Legal rules on environmental protection applicable to petrol and oil business in vietnam

VIETNAM NATIONAL UNIVERSITY, HANOI VIETNAM JAPAN UNIVERSITY NGUYEN TA BINH DUONG LEGAL RULES ON ENVIRONMENTAL PROTECTION APPLICABLE TO PETROL AND OIL BUSINESS IN VIETNAM MASTER'S THES

VIETNAM NATIONAL UNIVERSITY, HANOI

VIETNAM JAPAN UNIVERSITY

NGUYEN TA BINH DUONG

LEGAL RULES ON ENVIRONMENTAL PROTECTION APPLICABLE TO PETROL

AND OIL BUSINESS IN VIETNAM

MASTER'S THESIS PUBLIC POLICY

Hanoi, 2020

VIETNAM NATIONAL UNIVERSITY, HANOI

VIETNAM JAPAN UNIVERSITY

NGUYEN TA BINH DUONG

LEGAL RULES ON ENVIRONMENTAL PROTECTION APPLICABLE TO PETROL

AND OIL BUSINESS IN VIETNAM

MAJOR: PUBLIC POLI CY CODE: 8340402.01

RESEARCH SUPERVISOR:

Dr BUI HAI THIEM Prof NAOHISA OKAMOTO

Hanoi, 2020

ACKNOWLEDGEMENT

Firstly, I would like to thanks to my supervisors, Prof Naohisa Okamoto and

Dr Bui Hai Thiem Both of them have kindly guided me in the learning process as

well as in completing the thesis These are very valuable guidelines not only in the

process of doing this thesis but also for my steps in the process of learning and

career later

I would like to express my gratefulness to the teachers at Vietnam Japan

University, the Office of Master of Public Policy, for creating favorable conditions

for me during my study and research

Sincere thanks to my colleagues at the Department of Legal Affairs of

Ministry of Industry and Trade (MOIT) and other people for providing data and

documents to help me complete my thesis Thanks to everyone for in-depth

interviews

Finally, I would like to thank my family and my friends, who are always

willing to share and help with learning and life

Sincerely

Hanoi, 2020 Nguyen Ta Binh Duong

TABLE OF CONTENTS

ACKNOWLEDGEMENT i

LIST OF TABLES iv

LIST OF FIGURE v

LIST OF ABBREVIATIONS vi

ABSTRACT vii

CHAPTER 1: INTRODUCTION 1

1.1 The rational of research 1

1.2 Research questions 2

1.3 Literature view 3

1.3.1 International research 3

1.3.2 Domestic research 4

1.4 Research objective and tasks 5

1.5 Scope of research 5

1.6 Research methods 6

1.6.1 Data collection source 6

1.6.2 Data collection methods 6

1.7 Theoretical and practical meanings of the research 9

1.8 Thesis structure 9

CHAPTER 2: RATIONALE AND PRACTICAL BASIS OF LEGAL RULES ON EP APPLICABLE TO PETROL AND OIL BUSINESS IN VIETNAM 11

2.1 Rationale of legal rules on EP applicable to petrol and oil business in Vietnam11 2.1.1 Basic concepts related to legal rules on EP applicable to petrol and oil business in Vietnam 11

2.1.2.The role of petrol and oil 14

2.1.3 The need to promulgate environmental and EP regulations in the petrol and oil business 16

2.1.3 Influential factors and criteria for assessing the formulation and promulgation of legal provisions on EP in petrol and oil trading 20

2.2 International experience on the legal rules on EP in petrol and oil business 23

2.2.1 Philippines 24

2.2.2 Thailand 25

2.2.3 The United States 27

2.2.4 Japan 30

2.2.5 Lesson for Vietnam 31

2.3 Conclusion Chapter 2 31

CHAPTER 3: LEGAL RULES ON EP APPLICABLE TO PETROL AND OIL BUSINESS IN VIETNAM AND THEIR IMPLEMENTATION 32

3.1 The system of legal documents on EP currently applicable to petrol and oil

3.2 Contents of legal rules on EP in petrol and oil business 35

3.2.1 State management agencies on EP in petrol and oil business in Vietnam 35

3.2.2 Legal rules on responsibilities for conducting EIA 37

3.2.3.EP responsibilities of petrol and oil production and business establishments .37

3.2.4 Legal rules on EP fee 38

3.2.5 Legal rules on Preventing and responding to environmental emergencies and Oil spill incident response plan 38

3.2.6 Legal rules on responsibility to pay taxes for EP 39

3.3 The environmental management tools ensure the implementation of the Law on EP in petrol and oil business in Vietnam 41

3.3.1 Legal tool for EP 42

3.3.2 Economic tool for EP 42

3.3.3 Technical tool for EP 43

3.3.4 Educational tool for EP 44

3.4 The application of legal rules on EP in petrol and oil trading activities in Vietnam 45

3.4.1 Advantages in implementing the legal rules on EP applicable to petrol and oil business in Vietnam 45

3.4.2 Limitations of the legal rules on EP in petrol and oil business in Vietnam 47 3.5 Conclusion Chapter 3 51

CHAPTER 4: RECOMMENDATIONS FOR IMPROVING THE LEGAL RULES ON EP APPLICABLE TO PETROL AND OIL BUSINESS IN VIETNAM 52

4.1 The context and requirements for the improvement of legal rules on EP applicable to petrol and oil business in Vietnam 52

4.2 General direction for improving the legal rules on EP applicable to petrol and oil business in Vietnam 53

4.3 Basic solutions to improve the legal rules on EP applicable to petrol and oil business in Vietnam 54

4.4 Recommendations to improve the legal rules on EP applicable to petrol and oil business in Vietnam 57

CHAPTER 5: CONCLUSION 58

REFERENCES 59

ANNEX 1 62

ANNEX 2 64

LIST OF TABLES

Table 1.1 The In-depth interview plan ……….…… … 7

Table 2.1 Petrol and oil exports in the first 11 months of 2019 ……… 15

Table 2.2 Rate of fuel loss incurred in the petrol and oil storage ……… 17

Table 3.1 Tariff table from 2012 ……… 39

Table 3.2 Tariff table from 2019……… 40

LIST OF FIGURE

Figure 3.1 The system of legal documents On ep currently applicable to petrol and

oil business in Vietnam ……… 32

LIST OF ABBREVIATIONS

EIA Environmental Impact Assessment

EP Environmental Protection

MOF Ministry of Finance

MOIT Ministry of Industry and Trade

MONRE Ministry of Natural Resources and Environment MOST Ministry of Science and Technology

UNEP United Nations Environment Programme

USEPA United States Environmental Protection Agency VEA Vietnam Environment Administration

ABSTRACT

Petrol and oil are the main fuel for all activities of the economy Meanwhile, they are substances potentially causing environmental pollution and high fire and explosion

Recognizing the importance as well as the dangers of this item, Vietnam has classified petrol and oil as one of the commodities subject to business conditions In order to participate in petrol and oil business, it is necessary to comply with different legal rules In addition to the legal rules on construction, technology, fire and explosion prevention and fighting, petrol and oil business entities must comply with the legal rules on environmental protection (EP)

This thesis provides a critical review of legal rules on EP applicable to petrol and oil business in Vietnam It analyzes limitations of these rules and argues for major changes of these rules for the improvement in EP

CHAPTER 1: INTRODUCTION

1.1 The rational of research

The environment has an important influence on everyone's life, living things and the economic, cultural and social development of a country Protection of the environment has become a global concern and one of Vietnam's most current concerns with a guiding view throughout the legal development and enforcement that protection of people's health is a top priority, ensuring that everyone can live in

a clean environment

Vietnam has been accelerating industrialization and modernization of the country at an increasing pace Along with socio-economic development, the environmental quality has deteriorated due to production and business activities, including factors from petrol and oil trading Recognizing that, Vietnam has been promoting EP in various ways Among the important measures taken has been the development of a legal system on EP in the petrol and oil business

Petrol and oil are the main fuel for the economy's activities While these is a limited resource and cannot be replaced In Vietnam, petrol and oil are the kind of commodities subject to business conditions The management and operation of petrol and oil facilities are large and complex with potential risks and tremendous impacts on the environment If any negligence in petrol and oil activities happens, there will be environmental disaster, affecting human health, life, property, security and order, and the environment of the community

After recent efforts by the Government to cut down the conditions for business investment, petrol and oil business has started to increase significantly with a variety of participants Therefore, in order to participate in petrol and oil trading activities, it is necessary to comply with different regulations In addition to the legal rules on construction, technology and fire and explosion prevention and fighting, petrol and oil business entities must comply with the legal rules on EP

Environmental pollution due to petrol and oil business activities in Vietnam

has been certain shortcomings and limitations in the existing legal system Therefore, it is necessary to study the legal rules on EP in the petrol and oil business field

Researching on "Legal rules on environmental protection applicable to the

petrol and oil business in Vietnam", the author re-affirms the important role of the

legal rules on EP applied in the field of petrol and oil business in Vietnam The thesis first provides an overview of current legal rules on EP applied in petrol and oil business in Vietnam through desk study It takes a qualitative approach in investigating expert opinions, analysis and comments on the legal rules on EP applicable to petrol and oil trading in Vietnam Based on the critical analysis, the thesis recommends solutions to facilitate the observance of law on EP in the field of petrol and oil business, ensuring that “everyone has the right to live in a clean environment” and promoting the process of economic development in Vietnam

Using my professional experience, based on the knowledge provided in the Master of Public Policy program at Vietnam – Japan University, the author hopes that the thesis will contribute to consolidation and improvement of Vietnam's legal rules on EP on petrol and oil business

1.2 Research questions

There are a number of important questions in this research:

- What is the impact of petrol and oil business on the current environmental pollution in Vietnam?

- Are the legal rules in the petrol and oil business being effectively applied to

EP in Vietnam?

- Is there a correlation between the level of environmental pollution caused

by petrol and oil business and the legal rules formulated and implemented in Vietnam?

- What should the Government of Vietnam do to improve the legal rules on

EP applicable to petrol and oil business in Vietnam?

Gupta and Mahler, W (1994) explained why petrol and oil is subject to many taxes at high tax rates However, the above study was conducted in countries with petrol and oil market characteristics that are very different from Vietnam, thus the application is very difficult for the current situation of Vietnam

Yasamis, F D (2011) points out that there are three main environmental management strategies developed to address environmental quality issues: command and control strategies, self-control strategies and economic tools In order

to effectively protect the environment, all of these strategies need to be used in a harmonious manner depending on the strengths and weaknesses of the socio-economic situation, the availability of financial funds, people's awareness However, the research also emphasizes the importance of economic instruments in EP

Bell, S & McGillivray, D & Pederson, O W (2013) proved that environmental policy is the concretization of each country's law on EP and international environmental conventions Each level of administrative management has its own environmental policies, both concretizing laws and policies of higher levels and taking into account local characteristics The correctness and success of local policies have an important role in ensuring the success of central policies

These international studies were quite outdated and not focusing on EP on petrol and oil or conduct in countries with petrol and oil market characteristics that are different from Vietnam, so the application is very difficult for the current situation in Vietnam

1.3.2 Domestic research

In Vietnam, the law on environment protection in general and in each specific area of social life has been raised by the Party and the State, and especially scientists, who do special theoretical work Particularly interested in research in many aspects, different angles, such as:

Dinh, P Q (2011) studied legal rules on Vietnam's EP, clarified some theoretical issues of legal rules on EP and proposed major solutions to complete the legal rules on EP in the near future

Nguyen, T H (2016) evaluated the effectiveness of the EP tax law on petrol and oil The article points out the inadequacies of the current legal rules on EP tax

on petrol in Vietnam and provides some solutions to improve the effectiveness of these regulations

Vuong, T T H & Pham, X T (2017) raised some issues to be noted about

EP tax policies in some countries and made some recommendations for tax protection policy on EP in Vietnam

The above studies have shown many solutions to protect the environment However, the majority of studies focus on EP tax while none focused on specific studies on the other legal rules on EP that applied to petrol and oil business in Vietnam The promulgation and implementation of the legal rules on this issue are still limited such as the regulations are valid in a short time and there are still many inconsistent regulations

Existing literature does not focus on EP on petrol and oil or only discuses legal rules on EP tax on petrol and oil However, there has not been any research project on EP in petrol and oil business in Vietnam Therefore, the thesis aims to systematizing theoretical and practical issues on EP in petrol and oil business, analyzing the status of legal rules on EP in petrol and oil business in Vietnam over the past time and proposing solutions to improve the legal system of EP in petrol and oil business in Vietnam in the coming time

1.4 Research objective and tasks

- Research objective: The research thesis aims to contribute to completing the legal rules on EP applicable in the petrol and oil business in Vietnam in the coming time

or not mentioned in this thesis

In addition, there are still some regulations that have not been included in specific studies such as indicators of technical regulations and standards on EP in the field of petrol and oil trading, relevant regulations such as specific regulations

on fire prevention and fighting, chemicals The international agreements on environment to which Vietnam is a member are also not mentioned in the thesis

because the legal rules in Vietnam are subject to international commitments except the Constitution 2013

1.6 Research methods

1.6.1 Data collection source

The data is collected from many different sources including secondary and primary data

Secondary data was collected by the author from textbooks, reference books, monographs, summary reports of research results topics at all levels: concepts related to the legal rules on EP applicable to petrol and oil business; environmental management tools to ensure law enforcement on EP in petrol and oil business

The sources include figures and materials from articles in scientific journals, scientific thematic reports; Information from reports of the Government, ministries/sectors of Vietnam, petrol and oil enterprises in Vietnam; reports of international agencies; Documents and decisions related to the legal rules on EP in general, the legal rules on EP in petrol and oil business in Vietnam in particular

Primary data is collected through the extraction of information from minutes

of meetings and discussions with businesses, managers, experts at the MOIT, the MONRE, etc Opinions of managers and enterprises are an important primary source to assess the formulation and enforcement of legal rules on EP in petrol and oil trading activities in Vietnam It provides ample evidence for research along with secondary data for the thesis to make more rigorous arguments

1.6.2 Data collection methods

 Desk research method: Collecting, analyzing and extract information from available sources related to research topics, including legal rules, government’s decrees and ministerial/sectoral circulars, international experience This method is used in Chapter 2

 In-depth interview method: Through the integration of information collected from meetings and discussions with businesses and officials at MOIT and

MONRE to collect comments, advice on ideas and solutions This method will be

+ Achievements and limitations of the legal rules on EP

+ To get deeper

knowledge of MONRE and legal rules on

+ International experience in legal rules on EP in petrol

+ To get deeper

knowledge of MOIT; legal rules on EP; experience from some countries

No Name of

organization

Interviewees Topic Objectives

and oil business + Achievements and limitations of the legal rules on EP

Director, 2 Employees

+ Legal rules on EP that enterprises must comply with

+ Achievements and limitations of the legal rules on EP

+ Which legal rules should be amended and supplemented?

Identify the legal rules on

EP applicable

to petrol and oil;

difficulties encountered with legal rules

Source: Author The author chooses officials from three state agencies directly managing EP

in the petrol and oil business in Vietnam for interview Representatives from a number of enterprises which took part in interview including Vietnam Petroleum Corporation, Petroleum Vung Tau Joint Stock Company, Petroleum Company B12

- are large companies in the petrol and oil industry in Vietnam The interviews are conducted from September 2019 to November 2019

For state management agencies, the author combines participation in seminars, conferences on EP in the petrol and oil business to conduct in-depth interviews For enterprises, the author takes advantage of the inspection and direct communication through the survey team of the MOIT on EP in the field of petrol and oil business Questions and answers of interviewees are attached in the annex

1.7 Theoretical and practical meanings of the research

 Theoretical meanings:

A critical analysis of the legal rules on EP for the petrol and oil business in Vietnam contributes to further knowledge in the field, drawing lessons from the practical implementation of the legal rules on EP in Vietnam

 Practical meanings:

The thesis provides the baseline data and evidence for recommending solutions for reviewing and improving policies and law The thesis will be used as a reference for companies operating in the petrol and oil business sector

1.8 Thesis structure

The thesis has 5 chapters as follows:

Chapter 1: Introduction This part presents the rationale of research,

research objective and tasks, research methodology, scope of research, research questions, expected contribution of the research, literature view, the expected structure of the thesis

Chapter 2: Rationale and practical basis of legal rules on EP applicable

to petrol and oil business This part presents the rationale, practical basis and the

need to promulgate legal rules on EP on the petrol and oil business field In addition, this chapter analyses the influential factors and criteria for assessing the formulation and promulgation legal rules on EP in petrol and oil trading

Chapter 3: Legal rules on EP applicable to petrol and oil business in Vietnam and their implementation This chapter analyzes the current situation,

content and application of legal rules on EP on petrol and oil business in Vietnam

Chapter 4: Recommendations for improving the legal rules on EP applicable to petrol and oil business in Vietnam This part presents the

achievements and limitations of the legal system on EP in the petrol and oil business in Vietnam From that give recommendations to improve the legal system

in this field

Chapter 5: Conclusion This chapter summarizes the research issues and

research limitations raised in the thesis

CHAPTER 2: RATIONALE AND PRACTICAL BASIS OF LEGAL RULES ON EP APPLICABLE TO PETROL AND OIL BUSINESS IN

2.1.1.1 Environmental concept and definition of “environmental protection”

The “environment” is a broad concept, defined in many different ways, especially after The UN Conference on the Human Environment held in Sweden in

1972 The Conference adopted the Stockholm Declaration, which consists of 26 important principles, laying the groundwork for global policy on the protection and improvement of human habitats, clearly demonstrating the perception that this is a problem The strategic importance of the well-being of all peoples and developing the world economy is the duty of every government

In the UNESCO Declaration of 1981, the environment is understood as: “All natural systems and man-made systems around us, in which people live and work

by themselves exploit natural or artificial resources to satisfy human needs.”

In that spirit, Law on EP in 2014 defines Environment as “a system of

natural and man-made physical elements that affect the existence and development

of human beings and living organisms”

Article 3 of the Law on EP in 2014 defines “Environmental protection

activities means activities of conserving the environment, and preventing and restricting adverse impacts on the environment; Responding to environmental incidents; Remedying environmental pollution and degradation, improving and rehabilitating the environment; Exploiting and rationally using natural resources in order to keep the environment clean.”

According to the author, the environment is a combination of natural factors and social factors that are closely related These factors affect the production, life, existence and development of human as well as nature

The environment includes the natural environment and the artificial environment The natural environment consists of all the elements that occur naturally on Earth It is an environment where living things interact with each other The natural environment provides us with air to breathe, mineral resources, soil for cultivation, building houses,

Unlike natural environment, artificial environment are all artificial factors such as chemical composition, physical properties These factors are created by humans and dominated by humans

There is also the concept of the social environment The social environment

is the relationship between people It is laws, commitments, institutions, regulations at different levels Social environment has the task of orienting people according to a certain framework for favorable development, making human life different from other living beings

Although these factors are contradictory, they co-exist and interact closely with each other The ingredients will always metabolize in a certain cycle to create balance

In the thesis, the environment the author aims at is the natural environment

EP in the research is protection of the natural environment EP is the activities to improve the environment, keep the environment fresh and minimize negative impacts on the environment EP also helps ensure ecological balance, overcoming the consequences that humans cause to the environment

2.1.1.2 Definition of “Law on EP”:

In Law on EP in 2014, “The law on environmental protection is a system of

legal documents issued by the state or competent agencies, including legal normative acts, legal principles governing relationships arising between entities in the process of exploitation, use or impact on one or several elements of the

environment on the basis of combining different adjustment methods to protect an effective way of human habitat.”

2.1.1.3 Definition of “Petrol and oil” and “Petrol and oil business”

“Petrol and oil” and “Petrol and oil business” are defined in Decree No.83/2014/ND-CP as follows:

“Petrol and oil is a general term used to refer to products of the crude oil refining process which are used as fuel, including engine petrol, diesel oil, kerosene, fuel oil and jet fuel; bio-fuel and other products used as engine fuel, excluding liquefied gas and compressed natural gas.”

The above concept includes only products from the refining of crude oil used for fuel, petrol and oil from the recycling of other raw materials (used petrol and oil) that has not been controlled This is a legal loophole because used petrol and oil also cause environmental pollution such as petrol and oil from the crude oil refining process, but has not been put into the entities of management Because it is not subject to management, there are currently no technical standards for the quality of these petrol and oil

“Petrol and oil business covers export, import, temporary import for re- export, border-gate transfer and export processing of petrol and oil and raw materials; production and processing of petrol and oil; distribution of petrol and oil on the domestic market; and provision of services of warehouse and port leasing and receipt, preservation and transportation of petrol and oil.”

Vietnam

Based on the above mentioned, the concepts of the environment, EP, the laws on EP, petrol and oil business, legal rules on EP applicable to petrol and oil business in Vietnam are contained in the legal documents on EP issued by the Vietnamese State and guaranteed to be implemented and applied to all entities involved in petrol and oil business Accordingly, the legal rules govern the relationships arising among entities with the use thereof or impacts on the

environment in petrol and oil trading activities on the basis of combining different regulation methods in order to protect the environment effectively

The law on EP in petrol and oil business basically has the characteristics of law on EP However, due to the characteristics of petrol and oil as special commodities, in addition to the law on EP in petrol and oil trading, there are a number of striking characteristics as follows:

It has complicated scope and subjects of regulation, including: social relations arising in the process of petrol and oil trading, relations to the state management of EP in petrol and oil trading activities, the relationship of international cooperation in EP

It contains various types of law branches such as the Law on EP, the Law on Enterprise, etc

The goal of each country in its social and economic development is to preserve a good balance of the natural environment, including the requirement to ensure a healthy environment One of the ways to minimize the impacts of petrol and oil business on the environment for developing an enabling regulatory framework

2.1.2 The role of petrol and oil

+ The role for the economy: “Petrol and oil” are important input for many

industries It can be said that petrol and oil has a comprehensive effect on all industries and sectors of the economy, including agriculture, industries and services… As fuel is a factor in production prices, changes in petrol and oil prices cause related products to fluctuate, and in turn affecting other products As the world economic integration increases, the movement of goods and services taking place around the world requires the main source of fuel for transporting goods to different parts of the world that is petrol and oil

Petrol and oil are the valuable commodity that contributes to the GDP of many countries, especially through exports

Table 2.1 Petrol and oil exports in the first 11 months of 2019

Market

First 11 months of 2019 Compared to the same period in

2018 (%) Tons Value (USD) Tons Value Cambodia 621.092 377.648.215 -3,63 -14,93 China 488.679 348.276.842 15,99 16,51 Thailand 183.847 98.599.345 38,81 23,67 Singapore 187.423 84.538.665 184,04 151,86 Malaysia 165.235 68.484.631 20,9 13,63

Source: Vietnam Customs

+ The role for social life: Petrol and oil are the fuel used for daily means of

transport which is currently difficult to replace Although new facilities have been introduced to use technologies that use clean energy such as solar energy, bio-fuel, etc., the number of such facilities is negligible In addition, the cost of investing and developing these technologies often requires huge capital and many businesses are not much interested in developing in this new fuel Currently, due to the extremely important role of petrol and oil for the economy and social life, the price of petrol and oil affects almost all goods and thereby affects every aspect of social life

+ The role for national security and defense: Petrol and oil are not only

important for the economic development and people's life, but also particularly important in the field of security and defense Almost all countries have established

a separate security and supply mechanism for national security and defense

In all areas of social life, petrol and oil plays a particularly important role Petrol and oil are not only a guarantee for the normal production and life activities, but also participates in creating social values that make social life increasingly improved

2.1.3 The need to promulgate environmental and EP regulations in the petrol and oil business

Petrol and oil are conditional business items, which pose a lot of risk of fire and serious EP if discharged to the environment, especially oil which may pollute water sources and petrol vapor can cause suffocation leading to death

Firstly, it is worth noting the characteristics of petrol and oil business to the environment:

Petrol and oil in liquid form are very flammable, especially sensitive to change in ambient temperature In conditions of temperature above 23 degrees Celsius with pressure above 100 degrees Atmosphere of pressure, only one spark of electric spark can ignite This feature requires a very strict fire prevention in petrol and oil business Means and equipment used for petrol and oil business must be specialized equipment Fire prevention and fighting is associated with the entire process of petrol and oil trading

Petrol vapor comes from the processes of importing, exporting, storing and transporting petrol and oil, which is the main cause of air pollution Vapors in the air may also cause fire or explosion When mixed with air ratio in the range of 1-7% and sparks, it will cause an explosion (Vietnam Environment Administration - VEA, 2013) Therefore, it is necessary to have strict protection and prevention measures for the process of transportation, export and import

Chemical substances are discharged in the exhaust of petrol vehicles such as carbon monoxide (due to the use of air conditioners in vehicles), sulfur dioxide, nitrogen oxide With the excessive increase of vehicles as today, the atmosphere is

no longer clean, or causing odor, contributing to the increase of greenhouse effect

Petrol and oil are very vulnerable products in the process of transportation, storage and trading Therefore, in production and business, it is necessary to calculate the movement path of petrol and oil and take reasonable measures to minimize wastage

Table 2.2 Rate of fuel loss incurred in the petrol and oil storage

1 Short-term petrol and oil storage:

No Petrol and oil products Fuel loss incurred by the short-term storage (%)

Underground tank, cavern, floating warehouse/ oil tanker, barge

Outdoor tank Vertical Horizontal

1 Biofuel E5, E10

- Floating roof tank

- Tank without floating roof

- 0.110

0.130 0.170

- 0.220

2 Ethanol fuel E100 0.110 0.170 0.220

3 Mineral gasoline of various

kinds:

- Floating roof tank

- Tank without floating roof

- 0.100

0.120 0.150

- 0.200

4 Kerosene oil (KO), jet fuel

JET A-1

0.012 0.020 0.025

5 Diesel oil (DO) of various

kinds

- Floating roof tank

- Tank without floating roof

- 0.010

0.008 0.015

- 0.020

6 Furnace fuel (FO) of various

kinds

0.003 0.003 0.003

2 Long-term petrol and oil storage:

No Petrol and oil products Fuel loss incurred by the long-term storage

(%/month) Underground

tank, cavern

Floating warehouse/

oil tanker, barge

Outdoor tank Vertical Horizontal

1 Ethanol fuel E100 - - 0.120 0.150

2 Mineral gasoline of

various kinds:

- Floating roof tank

- Tank without floating

roof

- 0.050

- 0.07

0.100 0.120

- 0.150

3 Kerosene oil (KO), jet

fuel JET A-1

technical, organizational and management solutions in the petrol and oil business process

Stored and used petrol and oil for pumping at petrol stations are volatile substances, diffused into the air When mixed with air to a certain limit of proportion (0.7 - 0.8% volume) will explode if there is a spark Therefore, the fire protection requirements in the area of entry, exit points and in the process of transporting petrol and oil are very high, especially acts and incidents generating naked sparks

In general, while the petrol and oil trading system through the petrol stations

is widely distributed over space, the waste of these systems affects nature also in a wide range

In order to minimize the impact on safety and environmental sanitation, in recent years, EP in the field of petrol and oil trading has been identified by Vietnam

as an important issue for national sustainable development Determining that these are mandatory tasks in the course of doing business, Vietnam has issued many legal documents related to EP for petrol and oil business

Petrol and oil are toxic chemical to humans Petrol and oil are the compound with strong chemical reactions, often causing environmental pollution Therefore, during the petrol and oil business process, it is critically important to pay special attention to EP and take appropriate measures to minimize the environmental impact

Waste water and liquid waste when washing tanks of petrol and oil tanks, daily-life waste water as well as waste water discharged at petrol stations has their surface associated with the dispersing of petrol during transportation and pumping, etc These wastewater sources mainly contain organic matter The excessive increase of organic matter in the wastewater makes it impossible for the aquatic animal populations to assimilate in time The result is a reduction in oxygen levels

in the water, but increased toxic substance, increased turbidity in the water and degradation of water

Secondly, it is important to recognize the role of the law on EP in general as well as EP in the field of petrol and oil business

The role of legal rules on EP in general as well as legal rules on EP applicable to petrol and oil business sector in particular has critically important The environment is largely destroyed by human activities during one's own development Therefore, the impact and adjustment of human behaviors are the most effective measure in protecting the environment

The role of legal rules on EP is reflected in the following aspects:

- The legal rules stipulate rules that people must follow for exploiting and using environmental factors The “environment” is both a living condition and an object of everyday human interaction Human impact through business activities that change the environment For that reason, directed exploitation, taking into account the balance of the environment, has a great impact in protecting natural resources and the environment

- The legal rules stipulate criminal, administrative and economic sanctions to force individuals and organizations to fulfill their obligations to protect the environment

- The legal rules specify the functions and mandates of EP organizations Through the law, the state creates an equal operating mechanism for organizations and individuals in EP activities

- The legal rules stipulate technical regulations that, they become the legal standards that all individuals and organizations in society must comply with when operating

2.1.3 Influential factors and criteria for assessing the formulation and promulgation of legal provisions on EP in petrol and oil trading

2.1.3.1 Influential factors

There are three important factors that determine the quality of the formulation of legal rules on EP in general First is the understanding of legal content and drafting skills to formulate legislative documents With the ever

growing large number of laws and sub-laws, the skill of drafting and developing legal documents plays an important role to minimize certain limitations such as: overlap between documents, consistency of text, inconsistencies between texts The drafting skills determine to a large extent the coherence of text content and the predictability of different regulatory scenarios in the legal text

The second factor is the socio-cultural elements affecting the legal rules in general and the legal system on EP in petrol and oil trading in particular In addition, that the promulgation of legal rules and norms taking full account of the reality and practicality is an important factor the determines effectiveness of law enforcement

The third is the coordination of agencies During the process of developing, implementing and enforcing laws, effective coordination, determines the quality of documents The consultation of enforcement agencies and specialized agencies is able to limit the inadequacies of legal documents and avoid the conflict of interest

2.1.3.2 Criteria for assessing

According to “the Law on Promulgation of Legislative Documents 2015”, rules on formulating and promulgating legal documents must ensure the following criteria:

+ Comprehensiveness and consistency: it is reflected in the full promulgation

of documents detailing documents and legal provisions in cases where detailed regulations are needed, so that when legal documents come into force, necessary conditions for implemention are in practice

+ Unity: This is a prerequisite for the formation of the system of legal documents in general and the legal system on EP in petrol and oil business in particular This is reflected in the fact that the legal documents in the same field, or

in many different fields, are uniform in establishing acts To avoid the situation that legal documents are at lower legal hierarchy contrary to those higher ones, and at the same time, all legal documents must all comply with the Constitution

+ Relevance: The appropriateness of the legal system reflected in the content

of the legal system is always correlated with the level of economic and social

development of the country It can be said that laws manifest the most basic, typical and most common needs of socio-economic life, which are generalized and modeled in specific legal forms through rational activities and wills of competent state agencies Therefore, the appropriateness and compatibility of legal documents, especially those of legal documents with objective laws of socio-economic development, is an extremely important condition, ensuring the feasibility and effectiveness of the law Compliance with the laws and socio-economic conditions makes the law easy to be implemented, while also contributing to the promotion and facilitation of socio-economic development In the opposite case, the law that is difficult to implement in practice, can even hinder or cause certain damages to that development

+ Transparency: It is a requirement that the drafting agency must publish the draft document, and must consult with the relevant stakeholders In addition, the drafting agency must collect comments and is responsible for studying and summarizing, the comments received for legal draft consolidation and must submit

a report on acceptance and explanation In addition, the drafting agency is responsible for updating changes in the new draft document in case the draft has been posted for comments

+ Feasibility: A quality legal system must ensure the feasibility, that is, the provisions of law must be able to be implemented in practice This requires legal provisions to be issued in accordance with the country's development level in each given period of development If requirements in legal regulations are issued too high or too low compared to the country's development conditions, the quality of the law is seriously affected In such cases, neither the law is able to be implemented nor its role is fully and effectively in social life

The feasibility of the legal system also shows that laws must be issued in a timely manner, meeting the demand of life and at the same time comply with the implementation mechanism and current laws When enacting a law, consideration must be given to the country's economic, political and social conditions that permit the implementation of such law or regulation, and must also take into account other conditions such as organization of the state apparatus, qualifications of cadres and

civil servants, public opinion in receiving such regulations or legal documents including support or opposition, educational level and legal knowledge of the people Good quality law should be the law that provides the best plan with the most appropriate legal adjustment methods to achieve desired outcomes under current socio-economic conditions

2.2 International experience on the legal rules on EP in petrol and oil business

With an important role of petrol, all countries in the world must take measures to minimize the harmful effects of petrol and oil trading activities on the environment Each country develops its own legal system taking into account their actual conditions to formulate different solutions to reduce bad impact on the environment

In this thesis, the author investigates experiences from 4 countries including two developing countries in Southeast Asia and two developed countries, Thailand and the Philippines use taxes and biofuels to protect the environment for petrol and oil business Meanwhile, the United States and Japan have a lot of experience in the field of environmental management

In Vietnam, the legal system of EP has many limitations and is managed by many agencies This leads to difficult law enforcement Vietnam is in the process of international integration, it is very important to consult and learn from experiences

in environmental management from developing countries The US is a country with

a lot of experience in environmental management, many US policy mechanisms that Vietnam can refer to in the process of perfecting the legal system on EP In Japan, the rapid development of industrial industries has increased burdens on the environment Facing this situation, the Japanese government had to carry out solutions to improve the legal system and set up an environmental state management agency to solve three problems at the same time: polluted; Reduce pollution, protect the environment; Reduce production costs and reduce energy costs This is a new thinking about production management, which means it is not only waste treatment at the end of production and must be taken into account from

To protect the environment and reduce dependence on fossil fuels, countries around the world use biofuel as a solution The Government of Vietnam is very interested in the development of biofuels with the goal of replacing a part of traditional fossil fuels, contributing to ensuring energy security and protecting the environment In Southeast Asia, Thailand and the Philippines are the two leading countries in this solution and have socio-economic conditions similar to that of Vietnam Vietnam can learn from the experiences of these two countries to develop the production and use of biofuels

2.2.1 Philippines

The Philippines introduced the Biofuels Act in 2006, which mandated the use of E5 (ethanol 5%) biofuel from 2009 and E10 (ethanol 10%) from 2011 The Philippines exempts tax on biofuel blends into gasoline, as well as exempt VAT for raw materials (sugarcane, cassava ) when used to produce biofuels Petrol and oil companies must purchase all domestically produced products before seeking import sources

Biofuels are fuel made from bio-derived compounds, made from animal and vegetable fats; cereals; agricultural waste or sawdust, waste wood in industrial production Compared to petrol and oil and coal, biofuels are more friendly with the environment

According to the assessment of the emission of gases from biodiesel, compared with diesel oil from petrol and oil, the content of CO decreased 40%, SO2decreased 98.5%; NO2 gas decreased by 99.1% (MOIT, 2014)

Biofuels are being widely used by countries for the following social benefits:

- Supply and use on-site biofuel from abundant and renewable plant materials, capable of producing and supplying in large quantities to replace when the price of mineral oil is increasing

- Biofuels do not contain toxic substances such as petrol and oil, high biodegradability Using biofuels reduces greenhouse gas emissions and other harmful emissions, reduces pollution costs

- Contributing to the construction of an agricultural economy, in addition to providing food and human food, pet food, industrial raw materials, and providing energy to society Create jobs for people, exploit and make use of unused land, improve the added value of agricultural products and agricultural by-products This

is also a measure to implement government policies to develop agriculture, build rural areas and improve people's lives

- Simple and convenient use of biofuels in addition to other fuels, interchangeable ethanol and mineral petrol can be used interchangeably, without the need to change engines

- Technology of producing ethanol, animal and vegetable oils and biofuel blending is not as complicated as petrochemical technology and much lower investment rate, and can be produced with different scales: from households, family groups, relatively small to large scale, can provide fuel with different scales

2.2.2 Thailand

Thailand is one of the major ethanol producers in Southeast Asia Thailand began supplying alcohol-blended gasoline to transport vehicles in 2005, mainly consuming E10 bio-fuel, partly E20 and E85 Initially, the government supported biofuels through the price and parallel circulation of biofuels and traditional gasoline However, the results are not high, so Thailand has changed its method of implementing biofuels Currently, only bio-ethanol blended gasoline in Thailand exists Consumers are forced to choose between ethanol blended gasoline with different ratios, so the consumption of biofuel increased by 93% (The Office of MOIT, 2017)

The Thai government has licensed more than 24 companies to build ethanol plants, and has set up an "Ethanol fund" to ensure the stability of input prices Invest about 30-35 million baht (~930-1085 thousand USD)/mixing station, excise duty-free for ethanol using fuel blends and set biofuel prices cheaper than conventional gasoline (RON 95) 1.5baht/liter thanks to the special consumption tax reduction policy, oil fund and energy conservation tax At the same time, Thailand has also developed and issued standards on biofuel, ethanol and base fuel,

especially assigning the Ministry of Energy to study the use of biofuel in carburetors and research, studying environmental impacts and revising quality standards for biofuel in accordance with Thailand’s conditions The government also cooperated with manufacturers to announce models of cars manufactured after

1995, compatible with biofuel

To encourage domestic consumption, the government has increased the production line of multi-fuel motor vehicles, adjusting taxes on gas-powered motor vehicles, multi-fuel vehicles, and autos-cars, Hybrid Besides, promoting the production of motorbikes using E20 gasoline, propagating and persuading the use of E10 for motorbikes In addition, the Government has also changed the regulation, allowing the use of ethanol in industrial fields

However, Thailand also has a valuable experience in bringing biofuel to market, but it has corrected the mistakes it has made in the past few years

Thailand has announced the ratio of blending ethanol into gasoline and oil and giving consumers the choice between conventional gasoline and biofuel blend However, now Thailand has realized it is wrong to give consumers a choice because

if two petrol types are circulated in the market, one is regular gasoline and the other

is ethanol blended gasoline (E5) then some users, especially luxury car owners, will

be hesitant They do not care and do not need to know how much cheaper this E5 gasoline is than conventional gasoline, but simply think that it is cheaper, can be lower quality and expensive cars should use their gasoline better From here, consumers will be reluctant to use new fuels and they just want to use the conventional fuels that are familiar and are considered to be better

In Thailand, when bringing E10 gasoline to the market, the government has set the price of this petrol 30-40cent/liter (~0.01 USD) lower than traditional gasoline to encourage consumers to switch to E10 gasoline Therefore, by 2013, the annual budget to subsidize the price of E10 gasoline has reached 1 billion USD/year The Thai government also finds that if consumers choose, the introduction of E10 gasoline widely used is very difficult and expensive

Learning from this, the Thai government has changed the approach when it comes to market biodiesel They have automatically applied a 3% blending rate of biodiesel to diesel (B3) and announced it to companies producing, distributing and trading diesel products without telling consumers that so Recently, Thailand has increased the ratio of blending bio-fuels into diesel to 5% (B5) and proceeded to distribute B5 biodiesel at a lower cost However, the reality of the market shows that the existence of these two levels of mixing (B5 and B10) also does not make the distribution of biofuels more efficient Therefore, they felt that they should only distribute one level of biofuels By the middle of this year, Thailand plans to apply the same ratio of biodiesel blends to diesel at 10% (B10) and will not publish it to consumers That helps Thailand save costs and no longer need to subsidize biodiesel

2.2.3 The United States

The United States is experienced in environmental management Vietnam can refer to and learn from many US environmental management mechanisms and policies in the process of improving the legal system of EP in general and EP in petrol and oil business in particular

In the US, except for the field of biodiversity, USEPA is responsible for managing the federal environment in general In addition, all states of the US have its own environment management system, but the tasks, functions and names of environmental management organizations may be different based on the characteristics of the state For example: The State of Maryland has a Department of Environment, the State of New York establishes a Department of Environmental Conservation, Washington State establishes a Department of Ecology, etc

 System of policies and legal rules on EP

In addition to the federal law system of EP, stipulating general rules on the field of EP, each state has its own specific laws and regulations

General rules of the Federal Law must be ensured; State law requires specific areas (for example: radioactivity; environmental control in trading of commodities such as gasoline, gas, etc.) must stricter and detailed than the rules of the Federal

Law on EP in the same field; States make laws that stem from a direct need for environmental management in specific areas

States can formulate multiple bills each year, and according to US law, drafted bills are formulated by Senate (for example, the State of Maryland formulates hundreds of draft bills each year) However, the number of bills passed

is not much, because in addition to criticism by direct voting in the Parliament (the Senate and the House of Commons), these bills are also subject to strict control and criticism of professional and social organizations, members of the Democratic Party and the Republican Party; Each year the US Senate and the House of Commons only meet for 90 days to consider passing the Law Therefore, the bills that are considered for approval are often very necessary issues for EP practices, there are many bills many years after being proposed and developed, but still not passed The development of laws on EP in the US (mainly by the states) is solve very detailed problems, stemming from the practical requirements of each specific area, so the laws when enacted are very effective State authorities and communities oversee the implementation of the laws

 Environmental management mechanism and pollution control

The basic rules of environmental management on pollution control in the US

in general and the states in particular are focus on the polluters, they have to pay to surmount pollution However, in particular cases because of force majeure or objective reasons (for example: contaminated soil in stock, polluted environment in natural disasters, etc.), the government will have detailed policies to supporting organizations and individuals to directly improve pollution such as tax exemption and reduction; processing technology support

In some states, environmental management and control of projects and facilities are depended on Environmental Impact Assessment (EIA) and licensing However, this activity is very flexible, may be hard-coded for projects or highly stable activities, but can also be changed to appropriate apply, to effective management of environmental factors for a number of specific cases

 Organization structure of agencies of investigation, and enforcement mechanisms, handling of violations of Law on EP

Handling violations of the EP Law are different in each State, so the organizational structure and operation mechanism of inspection and handling crimes are distinct For example, in Washington, the Department of Ecology has the function of inspecting, and handling administrative violations such as fines, collection of permits, forced remedial For serious violations, this agency may compile a dossier to request the judicial agency to prosecute and bring it to court for trial In these two states, there is no environmental police organization, while in New York State an environmental police force is established, with powers such as security agencies: investigating, arresting, prosecuting cases, establishing projects related to environmental law violations

 Mobilizing resources on EP

Financial sources for states' EP are diverse One part is distributed by the State from the Federal or National budget, the remains is contributed by directly participates in investment

 Information and communication in EP management

Information systems in the US have been developed at a high level and updated regularly Providing information must obey procedures Basis information

is widely spread on the Internet and other mass media People who need in-depth information must pay money in accordance with the law and must comply with the regulations on information provided

In order to serve the task of elaborating and amending the laws on EP applicable to petrol and oil business, it is necessary to organize surveys on experience in construction and law enforcement on EP in advanced countries in general and the United States in particular, in order to continue perfecting the legal system on EP in our country At the same time, more in-depth study of the environmental law systems of the US and developed countries, as well as the experience of environmental management of developing countries with the same conditions as Vietnam