Eligibility Criteria For Environmental License Or Environmental Impact Assessment Report (Eiar)

GENERNAL INFORMATION

After being issued the IRC, ERC and company seal, investors must proceed to apply for the environmental license or EIAR before commencing production. These crucial steps must be followed prior to initiating factory fit-out and machine installation.

Several of our clients seek legal guidance to help them discern whether their business necessitates an environmental license or EIAR – and to understand the distinctions between these two documents.

Based on the conditions outlined below, a manufacturing business can ascertain whether they need to acquire an environmental license or EIAR using the following criteria as a basis:

1. Industry and product
2. Production scale (product quantity/year, factory or warehouse area, etc.)
3. Amount of discharge volume (wastewater, emissions, solid waste, etc.)
4. Area of land, land with water surface, and sea used; scale of extraction of natural resources;
5. Environmentally sensitive factors.

According to the environmental criteria set out above, investment projects are classified into Group I, II, III and IV.

• Group I investment projects are those that pose a high risk of adverse environmental impacts.
• Group II investment projects are those that pose a risk of adverse environmental impacts.
• Group III investment projects are those that pose a risk of adverse environmental impacts, except for Group II investment projects.
• Group IV investment projects are those that do not pose a risk of adverse environmental impacts, except for Group II investment projects and Group III investment projects.

Generally, an environmental license is applicable for all investment projects that generate environmental risks (which means they generate wastewater, dust and exhaust gases that must be treated before being released into the environment or generate hazardous waste that must be managed) (specified in Decree 08/2022/NĐ-CP, dated January 10, 2022). Meanwhile, an EIAR is applicable for large and high environmental risk projects (Group I investment projects and Group II investment projects).

Drawing on BW’s legal consultancy expertise in navigating the application process of requisite licenses, particularly in the context of typical industries and commonly employed production processes characterized by minimal environmental risk, the factory’s dimensions emerge as a key factor in ascertaining whether an EIAR or environmental license is required. As a standard practice, an environmental license (EPP) typically applies to manufacturing areas encompassing less than 10,000 sqm, while an Environmental Impact Assessment Report (EIAR) is required for production areas exceeding 10,000 sqm that exert a more significant influence on the environment.

GUIDELINE FOR EIAR APPLICATION

The EIAR shall be conducted by the investment project owner or a qualified consultancy. The report generally covers:

• Project information
• Conformity with the national environmental protection planning and other relevant regulations;
• Assessment of technologies and activities with potential adverse environmental impacts;
• Demonstration of the suitability of the project location;
• Assessment and prediction of major environmental impacts and waste generated;
• Methods for collecting, storing and treating waste;
• Methods for reducing other adverse environmental impacts of the investment project;
• Environmental management and supervision program;
• Consultation result;
• Conclusions, propositions and commitments made by the investment project owner.

The investor shall then submit an application for EIAR appraisal, consisting of:

1. An application form EIAR appraisal;
2. The EIAR;
3. A feasibility study report of the investment project or equivalent document.

The Ministry of Natural Resources & Environment or provincial Department of Natural Resources & Environment will be the authority in charge of the EIAR assessment and approval. The estimated timeline is 30 to 45 business days.

Upon approval of EIAR, investors need to apply for an environmental license application.

GUIDELINES FOR ENVIRONMENTAL LICENSE APPLICATION

The environmental license is mandatory for all investment projects that possess the potential to negatively impact the environment and produce wastewater, dust, emissions, or hazardous waste that necessitates treatment or proper management.

The application dossier for an environmental license consists of the following:

1. Application form or environmental license registration;
2. A report on proposal for issuance of the environmental license;
3. Legal and technical documentation of the investment project, business, dedicated area for production, business operation and service provision or industrial cluster.

Licensing timeline: 30-45 days upon receipt of a satisfactory application dossier

The environmental license is valid from 07 to 10 years depending on the type of sites projects .

For further legal consultancy on licensing procedures for foreign manufacturers in Vietnam and support from BW, please contact our hotline at (+84) 28 710 29 000 or email to leasing@bwidjsc.com.