Governing Executive Contributions and Operations in Business Management

The draft amendment to the Civil Servant Law proposes allowing civil servants to enter into labor or service contracts with other organizations or businesses, provided these do not violate their primary contract or create conflicts of interest. Civil servants may also invest in, manage, or operate private enterprises, cooperatives, hospitals, educational institutions, and research organizations.

A Significant Reform

According to the Ministry of Home Affairs, this mechanism aims to leverage the expertise of civil servants, encourage innovation, and increase their lawful income while retaining skilled personnel in the public sector.

As the government promotes the socialization of healthcare, education, and the development of an innovation and science-technology ecosystem, allowing civil servants to invest in and manage private enterprises could serve as a “soft lever,” channeling their knowledge and experience into the private sector. However, this proposal raises concerns.

Currently, there are over 1.7 million civil servants nationwide working in public service units, including those with financial autonomy. Permitting civil servants to establish and manage private enterprises raises questions about the extent of such allowances, eligible entities, and oversight mechanisms.

Delegate Ha Duc Minh (Lao Cai Province) views this proposal as a progressive step, expanding professional rights and fostering proactiveness and creativity among public intellectuals. This aligns with the need for public-private resource integration, effectively utilizing civil servants’ capabilities in science, technology, education, healthcare, and digital transformation.

However, Delegate Minh notes that the draft law’s broad scope could lead to civil servants engaging in business activities, causing conflicts of interest and compromising professional ethics and public service quality. Additionally, oversight and violation handling mechanisms remain unclear, potentially enabling abuse of public positions for personal gain or misuse of public assets.

Delegate Pham Van Hoa (Dong Thap Province) expresses concern that leaders of public service units with economic interests in external enterprises might favor those entities. He suggests limiting such activities to regular staff and deputy managers, while strictly restricting top leaders due to their managerial authority and associated risks of exploitation.

Delegate Thach Phuoc Binh (Vinh Long Province) emphasizes the need for strict control to prevent civil servants from exploiting their positions for personal gain. He proposes clearly defining permissible sectors and professions, mandating transparent reporting, and ensuring oversight by managing entities.

From another perspective, Dr. Nguyen Tien Dinh, former Deputy Minister of Home Affairs, argues that concerns about conflicts of interest or abuse of power are unwarranted, as civil servants primarily provide public services in education and healthcare, rather than directly managing state affairs or policymaking. Enterprises are often established by public service units to commercialize research, intellectual property, and digital technology, both domestically and internationally. Dr. Dinh believes relaxing these regulations is appropriate and necessary in the current context, enabling civil servants to engage in economic activities.

Clarifying Scope and Investment Limits

Connecting public and private sector human resources will maximize the expertise of civil servants, stimulate creativity, and retain talent within the public system. However, many argue for a robust legal framework to ensure absolute transparency, preventing policy loopholes in public service operations.

Deputy Chair of the National Assembly’s Law and Justice Committee, Nguyen Phuong Thuy, supports allowing civil servants to enter additional contracts, invest, and manage enterprises. She stresses the need for risk control mechanisms to prevent conflicts of interest, especially in healthcare and science-technology sectors.

Mrs. Thuy warns that without specific limits on investment amounts, management scope, or information disclosure mechanisms, the regulations could be exploited, damaging the public sector’s reputation and integrity. She recommends the draft law include clear provisions on contract disclosure and investment limits. “This will facilitate implementation and ensure transparency in public service activities,” she observes.

Delegate Pham Nhu Hiep (Hue City) acknowledges the progressiveness of allowing civil servants to contract, invest, and manage enterprises but calls for strict control mechanisms to prevent abuse and personal gain. He cites the example of public hospital doctors operating private clinics, potentially leveraging the hospital’s reputation, research data, equipment, and staff for private profit.

Therefore, Mr. Hiep proposes that the law clearly limit participation scope or establish mandatory approval and transparency procedures to ensure civil servants do not harm their public service units.

Delegate Ngo Dong Hai (Hung Yen Province) suggests the draft amendment explicitly prohibit civil servants from using the name, brand, or any resources of their public service units in external activities.