Vietnam’s groundbreaking draft Urban Development Law must include safeguards: justice minister

Tung made the remarks on Tuesday morning after National Assembly (NA) deputies debated the draft law in a plenary sitting, as part of the first extraordinary session of the country’s 16th NA, which is taking place in Hanoi from August 3 to 24.

He explained the law is intended to create a stable legal framework to remove institutional bottlenecks and drive sustainable growth in metropolises, particularly Ho Chi Minh City and special economic zones.

“The guiding principle is to institutionalize Party policies, shift from tight management to development-oriented governance, and implement thorough decentralization under the motto: localities decide, act, and take responsibility,” he said.

The minister added that the law is a framework statute, setting principles and defining the law-making National Assembly’s authority while embedding mechanisms for power control and financial accountability.

It provides policies for special urban areas, other cities, and economic zones.

Some lawmakers had suggested automatically extending special mechanisms to cities not yet designated as special urban areas.

Tung responded that requiring government approval ensures careful implementation, prevents legal fragmentation, and aligns with Politburo directives.

The minister said that breakthrough policies demand high governance capacity and financial resources, generally suited only to special urban areas.

Allowing the government to determine whether a non-special urban area can adopt such mechanisms would enable authorities to assess each locality’s actual implementation capacity before granting additional powers.

Excluding certain provisions from automatic application would also reduce the risk of disrupting the national legal framework or creating localized legal systems if cities were broadly allowed to issue regulations that differ from central rules.

At the same time, the approach would give the government flexibility to introduce policies for new growth drivers as cities develop, without waiting for amendments to the law or separate NA resolutions.

“This provision helps prevent localities from competing through preferential policies, which could lead to unhealthy competition, fragment national resources, and erode the advantages of special mechanisms,” Tung said.

Another key part of his explanation concerned safeguards against the abuse of decentralized powers.

Tung said that decentralization must not undermine macroeconomic stability or national financial security, and must respect market principles.

Special mechanisms would not apply to areas including national defense, security, foreign affairs, and religion.

Implementation must also safeguard human rights, citizens’ rights, and cultural heritage values.

Even Ho Chi Minh City, for example, would have to follow strict procedures when issuing regulations that differ from the central government’s rules.

These include impact assessments, consultations with ministries and agencies, and reporting to the NA Standing Committee and the government within seven days of issuance.

The prime minister would have the authority to suspend or annul city regulations that violate the law or infringe upon national interests.

For sandbox mechanisms, the draft imposes a time limit of up to five years, with extensions capped at another five years.

A city's People’s Committee must immediately suspend a pilot if it produces negative impacts.

Financial and investment activities would also face safeguards.

Bond issuance and borrowing must remain within approved public-debt limits to prevent excessive financial risks at the local level.

For major projects, the central government would have the authority to decide on additional budget allocations, ensuring the continued leading role of the central budget.

Tung concluded that the ministry will incorporate lawmakers’ feedback to strengthen oversight mechanisms throughout the draft law, ensuring transparency, accountability, and effective governance.