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Consultant report submitted to DANIDA (09/2007) Institutional and Regulatory Context of Natural Resource Management in Vietnam By MA Dinh Duc Truong Faculty of Environmental and Natural Resource Economics National Economics University (NEU) 207, Giai Phong Road Hanoi, Vietnam Email: dinhductruong@yahoo.com September, 2007 CONTENTS I INTRODUCTION II LAND GOVERNANCE IN VIETNAM 4 Overview Land institutional arrangement Regulatory framework and land use right in Vietnam Assessment of land reform process in Vietnam III WATER GOVERNANCE IN VIETNAM 12 Overview on water resource in Vietnam 12 Institution arrangement for water resource management in Vietnam 12 Overview of the process of formation and development of 14 Vietnam’s legal system on water resource protection Assessment of Vietnam’s legislation on WRP IV MINERAL RESOURCE GOVERNANCE IN VIETNAM 15 20 Overview on mineral resources in Vietnam 20 Institution arrangement for mineral resource management in 20 Vietnam Government regulatory and policy 21 Assessment of mineral regulatory implementation in Vietnam 23 V CONCLUSION 25 REFERENCES 26 Acronyms DFID Department of International Development DGMV Departmentof Geology and Minerals of Vietnam DONRE Department of Natural Resource and Environment GDLA General Department of Land Administration GDHM General Department of Hydrology and Meteorology LEP Law on Environment Protection LM Law on Minerals LL Land Law LWR Law on Water Resources NWRC The National Water Resources Council LUC Land use certificate LUR Land use right MARD Ministry of Agriculture and Rural Development MOC Ministry of Construction MONRE Ministry of Natural Resources and Environment MOI Ministry of Industry MOH Ministry of Health MOF Ministry of Finance MOT Ministry of Transportation MPI Ministry of Planning and Investment UNDP United Nation Development Programme WHO World Health Organization WRP Water Resource Protection I INTRODUCTION In 1986, the Government of Vietnam embarked on a renovation process named "Doi moi" to guide the country from a centrally-planned toward a market economy Vietnam has since then opened up its economy and has entered the process of trade liberalization While has been successful in generating strong economic growth, it is necessary to take measures to protect and use the country’s natural resources in a sustainable and efficient way After decades of wars and being under a central economy which considers all natural resources as common property, the natural resources in Vietnam had depleted and degraded quickly (Chung 2002) However, with the ongoing reform process, together with globalization, Vietnam has a unique opportunity to learn from the experiences of other countries for the development and implementation of creative regulatory frameworks and policies for natural resource management (Son 2005) For some recent years, Vietnam has implemented a number of policies and reforms to comply with its commitment on sustainable development that emphasizes the importance of sustainable use of natural resource Several Government strategic documents about sustainable development have been promulgated such as: The National Strategy on Economic Growth, Hunger Alleviation and Poverty Reduction (2002), National Sustainable Development Strategy (Agenda 21) (2004), National Strategy on Environmental Protection to 2020 (2003), Law on Environmental Protection and the like Beside changes in regulatory system, there have also been significant reforms of institutional structures to deal with natural resource issues Accordingly, the roles and responsibilities for implementing management policies in Vietnam have been more decentralized than those of two decades ago (Nhu et.al 2006) This paper aims at examining the institutional and regulatory aspects of natural resource management in Vietnam Focusing on land, water and mineral, it addresses the question that how these resources are managed and how the policy-making process regarding management has been made For each resource, the paper will first highlight the institutional context of its management, then to provide an overview on legal framework and policies which are presently in active for managing these resources Finally, achievements and shortcomings when implementing these framework and policy are also identified and analyzed II LAND GOVERNANCE IN VIETNAM Overview According to Vietnam Constitution, land is the property of the entire people, which is allocated or leased by the State to organizations, households or individuals for long-term use Depending on their status, land users are fully or partly granted the rights of land exchange, transfer, inheritance, mortgage, lease and investment into joint-venture (Vo 2002) The land policies in Vietnam have been more centrally legalized in more than two decades from early 1980s Beginning with the 1980 Constitution, followed by the 1988 Land Law, then the 1993 Land Law and most recently the 2003 Land Law (Nhu 2006) The last one has perfected further the land management mechanism in Vietnam on the basis of supplementation and the amendment of a number of articles of the 1993 Land Law According to the new Land Law in 2003, land has initially been considered as a commodity that will be openly traded in market However, it is a special commodity and special stipulations will be worked out for this market Nevertheless, it is an especially important step forward to help Vietnam develop a rational market mechanism, spurring a healthy socio-economic development, especially in rural areas, and particularly in the mountainous regions that abound in land potential, but the inhabitants are the poorest (Ausaid 2001) Land institutional arrangements In 1986, the State of Vietnam decided to innovate its economic system under the market economy model with state management Since then, land administration has been regarded significant to secure political stability, social justice and economic development In general, the land administration system of Vietnam is a nationwide four-level system including the MONRE at the central level, DONRE at provincial level belonging to provincial People Committee (provincial government), Division of Natural Resources and Environment at district level belonging to District People Committee and one/two Land Officers in each commune (MONRE 2007) In early 1994 Vietnam Government decided to establish the General Department of Land Administration (GDLA) by merging and reorganizing two state bodies; General Department of Land Management and National Department of Surveying and Mapping (Vo 2002) In 2002, the Ministry of Natural Resources and Environment (MONRE) was established by merging the General Department of Land Administration, General Department of Meteorology and Hydrology, National Environmental Agency (belonging to MOSTE), General Department of Geology and Minerals (belonging to MOI) and Department of Water Resource Management (belonging to MARD) Within MONRE, Department of Land and Department of Land Registration and Statistics have main functions to implement state management regarding land in Vietnam Specifically, Department of Land is responsible for state management of land policy and regulatory while Department of Land Registration and Statistics is in charge of managing land survey, assessment, valuation, classification; land use planning, land allocation, lease and claimation; land inspection and mapping At other levels, land administration bodies are responsible for the following tasks regarding land management:  Implementating of cadastral system including land register, cadastral, mapping, cadastral documentation, land tenure certificate issuance, and land record system update;  Carrying out land investigation and inventory for land classification, land assessment, and land valuation;  Undertaking land statistics and current land use mapping;  Setting long term and annual land use planning;  Implementing land inspection;  Solving land disputes;  Making reference geodetic system definition, coordinates and leveling control network construction;  Managing aerial-satellite imagery  Doing hydrographic survey;  Setting topographic map and base map systems for inland and seabed;  Managing geo-database and Land-database Figure 1: Institutional Structure of land management in Vietnam National level government MONRE Department of Land Department of Land Registration and Statistics Provincial level Provincial People Committee District level District People Committee Department of Natural Resource and Environment Division of Natural Resource and Environment Commune level Commune People Committee government Management line Office of Natural Resource and Environment Technical guidline Data reported line Source: Trung, T.N (2005) Regulatory framework and land use right in Vietnam Legal framework of land management Soon after the Democratic Republic of Vietnam (former name of the Socialist Republic of Vietnam) was founded, Vietnam suffered from wars for 30 years between 1945 and 1975 Land administration was ignored in the following 1975 - 1986 period because of the centrally planned economy model (Que 1999)l In the first half of 80’s of the last century, Vietnam’s economy had very low productivity in agriculture, which caused lack of food for social needs The economic solution to this problem was based on the allocation of agriculture land to individuals and households In 1986, the State of Vietnam decided to innovate its economic system under the market economy model managed by the State Since then, land administration has been regarded significant to secure political stability, social justice and economic development The first Land Law of Vietnam was approved by the National Assembly in 1988 After having been implemented for years, some articles proved to be not encouraging enough for development of the market economy (Chung 2001) A revised land law was therefore promulgated and approved by the National Assembly in 1993, called the 1993 Land Law Then the 1993 Land Law was replaced by the 1998 Land Law and most recently the 2003 Land Law The last one has perfected further the land management mechanism in Vietnam on the basis of supplementation and the amendment of a number of articles of the 1993 Land Law According to this new Land Law in 2003, land use right has initially been considered as a commodity that will be openly traded in market (Ausaid 2001) Implementing the Decree on the Land Law, Decree 181/2004/ND-CP ("Decree 181") was issued by the Government on 29 October 2004 Decree 181 contains 186 articles and covers a wide range of land issues It repeals nine Decrees and partly repeals certain other legal instruments Decree 181, which had been expected to be issued prior to July 2004 (which was the effective date of the Land Law), deals with the planning of land use, allocation of land, lease of land, change of purposes of using land, land resumption and land requisition, land use right certificates, the real estate market, rights and obligations of land users, procedures for exchanges, transfers, leases, mortgages and inheritances of land and regulations on the settlement of claims and disputes in respect to land The Decree came into effect on 16 November 2004 (Nhu 2006) Some impotantlly admended points in this Decree is summarized as follow: Real Estate Market The Decree recognizes the ‘real estate market’ and describes land as a ‘special commodity’ Permitted activities in the real estate market include conversion, assignment, lease, sub-lease, mortgage, inheritance of or gifting land use rights, provision of guarantees secured by land use rights, contribution of capital by way of land use rights and investment in construction and development of residential property However, not all land users are entitled to carry out all these activities The activities which are allowed depend on the land users legal status, whether the land is allocated or leased by the State and the land users residual financial obligations toward the State in respect to that land (if any) Land Use Right Certificates A land use right certificate (LURC) is the form of registration of "ownership" of land conferring various rights on the owner However, most conferred rights fall short of the freehold title to land recognized in many other jurisdictions LURCs are to be issued in a standard form for all types of land Decree 181 also deals with the issuance of LURCs in specific circumstances including to land users using land for construction of offices of administrative agencies and to land users using land for construction of housing developments and apartment buildings Overseas Vietnamese and Foreigners Under current land laws, with the exception of overseas Vietnamese who can be allocated with land from the State, foreign organizations and individuals (including foreign invested enterprises) are permitted to lease land from the State only, except where the land is located in an industrial zone or in circumstances where the Vietnamese partner to a joint venture contributes land as capital to the joint venture company Decree 181 has consolidated a number of legal instruments dealing with the use of land by foreign invested enterprises as well as providing new provisions Procedures for Allocation or Lease of Land After obtaining the agreement of the authority on the location of the project, the foreign investor must submit an application file for allocation or lease of land to the Department of Natural Resources and Environment ("DNRE") The DNRE then will examine the application and submit documents to the provincial people’s committee for issuance of a land use right certificate The timeframe for issuance of a land use right certificate is stated to be 20 working days from the date of receipt of appropriate documents from the investors Rights and Obligations of Joint Ventures in Using Land Joint ventures between foreign organizations, foreign individuals and overseas Vietnamese with a domestic company in respect of which the Vietnamese partner contributes land use rights to the joint venture shall not be required to convert the land title to land lease in some circumstances In such cases, joint venture companies will not be required to convert the contributed land to a "leasehold title" and will have rights and obligations similar to those of the Vietnamese company which contributed the value of land use rights to the joint venture These regulations also apply to joint ventures to which an overseas Vietnamese who has been allocated land by the State contributes the land use rights value and has paid the land use fees to the State In particular, such joint ventures are entitled to assign the land use rights and infrastructure attached to the land, to lease the land use rights and infrastructure attached to the land or to contribute the land use rights to form a joint venture with Vietnamese organizations, overseas Vietnamese, foreign organizations or individuals Besides these two main legal documents, other important regulations promulgated for land management in Vietnam include:  Prime Minister Decree No 64/1993 on the enactment of regulations on the allocation of land to households and individuals for stable and long term use for the purpose of agricultural production  Prime Minister Decree No 02/1994 on the enactment of regulations on the allocation of forestry land to organizations, households and individuals for stable and long term use for forestry purposes  Prime Minister Decree No 61/1994 on buying, selling and trading in residential houses  Government Resolution No 01/CP 1995 on the allocation and contracting of land to state enterprises for agriculture, forestry and aquaculture production;  Government Decree No 163/1999/ND-CP concerning the allocation and lease of forest land to organizations, households and individuals for long-term forestry purposes;  Prime Minister Decision No 178/2001/QD-TTg on the rights and obligations of households/individuals who have been allocated forest land for benefit sharing  MONRE Circular 24/2004/QD-BTNMT on the certificate of land use rights  Prime Minister Decree No 188/2004/ND-CP on the methods to valuing land prices and price frame for land categories  MOF Circular No 114/2004/TT- BTC provide guilines for the implementation of the Prime Minister Decree No 188/2004/ND-CP on the methods to valuing land prices and price frame for land categories  Prime Minister Decree No 198/2004/ND-CP on the collection of land use tax  MOF Circular No 117/2004/TT- BTC provide guilines for the implementation of the Prime Minister Decree No 198/2004/ND-CP on the collection of land use tax  Prime Minister Decree No 197/2004/ND-CP on the compensation and resettlement support in case of State land reclaimation  MOF Circular No 116/2004/TT- BTC provide guilines for the implementation of the Prime Minister Decree No 197/2004/ND-CP on the compensation and resettlement support in case of State land reclaimation  Prime Minister Decree No 17/2006/ND-CP on changes and admendments of some articles in Decrees guiding the implemention of Land Law  MONRE Decision No 08/2006/QD-BTNMT about regulations on land use certificate  Prime Minister Decree No 84/2007/ND-CP on admendments of the issue of land use certificate, land reclaimation, the implementation of land use right, procedures for land compenstation, resettlement and denunciation  MONRE Circular No 06/2007/BTNMT on the guidelines of Prime Minister Decree No 84/2007/ND-CP on admendments of the issue of land use certificate, land reclaimation, the implementation of land use right, procedures for land compenstation, resettlement and denunciation  Prime Minister Decree No 123/2007/ND-CP on complementing some articles of Prime Minister Decree No 188/2004/ND-CP on the methods to valuing land prices and price frame for land categories Land use right development The 1980 Constitution vested all rights in land to the state This principle appeared in the 1988 Land Law, but was changed to people’s ownership and state management in the 1992 Constitution and 1993 Land Law Since the central and local governments exercise the right of land ownership on behalf of the people, they also have rights to possess, use and dispose the land The 1993 Land Law (LL) set out six main principles governing land: (1) land belongs to the entire people; (2) is uniformly administered by the state; (3) which promotes effective and economical usage Further, (4) the state protects agricultural land; (5) encourages investment in land; and (6) stipulates the value of land (LL 1993) While retaining ultimate control over legislation and policy, the central state has devolved land management to People’s Committees City level People’s Committees, for example, possess broad discretionary powers to allot land use rights in urban areas Local authorities are also responsible for promulgating zoning and land use regulations, registration and settling certain types of land use disputes As a concession to the emerging mixed market economy, the Land Law recognized various private interests in land, which can be transferred, leased and encumbered, without disturbing the underlying principle of state ownership of land These rights were extended and clarified by the 1998 amendment to the Land Law Land use rights (quyen su dung dat) convey extensive occupation, disposal (vat quyen) and encumbrance rights Private ownership of immovable other than land, such as building and trees is permitted under the Civil Code (articles 172.205) Maintaining the socialist distinction between income and non-income 10 Along with establishment of MONRE, Department of Natural Resources and Environment (DONRE) are formed in each province These Departments and its lower levels, District Divisions of Natural Resource and Environment, are responsible for state managing water resource and relating issues at their authority levels Overview of the process of formation and development of Vietnam’s legal system on water resource protection (WRP) The formation and development of the legal system on WRP proceed together with the formation and development of the human perception of the role of water In the past, people thought that water was an infinite natural resource and, therefore, paid more attention to exploitation and use of water for domestic consumption and production than to its protection Hence, the then legislation seemed to only provide for the exploitation and use of water sources (including groundwater and surface water) As the society develops, human awareness about water resources has gradually changed Water is not an infinite but finite natural resource Humans’ careless activities have been polluting water sources, which, as a precious natural resource, will be exhausted unless people know how to exploit and use as well as protect them The shortage of clean water has become a global concern This constitutes one of the main conditions giving rise to the regulations on WRP Today, WRP legislation not only provides for the rational exploitation and use of water sources but also attaches importance to protecting them against contamination (Bennett and Lai 2005)) In Vietnam, the WRP legislation had not strongly developed until the promulgation of the 1993 Environment Protection Law, which clearly stipulates, among other things, the prevention, combat and overcoming of water pollution Particularly, on May 20, 1998 the Xth National Assembly, 3rd session, passed the Law on Water Resources, regulating the unified and comprehensive management as well as rational exploitation and stringent protection of water resources Then, a series of legal documents on WRP have been promulgated, including:  Decree No 179/1999/ND-CP of December 30, 1999 providing for the implementation of the Water Resources Law;  The 2000 Ordinance Amending and Supplementing a Number of Articles of the Ordinance on Flood and Storm Prevention and Combat;  The 2000 Ordinance on Dikes;  The 2001 Ordinance on Exploitation and Protection of Irrigation Works;  Decree No 91/2002/ND-CP of November 11, 2002 defining the functions, tasks, powers and organizational structure of the Ministry of Natural Resources and Environment (MONRE); 16  Decision No 600/2003/QD-BTN&MT of May 8, 2003 defining the functions, tasks, powers and organizational structure of the Water Resources Management Department under the MONRE;  Decree No 67/2003/ND-CP of June 13, 2003 on environment protection charges for waste water;  Decision No 05/2003/QD-BTN&MT of September 4, 2003 issuing the Regulation on licensing groundwater exploration, exploitation and drilling practice;  Joint Circular No 125/2003/TTLT-BTC-BTNMT of December 18, 2003 of the Ministry of Finance (MoF) and the MONRE, guiding the implementation of Decree No 67/2003/ND-CP of June 13, 2003 on environment protection charges for waste water;  Decree No 149/2004/ND-CP of March, 17, 2004 regulating administrative fines on water resources  Decree No 149/2004/ND-CP of July 27, 2004 providing for the licensing of exploration, exploitation and use of water resources and discharge of waste water into water sources  MONRE Circular No 02/2005/BTNMT guiding the implementation of Decree No 149/2004/ND-CP of July 27, 2004 providing for the licensing of exploration, exploitation and use of water resources and discharge of waste water into water sources  Prime Minister Decision No 81/2006/QD-TTg approving the Vietnam National Strategy on Water Resource to 2020  MOF Circular 05/2006/TT-BTC guiding the natural resource tax for water used for producing hydro power Besides direct law and legislation on water resources, management of water resources is linked to several related laws such as Law on Environment Protection (LEP)-1993 and revised on 2001, Law on Land (LL)-revised 2003, Law on Minerals (LM)-1996 LEP focus on state management on environmental protection, which aims to preserve a healthy and beautiful environment, ensure balance of ecology, prevent impact of man and nature on the environment, and ensure rational and economical exploitation and utilization of natural resources State management of water resources is a part of natural resources management and needs to be coordinated with environmental protection (Tuyen 2005) LL was revised on 2003; stipulate principles of land ownership and state management of land LL includes the responsibility of different levels in land use planning and land allocation, which have an important linkage to use and ownership of watershed and then, water quality and quantity 17 LM indicates the management, protection and investigation of mineral resources, which includes regulations on exploitation of mineral water, natural hot water and processing of hard minerals LM and LWR have some similar objectives relating to water quality and exploitation (MARD 2006) Assessment of Vietnam’s legislation on WRP 4.1 Achievements Over the past years, Vietnam’s legislation on WRP has been further improved, actively contributing to mobilizing all social resources for WRP The active role of the WRP legislation can be seen in the following: First, the promulgation of WRP legislation shows the Party’s and State’s concern about the creation of a viable legal framework for the strict management of water resources The enforcement of the Water Resources Law has step by step put the water management and use into order, raised the people’s awareness about the rational and thrifty use of water and protection of water sources from pollution, contamination and exhaustion Second, the WRP legislation, together with other legal documents on land, forest, mineral and aquatic resource protection…, has contributed to perfecting Vietnam’s legal system on environment protection under the conditions of market economy This has manifested not only the Party’s and State’s concern about the acceleration of economic development and improvement of people’s living standards but also their special attention to the rational exploitation and sustainable protection of natural resources, assuring the people’s right to live in a clean environment Third, Vietnam’s WRP legislation has approached and “localized” the integrated water resource development and management viewpoint of the United Nations Conference on Environment and Development (“Earth Summit”) in Rio de Janeiro in 1992 Chapter 18.8 of Agenda 21 on protection of the quality and supply of freshwater resources reads: “Integrated water resource management is based on the perception of water as an integral part of the ecosystem, a natural resource and social and economic goods, whose quantity and quality determine the nature of its utilization To this end, water resources have to be protected, taking into account the functioning of aquatic ecosystems and the perenniality of the resource, in order to satisfy and reconcile needs for water in human activities.” This viewpoint emerged when mankind came to realize that water is a finite natural resource while the demand for qualitative and quantitative water exploitation and use is increasing The integrated water resource management is enshrined in the Water Resources Law’s provisions on:  The establishment of a system of agencies exercising uniform management over water resources;  The contents and competence of state management over water resources; 18  The protection of water quality; prevention, combat and overcoming of consequences and harms caused by water;  The licensing of water resource exploitation and use;  The adoption of financial policies on water resources Fourth, the viewpoint on water resource protection, exploitation and use has been deeply embedded in the WRP legislation, which states that the prevention, combat and overcoming of consequences and harms caused by water must comply with the catchments basin planning, ensuring the systematic distribution of catchments areas, and not splitting them by administrative territory Under the Water Resources Law, the catchment’s basin planning management is regarded as a task of State management over water, covering: “(i) The elaboration, submission for approval, and monitoring of the implementation of, catchment’s basin planning, ensuring the uniform management of catchment’s basins according to such planning in association with management based on administrative territories; (ii) Coordination between the relevant agencies of ministries, branches and localities in conducting basic surveys, inventorying and assessing water resources in the catchment areas as well as in elaborating, submitting for approval, and monitoring the execution of, sub-basin plannings; (iii) Proposals on the settlement of disputes over water resources in the catchment basins.” (Clause of Article 64) Fifth, the WRP legislation has also provided for international relations on water resources This is an issue of paramount importance for Vietnam to make use of the cooperation and assistance from non-governmental organizations and international community in general and the coordination of the countries sharing the same water sources in particular in the rational use and sustainable protection of water resources Under the current legislation, international cooperation on water resources will comply with the following basic principles: “(i) Respect for the sovereignty, territorial integrity and interests of the countries sharing the same water sources; (ii) Ensuring equity, rationality, mutual benefits and sustainable development in the exploitation and use of transboundary water sources; (iii) Causing no harms to the rights and interests of the countries sharing the same water sources in accordance with international agreements which Vietnam has signed or acceded to; (iv) Complying with Vietnamese laws and implementing international agreements which Vietnam has signed or acceded to; and respecting international law.” (Article 53 of the Water Resources Law) The WRP legislation has also established a legal mechanism for the settlement of disputes over transboundary water sources Accordingly, all disputes over sovereignty in protection, exploitation and use of such water sources; prevention, combat and overcoming of consequences and harms caused by water sources between the countries sharing the same water sources, including Vietnam, will be settled by the State of Vietnam and related States through negotiations in accordance with international agreements which Vietnam has signed or acceded to and with international practices (Clause 1, Article 56 of the Water Resources Law) (Tuyen 2005) 19 4.2 Shortcomings Besides its obvious benefits, Vietnam’s WRP legislation has also revealed shortcomings and limitations, which should be redressed to satisfy the requirements of State management over water resources in the period of accelerated industrialization and modernization These shortcomings and limitations can be seen in the following aspects: First, the lack of legal documents guiding the Water Resources Law, which diminishes the effectiveness of State management over water resources The required documents and regulations include:  Documents guiding the order and procedures for registration, declaration, and licensing of the exploitation and use of groundwater and surface water as well as discharge of waste water  Regulations on application forms for registration, declaration and use of water sources; forms of permit for exploitation and use of water sources; and criteria and norms for discharge of waste water  Documents on the establishment of a specialized system for inspection of water resources as well as regulations on functions, tasks and powers of inspectors;  Regulations on administrative sanctions in the domain of water management and use;  Detailed guidance on basic surveys and assessment of water resource reserves, quality and planning  Regulations on protection of water quality; prevention of acts of exhausting water sources;  Regulations on natural resources charges, fees and taxes applicable to organizations, households and individuals exploiting and using water Second, the lack of specific regulations on functions, tasks and powers of the catchment basin-management boards; on coordinative and cooperative relations between these boards and State management bodies in charge of water resources at all levels (the MONRE, the Water Resources Management Department and the local People’s Committees) in water resource management and protection; and the lack of a transparent mechanism for combination of water resource management based on catchment basin planning with that based on administrative territories Third, the lack of a national long-term strategy and national plan of action for water resource management and protection to meet the national socio-economic development requirements This is reflected in the absence of of:  A comprehensive assessment and survey of the reserve and scale of water sources nationwide; 20  A complete and comprehensive assessment of the quantity and quality of water sources;  A regular and thorough planning of water resources for orienting the management and use of water in the country  A system of archived dossiers, information and database on water resources, serving as basis for State management over water At present, data and information on water resources are updated late and inconsistent Their publicity and transparency have not been ensured, causing difficulties to their exploitation, reference and access Fourth, the fragmented management over water resources Currently, water resource management is undertaken by two agencies under two different ministries: (i) the Water Resource Management Department under the MONRE, which performs the State management over natural resources and environment to ensure sustainable water resources; and (ii) the Irrigation Works Management Department under the Ministry of Agriculture and Rural Development- MARD, which exercises the State management over water exploitation and use in service of agricultural and forestry irrigation as well as prevention and mitigation of harms caused by water to human life and production However, so far the State has not yet promulgated any legal documents on coordination and cooperation between these agencies in water resource management In fact, the two agencies independently perform their assigned tasks without close and regular coordination in water resource management, which also attributes to the poor effectiveness and efficiency of the State management over water resources Fifth, the unsuitability of a number of provisions of the 1998 Water Resources Law to the current practical situation Under this Law “the MARD shall take responsibility before the Government for performing the function of State management over water resources under the latter’s assignment” (Clause of Article 58) This function, however, is designated to the MONRE according to the XIth National Assembly’s Resolution No 02/2002/QH11 of August 5, 2002 and the Government’s Decree No 91/2002/ND-CP of November 11, 2002 Hence, the Water Resources Law should be revised to suit the practical requirements and create favorable conditions for the MONRE to better manage water resources Sixth, the lack of regulations on water management, exploitation and use Clause 1, Article of the Water Resources Law stipulates: “Water resources include surface water, rainwater, groundwater and seawater sources in the territory of the Socialist Republic of Vietnam Seawater and groundwater in exclusive economic zones and continental shelves are prescribed in other legal documents Mineral water and natural hot water are prescribed in the Law on Minerals.” The current WRP legislation, however, provides for the management, exploitation and use of surface and underground water sources only, but not seawater, mineral water and natural thermal water sources (Tuyen 2005) - Weak Enforcement of legal redulations 21 IV MINERAL RESOURCE GOVERNANCE IN VIETNAM Overview on mineral resources in Vietnam According to the Vietnamese Government, the Geological Survey of Vietnam completed regional geologic mapping of the country’s land area on 1994 On the basis of the Government’s preliminary geologic surveys and detailed exploration of 500 mineral occurrences and deposits, a wide variety of minerals were identified—antimony, bauxite, carbonate rocks, clays, chromite, coal, copper, natural gas, gemstones, gold, graphite, iron ore, lead, manganese, nickel, crude petroleum, phosphate rock (apatite), pyrophyllite, rare earths, silica sand, tin, titanium, tungsten, zinc, and zirconium (DGMV 2007) Except construction aggregates, coal, and petroleum, these mineral resources remained largely unexploited (Le 1995) In 2000, Vietnam was the world’s fourth largest producer of anthracite and the sixth largest producer of crude petroleum in the Asia and the Pacific region (National Mining Association 2000) None of Vietnam’s mineral resources, however, was of world significance The mining and quarrying sector, which played an important role in Vietnam’s economic development, was an important sector of the Vietnamese economy The output of the mining and quarrying sector, which included the output of the oil and gas industry, contributed about 7% to Vietnam’s gross domestic product (GDP), which was estimated to be $31 billion in 2000 Exports of crude petroleum alone accounted for about 18% to the total export earnings (Wu 2001) Institution arrangement for mineral resource management in Vietnam In 1996, the Department of Geology and Minerals of Vietnam was established under the Ministry of Industry by merging the Geological Survey of Vietnam and the State Department for Management of Mineral Resources In 2002, after the establishment of the Ministry of Natural Resources and Environment (MONRE) by Decree No 91/2002/ND-CP, the function of State management for geology and minerals was moved from the Ministry of Industry to MONRE Accordingly, in 2002 the Department of Geology and Minerals of Vietnam was also moved from the Ministry of Industry to the Ministry of Natural Resources and Environment (MONRE 2007) According to the Government Directive 10/2005/CT-TTG, MONRE takes the lead and coordinate with the Ministry of Public Security, Ministry of Finance (the General Department of Customs) and the People Committees of provinces and cities directly under the central authority to organize control over the mining and export of iron, leadzinc, titanium, chromite, manganese ores of the organizations and individuals holding mining licences; revoke mining licences stop the export of minerals according to its jurisdiction for the cases of violating the provisions stated in the licences issued, especially those on the mining duration, acreage of the mining areas, mining 22 production, requirements concerning mineral processing, occupational safety and environmental protection (Vietnam Government 2005) The Department of Geology and Minerals of Vietnam is an organization directly under the Ministry of Natural Resources and Environment, having the function to implement State management of geology and mineral resources, comprising: basic geological survey, basic mineral resources survey, mineral activities, protection of mineral resources and to organise the implementation of basic geological survey, basic mineral resources survey, assessment of mineral resources potential and the discovery of mineral deposits throughout the country Along with establishment of MONRE, Department of Natural Resources and Environment (DONRE) are formed in each province These Departments and its lower levels, District Divisions of Natural Resource and Environment, are responsible for state managing mineral resources and relating issues at their authority levels Government regulatory and policy To attract foreign investment in the mining sector, the Government of Vietnam enacted the Law on Foreign Investment in 1987 and the Ordinance on Mineral Resources in 1989 In the past 20 years, several production-sharing contracts to explore for oil and natural gas and numerous exploration licences to explore for coal, copper, gold, nickel, manganese, rare earths, tin, titanium, tungsten, zinc, and zirconium in Vietnam had been granted bythe Government to foreign companies from Australia, Belgium, Canada, France, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, Norway, Singapore, Sweden, Thailand, the United Kingdom, the United States, and other countries (Wu 2000, Imrich 2001) To provide a more competitive and favorable environment for foreign investment in its mining sector, Vietnam’s National Assembly passed a new Mining Law in March 1996 to replace the 1989 Ordinance on Mineral Resources To implement the new law, the Government issued the Decree No 68 CP in November 1996 on regulations and guidelines for the frameworks for managing mineral resources and such activities as geologic survey, prospecting, exploration, development, production, and processing of minerals in the mining sector (Nguyen 1997) The Government issued a new foreign investment Decree in 1998 that disallowed 100% foreign ownership in oil and mineral exploration projects but eased licensing and export rules for export-oriented companies (Far Eastern Economic Review, 1998) Since the new Mining Law became effective in 1996, the exclusive right of a successful exploration company to obtain mining licences, the sole right of an exploration company to conduct exploration within its licence’s area, and the ability of a foreign mining company to export unprocessed minerals had been the major concerns of foreign investors (Wu 2000) Vietnam’s 1996 Law on Minerals has been amended by a new law The Law on amendments and supplements to the law on minerals (the revised law), which came into 23 effect on October 2005, was adopted swiftly as part of an expedited law -making process to comply with World Trade Organization accession requirements Perhaps due to the rush, the revised law does not touch on most of the regulatory problems contained in the previous law A complete review of these problems has been deferred until the 2008 national assembly session (Foster 2006) To guide the implementation of the new law, two important regulations were also issued namely the Prime Minister Decree 160/2005/ND-CP on ‘Stipulating detailed provisions on the implementation of the law on amendment and supplement of some articles of the mineral law’ and the MONRE’s Circular 01/2006/TT-BTNMT providing guidance on the implementation of Decree 160/2005/ND-CP However, as the revised law which does not contain any significant reform, neither the Decree nor the Circular contains many substantive changes Figure 3: Legal documents on mineral resource management in Vietnam Top of Form Issued Number Issued Date Quote 01/2006/TTBTNMT 01/23/2006 Providing guidance on the implementation of Decree No 160/2005/ND-CP dated 27 December 2005 of the Government and the Mineral law 160/2005/NĐ-CP 12/27/2005 Decree No 160/2005/ND-CP dated 27 December 2005 of the Government and the Mineral law 46/2005/QH11 06/14/2005 Law on amendment and supplement of some articles of the mineral law 10/2005/CT-TTG 04/05/2005 Directive of the prime minister on strengthening the state management of mineral exploration, exploitation, processing and export activities 14/2003/QDBTNMT 01/09/2003 Decision of the Minister of natural resources and environment 91/2002/ND-CP 11/11/2002 Decree of the Government Defining the Functions, Tasks, Powers and Organization Structure of the Ministry of Natural Resources and Enviroment 37/2002/QD-DCKS 09/13/2002 Decision of the Minister of Industry 46/2002/TTLT-BTC- 05/21/2002 Inter-Circular Guiding the Method of Determining the Value, BCN Mode and Procedures of Payment of Charges for the Use of the State-owned Data and Information Converning Results of Mineral Prospecting and Exploration 76/2000/ND-CP 12/15/2000 Decree of the Goverment on the Implementation of the Mineral Law (Revised) 126/1999/TTLT- 10/22/199 Providing Guidance on Marking Escrows for Enviromental 24 BTC-BCNBKHCNMT Rehabilitation in Mineral Mining Actives Source: Department of Geology and Minerals of Vietnam (2007) Assessment of mineral regulatory implementation in Vietnam 4.1 Achievements The revised Law, Decree 160 and Circular contain the following amendments and supplements: It provides the basis for a ‘mineral master plan’, detail of which will be provided by the government In principle, any mining activities in violation of the mineral master plan (when the plan is published) are prohibited Decree 160 sets out some elements to be included in master plans (e.g socio-economic conditions) but they remain in general terms One such master plan for the coal industry was adopted by the government in 2003 In addition, it clarifies the allocation of licensing authority for mineral-related projects between the central government and the local government as follows  The provincial people’s committees may issue individual mining licences; licences to survey, explore, mine and process ordinary construction minerals; and licences for mining and processing minerals in areas excluded from the national master mineral plan or national mineral reserve areas  The MONRE has the authority to issue licences to survey, explore, mine and process minerals that are not under the authority of the provincial people’s committees The issuer of a licence has the power to approve the extension, revocation, return and assignment of that licence The revised law exempts mining of ‘ordinary construction materials’ (as listed in decree 160) under a certain volume from the mining licence requirement In reality, it has proven impractical to require individuals and small companies to go through the process of exploration, preparation of feasibility studies and application for mining licences for small-scale mining of construction materials 4.2 Shortcomings Some issues of concern to investors contained in the previous law have not been addressed in the revised law The key outstanding issues are set out below Firstly, requirement to invest in upgrading infrastructure 25