Incentive structure of land acquisition and land allocation in Vietnam

Dung T. Ngo & Thang N. TranHue University of Agriculture & Forestry

Utrecht, 9 July 2015

Land acquisition & allocation

Legal context

Roles of local governments

Case studiesForest allocation

Resettlement

Forest contract

RationaleVietnam: rapid change from central-planning market economy (1990s)

Land acquisition:Industrialization: agr. land to factory, storageUrbanization: housing, infrastructure

Land allocation: decentralize state-land management to different stakeholders

Legal context

Constitution 1992, 2013: land and natural resources under public property, managed & represented by State

Land use rights: allocated/ leased to individuals and organizations by the State

State delegates to province: land ownership, management regime

Four cases of land acquisition:

1. National defense/ security purpose (Article 61);

2. Socio-economic development for national/ public interest (Art. 62); (purpose vs. compensation)

3. Violations of land law (Art. 64); 4. Termination, voluntary return,

risks of threat (Art. 65).

Three decision-making levels:

National Assembly: highly national benefits

Prime Minister: offices, infrastructure, electricity, water service… at national level

Provincial Council: provincial infrastructure, housing, forest conservation, etc.

Steps of land acquisitionStep 1 •Request for land acquisition by the investor

Step 2 •Announcement on location, time, reasons

Step 3 •Submit investment plan including S/EIA

Step 4 •Submit compensation plan, resettlement, feedback

Step 5 •Prepare land dossier and submit for land acquisition

Step 6 •Conduct compensation, resettlement plan

Step 7 • Implementation of land acquisition and site clearance

Step 8 •Hand-over in field and contract

Case #1: Forest land allocation

Key actors Duties

State forest enterprises (SFE) Allocate forest to local people

Forest Protection Dept. (FPD) Facilitate allocation procedures: forest inventory, local meetings

Local people (groups, households) Group formation, forest inventory, forestboundary

Forest allocation = assign forest areas to villages, groups, or individual households for 50-year period with most property rights

Stakeholder Allocation to Perceived Benefit(s) of Allocation

Perceived Cost(s) of Allocation

State Forest Enterprises

Individual Reduce forest protection duties Less benefits from timber extraction Group

Forest Protection Unit (district level)

Individual - Reduced protection duties

- Direct payment from SNV

- Less direct benefits from sanction

- High time and effort in allocation (forest inventory and demarcation)

Group - Reduced protection duties

- Direct payment from SNV

- Effort in allocation (but lower than for household allocation)

Local People Individual - Forest products

- Red book for long term investment and loan from bank

- Rationale for sanction

- Integrated other land uses (plantation, NTFPs)

- Time and effort in management

- Protection cost is higher if allocted patches are in remote area.

Group - Forest products

- Red book for long term investment and loan from bank

- Rationale for sanction

- Receive larger areas of natural forest

- Transaction costs associated with penalty agreement, harvest approval

- Investment to generate incomes from degraded forest

Findings

SFE: reluctant to return rich forests for allocation; delayed in process

FPD: highly active due to benefits and conservation purpose

Local people:Interested in rich/medium forest and barren land;

Not interested in degraded forests (high cost for conservation)

From areas vulnerable to natural disasters

From industrial zone/city development

From hydropower plant, reservoir

construction

Case #2: Resettlement stories

Before vs. After resettlement

Case studies in 5 villages of Huong Tra district, TT Hue province (2012)

Findings

Actors: local government – hydropower companies - resettlers

Infrastructure, school, water, electricity: improved

Livelihood option: decreased

Land access: Limited, insufficient for agr. production;

Career and job: limited

Case #3: Forest protection contractContext: Implementation of PFES in Lam Dong province;

Main actors: Forest fund – Local government – local groups for forest protection contract

Assessment of stakeholders’ participation: legal framework –capacity – implementation

Payment for forest environmental service (PFES) in Vietnam

Payment for forest environmental services

Provincial Fund

Central Fund

entrusted payment for ESES providers

ES usersEnvironmental services

FindingsLegal framework:

Robust and rationale for participation in PESInsufficient clearance & disseminationTime pressure for PES implementation

Capacity:District, commune staff: sufficient training in procedures but not facilitation skills;Knowledge of local people on their rights in PES: limitedFund management: insufficient in enforcement of violation

ImplementationBudget collection: effectively due to state gov. support in pilotForest protection: somewhat limited due to payment < opportunity costs for commercial plantation (rubber, coffee)Long-term vision: possible if carbon credit, land ownership function well.

Lesson learnt & discussion

Legal framework: very important for monitoring, conflict solving (land rights, acquistion procedures, compensation)Participatory decision making process: legality, capacity, practiceCivil society & NGOs: capacity building, monitoring, transparency, fundingBenefit sharing mechanism: simple, transparent, consensus