Incentive structure of land acquisition
and land allocation in Vietnam
Dung T. Ngo & Thang N. Tran
Hue University of Agriculture & Forestry
Utrecht, 9 July 2015
Land acquisition & allocation
Legal context
Roles of local governments
Case studies
Forest allocation
Resettlement
Forest contract
Rationale
Vietnam: rapid change from
central-planning  market
economy (1990s)
Land acquisition:
Industrialization: agr. land to
factory, storage
Urbanization: housing,
infrastructure
Land allocation: decentralize stateland 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 acquisition
Step 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, forest
boundary
Forest allocation = assign forest areas to villages, groups, or individual households for 50-year
period with most property rights
Stakeholder
Allocation to
State Forest
Enterprises
Individual
Forest Protection
Unit (district level)
Individual
Perceived Benefit(s) of
Allocation
Perceived Cost(s) of
Allocation
Reduce forest protection duties
Less benefits from timber
extraction
- Reduced protection duties
- Less direct benefits from
sanction
Group
- Direct payment from SNV
- High time and effort in
allocation (forest inventory
and demarcation)
Group
- Reduced protection duties
- Direct payment from SNV
Local People
Individual
- Forest products
- Red book for long term
investment and loan from bank
- Rationale for sanction
- Effort in allocation (but
lower than for household
allocation)
- Time and effort in
management
- Protection cost is higher if
allocted patches are in remote
area.
- Integrated other land uses
(plantation, NTFPs)
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)
Case #2: Resettlement stories
From industrial
zone/city
development
From areas
vulnerable to natural
disasters
From hydropower
plant, reservoir
construction
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 contract
Context: 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
ES providers
Central
Fund
entrusted payment for ES
Environmental services
ES users
Findings
Legal framework:
Robust and rationale for participation in PES
Insufficient clearance & dissemination
Time 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: limited
Fund management: insufficient in enforcement of violation
Implementation
Budget collection: effectively due to state gov. support in pilot
Forest 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,
practice
Civil society & NGOs: capacity building, monitoring,
transparency, funding
Benefit sharing mechanism: simple, transparent,
consensus