DECREE No DECREE No.02-CP OF JANUARY 25, 1996 OF THE GOVERNMENT RATIFYING THE STATUTE ON THE ORGANIZATION AND OPERATION OF THE VIETNAM NATIONAL CHEMICAL CORPORATION THE GOVERNMENT Pursuant to the Law on Organization of the Government of September 30, 1992; Pursuant to the Law on State Enterprises of April 20, 1995; Considering the proposal of the Managing Board of the Vietnam National Chemical Corporation, DECREES: Article 1.- To ratify the Statute on the Organization and Operation of the Vietnam National Chemical Corporation issued together with this Decree. Article 2.- The Minister of Finance, the Governor of the State Bank, the Minister of Industry, and the concerned Ministers, Heads of the ministerial-level agencies and Heads of the Agencies attached to the Government, shall guide the implementation of this Decree. Article 3.- This Decree takes effect from the date of its signing. The Ministers, the Heads of the ministerial-level agencies, the Heads of the Agencies attached to the Government, the Presidents of the People's Committees of the provinces and cities directly under the Central Government, the Managing Board and the General Director of the Vietnam National Chemical Corporation, are responsible for the implementation of this Decree. On behalf of the Government The Prime Minister VO VAN KIET STATUTE ON THE ORGANIZATION AND OPERATION OF THE VIETNAM NATIONAL CHEMICAL CORPORATION (Ratified by Decree No.02-CP of January 25, 1996 of the Government) Chapter I GENERAL PROVISIONS Article 1.- The Vietnam National Chemical Corporation (hereafter referred to as the Corporation) is a State corporation composed of member units which are closely associated by economic interests, finance, technology, supply, consumption, services, information, training, research, marketing and by operations in the chemical industry. The Corporation is established by the Prime Minister with a view to increasing capital accumulation and concentration, specialization and cooperation for production, in order to fulfill the tasks assigned by the State, raise the capability and business efficiency of the member units and the Corporation as a whole, and meet the needs of the economy. Article 2.- The Corporation has the task of undertaking chemical business, including research and planning, business plan in conformity with the strategy, planning, and development plan of the chemical industry of the State, investing, creating sources of investment, building, production, transport, import and export, marketing of products, and supply of materials and equipment for the chemical industry, and conducting other business activities in accordance with law and the State policies. Article 3.- The Corporation has: 1. The statute of a juridical person as provided for by Vietnamese law. 2. Its Status on organization and operation, and managerial and executive apparatus. 3. Its own capital and properties, and the responsibility for its debts within the capital under its management; 4. Its seal, bank accounts at the State Treasury and banks inside and outside the country. 5. Its balance of properties and centralized funds according to the provisions of the Government and under the guidance of the Ministry of Finance. 6. Its international transaction name as VIETNAM NATIONAL CHEMICAL CORPORATION, or VINACHEM in abbreviation. 7. Its main office is located in Hanoi City. Article 4.- The Corporation is subject to the State management of the Ministries, the Agencies at ministerial level, the Agencies attached to the Government and the People's Committees of the provinces and cities directly under the Central Government in their capacity as State management bodies; at the same time subject to the management of these agencies which exercise the right of the owner over a State enterprise in accordance with the Law on State Enterprises and other provisions of law. Article 5.- The Corporation is managed by the Managing Board and run by the General Director. Article 6.- The organization of the Communist Party of Vietnam in the Corporation shall operate in accordance with the Constitution and the laws of the Socialist Republic of Vietnam and the provisions of the Communist Party of Vietnam. The Trade Union and other socio-political organizations in the Corporation shall operate according to the Constitution and laws. Chapter II RIGHTS AND DUTIES OF THE CORPORATION Section 1. RIGHTS OF THE CORPORATION Article 7.- 1. The Corporation has the right to manage and use its capital, land, natural resources, and other sources allocated by the State according to law in order to achieve the targets and fulfill the tasks assigned by the State. 2. The Corporation has the right to re-assign to its member units for management and use of the resources which it has received from the State; and in case of necessity, to adjust the resources it has assigned to its member units in line with the overall development plan of the entire Corporation. 3. The Corporation is entitled to invest, enter into joint venture, contribute stocks, and buy part or the whole property of other enterprises in accordance with law. 4. The Corporation is entitled to transfer, replace, rent, mortgage and pawn property under its management, except for the important equipment and workshops which, by prescription of the Government, must have the permission of competent State agencies, and on the principle of preserving and developing the capital; as regards the land and other resources under the management and use of the Corporation, relevant laws shall apply. Article 8.- The Corporation has the following rights in the organization of management and business: 1. To organize the managerial apparatus and organize business in conformity with the objectives and tasks assigned by the State; 2. To renew technology and equipment; 3. To set up branches and representive offices of the Corporation in the country and abroad as prescribed by law; 4. To conduct business in such trades and occupations as suit the objectives and tasks assigned by the State; to broaden the scope of business according to the capabilities of the Corporation and market demand; and to conduct additional businesses if permitted by the authorized State agency; 5. To select its own market and uniformly to divide the markets among its member units; to conduct import and export according to prescriptions of the State; 6. To decide itself the price bracket, or the buying and selling prices of the main products and services, the minumum export and maximum import prices, except those products and services of which the prices are set by the State; 7. To work out and apply the norms for labor, unit price of wage per unit of product in the framework of the norms and unit prices set by the State; 8. To assign responsibilities in the recruitment, hiring, assignment, employment and training of labor, to select the forms of wage and bonus payment, and exercise other rights of the employer as provided for by the Labor Code and other prescriptions of law; to decide the wages and bonuses for the laborers on the basis of the unit prices of wage per unit of product, or the service fees and the effectiveness of the operations of the Corporation; 9. To invite and receive foreign business partners to work with the Corporation in Vietnam; and send representatives of the Corporation abroad to work, study, and research, except for the Chairman of the Managing Board and the General Director who must get the permission of the Prime Minister. The sending abroad of other members of the Managing Board shall be decided by the Chairman of the Managing Board. The sending abroad of the Deputy General Director and other functionaries in the Corporation shall be decided by the General Director. Article 9.- The Corporation has the following powers in financial management: 1. To use the capital and the various funds of the Corporation to meet in time the business requirements on the principle of preservation and effectiveness. It has to reimburse capital or fund used not in line with the designated purposes; 2. To mobilize capital of its own for business activities but without changing the form of ownership; to issue bonds as defined by law; to mortgage the land use right associated with the property under the management of the Corporation at Vietnamese banks in order to borrow capital for business according to prescriptions of law; 3. To set up, manage and use the centralized funds and the capital depreciation fund at the level and rate of deduction, and under the regime of utilization and management of these funds in conformity with the guidance of the Ministry of Finance and the prescriptions of the Financial Regulations of the Corporation; 4. The Corporation may use the remaining profits after fulfilling all obligations to the State to set up development investment funds and other funds as prescribed, in order to distribute to the laborers according to their contributions to the business results in the year, and according to the shares they have contributed (if any); 5. The Corporation is entitled to the regime of subsidies, price subsidies and other preferential regimes of the State when performing its production or supply tasks in service of national defense and security, and the prevention and fight against natural calamities, or in service of public interests, or in the supply of products and services in accordance with the price policy of the State which cannot make up for the production cost or service cost which the Corporation has spent on these products and services; 6. The Corporation is entitled to the investment or reinvestment preferential regime as prescribed by the State. Article 10.- The Corporation may refuse and denounce all requests for resource supply not stipulated by law by any individual or organization, except the voluntary contributions for humanitarian purposes and public interest. Section 2. OBLIGATIONS OF THE CORPORATION Article 11.- 1. The Corporation has the duty to receive and efficiently use, preserve and develop the capital allocated to it by the State (including the capital it invests in other enterprises); receive and efficiently use the land, natural resources, and other allocated resources in order to realize the business targets and the tasks assigned by the State. 2. The Corporation has the obligations: a/ To collect or pay the debts recorded in the balance of property of the Corporation at the time of its establishment; b/ To pay the international credits used by the Corporation under decision of the Government; c/ To pay the credits directly borrowed by the Corporation, or borrowed under trust contract by its member units with guaranty from the Corporation, if these units are unable to pay. Article 12.- The Corporation has the following obligations in managing its business operations: 1. To register for business and conduct its business in accordance with the registration; to take responsibility before the State for the results of its operations, and before the customers and law for its products and services; 2. To work out the development strategy, the five-year and annual plans in line with the strategy, planning and the economic-social development plan of the State, the objectives and tasks assigned by the State, and market demands; 3. To sign, and organize the implementation of economic contracts with its partners; 4. To ensure the major balances of the State, meet the market need, and take part in stabilizing the prices of essential products and services as stipulated by the State which the Corporation is trading in; 5. To renew and modernize the technology and mode of management; and to use the income generated by the assignment of property to re-invest, renew the equipment and technology of the Corporation; 6. To exercise the obligations toward the laborers in accordance with the provisions of the Labor Code and to ensure their participation in the management of the Corporation; 7. To carry out the regulations of the State with regard to the protection of natural resources, the environment, and national defense and security; 8. To abide by the regime of statistical and accountancy reporting and periodical reporting as prescribed by the State, and also the regime of irregular reporting at the request of the representative of the owner; and take responsibility for the accuracy of the reports; 9. To submit to the control of the representative of the owner; to abide by the regulations concerning the inspection by the financial agency and other authorized State agencies as prescribed by law. Article 13.- The Corporation has the following obligations in the financial management: 1. To carry out correctly the regime and other regulations on the management of capital, property, the various funds, book-keeping, cost accounting, audit regime and the other regimes prescribed by the State; and to take responsibility for the accuracy of its financial operations. 2. To make public its annual financial statement and other information so as to help the correct and objective evaluation of the operation of the Corporation as prescribed by the Government. 3. To fulfill its obligation of paying taxes and other remittances to the State budget as provided for by law. In case the property mobilized by the Corporation among its member units is recorded in the form of increase or decrease of capital, the Corporation shall be exempted from registration tax. The semi-finished products transferred internally among the member units in order to continue finishing, or the services mutually conducted by member units in service of business shall be exempted from turnover tax. Chapter III THE MANAGING BOARD AND THE CONTROL COMMISSION Article 14.- 1. The Managing Board performs the function of managing the operations of the Corporation, and takes responsibility for the development of the Corporation in accordance with the tasks assigned by the State. 2. The Magaging Board has the following powers and tasks: a/ To receive capital (including debts), land, natural resources and other sources assigned to the Corporation by the State; b/ To examine and approve the plans proposed by the General Director concerning the allocation of capital and other resources to the member units, and the plan for the regulation of capital and other resources among the member units; to control and supervise the realization of these plans; c/ To control and supervise all activities of the Corporation; the utilization, preservation and development of the capital and other assigned resources; the implementation of the resolutions and decisions of the Managing Board and the provisions of law; and the discharge of the obligations to the State; d/ To adopt the proposals of the General Director to be submitted to the Prime Minister for approval concerning the strategy, planning and plans for long-term development, the five-year plans of the Corporation. To decide the annual targets and plan of the Corporation and report them to the Prime Minister; to adopt the plan of the Corporation for exploration, exploitation, management and preservation of natural resources, so that the General Director may assign it to the member units; e/ To organize the evaluation and submit to the authorized agency for approval the plans for investment, new investment projects and projects of investment in cooperation with foreign parties with the capital managed by the Corporation; f/ To submit to the Prime Minister for approval, and in case of accreditation by the Prime Minister, decide the joint venture projects with foreign countries in accordance with the prescriptions of the Government; to decide joint venture projects with domestic partners and the economic contracts of large value. To submit to the Prime Minister for decision on investment projects of Group A; to decide the investment projects of Group C; if empowered, to decide a number of investment projects of Group B; to empower the General Director or the Director of a member unit to approve small investment projects; g/ To issue and supervise the implementation of the economic and technical norms and criteria, including unit price of wages, unit prices and norms in specialized construction, product criteria, trade marks, within the Corporation at the proposal of the General Director and on the basis of the common regulation of the branch and of the country; h/ To work out and submit to the Prime Minister for approval the Statute on the organization and operation of the Corporation, and the amendments and supplements to the Statute. To approve the Statutes and the Regulations on the organization and operation of the member units, and the amendments or supplements to these Statutes and Regulations at the proposal of the General Director. To decide to open branches and representative offices of the Corporation in the country and abroad in accordance with the procedures defined by law. To ratify the plan of the Corporation for organization of management and business presented by the General Director. To propose the establishment, splitting, merger and dissolution of the member units as prescribed by law; i/ To propose the Minister of Industry to submit to the Prime Minister to appoint, dismiss, commend or discipline the General Director. To propose the Minister of Industry to appoint, dismiss, commend or discipline the Deputy General Director and the Chief Account of the Corporation at the proposal of the General Director; to appoint, dismiss, commend or discipline the Directors of the member units at the proposal of the General Director; to decide the total personnel of the managerial and operational apparatus of the Corporation, and readjust it when necessary at the proposal of the General Director; j/ To issue the Financial Regulation of the Corporation after it is approved by the Ministry of Finance. The Regulation shall be compiled in conformity with the Model Financial Regulations for State corporations issued by the Ministry of Finance; k/ To adopt the plan proposed by the General Director concerning the founding and utilization of the centralized funds corresponding with the business and financial plans of the Corporation; l/ To examine the plans for capital mobilization (in all forms) and guarantee the borrowings and liquidation of property of the member units, to decide or submit to the Prime Minister for decision, according to the principles mentioned in Item 4, Article 37 of this Statute; m/ To adopt the quarterly, six-month and annual operational reports of the Corporation, and the annual general financial reports (including the property balance) of the Corporation and the member units presented by the General Director, and request the General Director to make public the annual financial report as prescribed by the Ministry of Finance; n/ To issue the regulation on the protection of business secrecy, internal economic information and State secrets as prescribed by law, as presented by the General Director, for uniform application throughout the Corporation. 3. The Managing Board comprises 5 members to be appointed and dismissed by the Prime Minister. The criteria of the persons to be nominated as members of the Managing Board shall comply with the provision in Article 32 of the Law on State Enterprises. 4. The Managing Board shall comprise a number of full-time members, including the Chairman of the Board, a member who is also the General Director, a member who is also President of the Control Commission, and a number of full-time or half-time members who are specialists operating in the domains of economy, technology, finance, business management and law. 5. The Chairman of the Managing Board must not be also General Director of the Corporation. 6. The term of office of the members of the Managing Board is five years. A member of the Managing Board may be re-appointed. He/she may also be dismissed and replaced in the following cases: a/ Law-breaking, or

Decree 02/CP