Revised regulation on petroleum contract language stirs concerns

A new regulation in the draft amended Petroleum Law has worried foreign investors as it stipulates that petroleum contracts will only be in Vietnamese if they involve domestic contractors instead of both Vietnamese and English as at present.

Under Clause 1, Article 34 of the draft law, subject to discussions at the National Assembly's ongoing session, the language used in petroleum contracts is Vietnamese in case contractors selected at the time of signing hold Vietnamese nationality.

Although Clause 2 of this article stipulates that Vietnam is willing to use two languages in petroleum contracts when they involve foreign contractors, many experts, lawyers and businesses insisted this regulation is not appropriate.

Legal experts and industry insiders said foreign investors want the two languages because it will be very difficult to adjust a contract in only Vietnamese when a foreign partner wishes to join in.

Foreign investors are hesitant to join petroleum contracts that used only Vietnamese before, or were translated into English, without signatories of relevant sides, they argued.

Moreover, English is used in the activities of the world's oil and gas industry, and there are many specialized terms that could not be explained correctly in Vietnamese.

Therefore, using English in contracts right at the outset is essential and has become an international practice, they said, adding the absence of English in contracts will be a new barrier in attracting foreign investment to Vietnam's oil and gas industry.

They said the regulation does not need to be amended as in fact, petroleum contracts in both Vietnamese and English have commenced smoothly, without any problems.

According legal experts and industry insiders, such an amendment is considered a backward step in drawing up policies for oil and gas activities. It is not suitable for the building of the legal system in general and laws on oil and gas in particular, and does not help improve the investment environment in this field.

Therefore, in order to create favorable conditions for potential contractors to join existing oil and gas contracts, at the time of signing, petroleum contracts should be presented in a common foreign language like English regardless of the nationality of the contractor, they noted.

The Petroleum Law was first introduced on July 6, 1993, and revised in 2000, 2008 and 2018. Together with guiding documents, it has been facilitating the development of the oil and gas industry.

However, there has been a number of challenges emerging in the enforcement of the law. For example, there are major gaps between several provisions and the changing reality as well as the robust growth of the energy sector at present. Some parts of the law are also not consistent with related laws and regulations.

The draft revised Petroleum Law was first submitted for discussion at the National Assembly session in May this year, aiming to build a law more relevant to the current situation and enhance the efficiency of state governance in the field. The revision also seeks to provide a more unified regulatory framework and remove legal barriers for investors.

The bill has been tabled for discussion again and adopted at the National Assembly's ongoing session.