Security of exchange commission

The Hanoitimes – The Vietnamese candidate is the first Vietnamese elected as a member of the UN Commission.

Vietnam’s Permanent Missions to the United Nations (UN) in New York and Geneva have announced the candidacy of Ambassador Nguyen Hong Thao to the International Law Commission (ILC) for the 2023-27 tenure.

Ambassador Nguyen Hong Thao. Source: Baoquocte

The election of the members of the Commission for the next term is scheduled for November 2021 in New York, according to the Vietnam’s Ministry of Foreign Affairs.

Dr. Thao will compete for the election with 9 other candidates in Asia-Pacific states, including China, Japan, India, South Korea, Thailand, Uzbekistan, and Lebanon, to represent the region at the ILC.

Under the General Assembly’s resolution, Asia-Pacific has seven out of 34 seats at the Commission.

In 2016, Thao became the first Vietnamese to be elected as an ILC member. During the 2017-22 tenure, he has actively contributed to ILC’s researches, including national inheritance, international conflict resolution, delivered speeches and joined discussions at the ILC.

Deputy Minister of Foreign Affairs Le Hoai Trung said joining the International Law Commission is a great opportunity for Vietnam to build and develop a team of experts, proactively handling international issues on the basis of international law.

Associate Prof. Nguyen Hong Thao received his LL.B. and Ph. D. from University of Paris I Pantheon – Sorbonne, France in 1996. His main academic specializations are in Public International Law, Law of the Sea, International Organizations, International Humanitarian and Environmental Law.

Dr. Thao is author of series of works on international law, especially on the maritime dispute resolutions.

He has had experience in maritime affairs and diplomacy, with Ambassador Postings in Malaysia (2011-2014) and Kuwait (2014-2017).

He is also member of Asian Society of International Law, Vietnam Society of International Law, Editor in Chief of the Vietnamese Yearbook on International Law, Member of the Advisory Board of the Asian Yearbook of International Law AYBIL, Member of the Asian Journal of International Law (AsianJIL), AALCO Journal of International Law and Journal of East Asia and International Law Editorial Boards.

In 2016, he was elected as a Member of International Law Commission of the United Nations for the term of 2017-2021. In 2018, he was appointed as 2nd Vice Chairman of the Commission.

Since Vietnam’s timber exports are on the rise, securing supply chains for raw materials is crucial. Photo: Le Toan

By the end of 2020, Nguyen Trong Hieu and seven other production households representing the Lien Ha handicraft village in Hanoi’s Dan Phuong district had been supplying the market mostly with beds and wardrobes, mainly to furniture store Tan Vinh Cuu JSC (Tavico) in the southern province of Dong Nai.

Hieu told VIR, “We are gradually creating links between production households in Lien Ha and furniture manufacturers in the south to promote and sell our products.”

However, as long as the southern market remains unfamiliar with traditional handicraft products from the north, Lien Ha can certainly not sell its products immediately. The advantages of its craftsmanship or the use of proper and high-quality materials cannot offset the cost of transporting from Hanoi to Dong Nai.

“The important factor for these products is to have a unique design, but we cannot always achieve it,” Hieu explained.

The emergence of Lien Ha village’s products at Tavico has attracted the attention of other manufacturers, contributing to creating new awareness for traditional craft villages about the legal use of timber. This association process can help craft villages build brand names and values through activities that capture market trends, the importance of designs, and the demand of domestic consumers.

Weak links

There are already several link models between craft villages and manufacturers in Vietnam, some of which were born when they realised that such cooperation would foster survival to withstand the pandemic, even before taking sustainable development into account. However, these models are still very new, focusing on a few timber suppliers and not meant for export, which would benefit the entire value chain the most.

“Vietnam has a weak and inactive link system when it comes to wood billets and other raw materials,” said Tran Thien, director of Thanh Hoa Co., Ltd.

According to Thien, the stages within the chain, from afforestation over processing to sales, are not defined. Vietnam’s timber industry, of which 95 per cent are private enterprises, “is still completely swimming by itself and lacks supportive policies from the government.”

Thanh Hoa, based in Ho Chi Minh City, supplies timber to nearly 70 furniture manufacturers and witnessed the breakdown of existing timber supply chains. After nearly 10 years of sticking to three projects between businesses and growers in the central province of Thua Thien-Hue, Thien had to give up the plan to develop sustainable material areas, as the loss amounted to nearly VND5 billion ($217,000), with more than 3,000 cubic metres of raw materials in stock.

In principle, the signing and implementation of contracts between raw material suppliers and furniture manufacturers must comply with the provisions of the law on economic contracts. Thien mentioned a “painful” situation as the implementation of contractual commitments is a weakness of many timber enterprises.

“The rights belong to the buyers and owners of the large processing companies, and they never give up their interests to be equal with the primary processors or the 1.1 million forest planters,” Thien said.

Vietnamese manufacturers of timber products meant for export have just experienced 2020 and made it through the year mostly thanks to a sharp increase in customers during the pandemic. Nevertheless, the internal report of the Vietnam Timber and Forest Product Association reaffirmed the importance of sustainable raw material supplies.

COVID-19 has disrupted the supply chains of timber from China, making it difficult for manufacturers that depend on this supply. Timber flows sourced from some of Vietnam’s main sources, such as Nigeria, were stopped because the governments of these countries ceased exporting and importing goods at the time of the outbreaks.

Timber suppliers in Vietnam currently only import enough goods for signed orders and did not sign new ones, especially with the African market out of fear that COVID-19 would hit again and continue to disrupt supply chains and cause risks to their businesses.

More than a year after the pandemic began, the export of wooden furniture in Vietnam continues to suffer under its negative impacts, also including afforestation households, primary processors, and importers of raw materials. For example, the output of the Tay Coc sawmill in the northern province of Phu Tho’s Doan Hung district has decreased by more than 60 per cent compared to 2019.

According to Nguyen Van Thai, owner of the sawmill, the price of timber has decreased sharply, and inventories remain fully stocked, so Tay Coc can only produce in moderation. In Doan Hung, the price of materials like round acacia timber has decreased by VND100,000 ($4.30) per tonne compared to before the pandemic. In particular, the price of wood chips has fallen sharply, from over VND800,000 ($35) per tonne to below VND700,000 ($30).

Thai said that these lower prices had a direct negative impact on afforestation households.

Nguyen Xuan Cuong, Minister of Agriculture and Rural Development, has more than once mentioned the deepening imbalance within the local timber industry. The north-central and central regions are lacking factories and industrial zones for the timber industry, while manufacturers are mainly located in the southern and eastern provinces. This, he argued, leads to low material purchases from farmers and does not speed up afforestation – the fundamental solution for Vietnam’s timber exports to develop sustainably.

Ambitious goals

Data from the Ministry of Agriculture and Rural Development shows that in 2020, the export value of forest products reached about $13.17 billion, exceeding the plan for last year by 5.4 per cent and representing an increase of 16.4 per cent compared to 2019, in which the export of timber and related products was estimated at $12.8 billion. But to achieve such figures, businesses had to spend about $2.58 billion on imports of timber and materials, up 11 per cent from 2019.

Exports of timber and products thereof are set to reach around $20 billion by 2025 – an ambitious goal, especially when considering that so far Vietnam has not identified opportunities to increase its share in the global market and raw material chains.

Now that COVID-19 is also back in Vietnam, the situation once again shows the importance of the domestic market as a platform for the timber industry. Vo Quang Ha, chairman of Tavico said, “This opportunity should be used to balance the interests of the different players in the timber industry.”

With these conditions, Ha found that many timber exporters also had plans to bring their products to the domestic market but faced many difficulties because they could not find suitable distribution channels and open shops for sale. Because of the high cost of premises, the resulting product prices would only lead to a loss of competitive advantages. In addition, the quantity of orders from domestic retailers is small and cannot relate to mass production.

Current development policies for the timber industry still focus on export processing but may require a more balanced policy to enable links in the chains to develop together. According to Ha, the timber industry should be divided into four chains that specify where the timber goes to.

“If the policy continues to focus on export, it will only take care of a quarter of the development target. But if the state makes policies suitable to the characteristics of each chain, it will help the whole industry to grow more sustainably,” Ha said.

Dr. To Xuan Phuc, an expert at Forest Trends, said that Vietnam needs a strategy for sustainable development of the industry, clearly defining product lines and strategic markets. Only then can the country accurately prepare the local timber industry for the global map.

Phuc also said that this period could be an opportunity for the Vietnamese timber industry to build new chains, with the government playing a leading role in creating priority conditions for businesses to participate in the supply of legal timber products, especially those derived from planted forests by households, which are preliminarily processed through household sawmills located in plantation areas.

“The Vietnamese government can also apply a public procurement policy to domestically produced products and introduce legal tender rules to encourage businesses and promote markets,” Phuc suggested.

Such an incentive, he believed, would help form links and domestic supply chains between businesses, processors, and reforestation households to serve the public procurement market, which is not small at all.