NDO – Payments for forest environmental services (PFES) have made significant contributions to the restructuring and sustainable development of the forestry sector while providing a financial source for forestry protection and development. However, despite encouraging results, there still remain a number of obstacles in operating PFES in Vietnam which require further attention.
Locals plant seeds in Son Duong commune in Quang Ninh province. (Photo: VNA).
Encouraging outcomes of PFES programme
Hoa Binh province is one of the localities in the northern mountainous region with the largest areas of forestry coverage. Local authorities have considered the PFES programme as a means to pay forest owners for each hectare they help look after each year. Efforts have also been made to disseminate policies and raise awareness of administrators, forest owners and local residents on the importance of forest management and protection.
Bui Xuan Nhan, Director of Hoa Binh provincial Fund for Forest Protection and Development said that as a locality located along the basin of the Da and Ma rivers where Hoa Binh and Ba Thuoc II are operating respectively, in 2016, Hoa Binh collected more than VND 4 million from the PFES programme and nearly VND 226 million from the reforestation programme.
Over the past five years, more than VND 12.2 billion was paid to 18,000 forest owners in the locality. They include organisations, households and residential communities who manage and take care of a total of 107,000 hectares of forest.
The PFES programme has created significant positive impacts for the province as it has helped boost sustainable management and the development of forestry, effectively protected ecological environments, prevented floods, and improved people’s incomes.
Similar to Hoa Binh, two other northern mountainous provinces, Lao Cai and Son La, have effectively implemented the PFES programme. Lao Cai is the first locality in Vietnam to pilot the programme at industrial and aquaculture production facilities that utilise water resources from forests in their operation. The province has set a target of collecting around VND 416 billion from the PFES programme in the 2016-2020 period, of which hydro-power revenues make up the largest contribution (82%).
Meanwhile in Son La province, approximately VND 388 billion has been paid to local forest owners over the past five years by the local Fund for Forest Protection and Development, reaching 97% of the province’s set target. At the same time, the province has also collected more than VND 38 billion from the reforestation programme, with the total area of restocking forests amounting to 126 hectares, meeting 61.9% of the province’s set target.
The country now has more than 500,000 households receiving financial support from the PFES programme. According to the Vietnam’s Fund for Forest Protection and Development, localities nationwide have so far completed reviewing and identifying the boundaries and area of forest land, thus calculating payment for forest owners there.
A total of 42 funds for Forest Protection and Development have been activated nationwide, which collected more than VND 6.5 trillion from the PFES programme in the 2011-2016 period, equivalent to an average of VND 1.2 trillion per year.
The PFES programme creates incentives for individuals and communities to protect environmental services by compensating them for any costs incurred in managing and providing those services. The programme has contributed to managing and safeguarding 5.8 million hectares of forest, accounting for 42% of total forest land nationwide. It has also provided financial support for forest owners and improved the income of local residents while assisting the State budget for the forestry sector.
Perfecting policies for better operation
According to Nguyen Ba Ngai Deputy General Director of Vietnam Administration of Forestry, although the operation of funds for forest protection and development as well as the implementation of PFES programme have shown remarkable achievements, they still face certain difficulties which have resulted in the outcomes remaining low compared to their potential.
He explained one of the reasons is that as defined in Decree No. 99, fees for forest environmental services are being collected in three major fields of hydroelectric power, freshwater and tourism activities, which means that other activities such as industrial facilities using surface water, aquaculture production using water resources from forests, and carbon sequestration services are excluded.
Fees for forest environmental services from hydroelectric power plants are now charged at VND 36/ kwh and VND 53 per cubic metre from freshwater factories, which are much lower than the value of other environmental services. Forest environmental services bring in a total revenue of around VND 1.2 billion per year. The total amount remains at around VND 200,000 per hectare of forest land per year, after excluding management and operation costs. It also means that a household that takes care of forest land can earn an average of VND 2 million per year.
In addition, a number of facilities using forest environmental services have not yet fully completed their responsibilities in paying fees for the services, which have consequently caused accrued liability in fee collection, thus affecting the revenue and expenditure plan and the forest protection plan of localities.
A conference was recently held by the Ministry of Agriculture and Rural Development to review outcomes and obstacles and suggest solutions to bolster the implementation of the PFES programme. Delegates at the event proposed the amendment and supplementation of Decree 05/2008 / ND-CP which should stipulate the legal status of the Fund for Forest Protection and Development as non-government financing fund which is established by authorised agencies. They also requested for the increased role and rights of the fund’s management council.
Strengthened management is also needed to ensure fees are collected properly and on-time, they emphasised, asking the State to revoke the licenses of and shut down hydroelectric plants and other projects that are not capable of paying fees for forest environmental services or creating new forest reserves, which is designed to replace an existing forest reserve which is used for the project. In addition, the PFES programme is implemented at the same time with plans for forest protection and development as well as policies linked to the implementation of forest protection and other policies on encouraging forestry development.