In December 2022, Vietnam became the third “developing” country, after South Africa and Indonesia, to agree to a Just Energy Transition Partnership with “developed” nations.
The partnership will see Vietnam receive billions of dollars in loans, grants and investments from the International Partners Group (IPG) to assist its transition away from coal and towards renewable energies. The IPG comprises the European Union, United Kingdom, France, Germany, United States, Italy, Canada, Japan, Norway and Denmark.
The UK and EU, in their role as lead negotiators for the IPG, celebrated the agreement. Yet the Vietnamese side made few public statements despite their successful negotiation. The IPG put US$5 billion on the table initially, but the final deal includes a finance package of $15.5 billion. In comparison, South Africa negotiated $8.5 billion and Indonesia $20 billion.
Beyond the headline numbers, much remains unclear in the Just Energy Transition Partnership (JETP) agreement, especially how it will be implemented. A few key issues in Vietnam’s current domestic politics explain the lack of public comments from Vietnam and the deal’s missing clarity.
Under General Secretary Nguyen Phu Trong, an anti-corruption campaign has cost the position of many high-ranking officials in the Communist Party of Vietnam and in the government. In some cases, it has even cost them their freedom. The latest surprising personnel change was the resignation of President Nguyen Xuan Phuc, who stepped back in January after corruption scandals around Covid measures reached his family. Many workers in government ministries have quit for fear of being fired or prosecuted on corruption charges.
A just transition requires true participation, the release of political prisoners, and restorative justice
One investigation has hit at the core of the JETP implementation. The Ministry of Industry and Trade (MOIT), which is responsible for energy policies in Vietnam, is undergoing an investigation on the policies that led to the solar power boom in 2019; the boom caused the bankruptcy of enterprises and much trouble for the state-owned grid operator EVN. While the investigation continues, it is unlikely that major changes will take place in the energy sector.
Implementation of the JETP has been assigned to the Ministry of Natural Resources and Environment (MONRE), yet MOIT is the central player in the energy transition. While MONRE has been pushing for more ambitious emission reduction targets and has formulated a climate change strategy that would see renewable energies accounting for around 70% of the energy supply by 2050, MOIT has not endorsed these strategies and plans. MOIT has been working on the national Power Development Plan 8 (PDP 8), but this has already been delayed two years, effectively bringing energy policy to a standstill. MONRE, provincial governments, and enterprises are all waiting for PDP 8 to know what investments to make. Even if MONRE pushes the JETP forward under the mandate they were given, they won’t be able to do so successfully without MOIT and other actors on board.
In announcing the JETP agreement with Vietnam, the IPG stated its pride in having successfully negotiated to have included in the text of the agreement NGO and media participation in the JETP process. However, the silence in the Vietnamese media and the fear by civil society organisations and NGOs to comment on the agreement shows that action is unlikely to follow. The arrest of Nguy Thi Khanh in 2022, the most prominent non-government advocate for renewable energy, symbolised the closing space for civil society in Vietnam. Two local NGOs have already shut down since the arrest of Nguy Thi Khanh and other organisations exercise self-censorship out of fear of the same fate. International NGOs need to watch what they are saying and doing, even more closely than before, to avoid getting their permits revoked or their operations suspended. A meaningful participation in the implementation of the JETP is impossible under the current circumstances.
Yes, the Vietnamese government wants the JETP: it wants the finance for climate mitigation and adaptation as it’s painfully aware of the impacts that climate change is having on the country. But the JETP is unlikely to speed current processes up until Vietnam’s internal problems are resolved. The timeline in the JETP agreement will likely proceed more slowly than hoped for.
The IPG should use this time to consider what “just” means. For Vietnam, the term is clearly defined: financial support from “developed” to “developing” countries, if possible through grants; keeping the price of energy low so that all socio-economic groups can afford it; and re-skilling workers in coal regions. But since the trade unions are under the leadership of the Communist Party and are not independent, it’s questionable whether their involvement or the provision of energy necessarily makes for a just transition. A just transition requires true participation, the release of political prisoners, and restorative justice. From what has been voiced from the IPG so far, the Vietnamese definition of justice is enough for them. The JETP will most likely go ahead as soon as Vietnamese politics allows it.
