam, many construction activities, such as new construction, rehabilitation, repair, up-grading of ancient monuments, houses, roads, bridges are undertaken, in particular in the urban centers. Activities such as digging up soil, dumping soil, demolition of old buildings, spillage of building materials during transportation, etc. generate serious dust pollution. Measured results show that 60 to 70 percent of the dust volume in urban air is powdered soil and stone whirling from the surface of land and roads and originating from transportation and construction activities (UNEP, 2001). According to the Law, the Ministry of Construction is responsible for setting and enforcing the standards for all construction activities; environmental standards are part of that task. The National Institute for Urban and Industrial Projects has authority to stop operations where very severe pollution occurs. In practice, it seems that the Ministry of Construction and its provincial units ignore doing their tasks. No construction that causes serious air pollution has been required to stop until 2003. 9.3.2Transport The industrialization of Vietnam has caused major changes, not only in industry but also in population. Urban population has increased very quickly. In recent years, the urban population has been growing at around 3 per cent per year (UN, 1999). By 2010, about 40 per cent of the population is expected to live in cities (Dana ORourke, 2001). The more population grows in urban areas and incomes rise, the more the number of automobiles, motorcycles increases in the cities. This is a big and increasing source of air pollution. Before 1980, 80 to 90% of urban dwellers used bicycles; in 2001, 80% of the people living in urban areas used motorcycles (UNEP, 2001). According to data from the Ministry of Transport (1999, 2001), there were 372,010 registered automobiles in the country in 1996 (not counting Ministry of Defense vehicles); it had increased to 486,000 vehicles in 2000. Thus, there was an average annual increase in automobiles of close to 10%. 4,022,683 motorcycles were registered in 1996; their number had increased to 6,479,000 in 2000. This constitutes an annual rate or increase of more than 15 percent. 44% of in-use motor vehicles are more than 20 years old; 20% is between 10 to 20 years old and 36% is less than 10 years old. So the average age of automobiles is about 16 years. Of motorcycles 40% is less than 5 years of age; the rest is older than 5 years. 75% of all automobiles use petrol, 25% use diesel, while all motorcycles use petrol. Before the phase-out of lead in July 2001, 70% of total petrol used was Mogas 83 and 30% Mogas 92. Mogas 92 has a lead content of 0.15g/l and Mogas 83 a lead content of 0.40g/l. Therefore, emissions from vehicles did not only include dust, CO, NO2, SO2, but also harmful lead (UNEP, 2001). Currently, the number of vehicles, especially motorcycles, is increasing rapidly in all cities of the country because the price of motorbikes has decreased due to the import of reasonably priced motorbikes from China, Taiwan, and Korea. The report of Petrolimex showed that the annual growth rate of fuel demand in Hanoi and HCMC is expected to be 235

approximately 12% to 15% between 2005 and2010. According to Vietnam Business News (2002), the Ministry of Transport is planning to invest US$ 3.78 billion to modernize the roads in Vietnam over the next ve years. At present, the Hai Van Tunnel is being built to facilitate easier travel between the North and the South. The improvement and extension of road infrastructure will produce even more trafc and pollution. The Ministry of Transport forecasts the total number of vehicles in Hanoi to grow by 8.5% per year from 2000 to 2010. Vehicles will be the main cause of air pollution in both Hanoi and HCMC in the years to come (Tran Thien Trang, 2002). 9.3.3ThemainairpollutantsinVietnam The main air pollutants in Vietnam are primarily particulate matter and SO2. In addition, NOx, and CO are also a big concern in and near high trafc areas. Particulate matter (PM) or ne dust is the main cause of air quality problems in Vietnam. The measured PM concentration in various cities is one to ve times higher than allowed by Vietnam Ambient Air Quality Standards, which are already less stringent than those of the World Health Organization (Multi-sectoral Action Plan Group, 2002). In residential areas that are far away from main arteries or from production facilities and within green parks, PM is approximately at the permitted levels (UNEP, 2001). Construction activities are the main source of dust in urban areas, generating about 70 percent of the total dust volume. Next to that transport, households and industry contribute to emissions of PM. Unfortunately, little analysis of the industrial emission sources of the PM has been done up to now. However, it is known that industries, such as the thermoelectric, chemical and cement sectors, generate the highest volumes of PM from industry. Diesel-powered vehicles are a major source of SO2 in Vietnam. Power generation and fuel intensive industry are also large emitters of SO2. Some measurements at areas surrounding power plants (thermoelectric plants, cement companies, coal mines and chemical industries) showed that SO2 concentration exceeded permitted standards by multiple levels (NEA, 1999). Even though SO2 is lower than air quality standards allow in areas outside cities, the concentrations tend to be on the increase (UNEP, 2001). The ongoing industrialization of the country and growth in transport and trafc will cause an increase in the concentration of this pollutant in the future unless stringent measures are taken to turn the tide. CO is emitted by thermoelectric plants, cement and construction material plants but mainly by vehicle emissions. The national monitoring system has shown that daily CO levels are below the Vietnam Ambient Air Quality Standards for the country at large but the concentration exceeds the Vietnam Ambient Air Quality Standards in locations with high trafc intensity, such as in large cities (UNEP, 2001). The rapid increase in the number of motorcycles and the continued use of old vehicles will make this situation even worse. Similar to SO2 and CO, NOx emissions result from fuel combustion. The main pollutant in this group is NO2 which reaches high concentrations in heavy trafc areas, occurring on a daily basis even in non rush-hours in large cities. However, according to the results of the National Stations of Environmental Monitoring, in urban areas daily average concentrations of NO2 gas were lower than permitted standards in recent years except at some major intersections (UNEP, 2001).

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Three stations are monitoring acid rain, using a monitoring system based on national environmental standards; the station in Lao Cai has begun measuring the acidity of rain water from 1995 onwards. The other two stations, in HCMC and Quang Ngai respectively began monitoring acidity in rain water since 1999. Acid rain, caused mainly by SO2 and NOx emissions, has not been a problem in Vietnam up to now. Lead pollution in urban air was generated by motor vehicles using petrol containing lead. In Vietnam, lead pollution was not monitored or evaluated ofcially by the National System of Environmental Monitoring (UNEP, 2001). Before 2001, lead content in air at some large intersections approximated or equaled the maximum permitted standard. Nowadays, lead pollution is not an issue because lead was phased out beginning in July 2001. Odor pollution is serious in several urban areas because of canal sludge, waste dumping, and lack of an adequate disposal system. Unfortunately, inhabitants still reside in these areas because they do not have the nancial ability to move and measures to solve that bottleneck have not been taken. Noise in Vietnam is a very big issue. Residents near industrial areas and high-trafc areas not only bear dust and other pollutants but also have to bear noise levels that range from 98 to 116 decibels; this applies especially to workers. The standard for maximum noise level is 90 decibels. A survey of 11 industrial enterprises showed that 11% of all industrial workers becomes deaf (UNEP, 2001). In summary, due to the rapid speed of industrialization and urbanization, air pollutants generated by stationary sources and a huge number of motor vehicles tend to increase fast if emissions remain unabated. Especially, out-of-date industrial technology and old vehicles have become major sources of air pollution in urban areas, particularly in large cities such as Hanoi, HCMC, HaiPhong and DaNang. Slow trafc and narrow, poor quality streets exacerbate the health damage effects of air pollution on residents. Taking the TCVN standards for ambient air quality (which are less stringent than the WHO air quality standards; see section 9.5.2.1) as a benchmark the current situation in Vietnam can be summarized as follows: The PM levels often exceed TCVN standards; CO exceeds standards only in major cities; SO2 levels are usually better than standards; and NOx concentrations are generally below standards. Among the pollutants, PM probably requires the most attention. According to the Environmental Vietnam Report 2001 of UNEP, the PM level is obviously over the limit in many cities. All in all, air pollution in Vietnam is almost exclusively a problem of urban areas.

9.4GovernmentEnvironmentalOrganization
Based on the mandate of the National Plan on Environment and Sustainable Development 19912000 of 1991, in 1992, a start was made in creating an institutional framework for managing the environment with the establishment of the Ministry of Science, Technology and Environment (MOSTE) at the central level; the Department of Science, Technology and Environment (DOSTEs) at province level and the Environmental Bureau at district level. These organizations were to be in charge of protecting the environment. The three layers are related in technical matters only. In this respect it might be said that DOSTE is a local department of MOSTE and the Environmental Bureau is a local department of DOSTE. 237

However, politically, administratively and nancially DOSTEs are under the control of the Provincial Peoples Committees that form the governments of the provinces; Environmental Bureaus belong to District Peoples Committees that is the local government. Besides MOSTE, DOSTEs and Environmental Bureaus, there are other organizations at national and provincial levels that also are in charge of environmental protection, such as the Ministry of Transportation, the Ministry of Construction, the Ministry of Industry, the 23 Departments of Science and technology that belong to 23 line ministries (national level); the Divisions of Planning and Environment which belong to provincial Industrial Zone Management Boards (provincial level). Their tasks and the relations between the three layers will be discussed in the following subsections. 9.4.1Nationallevel TheNationalEnvironmentalAgencyandtheVietnamEnvironmentalProtection Agency The Ministry of Science, Technology and Environment (MOSTE) was established in 1992. MOSTE had overall responsibility for the technology and environment related issues such as scientic research, technology development, standardization of equipment, protection of industrial property rights, and environmental protection. In environmental protection policy, the Ministry had two branches. The Directorate for Standards and Quality (STAMEQ) was the body responsible for drafting the National Environmental Standards (TCVN 1995; ambient air quality and emissions standards) and for submitting TCVN drafts to the Ministry of MOSTE for approval. In addition, in support of the Ministry of Transportation, STAMEQ sets emission standards for vehicular sources. The National Environmental Agency (NEA) was the executive department of MOSTE with regard to environmental management and protection. NEA is responsible for making a draft of environmental policy and sends it to MOSTE for review. Thereafter, the policy is submitted to the Prime Ministers Ofce to be signed, and then it is presented to the National Assembly for approval. NEA is also responsible for many other tasks, such as: establishing the guidance for and organizing the implementation of environmental policy; codifying environmental regulations and standards; making plans or strategies for protecting the environment; making an assessment of and approving EIA reports for large/medium-sized or high potential impact projects; issuing and withdrawing environmental licenses; establishing and managing monitoring pollution control stations. NEA also supervises, inspects and checks the adherence to environmental protection legislation of other related ministries, line ministries and DOSTEs; it inspects the implementation of pollution control regulations of plants; settles environmental disputes, appeals or complaints concerning environmental protection; and applies sanctions for non-compliance. When NEA was rst established in 1993, it had only 15 staff members; it increased to 67 in 2000 and a proposition was made in that year to expand NEAs staff to approximately 350 persons (ORourke, 1999; Nguyen Ngoc Sinh and Friederich, 1997; Nguyen Ngoc Sinh et al., 1999; NEA, 2000). Since 1999, NEA has 9 divisions: Policy, Environmental Impact Assessment (EIA), Pollution Control, Inspection, Conservation of Nature, Training and Awareness, Information and Data, Monitoring; and International Relations. According to article 38 of the Law on Environmental Protection (1994), at the national level, MOSTE shall be responsible to the Government for performing these tasks to control 238

pollution at both stationary and vehicular sources. MOSTE has to assess the environmental situation of the country and report it to the Government and the National Assembly. Parallel with MOSTEs functions of supervising, inspecting and checking the implementation of environmental protection legislation, article 8 of the Law on Environmental Protection also gives these rights to the National Assembly, the Peoples Council, the Vietnam Fatherland Front and its member organizations. According to Article 38 of the Law on Environmental Protection, at the local level, the Province Peoples Committee shall be responsible for environmental protection tasks. DOSTEs shall be responsible to the provincial Peoples Committee for environmental protection in its localities. Being responsible in the central government at the national level for environmental protection tasks, MOSTE/NEA has the right to delegate these tasks to provincial Peoples Committees to protect the environment at local level. The Provincial Peoples Committees delegate these tasks to DOSTEs. DOSTEs have to report the results of implementation of their tasks to Province Peoples Committees and MOSTE/NEA. In August 2002, the Ministry of Science, Technology and Environment was divided into two ministries, namely the Ministry of Science and Technology (MOST); and Ministry of Natural Resources and Environment (MONRE). All the environment-related issues were passed to the Ministry of Natural Resources and Environment which also took over NEA. NEAs name was changed to the Vietnam Environmental Protection Agency (VEPA) without a change in function. STAMEQ was maintained as a branch of MOST. Otherministries Beside the ministry for the environment (MOSTE/MONRE) many of the ministries have the authority to plan and manage environmental issues in specic sectors such as transport, construction or industry. Article 5 of Decree 175/CP (1994) on Guiding the Implementation of the Law on Environmental Protection provides that sector ministries have their own tasks in protecting the environment. They have the authority to issue environmental protection documents within their sector or draft documents on environmental issues that relate to their activities and to submit their documentation to the Government for promulgation; to manage the projects of their branch relating to environmental protection; to participate in the EIA committees to make the Environmental Impact Assessment (EIA) reports; to settle disputes and complaint, to the extent permitted, and to petition for punishment of violations of the Law on Environmental Protection. They should cooperate with MOSTE to survey, monitor and evaluate the environmental situation of their sectors. As article 38 of the Law on Environmental Protection says, all other ministries, within the scope of their functions, powers and responsibilities, cooperate with MOSTE in carrying out their environmental protection duties in their sectors and branches. The purpose of this cooperation is to release the burden of MOSTE/MONRE and integrate environmental concerns into the decisions of all sectors. For example, most of the programs for vehicular pollution sources control are the responsibility of the transport and public works agencies and public security police. These agencies must cooperate with MOSTE in issuing their environmental policy measures in order to match the national environmental policy framework. The three sector ministries that should have closest cooperation with MOSTE are Transportation, Construction and Industries.

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The Ministry of Transportation (MOT) has responsibility for making transportation plans and management, such as infrastructure, roads, intersections, and trafc control. MOT has the authority to determine the types, quality, technical safety standards and to inspect the safety of motor vehicles. The MOT also drafts, reviews and decides on motor vehicle emission standards and enforces it for vehicles. The MOT grants certicates on meeting the emission standards for vehicles. It cooperates with MOSTE. Viet Register is an agency which is part of the MOT and also inspects the emission standards and safety of vehicles and, together with STAMEQ, prepares the drafts of the vehicle emission standards. Giving its assistance to the Vietnam Register is the Center for Vehicle Management and Inspection. The Ministry of Construction (MOC) is responsible for policies on planning, design, and construction as well as guidelines for houses, public works, and construction activities. These include the environmental standards in construction. The policies cover such areas as drainage and sanitation, waste management, slum improvement, and urban planning. The National Institute for Urban and Industrial Projects plays a major role in the areas of pollution prevention; it has authority to stop operations whenever very severe pollution occurs. The MOC also has its provincial units to take primary responsibility for their tasks at the local level. The Ministry of Industry (MOI) is responsible for planning of industrial development strategies. It provides technical assistance for pollution reduction and partly funds for environmental projects implemented within different industrial enterprises. In practice, the sector ministries do not always cooperate with MOSTE in implementing environmental policy in their sector. The scattering of environmental responsibilities over different ministries results in overlap. The denitions and divisions of tasks and responsibilities between them are not clear. Poor collaboration among government agencies and their conicts of interests also result in competition between ministries and agencies in making decisions on environmental issues. In theory MOSTE/MONRE is equal to other ministries, but in practice, it is often weaker than others, such as the Ministry of Industry, because environmental issues do not have such a high priority on the political agenda as is proclaimed in ofcial documents. The following example illustrates this. On paper, NEA/VEPA has the authority to close rms that are continuously out of compliance with air pollution standards. In reality, NEA/VEPA has no power to close those rms, especially if the rms are joint ventures, foreign-owned, or state-owned (Phung Thuy Phuong, 2002). If stateowned enterprises that belong to a sector ministry violate environmental protection laws, the Minister of MOSTE/MONRE has to nd a way to solve the problem with that ministry. MOSTE/MONRE just cannot act directly even though the law provides that. In 1995, for example, NEA recommended closing 13 rms, mostly state-owned enterprises, because of their heavy pollution emissions and inability to comply with national environmental standards. However, the sector ministries did not agree with this proposal and, in the end, none of the rms out of compliance was shut down. The obligation to get the cooperation of other ministries which have interests other than the protection of the environment clearly undermines the power of MOSTE/MONRE to enforce environmental regulations. Thus, the dispersal of environmental management between ministries without clearly identied responsibilities and functions, and without adequate mechanisms to overcome inter-ministerial disputes, creates bottlenecks in limiting environmental pollution.

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9.4.2ProvincialandDistrictLevel TheDepartmentofScience,technologyandEnvironment(DOSTE) As discussed above, DOSTEs are local departments of MOSTE and exist in most provinces and large cities. Politically, administratively and nancially, DOSTEs are under the control of provincial Peoples Committees which form the government of the province. MOSTE delegates the environmental protection tasks to provincial Peoples Committees. Provincial Peoples Committees delegate these tasks to DOSTE. Thus, DOSTEs relate to MOSTE only with regard to technical matters, meaning DOSTEs are supposed to implement national policies established by MOSTE/NEA. In each DOSTE, the Environment Division is its executive body to implement the environmental tasks. These tasks are similar to NEA/VEPAs tasks but at a provincial level. DOSTE issues environmental policy for its provinces and provides guidance for the implementation provincial environmental policy. In its province DOSTE is allowed to set and implement emission standards for stationary sources and mobile sources more stringent than national emission standards. A major task is to see that EIAs are prepared, contain appropriate control measures, and are approved by the Provincial government. DOSTE inspects and monitors plants for compliance, settles environmental disputes, and imposes sanctions for non-compliance, such as applying administrative nes or withdrawing environmental licenses of plants. Notice that DOSTEs have the authority to solve environmental problems in their territory, but only within the scope of their delegated authority. For matters outside of their mandate, DOSTEs must obtain permission of the national government bodies to act. For example, Provincial Peoples Committees/DOSTEs have no authority to shut down polluting factories that are out of compliance and located in their provinces but are under the control of the central government. DOSTEs must ask for permission of MOSTE and involved sector ministries to deal with these factories. DOSTEs also have to make plans or strategies to protect the environment in their provinces. DOSTEs provide environmental training and awareness programs. In addition, DOSTEs are also in charge of supervising the compliance with the Law on Environmental Protection by the environmental management units at district level. The number of staff in the Environmental Division in DOSTE ranks from 3 to 16 staff depending on the priority set in the province. In some provinces, DOSTEs are very active. The HoChiMinh City DOSTE is an example of how policy can be established to deal with industrial pollution in the city. It developed a so-called Industrial Pollution Minimization Fund (IPMF) to support industries nancially in order to install waste reduction treatment. It organizes training on treatment technology for enterprises; implementing some pilot projects in industry, together with awareness-raising activities. It was the rst DOSTE of the country to establish a black book of the most polluting rms in the city and forced them to make a commitment to control their pollution within a set period of time or else their factories would have to move out of the city. The HoChiMinh City DOSTE also developed a casebook of best practice examples and made that publicly known via the mass media in order to encourage industries to improve their environmental pollution control. The DOSTEs of other provinces, including Hanoi DOSTE, have learned from the experiences of HoChiMinh City DOSTE. Section 9.8 will give further details on the example of HoChiMinh City DOSTE.

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TheDistrictLevel Environmental Bureaus at the district level are under control of the district government: the district Peoples Committees. Similar to the relationship between MOSTE and DOSTEs, Environmental Bureaus are local departments of DOSTE, linked to DOSTE in technical matters only to take care of environmental issues. The main tasks of the Environmental Bureaus are to implement environmental regulations, in the form of instructions that DOSTEs delegate to them; to resolve small disputes and to process complaints stemming from pollution in their localities. Environmental Bureaus inspect the pollution control measures taken in plants and have the authority to warn factories that are out of compliance. Although many disputes or complaints about industrial pollution are within their mandate they usually prefer to transfer them to DOSTEs. 9.4.3Summaryandconclusion In summary, Vietnam has a three-layer system of environmental management organization from the central government to the regional and local government. At the national central government level, MOSTE/MONRE is the main organization responsible for environmental protection issues in both stationary and mobile sources. MOSTE promulgates environmental regulations, sets ambient air quality standards and emission standards for stationary and mobile sources nationally. MOSTE inspects DOSTEs for the implementation of MOSTEs regulations and instructions. MOSTE also inspects and monitors projects with serious potential environmental impact, and imposes sanctions on plants that are out of compliance. Other ministries are requested to cooperate with MOSTE to protect the environment in their sectors. The Ministry of Transportation especially has played a signicant role in cooperating with MOSTE to set emission standards for air pollution of motor vehicles and to inspect the quality and safety of motor vehicles. At the regional level, MOSTE delegates its environmental protection tasks to provincial Peoples Committees/DOSTEs. Besides implementing the delegated tasks, DOSTEs are allowed to issue regulations to support the implementation of their tasks or to have better results. Some DOSTEs have set emission standards for air pollution control of factories in their region. The regional emission standards are not allowed to be less stringent than national emission standards. Similarly, at the district level, DOSTEs delegate the environmental protection tasks to district Peoples Committees/Environmental Bureaus. Thus, Vietnam has its environmental management architecture in place as required by the Environmental Protection Law. However, in practice, MOSTE and DOSTEs lack broad political support and their power is limited, compared especially to the power of the National Assembly, the Peoples Council, the Vietnam Fatherland Front and its member organizations. Because of conicts of interests collaboration of other ministries with MOSTE in environmental protection has been very poor. In addition, the Law on Environmental Protection does not dene and devise tasks and responsibilities between them clearly. The scattering of environmental responsibilities across all ministries results in overlap and also results in competition between ministries and agencies that make decisions on environmental issues. In theory, MOSTE/MONRE is equal to other ministries, but, in practice, it is often weaker than others because environmental issues do not have such a high priority on the political agenda as is proclaimed in ofcial documents. In addition, the environmental authorities have had great difculty in enforcing the Law on Environmental Protection when they deal with state-owned-enterprises (SOEs) 242

and foreign companies. Besides that, there have never been enough human resources in these organizations, particularly staff that has a specialization in environment-related subjects. The lack of knowledge and information and inadequate funding also contribute to the difculties the environmental organizations have in performing their tasks. The shortage in environmental experts is even more serious in the National Assembly, the Peoples Council, the Vietnam Fatherland Front and its member organizations. Although the Environmental Bureaus system at the district level is in place on paper, it does not or hardly seem to exist in reality. If there is an Environmental Bureau in a district, it is very weak in all aspects. DOSTEs have to cover most of their tasks.

9.5Developmentofenvironmentallegislationtocontrolpollutionof stationarysources
The development of environmental legislation in Vietnam shall be divided into two time periods: before and after 1994. The division is based on the year when Vietnam rst started to take action on protecting the environment by enacting the national Law on Environmental Protection in 1994, after a long period of time when the issue was mentioned solely on paper. Subsection 9.5.1 will present the development of environmental legislation on air pollution control in the period before 1994: how the environmental issues were treated under the Socialist regime of the North and the Capitalist regime of the South; it also includes features of environmental legislation development in the time after both regions were unied in 1975 until 1994. Subsection 9.5.2 will focus on the major characteristics of environmental legislation since it became a political concern in 1994 and cover the period up to 2003. It will include the presentation and assessment of all the major components of the national policy approach in air pollution control of stationary sources: the establishment of ambient air quality and emission standards, the Environmental Impact Assessment (EIA) and environmental certication, the monitoring, inspection and enforcement system, and the noncommand-and-control approaches which have been applied or discussed in Vietnam. National planning to control pollution of stationary sources for the next 5 to 10 years is the subject of subsection 9.5.3. Finally, the summary and conclusion of the section is presented in 9.5.4. 9.5.1Environmentallegislationbefore1994 As mentioned in section 2, Vietnam had only small industrial zones in towns and some industries scattered across the country. At that time, environmental pollution in general and air pollution in particular was not an issue, even among scientists. There exist virtually no documents or materials on the subject of air pollution control from that period of time. At universities, however, courses were offered, which were indirectly related to air pollution. For example, at the Hanoi Construction University of the North, the Department of so-called Ventilation (Thong Gio) in the Faculty of Constructional Materials and Sanitary Technology had specialized courses in Ventilation and Heat Supply (Cap Nhiet). The contents of the teaching program were similar to those in universities of the former Soviet Union and covered some issues related to air pollution, such as dust and chemical pollution, but only in so far as it occurred in the work environment. Other institutions, such as the Labor Medical Institute at Hanoi Medical University, also had programs on environmental subjects, but limited to the work environment as well. 243

In the South, no courses about the environment were taught at universities. However, several books by American authors, such as Environmental Pollution (ue nhiem moi sinh) and Chemical Clean-up Technology (ky thuat thanh hoa), were translated into Vietnamese. In 1974, a chemical clean-up technology laboratory was established at the Civil Engineering Faculty of Phu Tho Technology University. It also was the rst time the university offered students a special course in chemical clean-up technology (Nguyen Dinh Tuan, 2002). After 1975, all activity concentrated solely on the economic recovery of the country. Environmental issues were put behind other problems on the political agenda. The rst signal of change was the foundation of the Department of Environment-Biology Technology at the Polytechnic University of HCMC in 1980. This department belonged to the Construction/Building faculty. Years after that, other institutes were established with the help of the Environmental Programs of the United Nations (UNEP), such as the Institute of Tropical Technology and Environmental Protection. In 1985 the Council of Ministers promulgated Resolution No. 246 on The Survey and Rational Use of Natural Resources and Environmental protection. This Resolution was very general; it did not contain statements specifying a policy to protect the environment. One step further was the National Plan on Environmental and Sustainable Development 19912000, approved by the Council of Ministers in 1991. This plan did emphasize environmental protection issues: it conrmed the need to establish a central environmental authority and to develop and implement an environmental policy including environmental ambient air quality and emission standards for industrial pollution control. As a result of this plan, MOSTE was established in 1992, and in 1993 the Law on Environmental Protection (LEP) was enacted by the National Assembly which became effective in the beginning of 1994. 9.5.2Thedevelopmentofenvironmentallegislationfrom1994to2003 Environmental policy in Vietnam has mainly followed the traditional model of commandand-control, characterized by standards and regulations, and a top-down implementation of legislation since the moment environmental issues started to become a political concern in 1994. The Law on Environmental Protection (LEP) is the highest one in the hierarchy of environmental legislation of Vietnam. It states that the purpose of the law is to protect peoples health, to serve the sustainable development of the country and to contribute to the environmental protection of the Asia region and the world. It includes 7 chapters and 55 articles. It devises the tasks for MOSTE, other ministries and DOSTEs (see section 9.4). It stipulates that MOSTE has to set the national environmental standards, including national ambient air quality standards and emission standards for existing and new stationary sources (see 9.5.2.1). It requires that existing and new stationary sources submit EIA reports to the authority. Further details on EIA will be discussed in 9.5.2.2. The Law also mentions the necessity of having a monitoring, inspection and enforcement system in place (see 9.5.2.3). Only 20 pages long, the Law on Environmental Protection is very general. It had to be worked out in many other regulations, decrees, resolutions, and decisions that provide instructions on how to implement national environmental law. Therefore, after the Law went into effect a number of regulations were enacted. Decree 175/CP, issued in 1994, provides guidelines on the implementation of the Law on Environmental Protection; Decree No. 26/CP issued by the central government on April, 1996 provides regulations on administrative nes for violation of the Law on Environmental protection; Circular No. 490/1998/TT244

BKHCNMT, issued by MOSTE on April 1998, gives guidelines for the EIA of investment projects. The contents of these regulations will be discussed in the following subsections. 9.5.2.1Environmentalstandards Following the requirements of the Law on Environmental Protection and Decree No.175/CP of the central government, issued in 1994, which provides guidelines on the implementation of the Law on Environmental Protection, the Vietnam environmental standards were set by MOSTE in 1995: the so-called TCVN-1995. The TCVN-1995 was established by the Directorate for Standards and Quality (STAMEQ), which is part of MOSTE and is the body responsible for organizing technical committees for the development of TCVN drafts and submitting them to the MOSTE Ministry for approval. Developing standards is a ve-step process. First, a technical-legislative committee of STAMEQ makes a proposal for standards and gets the approval of STAMEQ. Second, the standards proposal is given to the technical Committees to make a second draft of standards. There are 7 technical committees working for environmental standards development including the technical committee on ambient air quality. The technical committee comprises researchers, scientists of universities and research institutes, experts of government agencies, representatives of industries, consumers, etc. Third, the technical committees draft needs to get the approval of the majority of the technical committees to become the TCVN draft. Fourth, the TCVN draft is submitted to outside reviewers, and is circulated for comments. Finally, the draft must be passed by the technical-legislative expertise of STAMEQ before being submitted to MOSTE for approval. The following ambient and emission standards have been developed and issued since 1995: 1. TCVN 5937: 1995 Air quality Ambient air quality standards for 6 types of pollutants: CO, NO2, SO2, Pb, O3 and suspended dust (SPM)27. 2. TCVN 5938: 1995 Air quality maximum permitted concentration of hazardous substances in ambient air (ambient air quality standards)28. 3. TCVN 5939: 1995 Air quality Industrial emission standards inorganic substances and dust (including 19 types of pollutants, such as SO2, NOx, CO, etc.) 4. TCVN 5940: 1995 Air quality Industrial emission standards organic substances (including 109 types of pollutants, such as CH3COCH3 (Aceton), C2H5OH (Etanol), C8H18 (Octan), C5H12 (Pentan), etc.) 5. Dozens of TCVN technical standards on analysis methods (sampling, measurement) for ambient air quality standards and emission standards.
27

TCVN 5937: 1995 -Air quality (mg/m3) Hourly average 40 (WHO: 30) 0,4 (WHO: 0,4) 0,5 (WHO: 0,35) 0,2 0,3 8-hour average 10 24-hour average 5 (WHO: 10) 0,1 (WHO: 0,15) 0,3 (WHO: 0,1-0,15) 0,005 0,06 0,2 (WHO: 0,15-0,23)

Pollutants CO NO2 SO2 Pb O3 SPM

Source: STAMEQ, MOSTE (1999).

28 Similar to the chapters on the development of environmental policy in United States, this chapter on the development of environmental policy in Vietnam does not discuss hazardous pollutants.

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Thus, TCVN-1995 for air quality includes 3 types of standards: ambient air quality standards, emission standards, and technical standards (methods of measuring, collecting, analyzing, and treatment of samples). Ambient air quality standards are the targets of air pollution control policy. The concentration of pollutants dened in the standards should not be exceeded. Some of Vietnams ambient air quality standards are less tight than WHOs ambient air quality standards and some are more tight (see footnote). Emission standards and technical standards are the requirements to be complied with by rms which have to pass the EIA procedure. Conceptually ambient air quality standards are the targets of air pollution control policy. Emission standards are the tools of the environmental authority used to inform rms what they should do and not do in containing emissions. The emission standards also function as criteria in establishing whether rms have complied with their EIA or not. The TCVN-1995 emission standards are performance standards for most existing and new small, medium and large stationary sources. Article 16 of the LEP and article 22 of Decree No.175/CP provide that all types of rms and individuals who are in charge of environment-related activities must comply with TCVN-1995. Article 29(2) of the LEP prohibits any activities that result in a discharge of pollution into the air exceeding the Vietnam ambient air quality standards. The TCVN-1995 mandatory emission standards were uniform and had to be applied equally for all pollution sources in the entire country, including existing and new or expanding sources. The emission standards were revised in 2001. Further details are provided below. In 1998, MOSTE issued Circular No. 490/1998/TT-BKHCNMT as guidance for the making and assessment of EIA; the Circular stated that in any province that has its own environmental standards, rms located in that province are obliged to apply the local environmental standards, if the local environmental standards are more stringent than national environmental standards TCVN-1995. In case of pollutants which are not on the list of TCVN-1995, the investors must ask permission of MOSTE to apply the environmental standards of those pollutants that have been applied in developed countries. Interviews with staff from MOSTE, DOSTEs, factory managers, and environmental experts in some institutions, and the articles of Nguyen Khac Kinh, (1999); Le Doan Thao and Dang Viet Khoa, (1999); the Ministry of Industry, (1999), Phung Thuy Phuong (2002) reveal a number of bottlenecks in implementing the standards. First, TCVN-1995 is based on foreign models of environmental standards for ambient air quality and emission to air. The policy-makers did not have knowledge about setting up environmental standards. They just picked the environmental standards in some developed countries. In their opinion, Vietnam should meet these standards as well, without considering the existing technologies and investments that would enable industries to comply. Second, the environmental emission standards are applied equally across the entire country without considering the differences in scale, type of production, characters of pollutants, and location of industries. In some cases, all polluters in a geographical area comply with emission standards, while severe deterioration of the environmental quality still continues due to strong local or regional concentration of stationary and mobile sources and/or the limited self-purifying capacity of the area. Since the emission standards are national minimum emission requirements the regional or local authority could set more stringent regional or local emission standards for stationary sources. However, it might be unwilling to do so from fear to remain behind in attracting new rms. On the other hand, pollution control costs might cause unnecessary high costs for industries located in less 246

polluted areas because of being excessively tight. These standards were not changed until the end of the year 2002. After 7 years of effort to implement emission standards TCVN-1995 with very little result, some emission standards in the TCVN-1995 have been changed. From January 1, 2003 on they replace the old ones. Emission standards TCVN-2003 also apply to small, medium, and large, new and existing stationary sources. The ambient air quality standards in TCVN-1995 are still in place and were not revised. The emission standards TCVN-2003 in air pollution control are: 1. TCVN 6991: 2001 Air quality emission standards for inorganic substances in industrial emission discharged in industrial zones. 2. TCVN 6992: 2001 Air quality emission standards for inorganic substances in industrial emission discharged in urban regions. 3. TCVN 6993: 2001 Air quality emission standards for inorganic substances in industrial emission discharged in rural regions. 4. TCVN 6994: 2001 Air quality emission standards for organic substances in industrial emission discharged in industrial zones. 5. TCVN 6995: 2001 Air quality emission standards for organic substances in industrial emission discharged in urban regions. 6. TCVN 6996: 2001 Air quality emission standards for organic substances in industrial emission discharged in rural regions. Thus, instead of the uniform emission standards regulated in TCVN-1995 for inorganic substances, dust and organic substances applied to all rms in all locations, the emission standards set in TCVN-2003 are differentiated, distinguishing emission standards levels for three different locations: industrial zones, urban regions, rural regions. Based on the reality that air pollution is always more concentrated in industrial zones rather than in other regions, and also based on the characteristic that most existing small and medium sized industrial rms in Vietnam are located in urban areas, emission standards TCVN-2003 are more stringent in industrial zones than in urban and rural regions. Similarly, the emission standards for rms located in urban regions are more stringent than those for rms located in rural regions. It is still too early to assess the implementation of TCVN-2003. It has to be noted that TCVN emission standards of 1995 and 2003 apply to new and old sources alike and do not differentiate between types of source, for example based on their scale and capacities to control emissions at relatively low costs. 9.5.2.2Environmentalimpactassessment(EIA)andenvironmentallicensing EIA is the process of analyzing, evaluating, and forecasting the environmental impacts caused by the implementation of socio-economic development projects, master plans, production units, enterprises, and other signicant economic, scientic, technical, health care, security, and defense projects (Le Thac Can, 1997; Phung Thuy Phuong, 2002). Theoretically, the EIA process can mitigate the environmental impacts of economic development. According to the OECD (1999), EIA has become one of the most commonly used environmental policy tools for countries in economic transition. In Vietnam, EIA was introduced in the mid-1980s to promote environmental protection and sustainable development (Le Trinh, 1997). At that 247

time, EIA was not yet ofcially required as an element of feasibility studies or in design phases of development projects (Phung Thuy Phuong, 2002). In 1994, the Law on Environmental Protection changed the situation by making the EIA procedure compulsory for the approval of investment projects and also for the continuation of existing industries. In addition, Decree No. 175/CP outlines more details about Environmental Impact Assessment (EIA) procedures. According to articles 17, 18 of the LEP and article 9 of Decree No. 175/CP, both existing and new sources, including most small, medium and large sources, have to prepare and submit their EIA report for assessment and approval by the authorities. The EIA report includes an evaluation of the environmental status at the location where the rm has been/will be located, an assessment of the environmental impact of investment projects, including the establishment and expansion of industrial plants. The EIA has also to address the suggested measures required to control emissions for mitigating negative environmental effects (article 10 of Decree No. 175/CP). A public authority (national or regional) has to evaluate the report and decide on the pollution control measures to be taken. For existing sources, should the EIA report show that they might fail to meet environmental standards (TCVN-1995), the authority shall give them a period of time to correct it. If they continue to fail after the given time, the authority shall report it to higher authority level to make a decision about whether to suspend operations or otherwise impose a penalty on those polluting rms. For new sources or those being expanded, once the authorities have approved the EIA, steps could be taken to give land grant permits as well as construction licenses. Thus, the approval of an EIA report constitutes a legal foundation for investors to implement their projects. If their EIA is not approved, investors could not conduct their business. The LEP (article 50) regulates that rms which fail to comply with the commitments in their EIA report shall be penalized with administrative nes or criminally prosecuted (the next subsection will give further details on this). Decree 175/CP also allocates the authority to approve EIAs for different types of projects to different government agencies. It distinguishes projects of national and regional signicance for which an EIA has to be made and approved by either national or provincial public authorities and next to that, small projects that do not need an EIA. On behalf of the investor, the EIA report has to be prepared by agencies or organizations that have qualied staff and the necessary facilities (Article 12(2) of Decree 175/CP) and the report has to be submitted to the public authority, either nationally (MOSTE) or regionally (DOSTE). As was described in section 9.4, NEA/VEPA (for MOSTE) and DOSTE (for Peoples Committee of that province/city) are in charge of assessing the submitted EIA on its quality, completeness and the sufciency or insufciency of the pollution control measures proposed in the EIA. In case of important projects, the NEA or the DOSTE can assess the performance through committees especially installed for the task. In addition, MOSTE or DOSTE respectively have responsibility to supervise the technical design and implementation measures to protect the environment which were proposed in the EIA report (Article 17 of Decree 175/CP). As was said, after the EIA report has been approved, the land use permit and the construction permit can be issued. The rm then constructs its facilities and installs the pollution control technology that was proposed in its approved EIA report. Once the construction is completed, the environmental agency inspects the plant to see if the investor has followed up the measures stated in its approved EIA report. If it does, the rm is allowed to start operations. Article 6 of Circular No. 276-TT/MTg, issued by MOSTE on March 6, 248

1997 as guidance for industries in controlling pollution after their EIA has been issued, states that after the rm has started its operations, the investor has to apply for the Certicate of implementing pollution control measures. Finally, after all the above steps have been completed, the rm has to apply for an environmental license by submitting its approved EIA and its certicate of implementing pollution control measures. The environmental license states the environmental requirements to be met by the plant. For the rm receiving the license functions as evidence that it has complied with the measures which were stated in its EIA report. It also means that the rm has complied with environmental standards TCVN-1995. Basically, the measures to control emissions suggested in the EIA, and approved by the public authority, should be copied into the environmental license. According to Circular No. 2781-TT/KCM, issued by MOSTE on December 3, 1996 as guidance for granting, extending and withdrawing environmental licenses for industries, all rms including existing and new or expanding rms must apply for the environmental license. An environmental license is valid for 3 or 5 years depending on the size of the factory and type of industry it belongs to. The authority granting EIA approval also has the right to grant, extend, and withdraw the environmental license. Firms that operate without an environmental license or that violate the commitments in the environmental license will be suspended or criminally prosecuted. The steps that an investor needs to make to comply with the environmental requirements are summarized in the following scheme. Normally the next step should only be taken after the requirements of the earlier stage have been met. Firm needs EIA Firm starts EIA procedure Approval of EIA Application for land use and construction permit Permit granted Construction Inform environmental agency of completion of construction Environmental agency inspects plant Agency approves Start of operations Application for certicate of implementing pollution control measures Certicate granted

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Application for environmental license Monitoring of emissions during operations License granted The environmental licensing procedure is similar to the procedure applied to starting an industrial plant in developed countries, including the U.S. as we have seen in chapter 3. The similarities bring out that the basic instrument of environmental policy in Vietnam is the command-and-control approach similar to the approach in the industrially developed world. The difference between the U.S. and Vietnam is that in the U.S. acquiring the environmental license usually does not involve making an EIA. EIA are made only for very big investment projects with potentially large negative environmental consequences. According to Le Thac Can (1997) the review of the EIA reports for new projects in Vietnam found that there were projects which had to change their production process, materials input, or fuel or invest more in pollution control to get the approval of their EIA report. Some investment projects were not approved because the location of the project or the technological processes involved was considered to be inappropriate. It might be said that EIA procedures could be effective when followed properly. Yet, even when procedures are followed meticulously, the bottleneck emerges that members of the EIA report assessment committees lack knowledge and experience in environmental management and technology. The result is that sometimes a project is easily granted an environmental permit as a nominal procedure. In addition, the number of environmental experts is small; experts who make EIA reports and who make an evaluation of an EIA report know each other, sometimes closely or as friends. As a consequence, many projects are approved because environmental experts try to avoid conict and disagreement between themselves in approving the projects (Phung Thuy Phuong, 2002). In Vietnam, culturally, personal emotions and relationships easily inuence people in their public jobs. Deciencies in EIA reports are not easily detected and corrected: there is no quality control in the review of EIA either by an independent agency or by the public and there is no compulsory public participation in EIA evaluation and monitoring. On paper, representatives of local people are included in the EIA evaluation committee at the local level, but in practice, there is just very little public access to the nal EIA. Major bottlenecks also occur in implementing the conclusions of approved EIAs. After granting approval, there is no monitoring in the implementation phase of the projects. Therefore, most investors do not implement the pollution control measures as their EIA reports stated. Finally, it is possible that rms circumvent or manipulate EIA already in its preparation stage: because of corruption in the bureaucratic system, investors could buy EIA reports and assessments easily without going through the EIA evaluation procedures (Phung Thuy Phuong, 2002). Another possibility is that, although investors have an obligation to submit EIA reports as a requirement for a land use permit and construction licenses, they actually only start making EIA reports when the construction of the infrastructure has already started. Later on, investors just ask for the EIA report evaluation for fullling the administrative procedure (Chu Thi Sang, 1999).

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One result of all these features is the virtual lack of a relationship between a rms environmental performance and its approved EIA. Usually, rms rely on an approved EIA report as legal proof that they do not violate environmental protection laws even though in reality they are (Phung Thuy Phuong, 2002). Sheltering behind this legal proof, they do not let the authority come inside the rm to inspect. As ORourke (1999) said: EIAs are still required in most provinces, but have largely become money-making ventures rather than environmental initiatives. In 1998, Circular No. 490/1998/TT-BKHCNMT enacted by MOSTE, conrmed that EIA approval of investment projects needed to be obtained before land use permits and construction licenses, which give the investor permission to start construction of the site, could be issued. If applied such a rule can prevent that the authority comes under pressure to approve an EIA because so much has already been invested and would be lost in case of refusal. Spurred by the economic crisis in Asia the Circular also announced that the mandatory EIA was abolished for a rms planned investment project on a location in industrial zones/estates which already has its own EIA approval. Instead of submitting the EIA report, these investment projects needed to follow a simpler procedure by submitting to DOSTE a form called A registration for securing environmental standards. This form includes the description of the type of pollution emitted and most importantly a promise to follow the environmental standards of TCVN-1995. DOSTE will decide whether or not the investor needs to install pollution treatment facilities. If yes, the investor has to submit the design of facilities together with the form to DOSTE. If the form and the design are approved by DOSTE, the next steps can be taken from the construction to monitoring as described in the scheme above. This Circular does not apply for investment projects which are going to locate in industrial zones/estates that have not obtained their own EIA approval. The purpose behind this decision was to reduce the administrative and bureaucratic red tape so that investors, especially foreign investors, would be attracted to invest in industrial estates. In August 2002, MOSTE issued for the rst time a specic Regulation on the Protection of the Environment in Industrial Zones/Estates, even though most industrial zones/ estates have been in operation since 1994. The Regulation has 10 chapters with 53 articles. The Regulation applies to any organization or individuals, including foreigners, involved in any activities (e.g. investment) that relate to industrial zones/estates (Article 2). In principle, the contents of the Regulation are similar to the related industrial environmental protection articles provided in the Law on Environmental Protection, Decree No. 175/CP, Circular No. 490/1998/TT-BKHCNMT. The so-called Infrastructure Development Company is responsible for making the EIA report for its own industrial zone investment project and submits it to MOSTE (Art. 8). The Infrastructure Development Company is allowed to start establishing the infrastructure for the industrial zone only after the EIA report is approved (Art. 11). The industrial zone must be established on the basis of the environmental protection measures stated in the EIA (Art. 12). The authority will check and inspect for compliance with the EIA. If the EIA is violated, depending on the type of violation, a penalty (e.g. suspension or ne) will be applied (Art. 13). Firms that invest in an industrial zone/estate that has its own approved EIA and rms that have invested in industrial zones and already have an approved EIA, have only to apply for a registration for securing environmental standards 251

(Art. 15). In the case of air pollution, article 21 of the Regulation provides that rms in industrial zones which emit in excess of permitted air pollution levels must implement pollution-reduction treatment at the sources to make sure of compliance with TCVN for discharge of emissions into the air. As was said, the Regulation on the Protection of the Environment in Industrial Zones/Estates is just an accumulation of all related environmental protection codes for industrial zones/estates or investment projects that had previously been regulated in the Law on Environmental Protection, Decree No. 175/CP, Circular No. 490/1998/TT-BKHCNMT. The restatement of policy seems to have had little effect: a year after the Regulation took effect, no discernible progress on the implementation of the Regulation had been made. Assessment In summary, EIA was introduced in Vietnam more than two decades ago, but it did become a mandatory procedure together with the requirement to hold an environmental license in the 1994 Law on Environmental Protection. EIA and environmental license have become environmental policy tools to prevent pollution. Initially most stationary sources, including existing and new sources, were required to have an approved EIA report in order to continue to operate or to be granted land use and construction permits respectively. Next to that, rms must have an environmental license to prove that they have complied with their EIA reports. Later on, to simplify the EIA procedure, MOSTE issued the Circular No 490 in 1998 and the Regulation on the Protection of the Environment in Industrial zones/estates in 2002. The Circulars allowed rms that planned to locate their premises in industrial zones/estates which already have their own EIA approval to skip the EIA procedure. These investments projects only needed to apply for a registration for securing environmental standards instead of going through the complete EIA procedure. The EIA procedure has worked far from perfect. To see the bottlenecks in perspective one has to recall that Environmental Impact Assessments have been developed in the USA and other Western industrialized countries in the late nineteen-seventies as an instrument to assess the potential environmental damage of planned, large investment projects with potential environmentally highly harmful consequences. Such an EIA would help to decide not to go on with the projects or to change their design drastically at an early stage in the policy process. However, in Vietnam the original legislation required an EIA for about every economic activity: from large to most of small sources and not only for new and modied sources but even for existing sources. This seems far too costly, a waste of time and money and even impossible given the limits on manpower and expertise. It seems that this failure in policy design has been recognized. In 1998 an effort was made to reduce the number of EIAs by dropping the EIA requirement for rms establishing a plant in a zone/estate which has an EIA approved for the zone. However, this effort to make the procedure leaner had the unhappy effect of making it even more ineffective than it already was. Apart from being too demanding, which one can see as a design error, the EIA also shows a lot of shortcomings in its implementation, as was mentioned before: they appear in about every stage of the procedure running from drafting the EIA till operating the plant. The deciencies are mainly due to lack of personnel and expertise to implement and to monitor the implementation of the EIA procedure even after it was simplied. Next to that the tendency to avoid conicts and straightforward corruption of bureaucracies has created a real obstacle in the implementation of the EIA. 252

9.5.2.3Monitoring,InspectionandEnforcement Four topics will be discussed in this section: rst, the monitoring of air quality; second, the inspection of emission sources; third, the enforcement of compliance, and nally the enforcement will be assessed. Monitoringairquality Air quality monitoring is one of the signicant tasks of environmental protection agencies. It is an essential element for establishing or adjusting environmental standards and for developing air pollution control instruments to achieve the environmental protection target. NEA is in charge of this task at the national level. NEA has delegated the operation of monitoring to three institutions. Hanoi Civil Engineering University (CEETIA) is responsible for monitoring in Northern Vietnam; the Environmental Protection Centre (EPC) is responsible for the central and some southern parts of Vietnam; and the Institute for Natural Resources and Environment is responsible for the Mekong Delta region. At the local level, DOSTEs are in charge of monitoring air quality. In industrial zones/estates the Infrastructural Development Company is responsible for monitoring air quality and reporting the results to DOSTE twice a year. In Vietnam, there has been a lack of equipment for monitoring stations as well as too little funding for this activity. Only ambient air and water quality is monitored at a few locations, with a limited number of samples addressing a small number of parameters at each location. In 1994, there were only 5 air monitoring stations for the whole country. This number has increased to 53 stations in 2002, including 17 monitoring stations under NEA/VEPA and the rest monitoring under DOSTE (Vietnam Register, 2002). The monitoring stations take measurements four times a year at the beginning of each quarter. In practice, each major city collects the data using different methods, so the data might not be reliable. Besides that, the calibration between stations is also inconsistent. Furthermore, the collected data are not easily accessible to the public. Nevertheless, the monitoring system is improving gradually even though there continues to be a shortage of funding. Inspectionofemissionsources Inspecting installations in operating plants or even better direct measurement of emissions helps authorities to check whether a rm complies with environmental standards. Every six months, rms in industrial zones/estates must report their compliance with environmental standards to the Industrial Management Board and DOSTE. Infrastructural Development Companies have to report once a year on compliance with environmental protection measures of their industrial zones/estates to DOSTE. Environmental protection agencies are responsible for inspections to determine compliance with environmental policy. There are three types of inspection: (1) Regular inspections are based on a schedule prepared in advance. Normally, an inspection is conducted every six months or annually. The environmental agencies conduct inspections whether or not rms are in compliance with their EIA, environmental standards, applying measures to prevent environmental damage, etc. (2) Sudden inspections occur when there was an environmental policy violation that happened suddenly. (3) Complaint-based inspections. Due to the lack of personnel, both at national and local levels, inspections occur when there are continuing complaints. At the national level, MOSTE is responsible for inspecting those rms whose EIA was approved by MOSTE or when 253

DOSTEs request an inspection. At the local level, DOSTEs perform inspections when there are many complaints in the Community or from neighboring rms. Enforcementofcompliance While implementing the inspection tasks, should the authority detect rms that are not in compliance with environmental laws or their EIAs, a sanction will be imposed on those rms. MOSTE and the Provincial Peoples Committee/DOSTE are responsible for implementing the enforcement system. The sanctions for not complying with environmental regulations can be divided into administrative sanctions and criminal sanctions. Decree No. 26/CP issued by the central government in April, 1996 provides for the following types of administrative sanctions: a warning, with an order to redress the situation so as to comply; paying a ne; withdrawal of the environmental license for six months, which implies the plant is not allowed to operate during that period; paying compensation for damages inicted. The most often used enforcement tool for rms out of compliance is the administrative ne system. Decree No. 26/CP (1996) regulated administrative nes for polluters. Article 9 of the Decree established eight levels of enforcement for environmental offences; the lowest one is a warning and the highest one is a ne of VND29 50 million. (1) In case rms do not implement or insufciently implement required measures to control pollution (air, waste, water, etc) or do not install or install incorrectly the required pollution treatment technologies, the sanction for the rst violation is a warning or a ne of VND 100,000 to 400,000. (2) After the rst warning or ne, if rms continue to violate, the ne is set at from VND 1 million to 4 million. (3) The ne rises to VND 10 million to 30 million in cases where rms do not use or incorrectly use the regulated emission treatment technologies and do not comply with environmental standards. (4) The ne might be up to VND 50 million if the violation causes damage to the environment. (5) In case of rms emitting over the permitted emission standards, the ne will be VND 500,000 to 2 million. (6) Repeated violation of the emissions exceeding the permitted emission standards will be ned from VND 2 million to 5 million. (7) Firms might be ned from VND 10 million to 20 million if their violation has environmental consequences as stated in number 6. (8) Extra sanctions are applied together with the nes, such as withdrawing the environmental license for 6 months; suspending the plants operation; compensating the damage that has been caused. The procedure for applying the administrative ne is quite complicated in case the amount of the ne is higher than VND 10 million. This complex procedure undermines enforcement. According to article 20 of Decree No. 26/CP and part III of the Guidelines No. 2433TT/KCM (October 3, 1996) DOSTE inspectors have the right to give a warning to violating emitters or impose the ne of no more than VND 200,000. Chief inspectors of DOSTE have the authority to ne up to VND 10 million. If the ne is higher than VND 10 million, the director of DOSTE has to issue a report and send the le to the Peoples Committee of that province; then the chairman of the Peoples Committee makes the decision about the ne. The chief Inspector of NEA, which belongs to MOSTE, can issue a ne up to VND 20 million. If the ne is higher than VND 20 million, the le must be sent to the Peoples Committee at that province and the chairman of the Peoples Committee makes the decision.

29

USD100 = VND 1,550,000 (average rate in February, 2003).

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According to the Decree No. 26/CP, dating from April 1996 the environmentalspecialized inspector is an authority allowed to ne rms in violation. In fact, even some years later, there are only general inspectors who have no specialization in environmental issues. According to the law, the general inspectors are not allowed to ne polluters. The result of this conict is that employees who work for DOSTE who have some knowledge of environmental issues can only inspect but cannot ne the polluters because they do not have the right to ne. Given this situation, not only cases that have to be sent to the peoples committee but all violation cases must be transferred to the Peoples Committee to issue nes. To decide whether to ne, the local authorities (peoples committee) have to consider several other aspects such as economic priority, the relationship between the polluters and the authority, contributions to the local budget, etc. Under these circumstances, there is no incentive for the persons who inspect the polluted rms to decide sending the case to the local authority, especially when the polluting rms treat them nicely by giving small bribes. With regard to criminal sanctions, article 182 of the Criminal Amendment Act of Vietnam (1999) regulates criminal penalties for violating air pollution laws. The article says that anyone continuing to violate the orders of the authorities and continuing to cause serious impact by discharging air pollutants and after having been administrated a ne shall pay from VND10 million to VND100 million or shall be put in jail for a maximum of 10 years, depending on how serious the consequences are. This article has never been implemented. There is no document which gives a clear denition of what serious environmental damage caused by air pollution is. As long as environmental issues are not high on the political agenda, the article remains a dead article. Assessmentofenforcement Although Vietnam has developed a number of environmental laws, regulations, decrees and directives, their enforcement is very weak in practice. Interviews with many environmental experts in Vietnam showed that all of them agree that weak enforcement is one of the main reasons why the command-and-control approach has failed. There are many reasons for weak enforcement. First, there are the objective reasons: a serious lack of quality personnel in the environmental eld, environmental issues do not have the same priority as economic development issues, the sanctions for noncompliance are not strong enough. Second, there are the subjective reasons such as that the agencies that monitor regulations and inspect premises have no incentives to enforce the policies because of opposition from industry managers and factory owners. Industries do not feel pressure to follow regulations because the penalty might not be imposed or, if it is, the ne would be very small compared with the high pollution control costs. In case rms continue to be noncompliant, the authorities have to consider the potential negative social and economic impacts if the authority orders a rm to shut down or relocate. Until now, these strong enforcement measures were rarely used and criminal penalties were never applied. 9.5.2.4Non-CACapproaches In Vietnam, the CAC approach is the main, if not the only, environmental instrument for controlling pollution, especially air pollution. Other approaches, such as economic or communications instruments, have been applied or discussed to control other types of pollution. This sub-section presents these non-CAC approaches.

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Economicapproach Although no economic instruments have been applied directly in the eld of air pollution control some types of economic instruments for pollution control have been mentioned or newly-applied in Vietnam. The major one is the establishment of the VINACOAL environmental fund. In 1998, the Prime Ministers Decision No 98/TTG on Approval of a General Master Plan for Coal Sector Development up to the Year 2010 authorized the VINACOAL General Corporation, in charge of the entire national coal production, to increase the sales price of coal to establish an environmental fund. This fund provides grants to the different mining companies for pollution control activities. Another example is tax reduction for importing and installing clean technologies. Since environmental pollution is an issue on the political agenda, the government allowed for a lower import tax for any clean modern technologies that help to reduce pollution. On the other hand, the government also reduces taxes for any rm that installs these kinds of technologies. An example of regionally approached economic instrument is the Revolving fund for pollution reduction program applied in HCMC to grant low interest loan for industries which invest in pollution control measures and technologies. Recently, user charges were discussed for common wastewater treatment systems in industrial zones and export-processing zones. Deposit-refund systems have been in place for quite a long time, but only for beverage containers. In Hanoi, a 10% surcharge is added to the water bill to help meet the costs of sewage and pollution control. The actual revenues from this surcharge are small, but at least the principle has been established (ADB, 1996). Until now, other kinds of economic instruments such as subsidies for pollution control and prevention measures, product charges (excluding the surcharge on coal), marketable permits, development impact fees, depletion charges on resource use, etc. are lacking in Vietnam. Communicationsapproaches So far in Vietnam, the only so-called one-sided communications approach has been applied for almost a decade. At the national level, MOSTE in collaboration with other ministries such as the news and broadcasting authorities have provided information or general knowledge of environmental issues in order to raise public awareness of environmental protection. In addition, MOSTE in cooperation with organizations for culture, information and ne arts has sometimes organized national contests on environmental protection topics for public participation (Nguyen Ngoc Sinh and Friederich, 1997; Phung Thuy Phuong, 2002). At the provincial level, DOSTEs in many provinces and cities have organized campaigns on environmental cleanliness, such as Clean and Green, No garbage; Green Sunday, etc. Recently, training courses, seminars, workshops and conferences on industrial pollution, clean technologies and cleaner products have been given for specic groups like workers, ofcers, businessmen, etc. (Phung Thuy Phuong, 2002). Environmental issues have also started to be discussed in schools, colleges, and universities. However, these courses focus more on the green environment such as natural conservation, biodiversity, sanitation, etc., and not so much on industry or vehicle pollution prevention. In Vietnam, both at national and local level, the one-sided communications approach has been implemented for many years, but these activities are not frequent and strong enough to effect or change the awareness or behavior of populations as is its goal. Populations in 256

general and in villages in particular still have no idea of the concept of environmental protection and no concerns about their behavior that might affect the environment. Regarding the two-sided communications approach the so-called voluntary agreements they have neither been applied, nor been considered as an option up to now. 9.5.3Nationalplanningfortheperiod20012010 Considering the poor results of implementation of environmental policy since the Law on Environmental Protection went into effect and the current need for better results in environmental quality, at the end of 2002, MOSTE submitted the National Strategy for Environmental Protection (NSEP) for the period 20012010 for governmental review. The Government had not approved the NSEP yet early 2004. The NSEP sets out more than 20 programs to protect the environment in all aspects (air, water, waste, forest, land, etc.) of which the prevention of pollution from new and existing industries is the highest priority. One of its goals is to prevent pollution from new industries by strengthening the review process for EIA reports. The 1994 Law on Environmental Protection requires that the authority rst approve EIA reports, before it can issue the investment license to investors. But in practice, it occurs the other way around: the investment license is issued before taking into account the EIA. The NSEP, therefore, asks for strengthening the EIA procedures as regulated by the Law on Environmental Protection. It also requires improving public participation in EIA reviews. In addition, the NSEP plans to strengthen the capacity of Provincial People Committees to monitor and inspect compliance with the Law on Environmental Protection. Pollution Prevention Guidelines for new, small, and medium-sized enterprises will be drafted in the near future and will include the introduction of cleaner production principles. The planning to minimize pollution, including air pollution, from existing industries includes: (1) establishing a list of the 4000 most polluting medium and large enterprises in the country and requiring them to install pollution control equipment, or requiring them to relocate outside residential areas; (2) closing down all seriously polluting small enterprises located within residential areas before the end of 2005. Before 2005, MOSTE and MOI will establish a regulation which requires all medium and large enterprises to set up environmental self-monitoring systems to provide information on emissions from their operations. MOSTE and MOI will also issue a set of targets for maximum emission levels in industrial zones to be reached by 2005 and technical guidelines for environmental management in industrial zones. The NSEP states that the Polluters Pay Principle will be effectively applied, but it does not mention in what way this principle should be applied. The NSEP does not suggest any specic economic instruments or voluntary mechanisms to be discussed or applied. However, the NSEP plans that MOSTE, the Ministry of Planning and Investment, and the Ministry of Finance will carry out a comprehensive study to determine which policy instruments provide incentives for environmental protection. In 2004, the Government should also determine a range of nancial incentives for enterprises that invest in environmentally friendly technology, ecosystem restoration, and other environmentally friendly activities. The NSEP plans to raise the levels of the current administrative nes. In addition, the NSEP also requires a review of the Law on Environmental Protection after 10 years of implementation. 257

In summary, the planning for controlling emissions into air in particular from stationary sources for the next 10 years, as outlined in the National Strategy for Environmental Protection, is not very specic. Most of the planning to control pollution of new and existing industries as described above are not new, but are rather a reminder to implement correctly in practice what the laws have regulated. Although the NSEP was supposed to be in effect and implemented by the beginning of 2001, it had not been approved yet early 2004. Therefore the implementation of national planning will be far behind the schedule presented in the NSEP. 9.5.4Summaryandconclusion Environmental legislation in Vietnam has developed mainly from the 1990s on. Before that time, even though the government of Vietnam did mention the necessity of environmental protection, specically since the early 1980s, environmental pollution in general and air pollution in particular was not an issue even with scientists. There exist almost no documents or materials on the subject of air pollution control for that period. Since the 1990s some important initiatives have been taken to deal with environmental problems. A three-layer system of environmental management organizations from the central government to the regional and local government was established. MOSTE/MONRE is the main organization responsible for environmental protection issues at the national central government level. At the regional level, MOSTE delegates its environmental protection tasks to provincial Peoples Committees/DOSTEs. Similarly, at the district level, DOSTEs delegate the environmental protection tasks to district Peoples Committees/Environmental Bureaus. The Law on Environmental Protection, enacted in 1994, was phrased in general terms, but subsequent regulations have specied the structure and content of environmental policy, such as the guidelines on the implementation of the Law on Environmental Protection; the regulations on administrative nes for violation of the Law; and the Circular on the EIA of investment projects. These regulations have been taken up in the past years and in this way environmental policy in Vietnam, specically in air pollution control, has followed the traditional model of command-and-control, characterized by standards and regulations. The TCVN-1995 Vietnam introduced specic national environmental standards including ambient air quality standards, emission standards and technical standards for major pollutants. Originally the emission standards were required to apply uniformly to most of existing and new/modied small, medium, and large stationary sources. The national environmental standards are the minimum requirements that pollution sources must meet. Provinces are allowed to set their own environmental standards provided that they are more stringent than the national environmental standards. Since 2003 the requirement of uniform emission standards to be applied to pollution sources across the entire country has been dropped and differences in air quality are taken into account. New emission standards have been set with differentiated stringency for three different types of location: industrial zones, urban regions, and rural regions. Second, the Environmental Impact Assessment procedure and environmental license has been in place. EIA and environmental license/certicate have become the crucial environmental policy tools to prevent pollution. All sources, including existing and new sources, must have approval of their EIA report in order to continue to operate or to be granted land use and construction permits respectively. Next to that, rms must have an environmental license/certicate to prove that they have complied with their EIA reports. In 258

1998, the EIA procedure has been simplied to allow rms that plan to construct and operate a site in industrial zones/estates which already have approval of their own EIA do not have to go through an EIA procedure for their planned investment but a registration for securing environmental standards. Third, monitoring air quality, inspection of emission sources and sanctions for noncompliance are laid down in legislation. NEA and DOSTEs are in charge of the air quality monitoring and the inspection of emission sources tasks at national and local level respectively. NEA delegates its task of air quality monitoring to three different institutes located in the main parts of the country: north, south, and centre. The monitoring stations take measurements four times a year and report to its authorities: NEA (national level) or DOSTEs (local level). The legislation regulates three types of inspection of compliance: regular, sudden and complaint-based inspections. An either administrative or criminal sanction will be imposed on non-compliance rms. Yet, although the basic legal and institutional structure of environmental protection could be said to be in place, its functioning and implementation have been incomplete and defective in practice. The essential bottlenecks appear to be the following. First, the functioning of the three layer system of environmental organization is thwarted by lack of broad political support for its policy and by conicts on competence of the Ministry for the Environment with sector ministries. Second, differentiation of the emission standards, setting them at a more stringent level in poor air quality areas was certainly a step forward in term of cost efciency and environmental effectiveness compared to the original policy of uniform emission standards. On the other hand the opportunity is missed to increase cost efciency further by differentiating emission standards on the basis of control costs, which can depend on such parameters as type of industry, scale of operations and age of the plant. Third, the EIA procedure is a too heavy handed approach to control air pollution from the large majority of stationary sources. Since Vietnam has chosen for the command and control approach its basic method for imposing its emission standards is the environmental licensing procedure: the rm gets permission to operate its plant on the condition that it complies with the emission requirements. Vietnam could have followed the example of Western industrialized countries by applying the license procedure in the rst place to new and modied sources in the category of potentially polluting activities. Such a procedure does not require an EIA. However, in 1994 Vietnam decided to do things differently. It required an EIA for about every activity and approval of the EIA report was also required to get permission to go on with the planned investment. In 1998 this aw in environmental policy design was partly corrected by abandoning the EIA requirement for rms in industrial zones with an approved EIA report. But this solution created a new bottleneck because it shifts the responsibility to control air pollution of individual rm to the authority in charge of the industrial zone without proper instruction of how to act. There are indications that this problem has been recognized in recent years. NSEP 20012010 mentions that technical guidelines for environmental management in industrial zones will be issued and that targets for maximum emission levels in industrial zones to be achieved in 2005 will be set.

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NSEP 20012010 also implicitly admits the many defects in the EIA procedure. The announcement is made that the review process will be strengthened and that the investment license will only be issued after taking into account the EIA. The intended improvement of public participation in EIA reviews may be of help to increase transparency of the process thus strengthening the incentives for involved parties to respect the rules. A further potential bottleneck is thrown up by Article 29(2) of the LEP which prohibits any activities that result in a discharge of pollution into the air exceeding the Vietnam air quality standards. If taken seriously the Article sets a halt to all investment in industrial capacity in those areas where air quality standards are exceeded or are on the margin of being exceeded. It would create problems similar to those in non-attainment areas in the U.S. However, (to our knowledge) the article has not been applied in practice. Next to the above bottlenecks, which are principally faults in design there are possibly even more important defects in implementation. A major one is the lack of personnel and expertise, mainly due to lack of funding. Such shortages must have had their negative effects on all the stages of implementation, including the process of environmental licensing and the process of monitoring, inspection and enforcing compliance. Next to that the tendency to avoid conicts and straightforward corruption of bureaucracies has created a real obstacle in the implementation of the EIA. Another major defect in implementation is that the enforcement of environmental laws and regulations is very weak. The weakness shows up in every stage of enforcement. Inspections are infrequent and consequently the probability of detection of non-compliance is low. Sanctions, insofar as they are applied, do not bite since they are not strong enough. Industries do not feel pressure to follow regulations because the penalty might not be imposed or, if it is, the ne would be very small compared with the high pollution control costs. In case rms continue to be noncompliant, the authorities have to consider the potential negative social and economic impacts if the authority orders a rm to shut down or relocate. Until now, such strong enforcement measures have rarely been used and criminal penalties were never applied. NSEP 20012010 has identied at least a part of the enforcement problem and proposes remedies: administrative nes are to be raised and the regional capacity for monitoring and inspection is to be strengthened. Next to that medium and large enterprise will be required to set up self-monitoring systems and to report their emissions, thus providing the authority with the information it needs for an effective enforcement policy. One should however, remind that the political willingness to enforce is a fourth and indispensable pillar for achieving a higher rate of compliance. As was discussed, the main environmental policy instrument in Vietnam is the commandand-control approach, but this traditional instrument has not worked well in Vietnam for reasons stated above. Environmental policy-making and management in Vietnam, therefore, remains weak in the face of the negative environmental effects of rapid industrialization.

9.6Instrumentstocontrolpollutionfromvehicles
Air pollution caused by vehicles has become a signicant problem in Vietnam. This is especially true in the center of cities with their intense circulation of motor vehicles. Article 3 260

of the Road Trafc Law of Vietnam (2001) denes vehicles to include automobiles, motorcycles, special tractors, and machinery operating on roads. In recognition of the consequences (severe negative health impacts) of pollution from vehicles, the Government has enacted regulations and is also planning to establish controls. This section will discuss the legislation and its implementation in practice. This section also presents national planning for the next 5 to 20 years. Subsection 9.6.3 gives a summary and conclusion. 9.6.1Legislationanditsimplementation The Law on Environmental Protection (1994) was the rst one that mentioned the control of air pollution from vehicles. Article 22 of the Law regulates that all motor vehicles must comply with environmental emission standards. All motor vehicles that fail to meet the environmental emission standards are not allowed to be in operation. Vehicles and motorcycles are subject to periodic supervision and inspection by authorities. The Law on Environmental Protection left the environmental emission standards as well as the denition of periodic supervision and inspection of transport means or specic sanctions for violation of emission standards to be worked out in later regulations. This was implemented in 1994 with specic emission standards, mainly for new vehicles (including motorcycles) and in 1995 for vehicles already in use before the 1994 Environmental Law. Decree No. 175/CP guiding the Implementation of the Law on Environmental Protection by the government issued on October 10, 1994 did dene the emission standards for new vehicles and new motorcycles (Annex IV of the Decree No. 175/CP). New vehicles and motorcycles are dened as those motor vehicles that are imported or made in Vietnam and registered since the Law on Environmental Protection went into force. The emission standards were separated into those for vehicles that use gasoline and those that use diesel. The emission standards regulate three kinds of pollutants: CO, HC, and NOx based on the reference weight of a vehicle. There are nine levels of vehicle weight for those using gasoline and 7 levels for vehicles using diesel. The unit of testing is g per hour. The lightest one (vehicle with lower weight than 750kg for gasoline-powered vehicles) is allowed a maximum emission of 65 CO; 6.0 HC; 8.5 NOx. The heaviest category of gasoline powered vehicles (heavier than 2150kg) is allowed emission maximums of up to 143CO; 9.6 HC; 13.6 NOx. The emission standards for the lightest vehicles with Diesel-power (heavier than 750kg but less than 850kg) are 58 CO; 19 HC+NOx. The emission standards for the heaviest vehicles with diesel-powered engines (heavier than 2150kg) are 110 CO; 28 HC+NOx. Actually, these standards were based on the vehicle emission standards of ECE 15-03 and 15-04. For new motorcycles, the emissions of HC must be less than 5,0g/km; CO must be less than 12,0g/km. The emission standards for vehicles and motorcycles are the same everywhere in the country. For existing motor vehicles which operated before the Law on Environmental Protection came into effect in 1994, article 26(3) of Decree 175/CP provided that technical solutions must be applied to minimize the smoke and toxic exhaust discharged into the air. Starting with April 1, 1995, all kinds of motor vehicles in cities must ensure that the amount of smoke discharged into the air does not exceed 60 hart-ridge units (15hart-ridge units apply to new diesel-powered vehicles (Annex IV of Decree 175/CP)). Furthermore, in June 1995, MOSTE issued Circular No.1449/MTg which regulates the emission standards for new and 261

existing motor vehicles, the so-called 22TCN224-1995. According to the Circular, as of August 1, 1995, existing gasoline-powered vehicles are not allowed to emit CO beyond 6%. The Circular regulated only CO, not HC. For existing diesel-powered vehicles, the smoke level is not allowed to exceed more than 50%HSU. For new vehicles emission standards remained the same as emission standards regulated in Annex IV of Decree No.175/CP (1994). Decree 175/CP provides that any vehicle, including motorcycles, that does not comply with the emission standards stated above will not be allowed to operate and it makes the Ministry of Transportation (MOT) responsible for conducting inspections and granting certicates to vehicles that meet the emission standards. MOT shares its inspection tasks with the Vietnam Register; assisting the Vietnam Register is its Centre for Vehicle Management and Inspection (Circular 135/PC-KHKT dated June 27, 1995; and Decision No.4105/2001/QD-BGTVT of 2001). Thus, in blueprint since 1994, new and in-use vehicles and motor vehicles were supposed to pass the emission inspection at the time of registering that vehicle or motorcycle. Smoke and CO inspections for new gasoline-powered vehicles have been instituted since April 1, 1995; and since August 1, 1995 smoke inspections exist for in-use vehicles and motorcycles. Any vehicle or motorcycle that fails to meet emission standards must be repaired and reinspected until it passes the inspection. Furthermore, vehicles are also supposed to pass the periodic inspection for emission standards within a 6 to 30 month period, depending on the type of vehicles. However, in practice, the policy was mainly a failure. The reasons include bottlenecks in the design of the policy, in its implementation as well as in its enforcement. Bottlenecks in design did arise because the authorities (STAMEQ, NEA, and Vietnam Register) lacked experts to develop emission standards for road vehicles. In establishing the 1995 emission standards for existing cars it was insufciently taken into account that the stock of existing cars is on average very old and that a very large part would not be able to meet the standards. Neither had it been taken into account that air pollution by mobile sources is mainly a problem of the big cities, which means that regulation and its implementation should have been focused on cars registered in these urban areas. On the other hand new cars were imported, many of them from countries where car makers had to meet stringent standards at home, which simply could have been adopted as meeting the Vietnamese standards. Bottlenecks were also found in the implementation and enforcement of the policy. In the rst place the program was far too ambitious in the face of personnel and equipment available for carrying out the tasks. Emission standards had been set for new and old cars and motorcycles. Moreover the standards did take effect almost immediately in a situation where the whole organization and equipment for inspection still had to be build up. One can understand that even with most intensive efforts only a small part of the program could have been implemented in the rst years of the program. Actually it was worse than that. For both the authorities and the general public the concept of inspection or meeting emission standards for a vehicle was very new. Granting inspection certicates at the time of registration for a new vehicle was mostly just setting a rubber stamp, because the Vietnam Register did not have the capacity to test newly-manufactured/assembled vehicles. It simply accepted foreign testing results as meeting Vietnamese standards, which were based on ECE and EC standards. This rst omission did probably not have serious negative consequences for the environment in so far as new cars were involved; for used cars it is different. However, the most serious 262

failure was not implementing the provision of the Law on Environmental Protection that vehicles and motorcycles are subject to periodic supervision and inspection by authorities. Actually, because of the signicant lack of inspection stations, there hardly were any checks for emission standards of a new or in-use vehicle. For motorcycles there even was no emissions inspection at all. Even if there was a check, non-compliance vehicles were still allowed to operate even though Law and Decree No. 175/CP stipulated the opposite. In addition, many motor vehicles that pollute heavily had operating licenses; they could not be ned in such cases. The result of lacking inspections and weak enforcement made the regulation virtually ignored. Many substandard used vehicles and motorcycles continued to be imported. Reacting to these bottlenecks MOSTE reconsidered its policies in 1997/1998 and did set priorities. In the rst place it revised some of the emission standards, choosing for a more gradual and differentiated approach by distinguishing 3 levels of stringency for in-use cars, starting implementation at the least tight level and then only in the four biggest cities. It implied that old cars outside those cities would remain unregulated for the time being. Next to that, emission standards for in use motorcycles were not to be implemented, even not in the four biggest cities. Also emission standards for new cars and motorcycles were issued. The details of the revised emission standards and inspection programs are given in the next subsections. Revisingemissionstandards In December 1, 1997, MOSTE issued Decision No.2019/QD-MOSTE on General technical requirements for Importing Used Equipment. The Decision includes imported vehicles and motor vehicles. Accordingly, all imported vehicles and motor vehicles must retain at least 80% of their original quality and they must comply with environmental emission standards for that type of vehicle (Point V of the Decision). The inspection of a vehicles quality can be performed by either the Inspection Organization of the exporting country or by Vietnam. The purpose of the Decision was to prevent the importation of sub-standard equipment into Vietnam in order to protect the environment. In 1998, the MOT revised emission standards, the so-called TCVN 6438:1998 Road Motor Vehicle Emissions Maximum Permitted Limits for in-use motor vehicles with 2 stroke, 4 stroke and special stroke engines30. The emission standards distinguished three levels of stringency. Level 1 set the least stringent emission standards for in-use cars. They are less stringent than the earlier emission standards regulated in 22TCN224-1995. They started to apply in August 1999, but only for automobiles registered in four central cities: Hanoi, Haiphong, Danang and Hochiminh City. Actually, since 1999 to 2003, Vietnam has applied only emission standards at level 1. The more stringent levels 2 and 3 for in-use cars are reserved for application in the future.
The TCVN 6438:1998 emission standards are as follows: Gasoline-powered vehicles registered before August 1, 1999: 6.5% CO (level 1), 6.0% CO (level 2), 4.5% CO (level 3) and 1500 parts per million (ppm) HC (level 2) for 4 stroke engines, 7800ppm HC for 2 stroke engine, 3300ppm HC for special engines; 1200ppm HC (level 3) for 4 stroke engines, 7800ppm HC for 2 stroke engines, 3300ppm HC for special engines. Diesel-powered vehicles registered before August 1, 1999: 85% HSU (smoke) (level 1), and 72% HSU (level 2).Gasoline-powered vehicles registered after August 1, 1999: 4.5% CO, and 1200ppm HC for 4 stroke engines, 7800ppm HC for 2stroke engines, 3300ppm HC for special engines. Diesel-powered vehicles registered after August 1, 1999: 72% HSU (smoke) (level 1), and 50% HSU (level 2).
30

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Also in 1998, the emission standards, named TCVN 6431-1998, for newly-manufactured gasoline-powered motor vehicles, including motorcycles, were issued. The emission standards level for CO in TCVN 6431-1998 for new gasoline-powered automobiles is a bit more stringent than the one regulated in Decree No.175/CP of 1994. For example, the emissions of CO in TCVN 6431-1998 allow up to 58g/hour for a vehicle weight of up to 1020kg; 110g/hour for a vehicle weight heavier than 2150kg. Instead, the emissions of CO in Decree 175/CP for a vehicle weight up to 1020kg is 76g/hour, 143g/hour for a vehicle weight heavier than 2150kg. Whereas the emission standards of HC and NOx were regulated separately in Decree 175/CP, they are regulated together in TCVN 6431-1998 (HC+NOx). The emission standards of HC+NOx in TCVN6231-1998 differentiate between automobiles for 6 passengers and automobiles with more than 6 seats or trucks. As described above, emission standards levels of HC and NOx in Decree 175/CP was regulated for all kind of vehicles with the same weight. Compared with emission standards of HC and NOx in Decree 175/CP, the emission standards of HC+NOx in TCVN 6431-1998 are less stringent. For example, in TCVN 6431-1998, for a vehicle weight from 1470 to 1700kg, the emission standard of HC+NOx is 23.5g/hour (a 6-passenger vehicle), 29.4g/hour (a vehicle with more than 6 passengers or a truck); in Decree 175/CP, if a vehicle with the same dimensions in weight (from 1470 to 1700kg) was allowed to emit up to HC 8.1g/hour and NOx 12.3/hour. The emission standards for newly-manufactured motorcycles in TCVN 6431-1998 differentiate between motorcycles with 2 stroke and 4 stroke engines and between motorcycles with different weight (less than 100kg, from 100 to 300kg and heavier than 300kg). There are two levels of emission standards for CO and HC respectively for 2 stroke and 4 stroke engine motorcycles and for both levels the emission standards are less stringent than those regulated generally for all types of new motorcycles in Decree No.175/CP31; except emission standards of HC at level 2 of TCVN 6431-1998 for 2 stroke and 4 stroke engine motorcycles, regardless of weight, which are the same as was regulated in Decree No. 175/CP). The emission standards of motorcycles in TCVN 6431-1998 were based on the corresponding motorcycles emission standards of ECE 40-01 (Type 1, level 1) and TIS 11851993 (Type 1, level 2). In 1999, the emission standards for newly manufactured diesel-powered automobiles were set in so-called TCVN 6565-1999. These emission standards are the same as emission standards set for newly manufactured gasoline-powered automobiles. A comparison of TCVN 65651999 with the emission standards in Decree 175/CP for diesel-powered automobiles shows that the level of emission standards of CO are almost the same; the emission standards of HC+NOx automobiles with no more than 6 seats are also the same as those in Decree 175/CP. As was said above, the emission standards in Decree 175/CP did not make a distinction between automobiles by number of seats but by weight only. In TCVN 6565-1999, even with the same weight, an automobile with more than 6 seats or a truck, is allowed to emit more

For example, in TCVN 6431-1998, emission standards at level 1 of CO for a 2 stroke and 4 stroke engine motorcycle with less than 100kg is 12.8g/km; HC is 8.0g/km; for a 2 stroke engine motorcycle with more than 300kg; emission standards of CO is 32.0g/km; HC is 12.0g/km. At level 2, the emission standards of CO is 13.0g/km and HC is 5.0g/km for all types of motorcycles. While emission standards of all types of motorcycles, regardless of stroke and weight, as regulated in Decree 175/CP was HC: less than 5.0g/km; CO:12.0g/km.

31

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HC+NOx than an automobile with 6 seats32. Actually, the establishment of these emission standards in TCVN 6431-1998 and in TCVN 6565-1999 for new gasoline and diesel motor vehicles respectively were based on the vehicle emission standards of ECE 15-04. From the comparison of the new (1998, 1999) emission standards with the old (1994, 1995) standards appears that overall and for all categories of motor vehicles and motor cycles, newly manufactured as well as in-use, the new requirements are somewhat less stringent than their predecessor. The next step in pollution control of mobile sources was Prime Minister Instruction No24/2000/CT-TTg, issued on November 23, 2000. From July 1, 2001 on Vietnam would use petrol without lead instead of using lead-added petrol for vehicles. The Instruction was the consequence of Vietnam signing an agreement between ASEAN countries on October 7, 1998 that all petrol-vehicles in ASEAN countries must use unleaded petrol. Since Vietnam had never produced leaded petrol, the transfer from using leaded petrol to unleaded petrol in Vietnam was quite simple and at lower costs compared with other ASEAN countries. Since July 2001, Vietnam has been importing only unleaded petrol. In 2001, TCVN 6438 added emission standards for imported used vehicles. Since then, TCVN 6438-1998 is named TCVN 6438-2001. The emission standards for imported used gasoline-powered vehicles are as stringent as the emission standards for gasoline-powered vehicles rst registered after August 1, 1999: 4.5% CO, and 1200ppm HC for 4 stroke engines; 7800ppm HC for 2 stroke engines; 3300ppm HC for special engines. For dieselpowered imported used vehicles, the maximum emission of smoke is 72 HSU. This part of TCVN 6438-2001 is adapted to Decision No.2019/QD-MOSTE (1997) on General Technical Requirements for Importing Used Equipment. The Decision provided that all imported vehicles and motor vehicles must retain at least 80 percent of their original quality and must comply with environmental emission standards for that type of vehicle. TCVN 6438-2001 is currently the environmental standard for qualifying an imported used motor vehicle. In June 2001, the National Assembly of Vietnam enacted the Law on Road Trafc (LRT), which became effective on January 1, 2002. The LRT concentrated mainly on the regulation and safety of road trafc. The LRT regulated three main subjects related to environmental protection: (1) automobiles and motorcycles must comply with environmental standards (article 48); (2) all road motor vehicles must comply with compulsory periodic inspections for technical safety and environmental protection standards (article 50(3)); (3) the owners of all road vehicles, and drivers must maintain their vehicles so that they comply with emission standards during the intervals between periodic inspections (article 5). Subjects 1 and 2 are not new; the LRT just repeated generally what was said in the Law on Environmental Protection and Decree 175/CP. However, with regard to subject 3 it was the rst time that the obligation of maintenance of vehicles was mentioned. The next subsection on inspection and maintenance gives further details on subject 2 and 3 and the actual implementation of it in practice.
32 For example, instead of emitting a maximum of up to 19g/km of HC+NOx as provided for an automobile weight of up to 1020 kg with no more than 6 seats, an automobile with more than 6 seats or a truck with the same weight is allowed to emit up to 23.8g/km of HC+NOx.

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ImplementationofInspectionandMaintenance Inspection The discussion of inspection before August 1999 presented above did show that the regulations applying to vehicular sources pollution control existed on paper, and were not applied in practice. Since August 1999 this has changed: after TCVN 6438-1998 emission standards for in-use motor vehicles was issued, compulsory emission inspections have been applied to all in-use motor vehicles having three wheels or more, including special tractors and machinery operating on roadways. The Law on Road Trafc, article 50(3) provides that vehicles operating on roads shall be subject to compulsory periodic inspections to determine compliance with technical safety and environmental protection standards. The emission inspection is based on TCVN 6438-1998/2001, level 1 only. Levels 2 and 3, are more stringent than level 1 and are reserved for application in the future (see for more details in subsection 9.6.2 on action plan 20012010). For emission inspection of imported used vehicles, TCVN 6438-2001 is applied. Any vehicle that fails inspection must be repaired and re-inspected until it passes. Up to 2003, motorcycles have not been checked for emission standards. With respect to automobiles, only those registered in four central cities (Hanoi, Haiphong, Danang and Hochiminh City) must undergo inspection of environmental emissions. Vehicles from other provinces that operate in these four cities also are subject to emission standards inspection. Other provinces/towns/villages of the country are not required to conduct environmental emissions inspection yet, except safety inspections. Under the new regime the application of emission inspections for used automobiles has been quite effective. Most of cars in these four big cities went through the emission inspection. In 2000 and 2001, on average about 18% of the vehicles in the four cities failed emission inspections. These failed emission inspection cars are required to be repaired and checked again (Vietnam Register, 2002). The number of inspection stations has increased quickly. The inspection stations were initiated in 1995 with only 12 stations managed by the Vietnam Register. In 2001 the number had increased to 78 stations located in all provinces of the country of which 62 stations are managed by the Vietnam Register and 16 stations are managed by local authorities. Most of the inspection stations are equipped to inspect technical safety and emission levels. Since the emission inspection stations are growing in number, other provinces and cities are now encouraging the implementation of emission inspections for in use automobiles. Yet, these efforts had just started in 2003 and not many provinces had followed yet. Until 2003 the Vietnam Register had no capacity yet to implement testing of newly manufactured/assembled vehicles. In practice, similar to the period 1995 to 1999, it had to accept foreign testing results as a basis for Vietnamese standards, which are based on ECE and EC standards. MaintenanceSystem Article 5 of the Law on Road Trafc (2001) stipulates that the owners of vehicles and drivers must be responsible for maintaining good technical conditions between periodic inspections of vehicles in accordance with the emission standards when operating on road. In practice, this regulation could not yet be applied. At the moment, Vietnam Register is only making plans for a pilot project to evaluate the feasibility of periodic maintenance for vehicles in 2004. If successful, the maintenance would possibly start in 2006 (Pham Quang Thanh, 2003). 266

Sanctions The sanctions for any kind of vehicles not complying with environmental emission standards have been regulated in several documents. Article 22 of the Law on Environmental Protection (1994) stipulates that substandard motor vehicles are not allowed to operate on roads. Article 26(3) of Decree 175/CP (1994) says that any transportation means which fails to meet standards must suspend its operation. As was discussed above, because of weak implementation and enforcement of the Law on Environmental Protection in general, controlling pollution of vehicle sources in particular, the sanctions regulated in these two regulations had not been applied. In 2001, the Government promulgated Decree No. 26/2001/ND-CP specifying an administrative ne for non-compliant vehicles: a ne of VND 500,000 (approximately USA $32) is placed on anyone who drives autos that produced emissions above the permitted level. Compared with the average income of an employee this ne is severe: almost a months salary. Therefore, again, it was not actually applied. Realizing of the infeasibility of this administrative ne, in February 2003, the Government replaced Decree No. 26/2001/ND-CP with another, Decree No. 15/2003/ND-CP on Administrative nes for road trafc violators of which article 24 stipulates a ne of VND 100,000 to 200,000 for anyone who drives any motor vehicle that does not comply with emission standards. This ne is still very high by Vietnamese standards. However, at a certain level, Vietnamese people can afford it since currently the ne mainly applies to automobiles. The Decree covers all motor vehicles. However, as was mentioned, there is still no emission inspection for motorcycles to date. Therefore, there is no evidence of implementing a ne for substandard motorcycles. Publictransportation Public transportation in Vietnam remains virtually undeveloped, except for big cities such as Hanoi and HCMC, which have a small number of buses, most of them very old (in Hanoi about 80 percent of buses are 10 to 20 years old; in HCMC, the average age of buses is 25 years) (Action Plan Group, 2002) (More details about public transportation system in HCMC will be presented in section 9.7); other cities hardly have any buses. In 2000, public transportation in both Hanoi and HCMC met only 3 percent of the citys total transportation needs (Action Plan Group, 2002). In general, the public transportation network in Vietnam is not convenient, and buses are seldom on time. As a result, bus transportation is unattractive to almost all passengers. Those using public transportation are people who have no other option. The underdevelopment of public transportation is also caused by weak infrastructure, such as a shortage of space for stations, including stations located in safe areas not vulnerable to trafc accidents and congestion (Action Plan Group, 2002). This failure of public transportation has caused a shift from public to personal transportation, especially to motorcycles, which contributes terribly to trafc congestion and urban environmental air pollution. 9.6.2ActionPlan20012010 The National Strategy for Environmental Protection (NSEP) for the period 20012010, which was prepared by MOSTE and was still waiting for Government approval in 2003, emphasizes that it is necessary to control air pollution emitted by transportation sources by applying strict vehicle emission standards. The vehicle maintenance system must be developed. In particular, public transportation will be promoted in all major cities, and pedestrian areas will be 267

designed in the centers of Hanoi and HCMC. The NSEP required improving the enforcement capability of the Law on Environmental Protection at all levels, but did not give further details on how to achieve these objectives. This is just a very basic plan. On the implementation of this strategy, based on the spirit of NSEP, additional documents of MOSTE or of other related ministries (e.g. the Ministry of Transportation) will be issued to provide specic guidelines on how to reach the objectives of the strategy. The Integrated Action Plan to Reduce Vehicle Emissions prepared by the Multi-sectoral Action Plan Group is provided below as an example. In 2002, the Asian Development Bank assisted Vietnam in establishing an Integrated Action Plan to Reduce Vehicle Emissions in Vietnam. The Ministry of Transportations Vietnam Register was designated as the agency responsible for coordinating the Multi-sectoral Action Plan Group, in which Asian Development Bank consultants and other related agencies such as NEA, STAMEQ of MOSTE, Ministry of Health, Ministry of Planning and Investment, etc. participated, in drafting the so-called Action Plan. It is simply a research report, but considered to be a very important document that NEA could draw on to issue specic plans to control pollution from vehicular sources in the future. The content of the action plan for vehicle emission reductions is as follows. 1. Adapt emission standards for vehicles, including motorcycles, to be in line with European standards. For example, for new gasoline-powered automobiles (newly assembled, manufactured and imported), MOSTE will set new emission standards that are more stringent than the current emission standards. MOSTE will base those on European standards for vehicles, No. 98/69/EC (B) (Euro 4), with vehicle emission standards for Vietnam of CO(g/km) 1.0, HC(g/km) 0.10 and NOx(g/km) 0.08. These new standards for automobiles are supposed to be applied in 2005. For new motorcycles, the Action Plan proposes emission standards of CO(g/km) 4.5, HC+NOx(g/km) 3.0 (applied in 2004); in 2007 these standards for motorcycles will become more stringent: CO(g/km) 3.5, HC+NOx(g/km) 2.0. For in-use gasoline automobiles, including used imported automobiles, as of the beginning of 2003, the Action plan proposes to apply level 2 of vehicle emission standards TCVN 6438-1998/2001 for automobiles registered at four central cities only (Hanoi, Haiphong, Danang, and HCMC are currently applying level 1 of TCVN 6438-1998/2001. See subsection 9.6.1). Level 2 of TCVN 6438 applied for automobiles located in other provinces are currently not applied. In 2005, level 3 of TCVN6438 for automobiles will be applied in four central cities, level 2 in other cities. For in-use motorcycles, level 1 of TCVN6438 will be applied during inspections. At the moment, as was said in subsection 9.6.1, there is no application of emission standards to motorcycles and no emission inspection for motorcycles at all even though TCVN6438 regulated emission standards for both automobiles and motorcycles. For in-use diesel-powered automobiles, including used imported automobiles, starting in 2003, and level 2 of TCVN6438 will be applied for automobiles in four central cities; level 1 will be applied in other provinces. For new diesel-powered automobiles, from the year 2005, ECE 83-02(93/59/EEC) (Euro1) will be applied to light automobiles: CO(g/kg 1.0; HC+NOx(g/km) 0.70; PM(g/km) 0.08. Also from 2005 on, ECE 49-02(B) (Euro2) will be applied to heavy diesel-powered automobiles (g/kWh): CO 4.0; HC 1.1; NOx 7.0 and PM 15.

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The emission standards for both new and in-use gasoline-powered automobiles, motorcycles and diesel-powered automobiles (there are no diesel-powered motorcycles) are expected to have more stringent applications after every 2 to 3 years. The Action Plan also plans to set up an emission laboratory for light, heavy diesel and gasoline-powered autos in 2005; and emission testing stations will be established for motorcycles in 2004. 2. Improve inspection and maintenance by upgrading the inspection station system and developing regulations on maintenance work. The implementation of emission standards inspection of automobiles will be extended to other cities of the country (as point 1 said). It will require increasing the number of emission testing stations. A plan will have to be developed to regulate annual inspections of motorcycle emissions in 2004. The Action Plan establishes a plan to regulate compulsory maintenance of vehicles between two inspections. The Action Plan also suggests a project to strengthen administrative measures when vehicles fail standards. The Action Plan says generally that vehicle owners must be held accountable when their vehicles do not meet required standards, but the Action Plan does not suggest specically how to improve the current administrative nes (see 9.6.1 Sanction). 3. Improve the quality of gasoline and diesel by way of stricter fuel composition standards such as reduction in the benzene content of gasoline (to be reduced from 5% to 2.5% in 2003, from 2.5% to 1% in 2005) and the sulfur content in diesel (to be reduced from 0.5% and 1% to 0.2% in 2003, from 0.2% to 0.05% in 2005). 4. Introduce alternative fuel consumption: conducting pilot studies on LPG consumption in gasoline-powered vehicles; setting up emission standards for LPG powered vehicles; reducing VAT and corporate income taxes for taxi companies using LPG; using LPG trucks in Hanoi and HCMC in 2005. 5. Improve trafc management by improving the transportation infrastructure and public transportation, by reducing trafc density in Hanoi and HCMC. The use of motorcycles should be limited. 6. Introduce water spraying and road sweeping: using water sprayers and road sweepers to reduce dust; investing in water trucks for spraying. 7. Raise environmental awareness of all stakeholders: governmental agencies, vehicle manufacturers, vehicle users, etc. Raising environmental awareness should be done through conferences and seminars on environmental pollution for central and local leaders and policymakers; creating and disseminating mass circulars on vehicle emission priorities and health and environmental threats; creating and disseminating mass circulars on technical vehicle emission issues, such as vehicle types, maintenance regimes, effects of fuel use, vehicle use regimes, and suitable measures for owners to reduce vehicle emissions; developing a web site on vehicle emissions. Include information such as vehicle eet growth, vehicular-generated air pollution, measures to reduce emissions, and new domestic and regional policies, and owners responsibilities regarding vehicle inspection and maintenance and retiring old vehicles. Support of mass media should be sought for better public transportation and encouraging investment in public transport services. 269

9.6.3Summaryandconclusion Transportation has become a major source of air pollution in Vietnam and it will go on to grow if no action is taken to control it, especially since the number of motorcycles increased rapidly. Controlling air pollution from mobile sources was absolutely absent both on paper and in practice before the enactment of the Law on Environmental Protection in 1994. Since then, the emission standards for new and in-use motor vehicles (including motorcycles) have been established. The regulations concerning inspection and sanctions were in general terms also formulated in the legislation. However, even though control pollution of transportation means did nd its place on paper, implementation in practice was virtually ignored in the rst years of the new law. The general problem was that the program was over-ambitious by not taking into account that the policy had to start from scratch. Specically three bottlenecks have to be mentioned. The rst bottleneck was that the emission standards for both new and in-use vehicles were too stringent, in particular with respect to the condition of the vehicles in Vietnam where the cars are old and there is no maintenance system. The second bottleneck was a lack of inspection stations and a serious lack of experts for doing the inspection of motor vehicles. Since there were no inspections car owners did not have to fear sanctions for not complying. The third was a potential bottleneck: originally the sanction of taking out of operation vehicles which do not comply with the emission standards and next the introduction of a very high ne for non-compliance in 2001 was so harsh that they hardly would have been applicable. However, since inspections were not carried out the sanctions were not an actual bottleneck. The problems existed until 1998, when the emission standards for newly-manufactured and in use vehicles, for automobiles as well as motorcycles, were adjusted to the condition in Vietnam. Even more important a beginning was made in establishing and operating inspection stations. The number of inspection stations has gradually been increasing and they are starting to do their job. Since the beginning of 2000, the new emission standards for inuse vehicles and the emission inspection regime have been implemented in four central cities of the country. Other cities are now encouraged to follow. By lowering the ne in 2003 the sanctions for vehicles in violation of emission standards have also been adjusted to be more feasible. For newly-manufactured or imported vehicles the Vietnam Register accepts foreign testing results as meeting Vietnamese vehicle emission standards, which are based on ECE and EC emission standards. A big remaining bottleneck is motorcycles, which are a major source of air pollution. Vietnam did set the emission standards for new and in use motorcycles on paper as early as 1999, but the implementation of the policy is still absolutely absent in practice. Establishing a procedure for inspection of new motor cycles and setting up and operating stations for inspecting emissions of in-use motorcycles should have high priority. Public transportation has not developed yet in Vietnam. In small cities there are no buses. In big cities, such as Hanoi and HCMC, public transportation has met only 3 percent of total city transportation needs.

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Optimistically speaking, air pollution caused by mobile sources will gradually reduce if the policy of inspection and application of non-compliance sanctions is extended to the rest of the country and enforced. Moreover, applying the same policy to motorcycles is an absolute priority. The Action Plan for reducing vehicle emissions provided in itself very useful guidelines for reducing emissions from mobile sources further in the next 5 to 10 years. A real effort should be made to implement it properly. Developing public transportation to provide 20 to 30 percent of the total transportation demand of a city will help people to reduce the use of their own vehicles, in particular motorcycles. Tightening vehicle emission standards and improving the quality of gasoline and diesel will also contribute signicantly to reducing pollution from motor vehicles. One of the best moves of Vietnam to control air pollution from vehicles was the successful phase-out of lead in gasoline in 2001.

9.7EnvironmentalpolicyinstrumentsinHCMC
9.7.1Introduction With a population of 5.2 million, HCMC is the biggest city as well as the biggest economic center of Vietnam. The greater HCMC metropolitan area is one of the most industrialized areas of Vietnam and, recently, many different kinds of national and international industries such as textiles, the food industry, chemicals, paper mills, and metal processing have expanded into the area. Medium and large scale industries are rapidly being established and expanding in industrial areas, zones and estates around HCMC. HCMC is also one of the most densely populated areas, with the highest number of motor vehicles, especially motorcycles. These sources have caused and still do cause severe environmental problems. HCMC region suffers from a variety of environmental ills caused by industries and vehicular pollution. In 2001, there were a total of 28,573 industrial rms in HCMC, of which 128 SOEs were owned by the central government; 152 SOEs belonged to the local government; there were 27,901 private enterprises and 390 joint-venture enterprises. 700 industrial enterprises of the total number are medium and large sized enterprises (HEPZA, 2002). The rest of them are small-scale enterprises. Most of the enterprises are located adjacent to or in densely populated areas of HCMC. Most of the small and medium sized industries are over 20 years old; the technology is out of date. The small-scale enterprises do not control emissions and have little opportunity to adopt pollution control treatment technologies because they lack the nances, space, and environmental management knowledge. Ambient monitoring data of HCMC for the period 1996 till 2001 indicates that: PM levels near major roads were 2 to 7 times higher than the permitted standard; lead levels near major roads were lower than Vietnam permitted standards, but 2 to 3 times higher than WHO standards; 1hr-average CO levels monitored at all stations in HCMC were often 1.5 to 2.5 times higher than standards; SO2 concentrations in the areas surrounding oil-red power plant, industrial combustion sources such as boilers are higher than standards. However, ambient SO2 concentrations measured a long way from these main sources are lower than permitted standards. Therefore, SO2 is considered of a lower priority than PM and CO to control. NOx, is not a priority pollutant in HCMC Because, generally, measurements meet ambient standards. Cement plants are a signicant source of PM. However, the emission of PM from cement plants causes localized exposure only, whereas the emission from vehicles

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causes widespread exposure. In addition, there have been many complaints about odor pollution. It is a signicant problem not only in HCMC but also in many other cities. Although environmental policy is still relatively underdeveloped in Vietnam, DOSTE of HCMC is the most active in environmental policy to control pollution compared with other provinces of Vietnam. Most of the environmental policies which have been applied in other provinces are derived from the efforts and experience of HCMC. Therefore, HCMC will be presented as an interesting example of air pollution control policy at the local level in Vietnam. 9.7.2CurrentprogramsinHCMCtocontrolairpollutionfromstationary sources Next to the measures issued by the central government which apply in the whole country, extra environmental programs are implemented in HCMC to control air pollution from stationary sources. Among them are establishing a Black book of serious polluting industries, establishing a Revolving Fund for Pollution Reduction and removing polluting industries from residential areas to relocate in industrial zones outside the city is three main programs. TheBlackBookprogram DOSTE and the Department of Industry have established a black book in which 87 serious polluters are listed. These polluting industries are required by the city government to set up technical measures (e.g. end-of-pipe treatment) to control pollution within a specic period of time. After this period of time, if the indicated industry has not taken any action, the industry will get a warning or administrative nes will be imposed and it will be given another period of time to install technical measures. If after this second period, the industry still does not comply with the order, and then it can be put on a list to be shut down or re-located to one of nine industrial areas outside of the city. In practice, placing those industries on the relocation list is easier than shutting them down because, as was discussed in section 9.5.2.3, shutting down a serious polluting industry is very rarely executed and actually almost impossible, not only in HCMC but in the entire country. Therevolvingfundforpollutionreduction This program was established to support industries which invest in pollution control measures and technologies. It consists of a low interest loan at 0.85% per year to those rms. At present, enterprises are being assessed as to whether they invest enough in technology to limit pollution emissions; if they do, they will be granted loans from the Fund (HCMCs DOSTE, 2003). Theprogramtoremovethepollutingindustriesfromresidentialareas This program differs from the Black Book Program in that it is geared to tackling the pollution problems created by medium and small sized industry. The program is implemented by DOSTE, the Department of Industry, and the Housing Fund Unit. The program has been on paper since 1997, but the implementation was almost forgotten until the beginning of 2002, when, under heavy pressure of environmental pollution, the authorities paid attention to this policy. The reason for the delay in implementation was lack of nancial means for providing subsidies, or offering a reasonable price for a new location, etc in order to create 272

incentives for rms to move. Since the beginning of 2002, a so-called removal guidance committee has been established to help the Peoples Committee of HCMC re-locate polluting rms to the industrial zones. The committee set itself three major tasks: (1) At the end of 2004, all polluting enterprises which do not have the capacity to control pollution at their present location should have moved to the industrial zones or near industrial zones. (2) Relocation of the handicrafts to one location in order to establish handicraft villages for better cooperation among them. (3) Development of industrial zones in HCMC in accordance with the planning document. The DOSTE of HCMC has gathered information by sending questionnaires to rms and it then analyses the questionnaires in order to decide which rms have to move. The result of the investigation is that 260 polluting enterprises were indicated to be relocated during 20022004 (Le Van Khoa, 2002). The Peoples Committee also established a list of 14 types of industry that might generate pollution, and these types of industries will not be granted the investment permit to start and operate an establishment in residential areas. The existing industries which belong to this group will be moved to other areas outside the city. To encourage polluting rms to re-locate, the authorities have suggested several options, such as giving loans with low interest rates, decrease taxes, low rent, etc. for industries relocating before the year 2005. However, until 2003 none of these suggested options had been applied. The relocation of small and medium scale polluting enterprises seems at rst view a good way to reduce their impact on residential areas to protect public health and to have better control of emissions at their new premises. However, relocation is a far from perfect solution for pollution control. Several environmental arguments against such a policy can be mentioned. For example, the relocation of polluting enterprises to industrial zones outside of the city could be just a temporary means to get rid of environmental pollution from an urban to a more rural setting. And the important intended advantage of establishing common treatment of waste stream or other kind of pollutants is only valid for enterprises with similar kinds of pollutants. Moreover, in Vietnam, the inspection and monitoring of environmental policy implementation in industrial zones is weak, so the policy of relocating polluting enterprises is just a way to move the pollution from one place to another (Dasgupta, 2000; Frijns, 2000). There also are economic risks involved with the relocation of enterprises. Most enterprises in HCMC cannot afford the costs of relocation, or they fear that the extra cost will weaken their competitive position. Or the rms are unable to acquire the capital they need for removal and installation of new technologies (Saigon Times Daily Newspaper, April 8, 2002). The enterprises will only move if they are granted adequate facilities, such as water and electricity and if there is sufcient nancial support in the form of subsidies or loans. But facilities and support are hardly provided by the authorities because the authorities budget is limited too and the banking system for loans to small rms is underdeveloped. Often nancial compensation for relocation is limited or non-existing. In addition, many small enterprises cannot nd a new location because the industrial zones refuse to rent the location within the industrial zones at a low price while the existing industrial zones are almost full (Laborers Newspaper, July 25, 2002). The land rent in industrial zones is very high (40 to 70 usd/m2), which is beyond the nancial capacity of small enterprises (Le van Khoa, 2002).

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Perhaps the major bottleneck of this strategy is the failure to take into account the daily reality of the small-scale enterprises in HCMC. Small enterprises are located in the rst place in residential areas for their own reasons and the relocation policy seems to ignore the reason why they are there. The reasons for their original location choice are to be within easy reach of their customers and other enterprises. Especially family-based enterprises run the risk of higher transportation costs to the markets if re-located further away and, as a result, risk loosing their customers. For these reasons, most enterprises are not willing to relocate. According to Blackman (2000), the relocation of enterprises will be effective only if the government provides sufcient nancing for enterprises. Despite the arguments about the disadvantages of the relocation policy, it is still progress in policy-making for pollution control. The relocation policy seems to be a good solution in the short term for public health and for solving the continuous complaints of communities that live near polluting rms. However, relocation should be restricted to the plants which constitute really big threats and risks to health and the policy should be embedded in a general policy that really enforces the applicable standards. Shutdown of plants which can neither control pollution on location, nor move to another place, should complete the approach. 9.7.3CurrentprogramsofHCMCforcontrollingpollutionfrommobilesources Ambient air quality monitoring indicates that vehicles are the major sources of pollution in HCMC. The main pollution sources are the vehicles with 2-stroke engines, mainly motorcycles, and poor road quality. According to the data of the General Statistic Department of HCMC, the number of motor vehicles registered in HCMC has rapidly increased from 939,000 in 1993 to about 2,500,000 in December 2002, of which 93% are motorcycles (HCMC Police Newspaper, December, 10, 2002). This represents an annual average growth rate of about 15%. The vehicles contribute particularly to high concentrations of PM, CO, and hydrocarbon emissions. Trafc congestion in HCMC is exacerbated by insufcient and poor roads, as well as the development of residential and business properties concentrated along the road networks without any proper planning and control. This trafc congestion even makes the air pollution situation in HCMC more severe. As happened in all other cities of the country, before 1999 the enforcement of the national policy on controlling pollution from vehicles in HCMC was very weak. The authorities were concerned only with the safety of trafc and with solutions to reduce trafc congestion, for example by expanding trafc routes or building new streets and forbidding lories to go through the center of the city at rush-hours. By coincidence, it helps to reduce air pollution as well, but not very much. From August 1999 on, compulsory emission inspections have been applied at four central cities of Vietnam, and HCMC is one of them. The implementation of TCVN 6438-1998 for in-use automobiles started in 2000. The percentage of automobiles failing inspections due solely to their emissions was 17.31% in 2000 and 12.74% in 2001. There are eight inspection stations under the control of Vietnam Register located in HCMC. Roadside emission inspections of vehicles in HCMC are carried out every day by the Land Transport Police. Drivers of vehicles violating emission standards are ned and vehicles are not allowed to operate on the street until they are repaired and pass the re-inspection.

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However, the enforcement of this policy is not strict enough and easily circumvented by bribing policemen. The emission inspection of motorcycles has not yet started. The development of a bus system has the attention of the authorities. There are some types of public transportation such as: buses; small buses; taxis; carrier motorcycles. In HCMC, about 3 percent of road users use public transportation, the rest uses private transportation means. Public transportation could not survive since the governments subsidies are too low. Bus tickets are expensive compared with peoples income. In addition, the roads are narrow and of poor quality. Buses cannot drive on many streets in the city. Bus accidents happen quite often because of the narrow streets and their poor quality plus the old age of the buses. It is more convenient to use private motorcycles; gradually, people have acquired the habit of avoiding to make use of the public bus system. It is not too difcult for a household to buy motorcycles; the price of gasoline is not high, so people can afford to drive their own motorbike. Since 2002, the People Committee of HCMC has started to grant subsidies for the bus system. However, the subsidies are limited; therefore there is still not a strong incentive for bus companies to extend hours of operation. In addition, the administrative procedure to register and operate a bus network is very complicated and ineffective. 9.7.4PlanninginHCMC The project Air quality management strategy initiated in 2002 by DOSTE of HCMC plans to control air pollution in both the short term and the long term. The objectives of the plan are (1) to mitigate the air pollution problem where current air quality standards are exceeded; (2) to maintain air quality where current ambient air quality standards are not exceeded. The project establishes air quality targets which (1) reduce ambient PM, SO2, and CO to 50% of current levels by 2005; (2) further reduce ambient PM, SO2, and CO to standards by 2010; (3) maintain other levels of air pollutants below ambient air quality standards; (4) The ambient air monitoring programs will provide the data to develop and update the air quality management strategy. Cost-effective trafc management measures and industrial pollution control, reducing emission of PM, SO2, and CO, have been planned for achieving the air quality targets. StationarySources The project plans to control air pollution of stationary sources through strict enforcement of industrial pollution control regulation and application of measures for industrial pollution reduction and prevention. HCMCs plans for controlling environmental pollution from stationary sources are just the same as the national plans. A rst building block is strict enforcement of industrial pollution control regulations. All new and existing sources have to be in compliance with emission standards set by MOSTE. Enforcement of these standards needs to be strengthened, especially for potentially polluting industries. The project also suggested adjustments in cases where the standards are too challenging and not affordable for industries. The strict enforcement of industrial pollution control regulations will be carried out by DOSTE, the Department of Industry (DOI), and HEPZA (the Management Board of the Industrial Zones and Industrial Estates). The second building block is the implementation of measures to achieve a reduction in and prevention of industrial pollution. Examples of these measures are application of cleaner production measures and installation of facilities for the treatment of emissions. These measures will focus on the key polluting industries such as cement plants. In addition, the oil275

red power plants will be converted into gas-red plants in the years 2005 to 2010. The agencies responsible for these measures are DOSTE, the DOI, and HEPZA. MobileSources Based on the national action plan, the HCMC project has made more specic plans to limit air pollution caused by transportation in the following manner. Develop a 10-year and 20-year urban transportation master plan for HCMC and its surrounding areas. The plan includes the development of projects and measures to address trafc congestion, reduce trafc accidents and develop public transportation. It will be funded by aid from Japan. The Department of Transportation and Public Works (DTPW) will be responsible for the development of the master plan and identify the detailed measures to address transportation problems in HCMC. Planning measures have been developed to reduce trafc congestion, including (a) parking restrictions on major streets; (b) exible working hours; (c) construction of bicycle lanes separate from motorcycle and automobile lanes; (d) gradual ban on motorcycles moving into the inner city; (e) increasing the road network and highways; (f) automatic computerized trafc light management system; (j) construction of an elevated sky-train system and a subway system in some areas. Detailed measures will be identied in an Urban Transportation Master Plan. The national emission standards for motorcycles will be applied, as well as the inspection and maintenance program for motorcycles. These measures will be the responsibility of DOSTE and DTPW. Develop a public bus system. The project plans to develop public transport, with the target of getting 30% of the population to use public transport in 2010 and 50% in 2020. A new bus system network will be established with distances between bus stops of about 500 to 600 meter. DTPW will develop this system. 9.7.5Conclusion The population growth, industrialization and urbanization in a city with a weak and overloaded infrastructure have caused serious air pollution problems, trafc jams, and declining environmental hygiene in HCMC. The local government/DOSTE is quite active compared with other cities of Vietnam in establishing environmental pollution control programs for stationary sources of pollution with measures such as Black Book lists, a Revolving Fund and relocation of the most heavily polluting enterprises. These programs have been on paper and discussion for a long time, but in practice, these efforts have just started (the Revolving Fund) or are moving very slowly (such as the relocation program). In addition to pollution control from stationary sources, the reduction in air pollution from vehicular sources is slow for the typical reasons, such as lack of resources, nancing and experience. Despite praiseworthy ambitions the implementation of environmental policy has fallen short in HCMC. Up to now, the national environmental regulations and pollution control standards, the so-called command-and-control approach, have been used as the main instrument of environmental policy.

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9.8Summaryandconclusion
Environmental management was a new concept in Vietnam and it had not a high priority on the states political agenda in the period 1994 to 2003. There continues to exist an imbalance between economic growth and the underdeveloped infrastructure and out-of-date industrial technology. These factors together with rapid industrialization and urbanization and huge growth in the number of motor vehicles, especially motorcycles, in urban areas have made air pollution in Vietnam a big problem. The Law on Environmental Protection, enacted in 1994, was the rst step of a national environmental policy, including the control of air pollution from both stationary and vehicular sources. Subsequent regulations have specied the structure and content of environmental policy. The three-layer system of environmental management organizations, required by the Environmental Protection Law, has as its highest layer the national central government level: MOSTE/MONRE is the main organization responsible for environmental protection issues in both stationary and mobile sources. MOSTE promulgates environmental regulations, sets ambient air quality standards and emission standards for stationary and mobile sources nationally. MOSTE inspects DOSTEs for the implementation of MOSTEs regulations and instructions. MOSTE also inspects and monitors the largest plants in the most polluting category of industry, and imposes sanctions on plants that are out of compliance. Other ministries are requested to cooperate with MOSTE to protect the environment in their sectors. The Ministry of Transportation played a signicant role in cooperating with MOSTE to set emission standards for air pollution of motor vehicles and to inspect the quality and safety of motor vehicles. At the regional level, MOSTE delegates its environmental protection tasks to provincial Peoples Committees/DOSTEs. Besides implementing the delegated tasks, DOSTEs are allowed to issue regulations to support the implementation of their tasks or to achieve better results than national legislation requires. Some DOSTEs set emission standards for air pollution control of factories in their localities. The regional emission standards are not allowed to be less stringent than national emission standards. DOSTEs delegate the environmental protection tasks at the district level to district Peoples Committees/Environmental Bureaus. The Law on Environmental Protection enacted in 1994, was phrased in very general terms. Subsequent regulations have specied the structure and content of environmental policy. Major regulations are Decree 175/CP, which provides guidelines on the implementation of the Law on Environmental Protection, Decree No. 26/CP which provides regulations on administrative nes for violation of the Law on Environmental protection and Circular No. 490/1998/TT-BKHCNMT on guiding and assessing the EIA of investment projects. In air pollution control Vietnam has followed the traditional model of command-and-control, characterized by emission standards and procedures to get those standards implemented. Stationarysources The major three building blocks of the Law on Environmental Protection to protect the environment against air pollution from stationary sources are: national standards for air

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quality, an administrative procedure to control emissions from stationary sources and enforcement of compliance. The TCVN-1995 on environmental standards included ambient air quality standards, emission standards and technical standards for major pollutants. The national environmental standards are the minimum requirements. Provinces are allowed to set their own environmental standards provided that they are not less stringent than national environmental standards. The emission standards set in 1995 were uniform for all types of sources. They did not make a distinction between existing and new/modied sources; they did not differentiate between small, medium, and large stationary sources; and they did not take into account that to achieve the ambient standards more stringent emission standards have to be set in industrial areas than in rural areas. Recognizing the bottlenecks in applying uniform emission standards to pollution sources across the entire country, the emission standards were revised in 2003 in order to take differences in pollution load into account, setting the standard most stringent in industrial zones, where the pollution load is highest, less stringent in urban regions and least tight in. rural regions. Second, as a procedure to control pollution from existing and newly-established as well as expanding industrial rms the Environmental Impact Assessment procedure and the environmental license were set in place. EIA and environmental license have become the major environmental policy tools to prevent pollution from stationary sources. All sources, new as well as existing sources, must submit an Environmental Impact Assessment and get approval of the EIA report in order to be granted land use and construction permits, respectively to be allowed to continue to operate. Next to that, rms must have an environmental license to prove that they have complied with their EIA reports. In 1998, the EIA procedure was simplied to allow rms to skip the EIA procedure when they planned to locate in industrial zones/estates that already had their own EIA approval. Instead they have to ll in a form of a registration for securing environmental standards. Third, monitoring of air quality, inspection of emission sources and sanctions for noncompliance has been laid down in legislation. NEA and DOSTEs are in charge of air quality monitoring and of the inspection of emission sources at national and local level respectively. If a source does not comply with the legal requirements administrative sanctions or criminal sanctions can be imposed on the non-compliant rm. In short, environmental policy to control air pollution from stationary sources in Vietnam applies as instrument the command-and-control approach in the form of emission standards that have to be included in the EIA and in the environmental license. Economic instruments are hardly ever used. Voluntary agreements are totally absent. Yet, although the basic organizational and instrumental structure of environmental protection can be said to be in place, its functioning and implementation has been very imperfect in practice. The major bottlenecks are found in both the policy design and the actual implementation of the policy. The major bottlenecks in the design of the air pollution control policy can be described as follows. The rst major bottleneck is the lack of a clear denition of responsibilities and division of tasks in environmental protection between the Environmental Ministry and other ministries and also between local environmental agencies and other local agencies of ministries. The environmental protection tasks are dispersed among all ministries, resulting in overlap and 278

competition among ministries and agencies that make decisions on environmental issues. There are no adequate mechanisms to overcome inter-ministerial environmental disputes. This complexity creates the risk of having multiple responsibilities with inadequate accountability, and no one really accepting responsibility for solving problems. The second major bottleneck in design was the introduction of uniform emission standards for stationary sources in 1995. To correct the errors in the design of the rst emission standards, the revision made in 2003 introduced for emission standards different stringent levels based on the location of sources: industrial zones, urban regions, and rural regions. However, the revision did not exploit the opportunity to set less stringent emission standards for existing sources than for new and modied sources, based on differences in control cost. Differences in type of industry and scale of operation also do affect the costs of emission control, but this is not reected in the 2003 emission standards which do not differentiate on the base of these criteria. The NSEP 20012010 does not signal these bottlenecks, which cause unnecessary high cost of pollution control. Third, the EIA procedure is a too heavy handed approach to control air pollution from the large majority of stationary sources. Since Vietnam has chosen for the command-and-control approach its basic method for imposing its emission standards is the environmental licensing procedure: the rm gets permission to operate its plant, the environmental license, on the condition that it complies with the emission requirements. Vietnam could have followed the example of Western industrialized countries by delinking the EIA procedure and the environmental licensing procedure, making licensing the center piece of its command and control approach. The EIA procedure is then reserved for the exceptional cases of large investment projects with potentially large negative environmental impacts. To make the environmental licensing procedure work effectively the Vietnamese authorities could also have followed the US and other OECD countries by focusing on new and modied sources, postponing environmental licensing for established rms, with existing non-modied sources, to a next stage when staff and its technical and administrative competence would be more up to all its tasks and for regions where air quality below the ambient standard makes such measures necessary. However, in 1994 Vietnam decided to require an EIA for about every activity and approval of the EIA report was a necessary condition for getting the environmental license. The linking of EIA and environmental license made the commandand-control approach highly bureaucratic and costly, requiring a large and competent staff in the environmental authority to implement the tasks properly and in time. Since such a staff was lacking the result was that the policy failed and polluting rms could go ahead as if there was no environmental policy in place. In 1998 this aw in environmental policy design was partly corrected by abandoning the EIA requirement for rms in industrial zones with an approved EIA report. But this solution created a new bottleneck because it shifts the responsibility to control air pollution of individual rm to the authority in charge of the industrial zone without proper instruction of how to act. Next to that, there is no quality control of the review of the EIA by either an independent agency or by the public and there is no compulsory public participation in EIA evaluation and monitoring. There are indications that this problem has been recognized in recent years. NSEP 20012010 mentions that technical guidelines for environmental management in industrial zones will be issued and that targets for maximum emission levels in industrial zones, to be achieved in 2005, will be set.

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NSEP 20012010 also admits the many defects in the EIA procedure. The announcement is made that the review process will be strengthened and that the investment license will only be issued after taking into account the EIA. The intended improvement of public participation in EIA reviews may be of help to increase transparency of the process, thus strengthening the incentives for involved parties to respect the rules. The fourth major bottleneck was that the administrative nes are very low and have remained unchanged in nominal terms for years and have become eroded by ination. The procedure for imposing the administrative ne is quite complicated in case the ne is higher than VND 10 million. This complex procedure undermines enforcement. In NSEP 20012010 the bottleneck has been identied and the intention is announced to raise administrative nes considerably. A further potential bottleneck is thrown up by Article 29(2) of the LEP, which prohibits any activities that result in a discharge of pollution into the air exceeding the Vietnam air quality standards. If taken seriously the Article sets a halt to all investment in industrial capacity in those areas where air quality standards are exceeded or are on the margin of being exceeded. It would create problems similar to those in non-attainment areas in the U.S. However, (to our knowledge) the article has not been applied in practice. The bottlenecks in policy design have resulted in ineffective implementation. For example, where tasks are not clearly demarcated, real or perceived overlap of authority leads to competition and conicts or, otherwise, no one may accept authority. It will show up in defects in implementation. Next to problems in implementation due to the shortcomings of policy design implementation itself has suffered from neglect and understafng. Behind that lies lack of broad political support for air pollution control policy. Specically the essential bottlenecks in implementation of the environmental programs appeared to be the lack of capacity and weak enforcement. The rst major bottleneck is the lack of personnel and expertise, mainly due to lack of funding. Such shortages must have had their negative effects on all stages of implementation, including the process of environmental licensing and the process of monitoring, inspection and enforcing compliance. Next to that the tendency to avoid conicts and straight forward corruption of bureaucracies has been a further obstacle for effective implementation, in particular for the implementation of the EIA. The second major defect in implementation was the weak enforcement of environmental laws and regulations. The weakness shows up in every stage of enforcement. Inspections are infrequent and consequently the probability of detection of non-compliance is low. Sanctions, insofar as they are applied, do not bite since they are not strong enough. Industries do not feel pressure to follow regulations because the penalty might not be imposed or, if it is, the ne would be very small compared with the high pollution control costs. In case rms continue to be non-compliant, the authorities have to consider the potential negative social and economic impacts of ordering a rm to shut down or to relocate. Until now, such strong enforcement measures have rarely been used and criminal penalties were never applied. In particular the environmental authorities have been almost impotent to deal with non-compliant foreign or joint-venture companies and SOEs since these rms play an important role in contributing to the governments budget. NSEP 20012010 has identied at least a part of the enforcement problem and proposes remedies: administrative nes are to be raised and the regional capacity for monitoring and 280

inspection is to be strengthened. Next to that medium and large enterprise will be required to set up self-monitoring systems and to report their emissions, thus providing the authority with the information it needs for an effective enforcement policy. One should however, remind that the political willingness to enforce is an indispensable pillar for achieving a higher rate of compliance. The bottlenecks in quantity and quality of personnel in enforcement of compliance, together with imperfections in design, show up very clearly in the EIA and environmental licensing procedure. Because members of the EIA report assessment committees lack knowledge and experience in environmental management and technology it can happen that EIA is approved easily as a nominal procedure. Major bottlenecks also occur in implementing the conclusions of approved EIAs. After granting the approval, there is no monitoring in the implementation phase of the projects. Most investors do not implement the pollution control measures as their EIA reports stated. It is also possible that rms circumvent or manipulate the EIA already in the preparation stage by buying EIA reports and approval without going through the EIA evaluation procedures. Another deciency is that although the law requires that investors must have EIA approval as a requirement for a land use permit and construction licenses, in practice the land use permit and construction license are normally issued before the EIA gets approved. As a result of these shortcomings and bottlenecks the EIA and environmental license procedures do not work properly, leaving far too much room for noncompliance with standards. Last but not least, it should be remembered that in Vietnam air pollution is the problem of all the big cities of the country. Reduction of air pollution from stationary sources is difcult, not in the least because most enterprises in Vietnam are small and medium sized and are located in residential areas. Many large factories are located in urban areas. Industries themselves are old, use out-of-date technology, have little capital, and have no capacity to install technology to control pollution. Environmental licensing and enforcing compliance geared to the biggest polluters located in residential areas should have top priority and the source should be shut down if the rms management is unable or unwilling to comply. HCMCs Black Book Program is the appropriate approach, but of course it should be implemented. On the second rank in priority should be the medium sized polluters. Start ups in residential areas should only be allowed if the rm can comply with the regional emission standard, complies and gets its environmental license for that reason. Licensing and enforcing compliance of already existing rms, in combination with relocation is on the third rank in priority. The major bottleneck in dealing with air pollution from stationary sources in the residential areas of big cities seems to have been the lack of clear priorities and the weaknesses in implementing them through if environmental licensing and enforcing compliance. If the policy would actually be implemented a further bottleneck might turn up if established rms lack the capital to nance relocation and more generally the transition to investing in pollution control. Whether nancial support by the government is economically indispensable is difcult to asses, but nancial support would certainty help to reduce resistance against change. As was discussed, the main environmental policy instrument in Vietnam is the commandand-control approach, but this traditional instrument has not worked well in Vietnam due to the reasons stated above. Environmental policy-making and management in Vietnam, therefore, has remained weak in the face of the negative environmental effects of rapid 281

industrialization. Reacting to the bottlenecks in policy design and implementation, NSEP states that the command-and-control policy will remain the main instrument to protect the environment in the future. The national plan does not discuss any new kind of instrument that might be applied in the near future, but does mention the intention to apply the polluter pays principle. Searching for indications that cost considerations did play a role in the changes in the instrument of direct regulation for stationary sources one can observe that relaxation of emission standards has not been a part of it. But spatial differentiation of emission standards has been of importance, by making the distinction between three types of most polluted area and tailoring the stringency of the standard to the degree of air quality. The approach saves costs by not requiring the most stringent emission standard in areas where air pollution is of lower urgency. Therefore it qualies as an efcient policy. By not making a differentiation between emission standards for new/modied sources and existing sources the authorities missed an opportunity for improving the efciency of direct regulation. As was mentioned permitting, monitoring and enforcing compliance was very lax during the researched period. In theory there was the option to bring in some efciency by differentiation in laxity by being most lax in the surveillance of sources where control costs would have been highest. That would have meant being more lax with regard to existing sources than to new/modied sources. In the same vein laxity in implementation could have been differentiated spatially by focusing enforcement on areas where air pollution was most serious. We have no information whether such an approach has been practiced. Efforts to infuse exibility in direct regulation of stationary sources, by way of emission trading or otherwise have not been made. Such exibility, in which surplus emission reductions at sources where control costs are lowest can compensate excess emission from sources with highest costs, is an attractive option for rms that by tight regulations are forced to make really high cost. Due to the defects in permitting, monitoring and enforcement incentives to take the initiative to introduce that type of exibility were absent. The efciency of direct regulation can also be increased by simplifying bureaucratic procedure. Some efforts have been made. Most notorious is dropping the requirement that an EIA should be submitted for rms that plan to establish in an industrial zone that already has an approved Environmental Impact Assessment. The conclusion is that there are indications of efforts to contain control costs for stationary sources; however, the infusion of exibility, in particular emission reduction credit trading, has not been part of it. Consequently the rst steps that might be preparatory to a full-edged program of emission permit trading have not been made and economic instruments applied to stationary sources of air pollution remained beyond the horizon during the investigated period. Mobilesources Transportation has become a major source of air pollution in Vietnam and it will go on to grow if no action is taken to control it, especially since the number of motorcycles has increased rapidly. Control of air pollution from vehicular sources started with the enactment of the Law on Environmental Protection in 1994. The Law demanded that emission standards for motor vehicles were to be set, that vehicles not meeting the standards should not be allowed to be in operation and that a system of periodic inspection should be set up. These 282

building blocks of the policy to control air pollution of mobile sources were worked out in later regulations. Since then, the emission standards for new and in use motor vehicles (including motorcycles) have been established. The rst round of standard setting occurred in 1994 and 1995, a second round in 1998. The Ministry of Transportation was made responsible for conducting inspections and granting certicates to vehicles that did meet the emission standards at the time of registering the vehicles. The inspection task had to be carried out by the Vietnam Register Centre for Vehicle Management and Inspection. The sanction on non-compliance was suspending the operation of the transport means. For newlymanufactured or imported vehicles the Vietnam Register accepts foreign testing results as meeting Vietnamese vehicle emission standards, which are based on ECE and EC emission standards. In the blueprint, it looked as if controlling air pollution of transportation means did nd its place. However, big bottlenecks in the policy design and its implementation in practice have inhibited progress in air pollution control of mobile sources. The bottlenecks in policy design appeared as follows. First, the rst emission standards for in-use automobiles and motorcycles were set too stringent. If they would have been applied a dramatically large part of the countrys cars and other motor vehicles would have be taken out of operation. The rst emission standards for new motor vehicles also were very strict. Next to that they were supposed to apply to vehicles in the whole country, without distinction between urban and rural areas, whereas air pollution is hardly a problem in rural areas. The program was over ambitious by not taking into account that the policy had to start from scratch. Actually the emission standards of 1994, 1995 were not implemented. That situation lasted until 1998, when the emission standards for newly manufactured and in-use vehicles, for automobiles as well as motorcycles, were adjusted to the condition of vehicles in Vietnam. The new emission standards for in-use motor vehicles were classied in three levels in order to be applicable to vehicles that registered at different dates or in different locations. Since the beginning of 2000, the new emission standards for in-use vehicles, which are less stringent than the 1994, 1995 standards, and the emission inspection regime have been implemented in four central cities of the country. Other cities have been encouraged to follow. The second bottleneck was that the original administrative sanctions were too stringent by requiring that non-complying vehicles had to be taken out of operation. However, the sanctions for vehicles in violation of emission standards have also been adjusted to be more feasible: the Law on Road Trafc of 2001 introduced a ne for non-compliance that was too high to be feasible and therefore was lowered in 2003. Third, no guidelines or regulations had been issued to provide for a car exhaust maintenance system. Fourth, there was insufcient policy on public transportation development. Next to the bottlenecks in design the bottlenecks in implementation of the environmental policy in controlling air pollution from transportation sources have to be mentioned. The rst bottleneck was a lack of inspection stations and a serious lack of experts for doing the inspections of motor vehicles. Since there were no inspections car owners did not have to fear sanction for not complying. Although since 2000, the number of inspection stations has been gradually increasing they only cover automobiles of four central cities. The capacity to apply inspection to the whole country was still lacking in 2003. 283

Another remaining bottleneck is motorcycles. As was discussed, motorcycles are a major source of air pollution. Vietnam did set up the emission standards for new and in-use motorcycles on paper as early as 1999, but the implementation of the policy is still absolutely absent in practice. Establishing and implementing a procedure for inspection of new motor cycles and setting up and operating stations for inspecting emissions of in-use motorcycles should have high priority. The Action Plan for reducing vehicle emissions in itself gives very useful guidelines for reducing emissions from mobile sources further in the next 5 to 10 years. A real effort should be made to implement it properly. Optimistically speaking, air pollution caused by vehicular sources will gradually diminish if the policy of inspection and application of non-compliance sanctions is extended to the rest of the country. Moreover, applying the same policy to motorcycles is an absolute priority. Tightening of vehicle emission standards by introducing the more stringent levels 2 and 3, according to plan and improving the quality of gasoline and diesel will also contribute signicantly to reducing vehicular pollution. One of the best moves of Vietnam to control air pollution from vehicles was the successful phase-out of lead in gasoline in 2001. These plans might signal an awareness that a new start must be made in Vietnam to control air pollution from vehicular sources. Public transportation has not developed yet in Vietnam. In small cities there are no buses. In big cities, such as Hanoi and HCMC, public transportation has met only 3 percent of total city transportation needs. Developing public transportation to provide 20 to 30 percent of the total transportation demand of a city will help people to reduce the use of their own vehicles, in particular motorcycles. Looking for indications that cost considerations did play a role and that efforts have been made to improve the efciency of direct regulation of mobile sources one can observe that relaxation and differentiation of emission standards have been used in the period from 1994 to 2003. Relaxation was very prominent. In 1998 relaxation of the tight original emission standards, set in 1994, 1995 for new as well as in-use vehicles. There was also relaxation in the sanctions for non-compliance: taking the non-compliant vehicle out of circulation was replaced by a high ne that two years later was lowered. Unlike the regulation of stationary sources differentiation of emission standards for new and in-use vehicles was made from the start on. In 1998 standards for in use-cars were differentiated further, according to age and next to that also according to location. From 2000 on the (renewed) emission standards for in-use cars were implemented in four central cities, which mean spatial differentiation in the enforcement of emission standards. The differentiations were apparently inspired by the objective to save on control costs in an efcient way. The objective was attained by avoiding the tightest requirements for the oldest motor vehicles and by focusing requirements and their implementation on areas where air quality problems were most urgent. There are no indications of introducing exibility in the direct regulation of air pollution from mobile sources. Remember that in the US such efforts resulted from pressures created by tight, rigid and well-enforced regulation from the late 1970s on and were poorly developed for mobile sources. Such conditions were not present in Vietnam.

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Although in blueprint economic instruments could have played a role to reduce congestion and air pollution in the big cities in particular roadway pricing and spatially differentiated taxation of motor vehicles such measures have not been applied.

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