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The formation of the first industrial zone in Vietnam

Bien Hoa 1 Industrial Zone was built in 1963 (formerly known as Bien Hoa Industrial Park), and is the oldest industrial zone in Vietnam, a symbol of the industry in the South after the country's reunification. Bien Hoa 1 Industrial Zone with an area of ​​335ha is considered a "model" creating a premise for the formation and development of industrial zones across the country in the future. The formation and development of the first industrial zone in Vietnam will be summarized in this article by ATIM LAW FIRM

1. History of Bien Hoa 1 Industrial Zone

Bien Hoa 1 Industrial Zone (formerly known as Bien Hoa Industrial Park) is considered the first industrial zone in Vietnam. Bien Hoa Industrial Park was established under Decree No. 49/KT dated May 21, 1963, under the policy of the Ministry of Economy of the Saigon government. Initially, Bien Hoa Industrial Park was located in Tam Hiep Commune, Long Binh Ward of Bien Hoa, with an area of ​​376 hectares.

The purpose of building this industrial park was determined by the Saigon government to: (i) Disperse the concentrated labor force in the city of Saigon, (ii) relax the urban population, (iii) promote uniform industrial development to overcome the imbalance between Saigon and localities, (iv) Create jobs for people in Duc Tu district (Bien Hoa province), and (v) Military purposes, serving the Saigon government's war with the support of the United States in a military strategy parallel to the establishment of the Long Binh General Depot - the largest US logistics base in South Indochina.

In 1975, after being taken over by the revolutionary government, Bien Hoa Industrial Park was renamed Bien Hoa 1 Industrial Park with 76 enterprises producing goods from chemicals and building materials to metallurgy and electrical assembly, electronics, engines, consumer goods... However, in the initial period of liberation, only 38/94 factories and enterprises operated.

In 1990, Dong Nai province established the Bien Hoa Industrial Park Development Company (Sonadezi Bien Hoa). This enterprise has invested capital, embellished and upgraded the infrastructure of Bien Hoa 1 Industrial Park, called for and attracted foreign investment capital, and laid the basis for development in the new period.

2. Future development orientation of Bien Hoa 1 Industrial Zone

Currently, Bien Hoa 1 Industrial Zone locates in An Binh Ward, Bien Hoa City, bordering the Dong Nai River with 152 operating enterprises, including 17 foreign-invested enterprises. The number of employees working here is more than 21,000 people.

However, with decades of "life", the weaknesses of Bien Hoa 1 Industrial Zone have begun to reveal, especially the risk of causing environmental pollution. Infrastructure built with old technology, lack of synchronous wastewater treatment system has caused heavy pollution to ong Nai river. Every day, businesses operating here discharge more than 9,000m3 of wastewater, of which, only about 1,000m3 are connected through Bien Hoa II Industrial Zone for treatment, the rest are treated by themselves and then discharged directly to Dong Nai River.

Because of that, on October 7, 2009, the Government issued Document No. 307/TB-VCP announcing the conclusion of the Prime Minister at the meeting with Dong Nai province, which agreed on the policy converting the function of Bien Hoa 1 Industrial Zone into an urban - commercial - service area. However, it has been more than 10 years, but the project has not been implemented due to many problems such as:

(i)   In Vietnam, there is no precedent to convert Industrial Zones into urban - commercial - service areas, so many contents must be submitted to the Government and waiting for the promulgation of a new policy framework to continue.

(ii)   The value of compensation and support for relocation and resettlement is not enough for the enterprise to relocate.

(iii)   Enterprises are also concerned about the risk of losing customers.

(iv)   Risk of losing labor resources, especially qualified and skilled labor when moving further 20-60km to Giang Dien Industrial Park or other industrial zones.

On January 28, 2021, the document No. 111/TTg-CN of the Prime Minister approving to remove Bien Hoa 1 Industrial Zone from the development planning of Vietnam's industrial zones is an important legal basis for Dong Nai to carry out procedures to relocate businesses and terminate the operation of the oldest industrial zone in the country.

Accordingly, the People's Committee of Dong Nai province has finalized the plan to complete the relocation of all businesses in 2022 and agreed to choose the land use right auction plan to implement the project of converting Bien Hoa 1 Industrial Park into an urban - commercial - service area.

However, to implement this option, the province will have to allocate a huge budget for compensation and site clearance to create a clean land fund. Therefore, in order to balance investment resources, Chairman of Dong Nai People's Committee Cao Tien Dung asked Bien Hoa City and related units to review and divide into areas to carry out land clearance work, create a clean land fund for auction of land use rights. The auction of land use rights will be carried out in the form of "rolling" for each area.

Ly Tran (Paralegal)