The necessity of research
Forest ecosystems are crucial for human well-being and habitat preservation, significantly contributing to sustainable development and the overall health of our planet They supply essential raw materials, including timber and non-timber products for various industries, while also playing a vital role in environmental protection Forests help limit erosion, regulate water and floods, maintain climate stability, enhance landscape aesthetics, and conserve biodiversity.
One hectare of forest produces approximately 300-500 kg of biomass and 16 tons of oxygen annually, with pine forests generating up to 30 tons Forest ecosystems are vital for the biosphere, contributing significantly to human well-being However, centuries of exploitation driven by a lack of awareness and immediate profit have led to deforestation and severe ecological damage This destruction, coupled with industrialization and modernization, has become a major contributor to climate change.
Vietnam is home to approximately 40% of its population, or over 86 million people, residing in mountainous highlands, predominantly comprising ethnic minority groups These communities face significant disadvantages and limited access to resources that could enhance their quality of life This raises the question of how livelihoods can be improved through sustainable forestry practices Despite long-term policy efforts, the quality of natural forests has severely declined In response, the government has implemented initiatives such as Program 327 and the plan to plant five million hectares of forest, alongside forest policy beneficiaries as outlined in Decision No 178/2001/QĐ-TTg, to promote forestry development and improve the living conditions of these communities.
After the program ended on November 12, 2001, local communities faced unemployment and a decline in direct support for their livelihoods, leading to inadequate forest management and ongoing deforestation for agricultural purposes To preserve the environmental value of forest services and promote fairness for foresters, financial mechanisms for payments for forest environmental services have emerged as an effective solution in many countries In Vietnam, the implementation of these payments aligns with state policies aimed at fostering equity and supporting the sustainable management of forest resources as part of a broader socialization strategy.
Lao Cai, a mountainous province in Vietnam bordering China, is recognized for its potential in implementing payments for forest environmental services (PFES) to enhance livelihoods and promote sustainable forest management While PFES has achieved notable success in protecting forests and fostering sustainable development in Lao Cai, several challenges hinder its effectiveness This research, titled “Payments for Forest Environmental Services at Lao Cai: Realities, Difficulties, and Recommendations,” aims to identify these challenges and provide actionable recommendations for local managers and government officials to improve the implementation of PFES in the future.
Objective of research
Status of the implementation policy for payment for forest environmental services in Lao Cai
Shortcomings and limitations in the process of implementing the policy for payment for forest environment in the province and the causes
Proposing solutions to perform better the policy on payment for forest environmental services in Lao Cai
The analysis highlighted both the successes and challenges encountered in the local implementation of payments for forest environmental services (PFES) This evaluation aims to inform policy recommendations and strategies to enhance the effectiveness of PFES initiatives in the coming years.
OVERVIEW ABOUT PAYMENT FOR FOREST ENVIRONMENTAL
Overview about PFES policy in Viet Nam
Environmental services payment activities offer creative incentives and benefits to individuals utilizing ecosystems, promoting practices that protect and enhance these services By fostering a meaningful ecological environment, these initiatives aim to serve the interests of the broader population while encouraging sustainable forest management.
Communities can directly benefit from forest protection services, as those providing environmental services should receive compensation for their efforts in maintaining ecosystem functions This approach not only promotes the payment for environmental services but also presents an opportunity for increased income and sustainable livelihoods Additionally, it emphasizes the external value of forest goods and products, highlighting the importance of financial incentives in supporting ecological conservation.
In early 2008, the government tasked the Ministry of Agriculture and Rural Development (MARD) with developing a policy for payments for forest environmental services (PFES) within the Forest Sector, aiming for national implementation.
In 2008 and 2009, the government implemented the PFES policy in Son La and Lam Dong provinces, which has since been evaluated positively after two years of pilot implementation This policy garnered strong support from various sectors, including 25 million ethnic minorities living in forested areas, and established a new financial mechanism aimed at forest socialization and poverty reduction As a result, forest protection has improved, leading to a significant decline in deforestation and illegal activities, with Lam Dong reporting a 50% reduction in violations and Son La experiencing virtually no illegal logging Additionally, Lam Dong province noted a 15% decrease in poverty rates in pilot districts since 2008, contributing to regional stability and security (Ministry of Agriculture and Rural Development, 2011).
On 24/9/2010 the Government issued Decree No 99/2010/ND-CP regarding payment policies for forest environmental services Decree includes 5 chapters and 25 articles, and officially takes effect from 01/01/2011
Up to now there are several provinces have been implementing decree 99/2010 /
The Payment for Forest Ecosystem Services (PFES) policy is relatively new and represents a significant breakthrough, yet its implementation poses challenges across various levels and sectors, particularly in regions like Ninh Thuan, Lang Son, Quang Nam, and Lao Cai.
Some mechanisms and policies related to PFES issued in Vietnam
The Forest Protection and Development Fund, established under Decree No 05/2008/ND-CP on January 14, 2008, plays a crucial role in managing and receiving funds in accordance with regulations A key responsibility of the Fund includes overseeing payments for environmental services related to forests (PFES).
The Protection and Development Fund system operates at three levels: central, provincial, and communal, specifically for forests In 2015, the estimated total payments for forest environmental services from hydropower plants and clean water production companies reached approximately 1,300 billion VND annually, excluding contributions from tourism companies that rely on forest ecosystems.
Some mechanisms and policies related to PFES issued in Vietnam
The Fund for Protection and Development of Forests, established by Decree No 05/2008/ND-CP on January 14, 2008, plays a crucial role in managing funds, particularly for environmental services related to forests (PFES) This fund operates at three levels: central, provincial, and communal, focusing on areas with forest coverage By 2015, the total payments for forest environmental services from hydropower plants and clean water companies were estimated to reach 1,300 billion VND annually, excluding contributions from tourism companies that offer services based on forest ecosystems.
PAYMENT FOR FOREST ENVIRONMENT SERVICES POLICY AT
Overview about forest and forest land in Lao Cai
Lao Cai is a mountainous province in the northern border, with geographic coordinates from 22,009 'to 22,052' north latitude, from 103 031 'to 104 028 east longitude:
- In the east bordered with Ha Giang province;
- The south bordered with Yen Bai province;
- To the west bordered with Lai Chau province
Forest area and forest land
According to Decision No 3947 / QD-UBND 31/12/2010 Lao Cai provincial People's Committee approved protection and development planning stages from 2010 to
Lao Cai has a total natural land area of the province is: 638 389.6 hectares, and forestry planning 2010: 417,755.14 ha
By the end of 2010, the area of forested land are 327,755.1 hectares, including:
The special use forest, dedicated to the conservation of genetic resources and the protection of endemic flora and fauna, spans an area of 46,070 hectares This includes 45,527 hectares of forested land, comprised of 44,992.8 hectares of natural forests and 534.4 hectares of plantation forests, alongside 542.6 hectares of non-forested land.
- Protection forest (watershed protection, landscape protection) with: 170,089.1 hectares; including: land with forest: 147,341.5 ha (Natural forests: 131,686.2 ha of plantation forests: 15655.4 ha) of forest land without: 22747.6 hectares
The province encompasses a total of 201,775.2 hectares of production forest, with 136,508.4 hectares designated as forested land, which includes 81,011.9 hectares of natural forests and 55,496.5 hectares of plantation forests Additionally, there are 65,266.8 hectares of non-forested land The primary focus of the plantation forests is to produce small wood and wood materials for construction, paper processing, and plywood, with a portion also utilized for civil furniture to enhance daily living.
The area of forest land in the province has been planning for forest owners to strengthen the protection and development of forests, as follows:
- State Enterprises (Bao Yen Forestry Companies, Van Ban and Bao Thang Forestry Corporation) manages 22 305 hectares;
- Protective Forest Management Boards in districts, city manager: 156,157.7 hectares;
- Special use forest Management boards (Hoang Lien National Park, Hoang Lien Van Ban) manages 46 070 hectares;
- Households and individuals manage: 48274.5 hectares
- CPC and other forest owners manage: 145,128.3 hectares.
METHODOLOGICAL AND RESEARCH METHODOLOGY
Research Methodological
The systems approach emphasizes viewing objects within a system as part of a dynamic process that fosters integrity development This process involves resolving internal conflicts that arise from the interactions among various components of the system Key aspects of system integrity include understanding the system's structure, the laws governing interactions between its components, and the concept of integration itself.
Kind of philosophical approach, is the elaboration of the materialist dialectic, a generalization of the method of cybernetics (Source: Dictionary encyclopedia Vietnam)
This study employs a systematic approach to examine and analyze the solidarity relationships within the policy mechanisms of Payment for Ecosystem Services (PFES) across various administrative levels, including central, provincial, district, communal, and village levels.
The success of Payment for Ecosystem Services (PFES) and its benefit-sharing mechanism is heavily influenced by the institutional framework and settings in place This framework determines the relationships among various factors involved in the program, including financial capital flow, distribution, motivating factors, and the level of interest and participation from beneficiaries, ultimately impacting the overall outcomes of the initiative.
The initial phase of the research involves examining Vietnamese laws regarding Payment for Ecosystem Services (PFES) to identify both the supportive and obstructive factors affecting its implementation.
19 mechanism is evaluated on the ability to achieve the efficient, useful and fairness of output
Efficiency means in actually: has PFES maintain and enhance environmental services?
The effectiveness of Payment for Environmental Services (PFES) mechanisms hinges on their implementation and monitoring at minimal financial costs, ensuring usefulness Fairness encompasses both equitable distribution of benefits derived from forest resources and inclusive participation in the PFES processes Key elements of the PFES framework include a benefit-sharing mechanism and a robust monitoring and evaluation system, which are essential for achieving efficiency and fairness Suppliers of forest environmental services engage in PFES to gain various benefits, including financial compensation and social recognition for their conservation efforts A poorly designed benefit-sharing mechanism can lead to disinterest among service providers and exacerbate conflicts among stakeholders, undermining the system's effectiveness This research emphasizes the importance of designing monitoring and evaluation systems, as well as contract management, to ensure compliance from both sellers and buyers Additionally, it highlights the impacts of PFES on local communities' livelihoods, social security, and community relationships.
The diagram of analysis framework:
Research methodology
Data collection methods for payment for forest environmental services in Vietnam and globally involve analyzing relevant policies and research This includes gathering information on forestry, socio-economic factors, and the natural environment of local areas Sources of information encompass the General Directorate of Forestry, the Forest Inventory and Planning Institute, various line departments in Lao Cai province, specialized departments in Bac Ha district, local communities, and online data.
The method of investigation, research in the field:
This method involves conducting surveys within local communities to gather clear and specific information, including stories and images, at both the household and community levels regarding issues related to Payment for Forest Environmental Services (PFES) Intensive research will be carried out in the watershed that supplies water for the Bac Ha hydropower project.
- Corresponding/interview community, local authorities and specialist method
To gather insights on Payment for Ecosystem Services (PFES) at the community level, it is essential to conduct interviews with local households This approach will help assess the community's awareness of PFES and understand the aspirations of local residents regarding this issue Engaging with the community will provide valuable information on their perceptions and expectations related to ecosystem services.
The local government, encompassing commune, district, provincial, and specialized agencies, was interviewed to assess the current status of payments for forest environmental services This evaluation aimed to identify the advantages and disadvantages encountered during the implementation process Additionally, the discussion focused on potential solutions and future orientations that local authorities plan to adopt to enhance the effectiveness of these payments.
4.2.2 The method of analysis data/information:
Data/information will be analyzing by many methods:
- Use excel for summarize statistic data, summarize data about forest areas, data about finance of receiver- expenses activities, etc…
- With information is not statistic will be analyzing by assessment interact of related (the strengths, weaknesses, opportunities and challenges)
Making questions about realities and difficulties in implementation the policy on PFES at Lao Cai province and solutions of Manage council to resolve problems
Making questions to collect informations about impacts of PFES to life of local people
Making questions to collect information about benefits of users and financial informations which are related to PFES
RESULTS AND DISCUSSION
Realities of imlementation payment for forest environment services at Lao Cai
In early 2011, Lao Cai province initiated the implementation of Decree No 99/2010/ND-CP, which outlines the policy for payment for forest environmental services (PES) The province established a Provincial Steering Committee and developed operational regulations to oversee the initiative Efforts included organizing staffing and creating a comprehensive legal framework to facilitate PFES implementation Additionally, local departments were directed to propose relevant projects and activity plans tailored to the specific needs of each locality, ensuring effective adherence to the government's PES policies.
Lao Cai Province has established the Forest Protection and Development Fund, which, despite being newly created, is actively engaging its management board members They are collaborating closely with various departments to review and compile a list of entities required to pay for forest environmental services This initiative aims to implement policies effectively for each stakeholder and gather local feedback on these policies.
The Fund's Management Council has implemented regulations approved by the provincial people's committee, which include the collection rates and management of funds from forest environment services provided by tourism service organizations and individuals Additionally, the council has established guidelines for the appropriation and expenditure related to the management and prevention of forest environment services Furthermore, it has outlined payment structures for these services within the province and developed collection and payment plans for the years 2012 and 2013.
In 2014, under the direct guidance of a member of the Funds Management Council, the implementation of the payment policy for forest environmental services yielded significant results This initiative has effectively integrated government forestry activities into the lives of local communities, enhancing social policies and benefiting residents.
The PFES policy aims to enhance the accessibility of payment for forest environmental services The Council has recommended that the Provincial People's Committee (PPC) organize a conference to discuss the implementation of this policy, involving various departments and media outlets for broader coverage From April 2012 to June 2014, the Forest Protection and Development Fund of the province played a crucial role in developing and advising the PPC on the necessary decisions and policy documents, establishing a solid foundation for the implementation of the PFES policy This includes the creation of 25 legal decisions and several guidance documents directed by the PPC.
The Funds Management Council has successfully implemented projects to review and identify the boundaries of forest owners, as well as classify and gather statistics using provincial environmental services The Forest Protection and Development Fund of the province has completed the project, determining the boundaries and calculating the forest area for owners within the basins of hydropower plants This includes delineating and calculating forest areas for 72 hydropower plants in accordance with Circular No 60/2012/TT-MARD from the Ministry of Agriculture and Rural Development Utilizing SPOT 5 satellite imagery, a detailed map of forest status was created at a scale of 1:10,000, covering 117 communes and forest management companies in the district The project has effectively reviewed and identified forest boundaries in districts such as Van Ban, Bac Ha, Bao Yen, Bao Thang, Bat Xat, and Sapa Based on these findings, the Forest Protection and Development Fund has provided recommendations to the Provincial People's Committee (PPC).
The Decision 891/QD-PPC, approved on April 1, 2014, outlines the unit price and beneficiaries of forest environmental services for the years 2012 and 2013 The total forest area within the hydropower plant basin in the province spans 192,818 hectares.
In 2012, a total of 97,495 hectares of eligible forest areas in hydropower basins were compensated for their environmental services, covering eight different hydroelectric plants These areas received varying unit prices, ranging from a low of 32,000 VND per hectare to a high of 137,000 VND per hectare, with the provincial average unit price set at 65,000 VND per hectare.
The forest area in the basins of hydropower plants by the owner managers, including:
• Forest owners are organizations: 10 organizations with an area of 49643 hectares;
• Forest owners are individuals, households and rural communities: 21855 hectares, belonged to 9446 households;
Organizations who are not the owners have the responsibility for protecting forest:
38 organizations with an area of 25991 hectares
Table 5.1: Eligible forest area paid from forest environment service in the basin of hydropower in 2012
No Name of basins (hydropower plant)
The forest area in the basin to the provider Total
Organizations ( manage council of national park, special use forest , forestry companies)
Organizations are not forest owner
1 Van Ho (including: Ngoi Xan 1,2, Trung Ho,
2 Coc San Ha( including: Coc San, Chu Linh) 4582 3410 278 893
3 Su Pan 2 (including: Seo Choong Ho, Lao
Thac Ba hydropower plant( including: Bac
Cuong, Bac Ha, Bac Na, Coc Đam, Nam
Khanh, Nam Luc, Nam Phang, Thải Giang Pho,
Vinh Ha, Pa Ke, Bao Nhai)
In 2013, a total of 127,734.89 hectares of eligible forest in the hydropower basin received payments for forest environmental services across 12 hydroelectric plants, each with distinct unit prices ranging from a low of 38,000 VND per hectare to a high of 307,000 VND per hectare The average payment rate for forest services in the province was 103,700 VND per hectare.
The forest area in the basins hydroelectric plants by the owner managers, including:
• Forest owners are organizations including 11 units with an area of 65828 hectares
• Forest owners are individuals, households and rural communities with an area of
• Organizations who are not the owners have the responsibility for protecting forest: 46 organizations with an area of 28334 hectares
Bảng 5.2: Eligible forest area paid from forest environment service in the basin of hydropower in 2013
No Name of basins (hydropower plant)
The forest area in the basin to the provider Total
Organizations ( manage council of national park, special use forest , forestry companies)
1 Muong Hum (including: Ta Loi Nam Ho) 19542 8425 2974 8142
2 Van Ho (including: Ngoi Xan 1,2, Trung Ho, Sung Vui,
3 Coc San Ha( including: Coc San, Chu Linh) 4582 3410 278 893
4 Ngoi Đuong 2 (including: Ngoi Đuong 1) 2147 1741 13 392
5 Su Pan 2 (including: Seo Choong Ho, Lao Chai) 9786 8872 540 372
Thac Ba hydroppwer plant( including: Bac Cuong, Bac
Ha, Bac Na, Cac Đam, Nam Khanh, Nam lac, Nam
Phang, Thai Giang Pho, Vinh Ha, Pa Ke, Bao Nhai)
Achievements after 3 years implementation the policy on Payment for forest
a) Number of PFES user involve in PFES
The implementation of Joint Circular No 62/2012/JC MARD-MF, dated November 16, 2012, by the Ministry of Agriculture and Rural Development and the Ministry of Finance, provides a guiding mechanism for managing service payments for forest environmental services The province has adhered to the trustee contract for these payments, ensuring compliance with established plans and processes while maximizing legal efficiency and effectiveness in forest protection and development.
Table 5.3: Summary of the involvement of stakeholders in the policy for payment for forest environmental services:
No Stakeholders Year 2012 Year 2013 Unit
I Organization use forest environment services which signed contracts
II The suppliers of forest environment services
Forest owners committed to protect the forests
Organizations are not forest owners but are assigned to manage forest
Figure 5.1: The number of PFES user involve in PFES
After 3 years of implementation of the policy on payment for forest environment services, the number of organizations signning commitment to pay has increased quickly from 33 in 2012 to 63 units in 2013 (the policy on payment for forest environment has been put into practice since 2011 due to the merger between 2011 and 2012 data into 2012 data) The parties who supplied environmental services of forests have also increased significantly from 9494 to 10160 forest owners The increase of forest using and forest owner groups showed the coordination of the parties involved in order to protect the forest b) Outcome of PFES in cash in period 2011-2013:
The Government's payment for forest environment services policy mandates the establishment of the Forest Protection and Development Fund in Lao Cai, which is responsible for developing a plan and collaborating with relevant agencies to identify both the payers and recipients of forest environmental service payments This annual payment collection plan is then submitted to the Provincial People's Committee (PPC) for approval.
After 3 years being put into practice the policy has achieved the following resultsof Results of revenue for forest environmental services in 2012-2013:
Table 5.4: Revenues collect for Forest Protection and Development Fund in period 2011-2013 unit: 1000 VNĐ
Collection plan Actual collected Percentage
II Central Fund coordinate 2,177,250 2,177,250 3,003,500 7,358,000 1,967,517 2,032,483 2,350,000 6,350,000 86.30 III Interest on deposits 442,500 508,875 951,375 535,331 1,056,377 1,591,708 167.31
Figure 5.2: Total money are collected to PFES fund in period 2011-2013
Between 2011 and 2012, the revenue of the Forest Protection and Development Fund rose by 2,538,294,000 VND, followed by a significant increase of 11,567,113,000 VND from 2012 to 2013 The primary source of this revenue growth has been the hydroelectric plants operating within the province, contributing to a remarkable surge in earnings during this period.
In 2013, the payment contract commitments made by forest user groups significantly enhanced the implementation of revenue and expenditure plans for the forest protection and development fund, leading to improved achievement of the policy objectives for payment for forest environmental services.
Results of disbursing money for forest environmental services from 2011 to 2013:
Table 5.5 : Results of the implementation of payment for forest environmental services in Lao Cai province
The total funding approved Paid Unpaid
Figure 5.3: Results of the implementation of payment for forest environmental services in Lao Cai province (unit: 1000VND)
From February 2012 to December 31, 2013, the total funds allocated for forest protection and development in Lao Cai province amounted to 15.030 billion VND This included payments and advances for forest environmental services to forest owners, totaling 7.305 billion VND out of 19.669 billion VND, achieving a disbursement rate of 37%.
Table 5.6: Summary results of the implementation of payment for forest environmental services unit, object forest owners: unit: 1000 VND
Total funding paid unpaid Total funding Paid Unpaid
8 Organizations are not forest owners but are assigned to manage forest
Forest owners are households individuals, community residents
Figure 5.4: Disbursement result of PFES in Lao Cai to provider
The Fund has distributed payments to forest owners, totaling 5.832 million VND for organizations, 703.9 million VND for households, and 769.6 million VND for non-forest owner organizations By September 2014, the Fund for Forest Protection and Development in Lao Cai is expected to complete disbursement of the remaining amounts to forest owners The number of recipients has increased annually due to a rise in eligible forest owners following a review period.
The project for forest protection in rural Ban Lot, Bao Thang District has received approval under Decision No 2797/QD-PPC dated October 17, 2013, enabling the community to benefit from the payment for forest environmental services policy, with an allocated budget of 94 million VND for supporting project contracts.
Advancing payment reviewing projects, identify forest owners: 4.237 million VND
Expensing for fund of regular activities and repay completely the advance in the provincial budget: 3.3394 million VND c) Results of the management and protection forest:
Deploying and implementing of payment for forest environment services policy in recent years has had great impact on management and protection forest across the province
Efforts to protect and develop forests have significantly reduced illegal activities such as forest infringement, destruction, and fires These initiatives have led to improvements in forest area, coverage, and quality over the years, contributing to the overall health of the ecosystem.
Table 5.7: Summary of the management and protection of forests in 2011 - 2013
1 The forest area of the province 334893 344304 Ha
2 Forests have a supply of PFES 97498 127734 Ha
2.1 Forest owners are organizations 49645 73672 Ha
Forest owners are households individuals, community residents 21858 25723 Ha
Organizations are not forest owners but are assigned to manage forest 25994 28.339 ha
3 Number of forest fires 37 2 case
Number of violations in the management, protection of forests 283 127 case
Figure 5.5: Results of the management and protection of forests in three years from
In 2012, the province's total forest area was 334,893.22 hectares, which increased to 344,304.86 hectares by 2013, marking a growth of 9,411.64 hectares Of this area, 127,734.89 hectares were deemed eligible for cash forest environmental services, reflecting an increase of 30,263.36 hectares since 2012 This includes 73,672.42 hectares owned by organizations (up by 24,026.71 hectares), 25,723.3 hectares by households and individuals (an increase of 3,865.29 hectares), and 28,339.16 hectares managed by organizations not assigned as forest owners (an increase of 2,344.36 hectares).
Figure 5.6: The number of violations in the work of forest protection and management in the 3 years 2011-2013 (unit: number of case)
The total number of violations in management decreased from, 283 cases in 2012 to , 127 cases in 2013, the number of forest fires in 2013 was 2 cases decreased 35 cases compared with 2012 d) Income from PFES:
The implementation of payment for forest environment services policies has introduced a novel financial mechanism for communities dependent on forestry This initiative not only enhances forest protection through effective policy enforcement but also gradually improves local awareness and livelihoods In certain regions, the average payment per hectare of forest significantly exceeds the financial support provided by the state budget for forest conservation efforts.
(200,000 VND/ha), particularly in: Basin of Ngoi Duong hydropower plant, and Van Ho hydropower plant the payment price is 295,000 VND - 307,000 VND / ha / year
The implementation of the payment for forest environment services policy has significantly increased the average real income of households engaged in forest protection, with earnings ranging from 1,000,000 to 2,000,000 VND per household annually This income, combined with other forest-related earnings, has played a vital role in job creation, poverty reduction, and livelihood improvement, fostering a closer relationship between communities and their forests As a result, this initiative has contributed to political stability, social order, and safety in highland and border areas.
Some shortcomings, limitations and reasons
The implementation of the payment for forest environmental services policy in Lao Cai province has seen notable achievements; however, significant challenges remain, particularly concerning delayed payments for these services.
The collection of funds for forest environmental services involving organizations and individuals in the travel sector is accessible to all parties However, some stakeholders have suggested that the PPC be exempt from the policy due to misunderstandings Additionally, several entities, including tourism associations like Sapa and Victoria Hotel Company Ltd, have failed to finalize contracts and report their collections for forest environmental services, hindering the effective implementation of this policy.
The payment obligations encompass industrial production facilities utilizing water from surface and groundwater sources, as well as supply services, breeding grounds, and aquaculture Currently, the Ministry of Agriculture and Rural Development has not issued circulars or established rates for these entities as mandated by the Government, leading to inconsistencies in policy implementation and fairness.
In 2011 and 2012, the collection of funds for forest environmental services from hydropower plants faced significant challenges While some plants adhered to the policy, others delayed payments, citing difficulties with revenue sources, despite fully receiving payments for their electricity sold to EVN By March 2013, numerous organizations, primarily hydropower plants, collectively owed over 13 billion VND in PFES charges Notably, Tan An Hydropower Company, which operates the Phu Mau 1, 2, and 3 plants, had a debt of 709 billion VND, while the Lao Cai Hydropower Joint Stock Company also had outstanding payments.
The Nậm Hô hydropower plant, operated by Bat Xat Corporation of Energy Development in Southeast Asia, has a capacity of 7.5 MW and utilizes water resources from extensive forest areas and the Muong Hum streams However, it has faced a significant delay in PFES payments amounting to 897 million VND, as reported by the Department of Taxation, highlighting the financial challenges associated with the implementation of the Payment for Forest Ecosystem Services (PFES) policy.
From 2011 to the end of Q4 2012, the plant sold 61,732 thousand kW of commercial electricity, generating revenue of 1,234 million VND Despite notifications and official requests from the Forest Protection and Development Fund for the company to sign contracts and pay for environmental forest services as mandated by law, the company has refused to comply Currently, the total liabilities of organizations utilizing forest environmental services in Lao Cai province exceed 29 billion VND.
Table 5.8: Summary of the debt situation the money for forest environmental services in 2011-2014:
The unpaid money of organizations (million)
Figure 5.7: The unpaid money of PFES user
The low adherence to payment for forest environmental services is attributed to the financial capacity of subjects who consciously neglect their obligations, resulting in a collection rate that falls short of expectations Additionally, the nascent nature of this policy area, coupled with a lack of synchronized regulations and insufficient guidance documents, hampers effective implementation The absence of adequate sanctions for violations further enables organizations to evade their payment responsibilities, undermining the overall effectiveness of the policy.
The decline in fees for forest environmental services from these organizations has directly impacted the collection and payment processes for these services This, in turn, hinders the achievement of the local government's policy objectives regarding payments for forest environmental services.
39 b) Difficulties in determining the boundaries, forest, demarcation
The project review implementation has been progressing rapidly, focusing on defining boundaries, identifying forest owners, and classifying users of forest environmental services As of December 13, 2013, field reviews have been completed in 34 communes across four districts: Bac Ha (21/21 communes), Bao Thang (5/5 communes), and Bat Xat (8/14 communes) To ensure accurate payment for forest environmental services, a comprehensive review of the entire forest land area in the hydropower plant basin is necessary, along with an assessment of forest quality for each owner Previous allocations of forest land have shown inaccuracies, including overlapping areas and insufficient grounds for service payments Additionally, a lack of funding for the project is hindering the progress of revising and identifying forest owners.
The implementation of the staff payment policy for forest environment services is hindered by a lack of practical experience, resulting in performance that fails to meet established schedules Additionally, there is an unequal distribution of payment levels across various localities within the province.
The payment rates for forest environment services in the province are low and inconsistent across different localities, with significant disparities in unit prices ranging from 32,000 VND/ha to 307,000 VND/ha This variation creates inequality among forest owners, as many find the compensation insufficient to cover travel and paperwork expenses, leading to a reluctance to participate in the program Additionally, the slow disbursement of payments further discourages providers from engaging with the system.
The implementation of payment for forest environmental services is progressing slowly, with only 37% of the total required payments being disbursed to households in the province Specifically, in the Nam Tha Hydropower 6 and Nam Khoa 3 basins, a significant amount of funds remains unpaid.
Hydroelectric projects Nam Tha and Nam Khoa 6 have completed their acceptance testing and billing records, but funding for payments to households and individuals remains unallocated Additionally, payments for conservation areas and protective forests are still pending In 2013, the Management Board of Hoang Lien – Van Ban nature conservation areas required 502,496,860 VND, which has not yet been disbursed The slow progress in implementing payments for forest environmental services is hindering the achievement of objectives outlined in decree 99/ND-CP.
The inconsistency in the implementation of policies for payment for forest environmental services stems from a lack of coordination among ministries and sectors While staff are trained to execute these policies, their limited practical experience hampers effective deployment at the local level Additionally, challenges in assessing forest areas, conditions, and ownership create obstacles, resulting in unclear criteria for payments and ultimately affecting the timely disbursement of environmental service payments.
CONCLUSIONS AND RECOMMENDATIONS
Conclusion
Payment for environment services is a model to conservation which is being commonly applied in many countries around the world and has made certain achievements
In Vietnam, the value of forest environmental services is increasingly recognized by policymakers and stakeholders, particularly the government, which sees it as an opportunity to implement Payment for Forest Environmental Services (PFES) This initiative is viewed as a transformative approach for the forestry sector, providing essential financial resources for sustainable forest management Since the implementation of Decree No 99/2010 on September 24, 2010, local governments have successfully mobilized social resources for forest protection and development, leading to positive changes and achieving the policy's objectives over nearly three years.
Public awareness regarding the execution and implementation of environmental policies is on the rise In 2011, numerous organizations and individuals engaged in forest environmental services diligently fulfilled their obligations, reflecting a serious commitment to sustainable practices.
Despite the successes achieved through the implementation of forest environmental services payment policies in Lao Cai province, several limitations persist that hinder effective policy execution Significant outstanding payments exist, and the processes for reviewing progress, identifying forest owners, and disbursing funds are sluggish These challenges primarily stem from overlapping forest land allocations from previous periods and the lack of precise, usable data sources, which adversely affect the revision and identification necessary for the payment and disbursement of forest environmental services.
The payment for forest environment services varies across different basins, resulting in disparities in unit prices between provincial areas.
Recommendations
To effectively enforce the payment for forest environmental services (PFES) policy, it is essential to conduct specific research that quantifies environmental values This approach will ensure high efficiency and equity, aligning with the unique circumstances of the local area.
1) Revising the policy on PFES to resolve difficulties about delayed PFES, example: making laws to resolve delayed PFES
2) Making Decisions, Circulars to implement PFES policy easier, such as: Instructing to demarcation, instructing to use coefficient K easier to make equal level of payment, making training courses to improve ability of officer of PFES fund,…
3) Making mechanisms to disburse moneys of PFES better.