Public private partnership as a new form of governance in involuntary resettlement in vietnam

The policy framework of land conversion in Vietnam: Continuous changes To understand land policy and land management including the land conversion mechanism in Viet Nam, Malcolm 2012 in

PUBLIC PRIVATE PARTNERSHIP

AS A NEW FORM OF GOVERNANCE

IN INVOLUNTARY RESETTLEMENT IN VIETNAM

Dinh ThiNgocBich^

1 Introduction

Vietnam eharaelerizes Iransifiona! economy, where the conversion of agricultural land is an indispensable requirement of development process (WB: 2010)

Successive policies of the Vietnamese goveminenl in the domain of economic reform and modernization have helped Vietnam to become one of the world's fastest growing economies Between 1990 and 2010 Vietnamese Economy achieved

an average annual growth rate of 7.3 percent and the per capita income almost quintupled (VDR 2012) Particularly, since the 1980s, the land management reform

as an 'evolution' that made substantial increases in production, turned Vietnam into the third largest exporter of rice (VDR 2011) Within less than 20 years since the launch of Doi Vloi, Vietnam has transformed itself from a centrally planned economy to a market oriented economy and from an extremely poor country to a lower-middle income counlr)'

The transition of Viet Nam also represents a further step of its development by realizing industrialization and modem economy Land policy and land manageinenl are critical in this transition period In order to meet the Vietnam Millennium Development Goals (MDGs) and decrease the existing 70% of agricultural area to 50% by 2020, Vietnam focuses on the transformation of thousands of hectares of agricultural land for non-agricultural use The country also experiences the most pressing governance challenges: how the government can handle the land conversion process in a way to achieve a counterbalance between the so-called

* Ph.D Candidate, Institute for European Studies, Vietnam Academy of Social Sciences, paper sent to the 4'^ International Conference on Viet Nam Studies, 26-28 November 2012, Hanoi

'inequitable distribution between gains and pains' (Cemea 1993,1996, 2008) and sustaining rapid economic growth through regular land conversion

2 The policy framework of land conversion in Vietnam: Continuous changes

To understand land policy and land management including the land conversion mechanism in Viet Nam, Malcolm (2012) in his recent research pointed out that it would be useful to begin with key ideology staled in the consfilulion, emphasizing 'collective ownership' over land Accordingly, Article 17 (Viet Nam Consfilulion 1992) slates that land is subject to "ownership by the entire people" This is re-affinned in Article 18 which states that "the State manages all land " Such ideology has shaped the "public attitude about access to; control over, and use of land" (Malcolm 2012:138) As the result, the terms of 'land conversion' or 'compulsory land conversion' or 'land takings' (Kim 2011) often used in policy frameworks in Vietnam refer to the transfonnalion of land from one purpose to another; and the ownership is implicitly understood as public or governmental The basic legal framework for land conversion lies with the Land Laws (1987), which have been revised over fime (1993, 2003) with supplementafion clauses relating to land aequisifion (1998, 2001) Particularly, the evolution in resetfiement and compensation policies lakes place continuously through Decree 197/2001; Decree 84/2007 and Decree 69/2009 as follows:

Decree No 84/2007/ND-CP, dated May 25, 2007 provides supplementary stipulafions on issue of LURC, land aequisifion, land use right implemenlafion, procedure of compensation, assistance in the event of land recovery by the state and grievance redress;

Decree No.l7/2003/ND-CP, promulgating the regulation on the exercise of democracy in communes, including requirements for consultation with and participation of people in communes;

Decree 69/2009/ND-CP dated 13 August 2009, is amended so that it elaborates on land use, cost of land, land recovery, compensation and resettlement This Decree offers assistance to severely affected households, especially households which need to be relocated or lose agricultural land Circular 14/2009/TT-BTNMT

of 1" October 2009 guides on the implemenlafion details of compensafion, rescfilement and resetfiement assistance, process of land acquisition, land alloeafion and land leasing

The forthcoming refinement of the Land Laws promises further considerable chaiges In general, the revised government policies on compensation, assistance

anc relocation have improved significantly in recent years and have moved a step

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closer to inlemafional standards on involuntary resettlement In particular, land administration including monitoring and supervision system is improved, and the guarantee for benefits of affected land users has been taken into account The public pressure in combination to rapid economic growth has changed the attitudes of the (provincial and central) leaders who used to be in favour of investors In effect, the interests and long-term development of the affected communities has become more important than attracting investment 'at any price'

Nevertheless, the legal framework of the compensation, support and resettlement policies still lacks specific clauses tailored for vulnerable groups such

as ethnic minorifies, poverty reduction, gender equity, to name a few

The two mechanisms in land conversion in Viet Nam: the compulsory land conversion is questionable

Officially, regulations on compensation and resettlement have been properly defined since the third revised Land Laws 2003, with the introduction of voluntary land conversion negotiated between public and private economic investors and affected stakeholders' Meantime, the revised Land Laws proposes principles to limit compulsory land conversion mechanism seen as the only method for land recovery

Compulsory land conversion, i.e., the land recovery mecltanism by the State is

applied to the projects of Group A, which acquire land for national and public purposes; FDI and 100% foreign funds (including ODA) or the implementation of special economic investment projects under big capital The land price is stipulated

by the Provincial People Committee (PPC) and must be based on the market price

of land; the relevant state authorities at the provincial or district levels are responsible for the implementation of compensation and resetfiement However, in practice, there is a debate on the eligibility for the projects of Group A, where the projects with political and social purposes and the projects of eommereial purposes (for profit of only the investors) are mixed in the same land policy framework In the meantime, the concept of 'special economic investment projects wifii high investment funds etc is likely blurred to implemenlafion praelilioners to define eligible projects For instance, how special and how big are projects which can be categorized in Group A?

Voluntary land conversion is used for the implementation of the investment

projects by domestic investors that are not subjected to compulsory land conversion

1 Hung Vo: 2009

(Group 11); or where the compulsory land conversion may be applied but the investors volunteer to conduct the process of voluntary land conversion mechanism' However, voluntary and compulsory land conversion are both involuntary in nature in a sense that both infer "pennanent forced relocation of entire households" (Feldman, Geisler, & Silberling, 2003 quoted in Wilmsen at all 2011:356) The two mechanisms are distinct in a sense that the prices for land compensafion can be negotiable in the former ease and that the prices are fixed in the latter case However, in HCMC, many investors used voluntary land conversion prior to 2004 and have continued to use it even for the eases when compulsory land conversion rules would apply The city leaders apply a market oriented approach to land and land compensation is determined in accordance with the market price of land based on a land price assessment supplied by the price evaluafion service organizations

3 The implementation of compulsory land conversion in Vietnam

Involuntary Resettlement -from international perspectives:

The literature review in the IR domain shows two dimensions of displacement which have been discussed by various scholars (see Shihata 1993; Cemea 1993,1996, 1999& 2008; Cemea and Guggenheim 1993; Roll 1996; McDowell

1996 Dwivedi 2002, and Sharma (2003) with different points of view on the nature

of IR First, the practifioners (supported by planners, managers, and applied academics) who consider displacement to be an inevitable and unintended outcome

of development focus their advocacy on resettlement and compensation activities Second, the action- research scholars (supported by sociologists, anthropologists and human-centred advocators), who contributed increased findings in academic research, focus on causes of uneven and unfair distribufion of costs and benefits and seek correcfive aefions by proposing new ways of development

As the results, involuntary resettlement characterizes two distinct but related processes At first, the displacement is a process by which the projects cause people

to lose their land, or other assets or other access to resources This ultimately results

in physical disloeafion, loss of income and other adverse impacts Secondly, there

is another process of resettlement or rehabilitation, whereby project affected people are assisted to improve, or 'at least restore' their income and standards of living (WB 2001a)

L WB2011:4

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Accordingly, policy makers in the IR field, in the attempt to be responsive to the fact given by various scholars as mentioned above, seek for effective ways of designing and handling resetfiement as well as minimizing the adverse impacts of displacement though appropriate legal, managerial and regulation frameworks A number of international norms, often regarded as social safeguard initiatives, have been set up as key instruments to guide the practice in resettlement projects Examples of such policies, but not limited to, are presented below:

- World Bank Group Operational Policies (OPs) and Directives (ODs),

including OP 4.01 Environmental Assessment and OP 4.12 on Involuntary Resettlement;

- IPC's Good Practice Manual (1998) "Doing Better Business through Effective Public Consultation ";

- IPC's "Investing 'in People: Sustaining Communities through Improved Business Practice - A Community Development Resource Guide for Companies " The implementation of Compulsory Land Conversion in Viet Nam

In Viet Nam, the revised policy framework since Decree 84 and re-emphasized in Decree 69 captures those important features of involuntary resettlement by determining compulsory land conversion to be more complex process, comprising "compensation, support and resettlement" With Decrees 84/2007 and 69/2009, significant improvements are allowed to the process of implementation for land acquisition, assistance and resettlement and with a lot of more support to the severely affected people who are impacted by land acquisition for the economic development, especially for people losing productive lands In these Decrees there are also Provisions (for instance, Provisions 20, 22 and 23 of Decree 69) which require assistance to vulnerable groups such as poor households, the households who are eligible to social policy of the Government, Viet Nam Heroic Mothers The policy makers acknowledges international norms by providing

a clear-cut of two dimensions of land conversion in separate policy provisions

However, praelilioners often tend to combine the goals in the same process, putting more weight on the compensation and resettlement activities rather than the livelihood rehabilitation and social safeguards measures (see Cernea; Hung Vo and

WB 2009) The practice of land conversion in Viet Nam shows that the entitlements for economic rehabilitation and social safeguards are intertwined in the same compensation package, more often in cash than in kind

This situation is caused by a lack of precise understanding of economic restoration and social safeguards provisions during implemenlafion; while appropriate measures are often interpreted to be more like 'good practice' rather than 'compulsory' In addition, it is not clear in the undertaken provisions about the mode of 'support' with dual possibilities of'in kind' or 'in cash' Moreover there is misconception about resettlement among state agencies and project developers Many project developers view resetfiemenls only as relocation sites, housing and accompanied infrastructure while the allenfion on construction of people lives is slightly overlooked Meanwhile, the value of enfifiements and package benefits are quite limited, very often not enough for the generation of effeefive economic restoration aclivifies

As we have mentioned above, the two processes of displacement and economic rehabilitation tend to be closely integrated without distinctive measures for each process, l^he practice shows that majority of land conversion projects favour to combine economic restoration and other social safeguard entitlements into cash compensation packages, whereas the implementation of economic restorafion programs including job creation and vocational training is often pro-forma (Flung Vo 2009) Particularly, the Fund No 156 of Ho Chi Minh, which was established in 2007 aiming to be a show ease for other cities in supporting resettled people in job replacement and vocational training, has been terminated after few years of implemenlafion This shows the failure of the government efforts in regards to mobilizafion of findings from land developers as well as ineffectively using the fund

Conventional institutional arrangement: still appropriate?

In general, the management of land fully belongs to state agencies, decentralized at provincial level, belonging to the Department of Natural Resources and Environment (DONRE) In particular, this slate agency and its hierarchical systems at provincial and district levels are responsible for the implementation of compulsory land conversion At district level, the Board of Compensafion, Support and Resettlement (BCSR) is appointed as the executive body by the District People Committee This is a temporary agency responsible for the implementation of administrative regulations on land recovery for a specific investment project Although the operafional cost of BCSR is subsidized by a governmental budget, the organisation gradually takes the shape of a public service provider which is self maintained through service charge or fees on the investors

However, in the practice of implementation there are still weaknesses in regards to institutional functions for land conversion and allocation originated from

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the feature of basic land policy and land management in Viet Nam (see more in VDR 2010)

Firstly, there is a lack of 'explicit guidance over who (especially which state agency) has to do what, when, where, with whom for whom, how and over what to allocate and use land efficiently, equitably and sustainably (Malcolm 2012: 138) Secondly, there are sfiU significant gaps between policy, which is viewed as advanced and local implementation actions deriving from limited capacity and accountability of local slate agencies

Thirdly, complete decentralisation provides local authorities, particularly the Provincial People Committee with great power in land management without clear accountability (VDR 2011: 45) in the sense that there is a lack of an effective and independent monitoring mechanism to supervise the performance of the local authorities and the delegated bodies The supervision and reporting are made upon the existing hierarchical administrative system

Social conflicts In Land conversion

Social conflict refers to 'inleraefions of interdependent people who see their goals as incompatible, and who believe the 'other' people are interfering with their efforts to safisfy their interests or values" (WCD 2000: v)

The status of social conflict in land conversion in Viet Nam can be found in the WB Report 2011 (where the slatisfies are based on the survey by MONRI': in 2005) According to this report, the majority of complaints and denouncements mainly relate to 'improper execution of land compensation and resettlement' which

is accounted for 70.64% of all administrative complaints The main concerns of complainers focus on land price which is accounted to 70% of all complaints on land compensation and resettlement The report also referred to voluntary land conversion mechanism as 'clearly regulated and procedures are simple' (WB 2011; 4); while the implemenlafion of compulsory land conversion remains uneven

The sources of social conflicts in involuntary land conversion in Viet Nam vary, rooting from policy framework, implementation performance, limitation of awareness and disparity between affected people and project beneficiaries, viewed here as private investors and government

At first, the government contradicts itself on the issues of policy and practice

of compulsory land compensation Since the market value of land is defined and imposed on land compensation prices (Decree 87 and 69-2009) the study shows

that the compensation prices reach only 50-70% of market price in Ha Noi, and a similar problem has been observed in other provinces in the North (WB 2011: 20)

Secondly, according to the point of view provided by responsible agencies, the complaints in administration procedures for land compulsory conversion have resulted from poor perfonnanee of local agencies, which are responsible for land recovery, Indeed, non- compliance to government policy has occurred in terms of orders and procedures of land acquisition, support and resettlement such as to promulgate the ground clearance decision without a notice of an official decision on land recovery nor without prior a notice on land aequisifion planning and schedule'

to the project affected persons; to force for land recovery without relocation arrangement or the land compensation calculation wrongly made etc

Thirdly, in many eases people do not abide by the land administrative decision due to a limitation of awareness of laws and policies in regards to complaint and denunciation procedures Some people resist the decisions of land administration, such as the decision on compensation, support and resettlement There is a certain consensus that the number of complaints and denunciations in the period from 2008

to 2011 is increasing, but up to half of these are the "false accusations'^, that resulted to prolonged complaints and denunciations causing negative impacts on political and socio-economic situations

Finally, the dissatisfaefion of affected people in livelihood measures or the level benefit sharing resulted to resistance to land acquisition in both mechanisms Negoliation basics (of voluntary resettlement) are in favour of affected people, but have been proven to be problematic for authorities and private investors due to an increased demand from affected people In other words, as explained by Kim (2009:25) that 'the disparity between compensation levels and private profits and government revenue' could be the main sources of conflicts (conflict of interests, different perceptions) Consequently, conflict and resistance between actors (stale, investors, affected people) in both voluntary and compulsory land conversion projects negatively influences the investment progress of private companies, as well

as causes delays of the targeted development progress of the local govemments, raising critical demands to further refinements of the policy

1 In Vietnamese: Phuong an Ihu hoi dat

2 http://www.bbc.co.uk/vietnamese/vietnam/2012/05/120501_land_eomplainls_viet.shtml Half of complaints is false accusation; Phan Van Tan ( )

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4 PPP approach in land compensation, support and resettlement

In the transitional context in Viet Nam, the key feature of which is approaching a mulfi-seetor economy in which private, foreign and joint venture businesses have become the main forces for the nafional economy (WB 2006; VDR 2007) Especially, the Private sector enterprises started fonnalizing and expanding,

in a process that caught speed after 2000; they account now for 33 percent of the value of production in manufacturing (ibid.)

PPP in Viet Nam

In Vietnam, PPP is understood as a new government management tool in regards to inslilutional arrangements for financial relationships Thus, the concept

of PPP is primarily engaged to public Investment since the role of PPP has been recognized as a solution for raising capital in infrastructure development It has

been indicated by the A D B ' , where it was pointed out that the need to increase private sector participation in infrastructure investment, primarily through PPPs is

an important opportunity to addressing the financing and technical skills, and management gaps The Vietnamese government is aiming to replace the BOT (Build, Operation and Transfer)^, BTO and BT (Build and Transform) by the standard PPP-inodels regulated by government decision No 71'^ in order to raise 50% to 60% of total investment (estimated at 70-80 billion USD) from the private sector to basic infrastructure with a focus on transport, electricity, water and environment (VDR 2007; Manh Duong, 2010) In 2011 the government officially granted the regulations on the trial implementation of fiie PPP model in infrastructure development It stated that the State's capital to be invested into the projects will not be higher than 30 percent of the total investment capital of the

1 Ayumi Konishi, Country Director of ADB VRM Workshop on Strengthening Public-Private Partnership for Infrastructure Investment in Viet Nam held on 3 November 2008 http://wvAv.adbi.org/event/2676.ppp.infrastructure.viet.nam/

2 Private investors can build infrastructure under certain favourable conditions and charge a tariff agreed with the State for the use of that infrastructure for an agreed period of time

3 PPP regulations issued Decision 71/2010/QD-TTg dated 9-11-2010 of the Prime Minister, conditions, procedures and rules apply for some pilot projects development of infrastructure, provision of public services in the form of PPP However, Vietnam has been long familiar with models such as BOT, BT and BTO Since Decision 71 is made, any investors wanting

to cooperate in PPP, need to be familiar with the basic requirements of a cooperation project Accordingly, the standard structure for a PPP project is: state capital accounts for 30%, while the private sector bears the remaining 70%

projects It means that 50-60 % of the total needed capital for infrastructure will be raised from the private sector and other sources Besides, the government also calls for private investment on some other fields of public service, such as medical examination and treatment

l o conclude, PPP in Viet Nam is broadly understood in quite a limited concept of public investment in infrastmcture which must be officially institutionalized and legitimated under governmental regulations

However, PPP should be understood in a broader sense - meaning that the

slate allows private investment (or eo- investment) to participate in services or

public works of the state Using this broad concept, PPP can be also found in the field of sustainable development, especially in the field of power and clean development mechanisms (CDM) such as renewable energy, waste treatment and deforeslafion (See Bich and Sarah - forthcoming 2013)

Recently, and counting from the activation of the national public adminisfialion reform (PAR) in 1990s PPP to some extent can be understood as a tool of 'soeializafion' or, 'public service supply soeializafion' (CIEM 2006) In general, the meaning of socialization can be understood as the government allowing 'the private and other non-state actors to take part in the provision of services' which is traditionally and legally handled by state administrafive entities (Alfaro 2009:79) This concept is, however, fundamentally different from privatization in term of responsibility, guidance and ordination of the State to public service supply (CTBM 2006: 22) Applying the concept of 'soeializafion' the Vietnamese government has promoted the participafion of private and non-state actors in public service with the idea of simplification of the public sector as well as inducing the mobilization of budget and resources to achieve the key objectives of the public adminisfialion reform (PAR) embarked on from the 1990s The socialization of public service has gained certain achievements in education, health care, cultural

acfivilies and tourism (Painter 2003:260, Alfaro 2009: 79 8c 161)

PPP in land conversion

The discussion derives from the observation that the innovations in the implementation of land conversion implementation takes place with new forms of participation and new actors, providing that land conversion is gradually transferred to professional service providers both public and private Notably,

1 http://ven.vn/open-door-for-ppp-investment-atlraction_l77c341n24850tn.aspx