Sustainable development impacts of investment incentives : A case study of the mining industry in Vietnam

This case study examines the impact of investment incentives on foreign direct investment (FDI) in Vietnam's mining and quarrying sector, assessing their role in promoting economic, social, and environmental sustainability.

• Investment incentives, particularly tax incentives, were an important factor for foreign enterprises deciding to invest in Vietnam's mining and quarrying sector, though they were not a prerequisite. An equal and transparent legal system was also identified as a crucial factor.
• Existing investment incentives have not primarily influenced the sustainable development behavior of foreign enterprises in the mining and quarrying industry. While laws require the State to encourage social responsibility and environmental sustainability, these requirements are not as strictly enforced as other demands.
• Foreign enterprises in the mining sector outperformed domestic firms in productivity, technology, investment capital, and state budget contributions. However, corporate income tax incentives caused substantial state budget losses, estimated at 0.5 to 0.7 percent of the sector's industrial turnover between 2001 and 2006.
• Regarding social sustainability, foreign enterprises provided higher employee incomes than domestic firms but neglected social welfare areas such as health care insurance, social insurance, vocational training, and contributions to trade unions.
• Foreign enterprises have not been proactive in preventing pollution, performing environmental protection activities primarily to satisfy legal regulations rather than to improve performance.
• To promote sustainable development, the State should link incentive entitlement to social and environmental targets, strengthen post-investment monitoring, and involve the public by requiring the publication of investor commitments.
• The natural resource royalty system should be adjusted to encourage conservation. Increasing mineral royalties would limit exploitation and provide funds for restoring environments in exploited areas.

APA

Hoa,, V. X. N. H. M. T. C. (2009). Sustainable development impacts of investment incentives : A case study of the mining industry in Vietnam. International Institute for Sustainable Development. https://www.iisd.org/publications/report/sustainable-development-impacts-investment-incentives-case-study-mining

Chicago

Hoa,, Vu Xuan Nguyet Hong,Ngo Minh Tuan,Ho Cong. Sustainable development impacts of investment incentives : A case study of the mining industry in Vietnam. International Institute for Sustainable Development, 2009. https://www.iisd.org/publications/report/sustainable-development-impacts-investment-incentives-case-study-mining.

Wikipedia

{{cite report |last1=Hoa, |first1=Vu Xuan Nguyet Hong,Ngo Minh Tuan,Ho Cong |title=Sustainable development impacts of investment incentives : A case study of the mining industry in Vietnam |publisher=International Institute for Sustainable Development |date=6 March 2009 |url=https://www.iisd.org/publications/report/sustainable-development-impacts-investment-incentives-case-study-mining |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{hoa2009sustainable, author = {Hoa,, Vu Xuan Nguyet Hong,Ngo Minh Tuan,Ho Cong}, title = {{Sustainable development impacts of investment incentives : A case study of the mining industry in Vietnam}}, institution = {International Institute for Sustainable Development}, year = {2009}, month = mar, url = {https://www.iisd.org/publications/report/sustainable-development-impacts-investment-incentives-case-study-mining}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }