Vietnam’s Experiences with International Investment Agreements Governance: Issues and Solutions

Abstract

Vietnam’s major economic reforms of Doi Moi (Renovation) was launched in 1986 by the Communist Party of Vietnam (CPV) to boost the country’s underperforming economy and restore international ties. Under the Doi Moi policy, the Soviet centrally-planned economy was replaced with a socialist market mechanism, which promoted the concept of a multi-sectoral economy, open-door policies towards international trade and investment, and recognized private property rights. The leadership of Vietnam has identified international investment agreements (IIAs) to be significant for the transition, therefore putting them at the forefront of national economic policy. During the last decades, Vietnam has quickly developed its IIA network. As of 2019, Vietnam concluded 67 BITs and 12 FTAs (with investment protection provisions). The Vietnamese government aslo has made substantial efforts in developing a favourable FDI environment in the light of its integration. The national legal framework for investment has been regularly amended and revised to meet the country’s IIA obligations. However, it is observed that the country still faces numerous issues relating to IIA governance, which have resulted in increasing investor-state disputes in recent years. This raises big concerns for the government. This article seeks to analyse the IIA’s governance in Vietnam. It is believed that a proper assessment of the IIA governance shall be based on two important factors. Firstly, states must have a clear IIA policy and seek to comply with their international treaty obligations. Secondly, states must take initiative to internalize the IIA’s obligations into the legal system as well as take into account the IIAs obligations in decision making at both central and local levels. It is of high significance to assess the process through which the IIAs internalization happens. The internationalization could be done not only through the legislative processes - transplanting the IIAs into the national legislation, but also through other components, including informational processes – informing the state’s international legal obligations to the relevant domestic actors, monitoring processes – screening the investment policies and measures to ensure the compliance with state’s international obligations, and remedial process – correcting or defending the state’s international obligations.