Sources of law and legal traditions
3.1 Introduction
As mentioned above, Vietnam is similar to civil law jurisdictions in that its sources of law comprise only written legislation, commonly referred to in Vietnam as �legal instruments’.
These are laws and regulations enacted by state bodies which are binding on citizens and enforceable by the state. Court judgments are not officially considered a source of law as judges do not have the power to interpret the law and court judgments are not binding in subsequent cases.[470] [471] The current Vietnamese legislation system comprises over 10 000 legal instruments; these are organised in a hierarchy in which higher-ranking legal instruments set out general rules and lower-ranking legal instruments provide the details. The ConÂstitution stands at the top of this legal hierarchy and forms the foundation of the entire legal system. The Law on Promulgation of Legal Instruments (LPLI), first enacted in 1996 and recently re-enacted in 2008,4 provides for this hierarchy of sources of law, the process for making law and the effectiveness and interaction between different sources of law. According to the LPLI, the sources of law in Vietnam comprise the following:• the Constitution
• Laws[472] and Resolutions of the National Assembly
• Ordinances and Resolutions of the Standing Committee of the National Assembly
• Orders and Decisions of the President
• Decrees and Resolutions of the Government
• Decisions and Directives of the Prime Minister
• Resolutions of the Judges’ Council of the Supreme People’s Court and Circulars of the Chief Justice of the Supreme People’s Court
• Circulars of the ChiefProcurator of the Supreme People’s Procuracy
• Circulars of Ministries and Decisions of Ministers
• Decisions of the Chief State Auditor
• Joint Circulars or Joint Resolutions of more than one issuing bodies
• Decisions of People’s Committees; Resolutions of People’s Councils.[473] There is no strict standard form of citing legal instruments.
In practice, each legal instrument is usually cited by reference to its number, year, issuing body and a short description of the subject matter. For example, Laws and Ordinances are most often cited only by their name (possibly also the number) and the year in which they were passed. For example, the company law of Vietnam could be referred to in short as â€?Law on Enterprises of2005’ or â€?Law on Enterprises passed by the National Assembly in 2005’. Alternatively (but less frequently), it could be referred to in full as â€?Law No. 60/2005/QH117 on Enterprises passed by the eleventh legislature of the National Assembly in its eighth session on 29 NovemÂber 2005'. Where a legal instrument has been amended, the amending legal instrument and the amended legal instrument are both referred to for completeÂness. For example, one would refer to the Ordinance on Population as â€?Ordinance 06/2003/PL-UBTVQU11 on Population as amended by Ordinance 08/2008/PL- UBTVQH12,. Decrees and Circulars are typically cited by their number (which often includes the year), the issuing body and the subject matter. The date is also often included, although not strictly necessary. For example, the current Decree on investment could be referred to as â€?Decree 108/2006/ND-CP ofthe Government dated 22 September 2006 making detailed provisions for the implementation of a number of articles of the Law on Investment'.As a matter of form, the above structure of legal instruments in Vietnam has not changed much since 1986, except that it is now more clearly organised under the LPLI of 2008. However, as a matter of substance, significant changes have taken place. In the late 1980s, there were relatively few legal instruments and they were often short, poorly drafted and, notably, not easily accessible by the public. The Official Gazettes contained a limited number of legal instruments but only months after they were enacted. Laws were drafted solely by Government officials with practically no public consultation or advice from external or international experts.
The limited number of legal instruments meant that there were many gaps in the legal system, resulting in a high level of discretion in the way state officials handled their affairs. Twenty-five years later, Vietnam now has an enormous and sophisticated body of legal instruments regulating almost every single activity in the country. Laws are now widely and easily available to the public through various means, including hard copies and electronic databases providing free access. There is now a high degree of transparency in the law-making process whereby draft laws are frequently released for public comments. International advisers are often engaged to advise on drafting laws and regulations, resulting in many laws being of international standard, such as the Law on Enterprises of2005 and the Law on Competition of2004. In short, over the past 25 years, the Vietnamese law-making authorities have created a comprehensive body of legal instruments, laying a firm foundation for the development of a sound legal system in the next few decades.Some of the main legal instruments are now described in more detail.
3.2 The Constitution
As mentioned above, Vietnam enacted its first Constitution in 1946. This was re-enacted several times before the current one was passed in 1992 and
7 The acronym after the number indicates the issuing body. For example â€?QH’ means National Assembly; â€?CP’ means Government, and so on. subsequently amended in 2001. This is the supreme legal instrument, passed with a two-third majority of the National Assembly. Consisting of about 150 articles, it provides for the basic rights and obligations of citizens; the strucÂture, powers and duties of the main state institutions; and the structure and development of the economy, culture and the society. Compared with the previÂous Constitutions, the most important change in the 1992 Constitution was the recognition of the development of a market-oriented economy, the recognition of private ownership and the permission and encouragement of foreign investment activities.[474] This was a fundamental change which paved the way for many other developments in the legal system over the following two and a half decades and beyond.
The legal institutions set up under the 1992 Constitution are substantially the same as those that existed under the previous Constitutions. These include the Legislature (NationalAssembly), the executive (the Government), the judiciary (the courts) and the prosecutors (the procuracy). Similar to the previous ConstiÂtutions, there is no concept of separation of powers under the 1992 Constitution. Instead, it adopts a system of centralised democracy whereby all state powers are deposited in the National Assembly which then sub-delegates powers to other branches in the system. Further details of these institutions and how they interact are provided later in this chapter.
3.3 Laws
Immediately below the Constitution in the hierarchy of legal instruments are Laws issued by the National Assembly. A Law represents the will of the National Assembly to regulate a particular subject matter and it often contains the most general rules and principles covering that area, with details to be stipulated by the Government and its Ministries. It is often the case that if an activity is not regulated by a Law, it is not regulated at all.[475] Starting with about 20 Laws in 1986 and about 90 Laws in 1995, Vietnam now has over 250 Laws regulating all different aspects of the society. While Laws enacted in the late 1980s would normallybe short and simple, Laws enacted more recently are much more detailed and sophisticated. For example, the Law on Foreign Investment of 1987was about 10 pages long with 42 articles. In contrast, the LawonInvestment of2005 is about 30 pages long and has 89 articles. The Law on Companies of 1990 was 15 pages long with 46 articles, while the Law on Enterprises of2005 is 100 pages long with 172 articles. Besides increasing in length, current Laws provide formany legal concepts and principles notknownin Vietnamese law25 years ago. For example, while the Law on Companies of1990 had no provisions on directors’ duties, the Law on Enterprises of2005 has detailed provisions on this issue.
While the Law on Foreign Investment of 1987 only contemplated direct investment, the Law on Investment of 2005 provides for all forms of investment, direct and indirect, and how they are to be implemented and regulated in Vietnam.Most of the Laws are named �Law’ followed by the subject matter: for example, the Law on Investment, the Law on Enterprises, the Law on Competition. Some of the more comprehensive Laws are also named Codes, such as the Civil Code, the Labour Code and the Criminal Code. These Codes have the same effect as Laws, except that they are often lengthy and comprehensive, covering an entire subject matter.
As mentioned above, a Law generally contains only broad principles on the regulated area without providing details on how such principles are to be impleÂmented in practice. For example, the Law on Investment of2005 prescribes that foreigners investing in a joint venture company must submit to the authority a joint venture contract. However, this Law does not specifythe required content of a joint venture contract or whether it must be prepared in Vietnamese or foreign languages. These â€?details’ are often to be provided for in a lower-ranking legal instrument, typically in a Decree of the Government or a Circular of the relevant Ministry implementing the Law. Forexample, the Decree of the Government may stipulate the required content of the joint venture contract and require it to be approved by a particular Ministry. However, the Decree may not specify the time limit for approval or the fee that must be paid to obtain such approval. The MinÂistry of Planning and Investment will then follow with a Circular implementing the Decree, prescribing the time limit for approval or the form for the applicant to fill. The Ministry of Finance will also follow by issuing a Circular prescribing the fees payable for such approval.
For this reason, up to the late 1990s, a Law, once passed, would remain practically ineffectual for a long time simply because there was no Decree or Circular implementing it.
It could take years for a Law to become reality if it took that long for the Government to arrange for the necessary Decree or Circular to be passed, providing for the necessary �details’. In extreme cases, by the time an implementing Decree or Circular was issued, it was already time for the Law to be amended or repealed. Fortunately, this problem has now become almost history thanks to several factors. First, the Laws are becoming increasingly detailed, obviating the need for implementing regulations. Second, the Government and Ministries are now much faster and more efficient in issuing implementing regulations. Third, the National Assembly now often requires draft Decrees or draft Circulars to be ready when a draft Law is submitted to the National Assembly for enactment. As a result, an implementing Decree or Circular may be issued shortly after the Law is passed, enabling the Law to be implemented very quickly.Every year, the National Assembly approves a Law-making program which lists the Laws to be discussed or passed in the following year. Typically, a Law proposal, often referred to as a �Law project’, is proposed to the NationalAssembly by a relevant Ministry or organisation. After a Law proposal is accepted and included in the Law-making program of the National Assembly, it will go through a Iengthyprocess to be drafted, discussed by various Ministries and organisations before it is tabled before the National Assembly, debated and eventually enacted. This process is required by the LPLI and may typically take several years. In practice, a draft Law must go through the following steps before it is tabled before the National Assembly for the first reading:
1. drafted by a drafting committee
2. released for public comments
3. screened by relevant Ministries, including the Ministry of Justice
4. screened by a Committee of the National Assembly, often the Judicial Committee or the Law Committee
5. reported to and evaluated by the Standing Committee of the National Assembly.
A draft Law is often submitted to the National Assembly together with a subÂmission paper explaining in detail the necessity for the Law and the rationale for each particular section or chapter in the draft Law. Other reports are also submitted, such as an impact assessment report or a status report on the subÂject matter which the draft Law is intended to regulate. It is common these days for international advisers to be engaged to comment on draft Laws. Public comments on the drafts are collected via the internet, surveys, seminars and conferences.
After the first reading, most Law projects are returned to the drafting agency for revisions to reflect comments of National Assembly delegates. The draft Law is then resubmitted to the National Assembly for the second reading, upon which the Law is often passed. Finally, it has to be promulgated by the President before it takes effect.
3.4 Ordinances
Where a matter needs to be regulated but the circumstances do not allow for a Law to be passed by the National Assembly, the Standing Committee of the National Assembly may pass an Ordinance regulating the matter. The process for passing an Ordinance is simpler and less time consuming than a Law, enabling an Ordinance to be passed within six months from the time it is originated. An Ordinance, ranking lower than a Law in the hierarchy, must not contradict the provisions of a Law. Sometimes, an Ordinance is passed as a means of testing a draft Law. If the Ordinance proves to be practically sound, a Law project is then initiated, ultimately resulting in a Law being passed by the National Assembly. By the end of 2009, Vietnam had in total about 80 Ordinances in effect.
3.5 Decrees
Next in the hierarchy of legal instruments are Decrees of the Government. By the end of 2009, Vietnam had almost 1000 Decrees in effect. Every year, the Government passes over 100 Decrees providing details for a number of Laws. Decrees are typically needed to implement an existing Law. Occasionally, the Government passes a Decree to regulate a subject matter not yet regulated by any Law. However, this is notably rare. Itis interesting that the annual number of Decrees has not increased over the years. However, the length and sophistication of the Decrees have certainly increased. While it would be rare in the 1980s or even 1990s to have a Decree exceeding 20 pages in length, this is now very common.
The LPLI prescribes a process for drafting and passing Decrees.[476] Every year, the Government approves a Decree-making program for the following year, specifying a Ministry in charge of each particular draft Decree. A draft Decree is then prepared by a drafting committee chaired by the Ministry in charge. Public comment is also sought during the drafting process. The draft is then screened by an evaluation council including the Ministry of Justice before it is tabled before and passed by the Government. This process often takes from six months to a year.
3.6 Circulars
Almost lowest in the hierarchy but most often referred to in practice, Circulars issued by Ministries contain the most detailed provisions regarding the impleÂmentation of a Law or a Decree. The longest and most detailed Circulars are those relating to taxation; often exceeding 100 pages, these contain detailed forms, addresses for the forms to be sent, penalties for late payments, and so on. They deal with various minute circumstances which may possibly occur in practice. Over the past 25 years, Vietnamese Ministries have produced a very large number of Circulars. A search on a Vietnamese law database for CircuÂlars yields almost 5000 entries.[477] At least half of these Circulars are still in effect.
Compared to the 1980s and 1990s, mostCirculars these days are more detailed and better drafted. However, the large number of Circulars also means possiÂble overlap and inconsistencies between Circulars issued by different Ministries addressing the same subject matter. A Circular issued by the Ministry of Planning and Investment on investment licensing fees may conflict with a Circular issued by the Ministry of Finance on fees and charges to be collected by state authorities. Although draft Decrees are often screened carefully by the Ministry of Justice and other Ministries before being enacted, a draft Circular is often considered a task to be performed within one Ministry. While comments are sought from other Ministries, this is often treated as a mere formality and it is assumed that the Circular should not affect issues falling outside the jurisdiction of the Ministry in charge.
3.7 Otherlegalinstruments
Discussed so far are the main legal instruments one often encounters. Other legal instruments also exist but are less frequently referred to. For example, the National Assembly, the Standing Committee of the National Assembly and the Government all issue Resolutions on specific issues. Ministers issue Decisions, occasionally attaching detailed regulations on a particular subject matter within their respective authority. The Judges' Council of the Supreme People's Court issues Resolutions guiding lower courts on how to resolve cases. These are all legal instruments and thus part of the legal system of Vietnam.
3.8 International treaties
Vietnam is a party to many international treaties. Under Vietnamese law, interÂnational treaties take precedence over domestic legislation to the extent of any inconsistency. Domestic legal instruments must be drafted to comply with interÂnational treaties that Vietnam has entered into. This is specified in many laws, as well as in the LPLI.12 Therefore, international treaties effectively form another source of law in Vietnam.
3.9 Role of the Ministry of Justice
The Ministry of Justice has been playing an increasingly important role in checkÂing the legality of legal instruments, both before and after they are enacted. It participates actively in the evaluation and assessment of draft Laws, Decrees and other legal instruments and provides comments and opinions on them. It also examines legal instruments that are already passed by other bodies (mostly Ministries and People's Committees) and will issue an opinion if it considers that a particular legal instrument is unlawful because it contradicts a higher level legal instrument or has not been passed in accordance with the correct procedures. In theory, such opinion may not be binding upon the issuing body of the relevant legal instrument. However, it is highly influential in practice, such that upon an unfavourable opinion being issued by the MinÂistry of Justice, the issuing body has often moved to revoke the relevant legal instrument.
3.10 Lack of clarity and the use of �official letters’
With a legal system comprising over 10 000 legal instruments as described above, it is inevitable that inconsistencies, overlap and contradictions will exist, resulting in ambiguities in the Vietnamese legal system. This is exacerbated by occasionÂally poor drafting skills, especially at the level of Ministries or People's CommitÂtees. In addition, the consensus-based system in Vietnam practically requires the
12 LPLI, art 82. agreement of every party involved before a draft legal instrument is passed. ConÂsequently, clear and unambiguous drafting often has to give way to compromises in order for the relevant legal instrument to be passed. While such compromises achieve the passing of the legal instrument, they leave a number of questions unanswered in its content.
Where an ambiguity exists in a legal instrument, citizens will find it difficult in deciding how to act. In Vietnam the courts are not empowered to interpret legal instruments. While the Standing Committee of the National Assembly has the power to interpret Laws and Ordinances, this power is hardly exercised. In this context, a practice has developed in Vietnam whereby citizens submit enquiries to the authority that drafted, passed or is now administering the implementaÂtion of the relevant legal instrument. Such authority then provides a written response, informing the citizen of how the legal instrument should be interÂpreted or applied and how the citizen should behave. Such written response is invariably in the form of an â€?official letter'. Every week, hundreds of â€?offiÂcial letters' are issued by various government authorities answering enquiries from citizens on how to interpret or apply legal instruments which are not clear.
However, one needs to bear in mind that â€?official letters' are not legal instruÂments. Therefore, strictly speaking, they are not binding and have no force of law. They merely represent the way a particular authority views a legal instrument. In practice, there have been cases where two authorities issue conflicting official letÂters on the same subject matter. There have also been cases where official letters have been withdrawn because they were considered, in hindsight, an incorrect interpretation of the relevant legal instrument. In theory, a definitive answer is only known when a court passes judgment on a dispute (notwithstanding that the courts do not have the power to interpret the law) or when the competent authority passes a legal instrument addressing the relevant question. However, in practice, â€?official letters' continue to play an important role in guiding the behaviour of the community. To the relevant citizens, it is practically the view of the authority administering the law that counts, regardless of its correctness or otherwise.
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