Local miners are supporting Chinese firms in over-exploiting domestic minerals.

Lax management by local authorities have led to resource losses and serious environmental pollution

The situation was discussed at a seminar on auditing natural resources organised by the State Audit of Vietnam (SAV) and the Australian Society of Certified Practicing Accountants on November 15 in Hanoi.

Deputy Director of the Ministry of Public Security’s Economic Police Department General Hoang Van Truc said there have been several loopholes in mineral exploitation management, which had fostered smuggling and fraud.

Many mine owners had over-exploited minerals, fraudulently enumerating their output for illegal exports to neighbouring China.

The fact that local people steal coal from owners for sale to smugglers is an obvious problem in Quang Ninh Province's Dong Trieu District and Binh Dinh Province’s Phu Cat area, he said.

He noted that lax management by local authorities have led to resource losses and serious environmental pollution.

According to Truc, illicit coal trafficking is conducted along inland waterways in the northern region and the north-eastern sea area linking to China. Smuggled coal is mainly from illegal exploitation by local people, plus coal stolen from legal mining companies and coal set for domestic cement, power and fertilizer production.

“Smugglers used licensed documents for domestic trading to transport other minerals, such as iron, manganese, lead, zinc and ores by lorry or train to border areas for illegal exports to China,” he said.

In order to deal with corruption in mineral exploitation and land management, Prof cum Science Dr Dang Hung Vo said the auditing of natural resources would not only review operations, but also foster the fight against corruption.

He pointed out three groups of enterprises that were involved in such corruption. The first was mining companies that received licenses from the Ministry of Natural Resources and Environment or provincial governments and had not invested in processing plants but sold unrefined ore for profits.

The second group included companies that bought minerals from licensed firms for illegal exports to China.

The third group was transportation enterprises that directly took part in illicit mineral exports.

Solutions needed

MA Le The Chien, from the Government Inspectorate said that the current process of licensing mineral exploitation was inadequate due to the lack of appraisal.

In some localities, up to half of the granted licenses had not yet been approved by the Prime Minister.

In other cases, several projects had been licensed despite not being included in local planning. Some local authorities licensed projects to operate in larger areas that were beyond their authority.

Chien noted that in some places, over 60% of licensed mines had not completed procedures to hire land for their operations but were still operating. The most prominent case was in Nghe An Province with 127 out of 205 licensed mines operating in such a manner.

Geologists said that if no drastic measures were taken in the near future, Vietnam’s minerals will become increasingly scarce in the time to come. The situation may even get worse amid a sharp increase in Chinese demand for minerals.

“It’s high time for the country to scrutinise mineral exploitation and apply strict punishments for violators. A long-term task is to tighten controls over licensing and speed up planning for mineral processing industry,” Truc added.