ICT Update: Update on Vietnam's Draft Law on Cybersecurity

ICT Update | June 11, 2018
Authors: Matt Solomon, Ella Duangkaew, Ryan DelGaudio

Amendments to Draft Prior to Expected Vote Tomorrow (June 12)

On June 11, the Sponsoring Committee of Vietnam’s Law on Cybersecurity (LOCS) in the National Assembly (NA) approved a final draft of the legislation, which will be put to a vote tomorrow, June 12. The draft only incorporated minor changes to Article 26, which imposes data localization requirements and content restrictions upon foreign and domestic corporations. Updates to Article 26 in the final draft are as follows:

Updated Clauses

Article 26.3

Businesses, domestic and foreign, that provide services on the telecom network, the internet and value-added services on cyberspace in Vietnam which involve the collection, exploitation, analysis and processing of personal information, data about users‘ relationship and all other data generated by users in Vietnam must store these data in Vietnam for a duration of time to be specified by the Government.

Foreign businesses as specified in this clause must establish their branch or representative office in Vietnam.

Article 26.4

The Government will specify details in clause 26.3.

The only significant change in this final draft is a narrowing of the definition of affected businesses under Article 26.3, which now covers companies that collect, exploit, analyze, and process user data. Although this definition is seemingly limited to those businesses that rely on user data or process data to create revenue, it is still vague, and companies will need to work closely with the government during the implementation process. Foreign businesses falling within this category are also still required to establish a local office. The government is likely to provide further detail on this clause in implementing decrees and circulars.

The bill still contains vague language regarding what type of information must not be available on websites, web portals, or specialized pages on social networks of agencies, organizations, and individuals. Businesses are still also required to act upon takedown requests within 24 hours of notice by authorities (MPS or MIC).

Widespread Protests on China and Government Internet Control

Tens of thousands of Vietnamese took to the street across the country on June 10 to protest the draft Law on Special Administrative Zones (LSAZ) and the draft Law on Cybersecurity (LOCS). The protests took place in Hanoi, Hai Duong, Nghe An, Da Nang, Dak Lak, Binh Thuan, Khanh Hoa, Ho Chi Minh City, Binh Duong, Tien Giang, and other locations. The LSAZ aims to establish three special economic zones on Van Don Island. Protesters believe the incentives provided in the bill are designed to support China’s territorial ambitions, as the locations are geostrategically important and the bill would allow investors to lease land for 99 years.

Public pressure on the National Assembly (NA) to drop the bill mounted last week, and on Friday the Politburo decided to pull the plug. The government of Prime Minister Nguyen Xuan Phuc announced on Saturday its intention to pull the bill from the NA agenda, and on Monday, June 11, the NA voted overwhelmingly (over 85%) to postpone the vote on the LSAZ to the next session in October.

Advocacy on the Draft Law on Cybersecurity

Despite the fact that LSAZ, not LOCS, was dominating public discourse last week, the US-ASEAN Business Council made a final advocacy push on the latter, successfully targeting key stakeholders with its fourth set of comments and other materials. Updated arguments were transmitted to NA leadership, legislators, key individual government officials (incumbent and retired), news outlets, activist lawyers, and key opinion leaders. As a result, towards the end of last week and particularly over the weekend, powerful news articles both in print, online, and on social media emerged with sharp criticisms of LOCS. A group of influential retired senior government officials led by former Minister of Education Dang Huu sent a letter to NA Chairwoman Nguyen Thi Kim Ngan protesting against the bill, utilizing several of the Council’s key arguments. Prominent activist lawyer Tran Vu Hai led a petition with hundreds of signatures of lawyers across the country to request that the NA postpone the bill. The petition included some of the Council’s analysis and recommendations.

In the demonstrations on Sunday, protesters carried signs with slogans against the LSAZ and LOCS. While popular concern with LSAZ is related to anxieties over China’s influence, the reactions against LOCS hinge on its potential negative impact on privacy and freedom of expression. Given the sensitivity of the issues, the Council made clear to the government and other stakeholders that it is not involved in politics, and that its comments relate only to the business aspects of the bill. The Council also communicated its position to the U.S. Embassy, which took great care to avoid politicizing the companies’ issues when it issued a joint statement with the Canadian Embassy urging the NA to postpone the bill. USG and Canadian officials also communicated the Council’s position to Prime Minister Phuc as he attended G7 meetings in Canada at the invitation of the host country.

Next Steps

Unprecedented public pressure to stop LSAZ and LOCS, and the fact that one of the bills has already been delayed, have prompted some NA members to issue strong calls for postponing LOCS. This may embolden otherwise-silent legislators to vote against it in the June 12 session. While there was no clear indication following the Politburo’s Friday meeting that they would also call for a postponement on LOCS, people familiar with the decision-making process suggest that the protests were surprising, and made them think harder about LOCS. It now seems that the Politburo would no longer hold Prime Minister Phuc and NA Chairwoman Ngan responsible for not being able to pass the two bills, which could relieve pressure on the government and NA to force the adoption of LOCS in this session.

It should be noted that, while criticisms of LSAZ were mostly tolerated in the mainstream media and online, many articles critical of LOCS were deliberately removed from online editions of many news outlets last week, and critics of the bill were targeted on social media. However, this pro-LOCS pushback has since largely subsided.

Whether or not LOCS is passed or postponed on June 12, the Council’s advocacy efforts will continue, building on the momentum that has been created so far. The Council will propose a detailed plan later this week.