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Weak oversight leads to violations in essential sectors
A lack of strict management on the petrol and steel markets is said to be a primary cause of the violations taking place in these sectors, according to the Government Inspectorate.
Prime Minister Nguyen Tan Dung has approved the Government Inspectorate's recommendations for State management of imports and exports to achieve stabilisation in the petrol and steel markets.
Speaking at a press conference in Ha Noi on Tuesday, Deputy Chief of the Government Inspectorate Nguyen Van San said that the Ministry of Industry and Trade (MOIT) had not closely co-ordinated with provincial People's Committees and industrial park management boards, leading to ineffective investment.
San said the ministry had been slow to withdraw automatic import licences. He added that these have contributed to a high inventory level of steel, which, in turn, has affected business operations and caused banks to retract capital.
The Government Inspectorate said the ministry has not accurately reported the amount of imported steel and their control over market stabilisation on steel products for the Viet Nam Steel Corporation is limited.
The report showed that in 2008 alone, the corporation's profits reduced by VND600 billion (US$30.7 million), while profits at the Thai Nguyen Steel Company dropped by more than VND200 billion ($10.2 million).
The Government Inspectorate attributes this to the fact that the ministry had not taken strict measures to prevent the situation-it did not establish an inspection team on steel production and business activities.
Violations
The inspectors said the ministry did not carry out an inspection of petrol businesses, and thus did not follow the Inspection Law's Decree 55 on petrol business inspection.
MOIT granted business registration licences to 11 import firms but did not punish businesses that imported less petroleum than the stipulated minimum import quota.
In the 2008-09 period, six businesses violated the regulations with the lowest rate at 46 per cent.
The Government Inspectorate also discovered that the Transport Construction Company and the Truong Son Construction Company exported over 121 tonnes of petrol to Cambodia without permission from the ministry in 2009. The lack of investigation and punishment has led to increasing fraud in the sector. The Market Watch Department uncovered over 14,000 cases in 38 provinces and settled over 2,600 violations.
Inspectors added that the co-ordination between MOIT and the General Customs Department in controlling petrol export activities had not been effective, leading to exports of 100,000 tonnes of petrol without reports to the ministry.
They also pointed out the ministry's shortcomings in monitoring the operations of the Dung Quat Oil Refinery, which has resulted in a lack of transparency in business and State budget's receipts.
MOIT was asked to review and evaluate distribution systems to map out a complete development plan for the import of construction steel.
Banks' wrongdoings
Ngo Van Khanh, director of the Government Inspection's general affairs inspection department said that in the third quarter of the year, Government inspectors checked the interest rate-subsidised lending of five commercial banks: Military Bank (MB), Viet Nam International Commercial Joint Stock Bank (VIB), Asia Commercial Bank (ACB), Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank) and Technological and Commercial Joint Stock Bank (Techcombank).
All the five banks had violated Decision No 131/2009/QD-TTg regulating procedures for granting short-term loans, Khanh said.
The lending period was restricted to the second quarter of 2009, but some banks expanded the period and other banks lent to those who were unqualified to received the subsidy, Khanh said.
State Bank Governor Nguyen van Giau said that banks had to correct their faults by recalling loans provided to unqualified customers. Khanh said that the MB was reclaiming money from 22 wrong customers from the 26 to whom they lent.
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