Businesses sue state agencies for incompetence, harassment

More and more lawsuits, in which businesses are the plaintiffs and state management agencies the defendants, have been occurring in Vietnam.

According to an official of the HCM City Enterprise Association, many Vietnamese enterprises have become “brave” enough to  legal proceedings against state management agencies in cases of incompetence and harassment.

In July, for example, the HCM City People’s Court found the Ministry of Finance’s Chief Inspector guilty for a decision to collect tax arrears from Maseco, a service joint-stock company.

Maseco believed it met requirements to be eligible for tax incentives, while the finance ministry accused it of evading tax and asked the company to pay tax arrears. Maseco then decided to take legal proceedings, and asked the court to annul the ministry’s decision.

In another case, on February 21, 2013, the Hanoi Market Control Sub-department seized 6,000 Danlait brand milk boxes from Manh Cam Company Ltd to test for product quality.

Three months later, the products had become spoiled because of inadequate preservation. Meanwhile, some officials of the sub-department made unsubstantiated statements about the quality of the products and about Manh Cam Company’s operation.

Manh Cam then decided to sue Vuong Tri Dung, deputy head of the sub-department, for releasing the instructions that caused a loss of VND26 billion to the company.

On September 18, 2013, the HCM City Taxation Agency released a decision on forcing Timatex Vietnam to pay tax arrears of VND56.75 billion.

The agency also used coercive measures to collect the taxes, drawing money from the company’s account at banks and telling Timatex that its invoices were invalid.

Timatex Vietnam decided to sue the HCM City Taxation Agency for the decision, saying that it had lodged a complaint to the agency but received no reply.

Lawyer Pham Ngoc Hung, deputy chair of the HCM City Enterprises Association, said that many businesses have recently contacted the association to ask if they should sue state management agencies that make bad decisions, causing big losses to their businesses.

Hung noted that taking legal proceedings against state agencies is not usually a part of  “Vietnamese business culture”.

“Vietnamese believe that a bad compromise is better than a good lawsuit,” he commented.

Le Dang Doanh, a renowned economist, suggested that the state should help businesses’ operations by creating regulations that allow them to take legal proceedings against state management agencies or the officials who engaged in bad behavior or issued bad decisions.

Doanh said many businesses complain about problems they have when working with state agencies.

A Hanoi-based food export company, for example, spent big money to build a waste treatment system which was recognized by a European organization as meeting standards. However, inspectors still forced the company to pay a fine for “waste treatment problems”.

“If businesses cannot be protected, they will feel discouraged about the business environment and leave Vietnam,” Doanh warned.

Pham Huyen, VietNamNet Bridge