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Lawyer in Vietnam Oliver Massmann Education and Training
Executive Summary
The Vietnamese economy continues to grow and in order to sustain this growth at desired Levels the need
for quality education and training is imperative. Vietnam needs to improve the productivity of its
workforce and although a challenge at the present time with effective strategies it can become an
opportunity. This will be best achieved through a coordinated effort by all major stakeholders Lead by the
Vietnamese Government.
The article focuses on two main areas firstly, Decree 73 and secondly, issues relating to Technical and
Vocational Education and Training (TVET).
Decree 73 applies to foreign investment and cooperation projects in education in Vietnam. The quality of
education in Vietnam has been an issue and this can be improved, in part, by attracting foreign
institutions that have a record of delivering quality education.
A number of issues and recommendations have been raised and made to help make decree 73 more
effective in establishment of quality education institutions in Vietnam.
Having effective TVET institutions lays the foundation for economic growth by supplying work ready
graduates with the necessary knowledge, skills, and attitude to make a positive contribution in the
workplace. To achieve this it is necessary to know what competencies are needed by industry and then
developing and delivering curriculum to produce the graduates that industry needs.
The capacity of the institutions needs to be raised to the required Levels to be able to produce these
graduates. This requires training of TVET staff in areas such as Leadership, curriculum development,
market research and analysis etc. In addition, TVET institutions need to be able to attract capable
students and the development of a National Qualifications Framework (NQF) and a single articulation
system for Vietnamese education.
In conclusion the Vietnamese economy continues to grow and this is of benefit to the citizens of
Vietnam. There are opportunities for Vietnam, however, it needs a highly competent workforce to drive
growth in the economy.
Quality education and training is required and this would also require the combined efforts of relevant
stakeholders working closely together to find effective solutions. The Education and Training Working
Group, through the FOREIGN INVESTOR GROUP, will continue with its commitment to assist
Vietnam in achieving it economic potential.
1. Introduction
The Vietnamese economy is entering a new era with the formation of the ASEAN Economic Community
(AEC) and the Trans Pacific Partnership (TPP). This should lead to many growth opportunities in the
Vietnamese economy. However, in order to take full advantage of these opportunities the Vietnamese
workforce needs relevant knowledge and skills. The size of the Vietnamese workforce has been a key
factor in Vietnam’s economic growth, however, this cannot continue. Vietnam needs to focus on making
its workforce more productive.
A recent report from the International Labour Organisation (ILO) showed that Vietnam’s labour
productivity rate in 2013 was among the lowest in Asia Pacific. It was 15 times lower than Singapore, 11
times lower than Japan, and 10 times lower than South Korea. In addition, another report stated that
despite considerable improvement in recent years, Vietnam’s labour productivity is lagging decades
behind regional countries. The opportunity for Vietnam is to increase the skills of its workforce to rapidly
improve the productivity of its workforce.
The World Bank report "Skilling up Vietnam: Preparing the workforce for a modern market economy
states that "Equipping its workforce with the right skills will, therefore, be an important part of Vietnam’s
effort to accelerate economic growth and further its economic modernization in the coming decade and
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more". Therefore, efficient and effective education and training is integral to the development of the
Vietnamese workforce and economic growth.
The success in improving the quality of education and training in Vietnam will require the combined
efforts of relevant stakeholders working closely together to find effective solutions. The Education and
Training Working Group, through the FOREIGN INVESTOR GROUP, will continue with its
commitment to assist Vietnam in achieving it economic potential through improvements in education and
training.
This report will focus primarily on Decree 73 and the Technical and Vocational Education and Training
through the identification of relevant issues and opportunities to improve.
2. Decree 73
Decree 73 replaces Decree 06, and applies to foreign investment and cooperation projects in education
and vocational training in Vietnam including foreign-invested tertiary institutions, schools and
kindergartens, twinning programs, and representative offices of foreign education institutions. We firmly
believe that the most important goal is to have quality graduates entering the workforce and that Decree
73 is integral in this respect. The following are the main issues raised by the education and training
working group with proposed recommendations.
2.1 Licensing-related issue
2.1.1 Requiring 3 kinds of licenses
Under the Decree 73, the working group views it as being much more complicated than in
the past, as it requests to have an investment license, then an establishment license, then an operations
license. This applies even when setting up a branch of an already licensed organization. A lot of
articlework/steps are repeated during these processes and assessed by many of the same departments.
This results in an inefficient use of time for investors/organizations and agencies issuing licenses.
New investors to Vietnam, as well as current investors, feel that it is far too onerous to overcome all these
complicated licensing procedures. In addition, this is in contradiction with what was stated by the
Government and National Assembly on the investment law (i.e. simplifying administrative procedures for
investors).
The license application now has 3 steps instead of 2 like before (the additional step is the establishment
license). The application required is exactly the same for all 3 licenses and involves the same departments
for approval, which is duplicating processes and, therefore, simplification is strongly recommended.
The investment certificate requires the involvement of 7 departments/government bodies including the
Department of Planning and Investment, the Department of Education and Training (DOET), the
Construction Department, the People Committee of the District (they need to get 2 more Departments’
approval: the Architects Department, and the Fire Department then finally approval by the Peoples
Committee.
The establishment license requires the involvement of 3 departments/government bodies, which are
DOET, the Provincial People’s Committee, and the Department of Internal Affairs. The operations
license requires only the approval of DOET.
Recommendation
Retain the two-step process previously provided in Decree No. 06 and Circular 14.
2.1.2 The list of application documents
Currently, the list of application documents is not clearly understood and it leads to licensing authorities
requiring similar documents for 3 kinds of licenses. This poses a big challenge for investors.
For example, at the stage of applying the establishment license, the completed profiles of foreign teachers
that need to be submitted, include their work permit and labour contract However, the foreign invested
educational institution are not allowed to start operating until the operation license is granted.
3
Articles 38 and 48 of Decree 73 states that "it needs 60 working days to issue the establishment license
and 32 working days to issue the operation license". Therefore, the total duration is 92 workings days,
approximately 4 months. This means that the foreign invested educational Institution must pay 4 months
salary to these teachers until they obtain the necessary licenses to commence operations.
Recommendations
- That the documents required to obtain each type of license are clarified.
- Circulars to guide the implementation of the Decree 73 need to include clear penalties when
government officials process applications in order to avoid time-consuming delays and unnecessary costs
for investors.
2.1.3 Inspection the facilities of foreign invested educational Institution
Due to ambiguous regulations in Decree 73, licensing authorities need to conduct a number of inspections
of the facilities before issuing each license. Prior to commencing operations, each educational institution
will have 3 inspections by three different licensing authorities at the same location. This is an inefficient
use of both time and manpower for both investors and licensing authorities.
Recommendations
Decree 73 shouLd incLude provisions that cLassify at which period of the License appLication the
faciLities of the foreign invested educationaL institution need to be inspected.
2.2 The limitation on the percentage of Vietnamese students. (Article 24)
The Limited percentage 10%, 20% of Vietnamese students aLLowed to join internationaL schooLs as per
provided in ArticLe 24 of Decree No.73 are extremeLy unreasonabLe because of some reasons:
The demand of Vietnamese students in internationaL schooL is more and more increasing. If the
Government does not aLLow them to join internationaL schooLs in Vietnam, they wiLL go oversea. In
fact, the number of Vietnamese students go to overseas for study is increasing every year with current
now is more than 1 10.000 students in 47 countries with the schooL fee is from 30,000 USD to 40,000
per year. Vietnamese is exporting about 3 biLLion USD every year to overseas for education.
With this Limitation, the foreign investment in education is cLosed in second-tier cities of Vietnam
because the caLcuLation of percentage 10%, 20% of Vietnamese students aLLowed to join internationaL
schooLs is based on the number of foreign enroLLed students. If the foreign invested institutions have no
foreign students, then no Vietnamese students can enroL. The fact is aLmost second-tier provinces
besides Hanoi and Ho Chi Minh where have a few foreigners come to work and Live, it seems having no
foreign students for enroLment, it shaLL have no Vietnamese students are aLLowed to study. As
consequence, foreign investment in education is cLosed to second-tier cities in Vietnam.
Some concern that a great number of Vietnamese students studying at internationaL schooLs wiLL Lead
to the Loss of Vietnamese cuLturaL identity. However, this seems to be a conservative opinion because if
these students are not aLLowed to enroL at internationaL schooLs in Vietnam, they wiLL go abroad upon
their demand. And therefore, the Vietnamese cuLturaL identity wiLL be more difficuLt to be maintained.
Furthermore, some subjects such as: History, Geography, Literature and Vietnam study are compuLsory
in internationaL schooLs.
Recommendation
The quaLity of the Vietnamese education system needs to improve and to achieve this the presence of
foreign investment in education is very necessary. The Government shouLd end this Limitation but add
more conditions to ensure that Vietnamese students in internationaL schooLs to Learn and retain their
Vietnamese cuLture and traditions.
2.3 Article 74 - Point 1
The foLLowing is stipuLated in Decree 73.
Implementation Provisions - Article 74. Transitional provisions
"I.Foreign-capitalized educationaL institutions and their campuses that have been issued with the
Investment certificates concurrentLy, the Business registration certificates and the Licenses to provide
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education before this Decree takes effect are exempted from reappraisal, but must supplement and
complete the dossiers within 06 months since the effective date of the Decree in order to be issued with
the Decisions on approving the establishment of educationaL institutions and campuses”
Recommendations
If the establishment license is still retained, we respectfully recommend the Ministry to amend Article 74
of Decree 73 as recommended below so that non state higher education organizations can obtain a
decision on approving the establishment of educational institutions and campuses in a timely manner.
Currently, some members of the Education and Training Working Group are preparing dossiers following
the requirements as set out in this Article. However, officials are requesting that new requirements under
Decree 73 must be met instead of requirements under Decree 06. We respectfully request that the
Ministry indicates in the guiding regulations of Decree 73 that it does not require retroactive applications
when applying for the decision.
Suggested modification to Article 74.1.
"1. Foreign-capitalized educational institutions and their campuses that have been issued with the
investment certificates concurrently, the Business registration certificates and the Licenses to provide
education before this Decree takes effect are exempted from reappraisal, but have to submit an
application for establishment license and report actual activities in the last 3 years must supplement and
complete the dossiers within 06 months as from this Decree takes effect in order to be issued with the
Decisions on approving the
establishment of educational institutions and campuses.
2.4 Implementing the transitional provisions on enrolment of Vietnamese students and teaching
international curriculum (Article 12, Circular No. 34)
Clause 2: The foreign invested schools who already owned the pilot license on teaching international
curriculum and bilingual language for Vietnamese students issued by the competent authorities before the
effective date of Decree No. 73 shall be permitted to continue the issued pilot license. However, there is
inconsistent application between the DOET by DOET. Some accepted and followed this guidance while
others did not accept it with the opinion that it is only pilot license.
For example: Previously, in accordance with Decree No. 06 and Circular No. 14, the foreign invested
schools were allowed to provide educational service for Vietnamese students at senior high school level
but only piloted in Hanoi and Ho Chi Minh city. Based on this regulation, the schools had been granted
the pilot license from Department of Planning and Investment and Department of Education and Training
provide educational service for Vietnamese students at senior high school level but only piloted in Hanoi
and Ho Chi Minh City.
In accordance with Article 12 of the Circular No. 34 as abovementioned, we understand that the schools
who already obtained this pilot license shall be permitted to continue that one.
On 08 July 2014, MOET issued Official Letter No. 4774 to re-confirm about this matter.
However, in fact, some DOETs accepted and followed this guidance while others did not accept it
Recommendation
We would like to request MOET to have instructions to all DOETs for consistence 2.5 Invested
Capital (Article 28.6)
Article 28.6: The projects of investment in establishing higher education institutions must reach at least
150 million VND per student (not including the expense on land tenancy). The
total minimum capital is calculated when the estimated education scale is greatest, but must not be lower
than 300 billion VND.
This provision lacks clarity and creates confusion for investors.
Recommendations
It is requested that the total invested capital to be calculated based on the total number of full-time
equivalent students, instead of basing it on the time when the estimated education scale is greatest. In
5
reality, the total education and training capacity can be 3 times greater than the total number of full-time
equivalent students.
In addition, the total invested capital for the project will be disbursed through each stage of the project’s
expected implementation. Thus, the invested capital must be registered on the investment certificate
based on each implementation stage.
2.6 Conditions for approving educational activities (opening a new degree program)
The establishment of disciplines of university and college is prescribed in Circular No. 08/201 1/TT-
BGDDT dated February 17, 2011 of the Ministry of Education and Training stipulating conditions,
dossiers, procedures for opening disciplines of training university, college level. However, this regulation
on establishing disciplines is very complicated and not in accordance with foreign-invested educational
institutions.
Recommendations
- It is proposed that there should be separate regulations on establishing educational disciplines of
foreign-invested educational institutions.
- We respectfully request to make the guiding regulations of Decree 73 clear in term of
establishing new disciplines for foreign educational institutions to come under one set of separate
regulation OR, as an alternative, to come under the existing regulations on establishing new disciplines
under colleges and universities issued by the MOET.
2.7 Facilities and equipment (Article 29)
Not all students are present at campus at a single point of time. A student may register from one to four
courses per semester, and thus shall attend class for 3-12 hours per week. Students will have to spend
time for preparation and doing assignment that do not require them to be present at the campus.
Therefore, stipulating minimum land/floor areas for students without taking into account the number of
students present at the campus at a point of time is not reasonable, and may bring higher costs to
education institutions that will then increase tuition fees.
Recommendations
Minimum land/floor areas for students should not be specified in proportion to number of students.
Decree 73 should be amended to provide that the minimum land/floor areas for students should be in
proportion to the maximum number of students present at the campus at a point of time, and not simply in
proportion to number of students.
Furthermore, the facilities and equipment requirements on non-state higher education student ratio etc.
may become an increasing challenge with land pressures. Therefore, we suggest greater transparency in
how the specific ratios were determined; perhaps this ratio could be lowered.
2.8 The lack of a legal framework for extension of operation term of educational institution
Decree 73/2012 regulated that if the educationaL institution registers its operation term for more than 20
years it must meet the condition of construction its own buildings. There is no requirement of
construction its own buildings if it registers for Less than 20 years.
However, the decree does not mention the situation where the operation term of the educationaL
institution has expired. In this case, the Licensing authority wiLL add the previous term to the extended
term, and is the total is greater that 20 years then the conditions of construction of its own building wiLL
apply. This is deemed very unfair and needs to be revised.
Recommendations
- We respectfully request the MOET to amend Article 29.6 of Decree 73 as follows: A foreign-
capitalized educational institution that register or applies for extension of operation s license for less than
20years do not have to build their own facilities.
- The amendment to Decree 73 shouLd add more regulations on registering extension the operation
term is Less than 20 years, wiLL not require construction of its own buildings.
2.9 The teaching staff (Article 31)
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2.9.1 Minimum qualification of instructors
We are very much concerned about requirements for teaching staff being too high/chaLLenging for some
transnational education delivery especially:
- For tertiary education institutions, 60% of course modules must be delivered by permanent
teachers, and 80% of teaching staff must hold postgraduate degrees.
- Article 10.2.b. mandates the minimum qualification of instructors at college Level to be a master
degree.
Recommendation
We respectfully request the Ministry and the Government to re-consider amending this clause to reflect
the reality that professional instructors in a range of fields may not have post graduate education.
However, they earn their expertise and mastery through years of practicing, which may be certified by a
professional association. Their instruction is indispensable to the students in the program. Examples of
those fields include culinary art, performing art, and fashion design amongst others.
2.9.2 Years of teaching experience of foreign lecturers
A number of foreign Lecturers are highly experienced experts in their professions, especially in design,
fashion and textile programs. However, they do not possess 5 years of teaching experience in the same
teaching area. As the requirements for study in those programs have increased, we have tried hard to find
appropriate candidates with 5 years of teaching experience in the same teaching area, but stiLL are not be
abLe to recruit sufficient Lecturers meeting these requirements
Recommendation
It is recommended that Decree 73 be amended to decrease number of years of teaching experience of
foreign Lecturers in special teaching areas such as design (digital media), fashion (merchandise
management) to Less than 5 years. The combination of experience and qualifications in the relevant field
shouLd be considered.
2.9.3 Requirements for recruitment of English language teachers
As with the case of foreign lecturers in special teaching areas as mentioned above, the recruitment of
English teachers has been difficult due to scarcity of supply in the Vietnamese market. In reality, very
few English teachers possess Bachelor degrees in linguistics or English language teaching (as required by
Decree 73).
Moreover, we need to recruit seasonal or part-time English teachers who are currently teaching at some
other foreign language centres, as long as they meet our qualification requirements. Even though they
have already obtained work permits to teach at other centres, we must also submit another complete work
permit application package for obtaining another work permit for such sessional or part-time English
language teachers (as required by Decree 102). Such regulations and administrative procedures have been
very time consuming and costly for our operations.
Recommendations
Our recommendations are as follows:
- Recruitment of English teachers who possess Bachelor degrees in any field of study (not
necessarily in linguistics or English language teaching), as long as they are native English speakers; and
- Part-time or sessional English language teachers to use one work permit to teach at multiple
schools or language centres.
2.10 The lack of a legal framework on operation area of foreign-invested educational schools
(kindergarten to senior high schools) after obtaining the operating license and starting operations
Currently, there is only Decree 73/2012/ND-CP governing INVESTMENT but there is no clear
regulations in place at this time governing the OPERATIONS of schools (kindergarten to senior high
schools). Therefore, during the operations of educational institution, it is not clear of what regulation will
be applied that lead the different authorities will have different opinions on regulation application. Even
7
some authorities used the regulations applicable for local school to apply for foreign invested school with
the view that foreign invested school must meet minimum regulations of local schools.
For example: with regard to the appointment and recognition of a school principal, different authorities
have different opinions. Some authorities have asked that the principal is required to be registered and
formally recognized while others advised that there is no need to for formal recognition when it is
autonomic decision of school.
Recommendation
We recommend having transparency and clarity in the legal documents that regulate the operation area of
foreign-invested educational institutions. Furthermore, there should be a clear classification between
foreign-invested educational institutions and 100% Vietnamese institutions to avoid misunderstanding
and wrong application. Without the clarity, it will be difficult for state authorities to manage effectively
the area of foreign-invested educational institutions.
2.11 Hospitality education
We also respectfully request the Ministry to add new clauses to address the absence of a legal framework
to allow a university to operate a commercial restaurant or hotel as a practicum facility where full time
training takes place. This format of hospitality education enables students to conveniently and smoothly
learn theory, to practice with real customers, and to return to theory afterwards. This format requires the
learning environment to be the same as the practical one, where real customers are served. There is a
great need for teachers with experience in the field and that students have the opportunity to practice in
the field to become work-ready graduates.
3. Technical and Vocational Education and Training (TVET)
In order to improve the Vietnamese economy and to take advantages of the opportunities from
membership of the AEC and TPP, Vietnam will need a high-skilled workforce. The Vietnamese
Government has put vocational skills training and boosting employment at the heart of its development
goals. Its plan is that by 2020, trained skilled workers will make up 55% of the labour force. The
Government also wants to tailor its vocational training more to the needs of the business community, so it
is promoting the expansion of vocational education and training provision and improvements in the
quality and needs-based focus of training. The Government also wants to tailor its vocational training
more to the needs of the business community, so it is promoting the expansion of vocational education
and training provision and improvements in the quality and needs-based focus of training.
3.1 Meeting industry needs
In order to reduce the mismatch of skills demand and supply at the technician level, Technical and
Vocational Education and Training (TVET) institutions should make more effort to improve training
programs by carefully analysing the needs of industry. This will ensure that graduates from TVET
institutions have the skill sets required by industry both now and in the future.
To accomplish this would require coordination between the MOET, MOLISA, TVET institutions,
Industry and also the involvement of initiatives funded by foreign governments. The Vietnam
Development Partnership Forum (VDPF) TVET sector network organized by GDVT would also be able
to provide support here in addition to other areas of TVET activities.
Recommendation
It is recommended that the skills needs of Vietnamese industry be identified to provide the TVET
institutions with the market knowledge they need to develop appropriate curriculum for the market. The
colleges should be involved in identifying the needs of industry to meet local demand and have autonomy
to link more closely with industry.
3.2 Building the capacity of TVET Institutions
In addition to identify in the needs of industry the capacity of the TVET institutions needs to be raised in
order to provide them with the capability to meet the needs identified in 3.1 above. Areas including the
following need to be addressed:
8
- Organization and Management
- Vocational Teachers and Teacher Development
- Quality Assurance and System Accreditation
- Curriculum development
- National Skills Standards and Certification
- Assessment and Certification
There are already a number of initiatives underway including the following:
- The Vietnamese Skills for Employment Project (VSEP) - Canada
- Vietnamese - German Programme Reform of TVET in Viet Nam
- Japan International Cooperation Agency (JICA)
- The Higher Engineering Education ALLiance Program (HEEAP) – USA
Recommendations
- It is recommended that the Vietnamese Government Liaise with the various initiatives mention
above and other initiatives to have a coordinated approach to the capacity build of the TVET institutions.
It would also help the various projects focus on their outcomes while taking into account the outcomes of
the other initiatives. It would also help reduce overlap.
- The Vietnam DeveLopment Partnership Forum (VDPF) TVET could help with this coordination
work.
3.3 Attracting students into TVET institutions
One of the issues facing TVET institutions is the fact that high schooL students want to go directly into
University. In addition, it is now easier to enter University due to the Lower entry requirements.
University degrees are held in high regard even though many graduates with University certificates are
unable to find relevant work.
The formulation of a single articulation system for Vietnamese education would also help to make TVET
more attractive. The reform of the TVET system needs a coordinated, articulated approach so that
students’ training is not dead-ended and they 'system’ as a coordinated whole will attract high-achieving
students into careers with a future.
Recommendations
- In order to persuade more high schooL students to become interested in vocational training
programs, it is suggested that the Government shouLd improve the paths that vocational college
graduates can use to transfer to university courses. It is recommended that the Vietnamese Government
continue working on a National Qualifications Framework (NQF) so that students undertaking studies at
TVET institution can have this study officially recognised. This will also provide TVET students with
recognition for prior Learning if they want to continue their studies at University.
- Industry also needs to work with TVET institutions so that students graduating from TVET
institutions, with work ready skills are given recognition by industry for having these skills.
- It is recommended that MOET and MOLISA work together to develop a single articulation
system for Vietnamese education.
4. Other Issues
4.1 Overseas/Online Learning
The Vietnamese regulatory environment makes it difficult for students to gain recognition for overseas
qualifications delivered in Vietnam part online (i.e. blended Learning modes) even though these
qualifications are issued by the overseas university as meeting all the same quaLity assurance
requirements as the same courses delivered by 100% face-to-face mode.
9
In Australia, for example, where there is a robust quaLity assurance system in place, a university must
satisfy the national regulator - The Tertiary Education QuaLity and Standards Agency (TEQSA) that
blended courses Leading to an Australian qualification meet the course accreditation standards and are
equivalent wherever the qualification is delivered regardless of delivery mode. Online/blended delivery is
an emerging global trend and is a cost-effective, flexible and innovative way to deliver quaLity
education. It can help Vietnam improve access to quality education and overcome challenges such as an
imbalance in the level of development in different regions of the country.
Recommendation
The FOREIGN INVESTOR GROUP would like to see greater flexibility in the regulation to allow the
Vietnamese Government assess applications for course accreditation from Foreign education providers to
deliver courses with an online component and to recognise the qualifications of students undertaking such
courses.
5. Conclusion
The Vietnamese economy continues to grow and this is of benefit to the citizens of Vietnam. With
membership of the TPP and AEC Vietnam has a great opportunity to grow it economy and become an
even more prosperous nation. To achieve this Vietnam needs a highly competent workforce with the
knowledge and skills to drive growth in the economy.
Quality education and training is required to provide the skilled workforce to maintain this growth. We
have focused on two main areas in this article that will help Vietnam to raise the quality of its education.
Through effective legislation and a robust TVET system Vietnam will continue to prosper and take
advantage of the many opportunities coming its way.
As mentioned in our introduction this would require the combined efforts of relevant stakeholders
working closely together to find effective solutions. The Education and Training Working Group, through
the FOREIGN INVESTOR GROUP, will continue with its commitment to assist Vietnam in achieving it
economic potential.
***
Please do not hesitate to contact Oliver Massmann under omassmann@duanemorris.com if you
have any questions or want to know more details on the above. Oliver Massmann is the General
Director of Duane Morris Vietnam LLC.
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Lawyer in Vietnam Oliver Massmann Education and Training

  • 1. 1 Lawyer in Vietnam Oliver Massmann Education and Training Executive Summary The Vietnamese economy continues to grow and in order to sustain this growth at desired Levels the need for quality education and training is imperative. Vietnam needs to improve the productivity of its workforce and although a challenge at the present time with effective strategies it can become an opportunity. This will be best achieved through a coordinated effort by all major stakeholders Lead by the Vietnamese Government. The article focuses on two main areas firstly, Decree 73 and secondly, issues relating to Technical and Vocational Education and Training (TVET). Decree 73 applies to foreign investment and cooperation projects in education in Vietnam. The quality of education in Vietnam has been an issue and this can be improved, in part, by attracting foreign institutions that have a record of delivering quality education. A number of issues and recommendations have been raised and made to help make decree 73 more effective in establishment of quality education institutions in Vietnam. Having effective TVET institutions lays the foundation for economic growth by supplying work ready graduates with the necessary knowledge, skills, and attitude to make a positive contribution in the workplace. To achieve this it is necessary to know what competencies are needed by industry and then developing and delivering curriculum to produce the graduates that industry needs. The capacity of the institutions needs to be raised to the required Levels to be able to produce these graduates. This requires training of TVET staff in areas such as Leadership, curriculum development, market research and analysis etc. In addition, TVET institutions need to be able to attract capable students and the development of a National Qualifications Framework (NQF) and a single articulation system for Vietnamese education. In conclusion the Vietnamese economy continues to grow and this is of benefit to the citizens of Vietnam. There are opportunities for Vietnam, however, it needs a highly competent workforce to drive growth in the economy. Quality education and training is required and this would also require the combined efforts of relevant stakeholders working closely together to find effective solutions. The Education and Training Working Group, through the FOREIGN INVESTOR GROUP, will continue with its commitment to assist Vietnam in achieving it economic potential. 1. Introduction The Vietnamese economy is entering a new era with the formation of the ASEAN Economic Community (AEC) and the Trans Pacific Partnership (TPP). This should lead to many growth opportunities in the Vietnamese economy. However, in order to take full advantage of these opportunities the Vietnamese workforce needs relevant knowledge and skills. The size of the Vietnamese workforce has been a key factor in Vietnam’s economic growth, however, this cannot continue. Vietnam needs to focus on making its workforce more productive. A recent report from the International Labour Organisation (ILO) showed that Vietnam’s labour productivity rate in 2013 was among the lowest in Asia Pacific. It was 15 times lower than Singapore, 11 times lower than Japan, and 10 times lower than South Korea. In addition, another report stated that despite considerable improvement in recent years, Vietnam’s labour productivity is lagging decades behind regional countries. The opportunity for Vietnam is to increase the skills of its workforce to rapidly improve the productivity of its workforce. The World Bank report "Skilling up Vietnam: Preparing the workforce for a modern market economy states that "Equipping its workforce with the right skills will, therefore, be an important part of Vietnam’s effort to accelerate economic growth and further its economic modernization in the coming decade and
  • 2. 2 more". Therefore, efficient and effective education and training is integral to the development of the Vietnamese workforce and economic growth. The success in improving the quality of education and training in Vietnam will require the combined efforts of relevant stakeholders working closely together to find effective solutions. The Education and Training Working Group, through the FOREIGN INVESTOR GROUP, will continue with its commitment to assist Vietnam in achieving it economic potential through improvements in education and training. This report will focus primarily on Decree 73 and the Technical and Vocational Education and Training through the identification of relevant issues and opportunities to improve. 2. Decree 73 Decree 73 replaces Decree 06, and applies to foreign investment and cooperation projects in education and vocational training in Vietnam including foreign-invested tertiary institutions, schools and kindergartens, twinning programs, and representative offices of foreign education institutions. We firmly believe that the most important goal is to have quality graduates entering the workforce and that Decree 73 is integral in this respect. The following are the main issues raised by the education and training working group with proposed recommendations. 2.1 Licensing-related issue 2.1.1 Requiring 3 kinds of licenses Under the Decree 73, the working group views it as being much more complicated than in the past, as it requests to have an investment license, then an establishment license, then an operations license. This applies even when setting up a branch of an already licensed organization. A lot of articlework/steps are repeated during these processes and assessed by many of the same departments. This results in an inefficient use of time for investors/organizations and agencies issuing licenses. New investors to Vietnam, as well as current investors, feel that it is far too onerous to overcome all these complicated licensing procedures. In addition, this is in contradiction with what was stated by the Government and National Assembly on the investment law (i.e. simplifying administrative procedures for investors). The license application now has 3 steps instead of 2 like before (the additional step is the establishment license). The application required is exactly the same for all 3 licenses and involves the same departments for approval, which is duplicating processes and, therefore, simplification is strongly recommended. The investment certificate requires the involvement of 7 departments/government bodies including the Department of Planning and Investment, the Department of Education and Training (DOET), the Construction Department, the People Committee of the District (they need to get 2 more Departments’ approval: the Architects Department, and the Fire Department then finally approval by the Peoples Committee. The establishment license requires the involvement of 3 departments/government bodies, which are DOET, the Provincial People’s Committee, and the Department of Internal Affairs. The operations license requires only the approval of DOET. Recommendation Retain the two-step process previously provided in Decree No. 06 and Circular 14. 2.1.2 The list of application documents Currently, the list of application documents is not clearly understood and it leads to licensing authorities requiring similar documents for 3 kinds of licenses. This poses a big challenge for investors. For example, at the stage of applying the establishment license, the completed profiles of foreign teachers that need to be submitted, include their work permit and labour contract However, the foreign invested educational institution are not allowed to start operating until the operation license is granted.
  • 3. 3 Articles 38 and 48 of Decree 73 states that "it needs 60 working days to issue the establishment license and 32 working days to issue the operation license". Therefore, the total duration is 92 workings days, approximately 4 months. This means that the foreign invested educational Institution must pay 4 months salary to these teachers until they obtain the necessary licenses to commence operations. Recommendations - That the documents required to obtain each type of license are clarified. - Circulars to guide the implementation of the Decree 73 need to include clear penalties when government officials process applications in order to avoid time-consuming delays and unnecessary costs for investors. 2.1.3 Inspection the facilities of foreign invested educational Institution Due to ambiguous regulations in Decree 73, licensing authorities need to conduct a number of inspections of the facilities before issuing each license. Prior to commencing operations, each educational institution will have 3 inspections by three different licensing authorities at the same location. This is an inefficient use of both time and manpower for both investors and licensing authorities. Recommendations Decree 73 shouLd incLude provisions that cLassify at which period of the License appLication the faciLities of the foreign invested educationaL institution need to be inspected. 2.2 The limitation on the percentage of Vietnamese students. (Article 24) The Limited percentage 10%, 20% of Vietnamese students aLLowed to join internationaL schooLs as per provided in ArticLe 24 of Decree No.73 are extremeLy unreasonabLe because of some reasons: The demand of Vietnamese students in internationaL schooL is more and more increasing. If the Government does not aLLow them to join internationaL schooLs in Vietnam, they wiLL go oversea. In fact, the number of Vietnamese students go to overseas for study is increasing every year with current now is more than 1 10.000 students in 47 countries with the schooL fee is from 30,000 USD to 40,000 per year. Vietnamese is exporting about 3 biLLion USD every year to overseas for education. With this Limitation, the foreign investment in education is cLosed in second-tier cities of Vietnam because the caLcuLation of percentage 10%, 20% of Vietnamese students aLLowed to join internationaL schooLs is based on the number of foreign enroLLed students. If the foreign invested institutions have no foreign students, then no Vietnamese students can enroL. The fact is aLmost second-tier provinces besides Hanoi and Ho Chi Minh where have a few foreigners come to work and Live, it seems having no foreign students for enroLment, it shaLL have no Vietnamese students are aLLowed to study. As consequence, foreign investment in education is cLosed to second-tier cities in Vietnam. Some concern that a great number of Vietnamese students studying at internationaL schooLs wiLL Lead to the Loss of Vietnamese cuLturaL identity. However, this seems to be a conservative opinion because if these students are not aLLowed to enroL at internationaL schooLs in Vietnam, they wiLL go abroad upon their demand. And therefore, the Vietnamese cuLturaL identity wiLL be more difficuLt to be maintained. Furthermore, some subjects such as: History, Geography, Literature and Vietnam study are compuLsory in internationaL schooLs. Recommendation The quaLity of the Vietnamese education system needs to improve and to achieve this the presence of foreign investment in education is very necessary. The Government shouLd end this Limitation but add more conditions to ensure that Vietnamese students in internationaL schooLs to Learn and retain their Vietnamese cuLture and traditions. 2.3 Article 74 - Point 1 The foLLowing is stipuLated in Decree 73. Implementation Provisions - Article 74. Transitional provisions "I.Foreign-capitalized educationaL institutions and their campuses that have been issued with the Investment certificates concurrentLy, the Business registration certificates and the Licenses to provide
  • 4. 4 education before this Decree takes effect are exempted from reappraisal, but must supplement and complete the dossiers within 06 months since the effective date of the Decree in order to be issued with the Decisions on approving the establishment of educationaL institutions and campuses” Recommendations If the establishment license is still retained, we respectfully recommend the Ministry to amend Article 74 of Decree 73 as recommended below so that non state higher education organizations can obtain a decision on approving the establishment of educational institutions and campuses in a timely manner. Currently, some members of the Education and Training Working Group are preparing dossiers following the requirements as set out in this Article. However, officials are requesting that new requirements under Decree 73 must be met instead of requirements under Decree 06. We respectfully request that the Ministry indicates in the guiding regulations of Decree 73 that it does not require retroactive applications when applying for the decision. Suggested modification to Article 74.1. "1. Foreign-capitalized educational institutions and their campuses that have been issued with the investment certificates concurrently, the Business registration certificates and the Licenses to provide education before this Decree takes effect are exempted from reappraisal, but have to submit an application for establishment license and report actual activities in the last 3 years must supplement and complete the dossiers within 06 months as from this Decree takes effect in order to be issued with the Decisions on approving the establishment of educational institutions and campuses. 2.4 Implementing the transitional provisions on enrolment of Vietnamese students and teaching international curriculum (Article 12, Circular No. 34) Clause 2: The foreign invested schools who already owned the pilot license on teaching international curriculum and bilingual language for Vietnamese students issued by the competent authorities before the effective date of Decree No. 73 shall be permitted to continue the issued pilot license. However, there is inconsistent application between the DOET by DOET. Some accepted and followed this guidance while others did not accept it with the opinion that it is only pilot license. For example: Previously, in accordance with Decree No. 06 and Circular No. 14, the foreign invested schools were allowed to provide educational service for Vietnamese students at senior high school level but only piloted in Hanoi and Ho Chi Minh city. Based on this regulation, the schools had been granted the pilot license from Department of Planning and Investment and Department of Education and Training provide educational service for Vietnamese students at senior high school level but only piloted in Hanoi and Ho Chi Minh City. In accordance with Article 12 of the Circular No. 34 as abovementioned, we understand that the schools who already obtained this pilot license shall be permitted to continue that one. On 08 July 2014, MOET issued Official Letter No. 4774 to re-confirm about this matter. However, in fact, some DOETs accepted and followed this guidance while others did not accept it Recommendation We would like to request MOET to have instructions to all DOETs for consistence 2.5 Invested Capital (Article 28.6) Article 28.6: The projects of investment in establishing higher education institutions must reach at least 150 million VND per student (not including the expense on land tenancy). The total minimum capital is calculated when the estimated education scale is greatest, but must not be lower than 300 billion VND. This provision lacks clarity and creates confusion for investors. Recommendations It is requested that the total invested capital to be calculated based on the total number of full-time equivalent students, instead of basing it on the time when the estimated education scale is greatest. In
  • 5. 5 reality, the total education and training capacity can be 3 times greater than the total number of full-time equivalent students. In addition, the total invested capital for the project will be disbursed through each stage of the project’s expected implementation. Thus, the invested capital must be registered on the investment certificate based on each implementation stage. 2.6 Conditions for approving educational activities (opening a new degree program) The establishment of disciplines of university and college is prescribed in Circular No. 08/201 1/TT- BGDDT dated February 17, 2011 of the Ministry of Education and Training stipulating conditions, dossiers, procedures for opening disciplines of training university, college level. However, this regulation on establishing disciplines is very complicated and not in accordance with foreign-invested educational institutions. Recommendations - It is proposed that there should be separate regulations on establishing educational disciplines of foreign-invested educational institutions. - We respectfully request to make the guiding regulations of Decree 73 clear in term of establishing new disciplines for foreign educational institutions to come under one set of separate regulation OR, as an alternative, to come under the existing regulations on establishing new disciplines under colleges and universities issued by the MOET. 2.7 Facilities and equipment (Article 29) Not all students are present at campus at a single point of time. A student may register from one to four courses per semester, and thus shall attend class for 3-12 hours per week. Students will have to spend time for preparation and doing assignment that do not require them to be present at the campus. Therefore, stipulating minimum land/floor areas for students without taking into account the number of students present at the campus at a point of time is not reasonable, and may bring higher costs to education institutions that will then increase tuition fees. Recommendations Minimum land/floor areas for students should not be specified in proportion to number of students. Decree 73 should be amended to provide that the minimum land/floor areas for students should be in proportion to the maximum number of students present at the campus at a point of time, and not simply in proportion to number of students. Furthermore, the facilities and equipment requirements on non-state higher education student ratio etc. may become an increasing challenge with land pressures. Therefore, we suggest greater transparency in how the specific ratios were determined; perhaps this ratio could be lowered. 2.8 The lack of a legal framework for extension of operation term of educational institution Decree 73/2012 regulated that if the educationaL institution registers its operation term for more than 20 years it must meet the condition of construction its own buildings. There is no requirement of construction its own buildings if it registers for Less than 20 years. However, the decree does not mention the situation where the operation term of the educationaL institution has expired. In this case, the Licensing authority wiLL add the previous term to the extended term, and is the total is greater that 20 years then the conditions of construction of its own building wiLL apply. This is deemed very unfair and needs to be revised. Recommendations - We respectfully request the MOET to amend Article 29.6 of Decree 73 as follows: A foreign- capitalized educational institution that register or applies for extension of operation s license for less than 20years do not have to build their own facilities. - The amendment to Decree 73 shouLd add more regulations on registering extension the operation term is Less than 20 years, wiLL not require construction of its own buildings. 2.9 The teaching staff (Article 31)
  • 6. 6 2.9.1 Minimum qualification of instructors We are very much concerned about requirements for teaching staff being too high/chaLLenging for some transnational education delivery especially: - For tertiary education institutions, 60% of course modules must be delivered by permanent teachers, and 80% of teaching staff must hold postgraduate degrees. - Article 10.2.b. mandates the minimum qualification of instructors at college Level to be a master degree. Recommendation We respectfully request the Ministry and the Government to re-consider amending this clause to reflect the reality that professional instructors in a range of fields may not have post graduate education. However, they earn their expertise and mastery through years of practicing, which may be certified by a professional association. Their instruction is indispensable to the students in the program. Examples of those fields include culinary art, performing art, and fashion design amongst others. 2.9.2 Years of teaching experience of foreign lecturers A number of foreign Lecturers are highly experienced experts in their professions, especially in design, fashion and textile programs. However, they do not possess 5 years of teaching experience in the same teaching area. As the requirements for study in those programs have increased, we have tried hard to find appropriate candidates with 5 years of teaching experience in the same teaching area, but stiLL are not be abLe to recruit sufficient Lecturers meeting these requirements Recommendation It is recommended that Decree 73 be amended to decrease number of years of teaching experience of foreign Lecturers in special teaching areas such as design (digital media), fashion (merchandise management) to Less than 5 years. The combination of experience and qualifications in the relevant field shouLd be considered. 2.9.3 Requirements for recruitment of English language teachers As with the case of foreign lecturers in special teaching areas as mentioned above, the recruitment of English teachers has been difficult due to scarcity of supply in the Vietnamese market. In reality, very few English teachers possess Bachelor degrees in linguistics or English language teaching (as required by Decree 73). Moreover, we need to recruit seasonal or part-time English teachers who are currently teaching at some other foreign language centres, as long as they meet our qualification requirements. Even though they have already obtained work permits to teach at other centres, we must also submit another complete work permit application package for obtaining another work permit for such sessional or part-time English language teachers (as required by Decree 102). Such regulations and administrative procedures have been very time consuming and costly for our operations. Recommendations Our recommendations are as follows: - Recruitment of English teachers who possess Bachelor degrees in any field of study (not necessarily in linguistics or English language teaching), as long as they are native English speakers; and - Part-time or sessional English language teachers to use one work permit to teach at multiple schools or language centres. 2.10 The lack of a legal framework on operation area of foreign-invested educational schools (kindergarten to senior high schools) after obtaining the operating license and starting operations Currently, there is only Decree 73/2012/ND-CP governing INVESTMENT but there is no clear regulations in place at this time governing the OPERATIONS of schools (kindergarten to senior high schools). Therefore, during the operations of educational institution, it is not clear of what regulation will be applied that lead the different authorities will have different opinions on regulation application. Even
  • 7. 7 some authorities used the regulations applicable for local school to apply for foreign invested school with the view that foreign invested school must meet minimum regulations of local schools. For example: with regard to the appointment and recognition of a school principal, different authorities have different opinions. Some authorities have asked that the principal is required to be registered and formally recognized while others advised that there is no need to for formal recognition when it is autonomic decision of school. Recommendation We recommend having transparency and clarity in the legal documents that regulate the operation area of foreign-invested educational institutions. Furthermore, there should be a clear classification between foreign-invested educational institutions and 100% Vietnamese institutions to avoid misunderstanding and wrong application. Without the clarity, it will be difficult for state authorities to manage effectively the area of foreign-invested educational institutions. 2.11 Hospitality education We also respectfully request the Ministry to add new clauses to address the absence of a legal framework to allow a university to operate a commercial restaurant or hotel as a practicum facility where full time training takes place. This format of hospitality education enables students to conveniently and smoothly learn theory, to practice with real customers, and to return to theory afterwards. This format requires the learning environment to be the same as the practical one, where real customers are served. There is a great need for teachers with experience in the field and that students have the opportunity to practice in the field to become work-ready graduates. 3. Technical and Vocational Education and Training (TVET) In order to improve the Vietnamese economy and to take advantages of the opportunities from membership of the AEC and TPP, Vietnam will need a high-skilled workforce. The Vietnamese Government has put vocational skills training and boosting employment at the heart of its development goals. Its plan is that by 2020, trained skilled workers will make up 55% of the labour force. The Government also wants to tailor its vocational training more to the needs of the business community, so it is promoting the expansion of vocational education and training provision and improvements in the quality and needs-based focus of training. The Government also wants to tailor its vocational training more to the needs of the business community, so it is promoting the expansion of vocational education and training provision and improvements in the quality and needs-based focus of training. 3.1 Meeting industry needs In order to reduce the mismatch of skills demand and supply at the technician level, Technical and Vocational Education and Training (TVET) institutions should make more effort to improve training programs by carefully analysing the needs of industry. This will ensure that graduates from TVET institutions have the skill sets required by industry both now and in the future. To accomplish this would require coordination between the MOET, MOLISA, TVET institutions, Industry and also the involvement of initiatives funded by foreign governments. The Vietnam Development Partnership Forum (VDPF) TVET sector network organized by GDVT would also be able to provide support here in addition to other areas of TVET activities. Recommendation It is recommended that the skills needs of Vietnamese industry be identified to provide the TVET institutions with the market knowledge they need to develop appropriate curriculum for the market. The colleges should be involved in identifying the needs of industry to meet local demand and have autonomy to link more closely with industry. 3.2 Building the capacity of TVET Institutions In addition to identify in the needs of industry the capacity of the TVET institutions needs to be raised in order to provide them with the capability to meet the needs identified in 3.1 above. Areas including the following need to be addressed:
  • 8. 8 - Organization and Management - Vocational Teachers and Teacher Development - Quality Assurance and System Accreditation - Curriculum development - National Skills Standards and Certification - Assessment and Certification There are already a number of initiatives underway including the following: - The Vietnamese Skills for Employment Project (VSEP) - Canada - Vietnamese - German Programme Reform of TVET in Viet Nam - Japan International Cooperation Agency (JICA) - The Higher Engineering Education ALLiance Program (HEEAP) – USA Recommendations - It is recommended that the Vietnamese Government Liaise with the various initiatives mention above and other initiatives to have a coordinated approach to the capacity build of the TVET institutions. It would also help the various projects focus on their outcomes while taking into account the outcomes of the other initiatives. It would also help reduce overlap. - The Vietnam DeveLopment Partnership Forum (VDPF) TVET could help with this coordination work. 3.3 Attracting students into TVET institutions One of the issues facing TVET institutions is the fact that high schooL students want to go directly into University. In addition, it is now easier to enter University due to the Lower entry requirements. University degrees are held in high regard even though many graduates with University certificates are unable to find relevant work. The formulation of a single articulation system for Vietnamese education would also help to make TVET more attractive. The reform of the TVET system needs a coordinated, articulated approach so that students’ training is not dead-ended and they 'system’ as a coordinated whole will attract high-achieving students into careers with a future. Recommendations - In order to persuade more high schooL students to become interested in vocational training programs, it is suggested that the Government shouLd improve the paths that vocational college graduates can use to transfer to university courses. It is recommended that the Vietnamese Government continue working on a National Qualifications Framework (NQF) so that students undertaking studies at TVET institution can have this study officially recognised. This will also provide TVET students with recognition for prior Learning if they want to continue their studies at University. - Industry also needs to work with TVET institutions so that students graduating from TVET institutions, with work ready skills are given recognition by industry for having these skills. - It is recommended that MOET and MOLISA work together to develop a single articulation system for Vietnamese education. 4. Other Issues 4.1 Overseas/Online Learning The Vietnamese regulatory environment makes it difficult for students to gain recognition for overseas qualifications delivered in Vietnam part online (i.e. blended Learning modes) even though these qualifications are issued by the overseas university as meeting all the same quaLity assurance requirements as the same courses delivered by 100% face-to-face mode.
  • 9. 9 In Australia, for example, where there is a robust quaLity assurance system in place, a university must satisfy the national regulator - The Tertiary Education QuaLity and Standards Agency (TEQSA) that blended courses Leading to an Australian qualification meet the course accreditation standards and are equivalent wherever the qualification is delivered regardless of delivery mode. Online/blended delivery is an emerging global trend and is a cost-effective, flexible and innovative way to deliver quaLity education. It can help Vietnam improve access to quality education and overcome challenges such as an imbalance in the level of development in different regions of the country. Recommendation The FOREIGN INVESTOR GROUP would like to see greater flexibility in the regulation to allow the Vietnamese Government assess applications for course accreditation from Foreign education providers to deliver courses with an online component and to recognise the qualifications of students undertaking such courses. 5. Conclusion The Vietnamese economy continues to grow and this is of benefit to the citizens of Vietnam. With membership of the TPP and AEC Vietnam has a great opportunity to grow it economy and become an even more prosperous nation. To achieve this Vietnam needs a highly competent workforce with the knowledge and skills to drive growth in the economy. Quality education and training is required to provide the skilled workforce to maintain this growth. We have focused on two main areas in this article that will help Vietnam to raise the quality of its education. Through effective legislation and a robust TVET system Vietnam will continue to prosper and take advantage of the many opportunities coming its way. As mentioned in our introduction this would require the combined efforts of relevant stakeholders working closely together to find effective solutions. The Education and Training Working Group, through the FOREIGN INVESTOR GROUP, will continue with its commitment to assist Vietnam in achieving it economic potential. *** Please do not hesitate to contact Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.
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