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State Forest Enterprise Reform Dialogue in Vietnam
CHALLENGE
Over the past two decades, several countries have reformed their state forest institutions to improve the management, administration and governance of forest resources, and the delivery of products and services from forests in response to changing market and public demand. Reforms have focused on strengthening economically and environmentally sustainable forest management.
In Vietnam, a series of restructuring steps have taken place over the past 15 years. However, progress towards transforming state forest enterprises (SFEs) into commercially viable businesses based on sustainable forest management principles has been slow, incomplete and often stalled. The most recent reform effort included the stipulation of Decree 200 in 2004, which aimed to develop and implement reform plans for SFEs, including specific plans for forest classification, forestland allocation, asset valuation, equitization, business planning, commercial timber processing sector development, and improving social and economic opportunities. Despite this, the reallocation of forestland from SFEs to communities, which was viewed as a core element of reform, has been particularly slow.
SFEs in Vietnam control about 40% of all forestland and are believed to still hold substantial forest estates, including some of the most valuable natural forests. Significant uncertainty exists, however, regarding the extent and quality of these remaining forests. Illegal logging, poor governance and vested interests are complicating the overall picture. Vietnam’s natural forest resources are important for rural development, poverty reduction and upland livelihood security since most of the remaining natural forests are located in upland areas where the poorest ethnic minority populations are concentrated.
APPROACH
This PROFOR-financed activity proposes to develop and support a deeper forest sector policy dialogue in Vietnam. A second objective is to complement the World Bank’s overall dialogue and program on state-owned enterprise reform in Vietnam by adding a specific perspective on forest resources management.
Expected outcomes include increased capacity of key stakeholders, particularly the policy research institute of the Ministry of Agriculture and Rural Development, to carry out performance assessments and scoring of SFEs and to formulate reform needs.
More specifically, the activity is expected to produce:
- Review of the policy framework for SFE reform and the legal aspects of equitization.
- Review of business prospects of two SFEs, concerning forest assets, land use rights certificates, and other data required for good management.
- Methodology and application of forest valuation techniques for two SFEs: The valuation of property uses three basic approaches: (1) the comparable sales approach; (2) the replacement cost approach; and (3) the income approach. Investors will mainly use the income valuation approach. To anticipate what buyers/investors will bid, the government should use the same approach with some sensitivity analyses to bracket the likely valuations of foreign investors.
- Business plan development, one for each of the pilot SFEs demonstrating how the SFEs can improve their operations over time to become more efficient and profitable.
- Synthesis report, providing key information for understanding the situation relative to SFEs, their commercial value, and the policy environment relative to proposed sector reforms that is summarized in the main report.
In short, implementation activities include: stocktaking; a literature review of legal requirements; development of a scoring methodology and audits; review of land use, livelihoods and social issues; determining commercial prospects of SFEs; and a final synthesis report.
RESULTS
This activity is ongoing, and technical work is underway. Local experts have reviewed the regulatory framework for SFE reform and a stakeholder workshop was conducted in July. The pilot SFEs have been engaged and two technical missions were conducted to ensure readiness and participation. A preliminary analysis of each SFE was conducted, information was collected concerning assets and holdings, and draft commitment letters were drafted to formally engage the SFEs. The final synthesis report is expected by the end of June 2015.
The activity has concluded and all the outputs are being finalized for publication. Findings from the study show that:
There are 139 SFEs with 1.95 million hectares of forest, however, only 30 have commercial potential from plantation. These SFEs will have to be studied further to scale up their success in terms of their location, size, structure, financial structure, land tenure.
Additional measures to speed up reform might include (i) improving forestry and business practices to enhance efficiency and increase profits; (ii) providing incentives for and facilitating the merger of smaller SFEs to produce economies of scale; (iii) securitizing SFEs Land Use Rights Certificates; (iv) allowing for the sale and transfer of SFE Redbooks; (v) streamlining the policy framework and developing outreach programs to investors; (vi) developing practical and realistic approaches for mitigating potential employee layoffs that are expected as a result of the reform; (vii) certifying assets and holdings; and (viii) providing high-quality information to the public and potential investors. Technical assistance will be needed to guide SFEs through the financial reviews and asset valuations, develop business plans, sort through land tenure issues, improve forest and business management, and help resolve employee and labor situations, among others.
The study also finds high foreign investor risk due to shortcomings in individual SFEs and the complexity of the policy framework, posing a challenge for equitization. On the other hand, Vietnam is a favorable market in terms of environmental conditions for rapid tree growth, high prices for wood products, and close proximity and access to Asian markets. Capitalizing on assets in the sector while overcoming weaknesses in individual SFEs and simplifying the regulatory environment will be key to moving forward on reform and ensuring economic growth in the forest sector.
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Author : World Bank
Last Updated : 06-16-2024
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Framework for Development and Management of Coastal Forests in Vietnam
CHALLENGE
Forests along Vietnam’s extensive coastline help promote adaptation and resilience against the impacts of climate change, including by reducing coastal and inland flooding, regulating water flow and quality, stabilizing hillsides, and sequestering carbon. These are all services that have the potential to generate revenue and leverage finance for larger-scale action.
Vietnam’s investments in forest rehabilitation over the last few decades have resulted in increased forest cover and an expanded timber industry. However, a primary focus on aforestation for wood supply has reduced the emphasis on natural forests and the range of ecosystem services that they provide. As a result, forest quality has declined and deforestation has deteriorated many natural coastal defenses, affecting the lives and livelihoods of forest-dependent communities.
APPROACH
PROFOR and the World Bank are supporting the Government of Vietnam in implementing the country’s 2006-2020 Forestry Development Strategy, which envisions the widespread delivery of ecosystem services for sustainable development, livelihoods and growth. To achieve this, there is a need to strengthen the planning, governance and management of forest resources to promote inclusion of local government and communities in forest management.
Specifically, this activity will support the Vietnam Forest Administration (VNFOREST) in developing two sets of guidelines for further policy actions: one guideline on the restoration, conservation and management of coastal forest within selected coastal areas; and another for reviewing the forest types in coastal provinces and the development of appropriate monitoring frameworks
RESULTS
This project has been completed. The following draft outputs were developed.
- Technical guidelines for integration of aquaculture and agriculture in the coastal forest
- Guidelines on criteria for reviewing coastal protection forest planning
- Coastal situation assessment for national and coastal provinces
The Guidelines for implementing integrated agricultural and aquaculture production in coastal forests, for the first time, allow these activities to be implemented in coastal forest areas. The Guidelines are underpinned by a technical report on different models for integrated agricultural and aquaculture production in coastal forests, which was developed in collaboration with the GoV (at national and provincial levels) and is a government-owned resource. In so doing this project contributed to enhancing the technical knowledge and expertise within the government to develop and manage coastal forest.
The Guidelines aim to provide the regulatory basis for generating income from sustainable activities in coastal forest areas that are classified for protection functions. The regulation builds on lessons and experiences from the implementation of integrated production systems implemented in different parts of Vietnam, for example the Mekong Delta, Ca Mau, Thua Thien-Hue, Thai Binh, and Nam Dinh provinces. The Guidelines clarify the roles and responsibilities of different stakeholders including provincial departments, community groups and the private sector.
The Guidelines on criteria for reviewing coastal protection forest planning have enhanced the government’s capacity to classify coastal forest and coastal areas that are important for enhancing resilience to climate change. Specifically, the Guidelines (i) provide a legal basis for the identification of vulnerable coastal areas and measures for sustainable forest uses; (ii) provide the legal basis to review and adjust the planning for coastal protection forests to respond to climate change while using participatory approaches; and (iii) build government’s capacity for planning and monitoring of coastal protection forest.
The policy focuses on improvement of the processes for stakeholder engagement and involvement in classifying coastal forest, including by addressing conflicts that may arise due to coastal forest classification and other social safeguard issues. The policy also brings coherence and coordination on the classification of coastal forest, master planning, and monitoring of coastal forests by defining the roles and responsibilities of local government departments, communities and the private sector. These outcomes support strategic planning and channeling of resources that can help achieve the desired targets for coastal forest increase. The work to assess the coastal situation furthers the Guidelines on coastal forest planning in the broader context of key coastal sector planning. It focuses on how the management of coastal forest integrates with the broader coastal zone management.
The outputs contributed to the policy dialogues on coastal forest development and protection in the context of climate change. Technical work done as part of this project informed the design of the Forest Sector Modernization and Coastal Resilience Enhancement Project developed by the Government of Vietnam. This project, approved for World Bank financing in June 2017, aims to improve coastal forest management in targeted provinces.
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Last Updated : 06-15-2024
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Attachments
Summary Lao Workshop Nov 12-13 2009_0.pdf
Summary Hanoi, Vietnam Workshop Nov 24-25 FINAL, 2009_0.pdf
WorkingPaper-Mekong-Vol2-final_0.pdf
WorkingPaper-Mekong-Vol1-final_0.pdf
Keywords
Authors/Partners
World Bank and PROFOR
Forest Law Enforcement and Governance in the Mekong Region
CHALLENGE
Over the past years the Mekong region countries have increased their role in global timber trade and have been a focal point in the global discussion on forest governance and illegal logging. Countries in the region have different and complementing roles in the regional trade but much of the logging in natural forests in the region is still either unsustainable or unauthorized – or both. In all the countries, forest law enforcement and governance (FLEG) has been an actively debated issue.
The Association of Southeast Asian Nations (ASEAN) has made important progress in building regional commitment to improving good governance in the forest sector. The next step would be to develop concrete and substantive local, national and sub-regional forest governance and law enforcement programs and projects to implement the agreed policies in a tangible way.
APPROACH
The objective of the Mekong Project was to build on the political will demonstrated at the FLEG East Asia and Pacific Regional Ministerial Conference in Bali, Indonesia (hosted by the World Bank and Government of Indonesia in September 2001) and in the ASEAN. It aimed to support diagnostics, capacity building, and policy and institutional reforms, through regional and national activities, that would directly address the causes and symptoms of forest crimes and improve forest governance generally.
Cambodia, Lao PDR, Thailand and Vietnam were the primary focus countries in the region.
The project took a phased approach, first identifying priority areas through multi-stakeholder consultation, and strengthening the knowledge base. Based on the regional consultative process, the next step will be dedicated to preparing and implementing a detailed action plan.
RESULTS
Improving Forest Governance in the Mekong Region, a report outlining options for regional activities improving forest governance in the Mekong region in support of national programs, was published in April 2011. The report is based on a series of workshops and analyses that were conducted in 2009 and 2010, as well as extensive interviews with experts from national and regional programs in Cambodia, Lao PDR, Thailand and Vietnam. Representatives from government, civil society, industry and regional bodies such as ASEAN participated in two workshops held in Lao PDR and Vietnam. Analysis was also made on Myanmar to research potential for involvement in regional activities.
- The first volume presents current FLEG trends in the Mekong region, where countries have taken steps to respond to increased demands for accountability and legality of timber and wood product exports.
- The second volume identifies 13 areas of potential collaboration in the region. All of them:
- include regional components that cover issues common to several Mekong countries but would still support national processe
- utilize existing committees, working groups, forest governance processes and participants rather than establishing new administrative layers
- increase accountability and transparency in decision-making and access to information, and
- focus on building capacity to manage systems and processes beyond the term of project activities.
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Author : World Bank and PROFOR
Last Updated : 06-15-2024
Bringing International Best Practice to Inform Key Forest Sector Issues in Vietnam
CHALLENGE
Vietnam’s national commitment to using forests for sustainable and resilient growth is clearly articulated in the government’s Target Program for Sustainable Forest Development. Furthermore, the government has also shown its commitment to sustainable forest sector use by prioritizing policy actions related to the spatial planning of coastal forests in the ongoing development policy in financing climate change and green growth in the country. Vietnam is also revising its forest law that covers key issues such as collaborative management, restoration of coastal forest areas, and monitoring forest financing in the forest sector. As the forest law is being revised, it will be important to ensure that the legal framework for the sector facilitates involvement of private individuals, enterprises and communities in sustainable resource use and management. The World Bank is well positioned to bring the technical expertise needed to inform such ongoing and upcoming engagements, which includes informing the development of policy financing on Climate Change and Green Growth, the implementation of the Forest Sector Modernization and Coastal Forest Enhancement Project and the ongoing engagement on Emission Reduction (via the Forest Carbon Partnership Facility).
APPROACH
The scope of this activity will involve the following three sub activities:
1. Confirm and prioritize the intervention areas for which technical expertise will be obtained;
2. Bring international expertise to:
- Assist with the characterization of the forest users and understand what current demographic and socioeconomic characteristics means regarding who will be forest users and how they will use forests in the next 5 to 10 years.
- Inform policy discussions on the intervention areas (for example, on how to track use of forest financing).
- Assist with the piloting of approaches in the intervention areas (e.g., payments for ecosystem services in coastal forests, co-management arrangements, or citizen engagement in integrated planning of coastal forests) and learning from these efforts.
- Develop implementation guidance in the selected intervention areas (e.g., guidelines on how to operationalize payments for ecosystem services in coastal forests from aquaculture).
3. Assist with transferring international expertise to the provincial, district and commune-level.
The main audience of this work will be the Forestry Department within the Ministry of Agriculture and Rural Development. The activity will provide them with insights on how to technically and financially support these key areas.
RESULTS
This project has been completed and partly achieved its objective. It is informing implementation of investments in coastal forest management – ranging from stakeholder involvement, and mobilizing financing through PFES. The findings from the activity are still being used to inform the Government of Vietnam forest strategy that is under preparation and the PFES decree that will be issued after pilot work is completed, so the activity, to date, has not informed policies to the extent envisaged.
The work has offered relevant lessons from international and national practices to the stakeholder group that is mandated to implement sustainable forest management activities. The activity has also involved engaging closely with VNForest (the Agency within Ministry of Agriculture and Rural Development (MARD) mandated with policy and planning dimensions of forest management in Vietnam).
At the VNForest level, the objective of informing policy is ongoing as VNForest regards local stakeholder involvement (via co-management) in management of coastal forests, and on PFES to inform the design of a pilot for carbon PFES in coastal forest areas. In addition to producing reports that synthesized the main findings, the activity involved workshops and trainings at the technical level and for Department of Agriculture and Rural Development leaders (i.e. leaders of province level agency responsible for Agriculture and Rural Development who are responsible for forestry and also have the mandate to submit the sustainable forest management plans to the provincial government).
The work on co-management and on sustainable seedling supply to enable effective forest restoration is influencing the implementation of activities in the Forest Modernization and Coastal Resilience Project. The lessons and insights from the work on payments for ecosystem services (PFES) has informed the effort to pilot this approach in the same project and is being positioned to be one of the experiences from which lessons will be extracted in the development of the decree on PFES for carbon. (In Vietnam, decrees follow laws and provide more operational detail on how to implement specific elements of the law).
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Last Updated : 06-15-2024
