Payment for forest environment services at lao cai realities, difficulties and recommendations

MINISTRY OF AGRICULTURE AND RURAL DEVELOPMENT VIETNAM FORESTRY UNIVERSITY STUDENT THESIS PAYMENT FOR FOREST ENVIRONMENT SERVICES AT LAO CAI: REALITIES, DIFFICULTIES AND RECOMMENDATIONS Major: Advanced Curriculum in Natural Resources Management Code: D850101 Faculty: Forest resources and Environmental Management Student: Bui Dinh Luan Student ID: 1053020845 Class: K55 Natural Resources Management Course: 2010 – 2014 Advanced Education Program Developed in Collaboration with Colorado State University, USA Supervisor: Dr Do Anh Tuan Ha Noi, 11/10/2014 ACKNOWLEDGEMENT To complete this report, I have received a lot of support from organizations and individuals Firstly, I would like to send my most sincere thanks to Dr Do Anh Tuan Deputy Dean of faculty Silviculture-Forest University Vietnam who has dedicated guide and help me throughout the research I would like to thank the cooperation and help of the staff of the People's Committee and the agencies and units in Lao Cai province Thank for help of local people in the research areas of Lao Cai province who has enthusiastically providing information in the process of research This report is done over a period of nearly five months Initially practicing, learning about the field of scientific research, my knowledge is limited Thus, the inevitable shortcomings is certain, I would like to receive the valuable comments from teachers and friends to complete my knowledge I sincerely thank you! TABLE OF CONTENTS ACKNOWLEDGEMENT TABLE OF CONTENTS LIST OF ABBREVIATIONS LIST OF THE TABLES LIST OF THE FIGURES 1.1 The necessity of research 1.2 Objective of research 1.3 Subject and Scope of Research CHAPTER II OVERVIEW ABOUT PAYMENT FOR FOREST ENVIRONMENTAL SERVICES 2.1 Overview about PFES policy in Viet Nam 2.2 Some concepts relating to PFES in Viet Nam CHAPTER III PAYMENT FOR FOREST ENVIRONMENT SERVICES POLICY AT LAO CAI 13 3.1 Overview about forest and forest land in Lao Cai 13 3.2 Policy payments for forest environmental services in Lao Cai 14 CHAPTER IV METHODOLOGICAL AND RESEARCH METHODOLOGY 17 4.1 Research Methodological 17 4.1.1 Systems approach 17 4.1.2 Analytical Framework 18 4.2 Research methodology 20 4.2.1 Collection data/information 20 4.2.2 The method of analysis data/information: 21 CHAPTER V RESULTS AND DISCUSSION 22 5.1 Realities of imlementation payment for forest environment services at Lao Cai 22 5.2 Achievements after years implementation the policy on Payment for forest environment services (2011_2013) 28 5.3 Some shortcomings, limitations and reasons 36 CHAPTER VI CONCLUSIONS AND RECOMMENDATIONS 41 6.1 Conclusion 41 6.2 Recommendations 42 REFERENCES 43 LIST OF ABBREVIATIONS Abbreviations Content PFES Payment for Forest Environment Services QBVPTR Forest Protection and Development Fund NN & PTNT (MARD) Ministry of Agriculture and Rural Development UBND People’s Committee QĐ Decision NĐ Decree CP Goverment PPC Provincial People’s Committee JC MARD - MF Joint Circular between MARD – Ministry of Finance FPDF Forest protection and development fund TT Circular LIST OF THE TABLES Table 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 Content Eligible forest are paid from forest environment service in the basin of hydropower in 2012 Eligible forest are paid from forest environment service in the basin of hydropower in 20123 Summary of the involvement of stakeholders in the policy for payment for forest environmental services Revenues collect for Forest Protection and Development Fund in period 2011-2013 Results of the implementation of payment for forest environmental services in Lao Cai province Summary results of the implementation of payment for forest environmental services unit, object forest owners Summary of the management and protection of forests in 2011 - 2013 Summary of the debt situation the money for forest environmental services in 2011-2014 Page 25 27 28 30 31 31 34 36 LIST OF THE FIGURES Figure 5.1 5.2 5.3 5.4 5.5 5.6 5.7 Content Comparison of the involvement of the policy unit in payments for forest environmental services Total amount of forest environment services collected for FPDF Results of the implementation of payment for forest environmental services in Lao Cai province Graph performances implementation results of CTDVMTR in Lao Cai Results of the management and protection of forests in three years from 2011 to 2013 The number of violations in the work of forest protection and management in the years 2011-2013 The unpaid money of organizations Page 29 31 32 33 35 35 36 CHAPTER I INTRODUCTION 1.1 The necessity of research The forest ecosystems play a very important role for human beings and habitat maintenance, contributing to the sustainable development of each nation and the existence of the Earth Forests are not only provide raw materials such as timber and non-timber products for manufacturing industries, but also more importantly maintain and protect the environment, such as erosion limitation, water regulation, flood limitation, climate regulation, landscape values, biodiversity conservation One hectare of forest annually makes about 300 - 500 kg biomass, 16 tons of oxygen (30 tons of pine forest, 3-10 tons of plantation forests So, in the ecosystem of the biosphere forest ecosystems are more productive and have an extremely important role to humans, but so many centuries by the lack of awareness, knowledge, lack of experience or for the immediate benefit, exploitation of forest values a "no thought to the future" has made deforestation, serious destruction, simultaneously with the process of industrialization and modernization of the country has been one of the main causes of climate change Currently, Vietnam has about 40% of the population (in total more than 86 million people) living in the mountainous highlands, who lives directly attached to the forest, the majority of them are ethnic minority groups These communities are disadvantaged / lack of access to good conditions to improve their quality of life From then setting out to ask how people lived in the forest sector can improve livelihoods, enhance the quality of life from forestry After a long time the implementation of policy, the quality of natural forest and natural forest were severely diminished From the condition that the State has adopted policies to encourage the development of forestry as Program 327, program of planting million hectares of forest, forest policy beneficiaries (Decision No 178/2001/QÐ-TTg November 12, 2001) However, when the program ended, local people were fallen into unemployment, the loss of direct support to sustain life, forest management and protection were not good, deforestation for cultivation purposes continues to recur in a number of localities In order to maintain the environmental value of forest services and ensure fairness for foresters, financial mechanisms for payments for forest environmental services are becoming an effective solution in many countries to ensure sustainable financing for sustainable management of forest resources In Vietnam, implementing payments for forest environmental services is defined as a consistent policy of the State in the development trend towards fairness, and the general strategy of socialization contribute to forest sustainable management forest resources Lao Cai is a mountainous province of Vietnam and bordering with China ,evaluated as a potential province on the implementation of the policy for pay for forest environmental services in order to increase people's livelihoods and contribute to sustainable forest management and development The implementing payments for forest environmental services in Lao Cai has some achievements for example: contribute to protect forest and sustainable development forest However, in implementing PFES in Lao Cai still has many difficulties which reduce the effective of the PFES policy This research on “Payments for forest environmental services at Lao Cai: realities, difficulties and recommendations” therefore being implemented with the aim to indicate difficulties in implementing PFES at Lao CAI, contribute recommendations for local managers and government about solutions in implementing PFES for effective in next time 1.2 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 pointed out the achievements gained in the implementation process and the problems and shortcomings in the implementation of payments for forest environmental services locally, thereby contributing to policy recommendations / measures to promote the implementation of effective PFES locally in the coming years 1.3 Subject and Scope of Research Subjects of study  Implementation of policies on payment for forest environmental services in Lao Cai  The subjects used for PFES (Water supply Company, hydroelectric plants ) in Lao Cai  The subjects are paid (landowners, forest owners, community ) for the PFES in Lao Cai  Local government and local professional agencies: Department of Agriculture, Department of Natural Resources, Department of Forestry Ranger, Department of Forest Development Fund for protection and development of forests Lao Cai Scope of the study:  This study was carried out in Lao Cai province  Analyzing and evaluating about implementation the policy on PFES in Lao Cai province Figure 5.1: The number of PFES user involve in PFES After 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: According to the payment for forest environment services policy of the Government, after being established the Forest Protection And Development Fund of Lao Cai created plan and coordinated with associated agencies to review, identify the subjects who must pay and subject who must be paid from that contributing collection/ payment plan norm of money from forest environmental services annually submit to PPC for approval After years being put into practice the policy has achieved the following resultsof Results of revenue for forest environmental services in 2012-2013: 29 Table 5.4: Revenues collect for Forest Protection and Development Fund in period 2011-2013 unit: 1000 VNĐ Collection plan No Actual collected Percentage Content 2011 2012 2013 Total 2011 2012 2013 Total (%) 6=3+4+5 10=7+8+9 11=10/6 2,502,761 8,924,520 23,632,099 35,059,380 1,779,354 4,252,682 15,502,278 21,534,314 61.42 21,031,568 32,015,149 1,505,964 3,815,539 14,463,569 19,785,072 61.80 Collecting money of PFES I In the Province Hydropower Plant 2,341,181 8,642,400 Fresh water supply 161,580 282,120 377,016 820,716 147,400 271,314 584,696 1,003,410 122.26 Travel - - 2,223,515 2,223,515 125,990 165,829 454,013 745,832 33.54 II Central Fund coordinate 2,177,250 2,177,250 3,003,500 7,358,000 2,350,000 6,350,000 86.30 442,500 508,875 951,375 1,056,377 1,591,708 167.31 4,680,011 11,544,270 27,144,474 43,368,755 3,746,871 6,820,496 18,908,655 29,476,022 67.97 III Interest on deposits Total income 30 1,967,517 2,032,483 535,331 Figure 5.2: Total money are collected to PFES fund in period 2011-2013 From 2011 to 2012, there was an increase of 2,538,294,000 VND in revenue of Forest Protection and Development Fund; from 2012 to 2013 this figure was 11,567,113,000VND Revenues mostly come from hydroelectric plants which have been activating in the province Revenues increased dramatically during the period from 2012 to 2013 because of the payment contract commitments of the forest using groups which facilitating the implementation of plans revenues and expenditures of the fund forest protection and development By which the objectives of the policy on payment for forest environmental services are achieved better 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 Unit: 1,000 VND The total funding approved Total Paid Unpaid 2011+ 2012 2013 2011+2012 2013 2011+2012 2013 6419367 13250262 2471212 4834264 3948155 8415998 31 Figure 5.3: Results of the implementation of payment for forest environmental services in Lao Cai province (unit: 1000VND) Total money fund forest protection and development of Lao Cai province had disbursed accumulation from 2/2012 to 31/12/2013 was 15.030 million VND Including: Payment, advance payment for forest environmental services in 2012, 2013 for forest owners is 7.305 million / 19.669 million VND, reaching 37% Table 5.6: Summary results of the implementation of payment for forest environmental services unit, object forest owners: unit: 1000 VND Year 2011+2012 PFES provider Total owners are organizations 4014817 Organizations are not forest but are 1169934 owners Total paid unpaid 165809 235672 412363 757571 2380263 368802 400752 833864 2241019 291670 funding Forest Year 2013 Paid Unpaid 417379 445518 funding 8628980 assigned to manage forest Forest households owners are individuals, 1234616 community residents 32 201146 194934 Figure 5.4: Disbursement result of PFES in Lao Cai to provider Fund has made payments to forest owners In which, forest owners are organizations: 5.832 million VND; households: 703.9 million VND; organizations is not the forest owners: 769.6 million VND Expectedly in 9/2014, Fund forest protection and development of Lao Cai completed the payment disbursing the remaining sum for forest owners The number of forest owners who are paid increased each year because the number of objects had increased after the review period Expensing for supporting project contracts for forest protection community to benefit from the policy for payment for forest environmental services in rural Ban Lot, Bao Thang District (PPC approved in Decision No 2797 / QD-PPC dated 17/10 /2013): 94 million VND 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 33 and in each basin Along with the resources and solutions, synchronously activities in protecting and developing forest has contributed to the decrease of forest infringement, forest destruction, forest fires, illegal forest exploited Improving the area, the coverage, and quality of forests over the years Table 5.7: Summary of the management and protection of forests in 2011 - 2013 STT Indicator 2012 2013 Unit The forest area of the province 334893 344304 Ha Forests have a supply of PFES 97498 127734 Ha 2.1 Forest owners are organizations 49645 73672 Ha 21858 25723 Ha 25994 28.339 37 case 283 127 case Forest owners are households 2.2 individuals, community residents Organizations are not forest owners but are assigned to 2.3 manage forest Number of forest fires Number of violations in the management, protection of forests 34 Figure 5.5: Results of the management and protection of forests in three years from 2011 to 2013 (Unit: ha) In 2012, the total forest area of the province was 334,893.22 hectares, by 2013, the figure had increased to 344,304.86 hectares (an increase of 9,411.64 ha) In the forest area has been determined eligible for cash forest environmental services is 127,734.89 hectares (increased 30,263.36 compared to 2012), including forest owners are organizations 73,672.42 (increased 24,026.71 compared to 2012); households and individuals: 25,723.3 hectares (increased 3,865.29 compared to 2012), organizations is not assigned to manage forest owners: 28,339.16 hectares (increased 2,344.36 compared to 2012) Figure 5.6: The number of violations in the work of forest protection and management in the 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 cases decreased 35 cases compared with 2012 d) Income from PFES: Payment for forest environment services policy have brought about a new financial mechanism forpeople living on forestry In addition to contributing to better protection forest through the implementation of policy, people's awareness and livelihood are improving gradually In some places the unit price paid averaged over of forests is much higher than the level of support from the state budget for the protection of forests 35 (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 / / year By implementing the policy on payment for forest environment services, the average of real income of households, individuals contracted for forest protection has improved considerably, with the household income forest environmental service charges 1,000,000 - 2,000,000 VND / household / year The reality results showed: along with other sources of income from forests, money from forest environmental services have contributed to making job, reducing poverty, improving livelihoods and making people close to the forest Thereby, contributing to stability and security, political, social order and safety in the highland, border 5.3 Some shortcomings, limitations and reasons In the process of implementing and enforcing the policy on payment for forest environmental services in Lao Cai province, beside the achievements reached, there are some shortcomings needed to overcome a) Delayed payment for forest environment services The collection money for forest environmental services with organizations and individuals trading travel services in the province is accecssed to each individual and organization However, some subjects recommended PPC to be exempt from the policy due to a lack of understanding Some objects have not done contracting and declaring the collection to pay money for forest environmental services (tourism associations Sapa, Victoria Hotel Company Ltd, Hung Vy trade and tourism ), which affect to the progress of implementation of the policy to pay for forest environmental services The having to pay includes: The industrial production facilities that use water directly from the water sources (surface and groundwater); supply services, breeding grounds, aquaculture Until now, the Ministry of Agriculture and Rural Development haven't had guided circulars, prescribed the rates with this object as prescribed by the Government Which makes it unequal in equality in the execution of the policy 36 Developing and collecting money of forest environmental services in 2011, 2012 from hydropower plant was difficult While some hydropower plants conformed strictly to the policy, the others were late payment charges, excused difficulties reason in revenue sources, in fact they sold EVN electric output and were paid fully In early 3/2013, there were dozens of organizations, mainly hydropower plants still owed over 13 billion VND charges of PFES In particular, Tan An Hydropower Company (three hydroelectric plants Phu Mau 1,2,3) owed 709 billion VND; Lao Cai Hydropower Joint Stock Company owed 897 million VND Typical for the delay the payment of as prescribed PFES is Nậm Hô hydropower plants, in the commune Dền Thàng, Bat Xat Corporation of energy development in Southeast Asia This plant has a capacity of 7.5 MW and uses the water resources from hundreds hectares of forests and Muong Hum streams upstream According to the data of the Department of Taxation, clculating from the charge applied PFES (1-12011) to the end of quarter 4-2012, the plant was sold to EVN 61732 thousand kw of commercial electricity, amount of paid was 1234 million VND Forest Protection and Development Fund's staff was sent notifications, Official Dispatch has asked the company sign contracts trustee to pay but they still refused to and didn’t pay the charges to use the service environment forest as prescribed by law Up to now, the liabilities of the organizations using for forest environmental services in Lao Cai province has been more than 29 billion VND Table 5.8: Summary of the debt situation the money for forest environmental services in 2011-2014: 2011 2012 2013 months of 2014 The unpaid money of organizations (million) 5,908 7779 7444 8124 37 Figure 5.7: The unpaid money of PFES user The reason is in some cases the subjects having to pay for forest environment services have financial resources but consciously observance the policy on payment for forest environmental services is still low, deliberately avoided, unrealized obligations payment for environmental services of forests, which lead to rate levy environmental services of forests is low compared to the plan Besides, the policy for payment for forest environmental services is a new field, the policy system are not synchronized, the system documents guide the implementation of the collection of payment for forest environmental services are lack, which lead to offensive constraints in the implementation of policies to objects to payment for forest environmental services And the imposing sanctions for violations subject to payment for forest environmental services are lack, insufficient grounds to handle, lead to a number of organizations deliberately avoided the responsibility to pay,and sign the contact trustee payment for forest environmental services The slowing in charges for forest environment services of these organizations affected diirectly affected to progress of collecting and paying environmental services Thereby affecting to the implementation of the objectives of the policy on paying for forest environmental services as prescribed of the Local Government 38 b) Difficulties in determining the boundaries, forest, demarcation The implementation of project review, determined the boundary, forest owners, classification, statistic objects who use forests environment services are being conducted expeditiously Up to date of 13.12.2013 there had been 34 communes in the basin / districts being reviewed on the field including: Bac Ha district: 21/21 communes; Bao Thang: 5/5 communes, Bat Xat: 8/14communes However, to ensure the implementation payment forest environmental services accurately and right subjects, they need to review the whole area of forest land in the basin of hydropower palnt, assess forest quality for each forest owner Whereas, the quality of previous forestland allocation is not highly accurate, there is some overlapping areas, insufficient grounds to be paid for forest environmental services Besides, capital source for implement project is lack which directly affect to progress of revising and identifying forest owners The reason is staff implementation policy payment for forest environment services is lack of practical experience led to the fact that the performance cannot meet the schedule c) The level of payment between different localities in the province is unequal The payment rate is low and unequal between localities in the province The application of unit prices payment for forest environment services to forest owners in each basin hydropower plants lead to large differences in unit prices paid for forest owners providing environment services of forests, where lowest unit price: 32,000 VND/ ha, the highest unit price: 307,000 VND / ha, creating a lager difference between the forest owners in the province In many cases, the money received is not enough to afford travelling and paperwork fees so many housedholds don't want to receive d) Slow PFES disbursement to provider The implementation payment forest environmental services are slow, not pay for all households in the province The Fund pays only 37% of the total amount needed to pay Typically in the basin of the Nam Tha Hydropower 6, Nam Khoa the money unpaid is 39 still a lot: hydroelectricity Nam Tha and Nam Khoa 6, the payments to households and individuals have now been acceptance testing and complete billing records, but so far have not been allocated funding to pay Besides the payment for conservation areas and protective forests have not been paid In 2013, the funds needed to pay for Management Board of nature conservation areas Hoang Lien – Van Ban is 502,496,860 VND but not yet paid The implementation progress payment for forest environmental services affected slowly the implementation of the objectives that the decree 99/ND-CP issued The reason is the coordination between ministries and sectors in promulgating guidelines, the work of implementing the policy for payment for forest environmental services sometimes didn’t have high consistency, staff implemented policies to pay for forest environmental services but basically trained, but lack of practical experience led to the deployment of paying environment services of forests led to the deployment of local policy was difficult The review of the area, forest situation and forest owners were still difficult so didn’t have clear grounds, full for paying, affected the progress payment of environment services 40 CHAPTER VI CONCLUSIONS AND RECOMMENDATIONS 6.1 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 addition, in Vietnam the value of forest environment services are recognized by managers, policy lawmakers and other concerned beneficiaries, especially the government is interested in the value environment services the forest Therefore this is an opportunity to perform PFES PFES is considered to be a revolution of the forestry sector and is one of the important tools in order to create the fair and stable financial resources for the sustainable management of forest resources After nearly years of policy implementation according to Decree No 99/2010 / ND-CP on 24/9/2010 of the local government, enforcement policies have achieved much success, meaning and objectives of the policy had been gradually spreading received positive change in mobilizing social resources for the protection and development of forests in the local Awareness of the people about the execution and implement policies is increasingly highly Many units and individuals using of environmental services forests have been paid actively and seriously full time of the amount of forest environmental services in 2011, 2012 and 2013 Besides the achievements gained during the implement policies payment of forest environmental services in Lao Cai province are still some limitations and exists influence for working the policy implementation, concretely as: the money owed is big; review progress, identify forest owners and disburse funds forest environment services is slow, the main cause is due to the forest land allocation in previous period overlap and limitations, data sources inheritance with highly precision, hardly used, has affected the work of revising, identification of payment of forest environment services, disbursement of funds 41 forest environment services as prescribed; the applicable unit price paying forest environment services in each basin led to the disparity in paying between the unit price in the provincial areas 6.2 Recommendations To ensure enforcement policy on payment forest environment services while achieving high efficiency, consistent with the actual situation in the locality, need to have specific research quantifier the environmental values to perform the mechanisms of PFES effective and equitable 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 42 REFERENCES 1) Decree No 99/2010 / ND-CP dated 24 May 09 2010 Policy on payment for environmental services of forests 2) Decree No 05/2008 / ND-CP of the Government dated 14/01/2008 The establishment and management of the Fund for Protection and Development of Forests (Forest Protection and Development) 3) Decision No 3719 / QD-dated 30/12/2011 People's Committee of Lao Cai province to fund the establishment of forest protection and development in Lao Cai 4) the co 2009 Research Forest valuation in Vietnam Publisher of Science and Engineering 5) World Agroforestry Centre, ICRAF Vietnam, 2008 Payment for Environmental Services: Experiences and lessons learned in Vietnam, 6) Hoang Thi Thu Huong, 2011 Payment for environmental services in Vietnam: Case Studies in Chieng Co, city Son La, Lang Son, 7) To Xuan Phuc & Wolfram H Dressler & Sango Mahanty & Thu Thuy Pham & Claudia Zingerli, The Prospects for Payment for Ecosystem Services (PES) in Vietnam: A Look at Three Payment Schemes 8) Pamela D McElwee, 2011 Payments for Environmental services as neoliberal market-based forest conservation in Vietnam: Panacea or problem ?, 2011 9) Pham Thu Thuy; Karen Bennett; The co; Jake Brunner; Le Ngoc Dung; Nguyen Dinh Tien, payment for environmental services of forests in Vietnam from practice to policy 10) Archer et al 2008; Corbera et al 2009; Neef and Thomas 2009; Zabel and Roe 2009; Clements et al 2010; Vatn 2010 43