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THE MINISTRY OF FINANCE, |
SOCIALIST REPUBLIC OF VIETNAM Hanoi, 22 October 1999 |
INTER CIRCULAR
Providing Guidance on making Escrows for Environmental Rehabilitation
in Mineral Mining Activities
- Pursuant to the Mineral Law dated March 20, 1996;
- Pursuant to the Law on Environmental Protection dated December 27, 1993;
- Pursuant to Decree No. 68/ ND-CP dated 1st November 1996 of the Government providing detailed regulations for the implementation of the Mineral Law;
The Ministry of Finance, the Ministry of Industry, and the Ministry of Science, Technology and Environment hereby jointly provide guidance on making escrows for environmental rehabilitation in mineral mining activities, as follows:
I. SUBJECTS AND OBJECTIVES OF MAKING ESCROWS
1. Subjects liable to making escrows:
Prior to conducting mineral mining activities, an organisation or individual, granted with a mining licence (as provided in Article 15 and Article 16 of the Government’s Decree No. 68/ND-CP dated 1st November 1996) must deposit a sum of money, precious metal, precious stone, or any form of money (hereinafter referred to as money), into a frozen account of a Vietnamese banking institution or a foreign banking institution operating in Vietnam (hereinafter referred to as a banking institution), to secure the performance of its obligations in relation to environment rehabilitation following mineral mining activities.
2. Objectives of making escrows:
The escrows to be deposited in a frozen account of a banking institution are aimed at securing the performance of obligations to rehabilitate the environment following the mineral mining activities as required by the law on mineral activities and in accordance with the provisions of this Circular..
II. BASES AND METHODS OF DETERMINING SCROWS
1. Bases for determining
escrows:
The amounts of escrows are determined on the basis of the total estimated costs for rehabilitation, the mining period as stated in the feasibility study report, the mine design and the assessment of the environmental impacts of the mining activities, which have been appraised and approved by the State competent authorities, and the effective term of the mineral mining licence.
2. Methods of determining the
escrow amount:
a. One-time escrows :
Where the mining period, as sated in the feasibility study report on mineral mining, is less than three (3) years, the escrow must be paid in one time only. The escrow amount is equal to one hundred per cent (100%) of the total estimated costs for environmental rehabilitation according to the feasibility study report, the mine design and the assessment on the environmental impacts of mining activities, which have been appraised and approved by the State competent authorities (not including the costs of using technology for reducing bad effects on environment during the mining operations).
b. Multiple escrows:
b.1. Where the mining period, as stated in the feasibility study report on mineral mining, is more than three (3) years, the escrows can be paid in several times;
b.2. The escrow amount is determined on the basis of the mining periods stated in the feasibility study report, the mining licence and the total estimated costs for environmental rehabilitation, which have been stated in the feasibility study report, the mine design and the assessment on environmental impacts of mining activities appraised and approved by the State competent authorities. The deposit amount shall be calculated by the following formula:
Where:
A: Escrow amount (calculated in VND) for each subject permitted to mine minerals;
Tg: Mining period (years) stated in the mining licence;
Tb: Mining period stated in the feasibility study report, the mine design and the assessment on the environmental impacts of mining activities, which have been appraised and approved by the State competent authorities;
Mcp: Total estimated costs for environmental rehabilitation (in VND) as stated in the feasibility study report, the mine design and the assessment on the environmental impacts of mining activities which have been appraised and approved by the competent authorities (not including the costs of using technology for reducing bad effects on environment during the mining operations).
b.3. Amount of the first escrow (B) is determined respectively as follows:
b.3.1. Where the mining period stated in the mining licence (Tg) is less than ten (10) years, the initial escrow amount is equal to twenty five per cent (25%) of the total escrow amount determined by the above formula (A);
b.3.2. Where the mining period stated in the mining licence (Tg) is from ten (10) years to twenty (20) years, the initial escrow amount is equal to twenty per cent (20%) of the total escrow amount determined by the above formula (A);
b.3.3. Where the mining period, stated in the mining licence (Tg) is more than twenty (20) years, the initial escrow amount is equal to fifteen (15%) per cent of the total escrow amount determined by the above formula (A);
b.4. The escrow amounts of the following times are determined on the basis of the residual escrow amount and the mining period, stated in the mining licence, in the following formula:
c. Extension of mining period:
c.1. If the mining activities during the extended period are considered by the environment competent authorities as not producing bad effects on the environment as they have not reached the maximum mining capacity, they are not subject to pay additional escrows.
c.2. If the mining activities during the extended period may produce any bad effect on the environment, an additional escrow must be paid one time on the basis of the total estimated costs for environmental rehabilitation for the extended mining activities which have been appraised and approved by the state competent authorities.
3. Time for escrow payment:
a. With regard to the one time escrow and the initial escrow payment of the multiple escrows:
The escrow must be paid prior to the date of commencement of the mineral mining activities as registered at the competent authorities by the organisation or individual granted with the mining licence, in accordance with the provisions of the Mineral Law and its guiding regulations.
b. With regard to multiple escrows (from the second deposit onwards)
The escrows must be paid every year (before the 31st of December) from the date of commencement of the mineral mining activities to the expiry date of the issued mining licence. Any person entitled to multiple escrows may choose to pay all the escrows in one time for the whole mining period stated in the mineral mining licence.
c. With regard to the extension of mining period:
The escrow must be paid within fifteen (15) days from the date of receiving the permission for the extension issued by competent authorities.
III. ORDER AND PROCEDURES FOR
MAKING ESCROWS
1. Promptly after the issuance of a mineral mining licence, the licence issuing authorities must send a notice to the licence holder requesting him to make an escrow at a banking institution in accordance with the provisions of this Circular.
2. Within thirty (30) days from the date of receipt of that notice, the mining licence holder must make the requested escrow and then inform in writing to the following bodies:
- Peoples Committees of provinces and centrally-run cities, where mining activities are carried out;
- The Ministry of Industry (the Department of Geology and Minerals of Vietnam);
- The Ministry of Science, Technology and Environment (The Department of Environment).
3. The subjects liable to make escrows shall be responsible for paying the escrow service fees to the banking institutions in accordance with the provisions of the law on the operations of banking institutions.
4. Procedures of making escrows are to be in accordance with the guidelines of the banking institutions where the escrows are deposited and also in conformity with the laws and regulations on escrow operations of banking institutions.
5. The escrows is to be made, paid back and accounted, in Vietnamese Dong. Upon a request to make an escrow in a foreign currency, it is to be converted into Vietnamese Dong in accordance with the regulations of the banking institution where that escrow is made.
IV. MANAGEMENT AND USE OF ESCROWS
1. The competent authorities that are responsible to issue, extend, and withdraw a mineral mining licence (as provided in Article 9 of Decree No. 68/ND-CP dated 1st November 1996 of the Government) are entitled to the following powers and responsibilities :
- to supervise, accelerate, and examine the escrow making by organisations and individuals engaged in mineral mining activities as provided for in this Circular;
- to allow the withdrawal of escrows by organisations or individuals in order to rehabilitate the environment in accordance with this Circular;
- to return the unused amounts of escrow to the escrow depositor in accordance with the provisions of the laws on minerals and environmental protection, and of this Circular.
2. State management bodies of environmental protection are responsible for appraising and certifying:
The extension of mining period for those mining activities considered as not producing bad environmental impacts.
The organisations or individuals that have fulfilled their tasks in environmental rehabilitation
3. Any organisation or individual which has made an escrow may be entitled to withdraw the escrow if it has rehabilitated the environment and that has been certified by the State management body of environmental protection..
4. If a mineral mining organisation or individual, which has made an escrow, fails to rehabilitate the environment or goes bankrupt or is dissolved, the competent authorities (as provided in Article 9 of Government Decree No. 68/ND-CP dated 1st November 1996) may decide to use that escrow for environmental rehabilitation and choose (by bidding) the organisation to carry out the environmental rehabilitation. The escrow must be used for environmental rehabilitation and pursuant to the work volumes and estimated costs of environmental rehabilitation appraised and approved by the competent authorities. If the escrow is not exhausted the residue should be returned to the escrow depositor; in case the escrow depositor has gone bankrupt or been dissolved, the residue should go to the State budget in accordance with the provisions of the law on management and disposal of assets upon a decision on their confiscation to the State budget, and on assets to be established under the State ownership. The amount of escrow, which has been used, must be examined and accounted in accordance with the provisions of the current laws on finance.
V. ORGANISATION OF IMPLEMENTATION
1. The Department of Geology and Minerals of Vietnam, the Departments of Industry, the Departments of Science, Technology and Environment, the Departments of Finance of provinces and centrally-run cities are responsible for assisting the Minister of Industry, the Minister of Science, Technology and Environment, the Minister of Finance, the Chairpersons of People's Committees of provinces and centrally-run cities in implementing this Circular.
2. A banking institution where a mineral mining subject makes an escrow to secure environmental rehabilitation as provided in this Circular, is entitled to charge a service fee on the escrow in accordance with the provisions of the law on operations of banking institutions and is responsible for:
- Completing all procedures in relation to escrows, including receiving escrows, opening a frozen account for the escrow, providing a deposit certificate to the escrow depositor, keeping all relevant documents and disbursing the escrows, etc.., in accordance with the provisions of the law on operations of banking institutions and this Circular;
- Disbursing the escrow to the subjects entitled to escrow withdrawals, as provided in this Circular.
3. Any subject, who is liable to make an escrow under this Circular and fails to do this, shall not be permitted to conduct mineral mining activities or the mineral mining licence shall be withdrawn, in accordance with the provisions of the law on mineral activities.
4. Any body, who has to return the mining licence or whose licence is withdrawn, must perform its obligation to make an escrow in accordance with this Circular for the period up to the time the licence is returned or withdrawn. The reimbursement of the unused escrow to that body is to be conducted after a certification in respect of completion of the environmental rehabilitation is submitted or after the balance-sheet of the environmental rehabilitation costs has been issued.
5. The State competent authorities that are entitled to appraise and approve reports on assessment of environmental impacts must co-ordinate with the Ministry of Finance, or the local Department of Finance (when the body appraising and approving the reports is a local State management body) in appraising and approving the estimated costs of environmental rehabilitation stated in the reports. In case there is no estimated costs for environmental rehabilitation in the reports, the said competent authorities must request the applicant to add those estimated costs to the report. The financial body and the body, who is entitled to approve the above report must closely co-ordinate with each other in managing, and conducting the examination of the disbursement of the escrows..
6. The inspection, examination, rewards and violation handling, provided for in this Circular, are to be carried out in accordance with the current provisions of law.
7. This Circular comes into effect fifteen (15) days after the date of signing. For those subjects whose licences have been issued before the effective date of this Circular and remain effective, and who are liable to rehabilitate the environment, must make the escrows in accordance with the provisions of this Circular. Any previous provisions of the Ministry of Finance, the Ministry of Industry, and the Ministry of Science, Technology and Environment contrary to this Circular are hereby repealed. Any problems arising in the course of implementation should be promptly reported by the concerned parties to the Ministry of Finance, the Ministry of Industry, and the Ministry of Science, Technology and Environment for study and timely settlement.
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FOR THE MINISTER VICE MINISTER (Signed) Le Huy Con |
FOR THE MINISTER VICE MINISTER (Signed) Pham Khoi Nguyen |
FOR THE MINISTER VICE MINISTER (Signed) Pham Van Trong |