Viet Nam: Forests for Livelihood Improvement in the Central Highlands (Sector Loan)

Sovereign Project | 34341-013 Status: Approved

Summary

The Project objectives and activities include: (i) formulating technically sound and socially relevant SFM plans for over 3 million ha of natural forests and plantations on bare land. SFM plan preparation will include (a) delineating forest conservation and use zones, (b) rationalizing Government's and stakeholders' roles and responsibilities, and enabling effective participation of the local communities and the private sector in SFM, and (c) providing investments for improving the condition and productivity of household, community, and state managed forests; (ii) providing wage generating and livelihood improvement investments, especially for forest-dependent ethnic minorities; (iii) supporting stakeholder technical and operational capacity building for SFM; and (iv) providing project implementation support.

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Procurement Documents


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Project Name Forests for Livelihood Improvement in the Central Highlands (Sector Loan)
Project Number 34341-013
Country Viet Nam
Project Status Approved
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan 2269-VIE: Forests for Livelihood Improvement in the Central Highlands (Sector Loan)
Asian Development Fund US$ 45.00 million
TA 4859-VIE: Capacity Building for Forests Livelihood Improvement in the Central Highlands ( Formerly Central Highlands Livelihood and Natural Resource Management)
Technical Assistance Special Fund US$ 250,000.00
Trust Fund for Forests US$ 7.57 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Private sector development
Sector / Subsector

Agriculture, natural resources and rural development - Forestry

Gender Equity and Mainstreaming Effective gender mainstreaming
Description The Project objectives and activities include: (i) formulating technically sound and socially relevant SFM plans for over 3 million ha of natural forests and plantations on bare land. SFM plan preparation will include (a) delineating forest conservation and use zones, (b) rationalizing Government's and stakeholders' roles and responsibilities, and enabling effective participation of the local communities and the private sector in SFM, and (c) providing investments for improving the condition and productivity of household, community, and state managed forests; (ii) providing wage generating and livelihood improvement investments, especially for forest-dependent ethnic minorities; (iii) supporting stakeholder technical and operational capacity building for SFM; and (iv) providing project implementation support.
Project Rationale and Linkage to Country/Regional Strategy

Viet Nam's development success especially in expanding food production, and moving from a rice deficit country to the world's second largest rice exporter is attributed to (i) the allocation of land to individual farmers and households, (ii) rationalizing and reducing the role of the state in the sector; (iii) strengthening technical and operational capacity of state and non-state stakeholders; and (iv) increased investments and access to markets. Viet Nam's forestry sector has the necessary policies, laws, and sector strategies in place for replicating the successful experience of agriculture sector. But weak institutional, technical, and human resource capacity is a barrier to transitioning to a pro-poor and market oriented governance and incentive regime. Consequently, even in the Central Highlands, which has the highest potential for forest-based economic development and poverty reduction in the country, the sector is in serious decline largely due to resource over-exploitation. A key factor for the poor performance is the uncertainty over forest "ownership", management, and use rights and roles.

Government's Forest Development Strategy (2001-2010) and sector plans call for making forestry an important economic sector by (i) protecting and developing forest resources and increasing forest cover from 32 to 43% by 2010; (ii) achieving an annual growth rate of over 3.5% during 2006-2010 period, (iii) accelerating and completing forest land allocation; (iv) using forestry to improve livelihoods and reduce poverty in mountainous and ethnic minority dominated areas; and (iv) increasing efficiency and value of country's wood processing industry. The Government's policy is to restrict the state's role to forest and biodiversity protection, and let the non-state sector dominate the production forestry sub-sector.

The Comprehensive Poverty Reduction and Growth Strategy (CPRGS) emphasizes the need to focus on the disadvantaged rural areas that have high proportions of ethnic minorities. It is in these areas where most of the remaining forest still occurs, and the CPRGS recognizes this. It calls for investment of $600-800 million or about 12% of the agriculture sector investment over five years.

The Central Highlands is Viet Nam's most important forestry region contributing more than 60% of the country's annual hardwood production. And ecological conditions and terrain is suitable for sustainable forestry with population densities still relatively low compared to country's other regions. Improving road network is increasing access to national and regional markets, and incremental wood production from the Project will reduce the raw material supply shortages faced by the local processing enterprises. Project interventions have the potential to secure over 90% of Viet Nam's 2010-2015 domestic timber needs. Accordingly, draft 2006-2010 Socio Economic Development Plan (SEDP) identifies Central Highland as a priority forestry region.

Central Highlands, home to over 5 million people, is the second poorest region in the country with poverty rates as high as 57% among the ethnic minorities. Over 2.5 million people are in work force, but only about 11% are in wage earning occupations. Therefore, unemployment is high. Because they have forestry relevant skills and knowledge, engaging these communities in forestry will lead to improved forests, forestry, and livelihoods.

The Project is linked to the following:

1. The Government's Forest Development Strategy (2001-2010) and sector plans which call for making forestry an important economic sector by (i) protecting and developing forest resources and increasing forest cover from 32% to 43% by 2010, (ii) achieving an annual growth rate of over 3.5% during 2006?2010, (iii) accelerating and completing forestland allocation under the Land Law and the revised Forest Protection and Development Law, (iv) using forestry to improve livelihoods and reduce poverty in mountainous areas dominated by ethnic minorities, and (iv) increasing the efficiency and value of the country?s wood-processing industry.

2. The comprehensive poverty reduction and growth strategy (CPRGS) emphasizes the need to focus on the disadvantaged rural areas with high proportions of ethnic minorities, such as the Central Highlands, where minorities dominate. These areas are where most of the remaining forest survives, and the CPRGS recognizes this.

3. The draft 2006-2010 socioeconomic development plan identifies the Central Highlands as a priority forestry region.

Impact Improved forest productivity and livelihoods and reduced poverty in the Central Highlands
Project Outcome
Description of Outcome State-owned and other forests sustainably-managed in the Central Highlands.
Progress Toward Outcome

Overall the Project has supported the surveying of 3.6 million ha. of forest. At the commune level, the Project has supported 97 communes in the development of commune forest development plans and commune investment plans (CIP) as the basis of identifying areassuitable for production forestry, agro forestry or home garden development by households. Commune forest development plans were guided by district land use plans. The Project supported the preparation of two district land use plans, namely in Krong Pa and Kon Chro districts. Land use plans for the remaining 20 districts were prepared with counterpart funds.

According to Decision No. 166/2007/QD-TTg the project beneficiary households must return $150/ha to the coomune developement fund (CDF) or from project beneficiaries enterprises $250/ha to the Provincial Forest Protection and Development Fund from the proceeds of harvesting. The guidelines on collection are expected to be finalized before the project completion including the turnover of the CDF to the commune.

Implementation Progress
Description of Project Outputs

Six performance-enhancing, sustainable forest management plans covering over 3 million ha and timber stocks worth $4.4 billion

30,000 ha of high yielding plantations established, and 99,000 ha of natural forests protected, under non-state sector forestry, improving livelihoods of over 80,000 hh.

Forest planning and management decision-support systems, and capacity of project stakeholders and forestry education and training institutions enhanced at provincial, district and commune levels in 6 provinces and 60 communes.

Enhanced business models and capacity of six provincial forestry departments, at least 3 SFEs, 60 SMEs and 75 community groups

Status of Implementation Progress (Outputs, Activities, and Issues)

Instead of forest management plans, a provincial forest protection and development plans (FPDP) were prepared by the 5 provincies plus 1 in Gia Lai that its still ongoing until end of 2015. All of the FPDPs were financed by the Government fund. As of 31 August 2015, total areas surveyed, demarcated and allocated by forest use type and institution is 5,910,796 ha.

As of 31 August 2015, a total of 26,169 hectare (ha) has been afforested by the households (HH), SFEs, SMEs 87% of the target of 30,000 ha. Agroforestry has planted 9,672 ha gaining140% of the target 6,900 ha and home garden is 3,668 ha accounting for 91% of the 4,022 ha target.The Project supported PFMBs to carry out afforestation on 1,443 ha. of protection forest.This accounted for only 21% of the Project's target of support for protection forests.

Since the beginning of the project to 31 July 2015, the project organized 1,751 training courses for 69,271 beneficiaries, of them, 63% are ethnic minorities' people and 22%are women.

The project supported to develop business plans for 3 SFE and 18 SMEs in 6 project provinces.

The project supported 97 communes in the development of commune forest development plans and commune investment plans (CIP) as the basis of identifying areassuitable for production forestry, agro forestry or home garden development by households.

Geographical Location The project will be implemented in the Central Highlands provinces of Viet Nam, namely Dak Lak, dak Nong, Gia Lai, Kon Tum, Lam Dong and Phu Yen.
Safeguard Categories
Environment B
Involuntary Resettlement C
Indigenous Peoples A
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services The Project will require 167 person-months of international consulting services and 1,300 person-months of national consulting services and contracted staff. The international and national consultants will be recruited in a single package from a consulting firm, using ADB quality- and cost-based selection through a full technical proposal in accordance with ADB Guidelines on the Use of Consultants. Contracted staff will be recruited by MARD in consultation with ADB and in a manner consistent with ADB's policy on national staff recruitment. Expressions of Interest (EOI) will be accepted until 31 December 2006.
Procurement All supplies, equipment, and services financed from the ADB loan and technical assistance will be procured in accordance with ADB's Guidelines for Procurement. Vehicles, equipment, civil works, and materials will be procured by international competitive bidding where the cost is valued at more than $1,000,000 equivalent, or by international shopping where the cost is valued below $1,000, 000 equivalent. Where several local suppliers can offer satisfactory service facilities, then vehicles, equipment, civil works, and materials valued at less than $100,000 equivalent may be procured under local competitive bidding procedures acceptable to ADB, or through direct purchase. To commence the Project on time, ADB has approved, at Government's request, an advance action for procurement. The Government has been advised that approval of such advance action does not commit ADB to finance any part of the Project.
Responsible ADB Officer Sanath Ranawana
Responsible ADB Department Southeast Asia Department
Responsible ADB Division Environment, Natural Resources & Agriculture Division, SERD
Executing Agencies
Ministry of Agriculture and Rural Development
Dinh Duc Thuan
ddthuan@daln.gov.vn
29 La Thanh, Ha Noi, Viet Nam
Timetable
Concept Clearance 30 Aug 2005
Fact Finding 01 Jun 2005 to 07 Jun 2005
MRM 09 Sep 2005
Approval 26 Oct 2006
Last Review Mission -
PDS Creation Date 11 Dec 2006
Last PDS Update 22 Sep 2015

Grant 0060-VIE

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
26 Oct 2006 06 Jun 2007 06 Jun 2007 31 Oct 2014 - 06 Aug 2013
Financing Plan Grant Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 0.00 Cumulative Contract Awards
ADB 0.00 26 Oct 2006 0.00 5.49 69%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 26 Oct 2006 0.00 5.49 69%

Loan 2269-VIE

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
26 Oct 2006 07 Dec 2006 08 Jun 2007 30 Jun 2015 30 Jun 2016 -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 75.09 Cumulative Contract Awards
ADB 45.00 26 Oct 2006 44.53 0.00 98%
Counterpart 30.09 Cumulative Disbursements
Cofinancing 0.00 26 Oct 2006 42.15 0.00 93%

TA 4859-VIE

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
26 Oct 2006 25 Oct 2007 25 Oct 2007 31 Oct 2014 30 Jun 2016 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
250,000.00 7,570,000.00 0.00 0.00 0.00 0.00 7,820,000.00 26 Oct 2006 5,096,121.00

Safeguard Documents

See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Title Document Type Document Date
Livelihoods Improvement and Ethnic Minorities Development Plan Indigenous Peoples Plans/Indigenous Peoples Development Plans Sep 2005

Evaluation Documents

See also: Independent Evaluation

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Related Publications

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