Managing Partner Nguyen Van Phuc participated in the discussion with Vietnam Investment Review (VIR) on the relocation of Bien Hoa 1 Industrial Park

On April 22, Vietnam Investment Review (VIR) published a series of important articles on the relocation of Bien Hoa 1 Industrial Park ("IP"). Upon VIR's invitation, our Managing Partner Nguyen Van Phuc participated in the discussion and gave a remarkable and very practical account of the obstacles and difficulties faced by enterprises and workers in relocating Bien Hoa 1 IP in the coming period. 

At the end of January 2021, the Prime Minister gave written approval to remove the Bien Hoa 1 IP from the development plan of Vietnam's IPs. However, due to difficulties in policy and funding implementation, this project has continued for many years. In February, the Dong Nai People's Committee issued Decision No. 324/QD-UBND, approving the project to transform Bien Hoa 1 IP into an urban, commercial and service area and setting a target to relocate all enterprises operating in Bien Hoa 1 IP to another area by the end of 2025.

A source from Bien Hoa 1 IP (Source: Internet)

According to the content of the project, Bien Hoa 1 IP includes two main areas: the political and administrative center area of the province with a scale of about 44 hectares and the urban, commercial and service area with a scale of about 286 hectares, divided into 6 subdivisions and investment phases.

However, with a total of 76 enterprises (including: 6 FDI enterprises and 70 domestic enterprises) in operation, the relocation of Bien Hoa 1 IP to another IP in Dong Nai Province will have many problems to solve. Among them, the high cost of compensation for site clearance (according to Sonadezi's report, the cost is estimated at more than VND7,500 billion); regulations and policies for employees; the problem of finding land, building new factories, and complex legal regulations will undoubtedly be major obstacles in the relocation process.

According to Mr. Tran Vu Hoai Ha, Deputy Director of the Dong Nai Province Department of Planning and Investment, "The relocation of an IP is an unprecedented issue in Vietnam. Accompanying support policies are being set up for the first time, and we need to gather opinions and discuss with various authorities to ensure that the interests of all sides are met.”

Dong Nai Provincial Police Headquarters is being built in Bien Hoa 1 IP (Source: Construction Newspaper)

Participating in the discussion on this issue, our Managing Partner Nguyen Van Phuc shared with VIR as follows: "The first thing investors need is a stable business environment, and manufacturing factories must be guaranteed long-term operation. The fact that companies had to relocate while operating in Bien Hoa 1 has caused huge difficulties and costs for investors.

The government needs to have an appropriate policy with a long-term vision when planning IPs and economic zones. The development of such parks will inevitably lead to the development of neighboring urban areas. This is understandable, as the need to live near one's workplace is legitimate.

Therefore, to avoid the same situation as in Bien Hoa 1, future IPs must be implemented with a longer term vision and located in appropriate locations to avoid any disruption. They must be consistent with the planning of transportation infrastructure and neighboring urban areas to ensure that workers can easily travel to and from work.

The relocation of Bien Hoa 1 should be considered as a case study for the relevant authorities to learn from in developing the law on IPs and economic zones ("EZ"), as well as other related legal documents."

It can be seen that with the decision of Dong Nai People's Committee to change the function of Bien Hoa 1 IP, it can be a right decision to solve environmental and urban problems in Bien Hoa City, towards sustainable development, but from the perspective of investors, this decision will bring a lot of difficulties. Therefore, as our Managing Partner Nguyen Van Phuc shared, the relocation of Bien Hoa 1 IP in particular and other IPs EZs in the future needs to be done with appropriate policies with a longer-term vision.

(Source: Internet)

As a corporate law firm, we always focus on issues that affect your business operations in Vietnam. Therefore, the relocation of the Bien Hoa 1 IP and the current policies and regulations related to the issue is an issue that HM&P is very concerned about. Through the practical and useful sharing of our Managing Partner Nguyen Van Phuc, we hope that the Dong Nai People's Committee will have appropriate policies, quickly complete the plan to implement the project, ensure the effective implementation of the relocation, minimize negative impact on the operation of enterprises and the interests of employees working in Bien Hoa 1 IP in the near future. In addition, the competent authority also considers this a "case study" to be able to draw important issues in the vision and planning of an IP and EZ to operate effectively and sustainably, bringing long-term benefits to enterprises.

Finally, HM&P would like to express our sincere gratitude to VIR for extending the invitation and creating the conditions for our Managing Partner as well as other HM&P lawyers to have the opportunity to participate in the exchange, share views and contribute ideas to its proposal on the issue of relocation of Bien Hoa 1 IP. We believe that collaboration and exchange of ideas among stakeholders is a key factor in making sustainable and positive decisions on important issues such as the relocation of the Bien Hoa 1 IP. Once again, we would like to express our sincere gratitude to the VIR and hope to have the opportunity to work with the VIR on other issues in the future.

Read more at: Uncertain future for Bien Hoa IP’s workers and businesses