Fair Finance Asia - GreenID- Vietnam Being deeply influenced by political interests, Vietnam#s state-owned bank system is a risk for the entire public finance management system, which potentially affects social security. State owned and foreign banks in Vietnam are financing many projects which are affecting  people#s lives. Therefore, the banking sector is a very important area for Oxfam and Vietnam CSOs to influence policies and practices towards inclusive and sustainable development.

In recent decades, Vietnam has been reliant on a natural resource based- economic model with many mineral exploitation and energy development projects. According to the Vietnam Power Development Plan for the period 2011 # 2020, Vietnam will have over 800 hydropower projects (WARECOD, 2014) and 60 coal power plants (GreenID, 2017). Banks play crucial role in these projects.

Vietnam has ambitious plans to develop the coal power sector by 2030. Currently Vietnam has 19 coal-fired power plants, which is expected to rise to about 70 by 2030, with a total capacity of over 76,300 megawatts (see map at the side, with existing plants in black and planned projects in red).  If all of these plants are built, they will consume over162.6 million tons of coal by 2030 (18.5 times higher than in 2010), with a greenhouse gas emissions volume of 359.8 million tons, 20.4 times higher than in 2010. According to a UNDP report in 2016, the number of premature deaths annually as a result of emissionsfrom coal-fired power plants would increase from an estimated 4,263 in 2011 to 25,402 in 2030.  Coal dust from power plants has destroyed local fisheries and farming livelihoods, leading some affected communities to engage in protracted protests, most notably around the Vinh Tan plant in Binh Thuan province (south-central region) which was affected by intense protests in 2016 and again in June 2018. In regard to coal power plants, Vietnam has mobilized $40 billion including $8.3 billion from Chinese banks, $3.7 billion from Japanese banks, $3 billion from Korean banks and $2.5billion from Vietnam commercial banks (GreenID, 2017).

Regional hydropower development affects millions of people in Thailand, Cambodia, Vietnam and other countries. The largest trans-boundary effects come from dams on the mainstream Mekong: 11 dams inChina and Laos (such as Xekaman) are either built or under construction, and more are in the planning stages (see map above). The Mekong Delta in southern Vietnam absorbs the impact from dam building as well as salinization from the rise in sea level  andfrom erosion from sand mining and other environmentally harmful activities. According to some estimates, as much as 50% of the delta may be underwater by 2050. Some of the current and proposed Mekong dams, as well as tributary dams, have Vietnamese investors; such investment is directly harming Vietnam#s own interests in preserving the Mekong Delta as the leading region for agriculture and fisheries.
In order to foster sustainable development goals, Oxfam and partners in Vietnam aim to promote environmental and social responsibility of commercial banks who are investing in environmentally and socially sensitive projects such as coal power.

They will prioritize the energy sector, since this makes up the majority of regional loans to Vietnam and has thelargest environmental impacts (see FFA proposal annex on Financial Flows Analysis). Energy is also a main focus for Vietnamesecompanies and banks investing elsewhere in the Mekong region. The specific issues they will target are coal power (in Vietnam)and hydropower (regionally, especially mainstream Mekong dams). These fit with cross-national priorities on coal financing from Japan anddams in Thailand and possibly Cambodia.

In this project, the FFG coalition of Oxfam and partners in Vietnam willadopt the Fair Finance Guide (FFG) to assess investment polices of Vietnamese and foreign banks investing in the coal power sector and do an in-depth study to assess environmental performance of some selected commercial banks.
The assessment will be used toraise public pressure forbanks# environmental responsibility and to inform bank financing policies, especially related to environmental and socially sustainable investment, of the government. As the Vietnamese Government is reforming the banking sector,there are expanding opportunities for CSOs to engage both with the banks and the policy makers for fostering sustainable development. This engagement is important domestically and also has regional implications that FFA can contribute to.

When investigating Vietnamese and foreign banks investing in coal power sectors, the Vietnamese coalition will specifically target Japanese banks, which are the 2nd largest investors in coal power plants in Vietnam: JBIC, Mitsubishi (MUFG), Mizuho, Sumitomo Mitsui (SMBC). JBIC is a publicly owned bank, the other three areprivate and are members of Equator. Later on they will also extend advocacy on coal power to banks from Vietnam, China and other countries that are investing in Vietnam, to the extent this is possible within the scope of FFA.
The Vietnamese coalition and the regional team will look into the possibility to cooperate with Oxfam Hong Kong (OHK) to influence Chinese banks investing in coal power plants in Vietnam. It is foreseen that the China-ledAsia Infrastructure Investment Bank (AIIB) will finance a lot of coal power plants. This bank is closely followed for advocacy and influencing by OHK.
Another focus is on Vietnamese banks investing in cross-border projects on hydropower, agriculture, and other issues: Vietinbank, others. None are currently members of Equator Principles.

Regionally, the Vietnamese coalition will join with Thailand and other countries targeting regional banks investing in hydropower (i.e. the six Thai banks funding theXayaburi dam in Laos:  Bangkok Bank, Kasikorn Bank, Krung Thai Bank, Siam Commercial Bank, TISCO, and EXIM bank)