5 things you should know about deposits on environmental remediation and improvement during mineral mining in Vietnam

5 things you should know about deposits on environmental remediation and improvement during mineral mining in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Amount of deposits on environmental remediation and improvement during mineral mining in Vietnam

The amount of deposits on environmental remediation and improvement during mineral mining is regulated as follows:

- The deposits shall be calculated in such a way that provides adequate funding for environmental remediation and improvement and according to the environment improvement contents approved by the competent authority.

- Local norms and unit prices available at the time of formulating the environmental remediation and improvement scheme shall apply to calculation of deposits. If a local government does not set any norm or unit price, norm or unit price set by the equivalent ministry or branch shall apply. If the ministry or branch does not set any unit price, the market price shall apply.

- Calculation of deposits:

(i) The total deposit (exclusive of the inflation factor) equals the total funding for work items for environmental remediation and improvement. The methods for calculating and estimating the costs of environmental remediation and improvement shall comply with MONRE’s guidance;

(ii) The annual deposit (exclusive of the inflation factor) equals the total deposit minus the initial deposit then divided equally for the remaining years of the project or mining license duration;

(iii) The inflation factor must be taken into account when paying annual deposit, which equals the annual deposit specified in point b of this clause multiplied by the consumer price index in the previous years beginning from the date on which the scheme or additional scheme is approved.

The annual consumer price index applied is the one applied in the area where the project is executed as announced by the General Statistics Office or the one announced by a competent authority.

(Clause 1, 2 and 3, Article 37 of Decree 08/2022/ND-CP)

2. Term of deposits on environmental remediation and improvement during mineral mining in Vietnam

According to Clause 4, Article 37 of Decree 08/2022/ND-CP, term of deposits on environmental remediation and improvement during mineral mining is as follows:

- If the organization or individual applying for issuance of a new mining license, the term of deposit shall be determined according to duration of the investment project appraised by the competent authority but shall not exceed 30 years;

- If the organization or individual has been issued with a mining license, the term of deposit shall be determined according to the remaining effective period of the mining license beginning from the date on which the scheme is approved;

- If the mining duration specified in the mining license is different from that specified in the approved scheme, the organization or individual shall make an adjustment and calculate the deposit according to the duration specified in the issued mining license and send the scheme to an authority competent to approve the scheme for consideration and adjustment.

3. Methods of payment of deposits on environmental remediation and improvement during mineral mining in Vietnam

Methods of payment of deposits on environmental remediation and improvement during mineral mining in Vietnam are as follows:

- If the organization or individual has a mining license whose effective period is less than or equal to 01 year, they shall make a lump-sum payment of the deposit; The deposit is 100% of the approved amount and must be inflation-adjusted according to the inflation rate at that time;

- If the organization or individual has a mining license whose effective period is at least 01 year, they are permitted to pay the deposit in instalments; The initial deposit must be inflation-adjusted according to the inflation rate at that time and is determined as follows:

If the effective period of the mining license is less than 10 years, the initial deposit equals 25% of the total deposit;

If the effective period of the mining license is 10 years to less than 20 years, the initial deposit equals 20% of the total deposit.

If the effective period of the mining license is 20 years or more, the initial deposit equals 15% of the total deposit;

- The inflation-adjusted deposit shall be declared, paid and notified by the organization or individual themself to the environment protection fund to which the deposit is paid;

- The deposit is entitled to the interest which is equal to the borrowing interest of the environmental protection fund environment protection fund to which the deposit is paid and is calculated from the time of deposit payment.

(Clause 5, Article 37 of Decree 08/2022/ND-CP)

4. Time of payment of deposits on environmental remediation and improvement during mineral mining

According to Clause 6, Article 37 of Decree 08/2022/ND-CP, the time of payment of deposits on environmental remediation and improvement during mineral mining is as follows:

- The organization or individual that is mining minerals shall make a deposit for the first time within 30 days from the date on which the scheme or additional scheme is approved;

- If the organization or individual issued with a new license shall pay the deposit for the first time before the starting date of mine capital construction;

- In case of paying deposit in instalments, from the second time onwards, the deposit shall be paid within 07 days from the date on which the competent authority announces the consumer price index in the year preceding the year in which the deposit was paid;

- The deposit receiving authority is specified in point a clause 4 Article 137 of the LEP 2020;

- The deposit receiving authority shall check the correctness of the deposit and issue a certificate of deposit to the organization or individual.

5. Refund of deposit during mineral mining in Vietnam

The deposit refund shall be made depending on the completion of environmental remediation and improvement by the organization or individual. The authority competent to approve the mine closure plan of the mineral mining project shall inspect the completion of the environmental remediation and improvement scheme during the commissioning of result of implementation of the mine closure plan.

- The completion of the environmental remediation and improvement scheme serves as part of the mine closure decision:

+ Within 90 days from the date of receiving the mine closure decision, the deposit receiving authority shall refund the deposit to the organization or individual;

+ The organization or individual is only entitled to withdraw their interest at one time after receiving the mine closure decision;

+ The refund of the deposit to the organization or individual returning their mining license or having their mining license revoked shall be made after receiving the mine closure decision.

- In case of change of the mining license holder, the new license holder shall continue to fulfill environmental remediation and improvement obligations, pay deposits on environmental remediation and improvement, and notify the authority appraising the environmental remediation and improvement scheme and provincial specialized environmental protection authority.

- If the organization or individual mining minerals has paid a deposit but has dissolved or goes bankrupt and has not carried out environmental remediation and improvement according to the approved environmental remediation and improvement scheme, the authority competent to approve the mine closure plan of the mineral mining project shall use their deposit including interest to carry out environmental remediation and improvement.

(Clause 7, 8 and 9 Article 37 of Decree 08/2022/ND-CP)

Nguyen Thi Hoai Thuong

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