The Settlement Practice of Environmental Disputes Involving Foreign Investors in Vietnam – Two Sides of the FDI Coin

Abstract

Attracting foreign direct investment (“FDI”) has been a key part of Vietnam’s external economic affairs. The Government of Vietnam has made tremendous efforts to develop the business and investment climate, and by recognizing that the FDI sector is an integral part of the economy – essential to restructuring the economy and raising national competitiveness. It has also signed more than 80 investment treaties. FDI projects have played a very important role, not only in providing investment capital but also in stimulating export activities, as well as introducing new labor and management skills, transferring technologies and generating job opportunities in Vietnam.
However, FDI also contributes to various environmental problems and challenges to Vietnam, particularly that of environmental protection.

The major environmental disputes arose in the period from 2006 to 2016 were related to big FDI project, such as Vedan committed pollution in Thi Vai River (2008) and Formosa Steel toxic waste water disposal in Vung Ang Ha Tinh province (2016). Therefore, it is of essential to have an insight into the legal framework on foreign investment, environmental protection as well as the practice of environmental dispute settlement in Vietnam in order to find solutions meeting the urgent needs of the society.