Forests Asia 2014 – Nguyen Ba Ngai, Day 2 High-Level Panel Discussion

Watch Nguyen Ba Ngai, Deputy Director of VNFOREST, speak during a high-level panel discussion on investing in landscapes for green returns. From the second day of Forests Asia 2014.

Tuesday, 6 May 2014.

Forests Asia Summit, 5-6 May 2014, Jakarta, #ForestsAsia

Nguyen Ba Ngai’s speech:

Thank you very much ladies and gentlemen.

This is my honour to be here to speak about payments for forest environmental services in Vietnam, shortly called PFES.

On this occasion, I would like to talk and to share with you about some items. First, how to recognize the importance of PFES in terms of understanding awareness raising in this aspect. Secondly, is how to initiate activities related to PFES in Vietnam by means of what we are doing now; and third, I would like to talk about what are the main achievements and lessons learned: what we are doing until now? And lastly, we would like to say what we are facing now, mainly the major challenges in PFES in Vietnam.

As you know, Vietnam has high potential in PFES, particularly about watershed management and hydropower, and we also recognize that Vietnam has become one the first countries in Asia to initiate a PFES scheme. And we recognize that the role of PFES in Vietnam are to improve the forest quality and quantity and increase national investment in forestry sector, reduce the steep financial burden for forests protection and management, and improve social well-being.

We come up to the field. Which field we have mentioned here and which activity being paid for environmental services? Firstly, hydropower plants pay-for services for soil protection and reduction of erosion and sedimentation of reservoirs and rivers. As you know, in Vietnam we are have a number of hydropower [plants]: it’s about 200 hydropower [plants]. We consider them as service users, who manage about more than 4 million ha of forests.

Secondly, the clean water production and supply companies pay-for-services for regulation and maintenance of water sources for clean water production.

Thirdly is industrial manufacturing facilities that use water directly from water sources must buy forest services. And lastly is ecotourism companies should pay for landscape beauty and biodiversity.

And now, we have some achievements and lessons learned from implementation of PFES in Vietnam. I would like to say here that the government of Vietnam had made very strong commitments. Within only 10 years, it has 20 legal instruments like decrees, DCs and circulars for the legal basis for PFES implementation in Vietnam. The operation of PFES relies heavily on forest protection and development funds. Now we have established already about 35 forest protection and development funds in 35 provinces in the whole country.

PFES creates about 100 million US dollars annually and pays for about 300,000 households who are managing and protecting around 4 million ha of forests. PFES implementation has resulted in a stronger capacity for government agencies and published a website of the role of the forests protection and development.

Besides about achievement and good lessons learned, now we are facing some major challenges in enforcing PFES contracts, which has been identified as a shortage of human resources and staff capacity in local government departments, and we are lacking an authority of enforcing compliance.

PFES payments and opportunity costs, are still important questions. The threat to PFES schemes is the high opportunity cost of converting forests to other land use. The transaction costs of PFES might be high, because the forest owners are individual households, and local community, mainly living in remote areas which are very limited in capacity of public services.

The monitoring and evaluation systems of PFES are definitely needed, but are not available now. However, finally I would like to say to every side, in Vietnam PFES as a new initiative for forestry sector, it creates an innovative financial mechanism for forest development.

Thank you very much.

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