VZCZCXRO1785
RR RUEHCHI RUEHDT RUEHHM
DE RUEHHI #0835/01 1030418
ZNR UUUUU ZZH
R 130418Z APR 06 ZDK
FM AMEMBASSY HANOI
TO RUEHC/SECSTATE WASHDC 1445
INFO RUEHHM/AMCONSUL HO CHI MINH CITY 0920
RUEHZS/ASEAN REGIONAL FORUM COLLECTIVE

UNCLAS SECTION 01 OF 06 HANOI 000835 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/MLS 
 
E.O. 12958: N/A 
TAGS: PREL PGOV PHUM ETRD EINV ECON VM
SUBJECT:  HANOI DISCUSSES NEW LAW ON ASSOCIATIONS 
 
HANOI 00000835  001.2 OF 006 
 
 
¶1. (SBU) Summary and Comment:  On April 3, the GVN presented 
its ninth draft of a New Law on Associations to donor 
community Ambassadors, representatives of Vietnam's 
associations and international NGOs and other interested 
parties.  Follow-on discussion was open and pointed. 
Controversial elements in the latest draft include the 
retention of redundant State management of associations by 
line ministries and the Ministry of Home Affairs (MOHA), 
vague definitions of proscribed activities, cumbersome 
registration procedures and lack of a clear prohibition of 
commercial activity under the law's new favorable tax regime 
for associations.  The Danish Ambassador subsequently sent a 
letter on behalf of donors outlining these reservations. 
The new draft will be debated by the National Assembly in 
its upcoming special session in May.  A more liberal, rival 
draft written by civil society promoters may also be 
debated.  The GVN is hesitant to promulgate this civil 
society version of the law because it rightly recognizes 
that, depending on how it is done, legalizing associations 
could be like opening Pandora's Box.  Vietnam's leadership 
is likely to remain very skittish about the potential this 
law has to open up society, and thus further debate and foot- 
dragging is likely in the cards. End Summary and Comment. 
 
Draft Nine 
---------- 
 
¶2. (SBU) On April 3, MOHA held an open discussion on the 
ninth version of its draft Law on Associations. 
Approximately fifty outside representatives participated in 
the discussion, including Ambassador Marine, the Head of 
Delegation of the European Commission, a representative of 
the United Nations Development Program, the Ambassadors of 
Denmark, France, Sweden and Bulgaria, as well as 
representatives from other donors, Vietnamese associations 
and foreign NGOs. 
 
¶3. (SBU) The discussion was led by Vice Minister Dang Quoc 
Tien and Nguyen Ngoc Lam, Director General of MOHA's 
Department of NGOs.  Lam began the session with an extensive 
history of the latest draft of the Law on Associations. 
 
¶4. (SBU) Lam noted that as of a June 2005 statistical 
survey, Vietnam had 320 nationwide associations and 2,150 
provincial and municipal associations.  In addition, there 
were "tens of thousands" of rural and district-level 
associations, with a greater concentration in economically 
developed locations.  The current legal status for these 
associations depends on a 1957 decree (No. 102/SL/L004) and 
the July 2003 decree (No. 88/2003/ND-CP).  The draft law 
aims to address "mismatches and difficulties" in 
associations management stemming from "shortage of 
quantity," "poor alignment of policies and coordination" and 
"poor division of labor regarding management."  The law 
drafters also seek to specify new procedures for "redressing 
complaints and denunciations about associations."  Lam 
further admitted that current procedures for establishing an 
association are cumbersome, that the process for admitting 
foreign members to associations needs to be clarified, that 
responsibility for "State management" of associations has 
not been assigned and that associations operating under 
current decrees are ineffective and inefficient because of a 
"trend to bureaucratize them." 
 
¶5. (SBU) Lam explained that MOHA's drafters were given new 
guidelines to develop a Law on Associations in 1992 so 
"citizens can directly participate in the national 
reconstruction."  Their operating principles are:  1) to 
institutionalize guidelines and principles for associations 
that are part of the Communist Party of Vietnam (CPV); 
2) to elucidate "stipulations of the Constitution" regarding 
associations; 3) to ensure that socialist democracy is 
strengthened; 4) to create an "enabling and conducive" legal 
framework for associations; 5) to incorporate the legacy of 
previous legal decrees governing associations; 6) to 
incorporate practical experience and lessons learnt into the 
new law; and, 7) to "critically adapt" international 
experience concerning associations into the new law.  The 
project to develop this new law is part of the official 
legislative agenda for the 2006 National Assembly.  In 
preparation for this, MOHA's drafters have undertaken a 
general review of the GVN's experience with associations, 
reviewed current legal documents governing associations, 
participated in domestic seminars on associations, conducted 
overseas study tours and "collected practical ideas for 
operation, assent and accommodation," Lam said. 
 
¶6. (SBU) Lam noted that the ninth draft of the Law on 
Associations has nine chapters comprising sixty-two separate 
 
HANOI 00000835  002.2 OF 006 
 
 
articles.  Chapter I (Articles 1-8) outlines general 
provisions of the law including:  the right to create 
associations, the scope of the law, principles for 
organization and operation of associations, proscribed 
activities and "behaviors" and the responsibilities of State 
agencies charged with management of associations. 
 
¶7. (SBU) Chapter II (Articles 9-19) defines eligibility and 
procedures for establishing associations.  According to 
these articles, an association is "eligible for creation" 
(i.e., licensing) if it provides a legal statement of goals 
and objectives, has an appropriate organizational structure 
and number of members, has a charter, has a head office, 
owns property and does not have a "coincidence of names" 
(NFI).  The chapter also states that a campaign committee 
for the creation of an association must have five members, 
and defines nomenclature, logos, seals and the requirements 
for documentation of registration, as well as the major 
required provisions of a charter.  Certificates licensing 
the creation of associations must be granted within sixty 
days of application.  The association must hold its 
inaugural congress within ninety days of receiving the 
certificate, although this deadline may be extended by 
thirty days.  Chapter II also defines what must happen at 
the congress, as well as the required reports of its results 
and the authorized means for announcing establishment of the 
association.  Finally, the chapter states that MOHA has the 
national-level authority to grant certificates of 
establishment while Provincial People's Committees (PPCs) 
are responsible at the local level. 
 
¶8. (SBU) Lam stated that Chapter III (Articles 20-25) 
defines membership for official, associate and honorary 
members of associations, and defines admission, expulsion, 
obligations and rights of members under its charter. 
Associates and honorary members have the same rights as 
official members, but are barred from voting (or running) 
for leadership positions and from voting on association 
business, he said. 
 
¶9. (SBU) Chapter IV (Articles 26-39) defines the parameters 
for the organization and operation of an association.  An 
association is comprised of a congress, a board of 
management, an inspection board and other structures defined 
by its charter.  "In the interests of democracy," a congress 
must have the participation of two-thirds of the 
association's total membership and must be held every five 
years and must address specific issues for each term, Lam 
said.  Voting principles for participants and parameters for 
"ad hoc" congresses are also defined.  Reports on the 
congress must be available within thirty days of its 
conclusion.  Both the management and inspection boards of 
associations also have delineated responsibilities and 
authorities, and the head of the Management board must meet 
certain qualifications.  The chapter also authorizes an 
association to establish representatives and branch offices 
in foreign countries, though legal membership is qualified 
and association responsibilities and authorities defined in 
the law, he added. 
 
¶10. (SBU) Lam noted that Chapter V (Articles 40-52) 
describes procedures for uniting, splitting or dissolving 
associations, as well as management board and State agency 
responsibilities in cases of dissolution.  Associations may 
unite if they operate in the same field and area, and union 
promotes "coordination, harmonization and organization" of 
common activities, he said. 
 
¶11. (SBU) According to Lam, Chapter VI (Articles 53-55) 
governs foreign associations and foreign organizations 
operating in Vietnam.  Foreigners residing permanently in 
the country for more than twenty-four months, and foreign- 
based organizations, may form associations, under specific 
procedures and defined areas of operation. 
 
¶12. (SBU) Chapter VII (Articles 56-58) authorizes ownership 
of property and codifies the finances of an association. 
Associations are permitted to raise revenues through 
membership fees, support from the State budget, individual 
and organization contributions and from "legal incomes." 
Expenditures must follow the rules of an association's 
charter.  Management of property and finances is also 
subject to the association's charter and the laws of 
Vietnam.  Associations that "operate for the public good" as 
charity or humanitarian organizations are entitled to 
preferential taxation, he said. 
 
¶13. (SBU) Lam noted that Chapter VIII (Articles 59-60) deals 
with commendations and awards for good associations and 
 
HANOI 00000835  003.2 OF 006 
 
 
delineates procedures for "dealing with violations." 
Chapter IX (Articles 61-62) lays out the process for the law 
to be implemented under governmental decree. 
 
¶14. (SBU) In conclusion, Lam explained that there are still 
three areas to be resolved, "subject to differing points of 
view," concerning the draft Law on Associations.  First, 
there is still debate about the scope of the law, i.e., 
whether the Vietnam Fatherland Front (VFF), the Ho Chi Minh 
Communist Youth Union (HCMC CYU), the Vietnam Federation of 
Trade Unions (VFTU), the Vietnam Women's Association (VWA), 
the Vietnam Farmers' Association (VFA) and the Vietnam War 
Veterans' Association (VWVA) should fall within its purview. 
In addition, some people argue that associations of 
foreigners and foreign organizations should not be covered 
by the law.  Secondly, there is still disagreement 
concerning whether ministries and sectoral agencies should 
be allocated responsibility for managing the operation of 
associations that fall under their jurisdiction.  Finally, 
Lam acknowledged that "further considerations are needed to 
simplify the procedures for the establishment of 
associations." 
 
Discussion 
---------- 
 
¶15. (SBU) Ambassador Peter Hansen of Denmark noted that the 
donor community welcomed the opportunity to openly discuss 
this draft law and thanked MOHA for arranging the dialogue 
session.  The law is an important step for citizen 
involvement in Vietnam's social and economic development. 
He noted, however, that international concerns remain about 
how the draft gives discretionary powers to State officials 
under Article 8, point 3.  Assigning such poorly defined 
powers undermines the rule of law and is not in accordance 
with good governance.  "A good law is a clear law," he 
added.  The Law on Associations should clearly state what a 
citizen can or cannot do.  Hansen also noted that the draft 
assigns two separate institutions:  MOHA and a responsible 
agency at the national level, and the PPCs and agency 
departments at the provincial level.  This system of 
"redundant management" means that associations will "never 
know who they are actually working with," he said. Under the 
registration process as written, NGOs or associations must 
make at least two applications to register with the 
different management entities.  In addition, the 
registration process is needlessly complicated and 
cumbersome, which increases the likelihood of "rent-seeking" 
and corruption, which is particularly dangerous as Vietnam 
tries to establish a new system under the rule of law.  A 
rule-of-law system is the most conducive to facilitating 
growth of civil society in Vietnam, he said. 
 
¶16. (SBU) Ambassador Markus Cornaro, Head of the European 
Commission Delegation, noted his appreciation that the draft 
law addresses how foreigners, NGOs and international 
organizations may register associations.  However, he noted 
that it is not clear how NGOs that have already been 
established in Vietnam will be affected.  He also noted that 
in the sixth draft of the law, associations were allowed to 
comment and advise the GVN on national policy; however, this 
provision was struck from the latest draft.  Permission for 
associations to delve into national policy is important 
because "it strengthens associations' participation in 
national politics," he said.  Finally, he observed that the 
current draft law also "tends to bureaucratize" civil 
society despite MOHA's stated intention to move away from 
such a framework. 
 
¶17. (SBU) Ambassador Marine noted that the United States 
believes that a Law on Associations is important for 
empowering an increasingly vibrant civil society.  He agreed 
with the comments voiced by his colleagues and noted that 
Lam had acknowledged many of them in his presentation.  The 
new law should be drafted through a process of continued 
consultation and dialogue with the donor, NGO and Vietnamese 
association communities and with the input of the Vietnamese 
people.  The Law on Associations should also be as simple, 
open and non-intrusive as possible to remove the burden of 
Government micro-management.  The United States stands ready 
to provide any technical assistance or professional 
expertise required to facilitate the expeditious drafting 
and promulgation of this new law, he said. 
 
¶18. (SBU) A representative from a civil society association 
(NFI) asked why some organizations were included in the law 
and some were not, namely VFF, HCMC CYU, VFTU, VWA, VFA and 
VWVA, as well as religious organizations.  She noted that 
community-level organizations are also not covered by the 
 
HANOI 00000835  004.2 OF 006 
 
 
law.  The UNDP representative asked why the current draft 
did not include changes recommended by a recent UNDP study 
comparing MOHA's draft with a draft law written by the 
Vietnam Union of Scientific and Technical Associations 
(VUSTA).  (NOTE: A previous MOHA draft was widely criticized 
on December 13, 2005, by representatives of various 
associations.  On December 23, VUSTA released its own draft 
highlighting inadequacies in the MOHA draft. End Note). 
 
¶19. (SBU) In his response, Vice Minister Tien did not 
comment on specific issues, but addressed general areas of 
concern.  Regarding NGOs, he noted that the GVN always tries 
to encourage people to participate in the policy of "Doi 
Moi" (renovation) and the transformation of Vietnam into a 
market economy.  "The Law on Associations was drafted in 
that spirit," he said.  Regarding State management, he noted 
that MOHA has been assigned the responsibility of managing 
associations in certain areas by the GVN, including the 
responsibility for granting certificates of establishment. 
However, other ministries will also be responsible.  This 
does not mean that line ministries will handle day-to-day 
management, but associations will have to ask for approval 
for activities from them.  Associations will be subject to 
the law and ministries will have to manage the sectors under 
which they operate.  Associations will have to follow 
regulations in each sector. 
 
¶20. (SBU) Regarding exclusion of the six "mass 
organizations" from the purview of the law, Tien noted that 
this must be viewed in the "context of Vietnamese history." 
These organizations all existed before the establishment of 
the Communist Party of Vietnam and before the establishment 
of the Socialist Republic of Vietnam.  They worked with the 
GVN to develop the State.  Nevertheless, the draft is "still 
being consulted" in this area.  Tien also noted that a legal 
document will eventually be promulgated to facilitate the 
formation of international organizations in Vietnam. 
Regarding community-based associations, MOHA will take 
public concerns into account; however, the law won't cover 
small groups like clubs and other community groups. 
 
¶21. (SBU) Ambassador Jean-Francois Blarel of France observed 
that Vice Minister Tien did not address the Danish 
Ambassador's concerns about discretionary powers.  He also 
noted that the French Embassy organized a 2004 seminar for 
MOHA drafters, but very few of the ideas developed in that 
seminar were incorporated into this draft.  The 
recommendation to exclude associations from the normal 
taxation regime will lead to problems without the inclusion 
of the recommended provision to prevent commercial 
organizations from utilizing association status to profit 
improperly from business conducted under this favorable 
regime.  Ambassador Cornaro seconded this point. 
 
¶22. (SBU) Ambassador Hansen reiterated that the draft law 
appears to mandate unified management of associations under 
MOHA; however, line ministries are also tasked with 
management.  The term "management" itself suggests control 
rather than regulatory supervision.  Organizations and 
associations by definition shouldn't be managed by the 
State; rather, they should be self-governing institutions 
that are subject to law.  As written, the Law on 
Associations is completely counter to MOHA's stated goal to 
allow the establishment of as many associations as possible. 
 
¶23. (SBU) Tien responded that the draft incorporates some 
international advice; however, drafters took into account 
the context of Vietnam.  "We had a long war and were subject 
to a centrally planned economy for a long time so we have to 
be judicious in what experiences we draw on as we 
integrate," he said.  He added that associations are subject 
to the tax law, which is why MOHA did not include the French 
ideas in the current draft.  Improper business practices are 
covered under the tax law. 
 
¶24. (SBU) Regarding management, Tien explained that under 
Articles Six and Seven, there is no confusion over areas of 
responsibility.  MOHA will issue certificates of 
establishment while line ministries will regulate sectors in 
which associations operate.  For example, an association 
related to pharmaceuticals would be subject to Ministry of 
Health regulations, but would not be managed by the ministry 
on a day-to-day basis.  The drafters "are trying to end the 
traditional system of ministry patronage," he said.  The GVN 
is trying to facilitate citizen participation in civil 
society so it won't interfere in the management of 
associations. 
 
¶25. (SBU) Regarding national policy, Tien noted that Vietnam 
 
HANOI 00000835  005.2 OF 006 
 
 
is no longer a centrally planned economy, and thus 
associations are already able to advise the Government about 
policy.  For example, many different groups recently 
registered their opinions and ideas with the GVN about the 
Son La Dam project in Son La Province. 
 
¶26. (SBU) Ambassador Marine noted that use of the term 
"management of associations" is the root of the problem. 
What MOHA describes is a legal framework.  The law should 
not talk about management at all.  Associations should be 
simply told to obey national law.  There is no need for line 
ministries to be given management responsibilities.  The law 
should also spell out that associations have the right to 
advise on national policy, he added. 
 
¶27. (SBU) Ambassador Hansen stated that the issue of State 
employee discretion in interpreting the law has still not 
been addressed.  Under the draft as written, any State 
official could decide whether an association can be formed, 
but if they don't like the association or decide that it is 
"immoral," they can prevent its establishment until the 
right bribe is made.  MOHA must clarify limitations for 
associations to avoid running the great risk of expanding 
corruption, and damaging movement toward rule of law in 
Vietnam. 
 
¶28. (SBU) The PPWT (NFI) representative noted that under the 
draft law, associations that have not been officially 
established have no legal status and thus no rights under 
law.  This could be especially problematic for community 
associations.  She also seconded Ambassador Marine's point 
that an association's right to comment and advise on policy 
should be spelled out in the law. 
 
¶29. (SBU) Director General Lam responded that all 
associations should be able to establish legal status 
because all groups of more than two people must register. In 
any event, small groups should not be concerned about their 
legal status because the draft law only talks about groups 
with legal status (sic).  There is also no regulation in the 
draft regarding associations that have no members, e.g., 
foundations.  The drafting committee will recommend that the 
GVN establish a separate foundations law to cover these 
groups. 
 
¶30. (SBU) The Program Officer of the Swiss Embassy noted 
that once the law is promulgated, it will affect many 
existing organizations.  VUSTA has come up with an alternate 
draft.  How was the VUSTA law taken into account in the 
draft?  Also, the Swiss representative seconded the UNDP 
representative's points and asked why the documentation 
needed to apply for establishment was not explicitly 
defined.  She also noted that previous drafts of the law 
prescribed a minimum membership for establishment; however 
the present draft only states that "an association must have 
a large enough membership." 
 
¶31. (SBU) Lam recommended that dialogue participants compare 
and contrast the VUSTA and MOHA drafts on their own.  In any 
event, VUSTA associations will not be affected by the Law on 
Associations.  He also noted that Decree 31 and Decree 65 
already spell out the necessary documents for applying to 
establish an association.  Further implementing decrees will 
also cover this issue. 
 
¶32. (SBU) Ambassador Hansen reiterated the donor community's 
appreciation for the opportunity to comment on the draft law 
and asked that MOHA's drafters continue this dialogue after 
they have had a chance to discuss the issues raised in this 
session.  Tien responded that after the law is promulgated a 
number of decrees will be passed with further guidance on 
the meaning of the law. 
 
Donor Follow-up 
--------------- 
 
¶33. On April 7, Ambassador Hansen sent a letter drafted with 
input from the rest of the donor community to Tien 
reiterating concerns voiced during the open session.  In 
particular, at our urging, he reiterated concerns about the 
explicit use of the term "State management" in the draft. 
The letter suggested that the law use the terms "regulatory 
authority" and "registering responsibility" to define the 
roles of line ministries and MOHA, and drop the term 
"management" entirely.  This would clarify concerns about 
redundant management. 
 
Comment 
------- 
 
HANOI 00000835  006.2 OF 006 
 
 
 
¶34.  The GVN is hesitant to promulgate this civil society 
version of the law because it rightly recognizes that, 
depending on how it is done, legalizing associations could 
be like opening Pandora's Box.  Vietnam's leadership is 
likely to remain very skittish about the potential this law 
has to open up society, and thus further debate and foot- 
dragging is likely in the cards.  After all, the first draft 
of this law surfaced in 1992. 
 
MARINE