THE GOVERNMENT

DECREES:

Article 1.- To issue together with this Decree the Regulation on Exercising Democracy in State Enterprises.

This Regulation shall be effected in State enterprises in accordance with Articles 1 and 2 of the Law on State Enterprises.

Article 2.- This Decree takes effect 15 days after its signing. The earlier regulations contrary to the Regulation promulgated together with this Decree are all now annulled.

The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government, the presidents of the People�s Committees of the provinces and centrally-run cities shall have to guide and inspect the implementation of this Decree.

The Managing Boards and directors of State enterprises shall have to implement this Decree.

On behalf of the Government

Prime Minister

REGULATION ON EXERCISING DEMOCRACY IN STATE ENTERPRISES

Chapter I

GENERAL PROVISIONS

Article 1.- The exercise of democracy in State enterprises is aimed at:

1. Concretizing the motto "people know, people do and people inspect", bringing into play the laborers� right to democracy through trade unions and to participatory democracy, promoting the creativeness of collectives and individuals in order to raise the labor efficiency, preserve and develop the State�s capital, practice thrift, combat wastefulness and corruption, violations of democracy and breaches of discipline as well as internal disturbance, bringing into play the leading role of the State economic sector in the cause of industrialization and modernization.

2. Creating a powerful motive force for the sustainable development of State enterprises, based on the close coordination between the director and the employees in term of their responsibilities in a joint effort to efficiently boost production and business, increase the State budget�s revenues, improve the laborers� life and create more jobs for them; clearly determining the rights, responsibilities, obligations and interests of the director, workers and employees regarding the results of production and business activities of the enterprise; creating a favorable environment for the consolidation of solidarity, self-criticism and criticism, mutual inspection and supervision between the director and workers and employees as well as among workers and employees and among leading and managerial officials; ensuring the harmony between the State�s interests and the interests of the enterprise, the director and laborers, corresponding to the enterprise�s production and business results.

Article 2.- The exercise of democracy in enterprises must go hand in hand with the raising of the effect of State management by the State management agencies and business management by enterprises; with the assignment of responsibilities and determination of powers in enterprises, the encouragement and creation of favorable environment for the director�s initiative and creative management activities suitable to the requirements of the market mechanism; raising of the workers�, employees� and managerial cadres� knowledge about law as well as their rights, obligations and responsibilities before law and strict implementation of the regulations and rules set for them; proper exercise of the laborers� rights, performance of the laborers� obligations and responsibilities in exercising democracy in State enterprises, and at the same time keeping of enterprises� production and/or business secrets in accordance with the provisions of law.

Article 3.- Employers and employees in State enterprises shall have to well perform their assigned tasks, strictly abide by the signed labor contracts and labor agreements, observe the rules and regulations of enterprises; adequately exercise the right to democracy, maintain the discipline, combat manifestations of corruption and abuse of democracy to break the internal solidarity; and strive for the development of enterprises at the time of good business or difficulties as well.

Article 4.- Enhancing the Party organizations� leadership in State enterprises over the materialization of the Party�s lines and policies and the State�s laws by the entire laborers, the Managing Boards (in State enterprises with Managing Boards), the directors, the trade unions as well as the Ho Chi Minh Communist Youth Union organizations in order to efficiently boost enterprises� activities and build the Party more and more strong.

Chapter II

THINGS TO BE PUBLICIZED IN STATE ENTERPRISES

Article 5.- Things to be publicized by the Managing Board and the director of a State enterprise shall include:

1. The long-term, medium-term and annual plans and general tasks on investment, production and business development of the enterprise, its advantages, disadvantages and weaknesses; especially, the tasks, production plans and activities of workshops, production groups (teams) and sections (divisions) of the enterprise; and the major undertakings on changing the mode of management and transformation of enterprises.

2. The State�s major regimes and policies and the enterprise�s implementation regulations, which are directly related to its laborers in term of their rearrangement, recruitment, dismissal, training and re-training; wages and incomes, social insurance, medical insurance, dwelling houses; profit distribution and deductions for establishment of the enterprise�s funds; the labor recruitment plans and the implementation thereof; training and fostering of laborers to raise their professional skills.

3. The enterprise�s rules and its regulations on the recruitment and dismissal of laborers; work time, extra time and paid and unpaid leaves; norms of expenses; payment of wages, bonuses and funeral or wedding offerings; promotion of cadres, training, fostering and raising their skills; commendation, discipline and material responsibility; on the protection of the enterprise�s property, production and/or business secrets and prestige in accordance with the provisions of law; on the processes of operating machines and equipment at working places; the thrifty use of raw materials and materials; the implementation of regulations on labor safety, environmental protection and the maintenance of hygiene at working places; fire prevention; prevention and combat against violations of law.

4. Financial publicity. More concretely:

- The auditing results and annual financial report of the enterprise.

- The situation on capital and efficiency of the use thereof by the enterprise, the situation on its due and overdue debts and the cause thereof; difficulties in and measures for capital mobilization and the raising of the efficiency of capital use.

- The enterprise�s revenues from business activities and other activities such as revenue from investment outside the enterprise; revenue from the purchase and/or sale of bills, bonds and shares; revenue from the leasing or contracting properties; revenue from the value differences of the liquidated properties; revenue from the State�s price subsidies; revenue from joint venture, partnership and stock capital contribution, and revenue from deposit and loan interests.

- Development investment, expenses for training and fostering laborers and raising their skills.

- The enterprise�s regulations on and making of expenses for managerial activities, guest reception, meetings, transactions and brokerage commissions; fines paid by the enterprise.

- The performance of tax obligations, the deductions made according to the State�s regulations, for social insurance, medical insurance and trade union fund.

- Losses and profits and the causes- objective, subjective- thereof; measures to increase profits and reduce losses.

- Incomes and average income of laborers.

- Deductions from after-tax profits for the establishment and use of the enterprise�s funds: the development investment fund, the financial reserve fund, the severance allowance reserve fund, the welfare fund and the reward fund. And expenses for humanitarian and social purposes.

- Other revenues and expenses.

5. Criteria of personnel; procedures, and responsibility for promotion of cadres from production groups (teams) upwards.

6. Plan of action of the people�s inspection board and results of the settlement of complaints and denunciations according to the provisions of the legislation on complaints and denunciations.

7. Resolutions of congresses of the Party organizations and committees, related to production and/or business under decisions of the enterprise�s Party Committee; resolutions of the Trade Union and Ho Chi Minh Communist Youth Union in the enterprise.

Article 6.- Basing themselves on the characteristics of the enterprise�s business lines, the Managing Board and director shall reach agreement with the Trade Union executive committee on which of the contents mentioned in Article 5 above should be made public to the entire enterprise, which should be periodically informed to the meeting of key officials (the standing members of the Party Committee, the president and vice president of the Trade Union, the secretary of the Ho Chi Minh Communist Youth Union, heads and deputy heads of sections (divisions) and workshops); and which contents should be notified to the sections (divisions), workshops, production groups (teams) and all laborers. In addition to the determination of the right of each subject in the enterprise to receive information, it is also necessary to clearly determine his/her responsibility to protect the enterprise�s production/business secrets, especially the secrets related to the production technologies and products� prices, in accordance with the provisions of law. For matters related to the State�s secrets, including defense- security secret, their dissemination must strictly comply with the provisions of legislation on the protection of the State secrets.

The eligible information receivers shall have the right to question the Managing Board and/or the director on the publicized contents prescribed in Article 5 of this Regulation; the Managing Board and the director shall have to explain and clarify questions and inquiries of organizations and laborers in the enterprise and take full responsibility before law for the accuracy of the publicized information; have to make public announcement on the acceptance of opinions and suggestions contributed by organizations and laborers concerning the matters to be publicized in the enterprise.

Article 7.- The Managing Board and the director shall closely coordinate with the Trade Union in ensuring the practical and timely provision of information to the right subjects, with contents already determined as necessarily to be publicized in the enterprise through different appropriate forms:

1. Congresses of workers and employees (the plenary congress or congress of representatives of workers and employees) which may be held by production groups (teams), sections (divisions) or the entire enterprise.

2. Announcement at periodical meetings of the enterprise�s key officials.

3. Dissemination at the meetings of the enterprise, or workshops, production groups (teams) or sections (divisions).

4. Announcement at the meetings of trade union organizations and other socio-political organizations in the enterprise.

5. Written notices or printed matters, which are sent directly to each production group (team), workshop, section (division) or posted up at the convenient places in the enterprise.

6. Announcement via the enterprise�s public addressing system.

Chapter III

THINGS TO BE COMMENTED BY LABORERS

Article 8.- Things to be commented by laborers before they are decided by the Managing Board and/or the director of the enterprise shall include:

1. The long-term, medium-term and annual production and/or business orientations, tasks and plans of the enterprise, especially the production and/or business tasks and plans of the sections (divisions), workshops, production groups (teams); and the assessment of the operation situation of the enterprise as well as of the sections (divisions), production groups (teams).

2. Measures to develop production and/or business to improve the product structure, raise the competitiveness, reorganize production and effect the equitization.

3. The elaboration and implementation of the regulations and rules as stipulated in Clause 3, Article 5 of this Regulation.

4. Measures for: the renewal of technologies and equipment; increase of labor productivity; raising of products� quality; reduction of production cost; environmental protection; improvement of the labor organization, labor protection and working conditions; rearrangement, training and fostering of laborers to raise their professional skills; with attention being paid to measures directly related to workshops, production groups (teams) and sections (divisions) where the laborers work.

5. The principal contents of the collective labor agreement concluded between the enterprise�s director and the president of its trade union or the trade union�s representative, including the commitments on jobs and job guarantee, rest time, wages, bonuses, wage allowances, economic-technical norms, labor safety, labor hygiene and environment, social insurance, medical insurance and social welfare.

6. The principal contents of labor contracts to be concluded between the laborers and the enterprise�s director or the latter�s representative, including the work to be done, work time, rest time, place of work, term of contract, wages, conditions on labor safety, labor sanitation and environment, social insurance and medical insurance for laborers.

7. The general strategy on the mobilization and use of capital sources, the performance of obligations towards the locality, the deduction of the after-tax profits for the establishment of funds, the regulations on guest reception, meetings, transactions and brokerage commission; and contents of the program of action in support of the locality and for charity and humanitarian purposes.

Article 9.- Things to be commented by laborers, which shall serve as references for the higher-level management agencies, Party organizations and mass organizations in the enterprise before their decision, consideration or handling, shall include:

1. The recommendation of persons with full qualifications and prestige to the posts of director, deputy director or chief accountant of the enterprise; the opinion poll on candidates to such positions as the chairman of the Managing Board (for State enterprises with Managing Boards), the director, deputy director or chief accountant of the enterprise, in term of their prestige, managerial capability, sociability, their capability of promoting democracy, their sense of justice, and morals. The recommendation of qualified and prestigious delegates of the Trade Union to take part in the Managing Board and the Control Commission (for enterprises with Managing Boards) so that the competent State agencies may consider and appoint them.

2. The elaboration of the program of action and assessment of the results of operation of the people�s inspection board.

3. The organization and agenda of the enterprise�s congresses of workers and employees at the production group- (team) level or higher-level, according to the Law on State Enterprises and under guidance of the Vietnam General Labor Confederation.

4. The elaboration of resolutions of congresses of the Party organizations and Party Committee on matters related to production and business of the enterprise.

5. The contents of operation of Trade Union organizations and organizations of the Ho Chi Minh Communist Youth Union.

Article 10.- Basing themselves on the characteristics of business lines and organization of production of the enterprise, the Managing Board and the director shall reach agreement with the executive committee of the trade union to publicly announce in the entire enterprise matters which must be commented by the entire workers and employees, which by sections (divisions), production groups (teams) or a number of experts inside and outside the enterprise.

The Managing Board, the director, the Party organizations and mass organizations in the enterprise shall have to make public notice on their acceptance of opinions and suggestions contributed by laborers. If the laborers� suggestions on the contents stipulated in Articles 8 and 9 are not accepted, the laborers shall still have to strictly abide by the director�s decisions (regarding the contents stipulated in Clauses 1, 2, 3, 4 and 7 of Article 8) as well as decisions of the higher-level management agencies, the party organizations and mass organizations in the enterprise (regarding the contents stipulated in Article 9).

Article 11.- Laborers shall contribute their opinions through the following major forms:

1. Congresses of workers and employees held by the enterprise, its sections (divisions), or production groups (teams).

2. Professional conferences convened by the enterprise�s director, heads of sections (divisions), workshops or production groups (teams).

3. Public discussions and negotiations on the contents of the collective labor agreement and labor contracts.

4. The citizen reception according to the provisions of the legislation on complaints and denunciations.

5. The collection of workers� and employees� opinions by grassroots Party Committees and executive committees of the Trade Union organizations.

6. Meetings held directly between the chairman of the Managing Board or the director and workers and employees as scheduled or at urgent request.

7. The placement of postal boxes for comments at the convenient places in the enterprise.

Chapter IV

THINGS TO BE DECIDED BY LABORERS

Article 12.- Things to be decided by laborers shall include:

1. Voting to adopt the collective labor agreement or the amendments and/or supplements thereto so that the president or representative of the trade union and the director may sign it.

2. Signing labor contracts with the director or his/her representative; unilateral terminating labor contracts as prescribed by the Labor Code.

3. Discussing and voting at the congress of workers and employees for adoption the regulations and planned norms of the enterprise, which are directly related to the laborers� rights, interests and obligations and conform to the State�s guidance as well as the practical situation of the enterprise; paying attention to the regulation on deduction for establishment and use of the welfare fund, the reward fund and the severance allowance reserve fund.

4. Electing persons to the people�s inspection board at the congress of the enterprise�s workers and employees.

Article 13.- The laborers shall decide things defined in Article 12 of this Regulation through:

1. The congress of workers and employees (the plenary congress or the congress of delegates of workers and employees).

2. The conference of the entire enterprise or meetings of sections (divisions), workshops, production groups (teams).

3. The trade union organizations of the enterprise.

Chapter V

LABORERS� RIGHT TO SUPERVISION AND INSPECTION

Article 14.- The laborers shall have the right to supervise and inspect all the contents already publicized in the enterprise as stipulated in Article 5 of this Regulation and shall also supervise, inspect and educate one another in the exercise of their rights and obligations, with special attention being paid to the right to supervise and inspect the following:

1. The performance of tasks and norms set in the enterprise�s production and/or business plans.

2. The implementation of resolutions of the congresses of workers and employees.

3. The observance of the regulations and rules of the enterprise.

4. The implementation of the collective labor agreement.

5. The performance of the labor contracts.

6. The implementation of the State�s policies and regimes, the payment of taxes and performance of obligations by the enterprise towards the State and society, especially the use of the after-tax funds, particularly the welfare fund of the enterprise.

7. The results of the settlement of labor disputes.

8. The results of the settlement of citizens� complaints and denunciations.

Article 15.- The laborers� right to supervision and inspection in the enterprise shall be exercised through the following major forms and organizations:

1. The enterprise�s congress of workers and employees, the meetings of sections (divisions), workshops, production groups (teams).

2. The leadership, inspection and supervision by the Party organizations and the Trade Union organization�s participation in the management.

3. The activities of the people�s inspection board.

4. The auditing activities as prescribed by the State.

5. The exercise of the right to make complaints, denunciations and reports in accordance with the legislation on complaints and denunciations.

Chapter VI

IMPLEMENTATION PROVISIONS

Article 16.- The State corporations shall base themselves on this Regulation to elaborate their own regulations suited to their respective conditions.

The State enterprises shall base themselves on this Regulation to elaborate regulations and rules of their respective enterprises, applicable to each specific section (division), workshop, production group (team).

Article 17.- The Managing Board, the director, the Trade Union and the Ho Chi Minh Communist Youth Union organizations of the enterprise shall have to protect, encourage and promptly commend those who combat negative phenomena; prevent and handle manifestations of taking revenge on others, obstructing the fight against negative phenomena as well as acts of abusing democracy, causing internal conflict and disorder within the enterprise, thus adversely affecting the enterprise�s production and business.

Any person who violates the provisions of this Regulation shall, depending on the nature and seriousness of his/her violation, be subject to administrative sanctions or examined for penal liability as prescribed by law.

Article 18.- Under the leadership of the Party committee and the chairman of the Managing Board, the director of the enterprise shall have to organize the implementation and coordinate with the enterprise�s trade union in the implementation of this Regulation.

Article 19.- The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government, the presidents of the People�s Committees of the provinces and centrally-run cities shall have to direct the implementation of this Regulation and shall periodically report thereon to the Government once every six months.

Article 20.- The Head of the Central Board for Renewing the Management of Enterprises shall have to supervise, sum up the implementation of this Regulation and periodically report the situation to the Prime Minister.

On behalf of the Government

Prime Minister