the Government of Vietnam has recently issued Decree 147/2016/ND-CP amending and supplementing a number of provisions on forest environmental service payment policies stipulated in Decree 99/2010/ND-CP dated September 24, 2010.
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Noteworthy points in Decree 147 as compared to Decree 99 is that the Government of Vietnam has increased the payment amount for forest environmental services. To be specific:
- For hydropower production facilities: The payment rate for services has been raised from 20 VND/kWh to 36 VND/kWh. The electricity output used to calculate the payment for forest environmental services is the electricity output sold by hydropower production facilities to electricity buyers under the electricity purchase agreement. The amount to be paid for forest environmental services in the payment term is determined by multiplying the electricity output in the payment term (kWh) by the rate of payment for forest environmental services per kWh (36 VND/kWh).- For clean water production and supply facilities: The payment rate for services has been raised from 40 VND/m^3^ to 52 VND/m^3^. The water output used to calculate the payment for forest environmental services is the water output sold by clean water production and supply facilities to consumers. The amount to be paid for forest environmental services in the payment term is determined by multiplying the commercial water output in the payment term (m^3^) by the rate of payment for forest environmental services per m^3^ of commercial water (52 VND/m^3^).
Additionally, Decree 147 also amends and supplements regulations on the use of entrusted payment funds for forest environmental services at the provincial Forest Protection and Development Fund. The budget allocation should not exceed 5% of the total entrusted funds transferred to the provincial Forest Protection and Development Fund, along with other legal funding sources aside from the reserve, support for households, individuals, and village residential communities that are assigned long-term forest protection contracts. This includes cases of natural disasters or droughts and can be used when the payment rate for forest environmental services per unit area is lower than the payment rate of the preceding year.
For forest areas with a forest environmental service payment rate more than twice the state budget support for forest protection, the Provincial People's Committee will decide on an appropriate adjustment rate depending on the subjects within the provincial area.
For the remaining funds used to pay forest environmental service providers, Decree 147 stipulates:
Owners of forests that are households or individuals granted forests or leased forests by the State, village communities granted forests by the State for long-term stability; and forest owners that are households, individuals, or village communities investing their own capital in afforestation on forestry land are entitled to 100% of the remaining amount;
Forest owners that are organizations are regarded as having revenue sources and are managed and used according to the applicable financial laws for each type of organization. In cases where forest owners contract for forest protection, they may use no more than 10% of the total revenue from forest environmental services in the contracted forest protection area for management, organizing public environmental education activities; the remaining amount must be paid to the contract recipients.
The aforementioned adjustments are to be implemented from January 1, 2017.
