FGM Workshop Background Paper - REDD - VietNam

and newly established) : more than 4 million ha.
ISSUES TO BE ADDRESSED:
• Rights, duties, and responsibilities of FCs for forest management as forest
enterprises have not been clearly identified in legal documents, particularly,
the policy on natural forest with production function allocated to FCs.
According to the current law, natural forests with production function are
important production materials of the company, but they are not accepted as
FCs’ asset. FCs therefore manage the allocated forests as natural resources
not as asset.
• According to Forest Protection and Development Law, for FCs the
Government executes the land and forest land allocation or forest rental with
rental charge paid by FCs, but there is no specific provisions to address that.
Currently, the Government has performed the land allocation without land
and forest use/rental charge for many FCs. Some provinces implement forest
rental, but FCs can not afford the payment for the rental charge due to lack of
budget.
• Decree No. 200 also does not have any provision facilitating FCs to get longterm
loans for plantation cycle, essential for FCs to run their operation, even
FCs operating in remote areas.
• According to Forest Protection and Development Law (Article 64), though FCs
have paid forest use and rental charge from their own budget (no government
budget), they only are allowed to profit from the value added to the forests,
but there is no transparent and clear regulation how to identify the value
added and how to benefit from it.
• SFEs that do not have harvestable plantation and mainly have poor natural
forests were converted into FCs, do not afford to manage and protect this
forest area and can generate profits.
• Land withdrawn from SFEs for allocation to other bodies has not been
implemented well. In some localities, numerous area of forest land has been
withdrawn from FCs but failed to be allocated to other bodies. Commune
People Committes therefore temporarily manage this area, but they are not
forest owners and have no capacity for management and protection, which
results in “ownerless” circumstances for the forest land.
• Almost all FCs have not completed their forest and forest land management
plans or have plans available but fail to apply as a “legal” instrument for land
and forest management.
• In some provinces, FCs do not have self-control right for their own financial
issues during their natural forest business because in the provincial policy,
profits from standing tree auction is collected by Provincial Financial
Department and reallocated a part to FCs as forest management unit
operating under provincial budget.
• FCs had to hand over good-quality and close-to-communities lands for
agricultural purposes, so they had to move to more remote region and do their
business with poor-quality land left, poor infrastructure, long production cycle
with lots of risks which results in higher costs, particularly transportation and
lower efficiency.
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