Report No. 13200-VN Viet Nam Environmental Program and Policy Priorities for a Socialist Economy in Transition (In Two Volumes) Volume l: Executive Summary and Main Report February 27, 1995 Agriculture and Environment Operations Division Country Department I East Asia and Pacific Region W U,* ' .-k ' - ., -, ;-, F -Fsh.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~t , r%I ._i Vr I*,*,'. ,, ,;,.r.~~, _ . e . .,' .- - .; ' .~.X- - - ' ,; {6vrIaI1.rII-'; - - 4 . 't'., CURRENCY EOUIVALENTS The Vietnamese currency is the done (D) Calendar 1993 August 1994 US$1.00= D10,640 USS1.00= D11,000 D 1,000 = US $0.09 D 1,000 US$ 0.09 Fiscal Year January I - December 31 Weights and Measures Metric System ACRONYMS ADB - Asian Development Bank AIDAB - Australian International Development Assistance Bureau ASEAN - Association of South East Asian Nations ASS - Acid Sulphate Soils BAP - Biodiversity Action Plan CIDA - Canadian Intemational Development Agency CEST - Center for Environmental Science and Technology CEMA - Council of Mutual Economic Assistance COM - Council of Ministers DFCS - Department of Fixed Cultivation and Sedenterzation, MOF EA or EIA - Environment Assessment EPZ - Export Processing Zone ESCAP - Economic and Social Council for Asia and the Pacific ESMAP - Energy Sector Management Assistance Program FAO - Food and Agriculture Organization FINNIDA - Finnish International Development Agency FIPI - Forest Inventory and Planning Institute GDLA - General Department for Land Administration GDP - Gross Domestic Product GOV - Govemment of Viet Nam HCMC - Ho Chi Minh City IDA - International Development Association IPM - Integrated Pest Management ACRONYMS (continued) IUCN - International Union for Conservation and Nature JICA - Japan International Cooperation Agency MAFI - Ministry of Agriculture and Food Industry MDMP - Mekong Delta MFAP - Ministry of Fisheries and Aquatic Products MOC - Ministry of Construction MOE - Ministry of Energy MOF - Ministry of Forestry MOFA - Ministry of Finance MOH - Ministry of Health MOHI - Ministry of Heavy Industry MOLI - Ministry of Light Industry MLISA - Ministry of Labor, Invalids and Social Affairs MOSTE - Ministry of Science, Technology and Environment MWR - Ministry of Water Resources NEA - National Environment Agency NGO - Non-govermnental Organization NIAPP - National Institute for Agricultural Planning and Projections, MAFI NLEP - National Law on Environment Protection NPEB - National Project Evaluation Board NPESD - National Plan for Environment and Sustainable Development NPV - Net Present Value OOG - Office of the Government PPC - Provincial Peoples Committee SCCI - State Commission on Cooperation and Investment SCP - State Commission on Prices SIDA - Swedish Inernational Development Agency SPC - State Planning Committee TA - Technical Assistance UNCED - United Nations Council for Environment and Development UNDP - United Nations Development Programn UNEP - United Nations Enviromnment Program VND - Viet Nam Dong (currency) WFP - World Food Program WHO - World Health Organization Preface 1. This report is based on the findings of a reconnaissance mission to Viet Nam in November 1992 and a main mission in April-June, 1993. Written contributions to the report were made by: Choeng-Hoy Chung (task manager), Jean Aden, Susan Shen, Jaroslav Kozel, Charles Di Leva, Radha Singh (Bank staff); Gary Smith (FAO/CP); Catherine Bouveron, Ame Eriksson, Jean-Denis Kramkimel, G.W. Hyles, John Mulckhuyse, John Aldrick, Julian Lampienti, Thomas Sikor, and Allan Crego (consultants). Thang-Long Ton, Manida Unkulvasapaul, Suchilla Burns, Kim Thu Huong, Sandra Ginyard, Sarian Wilkinson, Amy Curry, Nathan Sage, Florence Sakyiama, Brenda Phillips and Rebecca Baldridge provided useful inputs in mission and report preparation. This report incorporates useful comments provided by the study's peer reviewers (Jack Fritz, Tom Walton, and Robert Goodland), participants, and William McCleary, who chaired the review meeting of the draft report at the World Bank. 2. This report also benefitted from the many economic and sector reports published by the World Bank and other donor institutions. Particularly important have been: World Bank, "Viet Nam: Energy Sector Investment and Policy Review," (June 1993); World Bank, "Viet Nam: Transition to the Market," (September 1993); UNDP/ESMAP, "Viet Nam: Rural and Household Energy Issues and Options (September 1993); and the technical reports to the Viet Nam TFAP ["Forestry Sector Review Tropical Forestry Action Progranimer (December 1991)1. 3. Collaboration and data support in Viet Nam was provided by: the Ministry of Science, Technology and Environment (MOSTE); the Forest Inventory and Planning Institute (FIPI); the National Institute for Agricultural Planning and Projections (NIAPP); and the General Department for Land Administration (GDLA). The draft report benefitted from the guidance of Professor Le Quy An (Deputy Minister, MOSTE) and Dr. Nguyen Ngoc Sinh (Director General, NEA) and the working groups established for discussing the key environmental issues at a mission workshop organized by MOSTE in Hanoi (mid-April, 1993). The draft report was discussed at a "National Workshop on Environmental Policy and Program Priorities for Viet Nam" in Hanoi on November 3-4, 1994. The workshop was organized by MOSTE and the Intemational Dvelopment Research Center (IDRC), with funding from the Canadian Intemational Development Agency (CIDA). The composition of the three national working groups to discuss program and policy issues, respectively for Natural Resources, Urban and Industrial Pollution, and Institutional Development, is given in Appendix I to this report. 4. The scope of the report may be summarized for the following category of readers: (a) those interested only in broad program and policy priorities and main recommendations, for whom an executive summary and major recommendation matrices outlines the strategic implementation plans (SIPs) are provided by sectors. (b) those interested in more background on sources of ecosystem degradation and existing policies and programs, for whom Chapter n and Annexes 2-3 (for natural resources) and Chapter III (for urban and industrial pollution) are provided; (c) those interested in detailed discussion of key issues, options and recommendations, for whom the policy framework is given in Chapter IV, the program framework in Chapter V, and the institutional and legal framework in Chapter VI; and (d) those who are just interested in priority project and technical assistance proposals and coverage, for whom Chapter VII is provided. A summary of findings from previous studies/reports is given in the Appendices 2-7 by ecosystem, type of impact, and types of measures. Detailed statistics, background, and supporting analyses are contained in the supporting annexes (Annexes 1-10). VIET NAM ENVIRONMENTAL PROGRAM AND POLICY PRIORITIES FOR A SOCIALIST ECONOMY IN TRANSITION Table of Contents Volume 1: Main Report Page No. Preface EXECUTIVE SUMMARY ........ ........................... i RECOMMENDATIONS MATRIX ...... ........................ xi 1. INTRODUCTORY BACKGROUND A. Introduction ............................. I B. The Economic Setting .............................. 2 C. The Agro-ecological Setting ............................. 5 D. Population ............................. 6 E. Land Use ............................. 7 F. Mineral, Energy and Water Resources .......................... 9 G. War Damages ....... ...................... 10 H. Biological Diversity . ............................. 1 1. Urban and Industrial Sectors ............................. 11 J. Institutional and Legal Framework ............................ 12 11. NATURAL RESOURCES DEGRADATION: SOURCES, MITIGATION INITIATIVES, AND IMPLICATIONS A. Upland Forests -- Forest Ecosystems ........ ............................ 13 -- Deforestation, Land Degradation and the Evolution of Barren Lands ..... 15 - Mitigation Initiatives and Implications ..... ................... 20 - Govemment Sponsored Settlement Programs .... ............. 20 - Reforestation Programs ...... ........................ 22 - The "Barren Lands" (Decree 327) Program .... .............. 22 -- Summary Perspective and the Cost of Land Degradation .... ........ 24 B. Wetland and Marine Coastal Ecosystems - Introduction .......... .............................. 25 - Mangroves ........... .............................. 25 -- Inland Marshes ......... ............................. 29 - Coastal Lagoons and Beaches ...... ....................... 31 -- Marine and Estuarine Ecosystems ...... ..................... 32 - Coral Reefs . ....................................... 34 - Sunumary Perspective and Degradation Costs .... ................ 35 C. Agriculture and Arable Land - Background on Agricultural Production ........... ............ 35 - Fertilizer Use .......... .................... 38 - Pesticide Use ......... .............................. 39 - Problem Soils ......... .............................. 42 - Fisheries and Aquaculture Development ..... ................. 44 - Livestock Development ...... ........................... 46 - Summary Perspective of Agricultural Degradation ...... . . . . . . . . . 48 D. The Population Dimension ....... .......................... 49 III URBAN AND INDUSTRIAL POLLUTION: SOURCES AND INCIDENCE A. Background - Evolution of the Industrial Sector ......... . . . . . . .. . . . . . . . . 53 - Urbanization Trends ......... ......................... 54 - Energy Sector Development ....... ....................... 55 B. Wastewater Discharge -- Background and Magnitude of the Problem ..... ............... 55 - Sources and Incidence ........ ......................... 56 C. Air Pollution -- Background and Magnitude of Problem ....................... 57 -- Sources and Incidence ........ ......................... 58 D. Solid Waste Treatment and Disposal ...... ..................... 59 E. Environmental Problems from the Energy Sector Perspective .... ........ 59 F. Summary Perspective and Implications for Pollution Abatement .... ...... 61 IV. DEVELOPMENTAL AND POLICY FRAMEWORK FOR INCREASED SUSTAINABILITY A. Towards Greater Developmental Sustainability: The Context and Precepts - Introduction ........................................ 62 - Macro-economic Reform Program and the Environment .... ........ 62 -- Environmentally Conscious Development and Increased Sustainability .... 63 -- The Choice of Policy Instruments and Their Implications .... ........ 65 - The Opportunity Cost of Not Being Environmentally Conscious ... .... 67 -- Rationalizing the Role of Government ..... ................... 69 B. Government Incentive Policies and Degradation/Pollution - Agriculture and Natural Resources Incentive Policy Issues .... ....... 70 - Urban and Industrial Incentive Policy Issues .... ................ 74 - Special Industrial Promotion Incentives ..... ................... 77 -- Other Incentive Issues ....... .......................... 77 V. PRIORITY PROGRAM FRAMEWORK: ISSUES, OPTIONS AND RECOMMENDATIONS A. Watershed Protection and Forest Conservation - The Framework ................. .................... 79 - Issues, Options and Recommendations ........ .. ............. 80 - Target Groups and Framework for Sedentarization and Resettlement . . 81 - Approach to Land Use Planning, Allocation and Tenure ... ....... 82 - Appropriate Transfer of Technology . .85 - Reducing Fuelwood Demand & Improving Energy Efficiency ... ... 86 B. Wetland and Coastal/Marine Resource Management - The Framework ......... ............................ 87 - Issues, Options and Recommendations ..... .................. 8S - Restricting Mangrove Destruction for Fisheries .88 - Wetland Forest Protection .89 - Mangrove Rehabilitation and Reforestation .89 - Marshland Rehabilitation and Development .90 - Other Coastal Resource Management and Programs .91 - Monitoring Cumulative Pollution in the Mekong Delta .92 C. Urban and Industrial Pollution -- The Framework ............... ................ 93 -- Issues, Options and Recommendations ....................... 94 - Urban Master Plans and the Associated Sectoral Plans .94 - Industrial Pollution Control .96 - Short-term Industrial Pollution Reduction .98 - Pricing and Taxation Measures .99 - Environmental Data Improvements and Awareness Campaigns . 100 - Control of Urban Air Pollution .101 VI. INSTITUTIONAL AND LEGAL FRAMEWORK FOR ENVIRONMENTAL ACTION A. Agencies with Environmental Mandates ..... .................. 102 B. The Legal Mandates ........ ............................ 105 C. Legal and Institutional Issues and Options ..... .................. 106 -- Environmental Legislation ...... ........................ 106 -- Institutional Design Issues ...... ........................ 107 - Policy Direction and Cross-Sectoral Conflict Resolution ... ...... 107 - Decentralization of Environmental Management .... .......... 109 - Public Access to Information and Participation .... .......... III D. Environmental Management Tools for Transitional Environmental Action - Environmental Assessment and Consultation .... ................ 112 E- nvironmental Standards and Regulatory Instruments .... .......... 114 E. Local Participation, Public Awareness, and the Role of the Private Sector . . . 116 VII. AGENDA FOR ENVIRONMENTAL ACTION: SEQUENCING PRIORITY PROJECTS AND TECHNICAL ASSISTANCE A. Introduction ......................................... 118 B. Projects and Technical Assistance for Forest/Watershed Protection and Barren Land Development ...... ................. 120 C. Projects and Technical Assistance for Wetlands Protection and Development . 124 D. Technical Assistance Support for Urban/Industrial Pollution Screening and Abatement ....... .................... 126 E. Technical Assistance For Appropriate Use of Market Based Instruments ... . 132 TEXT BOXES: Box 2.1: Relative Degradation and Livelihood Conditions in the Northern and Southern Highlands ................................ 21 Box 2.2: Mangrove Degradation and Aquaculture in Min Hai Province .... ......... 28 Box 2.3: Natural Resources, Population, and Poverty in Lai Chau Province .... ...... 49 Box 4.1: Generalizations from Present Use of Environment Policy Instruments ... ..... 68 TEXT CHARTS: Chart 6.1: Viet Nam Environmental Organizational Chart .................... 104 Chart 7.1: NPESD and its Linkages with Other Plans, Programs, and Projects ... .... 119 MAPS: Map 1: Viet Nam Regions ........ ................................ 4 Map 2: Land Susceptibility Classes ................................... 6 Map 3: Viet Nam Forest Depletion ................................... 14 Map 4: Viet Nam Population Growth Rate per Year ........................ 50 Map 5: Viet Nam: Provinces, Major Town, Roads, and Railroads (IBRD 25094) back cover APPENDICES: Appendix 1: Participants At The November, 1994 Environmental Policy/Program Workshop Appendix 2.A: Degradation of Upland Forest Ecosystems - Activity and Impact Appendix 2.B: Upland Forest Ecosystems - Objectives, Programs and Recommendations Appendix 3.A: Degradation of Wetland and Marine Coastal Ecosystems - Activity and Impact Appendix 3.1B: Wetland and Marine Coastal Ecosystems - Objectives, Programs and Recommendations Appendix 4.A: Degradation of Arable Land - Activity and Impact Appendix 4.B: Arable Land - Objectives, Programs and Recommendations Appendix 5.A: Degradation of Fresh Water Ecosystems - Activity and Impact Appendix 5.B: Fresh Water - Objectives, Programs and Recommendations Appendix 6.A: Degradation of Air Quality - Objectives, Activity and Impact Appendix 6.B: Air Quality - Objectives, Programs and Recommendations Appendix 7: Appendix Acronyms for Government Organizations and Documents Appendix 8: Appropriate Farming Systems in the Rehabilitation of Degraded Upland Areas Volume n1: The Supporting Annexes Annex 1: Statistical Annex Annex 2: Index of Susceptibility to Deterioration Annex 3: Forest Degradation and the Evolution of Barren Lands Annex 4: Viet Nam War Damages and the Environment Annex 5: Hill Arcas Programs with Environmental Implications: A Review Annex 6: Decree of the Council of Ministers - No. 327 Annex 7: Watershed Erosion Impact and Costs: The Da Watershed Annex 8: The Cost of Mangrove Destruction in Viet Nam Annex 9: Law on Environmental Protection Annex 10: Environment-Related Institutional and Regulatory System EXECUTIVE SUMMARY A. Background 1. The per capita income of Viet Nam, estimated at less than USS 200, makes it one of the poorest countries in the world. With about 78% of its approximately 70 million population living in the rural areas, Viet Nam is very dependent on its agriculture and natural resources. Agriculture accounts for about 40% of GDP, 60% of merchandise exports and over 77% of the total labor force. Processing of primary products account for 65 % of an industrial production which accounts for barely 20% of GDP. 2. Growth and development in Viet Nam are coming to a crossroads. Emerging from the strong socialist influence of the Soviet Union and the CMEA through the 1980s, Viet Nam has been changing from a centralized, largely controlled, socialist economy to one which is primarily market driven. It is an economy in transition. Through the "Doi Moi" or renovation policies (from the mid- 1980s and particularly since 1989) of the Government of Viet Nam (GOV), wide-ranging macro-economic and sector-specific adjustment measures have been implemented. GDP has grown at roughly seven percent p.a. since 1989. With the rescinding of the US-imposed embargo and a projected medium-term GDP growth of eight percent p.a., Viet Nam is being confronted with a number of very real trade-offs in its development objectives - particularly between growth and poverty; and between growth and the environment. While such objectives need not conflict in the long-run, in this transition period when Viet Nam is on the verge of economic 'take-off,' such trade-offs are inevitable. Trade-offs with the environmnent will be particularly difficult because, unlike the potential for trickle-down growth to ameliorate poverty, growth and maintaining the integrity of the environment for future generations are more likely to conflict directly. 3. This study complements GOV's 1991 'National Plan for Environment and Sustainable Development" (NPESD) by updating key developments, analyzing certain priority issues in greater depth, and exploring options and priority measures for resolution. With the objective of defining clear priorities for government policy, and for investment and technical assistance programn, this study focuses on issues pertaining to land-use and settlement; the evaluation of environmental stresses and their priorities; urban/industrial pollution; institutional development; the choice among policy instruments for environmental action, including pricing and incentive policies; and key developmental trade-offs. B. Environmental Setting and Priority Areas for Environmental Action 4. Viet Nam has a unique agro-ecological endowment which conditions its livelihood and development. Most notably. Viet Nam is endowed with a very long coastline (3,260 kIn), a preponderance of hill areas (accounting for three-quarters of total land area) and a cultivated area of about seven million ha (21% of total land area). With an estimated rural population of 55 million, cultivated area per capita is, therefore, only 0.13 ha - a figure which ranks among the lowest in the world. Unless productivity per cultivated area increases considerably to sustain the rural population and/or unless opportunities outside agriculture can enable income per rural capita to increase, the resulting stress on land and forests in Viet Nam cannot but cause serious deterioration. Agriculture and Natural Resource Developement 5. Viet Nam's management of its national resources has been mixed. On the positive side, three aspects stand out. First, GOV's controlled migration and early concem of shifting agriculture damage (as manifested in the initiation of its 'sedentarization' or fixed cultivation program for ethnic minorities), has meant that substantial and biologically diverse forest reserves have been kept intact, permitting the discovery of two new mammalian species in the past two years. (Only two other mammalian species have been discovered worldwide in this century.) Viet Nam remains a critical repository for 40% of the - it - world's flora and the following percentage of the world's endangered species of mammals (28%); amphibia and reptiles (21 %); and birds (10%). Second, after the vast ecological destruction of the Second Indochina War, extensive mangrove replanting programs in 1976-82, along with natural regeneration, restored a substantial part of the war damaged areas. Third, population growth declined from 3.1% (1960-76) to about 2.2% (1988-93), reducing the potential stress on Viet Nam's natural resources. 6. The negative aspects of natural resource management have begun to emerge. As increased growth takes place, the stresses on Viet Nam's agriculture and natural resources are raising concems for "danger spots" where decisions on a number of trade-off issues cannot be postponed any further. The evolution of the "danger spots" is summarized below. 7. Forests. Roughly 26% of Viet Nam is covered by natural forest as compared to 67% in the mid-1940s. In the past 25 years, the total area of natural forests (both upland and coastal) has declined at an estimated average rate of 350,000 ha/year. In the nearly 19 million ha of what is classified as "forest land" (land under the jurisdiction of the Ministry of Forestry) in 1990, only 8.7 million ha had natural forest cover; and a category of land designated as "barren lands" (largely denuded former forests, much of which are of low agricultural productivity) now cover about 13.4 million ha or nearly twice the area under existing cultivation. In terms of the evolution of barren lands or forest land degradation, sedentary shifting cultivation is the most extensive ause (affecting up to one million ha/year) and is often linked with the onset of forest fires. However, degradation of forest and land alone does not necessarily result in severe erosion. Severe erosion results from over-cultivation of soils that are inherently highly susceptible to deterioration. Thus, in many of the over populated, upper-sloped areas in the northwestem midland provinces of Viet Nam (the high susceptibility areas), the erosion and livelihood problems are probably insurmountable if altemative income sources are not found and the population pressure on land is not reduced. Overall, in the worst affected area, the Da watershed, where about 500,000 ha are devoted to annual food crops the cost of erosion (measured as the net loss of production value resulting from not adopting the most cost-effective erosion control measures) is US$140 million (in 1994 constant prices). Decisions will have to be made on (a) how to improve GOV's hill area settlement programs; (b) the need for restrictions on annual cropping of steep sloped, high-erosion susceptibility areas; (c) how to effect technology transfer to households to improve their livelihood and incomes and reduce the stress on vulnerable land and forest resources; and (d) how best to protect and manage conservation forests with high biodiversity value. 8. Wetlands. Because of their fishery breeding and nurturing functions, the loss of wetland forests (mangrove and back mangrove) is in many ways more serious than that of the upland forests or watersheds. Present wetland forests represent about 30 percent (approximately 1.2 million ha) of the cover existing in the 1940s. Most are remnants of large-scale, post-liberation replantings which have been subsequently destroyed by the expansion of largely unsustainable shrimp aquaculture ("shifting aquaculture") in acid sulphate soil areas of the Mekong Delta. Under typical conditions of improper diking and poor management which characterize these farms, acidification has led to pond abandonment. In Minh Hai Province alone, where 54% (50,000 ha) of the mangrove forests were destroyed in 1982-92, the opportunity cost of not adopting the more sustainable improved-extensive system of shrimp aquaculture was estimated to be about US$ 140 million. If the abandonment trend continues through another decade, a funrher US$ 249 million could well be forgone. Similar conditions apply to the back mangrove or Melaleuca forests which are typically richer in biodiversity and forest by-products than the coastal mangroves. Decisions have to be made regarding: (a) where and how replanting and protection of priority mangroves and back mangroves should take place; (b) how sustainable shrimp aquaculture and other sustainable wetlands production systems can be promoted; and (c) the nature of mangrove forest clearing restrictions on coastal acid sulphate soils. - ill - 9. Agriculture and Arable Land. Other than for upland forest and wetland degradation (discussed above) and possibly for dry season rice area expansion (discussed below), the environmental impacts from agricultural expansion are neither as wide ranging nor as critical. Degradation from fertilizer overuse, for example, is limited to localized areas. Pesticide overuse is a concern for rice in southern Viet Nam more in terms of the underutilization of integrated pest management (which reduces pesticide uses that kill natural predators and consequently increases net rice production benefits) than in terms of widespread environmental pollution. Toxicity problems from pesticide residue in water and especially in food are not critical (at least in comparison with the acidification effects of poorly managed acid sulphate soils); but farming, household storage, and handling could be substantially improved. Proper management of acid sulphate soils is critical not only because it has important repercussions for the wetlands, but also for rice area expansion. As can be surmised from proposals under the Mekong Delta Master Plan, the reclamation of acid sulphate soils for dry season rice is already considered costly from the perspective of the incremental cost compared with the incremental returns (ie., its marginal internal rates of return); but if the environmental cost of the reclamation is taken into account (i.e., the dry season downstream effect of flushing the acid in the soil and the opportunity cost of the use of this water), the costs could well be prohibitive. Pending more in-depth assessment of the opportunity cost of such reclamation and the under-exploited opportunities for introducing alternative environmentally more sustairnable and remuneratively more viable cropping systems, the need for restrictions on new large-scale wetland reclamation for rice production in acid sulphate soil areas should be seriously considered. 10. Coastal/Marine Resources: Agricultural holdings and coastal communities, particularly in the Central Coastal regions, have become more vulnerable to beach erosion and storm damage as a result of the breakdown of coastal protection dikes, the loss of mangroves, and, to a lesser extent, coral reefs. The Mekong and Red River delta and estuary systems are increasingly threatened by urban/industrial waste discharge. Other coastal areas, particularly in the central regions, face losses from destructive exploitation techniques for fishery and corals. Decisions will have to be made regarding: (a) how to monitor environmental impact on the two main estary systems; (b) the restrictions on destructive fisheries and coral exploitation techniques; and (c) the selection of priority coastal areas for protection. There is also an important need to: (a) rehabilitate and improve coastal and estuarine dikes in conjunction with additional mangrove plantings; and (b) undertake afforestation to stabilize extensive sand dunes in the central coastal region. However, caution should be taken to ensure cost-effective expansion of these activities. Urban and Industrial Development 11. One of the options which could act as a safety valve for population pressure on natural resources is urbanization. Unfortunately, urbanization has its own environmental costs. In the larger cities, population and industrial growth have overwhelmed the capacity of urban infrastructure and pollution stresses are already serious: household waste disposal seriously threatens urban waterways and failure to treat industrial wastes compound the problem. If urban population increases at the projected five to seven percent annual rate, by the year 2000 there will be 21-24 million urban people (compared with the ;993 level of nearly 15 million). Such a situation would be virtually impossible to accommodate. Short of a miracle in housing expansion, urban slum and squatter settlement growth and the attendant waste handling problems would be inevitable. Without proper urban planning, long-term living conditions in Viet Nam's growth cities and their surrounding confines could be seriously jeopardized. Furthermore, regional variations in past industrial growth has meant that Northern Viet Nam now accounts for the bulk of the country's heavy industries (iron, steel, chemicals, fertilizers, and cement), coal mines and thermal power plants, and Southern Viet Nam its light industries. Thus, the pollution problems from existig industries are more severe in the North than in the South. However, the industrial expansion that has taken place since Doi Moi is focused on the light industry sector. (About 80% of all new foreign investment applications originate from both the Hanoi-Haiphong/Quang Ninh and - iv - the Ho Chi Minh City (HCMC)-Vung Tau urban areas). Since the light industry orientation is also a function of previous investment funding constraints, the recent opening to western investment support means that high pollution, heavy industry promotion is being resumed and it is now imperative to properly screen such industries/projects for their environment impact. This would entail both completing the development of standards for industrial pollution and effluent release, and clarifying and operationalizing implementing regulations (Decree 175/CP) for the new National Law on Environmental Protection (NLEP), especially for (i) environment assessments and (ii) institutional responsibilities for environmental action and policy decision. C. Developmental Framework for Environmental Action Environmentally Conscious Development - The Need. Approach, and Precemts 12. Development in Viet Nam will have to be more envirornmentally conscious to enable a more sustainable growth for the economy. This calls for action at the policy, program/project and institutional levels to inprove natural resource management and environmental protection. The framework for natural resource management in this report is covered under the following broad headings: (a) watersheds and barren lands; (b) wetlands; and (c) marine/coastal resources (key agricultural and arable land issues are more conveniently discussed under the above categories). Environmental protection is discussed under (a) urban/industrial pollution; and (b) institutional and regulatory requirements. 13. Before specific discussion of the subsectoral framework for environmental action, it is important to understand the context and precepts underlying the proposals for environmentally conscious development and increased developmental sustainability given below. As the review of the "danger spots' above clearly demonstrates, protecting the environment in Viet Nam is not a luxury reserved for wealthier countries. The warning signals for Viet Nam are already evident and the cost of further delaying the implementation of environmental policy must now be confronted. In some instances, as damages approach the point where they may be irreparable, time may be expiring on even having the option to make choices. Consider, for instance: the situation for coastal aquaculture and fish spawning in dwindling mangrove ecosystemns; the expansion of rice and other agricultural activities into acid-sulphate soils at the expense of wetland ecosystems with high biodiversity and other economic value; some of the relentless expansion of annual cropping on steep highland slopes that are highly susceptible to erosion; and industrial contamination of certain bodies of water. Since substantial environmental damage has already occured for them, the cost of active mitigation may now be economically unjustifiable. In other instances such as pesticide use, groundwater contamination, municipal and industrial contamination of water bodies, watershed erosion, oil spill risks, and incursion on protected forests, pre-emption of the potential long-run costs associated with allowing damage to accelerate will have to be treated seriously. If specific plans for dealing with these issues are not designed and executed soon, then the increased costs of inaction will be chosen by default as will the possiblity of having fewer altematives in the future. 14. To deal with the above issues, the following precepts should be borne in mind: First, the basic root of environmental problems is a general failure of all sectors of society to take into consideration, as a matter of course, the impacts of their actions on the environment. An important remedial step is an attempt to build environmental concerns or awareness into choices and decision making, both individually and collectively. Environmental awareness can be translated into environmental action if: (a) the polluter is mnade to pay; (b) realistic standards on what constitutes pollution are established; (c) environment mitigating actions that are cost effective are promoted to existing firms or producers; (d) mechanisms are established to monitor and enforce serious transgressions of realistic pollution standards; and (e) political will and strong institutions exist (or can be established) to permit adsniistration of the above. - v - Second, well planned and directed programs or projects are necessary to ensure that the increasing destruction of the environment is contained through the process of better design and screening for environmental impacts: and, because investment funds are limited, priorities among programs/projects will need to be determined. Third, economic growth and a sound environment are not necessarily antagonistic. Rather, they can be reinforcing goals if appropriate policies are followed. In a number of instances, apprunriate (higher) pricing (e.g., by removing subsidies) can reduce environmental over-exploitation. This applies both to natural resources like forest, soil, and water (which are usually undervalued), and to the provision of environment-related support services (waste-management, potable water supply) which are often priced substantially below actual costs. This approach of "getting the prices right' (apan from environmental costs) is quite widely practiced in Viet Nam (see Chapter IV, B). In instances where the envronmental problem is already serious, however, additional steps will have to be initiated to take account of environmental costs by implementing appropriate natural resource management or pollution control policies. In choosing among these policies, two decisions are of particular importance. First, are regulatory or command and control methods such as emissions standards and land use zoning likely to be more cost effective than market-based policies that rely on economic incentives (such as taxes on emissions or land use)? And, second, should environmental policies be direct (targeted at the environmental damage itself), such as emission taxes or standards, or indirect (aimed at the use of inputs or outputs that contribute to the environmental damage), as with taxes or standards on fuels? 15. Our assessment of the choice among these policy instruments may be summarized as follows: (a) While the choice of an appropriate mix of policy instruments will depend, in general, on the characteristics of the environmental problem and on the capabilities of regulatory institutions, minimal requirements of (i) background statistics and monitoring information concerning the sources of the problem, (ii) implementing regulations, and (iii) institutional capacity will have to be met first. (b) In specific cases, the key considerations for policy choice would be: (i) the costs of abatement; and (ii) the ease of administration. As the minimal prerequisites are being developed, certain activities could be considered for more detailed evaluation and for pilot initiatives in increasing the use of market-based and indirect instruments (especially presumptive charges) for environmental action. These are discussed in the relevant sections below. The subsector sections below are devoted to addressing the questions raised in Section B above and to taking into account the precepts discussed. The recommendations for priority environmental program and policy initiatives are summarized at the end of the Executive Summary under three sets of matrices (for natural resources; urban and industrial pollution; and institutional development) as Strategic Implementation Plans (SIPs). Each of these action plans constitutes the development framework for the major environmental subsectors. The SIPs summarize for priority programs: What needs to be done (proposed activites and guiding principles); the priorities for action (proposed sites or selection criteria and sequencing); who should do it; and what has been done so far (especially the status of foreign assistance). Watershed/Forestrv Management and Rehabilitation of Barren Lands 16. Improved Sedentarization and Settlement Supoort. The lessons from past efforts indicate that: (a) the need for promoting sedentarization to ethnic minority groups should be examined on a case- by-case basis; (b) areas for sedentarization or settlement should be carefully chosen to ensure land suitability and appropriate use; and, for long-gestation tree crops, a close examination of local and - vi - international market prospects; (c) proper preparation and support at destination sites are undertaken; (d) origin households, before voluntarily moving, should exhaust prospects for employment within their own province and surrounding areas; and (e) ethnic minority households who want to transmigrate should not be summarily translocated without proper training to prepare them for their new lives. The need for land use plannine in the vulnerable upland areas is to first select the areas with the best chance for success. This requires: (a) the expanded production of agro-ecological rnaps in conjunction with erosion maps for districts with best potential underutilized barren lands (i.e., those with the lowest land susceptibility and the best potential for products with market prospects); and (b) planning to be focused at the sub-district level with the land allocation process involving consultations with the relevant administration, local communities, and households. Restriction of annual cropping in Class V land (greater than 35° slope) with shallow soils and inherently high erosion susceptibility should be considered, although the appropriate mix of policy tools (direct prohibition and/or prohibitive agricultural land tax) would need further evaluation for their efficacy and cost effectiveness. Furthermore, forest land rprotection` should be initiated to either permit natural regeneration or reforestation. 17. Appropriate Transfer of Imnroved Technology. Improved technology for developing the "barren land" in hill areas is available, but appropriate pricing policies and improvements in land tenure are not sufficient to bring it about. The challenge is to tailor the technology appropriately to existing conditions and constraints faced by the farming households and local communities and effectively extend the technology to them. In this context, lessons to heed are: (a) technologies with the best chance for replicability should be sufficiently renumerative in terms of fulfilling household subsistence and/or increasing net cash incomes from the farm households' efforts; (b) in terms of erosion control measures, soil conservation technology that emphasizes biological conservation measures would be preferred to the construction works (e.g., terraces for annual crops) which require large excavations; (c) conservation- based forage production offers a low cost and appropriate tool for both land conservation and income generation. In selected areas, relevant technology transfer groups should be established, comprising local farmers, knowledgeable extension workers, village elders, researchers, and non-governmental representatives working in the area; and technical assistance and credit support should be provided to try out and promote appropriate technology using successful hill area blocks as demonstration models. 18. Protection of Priority Conservation Forests. Conservation forest protection is now very important because, since Doi Moi, the control of population movements have been much less rigid and "spontaneous" settlement has increased dramatically, particularly in the Central Highlands. Agricultural land use has also been liberalized, which means that unsustainable use of land and forest will be harder to control. Successful protection and management of conservation forests (termed "special use" forests and "protected" forests in Viet Nam) require: (a) appropriate demarcation, protection enhancement, and improved management of the protection area; (b) biodiversity conservation and enhancement (including biological inventories and ecosystem rehabilitation); and (c) buffer zone development to reduce incursion pressure (including income generation or employment support outside the protected area, low cost soil stabilization measures, extension, credit support for appropriate technology transfer, joint protection agreements, and selected social/infrastructure developments). Choice of priority conservation forests for such support should be on the basis of: (a) the value of biodiversity; (b) nature and seriousness of threats; (c) the size of potential buffer zones: and (e) the administrative capacity of the local administration. Wetland Protection. Rehabilitation and Management 19. Successful wetland programs would need to provide for: (a) rehabilitation of degraded mangrove and melaleuca forest areas through reforestation and promotion of alternative uses of abandoned or about-to-be abandoned shrimp aquaculture ponds and holdings; - vii - (b) demarcation, protection, and appropriate management of mangrove areas and inland marshes, to preserve and, where needed, to improve their fishery nurturing functions and their rich biodiversity; (c) land allocation and investment support to local communities to encourage joint protection of wetlands and support of environmentally benign income generating activities and enterprises, especially in areas buffering the protected areas; and (d) institutional development to upgrade the efficiency of support services for forestry and fishery, including the promotion of private sector and local peoples' participation. In the case of the acid sulphate soil areas and critical waterways of the Mekong Delta, there would be the additional need to develop a framework or model to monitor the cumulative environmental impact of major investments, starting with the provinces encompassing the project areas selected for priority investment focus. This model can then be linked to the modelling of impact on key estuaries (para. 24 below). The choice of priority areas should be based on the assessments of the 1994 Biodiversity Action Plan, taking into account the same criteria as for upland conservation forests (para 18 above). 20. Promoting Sustainable Production Systems for Wetland Areas. Aquaculture promotion in coastal wetlands should only be undertaken in areas where the acid sulphate soils problem is not serious. Careful site selection is critical, as is the investment model to be used. For coastal mangroves, the least cost adjustment or rehabilitation of shrimp fanming areas is likely to come from a low-cost improved extensive system in conjunction with mangrove replanting. An inventory of abandoned or about-to-be abandoned ponds should be undertaken to enable the choice of better potential sites and to include prospective barren lands for joint rehabilitation and replanting. For wetlands further in from the coast, serious consideration should be given to, inter alia, the introduction of potentially more viable altematives (in terms of net incomes and the environment) to their rehabilitation for dry season rice production. Such potential "win-win" altematives include (i) the addition of aquafarming to the existing mono-cropped rice enterprises; and (ii) possibly oil palm plantings in more contiguous and better water control areas (acid soil flushing in the wet season). 21. Priority Restrictions for Consideration. That restrictions be instituted on the establishment of new shrimp aquaculture ponds involving mangrove destruction in acid sulphate soil areas is not the issue. At issue are: (a) what is the most appropriate policy tool (para 14 above) to use for this purpose; and (b) pending an evaluation of the answer for (a), should a moratorium be instituted against new shrimp aquaculture investments in acid sulphate coastal areas which require mangrove destruction? Given the study's assessment (detailed in Annex 8), the answer is yes. In fact, it may be almost too late for preventive measures in the badly managed ponds which will have to be abandoned because of acidification. A similar moratorium should also be considered for large-scale investments to reclaim acid sulphate soil marshes for dry season rice production pending a detailed assessment of the opportunity cost of such investments (para 9 above) and the feasibility of instituting a prohibitive land tax with rebates for appropriate land use measures as a pilot initiative. Other Coastal/Marine Resources Management 22. In addition to mangrove area planting and rehabilitation, stabilization and afforestation of sand dunes in the central regions, and reforestation of barren coastal lands (to buffer against storm damage and provide for local wood requirements) should expand within the implementation capacity of the agencies involved. While it can be an economic activity, the rehabilitation and improvement of coastal dikes should be expanded more cautiously for the central coastal areas that are highly susceptible to strong typhoon winds. In the meantime, more in-depth assessment should be made of the technical and economic feasibility of further upgrading the dike standards to withstand high intensity typhoons. - viii - 23. Coral Reef Protection. The top priority is identification of coral reefs for designation as special protection forests (marine parks) and, for presently designated areas, to assess the need for adjustment of the protected area cover. A demarcation, protection, and management plan should then be developed for the selected areas. Strict enforcement of fishing restrictions (especially dynamite ftshing) and the use of coral beds in both the conservation and surrounding buffer areas should be instituted. Most important is the clear delineation of responsibilities among the agencies involved and the involvement of affected local inhabitants in the protection process. 24. Monitoring Proeram for Cumulative Inmact on Key Estuaries. The viability of important wetland or coastal conservation areas can be seriously jeopardized, especially for the two most important estuarine delta areas of the Red and Mekong Rivers. Pollution stresses of each are quite different and careful study of the importance of relative pollution sources (both rural and urban) should be undertaken with the objective of developing effective monitoring systems for environmental protection. Urban and Industrial Pollution 25. No comprehensive assessments of the relative importance of various industrial pollutants have been undertaken. However, using Ho Chi Minh City as an example, water pollution from thermal plants contributes to less than 10% of total urban pollution load compared with household organic wastes (more than 60%) and inorganic wastes from small scale industries (about 30%). Similar results were obtained in the Bach Ho area, where estimates of pollution show that 70% of the total waste water disposed into the sea was untreated human waste, with industrial waste accounting for 18% of the pollution. Thus controlling of waste water and solid waste pollution is clearly the most important priority. Other pollutants are more site specific, with selected air pollution in certain parts of HCMC and Hanoi and particulate emission of thermal power plants ranking among the top priorities. Of less immediate concern is surface disruption from coal mines (including pollution from coal transportation), sulphur and NO, emissions from thermal plants, and pollution from oil exploration. 26. The following are the priority actions needed for pollution control and mitization: (a) short and medium-term measures to inprove the efficiency of existing water supply and sanitation infrastructure in ways that will not raise the cost of future investments (e.g., repair, maintenance, and cleansing of pipes and canals). (b) Short and medium-term actions to improve urban waste management and clean-up of existing industrial pollution, including upgrading maintenance equipment, emergency drainage, and flood control. (c) Medium-to-long term initiatives (which need to begin immediately) including the preparation of urban master plans and supporting sectoral plans for water supply and treatment, waste management, housing, urban transport, and flood control. The priority for urban (maste. and sectoral) plans should be the following three 'nexus' city regions, beginning with the largest three cities in each: (i) HCMC/Dong NaiNung Tau; (ii) Ha Noi/Hai Phong/Quang Ninh; and (iii) Quang Nam/Da Nang. (d) Measures to prevent pollution from new industries through the improvement of government capacities to screen potentially high-polluting projects at the licensing and application stage (especially for foreign investment and Economic Processing Zones) and thereby ensure appropriate mitigation measures. Support is needed at the level of MOSTE, the central project evaluation agencies (NPEB, SCCI), and the provincial (metropolitan) Environmental Comminties. - ix - (e) Short-term actions to reduce industrial pollution and energy consumption by selected existing industries through low-cost, in-plant measures designed to improve energy and productive efficiency. One avenue for implementing this program is the performance of efficiency audits on a fee-paying basis together with a small matching fund arrangement to finance low-cost pollution control actions reconimended. (f) Short to medium term measures to reduce urban air pollution through the increased use of unleaded gasoline and the reduction of two stroke motorcycle engine use. (g) Initiate pricing and taxation measures which can improve the incentives for pollution abatement. Focus should be on (i) a review of costs for providing water and sanitation services, an increase in new connection charges, and an exploration of potentially charging for services based on a user-pay principle; and (ii) an exploration of options (eg. in the waste wateT subsector) for increasing the use of market based and, particularly, indirect pollution control policies. Institutional and Regulatorv Requirements 27. The institutional requirements for environmental action may be summarised as follows: (a) To improve goverrment's capacity to review and make decisions on environmental policy, undertake interagency coordination, and to resolve interministerial policy conflicts, there is a need for GOV to: (i) consider altemative options for decision making (ranging from the establishment of a supra-ministerial body or council to the establishment of interministerial coordination arangements; and (ii) more clearly define the relative roles of MOSTE, the State Planning Committee, and the implementing ministries in planning, program/project review, monitoring, and enforcement of environmental measures. Options for resolving interprovincial pollution issues should also be explored. (b) To strengthen GOV's ability to review, supervise, and incorporate environmental assessments (EAs) for new industrial investments, there is a need for (i) the establishment of special EA staff in project units of implementing ministries in close cooperation with their respective Science, Technology, and Environment Departments, the National Environment Agency in MOSTE, relevent SPC Sector Departments, Provincial Departments of Science, Technology and Environment (DOSTEs) or Environment Committees; and (ii) technical assistance to establish and refine the EA process for key subsectoral investments and assist MOSTE in developing management guidelines on key polluting sectors and technologies. (c) To develop GOV capacity to monitor ambient pollution and firm-level emissions, there is a need to: (i) support two types of surveys of existing firms (one on the intrinsically heavy pollutors or pollutants, and one on a sample of "vulnerable" sector firms and sites); and (ii) provide technical assistance (TA) to establish, conduct and use the results at the provincial and central levels. (d) To strengthen the effectiveness of MOSTE and the DOSTEs in their oversight functions, (i) the technical collaborative links between MOSTE and provincial EAs could be strengthened in the same way as existing sectoral services at the provincial level (eg. for agriculture, forestry, and aquatic products where the center provides technical support to the provinces); and (ii) TA should be provided to address joint central-provincial issues, especially in clarifying and operationalizing the implementation regulations in support of the NLEP. - x - especially in clarifying and operationalizing the implementation regulations in support of the NLEP. 28. The priority regulatory requirements for environmental action are: (a) To complete, with technical assistance support, the development of guidelines and implementing regulations or instructions for performing and incorporating EAs at the central sectoral and provincial (DOSTE or environment committee) levels, starting with a limited number of pollutants that are within the monitoring and enforcement capacity of the DOSTEs or ECs. (b) To fill the gap in the development of national and provincial level ambient standards for pollutants and the regulations governing their use for industrial pollution, (including firm- and industry-level effluent standards), for which technical assistance would be required. (c) To rectify the limited capacity of MOSTE and DOSTEs in drafting implememing regulations for environmental protection by strengthening the environmental law expertise at the central governmental level and at the provincial levels. 29. Because of the unmet needs, the eagemess of donors, and, most importantly, the complex interlinkages characterizing environmental issues, special care must be taken in designing technical assistance support. TA, to be efficient and economical, should be provided in a consistent package (especially for urban and industrial pollution needs). Thus, support for the establishment of standards, monitoring, and pollution abatement assessments, for example, should be jointly provided to reduce conflicts in approach to tackling interconnected environmental impact problems. In addition, technical assistance to evaluate the relative applicability of market-based (particularly indirect) enviromnental policy instruments and to initiate pilot projects in increasing their use should begin now so that larger scale adoption can take place within a few years when the required information base, monitoring mechanisms, standards, regulations, and institutional capacity would be considerably strengthened. - xi - STRATEGIC IMPLEMENTATION PLANS FOR ENVIRONMENTAL ACTION 1 Introduction Based on the November 1994 Workshop to discuss the draft version of this report, three sets of strategic implementation plans were prepared in matrix form and these are presented below under the following environment program objectives: A. Strategic Implementation Plans for Natural Resources A.1 Demarcate-protect and manage upland conservation forests A.2 Develop and improve livelihood and income-generating potential in the hill areas or upper watersheds A.3 Reduce the demand for wood as fuel and improve energy efficiency A.4 Protect, rehabilitate and manage mangroves and inland marshes A.5 Protect vital or particularly vulnerable coastal or marine resources B. Strategic Implementation Plan for Urban and Industrial Pollution B.1 Review/prepare urban master plans with emphasis on environmental protection B.2 Conduct environmental assessments (EAs) for new industrial / development projects. Strengthen environmental planning and EA capabilities B.3 Critically assess the environmental pollution of large cities, industries, and Export Processing Zones and Implement environmental audits of existing factories. B.4 Application of Market Incentives to Promote Reduction and Prevention of Industrial Pollutidn B.5 Improve environmental monitoring system and Increase public awareness and participation C. Strategic Implementation for Institutional Development C.1 Coordination of environmental policy and planning C.2 Implement effective Environmental Assessments (EAs) for all State and foreign projects C.3 Establish standards for key pollutants C.4 Increase awareness of recent regulatory changes The matrices presented at the workshop have been modified by the study team to reflect assessments made in November 1994. - xii - Each matrix of the strategic implementation plans consists of the elements given below: WHA T NEEDS TO BE Environmental Program Objectives . The material in the draft DONE? report was used as the starting point for defining these objectives; this material was modified according to the recommendations of the working groups (based largely on additional information and changes in circumstances within Viet Nam since the April - June 1993 mission) It should be noted that the objectives represent a significant step in narrowing the wide range of environmental issues that could be addressed to a set of priority objectives. Environmental Program Components . These identify what needs to be done in order to achieve the Environmental Program Objectives . Proposed Activities . These are the details of the Environmental Program Components . While they can be thought of as separate, distinct studies, technical assistance, or investments, they are not intended to be comprehensive; considerable work remains to be done in the aea of specific project and technical assistance definition and preparation. Guiding Principles identify some of the measures already taken. stakeholders in the process, or critical elements to be considered PRIORITIES FOR ACTION in the further development of a preparatory framework. Proposed Sites/Criteria for Site Selection either lists the priority locations identified by the working groups or, where infonnation was lacking, proposes criteria for determining priority sites. Sequencing provides recommendations for project implementation, given the proposed sites, the nature of the project or technical assistance to be executed, and takes account RECOMMENDATiONS FOR of existing initiatives and studies, particularly regional and sectoral IMPLEMENTA 7ON master plans. Responsible agencies are listed without determining specific institutional roles and responsibilities. WHO SHOULD DO IT Status identifies which agencies have completed or are involved in assistance projects related to the program component. This list will need elaboration if maximum benefit is to be gained from WHATHASBEENDONESO previous and current initiatives. FAR Strategic Implementation Plan for Natural Resources: Matrix A. I Environmental Program Objective: Demarcate-protect and manage upland conservation forests Priority Program Proporod SItes/criterIa Componeots Proposed Artixities Guxding Prirciples tot Site SelecRton Seqxoocieg Responaibt SCates I Select ar..a ol high Select pro y ero The netoctior ot s rea rina site seincrio r to, Priority areas to, watershed Selection or BAP completed m biodio-raity and s0-rrd bie cooniste-t w-ti w-trrshed pretocilro should conser-atoo: Piorty areas- 1994. 1991. wetershed ostue Fot proposals loro:n TFAP tire bh bhard on iiporiance of FTro shorrid be ForesrIy Act. proteelio. Naiioo-I Watrs-iod he rivor sys--mf to. La, cti,: YT, BCa Lax cndeitoke,- by TFAP compilied Menogemeot Ptan; BAP, mergY. ne- and retoo . Car Son La -n-mitt.e in 1992 cod proinc-aI plane dnf-oresla,- oad acio- Second consistling or economic olcac.- Lam Ong: Ngtie An: MWRC MOF: Fina1 sie selection Ior Ha Tinh: Thea Thien MOE. MOSTE, biodio,reit- protectlon H,e: DOog Nai cnd PPC's. 2. Within selected FPe the aeteo-ed high priority The action in-l-emnrt ot ehoeld be hased on BAP. Tird MOF end loca Notional cr sereroln fcr.t. looe i - to eres ro, local P-cytencoooitcrlsm Consideration shol-d bh Dee L[r PPC5. sitiatices provide limpleme nt potetio rinderrake: domararro, w1 it he Ic,irica Ilim to cir.oorog p-ioi-e Prioiric are- I., bird-iVnet nta end iraragemeet piers moppng. biological -,entrii,s, determining ocatirirs ot m oocatior th1at are iligcg esereorci driori-cairor r rrsonYiem Irntatrihtatlion ant rnonreatrrio crisis vii yiiPr°iiy for aro irirtier et Liii Cla.l Ynii l, Lao coon reati rnoitoritg will, rcoyrpt idyotitrig approypiote -irjnotions wotristird Cv. Ha, Phonn, Nlre flote,rs aid inoetrmet cnd technical prlrectron and protectroon hiodi-rsiip Ao. Ito Tint, a TSrie protecton cod aseisreoce. eracagemeot meancien Protection. or rehanilrioi H.n; Lte Dro:g Dog --aag-r-et Na, Dac Lac. 05005 Alt !-Wloy assessed as 3. Establish end de.e.op Capital tveetment and technical Appropriatl ineritxtio.aI treng eqel prioritly utte National X- betterseenesaxurreending as-s-lnce to agrotreostro orriarigemeots tot p-oje-t res-posihi1ity initatives gie i osereacetiearena, reined species retoresatioid implemeirtation oisrirt hbe asorg-nd to preliminary basis H commvI.a . toresry: re oemed and e-hvated. either PPCs ot or sIre en-ir-nmen-atly compatible Proirces or pricri,a.ion and -eiproymeo cod ocomo MOP Other term reel generating rpprrtxoiie tew institutiene wilt models roar echnology tir-ster to oned to be redoce tend degradatixe: ineroved at nete-sion and 'boic peeds' va-npus -tg,, .i,rostrautuxr. ' . .pl5 sualgsY Establish ijot agreements MAF. between hoaseholds or cimenites with govnwinent to piOtect conservation toresle. 4. lmprpvetrstivtiuotn TA: program plannng and Shrs-ild be a con-o-rniet c Alt instit-tions imptented in a sepa,irY to plan monitor project preparationr. -oy neshr-et t and pai'icrparmg o-imber o end implement the tectnical essiltance ehoeld receive techical progrems above. cndrel,d rnde, this tIs technical assi-lance obleclie- as-istece proloeu.s '5 at Strategic Implementation Plan for Natural Resources: Matrix A.2 Environmental Program Objective: Develop and improve livelihood and income-generating potential in the hill areas or upper watersheds Priority Progrm Proposed Sits/Cteris Components Proposed Actviities Guiding Principles leo Site Selecnion SequenIng Responsible Statue 1 Se-let priority lever compainI ecr-syoter-hsnrl land rih slection at sires Fial site selection to, PliolitY areas tot barren lnd S-lection cl CIDA -site ucderetitled bsrran hill -rsonice maDping art erosiod enidbc i mii brenn rcllilili r lhtirin: priority areas selectin dali reaa mdlh esueti9g -tscepibiity classilicaion nd. Bartn Lands Pragra should b ba scd on Fesl: shold be hiesnorce data settlem"nts tot fiAh sa-i-eco-oek data .r IDecree 3271 and probabilily at succeslul S.n La: Lng Son; nddertebn, by and ernsi.n deonloement uenpart. Priarilv diicts, and mdi-es of Sdentariaat,iool/StLement re wbiiatiom total barren Oumg Ninh: Ha Tinh: c-cmiittaa eaneptibilir lielihood sislaicabilily select PRieem. as melt es lend are; and ec-lgical Dec Let consisting af PHRD -Forest aimity ptolect oraas and TFAP; and p-oinclet land type aflto,ed. S-ond: MOF; MOSTE; Pr1rention and Ponto land acnrdirgly. eA- Cenidera,ion a, -ild bre la Chair Ngh Ai PPCs; wIAP; Barren Lurd given In cthmsing provinces Thanh Hon GDLA. Development ot eictinns that sin high rliod, Projct. 2. Uedetake epprpriete Capbial inmatmeri and ,clcnical App,ianiarn incli.ltlinnal priority tora.ruinb-t ol Trivn Orranp; Yen B.i; Ultimate arlor-s nrin de.etopment. .ssislence to: a--nt--elry rrrangrmns or proiect o -iectioLs malorsod an cal: Vi P-.; responsibility lend nindo1s mined species ol rel-resrarin implemeI- tIlioi shI-ld be prtectone: bmudee,rity Gi-ng: Ha Bnid, Dong assigned ti deeloped. and voniunel hnree-r; re-i-mcd and -cahu l. pro bdci on: or rehbliterion al; Binh Th-an either PPC-e -l PInt eiiiaron,a no iemironmenlt.lo compalihbl p-ioincee or northern highland empluntriect end income- MOF. Other Ires goncnating eppmt.ririiee. inalitutinn will Little moth done Also, undertake markeing plan vn-d to be in Central - mith partinIpatlicn e rinute invled. e.g. Highlands. < socl. , GDLA. 3. Foc.s en ppropriate Reew replivability °' The active in-oln-oeme ol Local People s VPlshly succes aclhnogy traveler In hi N uccesslo vaes end op-l People's Commiltees Commirteca under ariahbl areas, comenonralo on cansernalior- will he ceilinal iii with lechcicel onditiunai bhsed l-rege pruducti.n technelgvy rentfer soppoir Item syslems. socceen. relevnen E.lablinh rele.no lecIrnulccy earional .ransler grudyin, ivcnlving . miqisrties. Iar mere nd local leadedr s-d uve succeenlol medels. 4. Denelop end Implement Annal cropping en Class V l-d MOFP PPCs. Pill icitrativ- Iend use restrlctl1ns to shovld bs prohibiled or initiun ranved. sane .oet end prohNbikine Ind I. ie 11.e.e produntithAy and arees mith ibnales Icr soil s-bslatence livelihood. e-slin masuien. S. Impinee letltcti.nal TA program plnning and Shnuld ho a nompnnent cl Ail ionil-lin, Impl-manmed in a cepecity to pben, monitor pitcl prepara_io. every investment and plarkipeing number cl end impltenet the techinal assistance should receive technical c. prasregee eba-e nnducled Indm tIIe tINelechcal asai-tane .W uhieclino. evseiveca. rinorclt. ________________________________ __________________~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~r 3. Strategic Implementation Plan for Natural Resources: Matrix A.3 Environmental Program Objective: Reduce the demand for wood as fuel and improve energy efficiency Prioilty Program Proposed Sires/Criterla Corrpo-ento Proposod AnRivirs Guiding Pfirripte, for Site Selection Sequ..ciog Responsible Status 1 Ecp.nd futl sthient TA ro begin improved TBC ITo . Co-plered rn *BC TsC Energy Inilia1 progrm uoohateos supply nd --u.er..ul cron disseminalion Ire course of derailed Insrirtre. ar-red under dtdbw-on program. tno.ict doontup-enr PPC., privars uNrOpEsMAp sector. Program 2. oro..o the numb., of TA to ldohrty prioriry oiaee TBC TBC TBC Energy TBC hydropower dame s.anl and micro-power sources lnsrir. MOE aspeelay awmrt end MWR. rrrero.frydrexpowarooira. 3. Esparcd produtfon Md TA 10 ptac fur i. preuemeoas in TSC TBC TC En-rgy TBC sate of hiher qacety corrmerciat neal brineirre Inoliute. cod brlrSt"e. pxuIdorion nd oairktiar. PPCs. privare 4. Impro..e lsatleat TA: peograw pinning and Should bee unmponeu- or An lriauaiens Implomenled in a capsuIy to plco. .oeWror project prepration. oe_ry inve-tmeen and partiulpating oumber of cAd tmple-wt th. renheinal assisance shrould r.cel.e technical pregame abene. nodunled coder Ibis this technical ascie.ance ehictine. assisrane. proiscra.| rr Strategic Implementation Plan for Natural Resources: Matrix A.4 Environmental Program Objective: Protect, rehabilitate and manage mangroves and inland marshes Prorly Program Proposed Sitas/CrIltere Components Proposed Activitis Guiding Principles to, Site Seleclon Sequencing Resposnihie Stetus 1. Choose ress oN igh Use BAP end undertek Sotction should be Sign siec-iu in bh Within tho prolrity rsoe Sei1roin ci BAP opletld in biodality ftn suppiewsnrey surveys In consisent with scnc.nt udnre,hien wo el vei-: frriilliv sits sncti priity nre. 1994; 1991 prolesecne. decide no c1res I, Prility pionn. o.g. SAP. TFAP rinrity anninces rd citoris.e ro,j ss tot shocld be Forestry protectin. MDMP. prrily sts enterpriss both mangreus development undfelrtkc by Prnsution Act. SelctM horeod he within pr-vIncc. nd AMdbAr dev.inpmct l co.ritie cossbtecs with The choice ol reWity sheutd bo chosen lor proJlect onsiting ol develpment plnss fo pronicces shubd bhe bhsed peparation. MOF: MFAP: wetler.d In r-inicrs cod on en csessoront ot rho Peddyeq-ucoit, MAFI: shocid bh -ecualutd lor AP's roviw. the etent o prowotio in Inisting peddY MOST: and pdoity ol Intr-provinir the incursion trcea.t cod the ares c- begic iwk ediatey Pfc.b sob-proi cs interikhanes rospective erol buffhter citer Identifying Ihe 2. Writdn iho bov TA to bh given tor prpatiu cl otllrt deveip,Menl one rirpol. end Iho rc c..silui wodoIs end steno MOF end coat Manegoe-tn has conserocilon ies i 1sein prnie.ts f-r annities: required poky rospects Io soccees.lul o locus. PPc.b occurred icrgeiv irsemeni preiodno deworoalon at pririty and Instuillitnr rerh.bilitelion. DOsign prcgrw lv monitor under and wasegeerel picas conseruc.. oc - ests: rspinntig orgolraIat mecurs. Pliorily sn,iouin ol ls.1I cuicf.tive e-vurcw-ncl r.setloIt nt torealis nd evltahaing Cunrstivlhe enhrorreintl enerprlses needs In prcri eltecs policies. ecosyotews within conservation nmriorng proorew -iwrid disticls and srlb-districts Within Ihe mindeb d bhoter PiNo irililiven orecs. be designd snd occordiug to hsl tinvocic1 e -nes. cunsultoliun end hove been orarrod Y In engroeve cmos. cn inventuny irplw-n-led Irv rho crnocs cod in-oowent ot loc-l In Duyn Hal Fi ot rpoteic1 s.s.aiahsb sloinrp Mekong Oettc as c pln ci Ins-tiil,onal cirreciy. households vini uoot t IHCMCI and iv qoacultoe sites ond rdparahi Inosimnets. Priorily woo.s Iot woticd protcion cod in the Tye Gibng IMi. barren ltnds shoid bh wade -once-vtlio and planning i resource Unit proviec. end ppriaplt develcepeni rehabilitutin: wenegewet and bhoter hntrdeweeied. 'rra: cove a"ritiris era ori-t. 3. Estblisbh nd .o.sop l heiTh.ofig wnil b required ci Minh Hlia Mang NMi ultiwlal LUtile developed. bufefr -5 s-ouendg roppry estsablshed bhote Sr T G-espneibility MOF curently aoewneen teslo. tones: at Isndac11-lt . . Sloc Trong; Kisc Gieng r as'need to * op trats mue e- geueff icilente-r pr .t.es Dong Thyp Ncw Ha; Thirn ii PPrCs. F direc meneger hi rncroew- f Binir; Ninh Binh; Hal Pro, s or ci r lscuce ha suIstchie stiulilos Ior "Phng MOF. In coniunction wirds ci provision ci s.oisi Thd.h11- Thw Th Veous other with households. inhillan.,che. 1. p,.,Ad. 'b.ITH..h lion Tinh Phe in:tirutic- mill Iltrasuociure to provide hasio Hoe Ha yin iseed ton ho l nesds oruic dTd c bd d9 eat Uhmlnl at jini I.n-vd at agreements hotween caucus stange. goverwoevi eind .o.nouniltes Io protect Coesetectice torests.F 'd 'V _.us _..I ell *Ut fdtUldl iebouuues. IVldLtIX A.4 tcontinued) Environmental Program Objective: Protect, rehabilitate, and manage mangroves and inland marshes, continued Priority Program Proposed Sites/Criteria Components Proposed Activities Guiding Principles for Site Selection Sequencing Responsible Status 4. Protect mangrove and Moratorium on shrimp Priority areas for wctland Sequencing slhould follow MOF, PPC's. Little has been back mangroves in Acid equaculture expansion involving conservation: priority area designation. initiated so lar. Sulphate Sofb from the cutting-down of mangrove First. desetnction and forests pending a) assessment Minh Hai; Quang Ninh unsustaInable of the long term sustainability of Second. aquectdttlre and dry Improved extensive shrimp Soc Trang; Kien Giang: season rice croping aquaculture models; and b) the Dong ThI ap Nnm Ha; Thai practices, design and implementation of Binli; Ninhi binI; Hai prohibitive land/ pond tax or Phong levy. Third: Moretorfim on dry season rice Thenh Hoa; Thua-Thien production In large scale Hueo Ha Tinh investnments to reclaim ASS mwrshes pending assessment ol al the opportunfty cost of dry season rice reclamation; and b) the feasibility of a prohibitive lend tax. S. Improve Intltutlonal TA: progrm planning and Should be a component of All institutions Implemented in a capecty to plan, monitor project preparation, every Investment and participating number of and Implement the technical assistance should receive technical programs above, conducted under this this technical assistance objective. assistance, projects. rt .. .. .. * ,- X ... .~~~~~~~~~~~~~~~~~~~~~~~~~~~~~- . ' b~~~~~~~~~~~~~~~~~~~~~~~~h Strategic Implementation Plan for Natural Resources: Matrix A.5 Environmental Program Objective: Protect vital or particularly vulnerable coastal or marine resources Priority Program Proposed Sites/Criteria Components Proposed Activities Guidinig Principles for Site Selection Sequencing Responsible Status 1 Stabilize and rehabilitate FRelorest or alforest priorltized Planning and activities Final site selection for PrioritV areas for coastal MOF and WFP Project sand dunes In the centrol sand dune areas and coastal shotild be consislent with coastal erosion protoction erosion proteclion: PPC'S. with 4304. regions and barren coast barren lands; TA will aid in site provincial context and should be based on: erosion First: involvement lands. selection and the supervision of plans. rate and intensity: and Outang Ninh; Nam Ha; from other timely planting. socioeconomic lactors. Minh Hai; Soc Trang; relevant Guang Binh institultons. Second: Thai Binh: Ha Tinh; De HNang; Phu Yen rhkd.- Ninh Binh 2. tehailtalte and Inprove TA Is nererhd for plnnminig and This initiative shoielrl Im Final situ sel.ction for Priority areas for typhoon MOF, MWR, WFP Project coeastal dikes. especlegy priorlization; investment consistent with nationial typhoon protectioni shiould protection: alnd PPCs, 4617: Save tl'e In Central Coast with resources are needed for low and provincial level be based on: typIhoon Cawing Nlnh Nann Ha; with Children Support. mangrove protectkion cosl dike rehabilitation, disaster planning and frequency and intensity: and Ouang Binh: Thai Binh Ha involvement mangrove aeed and propagule management. socioeconomic factors. Tinh; 0 Nag; Plu Yen; from other collection and purcldase. end Ninh Binh relevant thefr planting. AN are assessed as equal institutlons. prioIty. 3. Protect coral reels by TA is needed to prioritize Planning and activities Final site selection lor Priority areas Ior marine PPC's with Limited action. designating specified endangered coral reefs and should be consistent with marine perk protection park protection: technical cora reefs as special implement moniering and provincial context and should be based on BAP. Khanh Hoa; Binh Thuan; support of protection forests enforcement procedures. as well plans. Be Ria-Vung Tau: Quang MOF and (mrine parksl. as demarcate areas for Ninh MOSTE. protection end buffer zones. All are assessed as equal Restrct dynamite fishing ki pririty. proteteis coral areas *hd surrounding bulfer zonts. _ _ 4. ereovw Institutional TA: program planning and Should be a component of Al institutions Implemented in a eapacity to plan, monritor project preparation, every investment and participating number of and Implement the technical assistance should receive technical programs above, conducted under this this technical assistance objective, assistance. projects. tn t-t rt/ Strategic Implementation Plan for Urban and Industrial Pollution: Matrix B.1 Environmental Program Objective: Review/ prepare urban master plans with emphasis on environmental protection Proposed Priority Program Sites/Criteria for Components Proposed Activities Guiding Principles Site Selection Sequencing Responsible Status 1 Prepare and Develop rational land- Urban master plans Ha Noi;, HCMC. Hai New and evolving urban MOC, MOSTE, PPCs. National master plans of Implement urban use zoning for priority need to integrate Pliong, Hai Hung. master plans need to take MWR. MOH Ha Noi, HCMC were and EPZ master urban centres, concerns related to Vung Tau. Dong Nai. into account: National approved by the plans (or review Identify specific plans prevention of Quang Ninhl, uang strategies for socio- Government. Other big existing planml for urban transport; solid pollution with growth Nam-Da Nang. economic development.; cities are tinder for the medium wasto disposal sites: ot population, population growth and consideration. end long term. rlrainage system and industry, and Plan for coverage of distribution strategy: and There is currently an ADB. with more flood control; sewage/ transportation. 'nexus'-metropolitan the assessment of all city TA for HCMC Environ- emphasis on wastewater treatment areas. sectors. mental Improvement environmental system; rehabilitation. Master plans need to For master plans already Planning, which is protection, upgrading and expanding plan for preservation developed, proceed with attempting to lill the gaps water supply network, of high-value existing environimental in the master plan. Develop heritage urban areas as well improvement planning. Studies currently conservation plans for as for their underway include: urban areas of high redevelopment. Regional water supply Sanitation plan for Ha Noi cultural value. and sanitation zones I JICAI; National Urban Adopt mesures to Land capability should he defined and Water Supply and reduce air/noise pollution assessment for demand estimated. Sanitation Strategies from transportation. zoning is needed. Initial investment in (MOC/FINNIDAI; Urban X User pay systems rehabilitation, repair and master plan for Da Nang needed to support Include agricultural improvement of existing (AIOABI: Water supply and investments in water I and Industrial re-use facilities and their sanitation plan for Da Nang sanilation and to conain of wastes explicitly in management. IAIOAB/French Gov'tl; Ha extensive common planning. Introduce household Noi transportation plan access to suclh facilities. , connection and metering ISIDAI: water supply and for new facilities first. mgmt capacity in Ha Noi .- .. . . . ,.and Haiphong IFINNIDA). t-i Strategic Implementation Plan for Urban and Industrial Pollution: Matrix 6.2 Environmental Program Objective: Conduct EA for new industrial / development projects. Strengthen environmental planning and EA capabilities Proposed Priority Program Sites/Criteria for Components Proposed Activities Guiding Principles Site Selection Sequencing Responsible Status 1 Screen new Develop and implement Potential for Need to prioritize Sequence according to MOSTE. SPCINPEB, National Research Program on Industrial environmental auditing avoidance of very proposed processing procedures approved by SCCI. DOSTEs. and Environment has developed projects with for such projects already high long-term costs. zones and large government following line ministries recomnmendations for high pollution licensed or under Prevention is much industfial areas. MOSTE regulations with responsible for environmental screening and potential, construction, less expensive than an emphasis on industrial sectors, pollution control meastures. especially for Ensure adequate subsequent cleanup. Focus on key production techniques SPC and SCCI have agreed to loreign implementation ol EA sectors: thermal alnd mitigation measures. EA procedures in project Investment and procedure for new power; chemicals: New procedures need to review. EPZ. proposed projects. metallurgy10ood be clarified and Regulate new factories processing; textiles; implemented. to install pollution control pulp and paper; systems. petroleum and mining. 2. Training and EA should he Botl short-term and MOSTE. SPC. DOSTEs ADB-funded TA on capacity-bulding integrated into the intensive long-term .Strenglhening Environmental X for EA. project planning and training needed, with Planning and Environment decision-making emphasis on practical Impact Assessment system at an early field capability. capabilities in Viet Nam' will stage. start in early 1995. IDRC I CIDA supported EA diploma course for govt officials now underway at NUH. rt X- t*t l.J Strategic Implementation Plan for Urban and Industrial Pollution: Matrix B.3 Environmental Program Objective: Critically assess the environmental pollution of large cities, industries, and Export Processing Zones and Implement environmental audits of existing factories. Proposed Ptiority Program Sites/Criteria for Components Proposed Activities Guiding Principles Site Selection Sequencing Responsible Status 1. Conduct an Survey ALL higlhly- Focus on: thermal Select those To Be Completed as part MOSTE. DOSTE's. The environmental situation inventory of polluting firms and power; chemicals; facilities and of dotailed project expert institutes, has been roughly assessed particularly sample of remaining metallurgy.food enterprises likely to development for Ha Noi, Hai Phong, poluting firms, industries TA needed processing: textiles; suorvive-market HCMC, Bien Hoa. Quang for survey design, to pulp and paper; liberalization. Ngai, Nam Dinh. Ninh Binh. Inctude product, by- petroleum and Prior surveys conducted by products, raw materials, mining. Survey to include CEETIA, CEST. EPC, and processes, waste particularly vulnerable ENCOs. character and intensity. locations. Establish urban environmental database. 2. Conduct Standardize methods of Link emission audit to To Be Completed as DOSTEs. MOHI. MOLI, x poltution audita examination and industrial process part of detailed MLISA. General LeourX of selected analysis of important audit to show project development Union of Viet Nam enterprises or environmental relationship to sites, parameters. efficiency and Conduct specialized site- profitability. Start with audits for TA needed to design surveys, specific audits of Audits could also engineering and Industrial Including choice of sample process/emissions, analyse benefits for processes of selected polluters, sites and indicators Upgrade measurement worker health / firms to identify low-cost to be used. equipment. safety. approaches to lower Train environmental energy use and emissions scientists and facility into both the air and operating engineers to water. conduct monitoring. rt Strat6gic Implementation Plan for Urban and Industrial Pollution: Matrix B.4 Environmental Program Objective: Application of Market Incentives to Promote Reduction and Prevention of Industrial Pollution Priority Program Proposed Sites/Criteria for Silte Components Proposed Activities Guiding Principles Selection Sequencing Responsible Status . Apply Reduce budget Incentives for H-a Noi, HCMC, tlai Evaluate envifonmen tal MOSTE. DOSTE's. Little currently initiated. appropriate remittpnces acid taxes for i istallatiot, and Pfronfq Bien Hoa. Viet status of taiget sites (see MOFA. line ministries in incentive policy factories which havidle effective use of clean Tri Niif h dinlr. surve9 / data base activity change of State via tax reduction waste discharge properly, technologies, above). Enterprises, PPCs. or discount on Enhance environmental Develop selfl Develop and Implement budget inspection end monitoring procedures appropriate measures for remittance. enforcement of standards for industry, pollution control. by lines and penalties for Enforce pollution control damage to environment, measures. 2. Graduanly apply Fees, taxes should be Na Nol. HCMC, Hai Given the new concepts MOSTE, MOFA, UNDP Capacity 21 project will X PPP. and start designed to eneourage Phong. Hai Hung. contained in these PPC's, DOSTE's. introduce these concepts in oa X user pay investment in pollution Vung Tau, Dong Nai. activities, they should be Noi. Guang Ninh and Daec Lac iJ mechanisms, control technology. Quang Ninh. Quang tested with demonstration next year. Impose tax on Fees and taxes slhoukW Nam-Da Nang projects. polution, or be evehaated on the Need to prioritize inplementatioll ol feasible impose basis of lessibility, existing and proposed approaches shiould be presumptive effectiveness, and processing zones and gradual and should be emission fees. necessity. large industrial areas, linked to Implementation Revenues from fees of new standards. 3. Entourage and taxes should go to investments In improving monitornig less polluting and enforcement Industries or technologies. rn x t Strategic Implementation Plan for Urban and Industrial Pollution: Matrix 8.5 Environmental Program Objective: Improve environmental monitoring system Proposed Priority Program Sites/Criteria for Components Proposed Activities Guiding Principles Site Selection Sequencing Responsible Status 1. Technical Provide technical It will be best to focus Ha Noi, HCMC, Hai The system should build SPC, MOSTE, MOFA, Almost non-existent, save assistance to equipment and train staff, on monitoring a Phong, Ouang Ninh, from the design of the Ministry of Education and for basic water quality and administrative formulate a regional relatively small Bien lHoa. Vung Tau. National Network of Training. DOSTE's, General occupational health noid monitoring enviroimental qua4ty number of Otianj Narn-Da Nang, Environrental Quality Labopr UnioF) of Viet Nam, monitoring. agencies. management model, and environmental quality Viet Tri, Nifrh Binli, Monitoring Stations. MOH. Sustainability of any Including develop an environment paramneters, with Nam Dinh. A proposal has been made technical assistance in this scientific quality index system. priority given to by the National Researcih area is currently uncertain research and those witlh highest Program on Environment due to the burden of training. level of threat acid the to increase the list of recurrent costs. feasibility of control. water quality parameters Any recommended measured at selected monitoring must stations managed by the X initially build from General Oepartment of X existing national Meteorology and rrionitoring systems Hydrology. and greater private sector participation. Environmental Program Objective: Increase public awareness and participation 1. Dissemination of Sensitize public Environmental For all cities and Stafling of appropriate Ministry of Education and environmental especially through mviass education of these industrial areas. environmental expertise Training; Cultural Affairs; Information to Fnedia. sectors provides for within industries. cornmunication institutions; urben/ Industrial Undertake environmental cost effective MOSTE and other mass areas In both education in primary, urbanrindustrial associations. public and secondary and vocational environmental private sectors. schools. managemenit and protection. :3n rt bi Strategic Implementation Plan for Institutional Develoment Matrix C.1 Environmental Program Objective: Coordination of environmental policy and planning Priority Program Proposed Sites/Criteria Components Proposed Activities Guiding Principles for Site Selection Sequencing Responsible Status 1. Inter-agency policy A range of measures are 1 75/CP provides currenit Informal coordinating Formal mechanism SPC Roles and coordination at State possible, including: refer to framiiework (or action. mechanisms already requires clarification of MOSTE responsibilities of State Level: need PM for decision; conduct Coordiniation needed in all emerginig (eg. 'CIVb of 10', overall State planning and OOG and local,agencies in mechanism(sl for special studies; State-level sectors for effective this National Workshop. EIA policy coordindlion State line environment field have Inlormation exchange. Environment Commiltee; environment management. review commitlees). Best functions of SPC, Office agencies. been clarified officially Issue IdentIficatIon, informal inter-Ministerial Linkages to sectoral to build on these ot Government. Informal but not well known, coordination of gfoup; formal official planning and policies mechaniisms it successful. Interim solutions still and few integrating responses, reduce end workinig group; and direct essential le.g. tax policies Performance criteria to be helpful. ineclianisiris lexcept manage policy liaison between STE discourage Investment in developed. EIA review conflicts. services in line Ministries. pollullon control). committees). Selection of preferred SIDA/IUCN funded X mechanisms will require advisor in MOSTE to X Identification of support coordination. performance Crlteria. 2. Enhance capacity of Action already taken by Needs of large cities aind Criteria for ellectiveness of Issues nre ol most MOSTE Recent clialnije in provincial government througlh NLEP rural provinces are quite provincial environmental concern in a few large DOSTE status ol local environmental and 1751CP to formalize different. organization: tied to cities, where urban and PPCs. Environimient management. structure of provincial Structure and authiority of planning to reduce resource industrial pollution contiol Cotmmittecs meanis OOSTE. Capacity-building local environmental conflicts: political atithority depends on local agency uniform national required. organization now to enable enforcement of effectiveness. structures, but standardized. national standards and EIA concerns some urban The current situation may guidelines. provinces. require ongoing evaluation Other criteria, monitoring EIA capacity building avid monitoring for and evaluation procedures projects. effectiveness (possible TA). to be determined Ipossible TA). 3. Strengthen Inter- Regular framework lor Focus on large-scale issues Start with areas which have Stronger capacity for intra- Provincial Existing formal provincial natural planning and resolving inter- where central planning and already Identified common provincial planning and services for mechanisms include resource planning. provincial resource use coordination Is weak andtor concerns, or which have management may be environment MOMP and RROMP. issues. resource is mobile leg. participated in joint planning needed first. and natural This item not yet a high o water resource use and exercises already le.g. resource use, priority. quality, insh1ore lisheries). MOMP, RRDMP). planning. rt Strategic Implementation Plan for Institutional Development Matrix C. 1 (continued) Environmental Program Objective: Coordination of environmental policy and planning(contiiued) Priority Program Proposed Sites/Criteria Components Proposed Activities Guiding Principles for Site Selection Seqtoencing Responsible Status 4. Roles and Action already taken by MOSTE I DOS1E relatioins Collaboration on the MOSTE Provintcial agencies reel responibilities oa governtitent ilirough NLEP are nmost iloporiant in large development. DOSTEs. MOSTE not nmcetinig MOSTE and DOSTEs to and 175/CP to speciry broad cities. where colbttorntion is implementation or their needs for tectinical be ctarllOed tatet/local rsponsibilities required on tcchnical evaluation or 1A guidelirics. support. fot EA. Other issues rentain procedures, guidelines standards. etc could serve to be resoitved. Process for standards. MOSTE has as a basis for conildence- consultation, coordination authority, but most practical building anid ongoing and planning requires experience Is at local level, cooperation. strengthening. 5. Enhance capacity of Greater local capacity MOSTE tasks set in NLEP Role conrusion and capacity Creatiois or provisioisal MOSTE 1751CP identirics somc local agencies to needed so reduce the and 17)1CP. Includt problems greatest in large technkal guidelines for DOSTEs. responsibilities. but X respond to response load on MOSTE. establishing standards, cities, where industrial highly polluting industrial neitler DOSTE nor environmentat Issues guidelines and technkial accidents and rapid sectors will reduce current MIOSTE have resourccs procedures. lleavy densand development require urgent workload by standardizing to devote to these on MOSTE for large project practical response. initial responses. requirenents. issues or environmtental ADDsupport to IICMC disasters. (or environmental nignst and action plan. S. Establsh environmental TA:to central law committee Urgent requirements iocus MOSTE urgent tasks: MOSTE Drat regulations and law capability In to assist wish funesions and on regulations, ministerial regulations for ambient and DOSTEs tinisterial instructions MOSTE. DOSTEs and coordinatc conflicts between instractionss standards and emission standards. OOG. being prepared by partiamentary law ltws. implementation I monitoring and enforement. MOSTE. comminese. TA: to MOSTE to inmprove enforcentent provisions. Also ssrgent: provisional capschy to draft and Must be worked out prior to operating and legal evaluate legislation. legal fornalization with reqcuirmnents for nmarket- DOSTEs. based incentive pilot sc.hemes. St 5-4 0s 'a Strategic Implementation Plan for Institutional Development Matrix C.2 Environmental Program Objective: Implement effective Environmental Assessments (EAs) for all State and foreign projects Priority Program Proposed Sites/Criteria Coniponents Proposed Activities Guiding Principles for Site Selection Seqtteiicitig Responsible Statis 1. Develop guidelines. Provisional EA guidelines Review implementation Criieria fotr lehnical MOSTE Line aigeicies EA st3ndafd procedures approved by goventnscti in experience and evaluate guidelines priority: iigh DOSTEs guideliies exist. and Implementing 175/CP. Technical potential need for revisions pollution or encrgy use, EPC Admit rules for regulations or guidelines for eltviron. (TA?). Sleed developiment large inew investmecnts NUlIl allocation or Instructions for EA. protectioni in sclected sectors ol,provisional technical imnsincnt, high public Potytecituics respossibilities exist. 'I/ echnologies' arc under guidelines for speciric higih- profile. health risk of EIARU. rechntical procedures developnent. Ministerial profile, high-risk sectors (e.g. contanination, under developetttej insntcscions to be issued for nsarine oil pollution). (Selected TA for specific the guidelines. sectors e.g. SIDA- for lotarine only). 2. Incorporate EA Into Approved by government. New procedures now in Effcctivecness criteria. Litkage to National Univ of MOSTE SPC and SCCI have I new Industrial accepted by SPC and SCCI. effect require on-going evaluation plan for new EA lla Noi (NUII) ElADiplonta NUII now endorsed new EA Investment approvals, monitoring and evaluatio,i of guidelines not explicit, course for staittitdgC SPC / SCCI guidetinev for X process to evaluate Potential TA? evaluation. DOSTE. application to foreign effectiveness. investmetts projects. Imnplementation assistance would be appropriate: iraining. infonnation dissemination, documentation. 3. Require mechanism for New instructions based on Evaluation and monitoring MOSTE Potential TA to be broader participation In EAguidelines (175/CP) to nay be required to DOSTEs defined. EA, fonnalize participation of determine need for potential PPCs local govemment revisions to process. tass represcntatives saod popular organiatliots. organizations (when appropriate) on EA review comnuitice. t-t C-) Strategic Implementation Plan for Institutional Development Matrix C.3 Environmental Program Objective: Establish standards for key pollutants Priority Program Proposed Sies/Criteria Components Proposed Activities Guiding Principles for Site Selection Sequencing Responsible Status 1. Finish development ol MOSTE to prontulgate Much work lIas bIeeit dnlie, Pollutioni staiaids are a Develnptiseist or ittusitoiring MOSTE Oit-goinig researcit nailonal ambient mininsuits 1ttiotU1l standards Iut priorities unclear. higit priority coicemn in only capililitly esseisrial co- DOSTE efforn. Adapitatiotn of pollution standards, for local insplemenitation. Stiosild focus (n a Ijii;ited a simall niumber of provitices. reqtlisite (see below), expers institutes. ISO staidards. Potential TA:jlesign of nuntber of particularly .t iterim staitdards standards. itiplenmentation adverse pollutants to permtit expected to be rclased phasing. nmotitoritsg and monitoring and enfoicenient. witblin nso,tti.ls but evalualion. enforceability is A concern. 2. Develop capacity to Test existing nmonitoring Government monitorirtg Stan in IlCMC/Dong Noi Requires stippofr for MOSTE Monitoring protocuis monitor ambient and protocols, train DOSTE and should be limited and tied and hIa Noi/liai Phong. national analytical DOSTEs have been developed firm-level emissions industry staff, assign directly to SoE reporting, laboratories (IICMC and Hic MOIII hut not tested. lace aIso responsibility for monitoring, regulatory action. Nol - top priority). MOLI Limited equipmen. X Urban/lnf ustrldl DOSTEs: hire more technical enforcement. Also explore greater MOII laboratory facilities. Matix), staff. Most monitoring may liave involvement of the private labour unions. to be done by industry, sector Link to Occupational Jlealih standards / inspection. 3. Clarify prioritlls and Conduct two-level polisition- Evaluate previous and otn- I-ocus on vulnerable sites Co-rerluisite: survey could Few DOSTEs Some simtple surveys procedures for generation survey: 1) all going pollution monitoring and high-conflict urban forn basis for acquisitiots MOSTE lIave been dtne. Liik controlling pollution heavy polluters and 2) all efforts by DOSiEs and districts. of basic equipment and expert to various waste tittster Iae also othcr industry on sample donor projects to derertttinc training of local experts lislitutiuis. plantltitg projects Isee Urbanllndustrial basis. Possible TA. usefulness. anI DOSTE staff. Urbanit)lttustrial niauri). Matrix). Design survey io suppon PM has identified 4 standards developsient. industry categories fur capacity-building, data auink Ijillintioll action. and future evaiusation. 5-4 rU 0 X Strategic Implementation Plan for Institutional Development Matrix C.4 Environmental Program Objective: Increase awareness of recent regulatory changes Priority Program Proposed Sites/Criteria Components Proposed Activities Guiding Principles for Site Selection Seqtiencing Responsible Status 1 State agencles, Pulhlic infnmiation campaign IiiplentiaAion may need to Focus on urlian areas wIlere Strategy Gir dealing wiih MIOSTE enterprises, mass needed to inform agencies be gradtial it) allow tine for mu1(ist ittvestultcilt aimd existing industrial pilluters MO ii organizations and and investirs or tlcir adljiustenit / compliance. st llitiotn are concentrated. rcqidrcl first. N1011 forelgn investors to be responsibilities undier niew Mmuilotinig atud rrcs made aware ol recent regilations. enforircenitetut procedures DOSTEs. environmental iteleded to assure regulations. crediliility. t- rt ii t X VIET NAM ENVIRONMENTAL PROGRAM AND POLICY PRIORITIES FOR A SOCIALIST ECONOMY IN TRANSITION 1. INTRODUCTORY BACKGROUND A. Introduction Purpose of Study 1.1 Growth and development in Viet Nam is coming to a crossroads. Emerging from its socialist influence under the Soviet Union and CMEA through the late 1980s, Viet Nam is rapidly changing from a centralized, largely controlled economy to one which is to be driven primarily by the market. It is an economy in transition. With earnestness and impatience it is making up for lost time and attempting to catch up with its Southeast Asian neighbors, particularly Thailand and other ASEAN countries. In doing so it is very quickly being confronted with a number of very real trade-offs in its development objectives -- particularly between growth and poverty, and growth and the environment. While such objectives need not conflict in the long run, in this transition period when Viet Nam is on the verge of economic "take off," such trade-offs are inevitable. The trade-off with environment will be particularly difficult to face because, unlike the potential for growth to trickle down and ameliorate poverty, growth and maintaining the integrity of the environment for future generations are more likely to conflict. As the experience of Thailand (especially the environmental problems faced by Bangkok) is revealed to the Vietnamese through the opening up of travel and media coverage, the Government of the Socialist Republic of Viet Narn (henceforth called the Government of Viet Nam or GOV) and its populace are well aware of the danger of an unfettered growth strategy. 1.2 In 1990/91, the State Committee for Sciences, with the support of the United Nations Development Program (UNDP), the Swedish International Development Agency (SIDA), the United Nations Environmental Program (UNEP), and the International Union for Conservation and Nature (IUCN) prepared a "National Plan for Environmental and Sustainable Development, 1991-2000: Framework for Action" (NPESD). The publication of the NPESD in August, 1991, was timely. Its objective was to set the appropriate course of action before the large scale influx of foreign investments results in expensive long term costs for Vietnamnese society. The NPESD and its complementary reports (on "Project Profiles for the NPESD" and the "Viet Nam - UNCED National Report" submitted to the Rio Conference in 1992) provide a broad, wide ranging framework for environmental action in Viet Nam. This study complements the NPESD by updating key developments, analyzing certain priority issues in greater depth, and highlighting the most important issues to be faced and priority measures to be used. It focuses on issues pertaining to land use and settlement, a better understanding of environmental stresses and their priorities, urban and industrial pollution, institutional development, pricing and incentive policies, and key trade-offs -- with the objective of defining priorities for further government action in policy and investment programs, especially those which can benefit from foreign assistance. Scope and Coverage 1.3 The rest of Chapter I sets out the background information which sunmmarizes the broad setting of various country characteristics that have to be understood before critical issues can be analyzed and relevant recommendations can be mnade. Chapter 11 analyzes the extent of environmental stress, sources of degradation, and emerging problems which need to be tackled, including their implications for -2- and relevant reconmmendations can be made. Chapter II analyzes the extent of environmental stress, sources of degradation, and emerging problems which need to be tackled, including their implications for environmental action and the priority needs or problems for resolution. The following natural resource subsectors or ecosystems are treated separately in this chapter: (a) upland forests; (b) wetlands/marine ecosystems; (c) agriculture and arable land (including overuse of inputs and the role of livestock and fisheries in the degradation process); and (d) population. Chapter II also takes an initial look at degradation and pollution costs and their implications for environmental action priorities. The sources and incidence of urban and industrial pollution is given in Chapter 111. 1.4 Chapter IV sets out the developmental and policy framework to achieve a more sustainable growth of the Vietnamese economy. It first sets the context for such an approach by broadly reviewing the overall implications for environmental action arising from the government's macro-economic reform program; by setting out the precepts for environmentally conscious development, including the choice of policy instruments and their implications for environmental action; the opportunity cost of not being environmentally conscious; and by rationalizing the role of government in the process. It concludes by highlighting the incentive policies that are important for environmental action. Chapter V sets out the program framework and discusses the options and reconmnendations for addressing the key natural resource degradation issues under the following headings: (a) watershed and biodiversity conservation; (b) wetland and coastal/marine ecosystems management; and (c) urbanlindustrial pollution. Chapter VI then (a) reviews the principle institutions with environmental mandates in Viet Nam; (b) analyses key institutional issues pertaining to environmental action; and (c) recommends measures to develop an environmental regulatory framework and strengthen environment management capacity in Viet Nam. 1.5 In analyzing the sources of environmental degradation and pollution (Chapters II and 111), attempts will be made to summarize the linkages to overall development for the relevant subsector (e.g., crop agriculture, forestry, fisheries, livestock, industry, and energy) or major activities within them (e.g., watershed protection, wetlands protection, pollution control). Linkages with water resource development issues, however, have been particularly constrained by the lack of an overall subsector framework. (A Water Resources Review undertaken by the World Bank in collaboration with ADB and FAO/UNDP will look at such linkages in more depth.) This study also focuses on lessons learned from the results and performances of existing programs and policies with emphasis on "best practices" which are available from within Viet Nam and from neighboring countries with similar conditions and problems. To get a better handle on the relative priority of mitigation measures for various ecosystem degradation, a modest attempt is made to calculate roughly the cost of degradation and pollution. Most importantly, the study's recommendations for further action are given after considering relevant options and with due regard of institutional roles and responsibilities. 1.6 Finally, Chapter VII spells out an approach towards integration, design and sequencing of priority projects and programs and the required technical assistance to support environmental action. It also summarizes the status of actions and support for these activities; and sets out the framework and preparation needs (including priority site selections) for the proposed investment support and technical assistance. B. The Economic Setting 1.7 The per capita income of Viet Nam, estimated at less than US $200, makes it one of the poorest countries in the world. Through the government's 'Doi Moih or renovation policies (from the mid-1980s and particularly since 1989), Viet Nam has been passing through the transition from a centrally planned to a market oriented economy. Macro-economic and sector specific measures and decrees were implemented which provided for: macro-economic stabilization which included anti-inflation policies like the aligning of the Vietnamese Dong (D) close to its market exchange rate, the maintenance of interest -3- rates above domestic inflation, and reduced subsidies to state enterprises; the liberalization of pricing, marketing and trading (including agricultural products); the shift from centrally planned collective farming to individualized/family farming; increased allocation of state/cooperative-operated lands for private use with longer term rights to use them; increased management and financial autonomy for state enterprises (including state farms and cooperatives); and the promulgation of various laws aimed at strengthening the commnercial sector in Viet Nam (e.g., banking laws, business and enterprise laws, revised joint venture laws) 1/. 1.8 Viet Nam is very dependent on its agriculture and natural resource base - between the Philippines and Lao PDR (see Table 1.1). Agriculture and forestry account for about 40% of GDP and employ over 77% of the labor force. Processing of primary products (food, wood, petroleum and minerals) accounts for 65% of industrial production with the textile industry and the power sector accounting for most of the remaining industrial production in Viet Nam. In terms of sources of growth, agriculture and forestry accounted for 35% of total GDP growth, underlining the importance of the country's natural capital for economic development. Table 1.1: Selected East Asia Economies: GDP and Labor Force (in percentages) Average for East Asia and low income Pacific (low and Viet Nam Lao PDR Philippines Thailand countries a/ middle income) GDP: Agriculture 40 59 23 12 30 21 Industry 19 16 35 38 34 45 Services 41 24 42 49 38 36 Labor Force: Agriculture 77 88 45 70 n.a. b/ n.a. Industry 12 3 10 11 n.a. n.a. Services 11 9 45 19 n.a. n.a. Notes: al Does not include China and India. b/ n.a. Is not available. Source: Annex 1; World Bank, WDR, 1989 and 1992; UNDP, Humnan Development Report, 1993; and various country statistical publications. 1.9 Agriculture and natural resource based products are also the predominant source of Viet Nam's merchandise exports. Earnings from rice, fisheries products, perennial crops (rubber, coffee, tea) account for about 60% of total merchandise export revenues. Although it is expected that the industrial sector will sharply grow in the near future, the country will continue for some time to be heavily dependent on the exploitation of its natural resources as much of industrial growth would be the processing of primary agricultural and natural resource products. Hence, there is the need for natural 1/ Further details are contained in the World Bank Economic Report, Viet Nam: Transition to the Market, September, 1993. -4- Map 1: Viet Nam Region * Northern Mountains * Northern Midlands Red River Delta North Central Coast * South Central Coast * C.entral Highlands 177 I '. North East Mekong * Mekong Delta 0 100 200 -5- resources to be carefully managed to allow for sustainable use. Development of an institutional and policy framework which will help conserve the nation's natural capital while maximizing revenue generation will be indispensable. This will not be easy as there will be difficult trade-off problems between growth and the environment -- even within the agricultural-natural resource management sector. C. The Agro-ecological Settine 1.10 The environmental situation in Viet Nam is best discussed on the basis of eight separate agro-ecological regions, each consisting of a number of provinces (see Map 1). These regions are derived on the basis of topography, annual rainfall, inherent susceptibility of the land to deterioration (for further development of this idea and the development of an index of erosion susceptibility, see Annex 2) and the types of dominant land forms. Although within most of the regions there are wide variations in both ecological and social characteristics, there are a number of traits that are common to all provinces within each region. 1.11 To facilitate the understanding and discussion of land use in Viet Nam, a topology of land forms based on elevation is presented. The country is divided into the two broad categories of uplands and lowlands. Uplands consist of highlands and midlands. Highlands have elevations over 500 m and midlands have elevations between 50 m and 500 m. Within the uplands are also the more level valley lands and plateaus. Lowlands, with elevations less than 50 m, are divided into flatlands and wetlands. Flatlands are sites suitable for paddy rice production. Wetlands are areas naturally flooded for at least 4-6 months of the year. 1.12 To understand natural resource degradation problems, regional agro-ecological differences are worth noting. For Northern Viet Nam, the climate in the Northern Mountains and Northern Midlands is monsoonal, with an average yearly rainfall of 1,600 to 2,500 mm largely occurring from late April to October. The soils are acidic and have low fertility rates. Intense rainfall combined with steep topography and frequent seismic activity makes 47% of the Northern Mountains highly susceptible to deterioration or erosion. Fifty-five percent of the Northern Midlands has medium susceptibility to deterioration. The Red River Delta is also monsoonal in climate, with 1,678 mm of annual rainfall coming from late April to October. The flat topography, generally low susceptibility to deterioration, and alluvial soils make it suitable for intensive agriculture. In the North-Central Coast, the average yearly rainfall is 2,890 mm, which peaks in October and November, and typhoons are common from May to August. Yellow-red soils dominate the uplands; alluvial soils -- the lowlands; and sandy soils - - the coast. Thirty-nine percent of this region has medium susceptibility to deterioration (see Annex 2). 1.13 In Southern Viet Nam, the South-Central Coast is characterized by a very low rainfall of 700 mm per year, high temperatures, and a prolonged dry season similar to the North-Central region. Average yellow-red soils dominate the uplands and alluvium is common to the valleys. Despite rolling topography, low rainfall means that 50% of this region has low susceptibility to deterioration. In the Central Highlands and the Northeast of Mekong regions, most of the 2,000 mm to 2,200 mm rain falls from April to October, and the dry season is pleasantly cool. The yellow-red and degraded grey soils that predominate are acidic and of low fertility. The Central Highlands also include 1.8 million ha of soils of basaltic origin that have excellent potential for agricultural development. Sixty-six percent of the Central Highlands has medium susceptibility to deterioration, while 98% of the Northeast Mekong has low susceptibility to deterioration. In the Mekong Delta the 2,000 mm of rain per year comes later in June and ends in November. Soils are mostly alluvial, but there are extensive areas of acid sulfate and saline soils which can be developed only with special care. The entire region has low susceptibility to erosion. -6- Table 1.2: Agro-ecological Regions of Viet Nam Region Percent Rainfall Inherent Main Land Provinces (as of 1992) of Total Susceptibility to Form Area Deterioration Topology 1) Northem 23 Wet High Highlands Lang Son, Cao Bang. Ha Mountains Giang, Tuyen Quang, Lao Cai, Yen Bi, Lai Chau, Son La 2) Northem 12 Wet Medium Midlands Quang Ninh, Ha Bac, Bac Thai. Midlands Vinh Phu, Hoa Binh, Than Hoa 3) Red River 3 Wet Low Lowlands Hai Hung, Thai Binh, Nam Ha, Delta Ninh Binh, Ha Tay, Ha Noi, Hai Phong 4) North Central 12 Very Medium Midlands Nghe An. Ha Tinh, Quang Coast Wet Binh, Quang Tri, Thua Tien- Hue 5) South Central 12 Dry Low Midlands Quang Nam-Da Nang, Quang N Coast gai, Binh Dinh, Ph Yen, Khanh Hoa, Ninh Thuan, Binh Thuan 6) Central 17 Wet Medium Highlands Kon Tum, Gia Lai. Dac Lac, Highlands Lam Dong 7) North East of 7 Wet Low Midlands and Tay Ninh, Song Be, Dong Nai, Mekong Lowlands Ba Ria-Vung Tau, Ho Chi Minh City 8) Mekong Delta 12 Wet Low Lowlands Long An, Tien Giang, Dong Thap, A Giang, Ben Tre, Vinh Long, Tra Vinh, Can Tho, Soc Trang, Kien Giang, Minh Hai Notes: 1-4 comprises the Northem Viet Nam and 5-8 comprises Southern Viet Nam. Central Highlands is also referred to as Southem Highlands in other reports and publications. In many statistical sources, 1 and 2 are usually combined as Northem Midlands/Mountain region. Source: Derived from Annex 2. D. Population 1.14 Viet Narn is the second most populous nation in Southeast Asia (after Indonesia) and one of the most densely populated nations in the world. In 1989, when the most recent census was conducted, Viet Nam had a population of 64.4 million with the two rice growing deltas of the Red River (North) and Mekong River (South) each accounting for 21-22% of the population. In 1993, of an estimated total population of 70 million, about 78% (nearly 55 million) were located in rural areas. This implies a cultivated area/rural population ratio of 0. 13 ha/capita, one of the lowest in the world. The total fertility rate is nearly 4.0. The fertility rate of the urban population is 2.5, almost half that of the rural population (4.4). National population density is 195.2 persons per km2. The population density is about four times the national average in the Red River Delta region and about twice the national average in the Northern Midland region. About 87% of the population comprises lowland Kinhs, and the remnaining 17% consists of essentially ethnic minorities, most of whom live in the hill or mountain areas. -7- E. Land Use 1.15 The latest consistent land use data is based on the 1991 land use and land cover surveys conducted by the General Department of Land Administration (GDLA) and the Ministry of Forestry (MOF), indicated that out of a total land area of 33.1 million ha, 21% is dedicated to agriculture, 29% to forestry 2/, 36% is unused, and 14% is for residential, industrial, and infrastructure purposes (see Table 2.3). Table 2.3: Sunmnary of Land Use and Land Cover, (in 1000 ha, 1991) Land Use Area (percentage of total) Agriculture 7,008 (21%) Annual 5,368 (16%) Agriculture Paddy Rice 4,100 (12%) Other 1,268 (4%) Perennial 1,058 (3%) Agriculture Pasture and 582 (2%) Irrigation a/ Forestry b/ 9,617 (29%) Production (MOF) 6.228 (19%) Natural 5,600 (17%) Planted 628 (2%) Protection (MOF) 2,357 (7%) Special (MOF) 758 (2%) Other c/ 274 (1%) Barrmn Land d/ 12,062 (36%) Flat 1,032 (3%) Upland 11,030 (33%) Other el 4,417 (14%) Total Land Are iin Viet Nam 33,104 (100%) Notes: a] Water bodies used for irrigation. b/ "(MOF)" indicates land under the jurisdiction of the Ministry of Forestry. _/ This is an adjustment for the difference between forest area identified by GDLA and MOF (see annex 1). d/ This includes about 9.6 million ha of non-forested land controlled by the MOF but excludes 1.3 million ha of unused land classified in 'other category, (e) below. e/ Other includes urban areas, special use land, and four categories that are sometimes also included as unused land (water surfaces not for irrigation, rivers and streams, rocky mountains, and other unused land). Source: GDLA 1992, MOF 1991. 1.16 Agricultural production consists mostly of paddy rice cultivation in the lowland deltas or river valleys. In the midlands and highlands the common annual crops are upland rice, maize, and cassava. Perennial crop production is less well developed than annual crop production. It involves mostly fruit 2/ Forest land is sometimes cited as occupying 19.1 million ha or 57% of the total land area because there are about 9.5 million ha of unused or 'barren' land under the control of the MOF. -8- Map 2: Land Susceptibility Classes CLASS 1 (LEAST) E CLASS 2 E CLASS 3 E CCLASS 4 * CLASS 5 (MOST) D PROVINCES 9._ b 0 0 Km 0 1 00 200 -9- or nut trees and rubber in the lowlands, and mulberry, coffee, rubber and tea in the uplands. Pasture land is land designated for livestock enterprises. This category excludes the grazing that takes place in forests and barren lands. 1.17 Forests in Viet Nam are divided into three main functional categories: (a) production; (b) protection; and (c) special use. These categories are further subdivided, based on stocking volumes, into rich, medium, poor, and young. Production forest is dominated by natural forest managed for timber. Protection forest primarily serves the function of watershed protection in the uplands and wetland or coastal protection in the lowlands. Special use forest recognizes the use of national parks and wildlife sanctuaries for biodiversity preservation as well as scenic, amenity, scientific, and cultural values. The largest remaining contiguous areas of rich/medium forest are the production forests in the regions of South Central Coast and Central Highlands. Large areas of the production, protection, and special use forest are severely degraded and are little more than brush-covered hills. 1.18 About 12 million ha (roughly 36%) of the land in Viet Nam is classified as "Barren" or "unused" land -- formerly forested hilly land that predominantly lies fallow 3/. This unused land can be subdivided into those areas where the land resource has been severely degraded and those areas where it is relatively stable. Where the land is relatively stable and the forest has recovered, barren land approximates poorly stocked natural forest. (Details are in Annex 3.) 1.19 The remaining "Other" category of land use (4.4 million ha) covers urban areas, other unused areas not included under the "barren lands" category above, non-irrigated water surfaces, rivers and streams, rocky mountain areas, and mining areas. These areas account for the land-based mineral, energy, and water resources of the country. Environmental difficulties from land use in Viet Nam arise from: (a) the pressure of population on land with a high inherent susceptibility to deterioration (see Map 2); and (b) improper use or non-mitigation of environmental damage from natural resource extraction activities (from mining to commercial agriculture and commercial forestry). F. Mineral. Energy. and Water Resources 1.20 The reserves of mineral resources in Viet Nam are abundant in amount and type with more than 3,000 sites containing some 90 different varieties of ore. The number of sites which have been exploited in one form or another amounts to 1,000 (Annex 1, Table 17 summarizes the statistics of main minerals). Among the most important reserves are those for oil, gas, coal, bauxite, iron, and apatite. 1.21 Oil reserves are currently estimated to be nearly 10,000 million (M) tons with only 2.7 M currently being produced annually. Significant foreign investment has already been attracted for oil and gas exploration, with oil being extracted from Bach Ho block (200 km off the southeast coast) and the shore facilities based at Vung Tau (some 75 km east of Ho Chi Minh City). Although gas reserves have been discovered in the course of oil exploration, these have not been commercially exploited. At present, considerable quantities of gas are being flared off. 1.22 Overall estimated coal reserves are placed at 3,500 million tons. Most of Viet Narn's coal is high quality anthracite. Special coal for the cement industry is located in Na Duong (Lang Son Province) with reserves of 100 million tons. Coke for the ferrous metallurgical industry exists in Quang Ninh Province. The total bauxite reserve (for aluminum and iron) in Viet Nam is estimated to be from 1,000 to 3,000 million tons. The quality of bauxite in Viet Nam is good, with an ore content of between 3/ Some sources of statistics give 13.4 million ha as the area of barren lands. This figure includes 1.3 million ha from the "other" Forestry category in Table 2.3. -10- 40-43%. The ore content of the iron reserves is estimated at around 60%. Steel production was 100,000 tons in 1979, dropping to 60,000 tons after the border war with China. With the rehabilitation of two existing steel mills, the target for steel production is between 150,000 and 170,000 tons by 1995. Steel imports are currently around 400,000 tons per year. 1.23 Viet Namn has some of the most abundant water resources in the world. Surface water is quite evenly located throughout the country, thus being able to meet the requirements for the development of industry, agriculture, transportation, and daily needs in the short term as well as in the long term. There are 2,860 rivers and canals with an area of 653,566 ha, 394,000 ha of lakes, 56,000 ha of ponds, 85,000 ha of marshlands, and over I million ha of saline soil. This water resource can be exploited for hydropower generation, agriculture irrigation, aquaculture, and transportation development. 1.24 Viet Nam's hydropower reserve is among the greatest in the world. The Red River system has the highest potential capacity (96 million MWh), accounting for 37% of total potential hydropower, of which the Black (Da) River alone has the potential capacity of 50 million MWh. The Dong Nai River system stands in second place, with a capacity of 10 million MWh, representing 19%. Hydropower is now the main energy source in Viet Nam. With the completion of the first phase of the Hoa Binh Hydropower Project, the share of hydropower has risen from 20% to 55% of total power generation (3,258 MWh) at the end of 1991 4/. 1.25 Although groundwater usage in Viet Nam is small relative to that of surface water, it is an important additional source, especially in the Red River Delta where reserves are estimated at 700,000 m3 per day. These reserves can meet the requirements of daily life and industry in the two regions. G. War Damages 1.26 Environmental damage was an important tactic as well as a repercussion of the Second Indochina War of 1961 to 1975. The strategy involved the destruction of the natural resource base essential to the agrarian society. The theater of these operations was mainly Southern Viet Nam. The result was not only heavy direct casualties and continuing medical complications, but also the widespread disruption and degradation of productive ecosystems. 1.27 Almost two decades have elapsed since the end of the Second Indochina War. Various estimnates have been made concerning the extent of land damaged by the war, ranging from 0.1 million ha to 2.0 million ha. Bombs, herbicides, and heavy machinery were responsible for the majority of environmental damage. These weapons were targeted against upland forests, mangrove forests, and agricultural land. From the above, the only areas which warrant further assessment of potential net benefits for reclamation pertain to the total of 51 thousand ha of upland forest that was defoliated 4 or more times; and 27 thousand ha of Melaleuca mangrove that was completely destroyed. 1.28 With the passage of time, it is getting harder to separate war damages from the pressures of rapid development and population expansion. Annex 4, which attempts to quantify the extent of damage to inland forest, mangroves, and agricultural land caused by the war, shows that the long term environmental damage caused by the war is often sensationalized and sometimes mistakenly identified as the current prevailing cause of ecosystem degradation. Undoubtedly the war caused massive environmental destruction, but due to the resiliency of the environment and successful ecosystem rehabilitation and reclamation efforts by GOV, this destruction no longer deserves to be a central issue. 4/ Other power sources are thermal plants (848 MWh), diesel generators (446 MWh), and gas turbines (118 MWh). -11- This is not meant to detract from the tragic legacy of medical complications that is still pervasive in Vietnamese society, but rather to indicate that these problems are not within the scope of this report. H. Biological Diversity 1.29 Viet Nam contains a wealth of biological resources including some 275 species of manunals, 800 species of birds, 180 species of reptiles, 80 species of amphibians, and nearly 2500 fish and invertebrates. Some 5,500 insect species are just a fraction of the total number of insect families believed to inhabit Viet Nam's lush forests and wetlands. Of the 7,000 species of flora currently identified in Viet Nam, 40% are believed to be found nowhere else in the world. In terms of potential biodiversity loss, 28% of the mammals, 10% of the birds, and 21% of the amphibians and reptiles endemic to Viet Nam are currently listed as endangered species. The status of some 350 endangered animals and plants has now been published in Viet Nam's Red Book 5/. 1. Urban and Industrial Sectors 1.30 About fifteen million Vietnamese (22% of the population) live in urban areas, and up to 50% of the urban population are concentrated in the three largest cities -- Hanoi, Ho Chi Minh City (HCMC), and Haiphong. There are two cities, Hanoi and HCMC, with over I million population; another two, Haiphong and Danang, with 350,000 to I million population; and another 15 with 100,000 to 350,000 population. Under controlled migration conditions, Hanoi's growth rate in the 1980s was 1.6% -- half a percentage point less than the national population growth rate. Under recent economic reforms that are expected to accelerate urban growth rates from nearly 4 percent presently to five to seven percent by the year 2000, total urban population would be 21-24 million with the aggregate populations of Hanoi, HCMC, and Haiphong expected to total between 10-12 million. 1.31 Viet Nam's industrial sector accounts for nearly 20% of GDP, which is comparable to Malaysia (25%) and significantly less than Viet Nam's industrializing neighbors, Thailand (38%), Indonesia (40%), and China (42%). Major industrial activities in Viet Nam include: chemicals, fertilizers, rubber processing, equipment/machinery, construction materials, metals and metal finishing, fuels and electronics in the heavy industrial sector; and food and foodstuffs, weaving, wood products, garments, cellulose/paper, glass, ceramics, and porcelain in the light industrial sector. Of these, chemicals/fertilizers/rubber, equipment/machinery, and construction materials constituted 58% of heavy industrial output, and food/foodstuffs and textiles contributed 69% of light industrial output in 1989. Most existing industry in Viet Nam is old and technologically obsolescent. Once significant foreign investment begins, the contrast between the present industrial sector and the more technologically sophisticated, foreign-financed industries is expected to be a sharp one. 1.32 Under new foreign investment procedures introduced since 1987, about 1,026 investment applications have been approved through August 1994, of which 515 (50%) are for industrial enterprises accounting for 37% of total investment capital. Several of these investments will upgrade existing industries, but most will finance new light industries. Data on investment approvals indicates that the existing concentration of industries in Hanoi-Haiphong/Quang Ninh and Ho Chi Minh City/Dong Nai-Vung Tau is likely to increase in the medium term. Already, 82% of foreign capital investments have been concentrated in these two "growth nexus" areas. 1.33 Investment in sanitation and drainage has lagged behind investment in urban water supply, and population and industrial growth have overwhelmed the capacity of urban infrastructure and 5/ Biodiversity Action Plan for Viet Nam (BAP), Hanoi: 1994. -12- institutions to protect waterways and air quality in the larger cities. Urban pollution, due to inadequate domestic, industrial and solid waste treatment and disposal, has become an issue of concem to the governments of the larger cities. The experience of Viet Nam's neighbors who commenced rapid manufacturing-led growth in the mid-1970s (pollution loads increased by 5 times in Indonesia, 8 times in the Philippines and 10 times in Thailand from 1975 to 1988) suggests that, unless preventive measures are taken, expanding industry will be a major contributor to increased pollution loads in Viet Nam as well. To avoid irreversible degradation of soil and water resources, worsening health impacts, and high clean-up costs experienced by neighboring countries, Viet Nam needs to weigh the present and future costs of current urban and industrial pollution and identify cost-effective pollution prevention and control measures. J. Institutional and Legal Framework 1.34 The legislative and planning framework for environmental management in Vietnam consists of: (a) a recently enacted Environmental Protection Law (December 1993), with a new (October, 1994) regulation (No 175/CP) to provide broad guidance for its implementation (covering environmental assessment, institutional responsibilities, financing sources and environmental standards and inspections); (b) sector-specific laws and regulations that predate the Basic Law; (c) provincial environmental regulations and standards, some in draft, others enacted and under implementation; and (d) a National Plan for Environmentally Sustainable Development (NPESD), officially approved in 1991. 1.35 Vietnamese government agencies with environmental mandates under this framework include: (a) the National Environment Agency (NEA) within the Ministry of Science, Technology, and Environment (MOSTE); (b) provincial Departments of Science, Technology and Enviromnent (DOSTEs) or, in some cases, Environment Committees (ECs); and (c) the line ministries, including the Ministries of Construction, Agriculture and Food Industry, Forests, Fisheries and* Aquatic Products, Water Resources, Energy and both Heavy and Light Industry. The principal environmental management tools used or proposed by these agencies include: (a) environmental assessment; (b) environmental appraisal of proposed investments; (c) environmental standards; and (d) inspections. 1.36 MOSTE and the provincial DOSTEs face challenges - to promote more sustainable development of Vietnam's natural resources, control locally significant pollution in Vietnam's largest urban and industrial centers, and ensure that the new investment that is expected to spearhead Vietnam's growth in the next decade and the associated rising pressures on the environment do not overextend Vietnamese resources, expertise and authority. Like new environmental agencies in other Asian countries, MOSTE (and the DOSTEs) lack broad political support and essential linkages with other agencies with key environmental management functions (such as line ministries, project-approving agencies and enforcement agencies) or those with (b) resource allocation functions (such as de - 13 - II. NATURAL RESOURCE DEGRADATION: SOURCES. MITIGATION INITIATIVES AND IMPLICATIONS 2.1 This chapter describes the importance, characteristics and functions of various natural resource subsectors or ecosystems found in Viet Nam and highlights (where relevant) various biological diversity characteristics of each. It also analyzes the source and extent of degradation; evaluates the initiatives (specific program, projects or measures) to ameliorate the adverse environmental impacts; and summarizes the lessons learned from them. The implications for policy and program changes to resolve outstanding problems are also discussed. Finally, where possible, an attempt is made to summarize the costs of degradation in order to distill the priority perspective among various problems and measures. The subsectors/ecosystems are discussed under the following headings: (a) upland forests; (b) wetland and marine ecosystems (including mangroves, inland marshes, coastal lagoons/beaches, coastal marine ecosystems and coral reefs); and (c) agriculture and arable land (including problems associated with agro-chemical use, problem soils, and the role of fisheries and livestock); and Based on past studies, a summary of the relevant degradation activities, impacts, and examples of their incidence is given in each of the appendices as follows: Items (a)-(c) are covered in Appendices 2A, 3A, and 4A respectively. A. URland Forests Forest Ecosystems 2.2 Production of wood for domestic and industrial fuel, construction, industry and trade, food and medicinal uses are among the better known values of forests. But equally important are the less tangible values of soil and water conservation, protection of wildlife habitat, and the conservation of genetic resources and biological diversity. 2.3 Due to its wide range of latitudes and altitudes and wide variety of landforms, Viet Nam contains tremendous diversity of natural ecosystems and high species diversity in its forested areas. These ecosystems range from a broad spectrum of different forest types to coastal/aquatic ecosystems, shrub- and grasslands interspersed among croplands and settlement areas. 2.4 The diversity of forest ecosystems range from lowland evergreen rain forest rich in DipterocargMaceae in the Southern part of the country to deciduous forests in the Northern part of the country and dense evergreen forests in the uplands. These forests contain a wealth of plant species, many of which are endemic and confined to small geographical ranges and occur in low numbers. Some 7,000 - 14 - of an estimated 12,000 species of higher vascular plants have been identified in the forests, many of which are used for food, medicines, animal fodder, wood, oil, and other purposes. Of the identified vascular plants, 10% are believed to be endemic to Viet Nam. Six out of eight centers of plant species The diversity in East Asia identified by the International Union for the Conservation of Nature (IUCN) are located in Viet Nam. The forests of Viet Nam also contain the highest avian and primate diversity in mainland Southeast Asia (comprising Myanmar, Thailand, Laos, Cambodia, and Viet Nam). Of the 34 globally threatened birds identified as occurring in Viet Nam, 10 are restricted range, endemic forest species. In addition, four primate species are endemic to Viet Nam. 2.5 Perhaps Viet Nam's greatest claim to biodiversity notoriety is the discovery within the past two years of two new mammal species in the Vu Quang Nature Reserve located in the central provinces of Ha Tinh and Nghe An -- the Vu Quang Ox and the Giant Muntjac (a deer). Before these discoveries, only two other mammals had been discovered in this century (the Okapi in Zaire in 1906 and the Kouprey in Indochina in 1937). In addition, a new species of fish, two previously unknown bird species, and an unknown tortoise have been discovered in the reserve. 2.6 Deforestation or forest habitat loss may be the most important contributor to the loss of biodiversity in Viet Nam. While the percentage of total forest lost in Viet Nam is comparable to its neighboring countries, only some 20% of the original moist forests remain in Viet Nam as compared to 43% for Thailand, 55% for Laos, and 71 % for Cambodia (IUCN, 1991). Moist forests are the most species-rich ecosystems. Perhaps more important in terms of biodiversity is the degradation of remaining forests which is occurring largely unhindered today. Remote sensing data indicate that only 2 million ha of natural primary forests remain in Viet Nazn. Table 2.1: Forest Cover, Deforestation, and Barren Land Region Land Area Forest cover Barren land (1000 ha) (% of land area) (% of area) 1991 1943 1991 1993 1) Northern Mountains 7645 95% 17% 60%-65% 2) Northem Midlands 3982 55% 29% 27%-33% 3) Red River Delta 1030 3% 3% 5%-14% 4) North Central Coast 4002 66% 35% 40%-44% 5) South Central Coast 4582 62% 32% 42%-49% 6) Central Highlands 5557 93% 60% 25%-32% 7) N. E. of Mekong 2348 54% 24% 23%-34% 8) Mekong Delta 3957 23% 9% 12%-21% Totals 33104 67% 29% 35%-42% Source: Derived from Annex 1. - 15 - Deforestation. Land Degradation and the Evolution of Barren Land 1/ 2.7 Forest cover 2/ in Viet Nam decreased from 67% to 29% of total area between 1943 and 1991 (Table 2.1) (Map 3). This includes the loss of at least 12.6 million ha of forest, of which 8.0 million ha were in Northern Viet Nam and 4.6 million ha were in Southern Viet Nam. The Northern Mountains experienced the greatest decline, with forest cover dropping from 95% to 17% in 48 years. The decrease in this region was caused by the rapidly growing population's demand for forest products and agricultural land. The result was the formation of large areas of unproductive barren land. The remaining forests in the Northern Mountains are degraded, poorly stocked, and scattered in small non- contiguous plots. 2.8 The analysis of trends in forest destruction in Viet Nam is complicated by changes of definition (in the late 1980s) for "forest cover" and "barren land" areas (see Annex 3). After adjustments for comparability, and from the analysis of provincial data, the trend in forest loss may be summarized as follows: (a) The greatest rate of net deforestation (deforestation less afforestation) took place in the period of 1975-83, with particularly high rates of forest loss (three percent p.a. or more) experienced in the Red River Delta, Northern Midlands, Northern Mountain, Northeast of the Mekong and Mekong Delta - largely driven by the high demand of timber for post-war construction and the drive for increasing exports to earn scarce foreign exchange or to barter for its industrial raw material needs. (b) In 1985-1991, however, the rate of net deforestation decreased as reforestation programs were promoted throughout the country. (c) Increased forest loss was highly correlated with the expansion of barren land (see paras. i 18-1.19), particularly in selected provinces of the following regions: Northern Mountains, Northern Midlands, and North Central Coast. (d) In areas of high population density, there is relatively less barren land (reflecting the active competition for available resources and, in part, the presence of property rights); while low population density is accompanied by a high proportion of barren land (reflecting the lower land pressure, the larger. extent of shifting agricultural practices, and the open access degradation potential). 2.9 The main sources of forest degradation, their characteristics and implications for environmental action may be summarized as follows: (a) Arable Land Expansion. Expansion of agriculture into forest areas has both direct and indirect environmental impacts. Direct environmental impacts include erosion, loss of topsoil, watershed degradation, and changes in the distribution of both plant and animal species. The indirect environmental effects include the sedimentation of rivers, lakes, dams, and harbors as well as the loss of the carbon sequestration functions of the forest. Among the northern upland areas, the loss of natural forests was largely due to the expansion of annual crops -- reflecting the subsistence pressure in the chronic malnutrition provinces there; while the loss for the Central Highlands and South Central Coast was largely due to 1/ Deuails are contained in Annex 3. 2/ Forest cover includes both natural and planted forest. - 16 - Map 3:Viet Nam Forest Depletion / FOREST 1943 *FOREST 1987 PROVINCES > Km 0 100 200 - 17 - the expansion of tree crops (coffee, tea, rubber, etc.) 3/. The nature of such forest ecosystem stress is largely related to the nature of shifting cultivation (see (e) below and Annex 3) and the emphasis and implementation of GOV's settlement and sedentarization programs (see paras. 2.11-2.15 below and Annex 5). (b) Fuelwood Consumption. This is an important burden on forest resources. If converted to area equivalents. the demand for fuelwood would have accounted for 6 timles as miuchi torest destruction as commercial logging (Table 2.2). However, this does not meanl that the degradation effects are equivalent since a significant portion of fuelwood is obtainied from scattered trees rather than clear felling. Wood is the fuel of choice for houselholds il the Mekong Delta and Northern Midlands, and urban households in the Central region 4/. From a 1993 UNDP/ESMAP study of fuelwood shortages. the following sets of regioiis have large deficits: (i) the North Midlands and Red River Delta regionls: and (ii) the Mekong Delta and Northeast of Mekong regions. These regions are, therefore. likely to experience the greatest stress on their forest resources. However, a number of ilplicatiolis are worth noting. First, although the fuelwood depleted North Midlands and the Red River Delta are substantially deficit, because the fuelwood marketing zone extends to the fuelwood surplus Northern Highlands, part of the latter's surplus can be (and is) used to fulfil the formiers Table 2.2: Imputed Annual Deforestation (in 1,000 ha) Region Name Fire Itinerant Fuelwood Logging Total w/o Damage Shifting fuelwood Cultivation! 1990 1991 1992 1991 I) Northern Mountains 0 35 115 17 52 2) Northern Midlands 0 10 11 23 33 3) Red River Delta 0 0 33 5 5 4) North Central Coast 1 7 96 4 12 5) South Central Coast 0 15 46 4 19 6) Central Highlands 4 95 69 8 107 7) N. E. of Mekong 2 15 78 4 21 8) Mekong Delta 11 3 32 13 27 Totals 17 180 482 78 275 Note: a/ Data on sedentary shiftine cultivation (estinmated at up to about one million ha) is not avatilable hy region. (See Annex 3). Sources: FIPI 1990. 1991. TFAP 1991. World Bank estimnates 1992. 3/ In the Mekong Delta. however. overall arable land has declined while production (rice) increased, indicating that yield increase has dampened this source of degradation. 4/ However. in rural areas of high population density and where wood is relatively scarce, such as the Red River Delta and the coastal central regions. rice straw and other crop residues are critical substitutes. - 18 - needs. This means that fuelwood in the more accessible areas of the Northern Highlands provides an important source of cash income for its inhabitants, mitigating the food production deficit problem there. However, this also means that the forest capital in the Northern mountain areas could come under even greater depletion threat if the market for commercial fuelwood continues to expand. Second, part of the deficit of the Mekong Delta/N.E. of Mekong regions can similarly be mitigated by the surplus of the Central Highlands. However, because these regions are relatively inaccessible, they are not as likely to be under as intense a pressure as the remaining wetland forests in the Mekong Delta which is traversed by barge-laden waterways. - Third, to reduce stress on the remaining forest resources, promoting fuelwood plantations or communal forestry areas for fuelwood use is very important. Fourth, as part of the strategy to reduce forest ecosystem stress, the reduction of the demand for fuelwoods through the improvement of cook stoves is also important. Substantial development and demonstration work has been undertaken in Viet Nam. The need is to focus the Government's Improved Cook Stoves Program in resource stressed areas 5/. (c) Commnercial Logging. From 1986 to 1991, GOV reported that forest industries officially harvested approximately 3.5 million m3 of wood annually (to which an additional 30% to 50% can be added for illegal logging). Conversion to area equivalents indicates that legal logging accounted for the loss of perhaps 80,000 ha of forest per year in 1991 (Table 2.3). Although extraction is highest in the Central Highlands, with its higher natural stock of forests in agriculturally suitable areas, less vulnerable area is affected than in the Northem Mountains. Demand for paper, of which less than 100,000 tons is produced annually, may appear not to contribute to substantial deforestation as plantation grown wood and bamboo are its main sources of iaw materials. However, in localized hill areas within the zone of influence of the pulp and paper rnills, the planting of fast growing species for commercial plantations has displaced traditional sources and may thus have increased the degradation pressure on forests (see para 2.16 below). Official logging occurs in natural production forest, but unofficially it also takes place in protected and special use forest, albeit at a much smaller scale. Until 1991, the volume of logs extracted from natural forest for the wood industries was estimated to have surpassed the sustainable yield. Since the ban on the export of logs and lumber in 1991, however, logging activities by the state enterprises have been substantially reduced due to depressed log prices and a processing bottleneck. (d) Shifting Cultivation Damage. Shifting cultivators can be divided into two groups: itinerant and sedentary. The itinerant (swidden) cultivators (about 120,000 households) are comprised essentially of a few ethnic minority groups. Because of their nomadic nature there is little information available about their farming systems. What is known is that, in a number of areas, the swidden rotation cycle has been reduced as pressure on shifting S/ Another issue on the demand for fuelwood is the situation with respect to (a) interfuel substitution; and (b) the extent relative price incentives, affected by Government policy, toward increasing fuelwood demand and consequently forest degradation. The latter issue is discussed in Chapter IV, Section B. - 19 - cultivation areas (mostly the barren lands) has increased substantially. In 1990, their cultivated holdings were estimated to cover about 180,000 ha, the majority occurring in the Central Highlands and the Northern Mountains. The sedentary shifting cultivators include most of the rural population outside of the deltas (perhaps 15-16 million people or nearly 70% of the non-itinerant population in the hill/mountain areas). They have fixed households but shift cultivation sites. Probably relatively little direct loss of natural forest can be attributed to this activity compared with new land development associated with the land settlement program. However, it has caused serious land degradation problems due to over-cultivation in-situ, and is the primary factor preventing regeneration of natural forest on the barren lands. Over-cultivation is a particularly acute problem in the Northern Highlands, Northern Midlands and North Central Coast because of the high percentage of unstable land (see Map 2). The extent of sedentary shifting cultivation is estimated to cover as much as one million ha (i.e., one million ha/year is abandoned by shifting cultivators with a comparable area of fallow land being brought back into production) 6/. In general, both methods of shifting cultivation are deemed sustainable at population densities below 50-70 persons per km2. This threshold depends on factors such as the susceptibility of the land to deterioration, previous farming history, crops grown, and population density. Once the population density grows beyond the threshold level it will be necessary to modify one of these factors determining sustainability. It is therefore in the Northern Highlands and Midlands, and the North Central Coast that sedentary shifting cultivators cause the most extensive land degradation. The design and future direction of the Sedentarization Program, therefore, has important implications for resource degradation. (e) Fire Damage. Before planting each crop, shifting cultivators use fire as a tool for clearing land, controlling weeds and insects, and producing ash for fertilizer. Since uncontrolled fires often burn 10-20 times the intended area, the result is not only the localized destruction of protective vegetative cover, but also the extensive loss of soil organic matter and associated soil structure decline. The greatest forest losses occur in the Mekong Delta because the lower rainfall, the distinct dry season, and the peat conditions of the soil makes the vegetation readily combustible. The impact of forest fires on forest ecosystems have not been measured, but knowledgeable experts suggest that other than the Mekong Delta, the system under greatest threat is the lower-montagne evergreen forests of the Central Highlands. Attention should be given to incorporating fire prevention measures in developing the protection system and designing joint-protection arrangement between households and local authorities. (f) Other Causes. Other causes of upland forest degradation have been attributed to over- grazing, the construction of dams, and war damages. Over-grazing is not critical except in localized sites. Construction of dams results in the flooding of large areas of forest. It has been estimated that as much as 30,000 ha of forest is lost per year due to the creation of reservoirs. (This estimate is not included in the calculation of deforestation because reservoirs are usually logged before they are flooded.) However, no new large reservoirs are currently filling up. To a lesser extent, flooding increases deforestation by creating new navigable waterways for transporting logs. The effects of the war on upland forest, as 6/ See Bo Ohisson, Forestry and Rural Development, TFAP, 1990; and J. Aldrick, Land Use Assessments (mission background paper), 1993. This one million ha/year of degradation, however, cannot be interpreted as one million ha of forest loss/year as some fallow land brought to such use are not classified as forests. - 20 - elaborated in Annex 4, have been largely mitigated over time and are not considered to be so serious as to warrant priority consideration. Mitigation Initiatives and Implications 2.10 Mitigation initiatives to tackle the forest and barren land degradation problem revolves around three main GOV programs: (a) government sponsored resettlement; (b) reforestation; and (c) development of "barren hills" (see Annex 5 for details). These are briefly reviewed below, together with the implications for future consideration. Government Sponsored Settlement Programs 2.11 Government-sponsored resettlement programs represent both the source of forest degradation as well as one of the mitigation instruments (through GOV's "sedentarization" process). This is reflected in the history of sponsored migration and by the different objectives of various sponsored settlement programs. Since 1961, GOV has encouraged the official resettlement of 4.8 million persons. This population redistribution program has four objectives: (a) to match human resources with agricultural resources; (b) to develop the agricultural sector of the economy; (c) to create opportunities for employment in the agricultural sector; and (d) to strengthen national defence. In the 1960s the Democratic Republic of Viet Nam encouraged approximately 1.0 million people to migrate from the Red River Delta to the Northern Midlands and Highlands. Although inexperience, coupled with inadequate preparation, forced many of the migrants to return to their former areas of residence, this represented the wave of sponsored migration which tipped the Northern Midlands into the unsustainable situation it is in today (Box 2.1). After reunification in 1975 and up until 1989, all migration was controlled by the GOV. Of the 2.4 million people who were officially resettled between 1981-1990, about 75% moved within their own provinces. Of the 0.6 million people who moved outside their provinces (1981-89), 75% (1.8 million) moved from the North to the South, essentially from the Red River Delta (accounting for about 58%) and the North Central Coastal Region (41%) primarily to the Central Highlands. 2.12 Among the programs in support of Government's resettlement policy, the one with the largest implication for forest degradation and soil erosion is GOV's Fixed Cultivation and Sedentarization Program. This program, administered by a Department for Fixed Cultivation and Sedentarization (DFCS), has essentially been the source of intra-provincial migration in the highland regions. It is also one of the most important programs targeted towards the approximately three million population of shifting activators in the hill and mountain areas. The main objective of the program, which began in 1968, is to stabilize ("fix" in one place) the cultivation of ethnic minorities and encourage socio-economic development and improved income activities (including the provision of education, water supply and health support services). 2.13 Other parallel proerams administered through the Provinces, state enterprises and the Ministry of Labor, Invalids and Social Affairs (MLISA) pertain essentially to the North-South sponsored resettlement to the plateau areas of the Central Highland Region. These are primarily the result of a "guided migration" drive which began in 1977 to promote the establishment of "new economic zones" for permanent settlement with financial support for cooperatives and state farms to invest in infrastructure construction and production services. The program also provided opportunities for ethnic minorities to adopt permanent settlement (sedentarization) and additional financial support for productive agricultural activities. The approach adopted was for GOV to first identify the low population density areas with good potential agriculture land (mainly in the Central Highlands) and target population surplus areas for - 21 - Box 2.1: Relative Degradation and Livelihood Conditions in the Northern and Southern Highlands The contrasts between the Northern Midlands/Mountain region and the Central Highlands may be illustrated from the study teams's field trips taken in April/June 1993. In the Northwestern region, conditions are probably the worst and least sustainable among the Mountain areas. For example, in many of the mountain areas in Son La Province that were being prepared for planting, many places had more than 60% of the cropland being cultivated indicating that fallow would have been reduced to less than one year. From the landscape along Route 6, soil erosion was clearly evident and in some locations, the only viable option may well be the cessation of cultivation: slopes of more than 60% were being cultivated; soils have been weathered down to almost base rock; and at several recently cultivated sites even dry bare soil were observed to be very slowly slipping down the steep slope without disturbance. In a resettled area of Tai minorities, settlers had been directed to grow cash crops like mulberry or coffee and bananas on the better quality flat land under the assumption that, with their cash income, they could buy the food they need; but many instances were cited where relatively well-off families have continued to farm steep mountain slopes and illegally cut timber from the mountains. Land rights, if any, are informal. In a Hmong village, relatively high incomes encountered could be mainly attributable to the cash incomes derived primarily from growing opium and, to a much lesser extent, firewood sales. Opium income permits the family to purchase rice for its shortage period (typically 3-6 months). This has, however, reduced the stress on the forests as was vividly illustrated in another Hmong village located at the border of Son La and Lai Chau Provinces. A household, which had newly moved to the community had its livestock wiped out by animal disease because of the lack of veterinary support. Without growing opium, the household would have had to cut more firewood to compensate for its income loss. In the Midlands, with increased accessibility (e.g., in Hua Binh), high demand cash crops like sugar cane (for both direct consumption and processing) has also reduced the need for expanding the holding for subsistence food production. In the Central Highland Region (Provinces of Lam Dong and Dac Lac), severe degradation was much less evident. Settlements typically provide for larger holdings and higher cash income opportunities from commercial crops. In the Bao Lac area of Lam Dong Province, for example, those fortunate to benefit from sericulture support (mainly Kinh households) earn net cash incomes of about US$1,000 above their subsistence needs per family - more than three times what is earned by ethnic minority (Ma) families who depend primarily on tea and coffee for their cash income. In Dac Lac Province, some settlements run by Forestry Unions of Enterprises provide support to former workers and original Ede minority inhabitants who had recently been allocated long term rights to unutilized land parcels - typically 5 ha/family for cash crops (cashew, coffee) and new plantings of forest trees with good crops generally planted with tree seedlings during the immature period. Most of these settlements are located in the more fertile (basaltic soil) areas. Part of the agreement giving rights to land to the household involves an agreement to protect parcels of public forests (natural or replanted) for which a nominal fee is paid. However, fines are imposed if certain monitorable indicators of timber theft or malfeasance (e.g., number and size of forest fires in the dry season) take place. GOV (essentially the forestry enterprises' timber revenues) subsidizes two-third of start-up costs given officially as equivalent to US$ 100/ha but is actually closer to US$ 2,000/ha with overheads (including charged extension services) and required inputs factored in. New programs, like those implementing Decree 327 Program (see paras. 2.17-2.18 below) are expected to reach some of these enterprise settlements, but the amounts being made available cannot compensate for the loss of timber revenues which were the enterprises' primary budgetary source prior to 1992. - 22 - promotion of voluntary resettlement. Selected families are given a payment for moving their household, a lot at the reception site, and supervision to establish their agricultural enterprise (see Annex 5). 2.14 Overall impact of these programs has been mixed. Although forests were cut down to grow cash crops (tea, coffee, pepper, sericulture/mulberry) and some subsistence crops like rice and vegetables, by and large cash cropping in the settlements in the Central Highland plateaus took place on agriculturally suitable land and generally improved the livelihood of the settlers (Box 2.1). Also, because primarily tree crops were planted, land degradation was less than if annual crops were grown. However, in the Northern hill areas where natural forest areas are limited and holdings are more steeply sloped and relatively smaller in size, commercial success has been encountered only in some settlement areas (primarily the more accessible Northern Midlands) with the cultivation of trees yielding valuable non- wood products like shellac, cinnamon, and gum resins (Box 2.1). Overall, based on the assessment of the fixed cultivation and sedentarization programs, the predominant problem existing in the Northern hill areas continue to be unsustainable land use/fanning practices. The main lesson is that new settlements cannot be started in productively unsustainable areas. Choice of areas with good chances for success and careful planning for the development of prospective enterprises must be undertaken. 2.15 A new trend for environmental concern is the loosening of controls on inter-provincial migration since 1988. "Spontaneous" migration into the remaining favorable forest areas in the Central Highlands has jumped in the past few years, raising concern for remaining forests containing valuable biodiversity and head watersheds. In Dac Lac Province, for example, where 13,000 (primarily ethnic minority) families illegally settled onto about 13,000 ha of forests between 1986-1992, 6,000 ha was accounted for by 1992 alone. Containing such incursion into valuable conservation forests would require more active protection. Reforestation Programs 2.16 Externally assisted forest development programs, which began in the late 1970s with the construction of the large Vinh Phu Pulp and Paper mill in Bai Bang, Northern Viet Nam under SIDA assistance, have had a checkered history (see Annex 5). The project has been sequentially adjusting to lessons leamed and, together with a World Food Program (WFP) project, are now beginning to pay off in terms of appropriate reforestation, land tenure, land management, farm-level support (appropriate technology transfer) and the supply of fuelwood for household needs. The following are noteworthy lessons learned: (a) Reforestation in ostensibly "unused" barren lands for commercial (i.e., pulp and paper) use should take into account the loss of common access livelihood or subsistence production (e.g., household fuelwood, livestock grazing) that has to be foregone by affected households. Otherwise, increased pressure on natural forests or theft from the commercial plantations would invariably result. (b) Reforestation measures should first take into account the appropriateness of local technology and the constraints posed by the farming system of affected households and local conmmunity cultural practices. (c) Measures to ensure food security and the provision of more secure land tenure are important prerequisites for successful reforestation/agro-forestry programs. (d) Duplication of obligations and conditions for project/program participation should be avoided. - 23 - The "Barren Lands" Regreeninp, (Decree 327) Program 2.17 A reflection of the high priority accorded to the development of barren lands in Viet Nam is the promulgation by the Council of Ministers of a Decree (COM Decree 327) in September 1992 which sets out "Major Guidelines and Policies To Utilize Unoccupied Land, Barren Hilly Areas, Forests, Denuded Beaches and Waterfronts". A ten year program, coordinated by the State Planning Committee (SPC) has been launched in 1993 (with a US$ 68 million equivalent budgeted in the first year) to implement this decree. The provinces, often jointly with central agencies (essentially from the Ministries of Agriculture and Food Industries; Forestry; Aquatic Products and MLISA) have proposed about 1,800 projects for implementation. The primary goals of the highland portion of the Decree 327 program are to "stabilize" settlement villages and sedentarize itinerant shifting agriculture population by developing the underutilized barren uplands throughout the country with emphasis on linking agriculture, livestock and forestry and on increasing the protection of reserved forests and head watersheds. The focus would be on households as the basic production units with particular emphasis to be given to production technologies or products for manufacturing industries; and on environmental protection. Guidelines were given for targets, 7/ size of projects, and plots to be allocated to households by subsector (e.g., industrial tree crops; agro-forestry enterprises; livestock enterprises); investment funding; and organizational structure, including the role of the key agencies to plan, approve, and implement projects to be supported. (See Annex 5 which discusses the program in more detail and Annex 6 which sets out Decree 327 in its entirety.) 2.18 Besides the teething problems that are invariably encountered in the start of any large national program, preliminary evaluation of the implementation of the Decree 327 Program points out the following weaknesses: (a) There was a lack of planning and prioritization on the basis of land use and economic returns. (b) Virtually all projects were on-going, selected for their readiness for implementation rather than from an in-depth assessment of priority needs, constraints and institutional capacity. (c) Funds were spread over too many projects and, in many cases, were not sufficient to achieve their objectives. (d) About 23% of total allocation was spent on administrative and operating costs, which appears hard to justify, even on a start-up basis. (e) State-directed approaches in project development and implementation were used with virtually no participation of affected units or households in resource use planning. There is a risk of substantial resource waste in the future phases of the program without proper prioritization of objectives and adequate planning or project selection (See Annex 5). One conflict in objective is the emphasis on production of raw materials and commodities for industries in a setting of marginal food security and extreme land degradation which indicates that the lessons from the reforestation programs have yet to be learned. 7/ Annual commercial timber quotas/targets were reduced from about 1.0-1.3 million m3/year to 800,000 m3. - 24 - Surmary Perspective and the Cost of Land Degradation 2.19 Forest degradation has many forms in Viet Nam. In terms of loss of trees, fuelwood demand is the most important degradation source, with fuelwood removals accounting for more than six times the losses from conmmercial logging in area equivalent terms. However, as fuelwood is often obtained from scattered trees rather than from clear cutting forest blocks, its contribution to forest degradation is proportionally more benign. In terms of the evolution of barren lands and land degradation, sedentary shifting cultivation (rotating lands of up to one million ha/year) is the most extensive cause and it is often linked with the onset of forest fires. The 'true" shifting cultivators (the itinerant or swidden cultivators), covering probably about 180,000 ha, incur less damage. 2.20 However, degradation of forest and land alone does not necessarily result in severe erosion. Severe erosion results from cultivation of soils that are inherently susceptible to deterioration. Innate causes of high erosion susceptibility include slope, climate, seismographic factors and susceptibility of various soil types. It is thus the population pressure on highly erosion-susceptible areas (through the cultivation of annual crops on steep slopes with erosive soils) that result in severe erosion (c.f., the Northwestern Midland Provinces of Viet Nam). Unless sloping agriculture technology can be successfully implemented, the foregoing implies that restrictions on annual cropping on land with greater than 350 slope, shallow soil, and/or high erosion susceptibility should be considered. Prohibitive land taxes could be considered for such envirommentally irresponsible land use. 2.21 Our assessment of the cost of degradation for the Da Watershed (the worst watershed in terms of sedimentation rate) alludes to the cost of erosion in Viet Nam (see Annex 7). It indicates that on-site effects on the sloped areas of watersheds are the most important for mitigation in present value terms. The areas with highly unsustainable soils will have the sharpest decline in productivity and will be the costliest in terms of net production value foregone. On average, for the Da Watershed, nearly US$ 140 million (net production value in 1994 constant dollars discounted over a period of 30 years) could be saved if vegetative erosion control measures were to be practiced on presently actively cropped land (about 500,000 ha of annual crops) in association with 2 million ha of fallow. Nearly 95% of this value can be attributed to the reduction of yield losses. Financially and economically justified projects can therefore be developed with the introduction of alternative environmentaly stable cropping patterns that can give higher returns per ha. This is particularly true for investments in low cost erosion control and transfer of new technology. 2.22 In addition, forest area degradation has important implications for ecosystem losses and the loss of valuable biodiversity. The value of biodiversity is, however, difficult to assess. No attempts have yet been made, for example, to estimate the contingent value of eco-tourism in the protected areas/national parks. In terms of quasi-option or existence values (ie. the value of preserving options for future use in the expectation that valuable knowledge will grow with time), the discovery of two new mammalian species within the past two years in the north-central forest reserves (compared to the last known world discoveries in 1906 and .1937) endorses the potential for high existence value from these forests. Besides, with 40% of Viet Nam's flora species believed to be found nowhere else in the world and with 28% of the manmmals, 10% of the birds, and 21% of the amphibia and reptiles that are listed as endemic species currently on the endangered species list, the importance of biodiversity protection in important reserve forests is undisputable. - 25 - B. Wetland and Marine Coastal Ecosystems Introduction 2.23 Viet Nam possesses a long coastline of 3,260 km characterized by a wide range of wetland and marine coastal ecosystems. Wetland ecosystems include large estuarine and delta systems with extensive mangrove swamps and tidal mudflats, seasonally inundated inland marshes and coastal sand dune areas with brackish and saline lagoons. Viet Nam's marine life, especially fish species, is highly diverse due to its wide latitudinal range. The largest and perhaps one of the world's most floristically wetland ecosystem is found in the Mekong Delta in the South. The South Central Coast contains numerous rugged capes, bays, and rocky cliffs with some near-shore coral reefs and larger deeper coral reefs aggregated offshore. Significant coastal lagoons and extensive sandbanks dominate the North Central Coast. Further north, they are replaced by a low and swampy coastline integrating mudflats and mangrove stands, particularly around the Red River Delta. 2.24 These ecosystems provide direct economic benefits, particularly in supporting agriculture and forestry, as well as indirect services to humans. Mangrove swamps and estuaries have special ecological significance as spawning, nursing, and feeding grounds for numerous species of economically important fish and shellfish. Coral reefs concentrate nutrients to support fishes in the surrounding sea. Dunes, mangrove forests, and coral reefs present natural buffers against flooding, erosion, and storm wave damage. Wetland and marine coastal ecosystems also provide habitats for a great variety of plant species and wildlife. The coastal wetlands, for example, serve as important staging and wintering habitats for at least 100 species of migratory waterfowl. The Red River Delta offers wintering grounds for the rare Black-faced Spoonbill, Platalea minor and the Saunders' Gull, Larus saundersi. The Plain of Reeds in the Mekong Delta harbors the almost extinct Sarus Crane, Grus antigone sharpii and several other rare species such as the Black-necked Stork, Ephippiorhynchus asiaticus. 2.25 Similar to other countries in the Asia region, these wetland and marine coastal ecosystems are being converted or degraded rapidly. Although large areas of wetlands, particularly mangroves, were already lost during the war, recent economic pressures to convert wetlands for agriculture, aquaculture, and urban developments are accelerating their destruction and un-economical use. Coastal fisheries are being over-exploited and coral reefs depleted by the use of destructive fishing methods. Since the majority of Viet Nam's population, agricultural production, and industrial development are concentrated in the coastal zone and the Red River and Mekong delta systems; urban and industrial pollution as well as the effect of other development activities located in catchment areas pose a serious threat to coastal and marine resources. The expected growth in economic activity, particularly agricultural intensification, water resources and industrial development and increased shipping activities, will further increase the stress on wetland and marine coastal ecosystems in forthcoming years. Mangroves 2.26 Background. Mangrove forests in Viet Nam have decreased drastically, both in area and quality. Whereas 400,000 ha in the whole coastal area were covered with mangrove forests in 1950, only 252,000 ha of mangrove forest area was left in 1983. During the period 1965-1970, US herbicide spraying operations completely destroyed 124,000 ha of the mangrove forests in southern Viet Nam, 52,000 ha on Ca Mau peninsula alone. Despite strong reforestation efforts undertaken by the Vietnamese government after liberation, mangrove forests have continued to decline in the whole coastal zone of Viet Nam due to uncontrolled wood extraction, the expansion of paddy cultivation, and especially shrimp farming. - 26 - 2.27 Four mangrove zones with a great diversity of plant formations can be distinguished: 8/ (a) in the Northeast (39,400 ha), mangrove forests find rather suitable conditions in the estuary region around Hai Phong, their growth only limited by low temperatures in the winter; (b) along the coast of the Red River Delta (7,000 ha), mangroves are rather scarce due to the absence of protecting islands and frequent high winds and waves; (c) in the coastal zone of Central Viet Nam (14,300 ha), mangrove forests are confined to river mouths and lagoons since steeply sloping seashore, little alluvium, high winds and waves and frequent storms present unsuitable conditions for mangroves; and (d) South of Vung Tau cape (191,800 ha), the largest and richest mangroves of Viet Nam are found -favored by the low topography, numerous rivers and canals, abundant alluvium, a half-day tide with a large amplitude and a favorable tropical climate. 2.28 Functions. Mangrove forests provide a variety of direct and indirect benefits to humans. Their direct products include different wood products and other food and household items, such as roof thatching material, medicinal plants and honey. Since 80-90% of all marine fisheries production in Viet Nam comes from coastal waters up to a depth of 30 meters, mangrove forests have a prime role for fish catches by providing breeding, feeding, and nursery grounds for commercially important aquatic organisms and by exporting organic matter to other ecosystems. Through their filtering function they lessen the impact of toxic substances on surface and ground water as well as soils. Furthermore, mangrove forests serve as buffer zones against typhoon damages, and mangrove belts help to prevent sea dike breaching. In most provinces of central Viet Nam, dikes are breached by overtopping and serious erosion every year or two due to inadequate dike structures and the absence of protection forests results; every three to five years, there is massive breaching of dike systems and large areas are inundated. Mangrove forests also prevent coastal abrasion which reaches 10-25 meters per year along roughly 640 km (20%) of Viet Nam's coastline. In addition, mangrove forest areas play an important role in flood control and the prevention of salinity intrusion. 2.29 Mangroves in Viet Nam also support a wide variety of flora, consisting of 35 species of genuine mangrove and 41 associate mangrove species. Species compositions and sizes are distinct in the north and the south because of their different climates. In the north, the main species of genuine mangrove include Rhizophora stvlosa, Brugeria evmnorhiza, Avicennia W., Sonneratia caeseolaris, Kandelia candel, Acanthus ebracteatus, Aegiceras comiculatum. The trees do not exceed 2-3 meters in height due to cold winters and over-exploitation. In the south, where mangrove forests were among the richest mangrove forests in the world containing more than 40 species, more than 25 species, including three species of Bruguiera and two species of Ceriops, have been recorded. The highest trees (Rhizophora) reach up to fifteen meters in height. Mangrove forests present an important habitat to various aquatic organisms, insects, amphibians, reptiles, birds, and mammals, for example by providing breeding, staging, and wintering areas for migratory birds and spawning and nursery grounds for fisheries. 2.30 In 1987, the GOV established Nam Can Mangrove Reserve (7,547 ha) at the southern tip of the Mekong Delta and the protected areas Bac Lieu (40 ha), Cai Nuoc (20 ha), Dam Doi (119 ha) for the protection of breeding colonies of large water birds. The mangrove forests in Nan Can, for example, include 21 plant species and some 80 main species of wild animals. However, despite their protection designation, illegal egg and young bird harvesting, poaching and mangrove cutting is quite widespread. 8/ The following data are taken from Phan Nguyen Hong, The Mangroves of Vietnam, A Paper presented at the Symposium on New Perspectives in Research and Management of Mangrove Ecosystems, Colombo, Sri Lanka, 1986. The numbers given are from the early 1980s and are only intended to indicate the distribution, not actual extent of mangroves in Viet Nam. - 27 - 2.31 Manerove Degradation. The main activities causing the decrease in mangrove forests are the cutting of wood, the conversion of wetlands to zones with shrimp farming, and agricultural expansion. Mangrove forests are cut for the production of poles and charcoal for commercial use as well as for the collection of firewood. In the Mekong Delta, for example, the remaining forests cannot meet continuously increasing demands for timber, lumber, and fuelwood; and the existing reforestation programs are in no way sufficient to compensate for forest losses. Fuelwood and charcoal remain the predominant cooking fuel source in the Mekong Delta (98%) and in the Ho Chi Minh City area (71 %) despite recent price increases in fuelwood from the mangrove areas. 2.32 While a substantial number of mangrove trees have been cut for fuelwood and household uses, drastic clearing of mangrove areas, which affects the mangrove ecosystems the most, has largely arisen from the recent rise in the development of extensive shrimp pond culture. This has been particularly true for the vast mangrove areas in the southern Mekong Delta -- mainly in the peninsula province of Minh Hai. In this one province alone, which accounted for half the mangrove forests in Viet Nam, 60,000 ha (55%) of mangrove forest area was lost to aquaculture development in the period between 1983-1992. Box 2.2 summarizes the evolution of the problem of mangrove degradation and ecologically unsustainable aquaculture in Minh Hai Province and points out the present and future cost of such activities if nothing is done to remedy the situation. 2.33 Agricultural expansion and intensification directly affects mangrove forests by reclamation of coastal wetlands for agricultural production (rice), and indirectly through changes in the hydrological regime, pollution with agrochemicals and nutrients, and increased water acidification. Future water resources development in the Mekong Delta, for example, may result in a rise in salinity intrusion of the order of 4-6 km on the mainstream branches and of 25-35 kIn for the West Vaico River. Up-stream activities, such as deforestation and dam projects, change sedimentation rates and salinity levels which are important parameters in the growth of mangrove forests and its fishery. Oil pollution and localized land-based pollution pose further potential threats to the mangrove ecosystem. The implication of mangrove degradation, particularly in the past 5-7 years, and the unsustainability and potentially high social costs in the future calls for urgent program and policy actions by government. 2.34 Mitigation Initiatives and Needs. Few experiences of sustainable management of mangroves which maintain multiple mangrove products and services are available. At several forest enterprises in the south, among them Can Gio (Duyen Hai) in Ho Chi Minh City Province and Dat Mui and Tam Giang III in Minh Hai Province, combined aqua-forestry culture has been promoted with mixed success. Farmers are allocated individual plots and allowed to practice shrimp farming on about 20% of their land while managing the mangroves on the remaining part for sustainable yield (see paras. 2.89-2.90 below on shrimp farming systems). The Act of Forestry Protection and Development, enacted by the National Assembly on August 18, 1991, allows the relevant People's Committees to allocate specific property rights to mangrove areas. This law has thus created the legal basis for expanding the scope of this model which combines the goals of wood and fishery production with protection functions. In Minh Hai Province, for example, the opportunity to conserve mangrove forests by implementing the integrated shrimp mangrove model, however, has almost passed since only 45,000 hectares of mangrove forests were left in 1993. Further extension of shrimp aquaculture must, therefore, involve reforestation of miangroves as part of the integrated model. Furthermore, reversing the destructive trend can only come about through drastic policy changes, including improved legislation, land use zoning governing the conversion of mangroves to other uses, the use of prohibitive land use taxes, and the promotion of mangrove rehabilitation with limited sustainable shrimp aquaculture. Research has to be directed towards developing altemative income sources, such as tourism and the marketing of products from sustainably managed mangrove ecosystems, for people living near and from mangrove areas. - 28 - Box 2.2: Mangrove Degradation and Aquaculture in Minh Hai Province Minh Hai province, in the Mekong Delta, is facing serious socio-economic and enviromnental problems which threaten the long-term livelihood and future of a large segment of its 1.2 million population. In the mid-1940s, the province had about 437,000 ha of wetland forests, half of which were mangroves and the other half were subtidal or "back" mangroves. Hardly any untouched mature mnangrove forest now exist. Population pressure and the two Indo-China wars resulted in only about 61,000 ha of mangroves remaining by 1975; and these have largely been cut down, despite a large scale reforestation program which restored Minh Hai's mangrove area to about 110,000 ha by the early 1980s. Transmigration, fueled by shrimp aquaculture opportunities, saw an increase in agricultural households at a rate of 3.7% p.a. from 1985-1991 (compared to the national rate of 2.5% p.a.). Area under shrimp farming expanded at an average annual increment of 15,000 ha/yr from barely 11,000 ha in 1984 to about 132,000 ha by 1992. Mangrove forest in this period was more than halved - from about 110,000 ha to 50,000 ha - most of which were for shrimp farming by individual state enterprises and army units; and for charcoal production. In the early years, the hitherto larvae-rich coastal waters easily supported extensive low cost earth dike systems which let in the tidal waters through wooden gates for harvesting about seven times per year. But at the fast and concentrated rate of development, and given the acid sulphate nature of the soils, the poor management and often improper diking (leaving large sections of the acid sulphate pond bottoms uninundated and thus prone to acidification), the shrimp farmers have found their yields declining and supplementation with purchased shrimp larvae and some supplementary feeding have been necessitated. However, after about three years, the acidity of the ponds are so high that, in many such cases, even mangrove trees cannot be grown. Pond abandonment (i.e., idling of shrimp farming in previously designated areas) are now starting to be significant (from perhaps 3,000 ha in 1988 to about 8,000 ha in 1992), leaving only about 100,000 ha of functioning ponds. Extrapolating from developments in the recent past, abandonment could reach 30,000 ha/year by the end of the 1990s resulting in a cumulative loss since 1984 of nearly 160,000 ha compared to an expected cumulative development of 182,000 ha. If the shrimp fanming areas had adopted sustainable extensive systems when commercial shrimp farming began in earnest (in 1984), by 1994, the net present value obtained from such a scenario [(US$256 million (in 1994 dollars)] would have exceeded by US$140 million the estimated net income of US$116 million (1994 dollars) from 1984-93. If the trend continued through the year 2003, 87 percent of the area converted to shrimp aquaculture would have been abandoned and a further US$249 million (1994 dollars) would be foregone if sustainable systems were not adopted from 1994-2003 (see Annex 8). - 29 - 2.35 Along the North Central coast, Save the Children/U.K. and the World Food Program established community-managed mangrove forest belts in conjunction with sea dike protection (see paras. 2.45-2.47 below) which are expected to be used for limited wood production in later years. In the longer term, these efforts could be expanded to cover the whole shoreline of central Viet Nam in line with improvements to ensure an effective management of the protected mangrove forests. Inland Marshes 2.36 Background and Functions. In the 1940s, freshwater wetlands existed in almost all of the vast depression and peat areas of the Mekong and Red River Deltas with some smaller swamp areas in other regions. In the Mekong Delta 9/, melaleuca forest (back mangroves) covered approximately half of the acid sulphate area (1.6 million ha). Due to the spraying of defoliants and the excavation of a network of drainage canals for rice farming development during the war years, the area decreased to 174,000 ha by 1972. During 1972-1983, the average rate of Melaleuca forest loss was 5,000 hectares annually. The total Melaleuca area in 1985 was 110,133 ha. By 1988, due to intensive replanting programs in the intervening years, the total Melaleuca area in the Mekong Delta had been increased to 121,270 ha, but remaining old growth of natural forests were limited to only 7,180 ha in the Plain of Reeds. 2.37 Two main swamp regions can be found in the Mekong Delta: (a) the western part of Minh Hai province where well developed Melaleuca forests grow on the peaty acid sulphate soils of U Minh, with Melaleuca leucadendron (cajuput) being the dominant tree species (40,850 ha); and (b) the actual acid sulphate soils of the seasonally inundated Plain of Reeds (Dong Thap, Long An and Tien Giang provinces) and the Ha Tien Plain which are covered with Melaleuca and certain grasses and sedges. 2.38 The less disturbed Melaleuca ecosystem is characterized by a higher species diversity than the mangrove ecosystem. In addition to Melaleuca leucadendron, 134 plant species have been identified in the Mekong Delta. However, most of the original peat swamp forest has long disappeared due to frequent fires and human activities. Today, almost pure stands of Melaleuca leucadendron and sedge and bulrush communities have succeeded the original luxurious forests. The originally rich fauna found in these inland marshes have been drastically depleted during the war and subsequent drainage activities, forest clearance and fires. After some parts of the marshes were restored to their natural conditions and protection measures were increased in recent years, the diversity of wildlife has partially recovered, particularly in water birds. The bird fauna includes the endangered milky stork (Mycteria cinerea), the painted stork (Mycteria leucocephalus), the lesser adjutant (Leptoptilos iavanicus), the black-headed ibis (Threskiornis melanocephalus) and the Sarus Crane (Grus anti,one sharpii). The system of protected areas established by GOV includes the freshwater wetlands of Ba Be Lake (450 ha), Nui Coc Reservoir (20 ha) in the north, and Tram Chim Crane Reserve at Dong Thap Muoi (9,000 ha) and Vo Doi (U Minh) Melaleuca Protected Forest (4,000 ha) in the south. 2.39 Besides the importance of inland marshes for the protection of species and household and commercial uses, other functions and values of the Melaleuca ecosystem are well-known although they have not been studied in depth in Viet Nan. The swamps prevent the acidification of topsoils and surface water and provide water for people and wildlife through their storage of freshwater during most of the year. Melaleuca wetlands serve as spawning and nursing areas for many freshwater fish species, provide 2/ Since there is little information available on inland marshes in the other regions of Viet Nam, the following discussion concentrates on freshwater swamp ecosystems in the Mekong Delta. - 30 - the habitat for wildlife, regulate the local climate, filter surface water, prevent accelerated erosion, and trap and store alluvial sediments. The products of the Melaleuca ecosystems which have traditionally been exploited in Viet Nam include poles, fuelwood, fish, honey, and wildlife. 2.40 Marshlands Degradation. Agricultural intensification (primarily the clearing for paddy cultivation), cutting of logs and fuelwood, and accidental and purposely lit fires during the extraction of honey and aromatic oils account for the main direct causes of forest losses. The Provincial Forestry Service of Minh Hai province, for example, reports forest fires which have destroyed 85,000 ha of back mangrove swamps during the period 1976-1987. The extensive Melaleuca forest of Long An province near Ho Chi Minh City, which flourished until the early 1980s has been reduced to a low scrub. The extraction and burning of the water-saturated peat layer led to an increase in acid formation in potential acid sulphate soils (see para 2.79 below). Hunting and the over-exploitation of fisheries through the use of destructive fishing techniques (small mesh size) further contribute to the degradation of the Melaleuca ecosystem. 2.41 Agricultural intensification and expansion have affected inland marshes in two ways. First, wetlands have been lost through their conversion to agricultural lands. Second, drainage activities and excavation works for canals and raised bed cultivation have led to the oxidation of pyrite, acidification, the formation of iron and aluminum on acid sulphate soils and changes in the hydrological regime favoring wide-spread forest fires. Large-scale raised bed excavation in Long An and Tien Giang provinces, for example, resulted in severe acidification of surface water affecting paddy crops and fish stocks. The acidity of drainage water from these areas may cause detrimental effects on adjacent wetlands, agriculture, aquaculture, and domestic water supplies. In addition, the conversion of swamps as well as the construction of dikes and anti-salt barriers poses a serious threat to the reproduction cycle of various migratory species in the Mekong delta and estuary system which rely on freshwater areas as spawning and feeding grounds. The shortage of fuelwood supplies in the Mekong Delta (which only meet approximately one third of rural and urban demands) and the start of wetland wood exports to Japan for pulp and paper put further serious pressures on remaining forests. 2.42 Mitigation Initiatives and Needs. Recent developments demonstrate awareness of the value of the Melaleuca ecosystem. In the deep flooded areas of the Plain of Reeds and Long Xuyen Quadrangle, for example, farmers have begun changing their cropping pattern -- planting Melaleuca trees on severely acid sulphate soils areas and using the better soils for floating rice cultivation. With the assistance of the Center for Resources and Environmental Studies (CRES) at University of Hanoi, provincial governments have been developing some successful community based models for the rehabilitation of Melaleuca wetland forests. However, attempts at the Song Trem Forest Enterprise to implement an integrated model of Melaleuca forestry, aquafarming, and paddy and upland crop cultivation based on water management and soil improvement appears not to have been as successful. The reasons for the variable record of success needs further assessments. Applied research efforts, in any case, have to be increased over the next years to adapt or develop successful models for the sustainable management of inland swamp ecosystems (see Annex 8). In particular, the drastic shortage of wood supply in the Mekong Delta makes it very important to expand the current attempts to implement community forestry models for wood and fuelwood production. In addition, demand management measures, such as the development and promotion of fuel efficient cook stoves and the production of more efficient coal have to be accelerated. - 31 - Coastal Lagoons and Beaches 2.43 Background. A stretch of extensive sandbanks and lagoons extends along the coastline from Thanh Hoa Province to Binh Dinh Province, constituting roughly fifty percent of Viet Nam's coastline. These areas were formed by strong wind during northeast monsoons and typhoons depositing huge amounts of oceanic sand sediments. Freshwater influx, exchange with the sea and seasonal fluctuations vary for each lagoon, influencing the salinity and, hence, the species composition of these ecosystems. Due to their high nutrient levels, coastal lagoons are productive ecosystems which exceed those of the sea even in dry season. On average, roughly 100 kg/ha of fisheries products (fish, shrimp, crabs, mollusks, Gracilaria) are extracted yearly. Sand intrusion and shifting sand dunes due to prevailing strong winds seriously affect agricultural lands, villages, and roads in central Viet Nam where a total of 90,000 ha are estimated to require sand dune stabilization or wind barrier protection. Coastal erosion (particularly for the estuaries of the Red River, Dong Nai River and Mekong River) and coastal area flooding are important problems requiring resolution. Erosion of between 10 and 25 m/yr presents a serious problem along 640 km (20% of the total coastline length) and is leading to the loss of agricultural lands and even of villages. In recent years, the rate of coastline erosion has reached 50 m/year in some areas. Such a severe erosion has broken sections of dikes built for protection against salinity intrusion in Van Ly, or even completely submerged entire coastal villages such as those in Phan Ri (Central Region) and Go Cong (Southern Region). 2.44 Degradation. Overexploitation (disregarding the size of catch and harvest season), reclamation (clearing of vegetation which intensifies coastal erosion), and pollution (wastewater and oil) are the prevailing threats to coastal lagoon ecosystems. At Tam Giang Lagoon, the largest lagoon in Viet Nam, aquatic life has repeatedly been threatened by a decrease in salinity due to sand accumulation from river runoffs which blocked the openings of the main lagoons to the sea. Before implementing preservation programs, it will be important to survey coastal lagoons and determine the stresses affecting them. 2.45 Mitigation Initiatives and Needs. In terms of sand dune stabilization or wind barrier Protection, a pilot project was initiated by the World Food Programn in 1992 which supported the planting of Casuarina protection forests to stabilize sand dunes and serve as a buffer against frequent typhoons. This project, WFP 4304 "Coastal Reforestation in Vietnam," aims at the rehabilitation of eroded and denuded land in 13 coastal provinces through the reforestation of 125,000 hectares of wasteland. In addition to providing fuelwood, poles, and small timber, the plantations are expected to reverse the present trend of environmental destruction. Coastal shelterbelts will help protect agricultural fields and settlements. As in the WFP Upland Project, small farmers participating in the project will have lease holds of afforested areas, and WFP food assistance is provided as an incentive to undertake the afforestation activities. This five-year project involves a WFP investment in food and related services of US$ 20.3 million with an expected GOV contribution of US$ 8.9 million. In addition, the GOV, FAO, UNDP, and Australian government are executing a two-year technical assistance sub-project (1993- 1994) to support the implementation of Project 4304 and enhance its effectiveness. The sub-project will promote the plantation of eucalyptus (camaldulensis, tereticornis, urophvlla, pellita), acacias (mangium, auriculiformis, crassicarpa) and casuarina with seeds from Australia, Papua New Guinea, Thailand and the Vietnam National Forest Seed Company. 2.46 With regards to coastal erosion and saltwater flooding, initiatives have also begun to rehabilitate, upgrade, and protect existing coastal protection dikes. In Ha Tinh province alone, 260 km of dikes exist. These dikes are typically not sea dikes (designed to resist sea waves) but rather those that border the estuaries which extend inland from the coastline (estuarine/confluence dikes). Because of the latter's propensity for flooding, typhoon or storm damages tend to be more severe than other coastal areas - 32 - in terms of saltwater flooding of cropland and homestead, and the cumulative salinization of soils leaving large areas unsuitable for agriculture. A WFP Project (Rehabilitating and Upgrading of Sea Dikes) estimates an average annual dike failure cost of US$ 2.5 million (average 1982-1990) from such damages (including dike repairs) in Ha Tinh alone. 2.47 The experience of projects being implemented by WFP and Save the Children Fund 10/ indicates the need for dike upgrading to more rigorous standards than the "traditional" ones in terms of height above high tide, compaction, turfing, and mangrove stabilization. With more effective protection, internal rates of return to investments are estimated to be about 23 % through the prevention of damage to cropland and homesteads and the savings in dike repairs. However, it has yet to be established in the areas of high typhoon incidence that even such "rigorous" standards will suffice or that such damage would, in any case, be inevitable and, thus, too expensive to economically prevent. Until this issue is studied in depth, development should be cautiously undertaken. 2.48 Although Viet Nam has 2,500 km of sea and estuary dikes protecting about 500,000 ha of coastal land, priority rehabilitation is needed for about 500 km in the central provinces that are usually subjected to the most serious typhoon incidence. Part of this is being supported by a new five-year WFP project started in 1993 covering 44 km. The project introduces improved techniques and stricter standards of construction than were used under its preceding project to resist typhoons of up to intensity level 10. Part of the dike construction would complement the new mangrove plantings in Thach Ha district by Save the Children. Another 63 km upgrading may be assisted by Oxfam (UK) subject to the results of pilot initiatives in Ky Anh district. Marine and Estuarine Ecosystems 2.49 Background. Viet Nam's marine and estuarine life, especially fish species, is highly diverse due its wide latitudinal range. The 3260 km long coastline, 100,000 ha of coastal lagoons and closed gulfs, 290,000 ha of tidal marsh and mudflat and over 100 large estuaries harbor abundant fisheries resources for Vietnam. Total EEZ measures up to I million square kIn. To the north are found fish typical of Japan and China, to the east typical of the Pacific, and to the south typical of Indonesia. Some 2,000 species of fish and fish products have been identified, of which 100 species are of high economic value. These diverse marine resources also provide important sources of food and income for the Vietnamese population. Some one million tons of fish are caught annually, of which 50,000 tons are for export. About 80-90 % of all marine fisheries production comes from shallow coastal waters. Marine fishes supply some 30% of the animal protein consumed in Viet Nam. Harvest of algae, mainly Sargassum, Gracilaria, Porphvra, Hvpnea, Entreromorpha, and Ulva are the richest in central Viet Nam such as Khanh Hoa, Ninh Thuan and Quang Ngai provinces where productions total 10,000 to 15,000 tons dried weight per year. In addition to species used as food and in industries, some groups such as Enteromorpha are used in medicine and Ulva as fertilizers. 2.50 Decreasing catches per unit effort indicate that the majority of Viet Nam's inshore fisheries are being over-fished and that the nurturing and breeding conditions have declined. Many provinces, especially along the northern coast, have experienced declines in both fish size and yield in the last five years. Catches in near-shore waters of the Mekong Delta (annual catch: 0.21 million tons) exceed the estimated Maximum Sustainable Yield (0.15 million tons). Destructive fishing techniques, such as the use of fishnets of small size or explosives, seriously threaten to interrupt natural reproduction. The 10/ WFP, Approval of WFP-Assisted Project Viet Nam 4617, 'Rehabilitating and Upgrading of Sea Dykes," October 1992. Save the Children (UK), Mangrove Planting Project-Interim Evaluation, December 1992. - 33 - destruction and degradation of coastal habitats which are of great value to marine life as vital spawning and nursery grounds, such as mangrove forests and coral reefs, have compounded the problems of over- exploitation. Overfishing has led to the identification of about 70 species as threatened and endangered, many of them of economic value. 2.51 The Red River and Mekong delta and estuarine systems dominate Viet Nam's coastline in the north and the south respectively. The estuarine systems consist of tightly interconnected ecosystems, including mudflats, mangrove forests, marshes, and beaches. The Red River estuary, for example, can be divided into three major zones: (a) the land inside the dike, (b) coastal marshes, mudflats, and beaches beyond the sea dike, and (c) the islands in the estuary. The estuary systems are important for rice production, fisheries, aquaculture, and transportation; in addition, they function as spawning and feeding grounds for estuarine and marine fisheries and provide staging and wintering areas for migratory waterfowl. In 1987, the GOV joined the Ramsar convention 11/ as a Contracting Party, designating the Xuan Thuy area in the Red River Delta for inclusion in the Ramsar List of Wetlands of International Importance. 2.52 Large cities, sea ports and industries are located along Viet Nam's coastline and in the delta and estuarine systems. Estuaries and coastal waters increasingly suffer pollution from shipping and oil exploration activities as well as by urban and industrial wastes. Near cities, sewage is channeled into the major rivers without any treatment. All industrial waste waters from the existing 3,000 industrial enterprises are discharged without proper treatment. As much as 10% of the marketable coal production is lost during transport on water. Estimates of pollution from Bach Ho show that, in 1991, about 70% of total water disposed into the sea was untreated human waste; and that untreated industrial waste represented only 18% of the total pollution. The planned deep port for coal exports at Hai Phong could drastically affect the tourist potential of Ha Long Bay. Tourism expansion at resorts along Ha Long Bay itself would also contribute to the bay pollution. A careful study of environmental impact will need to be made and ongoing monitoring mechanisms established. The capacity of the relevant Vietnamese authorities to take samples and monitor environmental pollution, however is very limited. Establishing laboratory facilities all along the Vietnamese coast and staff training are priorities for environmental actions to curb pollution. 2.53 Large-scale oil spills have not been a critical problem; there have been documented oil spills in Viet Nam which were relatively small in scale and caused no widespread damage 12/. However, a major oil tanker route goes through the East Sea off Viet Nam's coast with a transport volume of approximately 200 million tons of oil per year and crude oil production at Bach Ho now amounts to 110,000 barrels per day. Oil discharges from regular activities are estimated at 20 tons per year for shipping and some one percent of oil extracted. Every year since 1975, oil spotting and pollution have been found on Vung Tau beaches; analyses revealed that the oil did not originate from Viet Nam. Samples taken along the whole coastline in 1989 indicated that the concentration of carbon in the water exceeded the harmful limit (0.05 mg/I) at 36% of the sites, indicating that the problem is serious and warrants attention. Also, since sea currents and winds have the tendency to bring the oil slick to the Vietnamese shore in the case of a major oil spill, there is a need to review and improve the contingency plans and control equipment for oil spills. There is no integrated framework for disaster planning and mitigation in place in Viet Nam. 111 The Ramsar Convention has as its goal the protection and sustainable use of wetlands. 12/ The latest, a 200 ton oil slick caused by a collision of two ships on the Long Tau river in May, 1994, was the most serious. The oil spread 20 km and caused an official estimated damage of US$60,000. No clean up was attempted because the relevant authorities did not have the proper equipment. - 34 - 2.54 Mitigation Initiatives and Needs. Mitigation of the degradation of coastal habitats of value to marine life (such as spawning and nursery grounds) has been discussed above for mangrove forests. For coral reefs, mitigation needs are discussed in para. 2.58 below. In termns of marine fisheries in Viet Nam, nearshore fisheries are likely to be over-fished while deep sea fisheries have hardly been developed. However, whether deep sea fishing can and should be expanded during the next few years would need to be assessed as substantial investments in expensive fishing equipment would be called for and there is already excess deep sea fishing capacity in the region. It is also important to ensure that coastal fisheries do not exceed sustainable yields. Measures to maintain the productivity of coastal fisheries have to include bans of destructive fishing techniques, such as the use of explosives and nets of small mesh size, as well as the protection of vital spawning and feeding grounds, such as mangrove forests and coral reefs, for local fisheries. Finally, in terms of contaimnent of oil spills, incidence of large spills have been rare. However, given the expected increase in tanker traffic and the unmitigated disaster a major oil spill could cause with respect to tourism, coastal ecology and inland damage of poorly protected coastal areas, preparation of an integrated framework for disaster planning and mitigation should start. Coral Reefs 2.55 Background and Function. Coral reefs in Viet Nam are mainly found south of Quy Nhon in the form of near-shore coral reefs, and as larger and deeper offshore reefs around the Hoang Sa (Paracel), Truong Sa (Spratly) and Son Tu Tay in the Spratly Archipelago. They are very productive habitats of marine life and fulfill an important function in the prevention of coastal erosion and typhoon damage by dissipating wave energy and, for deeper reef lagoons, providing critical boat shelter during storms. About 70 genera and 200 species of corals have been reported, some of which are threatened. Coral reefs are integrated into the Vietnamese network of protected areas through the protected areas of Cat Ba and Con Dao Islands. 2.56 Almost all fringe coastal coral reefs are threatened by the direct or indirect impact of human activities. Extensive areas of corals around Cat Ba Archipelago in the north have been smothered by silt. Increased sedimentation rates are caused by runoffs from the Red River system due to up-stream deforestation, mangrove clearance, and agricultural land reclamation. Dynamite fishing has destroyed most of the corals near Nha Trang. Coral mining for lime is a problem encountered in the Son Tra Peninsula in Da Nang. 2.57 Coral reefs, as well as mangrove forests, are often associated with sea-grass beds. A variety of marine turtle species and other aquatic life depend on these ecosystems as breeding and nursery grounds. The turtles are hunted for their shells and meat, and their eggs are collected. On the Phu Quoc Islands, for example, the hawksbill turtle Eretmochelvs imbricata has disappeared. 2.58 Mitigation Initiatives and Needs. Since most of the coral reefs in Viet Nam are under acute pressure threatening their survival, urgent measures for their protection are required. Existing protected areas, such as at Cat Ba and Con Dao, have to be expanded to achieve the effective protection of coral reefs. To secure the survival of the hawksbill turtle and other endangered species, sea turtle nesting grounds should be protected, the sale of their eggs banned, and international cooperation sought to assist in their protection.The resolution of the conflict with China will be essential for the implementation of measures to halt dynamite fishing at the Troung Sa Islands. - 35 - Sunmmary Perspective and Deeradation Costs 2.59 The loss of wetland forests (mangroves in the coastal areas or back mangroves further inland) of the Mekcng Delta is in many ways more serious than that of the upland forests and watersheds. First, as much as 40% of the natural fishery nurturing functions of mangroves are likely to have been permanently lost through the expansion of shrimp ponds and the subsequent abandonment that characterizes the extensive "shifting aquaculture" practiced in the acid sulphate soil areas. In Min Hai Province, which accounts for about half of all the mangroves in Viet Nam, nearly 55% of mangrove forests were destroyed between 1982 and 1992, mostly for shrimp aquaculture. By 1993, only 38% of the mangrove forests which had existed in the province remained intact from the onslaught of shrimp pond development. Furthermore, if this ratio applies to mangrove wetlands in the whole of the Mekong Delta, the Red River Delta and the Northeast Region, coastal aquaculture development would have led to the destruction of some 148,000 ha of mangrove forests; the implied cost of such unsustainable use of the mangrove eco-system (Annex 8) is about US$ 277 million (NPV in 1994 constant prices) in the past decade. (Of this total, about US$ 140 million is from Minh Hai province alone). Even if only half of such losses in the non-Mekong Delta areas are considered to be relevant (because the acid sulphate soils problem outside the Mekong is much less serious), the resulting indicative loss of US$ 209 million is still considerable. In light of these statistics, a moratorium on aquaculture expansion which requires the cutting down of mangrove areas should be considered. More importantly, mangrove replanting to improve the breeding and nurturing of seed fish, shrimp or shellfish and to enhance costal protection would need to be implemented as a matter of top priority. Such a program combined with selected introduction of sustainable shrimp aquaculture in better existing pond areas are economically justifiable. (Annex 8). 2.60 Two other coastal environment action programs also deserve priority consideration for support: (a) Rehabilitation and improvement of coastal dikes in conjunction with additional mangrove plantings and related measures to stabilize the rehabilitaed structures. Savings from the reduction of salt water flooding and other storm damage of cropland and homesteads and savings in existing dike repair costs, could generate internal rates of return of abut 23% (paras. 2.46-2.47). (b) Stabilization and afforestation in the central region of sand dunes (as a buffer against storm damage) and reforestation of coastal barren lands (to provide for local consumption needs for fuelwoods and construction poles) which would also serve to reduce the pressure on protected wetland forest areas (para 2.45). C. Agriculture and Arable Land Background on Agricultural Production 2.61 The importance of the agricultural sector in total GDP, employment, and exports has already been discussed in Chapter 1. Crop cultivation accounts for about three-quarters of the gross value of agricultural product and about two-thirds of this consists of grain production, within which rice accounts for 88%. Food grain production amounted to 21.6 million tons in 1990-91, of which paddy rice was 19.3 million tons. Among other edible products, maize, sweet potatoes, cassava, potatoes, and vegetables are the most important. Rubber is the most significant industrial crop; but tea, coffee, and sugarcane are also important. - 36 - 2.62 Between 1976-86, land reclamation and resettlement increased cultivated area by nearly 20% (to 5.6 million ha), primarily for rain fed industrial and tree crops. Grain planted area peaked in 1980 and has declined slightly since, indicating that the land frontier for food grain has essentially been reached. Paddy yields, which had been stagnant in the 1970s, grew by about six percent p.a. between 1980-85. Fertilizer consumption, primarily nitrogenous fertilizer for rice (imported from CMEA countries) increased at a compound growth rate of 23% p.a. from nearly 129,000 tons in 1980-81 (in nutrient terms) to nearly 296,000 tons (average 1984-85). The expansion of dry season technology and added incentives (primarily the implementation of a contract system between the farmer and the commune or cooperative) were the primary sources of production growth during this period. Gross fuxed investment in agriculture and forestry increased sharply towards the late 1970s and the mid 1980s. Investment in Viet Nam's water control facilities, power plants and transport facilities was primarily through CMEA trade and investment agreements with the USSR. CMEA countries also financed the expansion of tree crops (tea, coffee, and especially rubber), which were previously managed by State Farms but are now primarily run as subsidiary companies (estates or factories) of the respective state- owned enterprises (SEs) under the jurisdiction of the Ministry of Agriculture and Food Industry (MAFI). 2.63 Gross value of agricultural production (in constant 1989 prices) grew at 4.6% p.a. between 1980 and 1985, but declined to 2.7% p.a. between 1985 and 1990 after a dip in food grain production in 1987 (due to bad weather and the fact that benefits from the contract system had been used up and other constraints became limiting). While overall grain area remained below the 1980 peak level, overall rice area planted increased slightly as increases in the planted area for the Winter-Spring and Summer- Autumn rice reason crops (primarily from rehabilitation of acid sulphate soil areas in the Mekong Delta) more than compensated for the decline in the main (monsoon) season area. With lagging nitrogenous fertilizer use, yield increases since the mid-1980s (3.8% p.a.) did not keep up with the rate experienced in the first half of the 1980s. However, a number of adjustment measures to improve the structure of farming and household incentives (see Chapter 1) and the completion of irrigation investments initiated in the mid-1980s increased the availability of rice for exports. The resulting export volumes after 1988 for rice (first time export), rubber, and coffee have been timely in ameliorating Viet Nam's foreign exchange difficulties at the tum of the decade. Among the more dramatic post 1988 investments have been cotton in the southeast and cashew nuts in the central highlands. Since the mid-1980s, however, irrigation investments for food crops (essentially rice) have declined and until GOV's fiscal difficulties improve or significant extemal assistance expand substantially, opportunities for intensification (in terms of improved incomes per capita) will initially have to depend on small scale mechanization to improve cropping intensity, yield improvements from more intensive input use, and diversification to higher valued cropping systems. 2.64 In moving towards greater intensification, greater trade-offs between growth and the environment will likely be encountered. A brief summary of some of the trends, in conjunction with on their environmental implications, are summarized below: (a) The potential for further use of agro-chemical inputs to increase yields for the major crops (especially rice) is still high, especially given that nearly 60% of the rice cultivation in Viet Nam is irrigated. Overuse of fertilizer and pesticides, however, has negative environmental effects. The question is how efficiently are fertilizers and pesticides being used - not only from an economic standpoint but also from a pollution and health standpoint. (b) With the increasing shortage of productive land, the capacity for rice area expansion in the Mekong Delta is essentially limited to the reclamation of acid sulphate soils, where environmental costs in terms of the adverse impact on fisheries and household use resulting from the acidification of the dry season surface water resource will have to be considered. - 37 - Further expansion for irrigated rice will likely have to come from lower cost rehabilitation and improvement possibilities in the coastal and hinterland valley areas of the Central and Lower North regions where the presence of acid sulphate soils does not constitute a limiting constraint. Furthernore, with declining per capita supply of food grains outside the two major deltas, 13/ such an expansion emphasis would be economic as well as be supportive of Government's income distribution and environmental objectives since food security in these areas would mean a reduction in the pressure to expand into more fragile hill areas. (c) Although tree crop expansion has, by and large, been on to agriculturally suitable areas, some tree crop expansion has been associated with two types of costs which have environmental implications for land use. The first (an emerging problem) is the opportunity cost of agro-ecologically inappropriate expansion. One example is in the Central Highlands, where new rubber expansion runs the risk of expanding into agriculturally unsuitable areas relative to other crop uses for the land. This resulted from the successful promotion of individual commodity state enterprises rather than from careful evaluation of the options during land use planning for settlement. Second is the opportunity cost of pre-empting more economic use of good agricultural land. Again, in the Central Highlands, by planting rubber and coffee in the relatively level and fertile (basaltic soil) plateau areas instead of the undulating and more sloping areas, much of the future options of potentially more remunerative field crops, like annual oilseeds and cotton, could have likely been foregone 14/. Even worse, since the sloped areas are left for growing the annual industrial crops, prior expansion of tree crops onto level plateau land would have had a more negative environmental impact than if proper land use had first taken place. Again, land use planning with a longer-term vision could have forestalled this situation. The issue which has to be borne in mind for future planning is that in committing investments of long-term, high start-up cost investments like tree crop cultivation and processing, a careful evaluation of appropriate sites and long-term market prospects is critical. Taking into account the low market demand and price prospects for such tree crops as tea or coffee, the need for a more careful justification of further tree crop expansion in these areas is further reinforced. '(d) Besides competition for arable land in the valley or plateau areas, the practice of shifting agriculture (much of which involves ethnic minorities) and continued high fuelwood demand have exacerbated forest degradation in the hill/mountain areas which account for nearly three-fourths of the total land area in Viet Nam. (e) Similarly in the wetland areas of southern Viet Nam, crop expansion, fuelwood demand, and particularly improper commercial shrimp farming has also jeopardized long term land 13/ Primarily in the Northern Mountains and Midlands, the North and Central Coasts. 14/ With per capita incomes increasing rapidly, the demand for livestock products and, derivatively, the demand for high- value feed will also need to expand in a commensurate manner. Unless more rice is used for livestock feeding (unlikely- since when world prices were at historic lows it was still little used as feed and, besides, recent improved milling capacity has proportionately reduced brown rice availability), Viet Nam should now capitalize on its potential and comparative advantage in producing feed grains and, particularly oilseeds (for high protein cake) in these areas. Similarly, opportunities for cotton in the fertile areas of the central highlands will also be compromised. Given the rate of expansion anticipated by the domestic textile industry and the fact that it has yet to recover from the loss of its traditional source of cotton supply (the former Soviet Republic States), raw materials scarcity will worsen without large scale imports. - 38 - sustainability and the productivity of mangrove areas. An in-depth assessment of the "shifting aquaculture" problem (akin to that for shifting agriculture in the hills except that abandonment has a higher cost to the economy because of the likely prohibitive cost of reclamation and the loss in value of the nurturing function of mangroves) is an important prerequisite for planning such investments. Because the abandonment problem is essentially linked to acid sulphate soils management, such assessments would have to include the cumulative impact that interrelated environmentally damaging investments would have on the quality of the water resource (reduced water quality from dry season reclaimed rice area flushing on fishery productivity and household water supply). Other than for (d) and (e), which have been discussed in Sections A and B above, other direct environmental effects of concern for crop production are related to fertilizer and pesticide use, and the management of problem soils, all of which are discussed below. This section ends with a discussion of the role of fisheries and livestock in the degradation process. Fertilizer Use 2.65 Fertilizer use in Viet Nain has been steadily increasing from about 172,000 tons p.a. (in nutrient terms) in 1980-81 to 428,000 tons p.a. in 1984-86 to about 500,000 tons in 1989-90. However, average fertilizer consumption/ha is not high by East-Asian standards and by the extent of irrigation in the country. For rice, the predominant crop, the comparative situation is given in Table 2.3 below. 2.66 In 1989, the average nutrient use for rice cultivation in Viet Nam was 57N - 21P205 and 3K20. Depending on variety, plant densities, weed competition, water management, and pest control, research on farmer's fields in the Mekong Delta shows that with the application of approximately twice the existing average rate, yield potentials range from 5-7 ton/ha for alluvial soils and 4-6 ton/ha for acid sulphate and grey degraded soils. Compared to the regional averages of 3.7 t/ha in 1990, and with only the provinces of Dong Thap, An Giang, and Tien Giang exceeding 4.0 t/ha, there is plenty of scope for increased paddy yields if farmers were to use the presently recommended fertilizer rates in a timely and correct manner 15/. 15/ The most common fertilizer application rate recommended (and also frequently used by farmers who can get the cash) is 200 kg/ha urea and 100 kg/ha DAP. At the prevailing high urea and DAP prices of D2,100 and 2,700 per kg respectively (March 1993), fertilizer costs (excluding labor) would be D690,000 per ha. With a farm gate paddy price of Dl ,100/kg (March 1993), this would require an incremental yield of 620 kg/ha paddy to break-even. Existing studies indicate significantly higher (by 2 to 3 times) incremental yields are feasible. - 39 - Table 2.3: Fertilizer Use and Associated Indicators, 1987-89. Cambodia Thailand Viet Nam Malaysia Philippines Indonesia Average Paddy Yields 1.3 3.1 3.2 3.7 2.7 4.0 (tons/ha) % Rice area under 10.0 25.0 60.0 73.0 45.0 55.0 irrigation Average Fertilizer 10.0 39.0 75.0 151.0 63.0 113.0 use (kg nutrient/ cultivated ha) Average size of farm 5.0 3.8 0.6 3.5 2.8 1.1 (ha) Source: Various World Bank Reports and Country Statistical Reports. 2.67 In surveys undertaken by the National Institute for Agricultural Planning and Projections (NIAPP) in 1989-90, when urea and paddy prices were approximately D960 and D480 respectively (i.e., 2:1), an actual comparison of existing use of fertilizers with optimal (maximum profit) use showed that, even though fertilizer levels used are on average below those of other Asian countries, nitrogen levels in excess of the economic optimum were encountered in nearly all areas surveyed for the wet (monsoon) season crop (especially outside the Mekong Delta), and in certain provinces during the other seasons, particularly Binh Dinh (Tuy-Phuoc district) of the Southern Central Zone 16/. Under utilization of P205 was particularly evident for virtually all provinces of both the Northern and Southern Central Coastal zones and Hanoi province. In the Mekong Delta, fertilizer use was mainly optimum except possibly for slight overuse of N in the wet season. Thus, even from an economic optimum standpoint, opportunities exist to reduce some fertilizer application rates (i.e., especially for nitrogenous fertilizer). 2.68 From the perspective of environmnental impact, chemical fertilizers (especially nitrogenous fertilizers) can leach into ground water as nitrates and run off into streams. Although some very localized nitrate pollution has been identified, no widespread prevalence has been detected. In any case, more efficient nitrogen use (i.e. reduction of the over-application mentioned above) can be promoted through the extension service, especially in conjunction with more efficient plant protection. Pesticide Use 17/ 2.69 Slightly over 20,000 tons of pesticides were applied in 1991, with nearly 80% of finished products used in the form of insecticides. The main products used are organophosphorus compounds (basudin, methamidophos, pa.athion methyl, DDVP), carbamates (bassa, saturn, furadan), syperthroids (decis, cypermethrin), organochlorines (lindane, 2,4-D), and salts (copper sulphate, zinc phosphide). Many of these products have a high residual toxicity with serious ecological consequences. Some of these pesticides are non-selective and kill useful species including natural predators as well as pests. This usually leads to a rapid recovery of the pest population, or to invasions of secondary pest species. Many chemical pesticides are toxic to fish, birds, and mammals including man. Repeated use of pesticides of high residual toxicity, such as the stable organochlorines, pollutes water and soils with toxic residues 16/ See: NIAPP, 'Primary Survey of Fertilizer Use and Fertilizer Efficiency in the Main Rice GrowineAreas of Viet Nam", March 1991 and World Bank Paper by Muller, Boerema and Chung on 'Farm Profiles. Incomes. Incentives and Input Use, June 1991." 17/ The impact of pesticides as a war tactic is given in detail in Annex 4. - 40 - which enter the food chain of aquatic and terrestrial animals. Humans can be directly intoxicated by exposure to polluted water or air, or indirectly via food chain (fish, shrimps, birds, etc). Sustainable agricultural development requires strict regulations and control on type and use of agro-chemicals. 2.70 In 1986-88, an average of 20,000 tons of pesticides were imported by the various pesticide companies under the Ministry of Agriculture and Food Industries and the Ministry of Heavy Industries. Imports declined to only 7,600 tons and 11,100 tons in 1989 and 1990 respectively, primarily because of foreign exchange shortage. Imports expanded to nearly 17,000 tons in 1991 partly as a result of farmers' response to adverse brown plant hopper infestations on rice in the Mekong Delta during the 1990-91 crop year, and an improvement in the foreign exchange situation. 2.71 Pesticide use as reflected in pesticide expenditures per ha for selected countries are given in table 2.4 below. Table 2.4: Pesticide Expenditures and Applications, 1990-91 Region/Country Expenditures (USS/ha) No. of Applications Bangladesh 18.9 na China 25.6 3.5 India 24.9 2.4 Indonesia untrained 7.7 2.2 IPM trained 3.7 0.8 Philippines 26.1 2.0 Sri Lanka 17.3 2.7 Northem Viet Nam 22.3 1.0 Southern Viet Namn 39.3 5.3 Source: FAO: Intercountry Program for Integrated Pest Control in Rice in South and Southeast Asia, 1992. The preceding table and the farm management studies, undertaken by the National Institute for Agricultural Planning and Projection (NIAPP), show the overuse of pesticides for rice in Southern Viet Namn. This tendency for overuse is related to control of the brown plant hopper (BPH) which is prevalent in the Mekong Delta but not in the Northern rice growing areas. Studies on population dynamics of BPH, sponsored by the FAO Intercountry EPM Program and carried out in seven sites in the Mekong Delta, found that long spraying of fields kill BPH's natural enemies, allowing BPH populations to become much higher than in unsprayed fields where natural enemies were not disturbed (See Annex 1, Figures l.a through l.f). With integrated pest mranagement (which advocates reductions in the amount and frequency of spraying to control leaf folding insects early in the growing season; raising the spraying threshold, especially for leaffolder; avoiding the use of organophosphates, organochlorine, and pyrethoids in the rice field and restricting spraying only to BPH nymphs), average yields and net financial benefits are higher compared to existing farmers' practice (FP). This is illustrated in Table 2.5 below, which gives the results of the FAO IPM trial. As the table illustrates, net benefit improvements range from 11- 26% for 1990 to 1991 - an excellent example of a "win-win" scenario where the adoption of an environmentally friendly practice enhances net income at the same time. - 41 - Table 2.5: Pesticide Use, Average Yields and Net Benefits from IPM Summer 1990 Winter-Spring Summer 1991 T 1900-91 FPal IPMb/ FP IPM FP IPM Yield (ton/ha) 3.81 4.27 3.5 3.9 4.0 4.1 Amount pesticides used 0.93 0.58 1.2 0.7 1.39 0.79 (kg active ingred./ha) Net Benefits 1,303 1,594 1,865 2,354 2,628 2,926 (1,000 dong/ha) Notes: a/ FP = farmer practice b/ IPM = integrated pest management Source: FAO Inter-Country Program, op cit. There is, therefore, an urgent need to expand the training and extension program coverage and to increase field research on a wider range of conditions to provide farmers with better guidelines on higher threshold levels and the use of more appropriate chemicals (e.g., the carbamates rather than the organophosphates) when it is necessary to apply. 2.72 With greater market liberalization (less control), there is a greater tendency for the application of cheaper, more hazardous pesticides and less conformity to guidelines issued by the Department of Plant Protection. In 1992, for example, concrete actions have been taken by MAFI to ban 20 of the most hazardous pesticides, but the extent of their use has changed little. Some banned pesticides including DDT and arsenic are still being used, most of which are from outstanding stocks purchased before the ban. Such developments have implications for the monitoring of the unregulated pesticides market; the need to finalize the pesticide law and its implementing regulations; and better enforcement. 2.73 Environment pollution impacts of pesticide use revolves around two broad areas: (a) Pesticide toxicity or contamination in water, soil, and food. (b) Health risks to humans at the handling level from the import stage, through wholesale and to the farm level. 2.74 Results obtained from toxicity monitoring studies have been variable. A Ministry of Health (MOH) study in 1990 measured residues on food crops (tea, potatoes, rice) and found that, in general, their values were below maximum values. However, another MOH study (which measured pesticide residues in dozens of samples of surface water, aquatic animals, and crops in the Mekong Delta) indicated that pesticide levels in surface water exceeded the maximum permissible values given in WHO guidelines for drinking water quality 18/. While it may be cautiously assumed that, in general, major problems from pesticide residues in water and especially food are not a serious problem, a 18/ Le Trinh, Studies of Excotoxicologv and residuals of Pesticides in the Provinces of Can Tho and Soc Tran2 (in Vietnamese), unpublished report, 1992. - 42 - monitoring mechanism for vulnerable areas where potential problems are likely to arise should, in any case, be established. 2.75 In terms of pesticide handling, most pesticides used at the farm level are applied by farmers themselves or by hired laborers. Vietnamese farmers interviewed by the FAO Intercountry Project on IPM regularly indicate that they get poisoned by pesticides with effects ranging from itching up to hospitalization for a few days. Most farmers applying pesticides wear neither protective clothing nor eyewear, and are usually barefoot. Pesticides are often dispensed to farmers in small amounts in tinted soda bottles from home or from the retailer, and are usually not labelled. Since (as the Ministry of Health Survey 19/ indicates) 15% of all rural households store pesticides inside the house, such a situation could be potentially dangerous - especially since MOH surveys also estimate that in each rural household between 1-2 persons (or 15-20 million persons nationally) use pesticides on crops. There is, therefore, an urgent need to: (a) ensure that pesticide regulations contain labelling and handling requirements for human safety; (b) further assess the magnitude of the safe handling of pesticides at various levels of the marketing chain; and (c) incorporate safe handling precautions and procedures at the retail level and the farm level through existing farmer extension programs. Problem Soils 2.76 Vietnam has four main categories of problem soils including acid sulphate, saline, shifting coastal sands, and degraded and highly erodible mountain soils. Their extent, location, and the availability and cost of appropriate technology for their conservation and/or rehabilitation are important considerations in designing agricultural program support by Government. Their distribution by agro- ecological zone, together with a brief description of their parent material and properties, is detailed in Annex 1, Table 19. Acid sulphate and saline soils alone account for about 2.5 million ha in the Mekong and Red River Deltas. The most consistent theme across the problem soil types of Viet Nam are high acidity and associated aluminum (Al) toxicity, low organic matter content, poor moisture retention and low base saturation, and Cation Exchange Capacity (CEC). A lack of capital for infrastructure development, both to modify land use and provide supporting services, is another widespread constraint. 2.77 One of the most effective strategies available to farmers to modify upland soils is through the application of animal and green manure. This has a direct impact over time on all of the aforementioned deficiencies since it improves the plant root environment and fixes Al and bond mineral fertilizers, thus impeding leaching. Manures also buffer the soil against dramatic changes of pH associated with changing soil moisture conditions. While the maintenance of ground cover as a part of a manuring program will reduce the rate of manure decomposition and hence nutrient release, animal manure has the inherent benefit of a slower rate of mineralization, thus better matching nutrient release to crop demand. Table 2.6 (below) indicates the benefit of manuring some degraded soils in Northern Viet Nam. 2.78 The most difficult soils to manage, however, are lowland acid sulphate soils (ASS). About 1.4 million ha of perhaps 1.5 million ha are found in the Mekong Delta, accounting for 41 % of the soil types there. ASS may be categorized into two broad groups: (a) The potential acid sulphate (PAS) soils. (b) The actual acid sulphate (AAS) soils. 191 See, FAO Inter-Country Pro2ram for IPM. op. cit. - 43 - Soils containing pyrite (FeS2) are called PAS soils. Pyrites are formed from interactions among the following factors: presence of organic materials, sulfates and bacteria which reduces sulfates, the extent of anabolic conditions, slow sedimentation rates and tidal movement. Most PAS soils are found in the Ca Mau Peninsula. In the U Minh Forest, Minh Hai Province, these soils are covered with a peat layer of 0.5-2.5 m. Exposure of PAS soils to the air (e.g. after peat extraction and drainage or excavation) leads to oxidation of pyrite and formation of sulfuric acid which acidifies soil and soil water -- giving rise to AAS soil formation. If the pH of these soils or soil waters is less than 4.5, most fish species will not be able to survive; neither can aquatic nor plant life (including most mangrove species) below pH 3.0. Under acid conditions, aluminum, iron, and manganese ions increase and can result in aluminum and iron toxicity. In the case of aluminum, for example, a concentration of more than 0.1 mg/l affects aquatic life. Water which passes through acid sulphate soils (e.g. from floods or irrigation) can wash out the acid; but the effluent, if not properly diluted and drained, could have adverse downstream environment impact. This situation is particularly serious in the dry season, when the dilution process may not be cost effective in terms of alternative use for the scarce water. Table 2.6: Impact of Organic Matter on Rice Yields in Degraded Soils, Northern Viet Namn Manure Source Number Average Yield Paddy Yield of Trials Increment (%) (kg)/Ton Manure Composted Animal Manure 8 28 52 Green Manures: Sesbania 4 39 55 Tephrosia candida 1 18 41 Peanut Stem 1 23 53 Sweet Potato 1 14 43 Stem Soybean Stem 1 27 62 Rice Straw I 24 38 Source: NIAPP 2.79 "Improved" farming systems have been introduced to mitigate the effects of such soils and reclaim them for productive use. These include the following: 20/ (a) Flushing of soil and water acidity with freshwater (usually practiced for shallow pyritic soil layers). (b) Construction of raised beds for planting upland field crops or perennial crops (usually in shallow, flooded areas). (c) Adoption of local high acid tolerant crop varieties and special crop husbandry systems adapted to different intensities of acidity. 20/ Details are in Mekong Delta Master Plan, Thematic Studies On Environmental Impacts Volume 1, November 1992. - 44 - These systemns have different implications for the environment. The most serious is related to (a) above, where several canals have been excavated for flushing of soil and water acidity in the AAS soils (Plain of Reeds) with freshwater intake from the Mekong River. This has permitted the conversion of barren or low yielding single cropped acid sulphate areas to double or even triple paddy cropping land over more than 200,000 ha in the past 4-5 years, thus adding about 150-200 thousand tons/year to production and exports. However, this has also increased the acidity of drainage water in adjoining areas and could cause serious detrimental effects downstream (most serious in the Plain of Reeds and the West Vaico River), especially if flushing is done simultaneously. The imnpacts on aquatic fishery and household water quality have not been widely monitored. 2.80 The construction of raised beds for field crop (pineapple, sugarcane, vegetables) and perennial crop production without taking the proper precautions (affecting thousands of ha of acid sulphate soils) also results in acidification of the surface water as well. This is particularly serious for Long An and Tien Gian provinces. When the acidification impacts of the above measures are added to waste pollution from aquaculture farms, the sustainability of the biological ecosystem and the livelihood of certain segments of the farming population could be in jeopardy in the medium to longer term. However, no effective monitoring mechanism has been developed to simultaneously trace the environmental impact of these varied measures. 2.81 Environmentally friendly and sustainable yield enhancing measures which need further promotion include: (a) differential planting on the farm with melaleuca trees being planted in the more acid areas, and the better soils being devoted to floating rice; and (b) maintenance of high water tables or flooding of paddy fields with saline water (in Spring) to prevent pyrite oxidation and permit an extra "crop" in the form of fish culture in the diked waters. With monthly drainage of the fields, yields of about 200 kg/ha per year are feasible. This would also enable a rainy season paddy crop of 3-4 tons/ha. The best potential for expanding these practices is in Gia Rai (Min Hai province) and Vinh Chau (Soc Trang). Fisheries and Aguaculture Development 2.82 Fisheries products, of which 60-70% are derived from capture fisheries, supply half of the animal protein for the nation. One estimate of the total fisheries stock in the seas of Viet Nam is 3.6 million tons which include about 1.7 million tons of pelagic fish stock. Total exploitation potential or maximum sustainable yield is estimated at 1.2 to 1.3 million tons. In 1992, total fisheries products amounted to 1.09 million tons, comprising 730,000 tons from marine fisheries and 355,000 tons from inland fisheries. Total export value of all fisheries products amounted to US$ 305 million, which ranked third among all export commodities. In tonnage terms, frozen fisheries export comprised: shrimp (46,000), fish (15,000), and squid (5,000). The top three provinces in fisheries income are Minh Hai, Kien Giang, and Binh Thuan. 2.83 Marine capture fisherv is concentrated near-shore (less than 30m depth) with gill nets, trawl nets, and bottom nets used. Thirteen major fishing grounds in the nearshore region and offshore seamounts are currently being exploited (Annex 1, figure 2). Shrimp catching grounds are mostly concentrated along the coast in the Tonkin Gulf and Mekong Delta. Total fisheries landing from the south and south central regions (below 200N) contribute to over 85% of the national landing (see table 2.7). - 45 - Table 2.7: Marine Commercial Fishing Capacity and Production, 1992 Region No. of Total Average Production Percentage Boats hp hp (tons) North 6,681 69,499 10 29,220 4 North-central 11,708 160,678 14 80,770 1 1 South-central 21,826 348,201 16 226,242 31 South 14,247 369,877 26 391,712 54 Totals 54,462 948,255 17 727,944 100 Source: Biodiversity Action Plan, 1994. The fishing fleet, mostly using trawl and bottom nets, has expanded considerably in recent years with the doubling of total engine horsepower (hp) since 1983. This has caused an increase in over-fishing in Vietnamese waters. The majority of the fishing fleet is concentrated in the South and South-Central (Phan Thiet-Danang) regions of Viet Nam, accounting for over 66% of the total number of vessels and over 75% of the total engine power in 1992. Average engine power per boat is considerably higher in the south (26 hp) than in the north (10 hp). 2.84 Inland capture fishery is dependent on traditional methods practiced on rivers and adjacent flood plains. Non-sustainable fishing techniques like trawl netting, small mesh bottom netting, and especially dynamiting, are frequently used and are increasing. Information on standing stocks is not available. 2.85 Aguaculture. In Viet Nam, as in may other countries in the Indo-Pacific region, aquaculture has developed rapidly in recent years, contributing 30% of total fisheries production. In 1992, total aquaculture productions (fresh, brackish and salt water) amounted to 349,000 tons, largely from brackish systems and for export. Of these, 30-40% were shrimp; the rest were seaweeds CGracilaria spp.) and other invertebrates such as mollusks. Export of cultured fish is comparatively small (total annual yield is 200,000 tons). Most of the twenty species of cultured fish are indigenous. Of all provinces, Kien Giang and Minh Hai are the most developed and productive in terms of aquaculture. 2.86 Freshwater fish aquaculture is also widely practiced in Viet Nam in freshwater ponds and ditches. Pangasius M. and Tilapia . are the most commonly cultured in ponds; carps (Puntius spp, Leptobarbus M., and Cyprius spp.) are predominately raised in large ditches. Mussel cultures for pearl production are also quite important. In the Mekong Delta, annual average yields from these sources is about 4-5 tons/ha. Fish feed is primarily excreta (animal and human) and in places where pond water is also used for household purposes, infectious diseases can be quite common. Floating cage culture is also frequently practiced in the larger rivers, especially the Mekong and Bassac river systems in An Giang province. Yields (80kg/m3/yr) and profitability are high. Main types of fish reared in cage cultures are carps, catfish and Pangasius MP. with similar feeding practices as pond culture, and thus can be responsible for local contamination problems. 2.87 In Viet Nam, shrimp aquaculture occurs primarily in estuarine or coastal (mangrove) areas. Given the natural productivity of the freshwater lakes and rivers, the difficulty in husbandry, and the higher investment needed for freshwater prawn culture (in contrast to fish culture), inland shrimp production is primarily in the form of capture fishery rather than freshwater aquaculture. The potential of the capture fishery sector depends on the pollution of the lakes and rivers in which they reside and in the productivity of their breeding and nursing grounds. - 46 - 2.88 The most widespread form of shrimp culture that is practiced in Viet Nain is the "extensive" system as exemplified by the common practice in Min Hai Province (Box 2.2, page 28). Basically, this low-input, low-cost, low-productivity system is dependent on the natural "seedling" stock in the estuarine water let into the fishpond. Established in acid-sulphate soil areas without proper diking and water management, these farms are usually unsustainable as acidification takes place in the ponds and abandonment occurs after roughly four years (details are in Annex 8). This "shifting aquaculture" problem is a societal problem. Even if the activity is unsustainable (in that it has to be abandoned in the fourth year), private financial returns to investments are profitable in the four years (more than 40% internal rate of return). The social cost is the discounted value of production lost after the fourth year if a sustainable system were to have been adopted (See Annexes). As long as there is cheap "pond land" available, this environmentally degrading activity will be pursued and, in ASS areas, to the detriment of the overall economy. For the areas which cannot be successfully rehabilitated, the opportunity cost of not using a more sustainable extensive approach is therefore very high. Furthermore, since these systems came about through mangrove destruction, the fisheries nurturing capability of the areas decline, and the externalities cost could also be very high because of the impact on captive fishery 21/. 2.89 According to the analysts involved in the preparation of the Mekong Delta Master Plan, of the degraded (abandoned) pond areas (covering roughly 35,000 ha), about 50% may have the potential to be physically rehabilitated; but whether the cost of rehabilitation is economically justifiable for the whole area is still not clear. The need is for an inventory of these abandoned or about-to-be- abandoned areas to select the ones with the best potential for reclamation. In such an inventory, consideration should be given to rehabilitating adjoining barren lands with potential for reclamation to achieve economies-of-scale in the rehabilitation effort. 2.90 Among some of the existing models of shrimp culture in the coastal/estuarine ecosystem, the best prospects are: (a) an improved extensive model which focuses on upgrading/relocating dikes with mangrove replanting, proper husbandry to destroy existing predators, supplementation of commercial shrimp farms, and additional manuring and fertilization; (b) an integrated shrimp-mangrove model (presently practiced by the Tam Giang Forest Enterprise) with an extra canal and gate to provide drainage, provision for shrimp breeding in the canals, and some supplementary feeding. It is critical that these approaches be undertaken as part of mangrove forest rehabilitation. Livestock Development 22/ 2.91 Background. Viet Nam has a substantial livestock population. Data from MAFI indicates that in 1992 there were 13.9 million pigs, 3.2 million cattle, 2.9 million buffalo, and around 103 million 21/ For instance, overall for the Mekong Delta, average yield of shrimp farms declined from 297 kg/ha in 1986 to 153 kg/ha in 1988. One estimate of the annual loss of shrimp production arising from defoliation of the Ca Mau Peninsula during the Second Indochina War ranged between 2,700-4,500 tons/year (see Annex 8). 22/ For a detailed description of livestock husbandry in Viet Nam see: VIETNAM: Livestock Sub-sector Review and Pro4ect Identification Mission, FAO Investment Center, 1992; and Vietnam: Meat Industry Study, Lincoln International, May 1993. - 47 - poultry, of which 80 million are chickens and 23 million ducks. There are also an estimated 400,000 goats, 140,000 equines, and 40,000 sheep. Some 97% of all pigs, chickens and ducks, and 99% of cattle and buffalo, are owned privately, predominately by smallholder farmers. The animals that are still under state ownership are mainly breeding stock and exotic dairy animals. 2.92 The animal populations are not evenly distributed throughout the country. The Red River and Mekong Deltas account for almost four percent of the pig population and half of the national pork production, although the mountain and midlands area of the northwest also has a substantial pig population. Half of the buffalo population is found in these northwestern uplands, while half of the cattle population is found in the central coastal provinces. Half of the national chicken flock is found in the Red River Delta and northwest uplands, while 54% of the duck population is found in the Mekong Delta. Cattle and poultry populations have grown at rates of exceeding humnan population growth over the period 1980 to 1992, while pigs and buffalo have barely kept pace. However, pigs have achieved a substantial 7.5% annual improvement in productivity (in liveweight per sow per year) over the same period. 2.93 Livestock production represents 25-30% of the value of agriculture GDP and, more importantly, more than 50% of cash income in most farming systems. In smallholder mixed farming systems, the role of large ruminants is to provide draft power for cultivation and transport, as well as manure for crop production, and eventually a source of cash income. Pigs utilize crop and household by-products to provide cash income and manure, while poultry provide meat and eggs for household consumption and a source of cash income. Livestock make an important contribution to rural incomes, especially in the mountain areas where livestock may provide 30-40% of total household income. Their contribution to the cash incomes of rural households may reach 50% or more. 2.94 Meat production in Viet Nam is estimated to have increased by 240% over the period from 1980 to 1992, from 303,000 tons to 721,000 tons (carcass weight), an annual rate of increase of 7.5% p.a., though falling to 3.5 % p.a. by 1992. Meat production per head of population has increased at five percent p.a. over the same period. Some 77% of the meat produced is in the form of pork, 16% poultry (including duck meat), and seven percent as red meat, predominately from cattle and buffalo. Domestic meat consumption accounts for over 95 % of meat produced in Viet Nam. Per capita meat consumption of 10.1 kg per head is low by comparison with nearby Asian countries (Philippines 18.3 kg, Thailand 23.1 kg, South Korea 20.0 kg, and Japan 28.5 kg). Assuming an annual GDP growth in Viet Nam of 6.0%, overall per capita income growth of 3.8% p.a., it is estimated that meat demand (carcass weight) will rise to 834,000 tons by 1995, 1.125 million tons by the year 2000 and 1.52 million tons by 2005 (see Annex 1, Table 22). 2.95 The lack of private sector credit, a low genetic resource base, poor animal health, and an inadequate feed base continue to restrict livestock sub-sector growth. Without substantial importation of high protein feedstuffs or the development and promotion of new forage technology, it is expected that livestock sector growth over the next 5 years will be only marginally higher (34% p.a.) than that of rice production, the additional margin being attributable to expected higher growth in the non-rice livestock feed sector and a possible improvement in monogastric feed conversion efficiency. In any case the pressure on land and forests will increase. Furthermore, domestic demand can be expected to outstrip supply within a few years unless there is a broad based and cohesive investment program to develop the livestock sub-sector. 2.96 Land Degradation Impact and Implications. Research on the impact of livestock on land degradation in Viet Nam is scant. In focusing on three main regions, two where degradation from runiinant livestock is hypothesized (Northern Mountain and Northern Midlands) and one where ruminant production prospects are greatest (Central Highlands), the mission found that livestock farming may lead - 48 - to land degradation through: overgrazing (resulting in soil exposure and species change); and trampling and soil compaction (resulting in reduced infiltration, more rapid surface flow and channelling on animal tracks). There is evidence, supported by farmer comment, of dry season feed shortages and related overgrazing leading perhaps more to deterioration in species mix than soil exposure and loss. Another deleterious factor is fertility transfer due to hill side grazing followed by night enclosure at the homestead and subsequent manure application to lowland fields. Goats, notorious for forest degradation, are present in such low concentration as to have no significant environmental impact. 2.97 Factors mitigating the impact of livestock on the environment include inter alia: the predominance of stall feeding in pig production systems, particularly in the Central Highlands; the importance of animal traction as a source of draft power for paddy production and transportation; the importance of animal manure as a crop fertilizer in these regions -- providing both minerals and organic matter to soils; the frequent presence of dry-season fog and ground dew in mountain areas which keeps the sward growing (if only marginally productive) through the dry season; the lack of drinking water which reduces dry season grazing pressure in some extensive upland pasture areas; and availability of forest grazing, which provides a degree of weed control with consequent reduced moisture competition for trees. 2.98 A standard "balance sheet" analysis of estimated supply and demand of roughage feeds by agro-ecological regions indicates overall positive feed balances for the whole country (Annex 1, Table 21). Such a balance does not, however, reflect the true availability situation. First, available roughage is also used for household fuel (see Annex 3). Second, a surplus of fodder disguises large seasonal variation in the quantity and, particularly, quality of available forage. Third, even if there is an apparent feed energy surplus, there remains a clear protein deficit with average levels of protein for the Northern Mountains and Midlands and the Central Highlands being estimated at nine percent instead of the desired level of 13%. Thus, the incorporation of leguminous fodders into the farming and conservation systems is an important measure to address this inbalance. Summary Perspective of Agricultural Degradation 2.99 In terms of agricultural expansion, other than for upland forest and wetland degradation, which has been discussed in Sections A and B above, the environmental impacts are neither as wide ranging nor as critical. Fertilizer overuse, for example, is limited to localized areas. Pesticide overuse is a concern for rice in southern Viet Nam more in terms of the underutilization of integrated pest management approaches (which reduces pesticide use and increases net rice production benefits) rather than widespread environmental pollution. Toxicity problems from pesticide residue in water and especially in food are not critical (at least in comparison with the acidification effects of poorly managed acid sulphate soils); but farming and household storage and handling could be improved. Of some concern, however, is the continuous use of products with high residual toxicity which is on the list of items banned for use (eg. arsenic compounds, chlordane, parathion). These products are still used in many areas since they were purchased years ago before government prohibition of their imports were instituted. As their stocks run down, the problem is unlikely to be serious in the near future. 2.100 The problem with problem soils (erodible hill soils, saline, and acid sulphates) is the environmental repercussions from using them improperly. The erodible hill soils have been discussed above. Natural resource degradation actions that are particularly damaging (e.g., expanding annual crops to steep slopes with high erosion susceptibility) should be restricted. Issues concerning the management of acid sulphate soils are critical because they have important repercussions for aquaculture development and mangrove and Melaleuca forest rehabilitation (paras. 2.88 - 2.89). The reclamation of acid sulphate - 49 - soils for rice is now considered costly not only from the perspective of the marginal cost of rehabilitating an additional ha for rice compared to its economic return; but if the environmental cost of the reclamation is taken into account for the dry season (ie. the downstream effect of flushing acid and the opportunity cost of the use of this water), the costs could be prohibitively high 23/. Pending more in depth assessment of this phenomena, this implies that a moratorium on new large scale wetland reclamation for rice production in actual acid sulphate soil areas in the Mekong Delta should be considered. D. The Population Dimension 2.101 Underlying the environmental degradation problem for most of the ecosystems discussed above is the population problem. People are the single most important stress on upland forest in Viet Nam because of their demand for timber, fuelwood, non-wood forest products, and agricultural land. Therefore any program aimed at conserving these resources must address the critical dimensions of the population problem (population growth and population distribution) and, consequently, land settlement issues 24/. 2.102 VietNam's population growth during Box 2.3: Natural Resources, Population, and the last century can be divided into five periods. In Poverty in Lai Chau Province the first period (1921-51), there were fluctuations in the rate of population growth induced by intastropheiraeventof The p ionc the iucedsby In the face of rapidly evolving market conditions, poverty in catastrophic events. These include the suppression Viet Nam will vary with different endowments of natural of peasant uprisings by the French and the famine resources, capital, labor, and infrastructure. Lai Chau of 1945 (which was responsible for two million province, located on the westem edge of the Northem deaths.) The second period (1954-60) stands out Mountains, is an example of a difficult situation getting for its high population growth rate of 3.9% per worse. Its natural resource endowment is poor, with 75% of the land area subject to high levels of deterioration, and only year. The third period (1960-76) had a somewhat 8% forest cover. A shortage of land (0.7 ha cultivated land slower, although still high, annual growth rate of per household) and low productivity has led to an 3.1 %. The fourth period, covering the years impoverished population and a weak labor force that suffers immediately after the war and reunification (1976- from poor health and low skills and is unable to accumulate 80), saw a sharp fall in the population growth rate savings due to their marginal existence. Health care and to 2.2 . The latter can be attributed in part to the educational status continues to decline with the deterioration to 2.2%. The ltecaof traditional health care and education delivery systems. The economic devastation and large scale out-migration vicious cycle of poverty is perpetuated by a population, fifty- related to the war, as well as to falling fertility. five percent of which is ethnic minorities, that has among the The fifth period (1980-90) is characterized by an highest total fertility rate (6.8) and infant mortality rate (66.1 annual population growth rate of about 2.1 % and per 1000) in the country. Resources will continue to be used in fertility. Reduced infant beyond the sustainable limit as they are consumed by a acontinuing drop m fertlllty. Reduced Inrant population growing naturally at 3. 1% per year. The mortality has also resulted in family size well disadvantages in Lai Chau will continue because of their lack above historical norms in many areas. Such a of infrastructure and remoteness from the market. population growth rate places Viet Nam just below the average for low-income countries 25/ and is similar to that of Thailand (1.8%), Indonesia (1.8%), Myanmar (2.1%), and the Philippines (2.4%). 23/ Some of the irrigation projects proposed under the Mekong Delta Master Plan are already marginal with respect to their economic rates of retum. If the downstream negative effects are quantified, the rates of return would be uneconomic. 24/ People are also important in their contribution to the biggest urban environment problem - waste management. 25/ World Bank, World Development Report 1992, Oxford University Press, New York, 1990. - 50 - 2.103 The source of natural population increase has been a sharply falling death rate, not an increasing birth rate. The crude birth rate has been falling since 1950, indicating that Viet Namn is well past the point of demographic transition. However, because of a youth heavy-population structure, birth rates will remain high for some time. The growth rates in the Central Highland provinces (5.8%) and the Northern Mountains (2.9%) are higher than in the rest of the country (see Map 4). The high growth in the Central Highland provinces is mainly attributed to GOV sponsored migration designed to relieve the extremely high population pressure and unemployment in the food deficit Red River Delta provinces and to the high natural rate of population growth of the ethnic minorities residing in these regions 26/. 2.104 The even population growth rate and the falling fertility rate in Viet Narn veil the disparity between the Kinh and the non-Kinh (ethnic minority) populations. Eighty-seven percent of the population is of the Kinh (lowland Vietnamese) ethnic group. The remaining population is essentially made up of the Tay, Thai, Hoa, Kho Me, Muong, Nung and at least 25 other ethnic minority groups. The non-Kinh population is concentrated in the Northem Mountains and the Central Highlands and is characterized by high population growth rates and total fertility rates between 5.0 and 7.0. This disparity might be the result of different income levels, literacy rates, and infant mortality rates among the Kinh and non-Kinh ethnic groups and differential government incentives to promote compliance with its two child family policy. Thus, the highest population growth rates are now occurring in the under-resourced and remote mountainous areas. In an effort to reduce the practice of shifting cultivation preferred by many of the minority groups, the GOV has permanently settled some 2.9 million non-Kinh persons since 1968 (see Annex 5). 2.105 GOV has long recognized that rapid population growth would hinder socio-economic development, and has allocated top priority to addressing this issue. The reasons for assigning such importance to population stability is compelling. While agricultural intensification is correctly emphasized, there will be instances where trade-offs between growth and the enviromnent would have to be faced. Rural transmigration and increased urbanization could bring their own environmental nightmares. With such limnited room for manuevre, population programs clearly merit very high priority. 2.106 GOV's population goal is to achieve small and healthy families, on a voluntary basis, and to attain a stable population size at the earliest feasible date. The quantitative goal adopted is to reduce the Total Fertility Rate (TFR), currently about 4 children per woman, to 2.8 by the year 2000. This implies that the Contraceptive Prevalence Rate (CPR) should increase from 53 percent of married women of reproductive age to close to 70 percent (ie. about half a million couples each year must be added to the existing stock of family planning users). In total, about 1I million couples would have to practice family planning on a regular basis by the year 2000. That target is highly ambitious, but feasible if the necessary conditions are put into place. 26/ Since 1961, GOV has encouraged the official resettlement of 4.8 million persons, with 2.4 million resettled in the 1980s. The majority of resettlement were within their own provinces especially for the ethnic minority dominated areas in the Norther Midlands and Mountains and in the Central Highlands but the bulk of the redistributed population outside their own provinces originated in the lowlands of the Red River Delta and, to a lesser extent, the North Central Coasts (see - 51 - Map 4: Viet Nam Population Growth Per Year (Percentage) D- 0.6 to 1 1 to 2 2 to 3 3 to 4 Eto 5 * 5 to 6 E6 to 7 7 to 8 Km 0 100 200 - 52 - 2.107 In terms of population programs, Viet Nam had effectively implemented a pilot voluntary family planning program in the early 1960's 27/. Following reunification in 1975, the program was extended to the whole country. After 1987 the agricultural cooperatives, which were the traditional vehicle for dissemination of birth control, either decreased in effectiveness or ceased to exist - an inadvertant effect of Doi Moi. This gap is however being filled by the formation of Inter-communal Centers for Population and Family Planning. These centers attempt to provide comprehensive birth control services to the population but are handicapped by lack of trained personnel, operating facilities, and equipment, and funds. These efforts should be broadened not only in terms of the range of family planning services for women (IUD is the predominant birth control method) and men, but also for family health. Thus in the rural, more sparsely populated areas, mobile services would also be critical. 2.108 Though the practice of family planning is spreading, a large number of pregnancies remain undesired, resulting in high rates of induced abortion and unplanned births. Surveys conducted over the last few years consistently confirm that the large majority of today's Vietnamese couples, in urban and rural areas, want a small family size. Thus, the public good of reducing population growth coincides with the desired private benefit of limiting fertility. But potential clients are not well served in terms of the quality of services on offer: method choice remains limited and providers'skills as well as facilities need considerable improvement and support. 27/ Details on population programs and policies are given in the IDA repon, Viet Nam - Transition to the M - 53 - III. URBAN AND INDUSTRIAL POLLUTION: SOURCES AND INCIDENCE A. Back--round Evolution of the Industrial Sector 3.1 The Government of Viet Nam (GOV) has historically given considerable priority to the expansion of the industrial sector. Industrial output expanded at an annual average rate of almost 6.6% in real terms between 1983 and 1989 (well above the overall GDP growth rate of 4.7) and 8.6 percent p.a. in 1989-1993 (compared to overall GDP growth of 6.8 percent). This has reinforced the industrial sector's position as the second most important source of the country's GDP, with a share of 22% in 1993. Gross material product in industry amounted to 7,766 billion dong in 1993 (constant 1989 prices). While trailing far behind agriculture, industry plays a major role in labor absorption, with 11.7% of Viet Nam's employed force being engaged in industrial activities. As of August, 1994 of US$9.9. billion has been approved for 1026 foreign investment projects since 1988. In value terms, 37 % were for industry; 14% for oil and gas; 20% for hotels and tourism; and 7% for agriculture. The leading investors were Hong Kong and Taiwan (about US$1.7 billion each), South Korea, Australia and France (US$ 0.7-0.8 billion each); and Singapore, Malaysia and Japan (US$0. %-).6 billion each). 3.2 Organized industrial production in Viet Nam has traditionally been concentrated in the "socialist" sector of the economy. The distinction between the state and private sector has, however, been blurred as a result of recent reforms granting operational autonomy to the state-owned firms and permitting the establishment of joint-ventures between public and private enterprises. Various measures adopted by the Govermnent in recent years have also attracted increased private sector participation in manufacturing industry and have eroded some of the state sector's dominance in industrial production. The establishment of "Export Processing Zones" or EPZ's (e.g., in Hanoi) are also starting to attract foreign light industry participation (especially from Taiwan) many of which comprise investments of US$ 250,000-500,000. Despite all these developments, the pre-eminence of the state has persisted. The production of heavy industrial goods remains concentrated in some 700 firms owned by the central govermnent; the manufacturing of light industrial goods is centered in a further 2,400 enterprises owned by regional and local governments; and small-scale manufacturing sector is still dominated by co- operatives. 3.3 The differences in the historical evolution have resulted in the emergence of significant regional variations in the pattems of industrialization between northern and southem Viet Nam. Greater emphasis has been placed on the development of the manufacturing industry m the northern part of the country since the colonial period, when the port of Haiphong became Viet Nam's main cement producer and textile industries were established in the cities of Nam Dinh and Hanoi. This tendency was reinforced during the period of partition, when orthodox communist strategies aimed at the establishment of a heavy industrial base were pursued. As a result, the northern part of Viet Nam currently accounts for the bulk of the country's heavy industry (much of which is outside the major cities), including iron and steel, chemicals, cement, fertilizer, and vehicle manufacturing, with the consumer goods sector in the north being dominated by small-scale cooperative enterprises and artisanal establishments. In the southern part of the country, the adoption of more market-oriented policies during the period of partition facilitated the development of efficient light industrial enterprises and the associated management skills. - 54 - On average the output per worker in the South is 3.6 times higher than in the North for heavy industry and 2.5 times higher for light industry. Those productivity differences are probably reflective of the outmoded technology and overstaffing of government factories in the North. 3.4 Despite the dislocations of the first decade after reunification, market oriented entrepreneurs in marketing and light industry have now re-emerged. Two-thirds of Viet Nam's manufacturing output is thus estimated to be produced in the south of the country now, with much of it originating from non- state enterprises. Thus far, foreign investment capital is concentrated in two key sub-regions or "nexus" of metropolitan areas, with (a) Ho Chi Minh City/Dong Nai/Ba Ria-Vung Tau accounting for 52% of investment approvals and (b) Hanoi/Hai Phong/Quang Ninh accounting for 30%. 3.5 The increasing importance of light manufacturing in Viet Nam's industrial sector is underlined by the fact that the share of the light industrial sector in total industrial production is tentatively estimated to have increased from 66% in 1983 to 71% in 1989, implying an annual average growth rate of 9.4%. This contrasts with an estimated growth rate for the overall industrial sector of 5.2% per year. Official data indicate further that the once dominant role of heavy industry in labor absorption has also been gradually eroded in the past few years. Labor productivity has also been rising much more rapidly in the light industrial sector than in heavy industry. Urbanization Trends and the Environment 3.6 The estimated 1993 population of Vietnam is about 70 million, of which nearly 15 million (22%) of the total population live in urban centers. The population living in the three largest cities, Ho Chi Minh City (HCMC), Hanoi, and Haiphong, is variously estimated at between 40 and 50% of the total urban population. Assuming a population growth of 1.9% p.a. from 1993, the population of Vietnam is expected to reach 80 million by the Year 2000; and if the urban population grows at the projected rate of five to seven percent p.a. (the present rate is between three to four percent), the projected share of urban population is expected to be between 26-30% (21-24 million population). An unplanned urbanization process has brought industries closer to populated areas and vice versa, resulting in exposure to air pollutants at levels many times higher than maximum permissible levels. The principal air pollutants include carbon monoxide, particulates, sulfur and nitrogen compounds, and other hazardous air pollutants. Industrial machinery and traffic vehicles are generally old and faulty, thus releasing more pollutants than their counterparts in newly industrializing and industrialized countries. 3.7 Contrary to casual observation, urban and industrial water and air pollution has become critical in Vietnam's major cities, particularly surrounding the areas of HCMC, Bien Hoa, and Vung Tau in the south and Hanoi, Hai Phong, Lam Thao-Viet Tri, Ha Bac, and Quang Ninh in the north. There are no effectively funtioning treatment plants. Untreated sewage and industrial wastewater is discharged into water bodies and streams within and around these areas. Local authorities lack the capacity to dispose of wastes and to control emissions. Vietnam's rapidly increasing pace of industrialization and lack of pollution prevention and control has created urban pollution of soil, air, and water, the extent of which varies with location and type of industries. Signs of ground water contamination near urban areas is of concern in a number of areas, such as Hanoi City where virtually the entire population depends on groundwater for all drinking and household purposes. 3.8 Solid waste disposal has also become a serious hazard to enviromnental quality and public health. Even at its modest generation rate at present, less than half of urban solid waste is collected. The rest is scavenged and dumped into lakes, ponds and on uncontrolled sites throughout urban areas. These uncontrolled disposal sites have resulted in deteriorated surface and groundwater quality and have generated public health concerns. High rates of population growth are expected to exacerbate the - 55 - problem. In the past decade investment in the waste sector has been almost nonexistent with the majority of funds being directed to the water supply sector. 3.9 The move to a market economy has further strengthened the role of provincial governments. They are responsible for the operation and naintenance of their waste water and sanitation facilities, and increasingly for the external financing of their capital expansion. Their annual budget is approved by the central government but all operational funding and limited capital funds are supplied through collection fees and tax sources available to provinces. Under new regulations introduced in 1989 as part of Doi Moi, all drainage and sanitation companies are to cover their operation and maintenance costs, but the central government will contribute to new capital expansion in the cities in association with the People's Committee. In practice the waste companies rely heavily on the People's Committees for their operating budgets and, because of financial constraints at the central government level, little capital expansion has taken place. Energv Sector Development 3.10 Such development entails potentially serious environmental consequences. As oil and gas exploitations increase on Vietnam's continental shelf, oil spills could be disastrous for the coastline as oil slicks are generally brought towards the coast due to oceanographic conditions in the country's marine territory. Coal mining has also created extensive coal dust pollution and surface disruption primarily due to inadequate environmental management. Hydropower development entails ecological risks and potential social disruption due to resettlement. 3.11 Key aspects for the above are discussed in more detail below. It should be noted that data on existing pollution levels are fragmentary and may often be inconsistent. Water and air quality observations and data are based on spot samples, often on a one time basis. Observations presented below have been supplemented by mission and local expert judgements on the seriousness of incidence and impact. Appendices 5.A and 6.A summarize the results and incidence from past studies of wastewater and air pollution. Citations of sources are given in Appendix 7. B. Wastewater Discharge Background and Magnitude of the Problem 3.12 Urban water pollution has become critical. Investment in the waste sector during the past decade has been almost non-existent. Sewerage cover in all urban areas is extremely low. Lack of water treatment makes water contamination a major health threat, and aquatic ecosystems are threatened by the high amounts of untreated sewage and industrial wastewater generated in urban centers. There is no functioning wastewater treatment plant (for domestic and industrial) in any city in the entire country. Most wastewater is discharged into rivers, canals or lakes without treatment. The annual discharge of untreated sewage and industry wastewater into major rivers is estimated at 240- 300 million m3, 120 million m3 for Hanoi, 70 million m3 for Hai Phong, and 34 million m3 for Viet Tri. Based on rates of industrial and commercial development in these cities, the volume of wastewater in the next 15 years is expected to be ten times higher. Water quality as measured by dissolved oxygen (DO) in major rivers passing through these urban areas is at a level that will not support fish (i.e., below 4 mg DO per liter). Biological oxygen demand (BOD) values in canals near these urban centers were 10-30 mg 02/I in 1990/91, which is 2.5-7.5 times higher than the Vietnamese and EEC guidelines for surface water intended for the extraction of drinking water. Currently there is little evidence that groundwater contamination is widespread. However, due to - 56 - increasing emissions of all types of pollutants, groundwater is considered at risk. Given the long residence time of groundwater (tens of thousand of years), contamination will persist over long periods and clean up will entail large costs if no start is made to better identify the potentially most vulnerable areas and systems so that mitigation actions can begin now. Priority areas should be selected for groundwater pollution potential mapping, especially for Hanoi and HCMC. Sources and Incidence 3.13 Sewerage. For large segments of the urban population, access to sewerage systems are not available. The estimates of population coverage for sewerage systems at Hanoi and Haiphong vary from 20-35%. In HCMC sewerage systems are estimated to cover 60% of the population, though actual coverage may be far less. In Haiphong over 55 % of households ate without latrines of any type, and over 15% have only bucket latrines. Hanoi and HCMC have underground sewers in the older parts of the city; other areas have septic tanks; but most residents are served by ditches, street gutters, and other forms of open drainage. Sewers and ditches empty haphazardly into canals that drain to ponds (e.g., Hanoi), and directly into the river (e.g., HCMC). In any case, the sewerage system throughout the country is aging and in need of constant repair and the construction of new networks has not kept pace with urban growth. Nevertheless, it is common practice in Viet Nam to use untreated human excreta as fertilizer. For example, about half of the septic tanks and buckets (from latrines) in Hanoi are collected and used by private farmers; the rest are handled by the sewerage company. Domestic sewage is often dumped directly from surrounding apartments onto the surrounding ground. Faecal pollution is a concern during periods of flooding as none of the cities has operating treatment plants for domestic sewage or industrial effluent. 3.14 Industrial Wastewater. Industrial wastewater is also a serious environmental threat. All the wastewater discharged from the approximately 3,000 industrial enterprises in Vietnam, roughly half of them in heavy industry, is improperly treated. In Viet Tri, for example, pulp and paper, textile, food, and chemical factories discharge an estimated 35 million m3/year of wastewater containing 100 tons of sulfuric acid, 4000 tons of chloric acid, 1300 tons of sodium hydroxide, 300 tons of benzene, and 25 tons of pesticides, among others. Other important industrial zones in the north are Thai Nguyen (5 million m3/year of wastewater) and Ha Bac (8000 m3/year containing high concentrations of ammonia). Wastewater pollution from thermal power plants is not considered as serious as industrial waste water. In HCMC, where streams and canals receive highly concentrated wastewaters, industrial contamination is visibly apparent. Hospitals also discharge large amounts of wastewater causing point-source pollution. In Hanoi, for example, 10 of 18 major point source polluters are hospitals. Large amounts of toxic chemicals are discharged from industry but are not routinely monitored. In the south, for example, the Bien Hao-Dong Nai industrial zone discharges all effluent into the Dong Nai River without treatment. The mission's field visit of pulp and paper factories found that on average 20-40% of production was being lost through waste streams. Unlike human wastes, industrial discharges are likely to cause long-term environmental problems, as they often contain toxic substances. In addition to posing a potentially serious threat to human health, industrial wastewater can be highly acidic and may contain corroding and toxic chemicals that could severely damage piping and pumping systems of proposed sewerage systems and this may poison proposed biological treatment systems. 3.15 Water Supplv Systems. An important consequence of the above develoDments is that drinking water supplies in urban areas have been compromised as a result of pollution discharges. The quality of urban water supplies is generally poor. Internal control (within plant or facility) is almost non-existent, and external control, which is the responsibility of the Ministry of Health, is irregular. Only HCMC largely meets drinking water standards set by the World Health Organization (WHO). The Hanoi system may also soon meet WHO criteria, assuming successful implementation of plans for disinfectant services and training of operational staff. Of the 436 urban centers with populations exceeding 5000 in Viet Nam, only 100 have piped water systems. Together, these - 57 - systems serve about 6.0 million people or about 47% of the urban population. Of the remaining urban inhabitants, about 46% use water from shallow wells (in most cases unprotected and polluted), rainwater collection tanks, streams, and ponds. The mortality and morbidity profile in Vietnam is characterized heavily by diseases that are linked to water supply and sanitation. Excreta-related and water-borne diseases such as gastroenteritis, dystentary, typhoid, cholera, and viral hepatitis are also important sources of morbidity, especially among children. 3.16 In general, operation and maintenance of existing water supply systems is far below standards due to a lack of qualified staff, of a regular chemical supply, chemical dosing and process control equipment, and spare parts. There is also a tendency to concentrate on the quantity of water produced and neglect the quality of distributed water. In many urban centers, mainly in the north (with heavy reliance on groundwater), water iron content is extremely high and is distributed without iron removal. However, HCMC does have facilities in relatively good condition, although rehabilitation of equipment is needed. Hanoi has also recently benefitted from technical assistance provided by FINNIDA. A great number of plants (both recently built and old) suffer from inappropriate design and low quality construction. Some urban centers have no treatment facilities at all and raw water, occasionally with high levels of suspended solids, is distributed directly to consumers through the distribution network. 3.17 Drainage. In major urban centers such as Hanoi and HCMC, the drainage systems for storm water and sullage are either badly damaged or at best dilapidated. The problem is exacerbated by the fact that a high number of septic tanks in these cities, where they exist, are in a bad state of repair resulting in sewage flow to the surface and into the drainage system. The primary job of existing drainage systems is to remove storm water, but the tasks of removing storm water and sewage are not always compatible. Clogged or simply inadequate drains overflow during storms, spreading human excreta and garbage widely. Waste disposal during storms is most serious for towns on the Red River Delta where the river bed is now higher than the surrounding land, and drainage pumps are inadequate. C. Air Pollution Background and Magnitude of Problem 3.18 Industrial emissions, coal combustion and increasing numbers of vehicles using dirty fuels are the main causes of loss of air quality in urban and industrial areas. Overall exposures to particulates, CO, C02, S02 and NO, exceed permissible levels at many urban locations. Due to rapid urbanization, many factories which were previously located far from populated areas are now found inside urban zones. In HCMC, for example the industrial centers of Thanh Xuan Bac, Thanh Xuan Nam, and Kim Giang are located in zones of high population density. Thus, while air pollutants were previously dispersed over unpopulated areas, they now penetrate directly into city houses, posing a serious threat to human health. Hourly emissions in the Thuong Dinh area can reach 52.2 kg of sulfide, 57.6 kg of carbon monoxide, and 0.6 kg of nitrogen oxides. Ambient sulfide is 12 to 18 times higher than permnissible levels and carbon monoxide is 4.5 to 5.5 times higher. In Haiphong, the third largest city in Vietnam, levels of suspended particulates, primarily due to cement production, exceed permissible levels. In Haiphong, dust emissions from the cement plant exceed permissible levels by 3-8 times, and coat much of the city. In Hanoi ambient air pollutants have reached alarming levels. Carbon monoxide concentrations are 1.5-1.7 times higher than permissible levels, nitrogen dioxide 2.5-2.9 times higher, settleable particulates 43-60 times higher, and suspended particulates 5-10 timnes higher. - 58 - 3.19 In a 1990 survey of 63 industrial plants, 17% had excessive dust emissions and 17% discharged toxic waste such as benzene, lead, and mercury. Lead concentrations in Hanoi and HCMC (averaged hourly) were estimated at .001-.004 mg/m3 and .001-.002 mg/m3 respectively. The Hanoi Environment Committee received more than 200 pollution complaints over several months in 1992, of which the majority concerned atmospheric emissions from industrial plants. In 70% of plant inspections by the Hanoi Environment Committee in 1992, emissions exceeded air quality standards. Sources and Incidence 3.20 Coal. Coal, the dominant source of energy for urban industry, is another source of air pollution. Some 3.0 million tons of the coal produced from the Quang Ninh mines are used for fuelling steam power plants (primarily in the North), and approximately 2 million tons are used for other domestic purposes. Much of the coal is burned where people live and work. Open pit coal mines in north Vietnam have also created an extensive coal dust pollution problem. Coal consuming plants (especially power plants) add considerable quantities of ash and sulfur dioxide (SO2) into the air surrounding the plants. Despite this, the air pollution from such plants tends not to be as serious as that from high polluting industrial plants. For example, in Thu Dac thermal plant, which shares its local airshed with a cement plant and a steel mill, the steel mill emits acid gas into the air resulting in complaints and demands for compensation from area residents because of respiratory illnesses. Regulatory efforts or mitigative investments solely in the thermal plant will be pointless in the absence of similar initiatives for the entire airshed. 3.21 Transportation is another major source of air pollution. Motorcycles, three wheeled vehicles, buses, and trucks are the dominant vehicle types. Most transport vehicles are older, of Eastern European design (especially lorries and cars), and not well maintained. All gasoline in leaded. In HCMC, for example, there were 700,000 motorcycles and 75,000 other vehicles in 1990/91. Hanoi had 200,000 motorcycles and 34,000 cars and trucks. Haiphong had 30,000 motorcycles and 12,000 cars and trucks. Many transport vehicles are very old, including motorized tricycles using gasoline/kerosene mixtures. Concentrations of sulfur dioxide, dust, and lead in HCMC frequently exceed permissible levels. SO2 readings at 27 sampling points in HCMC have ranged as high as 2.9 mg/m3; and particulates, ranging 2.0 to 30.0 mg/m3, have exceeded permissible limits at the majority of the 27 sampling points in HCMC. At several locations in HCMC, readings of ambient lead concentrations also exceed permissible limits. Air pollution resulting from transportation also reaches significant proportions in Hanoi, due to narrow streets, low speed of traffic, and old and faulty engines of the vehicles. Air quality monitoring in heavy traffic areas in Hanoi indicates that carbon monoxide concentrations are 1.5 to 1.7 times the permissible level, nitrogen dioxide 2.5 to 2.9 times higher, settleable particulates 43-60 times higher, and suspended particulates 5-10 times higher 1/. 3.22 Air pollution in the work place is also frequently serious, as indicated by high rates of respiratory disease among workers. Examples include: coal furnaces from boilers with positive pressure poisoning the work place with high concentrations of C02, SO2 and coal dust; chlorine gas I/ Noise pollution on city streets is also significant. In Hanoi and HCMC, for example noise levels reach 75-85 dB, 3-4 times the permissible level. - 59 - in chemical factories 3-22 times higher than permissible levels; and lead dust in printing and battery factories 16-60 times higher than permissible levels 2/. 3.23 Evidence on the health and welfare effects of air pollution is scant, but some studies indicate that damages are significant. In a 1991 MPH survey, public and private health providers in 3 provinces found 27% of patients were treated for acute respiratory infections, and in 1988 morbidity from respiratory infections was 257 per 100,000. The incidence of nose, throat, and lung diseases is significantly higher in local contaminated areas than elsewhere. D. Solid Waste Treatment and Disposal Background and Magnitude of Problem 3.24 The volume of urban and solid waste collected in Viet Nam amounts to about 9100 rn3 per day, of which only 4000 m3 (44%) is collected. Hanoi and HCMC account for 3000 m3 per day. In HCMC most solid waste comes from domestic activities (only 18% is generated by industry) and about 90% of the waste generated is collected. In Hanoi less than half of the solid waste generated is collected, and in Hai Phong about 70% of the waste is collected. The remaining uncollected waste is either bumed or dumped into lakes, ponds andin uncontrolled sites on the ground, in uncontrolled sites. In Hanoi about 220 tons of septic tank sludge and night soil are generated each day. In all cities, the age and poor repair of existing facilities and equipment hampers collection. 3.25 Collected solid waste is generally brought to landfills except for two small composting plants in Hanoi and HCMC. In HCMC, 1500 tons of solid waste are collected each day, out of which the composting plant is capable of taking only 40 tons (about three percent). There are no solid waste incinerating plants and recuperation and recycling are only informal (scavengers in landfills). There is no official recycling or recuperation program. 3.26 Current disposal sites in urban areas are not properly designed and do not operate as sanitary landfills but simply as dump sites. Typically, the landfills are unlined with risk of leakage into surface and groundwater. They generally suffer from poor siting, lack of equipment, no daily cover, and no leachate collection or treatment. As a result they may be putting groundwater resources at risk. The extent of such risk is, however, unclear and should be evaluated. 3.27 No city in Viet Nam has adequate facilities for disposing of hospital and toxic wastes. E. Environmental Problems From the Energv Sector Perspective 3.28 Background and Magnitude of Problem. As development of the energy sector (petroleum, coal, hydroelectric, and thermal electric) intensifies, the environmental costs of energy production will increase. Each major component of the energy sector is discussed below 3/. 21 In addition, worker hearing loss is widespread in plants where noise levels frequently exceed 90 dBA (a study has shown, for example, that noise levels average 94-100 dBA in textile plants and 103 dBA in clinker grinding plants). 3/ For details, refer to World Bank Report No. 10842, 'Viet Nam: Enerfv Sector Investment and Policv Review, June 18, 1993. - 60 - 3.29 The Petroleum Sector. The major potential environmental costs of oil exploration, development, and production are those associated with oil spills. There have been three documented cases where spills have occurred (para. 2-53), and only one of these was directly related to Vietnamese crude oil production. While there are provisions in Viet Narn for national and company- based oil spill contingency plans, such plans have to date received low priority and are generally inadequate. 3.30 Per capita oil consumption in Viet Nam is currently quite low (40 kg/yr). By comparison per capita consumption in South Korea is 800 kg/yr, Taipei 1000 kg/yr, and Hong Kong 1100 kg/yr. As Viet Namn increases its currently low consumption rate, environmental risks will increase. 3.31 Exploration activities are being carried out on the Vietnamese continental shelf. On average approximately one percent of the oil extracted is spilled under normal operations. Thus, the East Sea is already polluted by oil spills to some extent. Due to oceanographic conditions in the East Sea, sea currents and winds will tend to bring oil slicks to the Vietnamese shore, increasing the potential for ecological damage should a major oil spill occur. 3.32 The Coal Sector. The open pit coal mines in north Viet Nam have created extensive coal dust pollution and surface disruption, largely due to past neglect of proper environmental management. Mines are not backfilled, topsoil is not reserved, and no attempts are made to reclaim the disturbed areas. A total of 2000 ha of land is estimated to be disturbed by current mining operations, and indiscriminate piling has resulted in the accumulations of some 100 million rn of overburden over the past five years. The costs of backfilling this overburden are estimated to approach US$ 150 million. 3.33 Hydroelectric Power. Hydroelectric projects are expected to form an important component of Viet Namn's future electricity generation capacity. Viet Nam's water resources are amnong the most abundant in the world, and its hydropower reserve is also among the greatest worldwide. Hydropower is now the main energy type in Viet Nam, accounting for approximately 55 % of total power generation in 1991. 3.34 Development of hydropower in Viet Nam has created serious ecological problems. No systematic environmental impact assessments were conducted even for large-scale projects implemented in the past. The existing hydropower projects are located in watersheds which are deforested or inadequately forested, which results in siltation of reservoirs due to erosion (see Section A). The result is reduced capacity to generate electricity, control floods, and provide irrigation water. 3.35 Although government authorities are beginning to rectify the situation, the relocation and settlement of affected people has hitherto been inadequate, creating much hardship and resentment. At Hoa Binh, for example, flooding by reservoir resulted in the loss of about 1800 ha of rice land, 700 ha of cash crops, 200 ha of fish ponds, 235 km of roads, 80,000 m2 of buildings, and forced over 4000 families to move. Many of the families which have moved (mostly further up from the reservoir areas) have been given formal land rights and are now the target areas of various agro- forestry programs (eg. WFP programs described in Annex 5). Nevertheless, current resettlement programs suffer from a lack of funds to provide land and infrastructure to displaced families, who are generally forced to resort to slash and bum agriculture in forest areas. - 61 - 3.36 Thermal Electric Power. Energy demand in Viet Nam is expected to increase more than 500% by the year 2010. Thermal electric generation will play an important role in meeting future energy needs. The major environmental issues associated with thermal electric generation involve particulate, NOx, and sulfur emissions, and water treatment. F. Summary Perspective and Implications for Pollution Abatement and Monitoring 3.37 No comprehensive assessments of the relative importance of various industrial pollutants have been undertaken. However, using Ho Chi Minh City as an example, water pollution from thermal plants contributes to less than 10% of total urban pollution load compared with household organic wastes (more than 60%) and inorganic wastes from small scale industries (about 30%). Similar results were obtained in the Bach Ho area, where estimates of pollution show that 70% of the total waste water disposed into the sea was untreated human waste with industrial waste accounting for 18% of the pollution. Thus controlling of waste water and solid waste pollution is clearly the most important priority. Other pollutants are more site specific, with selected air pollution in certain parts of HCMC and Hanoi and particulate emission of thermal power plants ranking among the top priorities. Less important is surface disruption from coal mines (including pollution from coal transportation), sulphur and NO, emissions from thermal plants, and pollution from oil exploration. The role of urban and industrial pollution on downstream estuarine ecosystems (particularly for the Red River and Mekong River Deltas) is also important. 3.38 From the above discussions, the importance of pollution abatement is clear. Due to anticipated growth in both urban population and industrial activity as well as the increased convergence of industrial facilities with residential areas, the need for establishing and implementing a general plan to manage urban and industrial pollution is becoming critical. Already, exposure to dangerous levels of industrial and household water pollution and industrial and vehicular air pollution in a number of urban areas is placing human health at risk. These risks have arisen because of the lack of pollution abatement and enforceable controls on industrial chemical discharges. Thus, further delay in implementing abatement measures not only places the urban population at considerably higher risks in the near future, but it will also increase damages to mangroves and coastal environments downstream. 3.39 Before abatement can be effective, pollution has to be properly monitored to ensure that legal standards are being met. In addition, monitoring is useful for policy and planning purposes to identify trends and impact of abatement actions. In the case of a poorly regulated industrial sector like in Viet Nam, improved monitoring can send clear signals to firms about the government's environmental interests and thus can autonomously induce pollution control and abatement measures on the part of the firm. Linking firms to provincial and national information centers could provide necessary and meaningful feedback regarding the relative importance of pollution sources. To improve monitoring, a number of deficiencies have to be overcome. First, is the limited availability of data at key "vulnerable sites" and, particularly at the firm level. Second, is the need to determine priority indicators (respective to water and air quality samples). Third, is the lack of pollution control skills and laboratory and scientific equipment. Fourth, and probably most important, is the lack of a policy and program to manage emerging pollution problems which include the proposals for appropriate use of various environmental policy instruments (See Chapter IV, Section A below) and the establishment of operational standards and regulations to implement the newly enacted NLEP and its 175/CP implementing decree. (see Chapter VI, Section C below). - 62 - IV. DEVELOPMENTAL AND POLICY FRAMEWORK FOR INCREASED SUSTAINABILITY A. Towards Greater Developmental Sustainability: The Context and Precepts Introduction 4.1 Viet Nam is an economy in transition: it is embarking on a development path that would primarily be dependent on the market rather than on central controls. With regard to natural resources and the environment, the nature of the market reform program and the choice of Viet Nam's developmental path is therefore critical. As Government increasingly relinquishes control of the economy and as the economic behavior of its inhabitants become less encumbered, the resulting growth (as discussed below) could potentially have negative or positive effects. While the sources of environmental and resource degradation have been covered in Chapter III and some of the positive or negative effects can be gleaned from the discussion there, macro-economic reforms, especially those pertaining to incentive policies, have not been set in the context of environmental issues. In addition, the priority actions and measures to address the degradation problem have yet to be discussed. 4.2 This chapter further explores the context of macro-economic policies, governmental role and the broad implications for environmental action. It then reviews the precepts for achieving a more "sustainable" growth including the opportunity cost of not being environmentally conscious; and explores, in more detail, the environmental impact and issues related to sub-sectoral incentive policies. Macro-economic Reform Program and the Environment 4.3 Viet Nam put into place a comprehensive reform of its economic system (Doi Moi) starting in 1986 and expanding in scope in 1989 (para. 1.7) l/. These reforms have had a tremendous impact on economic performance with average GDP growing at 7% p.a. and exports increasing at 30% p.a. during 1989-1992. Annual inflation rate was reduced from 400% p.a. in 1988 to 5.3% p.a. in 1993. Judged on an overall basis, much of the growth of the agricultural sector has probably been relatively benign from the standpoint of environmental impact, although certain tendencies with adverse effects on the environment have tumned into serious negative trends which must now be confronted. The expansion of the prominent crop, rice, has not seen broadly adverse consequences in terms of overuse of pesticides and fertilizers (paras. 2.68 and 2.74). In the case of rice expansion through the reclamation of acid sulphate soils in the Mekong Delta, however, there will be higher opportunity costs to be faced by the economy as the increased acidification of increasingly scarce dry-season water will cumulatively impact more adversely on fisheries and household water use. Other export crops which are grown in the uplands (rubber, coffee, tea) are more environmentally benign than upland annual crops, although some of the expansion under Doi Moi may not have been optimal in terms of land use [para. 2.64 (c)]. However, it is in the case of the second largest agricultural export subsector, fisheries products, that the largest negative consequence has been observed. Since shrimp aquaculture has hitherto involved the large-scale destruction of mangrove forests and given rise to the largely unsustainable "shifting aquaculture" phenomenon in the acid sulphate soil areas (para. 2.88), mitigation measures, and the further prevention of such destruction is urgently needed. Another impact which has yet to be quantified is the extent conservation forests (for watershed and valuable biodiversity protection) have been l/ See the World Bank Economic Report, Viet Nam: Transition in the Market, September 1993. - 63 - increasingly degraded because of the demand for new exportable species of timber which had hitherto ot found a market because of lack of marketing incentives (see paras 4.35-4.36 below). 4.4 In the case of the industrial sector, Viet Nam's reform policies, which promote further outward orientation of the economy to exploit its labor surplus economy, also has environmental benefits. An export-oriented strategy has the advantage of creating fewer environmental problems at the early stage of industrialization compared with other strategies. Concentrating on producing labor intensive products and initially importing heavy industrial products, especially those the production of which raises many environmental issues, enables a developing country to avoid these problems until it has reached a certain level of development. So far, this has been the case for Viet Nam partly because of financing constraints for heavy industry. However, with far fewer investment constraints than at the tum of the decade, high pollution industries are being seriously considered and it is imperative that such projects be screened for their impact on the environment. Others have also argued that increased incentives for exports arising from export marketing reform can make it financially attractive to over-exploit a country's natural resources; but in the case of Viet Nam, the results have been broadly positive (para. 4.3) and a genuine attempt is being made to strike a balanced course in export generation and natural resource destruction (see Section B below). 4.5 Viet Nam's development path mimics the early stages of growth in East Asia's Newly Industrializing Countries (NICs). Indonesia, Korea and Taiwan all had serious macroeconomic instability before they began their rapid development. Viet Nam until two years ago may be said to be similar to those economies in those periods, with low savings and investment and with macroeconomic instability. After stabilization (which has been the situation for Viet Nam since 1992), these economies were able to grow successfully on the basis of export and private sector led development. If Viet Nam improves on its past, largely successful measures to improve its fiscal and trade regimes, its ongoing reform of land and property rights and its initial start in privatization, Viet Nam could possibly replicate the NIC experience. However, it does not necessarily have to follow the path of those NICs whose growth have been obtained at a high cost by seriously jeopardizing the quality of life of their residents, and who are now finding that remedial measures are prohibitively expensive or even beyond the realm of medium term remediation 2/. Viet Nam has to decide on the path it wishes to travel in terms of growth and how it should be sustained. Environmentally Conscious Development and Increased Sustainability 4.6 It is possible to define "sustainable development" in theoretical terms (commonly as "maximizing net social returns while at least maintaining the capital stock of natural or ecological resources"). However, from a policy and program standpoint, it makes operational sense to look at issues and problems from the perspective of "environmentally conscious development", which sets the economy on a more sustainable footing than to seek a "sustainable development" path which is operationally meaningless. As in any country, but particularly in Viet Nam, one path toward a more sustainable footing with little (if any) trade-off is the stress on population stability and the consequent effect of reducing population pressure (para 2.105). Other developmental paths could likely face substantially larger trade-offs. In any case, if significant trade-offs between growth and environmental damage are anticipated, such trade-offs can always be analyzed and dealt with on a case-by-case basis. The precepts which underlie the type of environmentally conscious growth approach being proposed here are threefold: 2/ Consider for example Thailand's experience with: (a) urban pollution in Bangkok resulting from the concentration of economic growth there (air pollution, polluted canals and waterways, overuse of ground water leading to ground subsidence and flooding); and (b) the coastal destruction of mangroves. - 64 - First, economic growth and a sound environment are not necessarily antagonistic. Rather, they are (or can be) reinforcing goals if appropriate policies are followed. Broadly speaking, allowing for markets in natural resources, for example, could reduce over-exploitation and degradation. Because resources such as water, forests, soil, and the earth's diversity of plant and animals are often undervalued, they are overused. Pricing these resources appropriately (to take account of non-environmental and environmental costs) would reduce demand for the resource, improve the technology for using it, and lead to substitution of other less scarce resources. Appropriate pricing measures (cost recovery) of environment-related support services (eg. waste management, potable water supply) would also ensure efficient use and conservation. Second, the root of environrmental problems is a general failure of all sectors of society to take into consideration, as a matter of course, the impacts of their actions on the environment. An important remedial step is to attempt to build environmental concerns into choices and decision making, both individually or collectively. Environmentally sensitive decision-making would, however, require a population that is better informed about environmental realities and the impact of their actions on the environment. Public education is very important, but it would involve more than public education as environmental awareness would have to be translated into environmental action. This can be done if: (a) The polluter is made to pay. A wide array of tools or instruments are available for the purpose - each with its own advantages and disadvantages. (b) Realistic standards on what constitutes pollution are established. This applies not only to industrial pollution but also to natural resource degradation (e.g., the expansion of rice cultivation onto steep unstable degraded slopes is as much a form of pollution as pouring factory waste water into a lake). Differentiating between more stringent long term standards (or those to be applicable for new investments) and more realistic transition standards for existing pollutors is, therefore, necessary. (c) Environment mitigating actions that are cost effective are promoted to existing firms or producers. (d) Mechanisms are established to monitor and enforce serious transgressions of realistic pollution standards. (e) Political will and strong institutions exist (or can be established) to permit effective administration of the above. Furthermore, improved property rights will also increase environmental awareness. Third, well planned and directed programs or projects are necessary to ensure that damage to the environment, which could take place if environmental costs are not taken into account, is contained through the process of better design of development projects and screening for their environmental impacts. Priorities among these programs or projects would, however, need to be determined in the planning process. This means that it is necessary to considerably strengthen the government's capacity to undertake or review environmental impact, and to analyze the nature and costs of key trade-offs among developmental policy and investment options. - 65 - The Choice of Policy Instruments and Their Implications for Environmental Action 4.7 An important precondition for implementing environmental policies is that the use of resources and services that could affect the environment adversely is not subsidized. This principle means first "getting the prices right" for these resources even if environmental damage is not considered. This is particularly important with respect to: (a) the pricing of inputs for potentially high polluting production activities (eg., energy, fertilizer, pesticides) which involves eliminating subsidies for the inputs and consequently reducing their overuse; and (b) the pricing of renewable resources (forests, water), the utilization or exploitation of which have health and valuable ecosystem destruction implications. In these aspects, Viet Nam is among the better practitioner countries. (See Section B below). 4.8 Beyond pricing resources appropriately in this narrow sense (without environmental costs), it is necessary to take account of the social costs of polluting activities, ie. to take.into account externalities which requires factoring the value of environmental impacts as costs above production costs. The inclusion of these social costs is accomplished by using targeted policies for pollution control and natural resource management. 4.9 In designing these policies, the main consideration for a developing country like Viet Nam, which can ill afford to waste resources, should be to minimize the cost of implementing them effectively. These costs are of two types--those of controlling environmental damage and those of administering the policies effectively. In general, it will be cost-effective (or least-cost) to use a combination of the types of policies described below. And, the precise mix will depend on the nature of the environmental problem and the capabilities of the regulatory institutions. 4.10 Two main types of decisions are required in choosing environmental policies 3/. The first choice concerns the manner in which the behavior of polluters and resource users is to be influenced. Regulatory or "command and control" policies are those that mandate standards, for instance, on emissions, input use or production technologies. This approach contrasts with market- based or incentive-based policies that price additional pollution or resource use, such as taxes on emissions, logging or fuel use. Although the regulatory approach has been dominant in environmental policymaking in industrial and developing countries, interest in market-based policies has revived recently, particularly in the United States and Western Europe. 4.11 Economists have been almost unanimous in their preference for market-based environmental policies compared to regulations. The reason is that, if effectively implemented, such policies will typically be less costly (more cost effective) in meeting environmental goals than regulatory alternatives. A tax on industrial emissions, for example, means that all polluters are faced with the same price in deciding how much to control their emissions. Hence, those polluters with the lowest control costs will decide to pollute less (and pay less in taxes) than those with higher control costs. The total cost of achieving any degree of pollution control to the country is, therefore, reduced compared to regulations, which leave such decisions to regulators who are typically not so well informed as to make these choices at least cost. Moreover, market-based policies also provide the right long-term signals for resource conservation by rewarding users for reducing environmental damage. Unlike regulations (and particularly those that specify the precise control or production technologies that resource users must install), market-based policies encourage users to go further by 3/ For a more detailed discussion concerning the choice of environmental policies, see World Bank (1992), Wnrld Develooment ReDort 1992. DeveloDment and the Environment. Chapter 3, especially pp. 70-82. - 66 - adopting cleaner technologies or more effective controls than are required by standards. In this way, technical change is encouraged more by such policies than by regulations. 4.12 An important characteristic of most environmental policies currently used in industrial and developing countries is that they aim at controlling actions, such as emissions from industrial plants and the logging of various species, which are close proxies for the environmental damage being addressed. Such measures are termed direct policies, and the choice between these and indirect policies such as fuel taxes or land use planning, which try to influence actions related more distantly to environmental damage, is the second type of decision for environmental regulators to make. Direct policies can be more effective in controlling environmental damage because they affect actions such as the type of trees logged that directly influence the level of environmental damage. Their disadvantage, however, is that because they aim at controlling the behavior of individual resource users or polluters, they place a heavy administrative burden on regulators if they are to be enforced effectively. By contrast, indirect policies such as taxes on gasoline or coal may not be as effective in reducing pollution because they affect only one aspect of pollution (fuel use). This drawback, however, must be weighed against the administrative cost savings with fuel taxes that could be imposed at purchase and would not require that each polluter's behavior be checked for compliance. 4.13 Despite Viet Nam's history and experience in central control mechanisms, it is not recommended that direct policies exdusively be used to reduce environmental damage. Since effective environmental institutions and the necessary monitoring and enforcement infrastructure have either not been established or are not operating well, the administrative burden of monitoring compliance of individual resource users would be too heavy. Under such conditions, certain direct policies could, therefore, be difficult to enforce effectively. 4.14 Direct enviromnental policies such as taxes or standards on industrial emissions and logging quotas differentiated by species would be easiest to enforce, and therefore most applicable in Viet Nam to problems that involve a few, large resource users. Examples include emissions of air pollutants such as particulate matter and sulfur dioxide from power plants, discharges of heavy metals by pollutants by large-scale mining enterprises and timber extraction by logging companies. On the other hand, where resource users are numerous and dispersed, as with domestic solid wastes, emissions of air pollutants from motor vehicles, organic water pollution from industry, and pesticide runoff from farms, indirect policies will be cheaper to implement effectively. 4.15 Among both sets of policies, market-based measures are worth considering despite their limited use until recently even in industrial countries. Apart from their potential to control environmental damage at lower cost than regulations, these measures have the advantage that they will generate additional revenues in a less distortionary manner than traditional sources of public revenues such as taxes on production, income or capital. Unlike the latter, taxes tied to pollution or natural resource exploitation generate revenues by discouraging environmental damage, thereby benefiting society. The efficacy of their use should be evaluated on a case-by-case basis. 4.16 Given the likely preference for indirect environmental policies to address many problems in Viet Nam, a market-based instrument with particular potential is the "presumptive charge" to control pollution. This charge is based on fees assessed on the basis of presumed discharges beyond a specified abatement level (which could, for example, be based on industry averages when "minimal" pollution control is in place). To receive a rebate of the charge, the polluter would have to prove that its discharge was below the "presumed" level. This would minimize the administration and monitoring requirements on the part of government. However, this is a relatively new instrument - 67 - without the advantage of previous lessons learned to guide its implementation. This instrument is, nevertheless, worth considering for Viet Nam (see para 5.60 below). 4.17 This discussion shows that the choice of policy instruments will have to be pragmatic. Lessons from the United States and Central and Eastern Europe 4/ show that while it may be possible to characterize tihe general applicability of each of the commonly used instruments (See Box 4. 1), detailed assessments are needed of the suitability of different combinations of instruments for dealing with various environmental problems in different countries. The challenge for Viet Nam is to choose the correct combination of these instruments or systems for the "right" pollution problem, industry, or firm. Appropriate choices should be made on the basis of 5/: (a) the relative cost of abatement; and (b) the relative ease of administering the system. 4.18 In the final analysis, however, even well-chosen environmental policy instruments cannot change the underlying political choices which have to be made. These in turn will depend on the government's political will and the will of various other stakeholders (firms, households, peoples' representatives), to support environmental action. Environmental awareness is a pre-requisite for nurturing and shaping this political will. Scientists and affected households are aware of various environmental problems. Government may be broadly aware, but the importance of taking the environment into consideration and the need to do something now has yet to filter through some segments of government agency leadership. There are quite a number of GOV bureaucrats who view Viet Nam as being at a stage where protecting the environment is a luxury which only the wealthy can afford. The Opportunity Cost of Not Being Environmentallv Conscious 4.19 In terms of the extent of environmental degradation and pollution, as Chapter III clearly demonstrates, protecting the environment is not a luxury reserved for wealthier countries. If the environmental impact of highly pollutant production and consumption activities are ignored or the necessary environmental consciousness to implant a workable policy is not pursued seriously, the results will be costly to the economy in the medium and long term. As evidence from both developed and underdeveloped countries have shown, the cost of environmental degradation can rise at increasingly fast rates without early and appropriate environmental interventions. This stems, in part, from negatively reinforcing linkages throughout the environment among various subsectors of the economy and, in part, from irreversibilities in certain instances of environmental damage. 4.20 The warning signals for Viet Nam are already evident and the cost of further delaying the implementation of environmental policy must now be confronted. In some instances, as damages approach the point where they may be irreparable, time may be expiring on even having the option to make choices. Consider, for instance: the situation for coastal aquaculture and fish spawning in 41 See World Bank, Environmental Action Programme for Central and Eastern Europe, Report No. 10603-ECA, June 30, 1994. 51 In addition, if there is substantial uncertainty about the cost and consequences of adopting alternative instruments, an important consideration guiding the choice must be the relative cost of making mistakes, that is, of imposing too strict controls and/or achieving too little reduction in emissions. This comparison will determine whether price-based or quantity-based controls are cost effective. - 68 - BOX 4.1: Generalizations from Present Use of Environment Policy Instruments A review of the experience in the actual use of various environmental policy instruments, particularly in Europe and the United States has permitted the following generalizations to be made: * A regulatory approach is usually the right way to deal with micro-pollutants such as heavy metals and most toxic chemicals. The costs and difficulty of monitoring emissions of such pollutants are large, the costs of making mistakes often high, while the range of control costs seems to be relatively small. Examples of such regulations include technology standards that require enterprises to install certain kinds of process or end-of-pipe controls, but it may be cheaper to use emissions standards instead. * Emission standards may be used as instruments to achieve a desired level of environmental quality standard outside the plant concerned. Since continuous monitoring of emissions may not be possible or may be prohibitively expensive, it is common to rely upon random spot checks or a regular schedule of intermittent monitoring to enforce the standards. * PoDlution charges can be used in dealing with emissions from large or medium industrial plants that can be monitored at reasonable cost. This includes air pollutants such as dust, sulfur dioxide, nitrogen oxides as well as water pollutants such as organic material, suspended solids and some heavy metals. Where pollution charges have been applied in the past, they have usually been set too low to cause any change of behavior among enterprises; the exception is water pollution control in the Netherlands. * Tradeable discharge permits have an advantage over pollution charges in that they offer relative certainty about the total level of emissions. However, they can offer an effective alternative only if the number of sources within the area covered by the permits is sufficient to sustain a reasonable level of permit trades without any one source having a disproportionate influence on the market. The main experience of using tradeable permits has been in the United States. A scheme for phasing out lead in gasoline was successful. * Product charges and deposit refund schemes have been used with considerable success in many European countries to deal with various types of solid waste and to encourage recycling of glass and aluminum. This approach is now being considered to control the disposal of hazardous wastes in Thailand and other proposals are under consideration elsewhere. The principal problems in introducing market-based instruments arise from the distributional consequences of alternative levels of charges or permit allocations. It may be necessary to adopt transitional arrangements which mitigate the immediate impact of the new control system on existing sources. For instance, pollution charges could be increased gradually or a substantial share of permits could be allocated to existing sources. Such provisions may play an important role in ensuring that proposed schemes are politically acceptable. Until recently, environmental policies in the OECD economies were based primarily on 'Command and Control" approaches, but there is now a significant shift towards greater reliance upon market incentives as the costs of meeting stricter environmental goals have increased. Countries such as the United States, Netherlands and those in Scandinavia have put tradeable permits, effluent charges or environmental taxes at the core of their policies to tackle major environmental problems. - 69 - dwindling mangrove ecosystems; the expansion of rice and other agricultural activities into acid- sulphate soils at the expense wetland ecosystems with high biodiversity and other economic value; some of the relentless expansion of annual cropping on steep highland slopes that are highly susceptible to erosion; and industrial contamination of certain bodies of water. Since substantial environmental damage has already occurred for them, the cost of active mitigation may now be economically unjustifiable. In other instances such as pesticide use, groundwater contamination, municipal and industrial contamination of water bodies, watershed erosion, oil spill risks, and incursion on protected forests, pre-emption of the potential long-run costs associated with allowing damage to accelerate will have to be treated seriously. If specific plans for dealing with these issues are not designed and executed soon, then the increased costs of inaction will be chosen by default as will the possibility of having fewer alternatives in the future. Rationalizing the Role of Govermnent 4.21 Govermnent also has a role in situations where private returns from firms/households impinge negatively on others, i.e., where negative externalities (impacts outside the producing unit) exist. This is the case particularly with respect to environmental damage. Consider, for example, both the typical urban pollution situation (a factory releasing effluent into a lake) and the "land pollution" situation (expanding rice cultivation into steep vulnerable hillslopes leading to serious erosion, crop destruction downhill, and sedimentation downstream). In cases where preventive measures (e.g., to reduce erosion) are unaffordable because the benefits accrue outside the firm or farm, Government may have to, intervene to (i) provide the support services to promote the introduction of relevant technology (especially for households already living in poverty); (ii) demonstrate the potential commercial viability of a technology (use of cost effective waste treatment measures, introduction of reduced impact logging); or (iii) charge the producer for the damage they cause to others. 4.22 Another area for Government intervention is the construction and management of infrastructure for which the services it provides has to be shared interdependently or allocated amongst different users because of limited access or differential use. An example is the case of irrigation facilities where uses have to be allocated, especially in times of drought, for various types of crops (with different water requirements). Another example is the release of water from dams for agriculture, electrical generation, household use, flushing of saline intrusion, or diluting urban waterway pollution. Similarly, in the case of common use resources for which a framework for benefit sharing needs to be devised (e.g., communal forests in vulnerable watersheds, limited irrigation water, common livestock grazing land), Government has to play an active role. 4.23 Another aspect of environmental damage which requires governmental presence is the multidimensional nature of its impact, containment, and remediation, especially where destruction of natural resources is involved. Even apparently "straight forward' factory pollution of a water body involves industrial, health, water resources, fisheries, and agricultural authorities. It often involves different local governments as the deposit of effluence is felt downstream in another locality. Hence, the legal framework, in addition to providing for monitorable standards, should also provide for the appropriate role and accountability of these diverse authorities. 4.24 In summary, in the realm of environment and natural resource management, the role of Government is not only clearly justified, but in many instances critical. The issue is what environmental policy instruments should it use and how should the institutional and regulatory support for them be designed. The remaining section of this chapter is devoted to analyzing the performance of various indirect (incentive) policies which have been used in Viet Nam, the lessons learned, and - 70 - the prospects of introducing/improving relevant ones for government consideration. Chapter VI is devoted to the required institutional and regulatory framework for environmental action. B. Government Incentive Policies and Resource Degradation/Pollution Agriculture and Natural Resource Incentive Policy Issues 4.25 Agriculture, beside being the most important sector of the economy, has also proven to be the most responsive to structural reforms. Increased incentives stemming from decollectivization and the lifting of price controls helped boost agricultural output and exports. Overall, "getting the prices right" has been one of the most important achievements for agricultural policy under Doi Moi. The policy changes affecting agriculture and the rural sector, which may have both negative and positive effects on the environment (especially natural resource degradation), are discussed below. 4.26 One set of incentive policies of importance for agricultural crops has been the reduced bureaucratic control on migration, increased monetization of the economy, and market liberalization (which allowed farmers and economic agents unrestricted purchase and sale of products, including free interprovincial product movement). As can be seen from the increase in spontaneous migration into Dac Lac Province since 1989, (para. 2.15 above), this has resulted in the further destruction of protection forests and special use forests to produce more marketable products. Improved marketing incentives, however, have the potential for positive environmental effects in that better marketing prospects could encourage farmers to improve the intensity of cultivation, increase cash incomes, and provide employment opportunities in linked sectors downstream (e.g., further processing of the products marketed) or upstream (in terms of supply of inputs and associated services). These activities would contribute to relieving the pressure for incursion into the protected forests, especially if clearer demarcation of the priority forests and strengthened protection takes place at the same time. 4.27 Input Subsidies were removed under Doi Moi, but their impact on input use, let alone the impact on the environment, cannot be clearly established because of confounding factors. For instance, pesticide subsidies were gradually removed in 1989 and 1990, and the average imports (no total consumption data is available) for those two years (9,550 tons) were substantially lower than the average for 1986-88 (20,000 tons). The decline can be primarily attributed to shortage of foreign exchange because subsequent expansion in 1991 to 17,000 tons took place when the foreign exchange situation improved. The explanation that rice infestation rates were high in 1991 and thus necessitated greater use, while plausible, cannot be deemed the main reason because infestation rates were also high in 1990. Pesticides have, in effect, been overused primarily because of the lack of knowledge of the benefits relative to costs in adopting integrated pest management. Similarly, in 1991, when implicit subsidies for fertilizer (the lower than market rate of low cost CMEA imports acquired under barter-equivalent arrangements) were removed, fertilizer imports and use did not decline as government placed top priority on obtaining the foreign exchange to secure the supplies. This was done primarily by "persuading" exporting state enterprises (including non-agricultural ones) to import fertilizer for distribution to farmers or delivery to the quasi-governmental input supply companies. Subsequently, without the serious foreign exchange constraint, the basic reason why fertilizer use did not decline is that, at the farm level, fertilizer/paddy price ratios were still financially remunerative as paddy prices increased more than fertilizer prices 6/. Although, from a financial profitability standpoint, some overuse (especially of nitrogen) was encountered, overall fertilizer overuse had 6/ For an analysis of supply response to fertilizer among farmers in various agro-ecological zones in Viet Nam, see: Muller, Boerema and Chung, 'Farm Profiles, Incomes, Incentives and Input Use", June 1991. - 71 - limited environmnental impact in Viet Nam (paras. 2.67-2.68). The fertilizer situation, therefore, does not require government intervention. In the case of overuse of pesticides (especially in Southem Viet Nam) there is an economic incentive for curtailment through the practice of integrated pest management or IPM (para. 2.71, Table 2.5). Many farmers, however, do not know about it, hence the need is for improved training and extension, to promote IPM (including safer handling), and strict enforcement of the ban on hazardous pesticides. 4.28 Another policy change with important implications is the improved security of land tenure afforded by two major initiatives under Doi Moi. The first is the increased allocation of state or cooperative-operated lands for private use with non-formal govermnent (usually local Peoples Committee) rights to farm the allocated plots. This in practice mainly benefitted lowland paddy farmers (former state farm and cooperative members) and selected state farms in the upland areas. This initiative is also attributed to having been responsible for the yield increases from reduced planted rice areas in the late- 1980s. Where longer term leases were involved, land investments for preventing degradation and sustaining productivity have allegedly increased,1/ but mission field trips to upland regions indicate that few long term leases have been issued relative to the number of farmers being given non-formal rights to use the land. Unless the rate of formal rights issuance is increased, land/soil stabilization measures or investment may not materialize. The second is the allocation of forests and barren lands (primarily under timber state enterprises) with forner workers and new settlers being given land rights to selected plots for private use and fixed areas of forests (reforested or natural) for protection under contract. This has been undertaken in both upland forests (e.g., in Dac Lac and Lam Dong Provinces) and the lowland wetland forests (e.g., Minh Hai and HCMC Provinces). Again, such incentives provide a good potential for cost effective forest protection, but formal land rights issuance is still limited and needs to be expanded. 4.29 Investment support that is not tied to joint protection of remaining forest and formal longer term tenure rights will mean that the previous deleterious situation will continue. First, settlers will continue to contribute to forest degradation by increasing the demand for forest products. Second, settlers in forested areas will continue to clear the forest to plant various crops and, depending on the cropping system, serious erosion effects could result. Third, settlers not provided with proper extension support services will be apt to use lowland farming techniques in the midlands and highlands, resulting in further severe degradation of the land resource. Formal improvement in-- land tenure is therefore only a necessary but not sufficient condition for the reduction of forest degradation. In summary, the settlement process therefore needs to be reassessed, especially with respect to the need for resettlement and, if it is necessary, the need for land tenure improvements at the reception site to ensure that the enterprises being promoted are viable, and that appropriate farming techniques are extended so that the pressure to further degrade the protection and special use forests can be contained. This is discussed in Chapter V, Section A. 4.30 Pricing and Taxation Policy for Agriculture. Prior to 1989, prices of major agricultural commodities were administratively controlled, and, following the Soviet and Chinese models, used to subsidize food supplies to urban residents and industrial workers, and to cover the large overhead of the bureaucracy which managed distribution, including exports. Subsidized supply of food was phased out in 1988-89 and grain prices were unified at market rates, although the burden was partially monetized and transferred to the central and local government budgets in the form of higher wages and salaries for workers in the state sector. Excellent rice harvests from 1988 and sharp reductions of 7/ This is referenced in Prabhu L. Pingali, 'Institutional and Environmental Constraints to Agricultural Intensification," in Rural Development and Population-Institutions and Policy', a supplement to Vol. 15, 1989 of Population and Development Review, p. 253. - 72 - excess stock holdings by both farmers and the state eliminated overall shortages in staple food and put downwards pressure on market prices, facilitating a smooth transition. As state dominance in the marketing system for rice, fertilizer, and most cash crops diminished, "guidance pricing" relaxed, and private traders resumed their marketing activities, Viet Nam has become a true market economy. 4.31 Agricultural taxation is essentially in the form of a presumptive productivity land tax. It is currently structured on the basis of land quality based on different soil types and landforms, which are presumed to be linked to average productivity proxies (e.g. "best quality" paddy land is taxed at 0.7 tons of paddy/ha; and the tax on the next best quality is 0.56 tons/ha; and so on) 8/. Exemptions or reductions are given based on the severity of weather effects or pest infestation. Tax collections in 1990, according to official statistics, amounted to only 1.5% of the value added to the subsector 9/. GOV is said to be already starting to use exemptions to the land tax to encourage agro-forestry in the household-allocated highland areas, but it is not clear that the system can be practically refined to encourage specific environmentally preferred practices (eg. mixed tree species versus the soil depleting eucalyptus in hill areas). Prohibitively high rates can perhaps be set to discourage damaging erosion practices in high susceptibility areas, but this would still require further refining and the expansion of land categories for taxation. Since government has recently decided to drastically reduce agricultural land categories for ease of administration, the administrative feasibility of using the land tax for environmental action will have to be carefully re-evaluated. 4.32 Forestry Pricing. Taxation. and Exnort Policy. Besides improved land policy, GOV has adopted various incentive/disincentive systems in its attempt to achieve the objectives for improved forestry management, reduced forest denudation, and more efficient exploitation of the state-managed timber resources. 4.33 "Stumpage fees" until 1980 were levied as taxes on forest product extraction (both wood and non-wood) with no relation to investment costs in establishing the forest plantation. In the 1980s, GOV established a "Reforestation Fund" through the collection of registration or reforestation fees (which ranged from 10% to 60% of the value of forest product). In the late 1980s, this fund provided rebates for products earmarked for household use and for environmentally friendly incentive activities like reforestation with forest trees and high value trees (e.g., anise, cinnamon). Because of low official prices given for the products (and thus a lower value of rebate given) and the requirement to pay the registration fees first before getting the rebate, there was in practice virtually no incentive to reduce deforestation. To remedy the situation, in 1991/92 a series of decrees/official instructions were promulgated to introduce a "natural resource" tax (ranging from 7-40% of the value of relevant product) to separate the harvester of natural products (be it for timber, bamboo or non-wood products) from forest products removed from plantations whose users would continue to pay reforestation fees (calculated as a percentage of sales price in the local market). Exemptions or reductions of the natural resources tax would be permitted for natural calamities or war affecting the relevant enterprises; rural population with permits for forest products removal for domestic use (50% reduction); remote mountain area populations (e.g., under sweetened schemes) extracting forest products for household use (total exemption). 8/ Payment is usually made in the form of cash, computed at the market price of the province in question. 2/ If this is reflective of the actual situation, then the collection rate is probably very low since the land tax productivity schedules represent about 5% of average yields. - 73 - 4.34 Preliminary results from a MOF Study 10/ indicates that: (a) for well to moderately-well stocked natural forests that are exploited in accordance with a sustainable fixed rotation, the present levels of resource tax are reasonable as after-tax revenues of the forest land users are sufficient to cover the reinvestment of later silvicultural replanting operations and provide an adequate rate of return for the state enterprises involved. (b) For poorly stocked and degraded forests, which are normnally those recently allocated to farming households, the present levels of resource tax penalize long-term reforestation activities in favor of agriculture and other uses of the land which, in high susceptibility areas, could be environmentally detrimental. The resource tax should be reevaluated to mitigate such a possible environmentally negative consequence. (c) Bureaucratic constraints in administering the program (similar to those still being faced in implementing the reforestation fees program) add to the disincentives in participation. 4.35 In late 1991 and early 1992, GOV announced export bans for logs and sawnwood respectively. However, the net impact on the forestry sector and on the degradation of the forestry resource is unclear and reevaluation is needed. An analysis of timber price movements undertaken by MOF indicated that prices of both timber and non-timber products increased dramatically in the late 1980s through 1991. This is attributed to the access to new foreign markets (other than the immediate neighboring ones), especially for high demand logs and lumber associated with the Dipterocarp and Fokienia (Pomu) species made available through Doi Moi. Because of the lifting of monopoly export/import trading, new markets were found at the turn of the decade for cinnamon logs and for what the Vietnamese considered to be "lower class" (the lighter-colored) timber species like Alstonis scholar (mo cua) and Swietenia mahoRani (vane trunn) for which export market preferences were strong. Exportable timber prices increased between 70 to 100% within a couple of years, with exceptional demand species particularly prized in Taiwan and Japan (Fokienia) increasing by 300-400%. Similarly, expanded market access for non-wood forest products like cinnamon bar, anise star, pine resin, tung oil, and tung seed have also improved. However, because producers now mainly receive world prices, price instability has increased in line with world market conditions. With the ban on the export of logs and lumber, local timber prices have declined in real terms and have therefore been detrimental to the income status of forest enterprises and the individual producers of these products. 4.36 Tracing the further impact of the export ban needs more study. The outcome of trade- offs between export growth and the environment would need to be assessed quantitatively and has to be based on empirical data which is currently not easily available. There are a number of negative ramifications. While export leakages through neighboring countries will reduce some of the export market loss, prices received (as a result of the timber export bans) will be lower than from total direct export access. In any case, lost markets could mean potential collapse for certain producers (especially those products with little/domestic demand) and could have serious employment consequences. To this can be added the possibility that increased enterprise unemployment and loss of cash incomes for small farmners recently introduced to producing non-timber products could result in greater incentives to cut more timber from common access forests. This, in turn, means that even stronger forest protection would be required. There could also be positive ramifications. If, tO/ MOF, Plarning Department, 'Economic Realities to Consider in Developing Strategies for Forest Land Use, Draft, 1993". - 74 - for instance, the logging of desirable timber species had been taking place in protected and special use forests (i.e., those set aside for watershed protection and the protection of valuable biological ecosystems), and if the erosion damage had been substantial, the curtailment of such activities could be beneficial. 4.37 From the study teams's visit to a number of forestry state enterprises in Dac Lac province, most have curtailed their logging substantially because local processing capacity did not exist to purchase from them. An important consequence for these logging state enterprises has been a substantial increase in their budget deficits as government budget allocations, compared to log sale revenues, are only a small fraction of the source of funds for their operations (which includes land settlement and provision of social infrastructures support to their farmers or former workers). The finrncial situation of these SEs should be reexamined in the context of alternative options for these SEs to generate income and their longer-term role for the sector. Unlike industrial SEs, rural SEs like those in Dac Lac have social functions to perform (i.e., the provision and maintenance of housing, schools, health clinics and recreational facilities), the burden of which cannot be totally passed on to non govermmental operating enterprises. Phased disengagement from these functions, in line with the role of government for the rest of the economy should therefore be worked out. 4.38 The need is for GOV to define more dearly its timber/wood-based industry policy and programs to achieve sustainable production of high value timber species and commercial non-wood tree crop production that would be commensurate with local agro-ecological land use and the maintenance of natural forests for protection purposes. Recent experience shows that agro-forestry initiatives for products with reasonable marketing prospects can be replicated without undue compromise to environmental integrity in selected areas. Drawing from the experience of log export bans in other countries and their limited impact, the GOV should re-examine its policy towards the log and lumber export ban. However, there are program and project measures (e.g., agro- forestry) which can now be implemented that would be consistent with the objective of sustainable timber/timber product production and the environrnent. These are discussed in Chapter V, Section A. Urban and Industrial Incentive Policy Issues 4.39 Background. In contrast to agriculture, Government's reform measures have imposed a relatively harsher adjustment on industry, where high input prices, the elimination of government budget subsidies, and diminished credit availability contributed to a 3.3% reduction in the growth of output in 1989. Industry has since recovered and gross output, which grew by 3.2% in 1990, has averaged about 14% p.a. between 1990 and 1993. This improvement, however, reflects largely the increase in oil output, which in 1992 accounted for 17% of gross industrial product. Viet Nam began producing oil in 1987 through offshore facilities developed in a joint venture with the Soviet Union, and output reached 100,000 barrels per day in the first half of 1992. Other than the oil sector, the clear preference for light industry investments partly reflects the shortage of foreign investment funds for large (heavy industry) projects. But more importantly, it reflects the perception of risk by investors who, at this stage of economic transition, prefer smaller and faster pay-off investments. Despite recent changes in the Law of Import and Export Tariffs and the Foreign Investment Law, and despite the strengthening of land security which culminated in the passage of the new Land Law in July 1993, foreign investors for heavy industry are still wary of the past performance of frequently changing policies and uncertainty of who in Government is really responsible for critical decision making. 4.40 Government is aware of these concerns and is taking steps to improve the situation, especially in its implementation of the new laws and regulations. As investor experience and - 75 - confidence improve, Government has to ensure that the proper investment policy signals are sent out so that investment incentives and resource allocation are not distorted and are reflective of the true cost of production, including the allowance for appropriate pollution mitigation or prevention. Artificially low water prices, for example, could encourage overuse of water which could lead to unnecessary water storage, the drawdown of the groundwater, and excessive use for diluting effluents at the expense of household use. 4.41 Energy Pricing 11/. Over the past seven years, the real prices of energy in Viet Nam have changed dramatically; petroleum products prices have been brought to the international level, and electricity tariffs have almost doubled in real terms but still do not cover the costs of generation, while coal prices have declined in relative terms through productivity and quality improvements. The Government's main objectives in setting energy prices are that: they should be sufficiently high to provide for financial viability of the energy entities and generate surplus funds for the sector in order to provide a significant part of the future investment programs; taxes, especially on petroleum products, should provide revenues to the Government for road and other infrastructure uses; prices should be set at levels which encourage efficient use of energy and avoid wasteful consumption. 4.42 There are difficulties in pricing which pervade all the energy subsectors. When the rate of inflation was high (1990 and 1991), the Government set prices that were virtually out-of-date the day after they were published. Today the inflation situation has improved, but a number of prices set are still out of line. Another problem is that costs used by electricity companies are distorted by artificial costing rates (partly imposed by the Government), so that the estimated costs are lower than actual and future costs of power supply, but because of the absence of modern financial practices, it is difficult to determine precisely how much below the real cost of production and services are the tariff charges. 4.43 The State Commnission for Prices (SCP) bases its recommendations for electricity tariffs on the companies' submissions of their costs of production and distribution. These tend to underestimate real costs because fixed assets tend to be undervalued and depreciation rates are too low to allow for the repayment of investment and the cost of capital. In fact, low fixed assets in conjunction with low depreciation rates affect the cost estimates and subsequent pricing in most sectors of the economy. Improvements in price setting and more frequent changes of prices on the part of SCP in response to rising costs should be encouraged. This applies particularly to electricity tariffs which should be related to the investment costs of the sector. 4.44 Electricity prices are controlled and other tariffs are set below marginal costs. Coal prices are not controlled although minimum prices are set by the Coal Consumers Association (based on break-even cost levels of coal companies without a depletion premium). Fuelwood prices are market determined. With most of Viet Nam's energy sources operating under market pricing or close to market pricing mechanisms, the setting of electricity prices is an important governmental tool which has implications for inter-fuel use and thus different consequences for the environment. 4.45 Local "green" environmentalists contend that the recent doubling of electricity prices is likely to have adverse environmental impact because it would increase the demand for fuelwood and increase forest degradation. In terms of direct impact, other than the Red River Delta (the only region with more than two percent of households using electricity for cooking), the question is I I/ For details, see Word Bank Report No. 10842-VN, 'Viet Nam-Energy Sector Investment and Policy Review, June 18, 1993". - 76 - inconsequential. In terms of indirect impact, the problem is complicated by the question of the relative demand for coal and fuelwood and the relative environmental impact of using either one or the other. First, subsidies exist for about 200,000 tons of coal fines (powder) that are distributed by Government to mountain villages in 13 provinces at a budgetary cost of US$ 1.0 million per year. This should, in principle, reduce the demand for fuelwood, but whether this is environmentally positive, overall, is contentious 12/. As a household fuel, fuelwood is less polluting of the ambient environment than coal 13/. But encouragement of greater fuelwood use would mean forest degradation with its attendant negative environmental effects in terms of erosion and ecosystem destruction. The ambient pollution effects would have to be weighed with the environmental impact of the erosion and biodiversity effects. 4.46 Second, as the ESMAP study points out, despite increased fuelwood prices vis-a-vis coal prices, coal use has not increased as much as would be expected. A large part is probably related to its difficulty in lighting and control of heat output. Once lit, the tendency is to keep the stove burning all day (damping it down when not in use). As proposed by the UNDP/ESMAP study on both environmental and efficiency grounds, stronger controls on the quality of coal going to specific users in urban areas should be phased in as soon as possible. Coal washing and screening procedures can remove some of these particulates. The Energy Institute is already working on ways to improve the ignition properties of coal and coal briquettes and to rind inexpensive ways to screen out particulates from the material. These technologies should be promoted. 4.47 Urban Water Pricin. Consumers are required to pay for water distributed through house and yardtap connections, while water is free of charge at public taps and tanks. Since 1988, the Central Government has given the local governments and their water companies an increasingly free hand in determining tariff levels to encourage the companies to limit their dependance on subsidies and to become financially self-supporting. As a result, tariffs have been set at a level which probably comes close to recovering operations and maintenance costs, which is typically computed (e.g. Hanoi) omitting distribution and administrative overhead costs. Problems have none the less occurred due to the high inflation rate and the related rapid increase in production costs. In the case of HCMC, in mid-1989, the Water Company was allowed to increase its water tariff to cover the 50% increase in power costs (which constitute about 25-50% of operational costs). Water tariffs are supposedly set based on consumption levels. However, because of non-working meters, water consumption is usually and in the North (e.g. Hanoi) said to be charged at a flat rate (4m3 consumption at 600 dongs/cap). In practice, number of persons and price paid are negotiated and typically (as in Hanoi) only 65 % of water bills are collected. Tariff rates are also set according to ability to pay. Typically, there are three categories of tariffs: govermment employees; domestic consumers; and industry and commercial use. But in some cases, (particularly in the north) industrial consumers enjoy lower tariffs than commercial enterprises (hotels, shops). The highest tariffs have been introduced in Hanoi and HCMC for foreign institutions. 4.48 The most serious incentive policy problem is that the polluter does not pay. Industrial toxic waste discharge into streams and lakes is probably the most serious example. This is essentially 12/ If the ESMAP study's estimate (page 49) were to be accepted (that there is no fuelwood deficit in either the Northern highlands or the Central highlands), then coal fines subsidies could favor a higher ambient polluting fuel (coal) than a surplus lower polluting fuel (fuelwood). 13/ At the level of the household and the small rural industry (the largest industrial coal user), coal use results in particulate emissions of low height in open domestic stoves and brick/lime kilns, which in poor ventilation conditions have health consequences. - 77 - a problem of standards, setting appropriate legislation and enforcement (see Chapter VI). At an individually smaller scale, payment for waste management services (e.g. collection of solid waste, sewerage changes) are minimal for Vietnamese households which receive such service. Higher cost recovery commensurate with the quality of services provided should be considered. 4.49 Similarly, in light of the prospective demand/supply imbalances, water authorities in Viet Nam should pay increasing attention to metering of water services, ensure flexibility in their use, and adoption of the "user-pays principle" with the application of marginal cost pricing so as to enable the user to economize on water use (see para. 5.62 below for details). Thus, subsidization by tax payers and cross-subsidization among water service users would have to be phased out with only special exemptions for justified "social" reasons. Special Industrial Promotion Incentives 4.50 A concern for industrial policy is the role of export processing zones (EPZs) and their environmental implications. It remains to be determined what the net environmental impacts will be if Viet Nam more vigorously pursues the promotion and support of EPZs as investment incentives or, like some surrounding countries, the promotion of industrial estates. The establishment of industrial centers may attract foreign investment and allow Viet Nam to spare resources by taking advantage of economies-of-scale in providing firms the necessary inputs to production (such as water and power). Clearly-defined industrial areas also simplify the development of environmental policy and provide the opportunity to use economies-of-scale in pollution control. However, although the potential effects of concentrating pollutants in small areas may permit more effective enforcement of environmental standards, point level enforcement may not be enough if cumulative effects of such concentration and inadvertent mixing of various pollutants are not specifically taken into account. Furthermore, compelling firms to mitigate these interactive effects might cause them to lose their production cost advantage and move their facilities to elsewhere in Viet Nam or to other countries where environmental standards and enforcement are less stringent. Vietnamese authorities would then need to monitor the location of these firms in non-industrial zone locations, thus offsetting the touted advantage of economies-of-scale in monitoring. In any case, the kind of activities promoted for export processing zones are those tailored to take advantage of Viet Nam's comparative advantage in labor. Thus, intensive monitoring for environmental impact in EPZs may not be as critical as other uses of scarce governmental funds for environmental action. In Indonesia, for example, because of the economic liberalization measures of the 1980s and the promotion of export processing, less polluting assembly industries (garments, furniture) sprang up, increasing their share in relation to the more highly polluting processing industries that primarily cater to domestic requirements (sugar, pulp and paper). The implication for Viet Nam is that, while it is important to ensure proper monitoring and enforcement of environmental standards in the EPZs, it is unclear that EPZs warrant top priority for environmental focus if scarce manpower cannot yet be mobilized to undertake the same responsibilities at the central and provincial metropolitan levels. Other Incentives Issues 4.51 Incentives for modernization of industrial enterprise have a direct impact on pollution and energy efficiency. There are, for example, low cost "win-win" measures (e.g., improved maintenance and process control and low cost energy savings measures) which can be cost-efficiently instituted, especially for older plants. However, the incentives for larger investments on modernization are hampered by government's enterprise taxation policy. For instance, for the profitable state enterprises, the main problem is that the surplus they generate is not sufficiently utilized. While about half of the surplus is transferred to the government budget, the other half is - 78 - retained and mostly dissipated in bonuses and benefits to workers and managers. Thus the capacity for these firms to invest in modernization and new materials beneficial to the environment is almost non existent. It will be hard to impose modem and environmentally sound equipment and materials onto firms which are not simultaneously reformed to ensure the necessary sound management of new investment capacity. 4.52 For public utilities, a series of reforms are thus needed to ensure that some of the necessary new investmnents are rmanced out of retained earnings. In addition, budgetary resources can be used as financing becomes available. For large commercial state enterprises other than utilities, retained profits are likely to be the main source of domestic financing for new investments. In addition to relying on their own resources, these firms should be encouraged to seek foreign joint venture partners. Such linkages would provide new capital and access to management skills and technology. - 79 - V. PRIORITY PROGRAM FRAMEWORK: ISSUES. OPTIONS AND RECOMMENDATIONS 5.1 This chapter expands on the program framework and options to address the key degradation issues for: (a) watershed and biodiversity conservation; (b) wetland and coastal marine habitat destruction; and (c) urban/industrial pollution. Key agricultural expansion issues are covered under (a) and (b) above. This coverage is in line with those proposed by the NPESD and the project profiles considered to be important for resolving key technical and institutional issues identified in the NPESD. Rather than cover all the wide ranging programs and topics outlined, each of these subsections below focuses on the proposed framework for the most important problems and issues to be resolved; and the required improvements needed to ensure that these programs or projects achieve their goals. A. Watershed Protection and Forest Conservation The Framework 5.2 To ensure more effective protection of upland forests, especially for critical watersheds (the "protection forests") and "special-use forests" (national parks and wild life sanctuaries), attention would need to be focused on various target groups. These include: (a) agricultural land and fuelwood short communities in the northern midland and central coastal regions; (b) shifting cultivators, both itinerant and sedentary (particularly those residing in resettlement schemes) in the mountain and high plateau areas; and (c) communities in buffer zones surrounding valuable natural forests that are well known for their biodiversity or watershed protection value. 5.3 The programs and measures needed would have to be multi-pronged and focused on: 1/ (a) Forests and conservation areas with valuable biodiversity and critical as watershed catchments for natural regeneration. Priority areas would need to be chosen (i) for demarcation and protection (including the establishment of buffer zones) and (ii) to pernit natural regeneration in degraded areas. (b) Denuded "barren" land in priority watershed areas with the best potential for development. Rehabilitation of these areas would require: (i) reforestation - particularly on the steep slope of erosion prone areas and the forest buffer zones needed to provide both fuelwood and timber to reduce the degradation pressure on the ecologically vulnerable areas; and (ii) the introduction of more sustainable farming systems, including agro-forestry, contour planting, tree cropping, and natural stabilization, that are adapted to specific If This approach is largely summed up in the report submitted by Government to the UNCED Conference in Rio, 1992. - 80 - farm site conditions, farmer preferences for crops, and feasible soil and water conservation technologies. (c) The reduction of fuelwood demand pressure on natural forests by establishing community level or private fuelwood plantations near population centers for providing low cost fuelwood; and simultaneous decrease in fuelwood demand through the promotion of more fuel efficient cooking stoves. (d) Agricultural practices in better potential areas close to the degradation sites, with emphasis on appropriate intensified cultivation to increase productivity including crop rotation, reduced use of insecticides, increased organic farming, and irrigation practices that better utilize valuable water resources. (e) Improved training/education and the promotion of non-agricultural opportunities, especially those for the buffer zones [in (b), (i) above] which can be actively promoted through Government support services and private sector assistance. 5.4 The broad emphasis of programs and measures is easy to propose but, in planning and implementing these programs in more detail, a number of difficult outstanding issues and constraints will have to be faced in order to ensure success in reaching their objectives. Proposals made by previous studies, reports, and evaluations for tackling upland degradation problems are given in Appendix 2.B together with an outline of key constraints and recommendation for further action. Critical issues are selected for discussion below. The Issues. Options and Recommendations 5.5 The following sets of issues (presented in the form of questions) are important: (a) In resettling population onto the remaining land frontier in the Central Highlands, what should be the priority target group? What is the appropriate framework for resettlement and sedentarization? (b) What should be GOV's approach to land use planning, land allocation, and improved land tenure? (c) How can appropriate technology transfer be achieved? These issues are addressed below 2/ with recommendations presented in bold print at the end of each relevant discussion. 2/ These are primarily distilled from a number of assessments that have been made of the problems and constraints facing key settlement programs and the use of alternative agro-forestry/farming systems in the hill areas of Viet Nam. See for instance: (a) discussions in Chapter 2, Section A and Annexes 3 and 5; (b) C. Sargent, 1991; (c) Hoang Hoe, Some Facets of Agroforestry in Viet Nam - a paper presented to the Expert Consultation on Agroforestry in the Asia-Pacific Region, May, 1990; (d) Do Dinh Sam (oP.cit), 1990; (d) B. Ohlson, Forestry and Rural Development, TFAP Technical Report No. 2, 1990, and (e) J. Gamnmelgaard, Ethnic Minorities in Viet Nam, December 1990. - 81 - Target Groups and Framework for Sedentarization and Resettlement 5.6 Different views prevail over who should be given priority in the allocation of land for farming in the Central Highlands. A number of criticisms have been leveled on GOV's sedentarization and Resettlement Program. One Government view that has been criticized (see C. Sargent) advocates a policy of preventing emigration from the mountainous areas of the North because "a large population is required to redevelop the degraded ecosystems" there. This view, premised by the assumption that "with relatively low levels of input, thin and fragile upland soils can support a substantial population and allow for excess accumulation of biomass, enabling the re-establishment of soil and watershed properties" is largely unrealistic and cannot be generalized. On the other hand, critics of Government policy to move surplus population from the Northeast (Red River Delta) to the highland areas argue that it is a waste of financial resources to promote such a resettlement as lowland rice-cultivating population cannot easily adjust to hill area cultivation and many return to their original homes. This situation also cannot be generalized because the results have varied. Our view is that settlement should continue to be voluntary; a better assessment of "comparative advantage" of the households being resettled should be undertaken, but only after exhausting the options within and around their home province; relevant training for the new area should be provided, if necessary; and better planning in terms of choice and development of selected residents for the reception sites and greater socio-cultural concern for community needs is critical. 5.7 In practice, GOV's implementation framework for resettlement has, for the large part, been socio-economically sound. As the analysis in Chapter 11 (para. 2.11) points out, most past resettlement in the minority dominated Northem Midlands/Mountain Region and the Central Highlands Region has been intra-provincial. There has not been, for the most part, what could potentially be culturally traumatizing transplantation of itinerant minority populations into socio-ecological conditions or economic activities for which they have neither had experience in nor the inclination to undertake. There has been, for example, little moving of the Hmong from the Northern Mountain areas to sericulture-focused settlements in the more level or undulating midland areas of Lam Dong Province (Central Highlands). Instead, settlers from the Red River Delta provinces with prior experience in silkworm raising were given priority in those settlements. Also, in other Central Highland provinces like Dac Lac, Gia Lai and Kon Tum, the majority of local households or workers that were given land rights and settlement benefits were ethnic minorities like the Ede and Mo Nong. These minority households have been long sedentarized and many have had previous working experience in the settlements' promoted enterprises (e.g., the Ede had worked in coffee and rubber plantations when they were managed by the French). In effect, by taking into account the "comparative advantage" of the various potential settlers, GOV has been adopting a rather rational policy to cost effectively (from the standpoint of the efficiency of the family labor input) expand land settlements in Viet Nam. However, it is in the details of implementing the policy that difficulties have arisen. First, particularly for the Northern Midland and Mountain Region, not all minority groups need to be sedentarized as insufficient assessment has been made about the extent and impact of itinerant shifting cultivation damage. Furthermore, if sedentarization should result in greater degradation at the settlement site, the impact could be counterproductive. Hence, without proper choice of priority areas and the adoption of technology that is relevant to the ecological and socio-cultural conditions of the selected area, its communities, and its inhabitants, living conditions could considerably worsen. 5.8 Previously rigid models of resettlement had created difficulties of two types: surplus delta population could not adapt to hill agriculture easily; and "sedentarized" ethnic minorities did not adjust to rigidities in agricultural practices which, even if they were agronomically appropriate, were not adaptive to their socio-cultural conditions. Government's new strategy for ethnic minorities has found expression in the 1989 Political Bureau resolution on "Socioeconomic Development in Mountainous Regions" (Resolution 22), which criticized the "mechanical and apish imitation of the delta pattern with - 82 - little consideration of the standard of production and social conditions of the mountain regions." The resolution states that "in concretizing and organizing the implementation of commnon positions and policies for mountain regions, we must fully take into account the characteristics of nature, history, economy, society, culture, customs and habits of the mountain regions as a whole and of each area, and each ethnic group, in particular. In this matter, we should stress in particular the dynamic and creative roles of localities and grass-roots units." These concerns should be implemented. 5.9 Sedentarization of ethnic minority groups should, therefore, be based on a case-by-case basis. In certain remote mountain areas, because of the sparse population and the traditional type of shifting agriculture still being practiced, permanent settlement may well not be necessary. More commonly, however, given the increasing shortage of "shifting cultivation land" in these hilly areas and in similar areas in surrounding countries like Laos where they migrate to, even the highly itinerant minorities (e.g. the Hmong) have indicated strong interests to be sedentarized. Their interests are also influenced by the extent they will be provided with social services (particularly in health and water supply). Sedentarization of populations in "better potential" areas in the hills near where they normally practice shifting agriculture has to be an important transition measure even though, in the short term, households cannot be sustainable without reduction in population pressure and the introduction of more stable farming practices or alternative income-enhancing activities. Such transition support would enable the provision for improved basic needs services (health, water supply) and education to permit some of the households to be prepared for longer term voluntary resettlement. In addition, intensive training could be given to selected household members who want to be resettled and are adjudged to have a good chance of success in the Central Highlands. As importantly, such an action would enable those residual households to have a better livelihood and, at the same time, have the opportunity to preserve their cultural heritage. 5.10 In choosing voluntary residents for new settlements in the Central Highlands from the labor surplus provinces like those in the Red River Delta, an assessment should continue to be made not only of the comparative advantage of the households volunteering to be potential settlers, but also of the potential for nearby urban industry or service sectors in the originating province to first absorb these households. Most important is proper planning of the reception resettlement sites, increased land tenure security, and a reorientation of land use in these sites to ensure strict conformity to land use restrictions on critically vulnerable areas but, at the same time, permit flexibility in cropping in the agriculturally suitable areas through greater use of the market mechanism. To be successful, assistance in most cases will have to go beyond the present approach of just the broad identification of new economic zones (settlement areas) and the provision of basic housing materials, some rice for subsistence, subsidized start-up inputs and virtually no extension and investment support. Approach to Land Use Planning. Land Allocation and Improved Land Tenure 5.11 A number of sub-issues fall within this subheading: (a) How should the priority areas for program and project support be chosen? (b) What should be the balance between macro-land use planning versus project and farm level planning? (c) What is the appropriate balance of control and flexibility in land use? - 83 - 5.12 Selection of areas for priority support in the hills requires more and better details on existing land use and land capability; and the socio-economic and ecological susceptibility conditions, especially for the Northern Midland/Mountain region. Until recently, only single-factor maps had been prepared - - on soils, forest cover, land use, etc. -- but there was no integrated overview, no combination of soils with landform, slope, or geology, and very little consistent land suitability or susceptibility assessment. Historically, there have been differences in data collection and processing habits between provinces, districts, and localities (for example, at the local level, soils and their suitability for use have been described by quite different and quite local concepts and terminology, even from field to field). 5.13 However, that situation is changing. The National Institute for Agricultural Planning and Projections (NIAPP) has now adopted an integrated, ecosystem-based land resources mapping program and is in the process of applying it to the whole of Viet Nam. NIAPP uses Spot and Landsat-TM satellite tapes in GIS format to produce individual thematic maps and overlay them in a systematic manner to obtain current land use on the basis of agro-ecology. This "Assessment of Current Land Use From the Viewpoint of Sustainable Development And Agroecology" is designed to produce "agro-ecological" maps of all seven regions separately at 1:250,000 scale and also a composite 1:1,000,000 scale map of Viet Nam. Maps have already been produced for the Mekong and Red River Deltas and the Central Highlands. For project development, the need is to extend the production of these agro-ecological maps at 1:100,000 scale (already done for Central Highlands) to the Northern Midlands/Mountain region in conjunction with erosion maps for districts with best potential barren lands (i.e., those with low land susceptibility) that are presently underutilized. This information can then be used to link the land use and land suitability maps with updated socio-economic data tailored to the requirements of various ethnic groups to be assisted. 5.14 In the longer term (but starting as soon as possible), there needs to be more cooperation between the government departments involved in solving the land degradation problem. The MOF Catchunent Management group, the Forest Inventory and Planning Institute (FIPI) and NIAPP could work a lot more closely in solving these serious land resource problems. Perhaps coordinated by the General Department of Land Management, these groups could have common goals, pool their resources, share facilities and equipment (e.g., the GIS), and avoid duplication of effort. Such a land use working group should be officially established. This working group could also provide (and share) information with the recently established National Information and Documentation Center. 5.15 The preparation of improved land susceptibility maps (similar to those given in Annex 2) using the new eco-system based land resources maps at 1:250,000 scale would be useful. The identification of high erosion-susceptibility areas would be critical for choosing affected (degraded) watersheds and sub-catchments (through GIS)- for stringent control in land use and for implementing protection or mitigation measures. Similarly, areas with high environmental significance in terms of watershed protection or high conservation (biodiversity) value could also be overlaid on the detailed susceptibility maps to indicate the degree of protection such features may require. 5.16 In addition to the extension of NIAPP's ecosystem-based land surveys at the district level to the Northwestern provinces (para 5.13), there is a need for the Forest Inventory and Planning Institute (FIPI) to refine its assessments on the areas with best potential for forest plantations and forest/fruit tree home gardens with explicit account to be taken of existing and potential accessibility and the availability of markets. Such information can then be used in conjunction with various indicators of unsustainability (like relative shortage of rice fields; relatively low rural income status; relative shortage of basic needs infrastructure like health, household water supply and education services) for priority support. That is, the least unsustainable and best potential should be chosen. - 84 - 5.17 In terms of the balance between macro versus project/farmer level planning for land use, the primary objective for land use planning is that it needs to be strengthened both in relation to technical awareness towards the prevention of severe environmental problems and to enabling greater freedom of individual choice in pursuit of free market opportunities 3/. Striking a balance between land use planning for directed uses and permitting flexibility for individual choice is therefore critical. If free market policies are to be pursued, land use planning cannot be permitted to be an obstacle. However, while land use planning should not be used to dictate development of the economy, its role as a tool to protect critical environmentally sensitive areas should not be lost sight of. 5.18 At the macro-level, land use planning is not critical except in vulnerable degradation areas (and for urban development in land. scarce communities) where the role of govermment is unambiguous. The main focus should be on sub-regional planning in conjunction with the planning of new settlements and the reduction of rural poverty, taking into account (i) environmental impact in the vulnerable areas and (ii) institutional coordination. Provincial and even district boundaries, while good starting points for macro-planning of indicative use, rarely coincide with head watershed boundaries or boundaries of valuable biodiversity. Hence, land use planning at the local level for development of projects should use districts or preferably sub-districts comprising the administrative village or commune (perhaps 400-600 farm units) as the focal point. 5.19 Land allocation, where needed, should have multiple criteria. Allocation primnarily on the basis of size of family labor (as is currently done) could be counterproductive as this could lead to even more rapid population expansion. Account should be taken of potential income-generating activities (including those for non-agriculture) and their financial viability in relation to relevant farming systems constraints including the farm families' labor availability and capability, and the market prospects of the products being promoted commercially 4/. 5.20 More importantly, the land allocation process must involve consultation at the village or administrative unit level, knowledgeable extension support, and, most importantly, the households themselves. This would permit an assessment of the financial and technical feasibility of various enterprises to be introduced or improved within the context of the socio-economic and ecological constraints faced by the relevant households (see para. 5.22 below). Because of the ecological sensitivity in the project areas, adhering to land use criteria that is jointly agreed between stakeholders and the government to prevent severe degradation will be important. 5.21 Under these environmentally sensitive conditions, GOV should also reevaluate the extent to which land use prohibitions can and should be implemented. The starting point should be the land use guidelines proposed under the TFAP (see Annex 1, Table 28). The guidelines identify five land use classes based on slope and four based on soil depth, past practices, and available options. The study teamn recommends that greater flexibility for the introduction of the guidelines in the less steeper slopes 3/ Partly attributed to C. Sargent. OD cit. 4/ For example, as discussed in para 2.65 (c), the planting of coffee and tea in the relatively level and fertile (basaltic soil) areas in the Central Highlands instead of the sloped areas would not only preclude potentially more remunerative field crops like annual oilseeds and cotton but their poor price prospects and market limitations could yield lower incomes than previously anticipated. - 85 - should be permitted 51. However, in steep areas like Class V land (greater than 350 slope) with shallow soils and inherently very high erosion susceptibility, annual cropping should be prohibited and forest protection to permit natural regeneration of flora should be the only form of land use permitted. Another option could be the revision of existing agricultural land taxes to enable the rate to be set at prohibitively high levels for this category of land use. The feasibility and relative impact of both should be evaluated. Appropriate Transference of Improved Technologv 5.22 Improved technology for developing the "barren hill" areas is available. What is lacking is tailoring the technology appropriately to existing conditions and constraints faced by the farming household and their associated communities. Many of the systems currently practiced, especially the Taungya system (interplanting with short-term crops between immature tree crop or forest plantations), are temporary in nature as cropping under forests or tree crop canopy has a limited life (typically 2-5 years). For agriculture and agroforestry, focus for wider replication should consider some of the local "best practice" technologies for watershed protection and the sedentarization programs. This includes possibilities ranging from cinnamum and fruit trees to simple stick hole (zero degree tillage) systems (see Appendix 8). The new technologies could be those practiced in other countries where farmers face equivalent risks and constraints (see Appendix 8). The need is to better evaluate the conditions under which each of them has been successful so that replicability can be promoted. Based on past studies, certain prerequisites for effective technology transfer are noteworthy: (a) First, the technologies with the best chance for replicability must fit the conditions of the holding and the farm household; and be sufficiently remunerative in terms of fulfllling household subsistence and/or increasing net cash income from the farmers' efforts. Furthermore, the cash crop alternatives which may be feasible for certain areas may not be suitable for others depending on their relative accessibility and the market absorbability of the products. For instance, the conceptual model often used to demonstrate the objectives and strategy of the Decree 327 Program - of stratified forestry, agro-forestry and food crop production down the hillside - assumes a degree of homogeneity across the people, farming systems, and agro-ecological zones of Viet Nam that does not exist and is unlikely to be replicable. For example, forest plantation, especially long rotation forest, appears to be financially unattractive relative to current shifting cultivation systems (Annex 1, Table 23). Already some farmers are avoiding taking up land allocations that would require afforestation because: (i) government's incentive payments for tree planting and plantation management [an establishment grant of up to D 2.5 million (US$ 238) per hectare and maintenance allowance of up to D 50,000/ha/yr (US$ 5/ha/yr)] are too low; and (ii) they carry a risk of non-compliance on the part of government. These aspects should be analyzed. (b) Second, in terms of erosion control measures, soil conservation technology that emphasizes biological conservation measures would be preferred to the construction works (e.g. most terraces for annual crops) which require large excavations. The biological measures include the establishment of so called wash stops or cross slope barriers consisting of grass strips, trash lines, hedge rows, stone lines, soil banks, or a combination 5/ For example, graded terrace, especially for land in scattered fields would be impractical from a technical standpoint. Zero tillage and green manuring proposed for the less than 18 degree slope should be viewed in the practical context of the labor and farming constraints where such practices are not feasible (e.g. in small scale intensive farming or traditional integration with livestock situations. - 86 - of these measures. A simple model evaluating the net economic returns from: (a) grass strips and mulching; (b) earth bands; and (c) terraces (Annex 7) indicates the greater cost effectiveness of vegetative erosion control techniques [item (a)] compared with excavation techniques [items (b) and (c)]. For the former, deposition of sediments in front of the vegetative structures gradually builds up, developing them into bench terraces in any case. The time for this process to be completed, however, depends on the rate of soil erosion and the intensity of tillage. 5.23 It is likely that the best prospect for income enhancement and more sustainable production in the highland areas will have to be the introduction of fodder/fuelwood production technologies, many of which are being adopted by smallholder farmers in other S.E. Asian countries, particularly Indonesia, Thailand, the Philippines, and Malaysia. They include: 6/ (a) shrub and tree legume establishment; (b) legume undersowing of crops; (c) legume reinforcement of grazing lands; and (d) conservation-based forage strategies which could include: (i) forage reinforcement of soil conservation structures, (ii) direct seeded or transplanted trees or grasses (e.g. Vetiver zizanoides) on ploughed contour lines, (iii) leguminous tree reinforcement of degraded forest, and (iv) legume introduction into protected hillsides for subsequent cut-and-carry livestock feeding. In summary, conservation-based forage production offers a low cost, smalUholder implementable tool for land conservation. It also provides income generation opportunities through forage seed production, livestock feed, and fuelwood production which in turn improve smallholder farmer perception of the value of land conservation. 5.24 The development of these technologies would require strictly managed, multi-locational trials on well characterized sites to evaluate suitable species and establishment and management practices. For example, a screening program for acid-tolerant Rhizobium strains would also be required. Such technology development should be matched to an extensive on-farm-technology-testing and demonstration program based on a "best-bet" approach using transferred technology. Farming community participation in goal setting and technology development would be an essential component as would the reorientation of extension support and the training of extension staff. Most importantly, for quickest impact, advantage should be taken of local successes in technology transfer. In selected areas, relevant technology transfer groups should be established comprising local farmers and knowledgeable extension workers, village elders, researchers and non- governmental representatives working in the area. With technical assistance support, proposals can be made for on-farm technology adoption, which is consistent with the relevant farming system constraints and which provides tangible returns for the farm family. Successful hill area blocks could then be identified for use as demonstration models. Since there are sufficient staff at the provincial agricultural and forestry service level, the more effective individuals can be selected and trained to promote the technologies jointly with selected contact and model farners. It is essential that the selected staff be freed from non-extension duties and be given performance incentives (as envisaged in Decree 327 Program) to ensure success. As part of the extension/demonstration program, the provision of complementary credit suppport, especially medium to long term credit, is critical. Reducing Fuelwood Demand and Improving Energy Efficiency 5.25 As previously discussed in Chapter 11, demand for fuelwood, accounting for 87% of total demand for wood, is the leading cause of deforestation in Viet Nam. Since cooking accounts for 85% of total residential sector energy consumption in Viet Nam, a UNDEP/ESMAP program is currently addressing this problem through technical assistance to improve energy efficiency in the domestic fuel sector. In an effort to alleviate the demand for fuelwood, demand-side management and marketing of 6/ Details are in Appendix 8. - 87 - "improved, " more fuel-efficient cookstoves is being employed. The current initiative to disseminate more fuel-efficient stoves in the Hanoi area, which targets both manufacturers and end-users, should be expanded. However, in order to disseminate a large volume of stoves and ensure the long-term self- sustainability of the project, a commercial-oriented approach (including cost/price sensitivity) must be achieved. ESMAP highlights incentives to manufacturers who experience little or no difficulty in transferring their production line to accommodate the fuel-efficient stoves and publicity campaigns espousing the benefits of the improved technology to consumers. 5.26 Greater initiatives are needed to better exploit its sustainable and vast hydropower resources which are evenly distributed throughout the country. The large hydropower dams, if built, can also potentially provide exportable power resources and reduce the demand for fuelwood. However, issues of trade-off, including the destruction of biodiversity ecosystems, timber resources, and loss of livelihood of affected households versus the supply of clean power will have to be faced through appropriate environmental impact assessments 7/. Small hydropower stations or even micro-hydropower units may well prove to be more appropriate as they can be constructed more quickly; they face even less adverse environmental impact problems; and they are likely to be more useful for the less accessible and poorer areas of the country. These options should be seriously pursued. 5.27 In regions where wood is scarce and coal is more easily accessible (particularly in the North), coal briquettes (a coal-substitute derived from coal dust and clay) are a popular source of fuel for household cooking. In an effort to increase efficiency (both material and energy wastage) while producing higher quality briquettes, UNDP/ESMAP is providing technical assistance in efforts to modernize the domestic coal briquette industry from its current handpress technology. Utilizing the experience obtained from other heavy coal-using countries such as Korea, the program analyzes source points, transportation and distribution issues, technology adaptability, marketing practices, and end-use utilization. B. Wetland and Coastal/Marine Resource Management The Framework 5.28 Given the alarming rate of wetland and coastal degradation throughout much of Viet Nam, particularly wetland forest destruction in the Mekong Delta, drastic measures are needed to correct the situation before they become environmental disasters. These measures should include the following: (a) First and foremost, shrimp aquaculture expansion, which has been largely unsustainable, should not be permitted at the expense of remaining mangrove forests. (b) Second, priority wetland forests (both coastal mangrove and back mangroves) with high biodiversity value should be declared special use forests and their management plans should be revised to ensure better boundary demarcation and more effective protection. In 7/ Particularly difficult will be the problem of displacement of households which will invariably result from the flooding of these large dams. Procedures for environment assessment and resettlement for hydropower and irrigation projects and systematic procedures are required. At present, general procedures for compensation of people who have to give up their existing rights to use of the land exist (COM decree in May, 1990 and Ministry of Finance circular of June, 1992). In practice, government accepts a form of doctrine of eminent domain for households without formal rights and engages in a series of 'negotiations with them. Except for special provision for IDA-funded projects, specific (and even general) procedures for resettlement of households affected by hydropower/irrigation projects do not exist. - 88 - conjunction with such protected forests, buffer zones should be developed to (a) foster joint protection and (b) promote special activities to reduce the pressure on the protected areas. (c) Third, a coastal mangrove reforestation program should be developed to reestablish a protective mangrove forest belt along priority areas on the coast and also to rehabilitate degraded or semi-degraded forests or barren lands to restore the nurturing function for fishery, protect coastal areas, and provide fuelwood and other needs for the local communities which can be most cost-effectively rehabilitated. (d) Fourth, a Melaleuca (back mangrove) reforestation/afforestation program for the back mangrove areas should be developed to (i) prevent further acidification of topsoils and surface water in acid sulphate soil areas; (ii) provide spawning and nursing grounds for fisheries; and (iii) provide for the local demand of fuelwood and household needs in acid sulphate soil areas. (e) Fifth, the program for rehabilitation and improvement of coastal dikes (in conjunction with additional mangrove plantings and related measures to stabilize the rehabilitated structures) in the central coast should be cautiously expanded. (f) Sixth, stabilization and afforestation in the central region of sand dunes (to buffer against storm damage) and reforestation of barren coastal lands to provide for local consumption requirements of fuelwood and construction poles) should be continued. (g) Seventh, vulnerable coral reef areas with high biodiversity should be protected and coral mining for lime and dynamite fishing around these protected areas should be prohibited. (h) Eighth, a monitoring system of the linkages in environmental impacts will need to be established to anticipate the cumulative effects of investments which affect the priority sensitive wetland ecosystems and estuaries. (i) Ninth, a public education program should be instituted with participation from local non- governmental organizations if possible. Proposals made by previous studies, reports and evaluations for tackling wetland development, and coastal/ marine ecosystems management issues are given in Appendix 3b. Only the more important issues are selected for discussion below, together with possible options and recommendations. Issues. Options and Recommendations Restrictine Manerove Destruction for Fisheries and Unsustainable Agriculture 5.29 The destruction of mangroves has passed the sustainability level for much of the mangrove/former mangrove areas (para. 2.32). In addition, this study has already alluded to the high economic cost of unsustainable aquaculture investments and practices (Box 2.2 and para 2.88). Therefore, there remains no choice but for GOV to prohibit the expansion of aquaculture ponds at the expense of mangrove forests in acid sulphate soil areas. GOV should immediately institute a moratorium on the cutting of existing mangrove areas for aquaculture until it is demonstrated from the rehabilitation efforts of existing degraded areas that environmentally sustainable models can be widely replicated. Exceptions may, however, be permitted if, as part of a mangrove rehabilitation program (e.g., to adjust pond configuration), some cutting down of mangroves is necessitated. However, - 89 - a precondition must be that overall replanting and afforestation would have to be substantially larger. Similarly, pending a more detailed assessment of the social cost of reclaiming new acid-sulphate soil wetlands (coastal mangrove and, especially, Melaleuca or back mangrove) consideration should be given to a moratorium on dry-season, large-scale rice rehabilitation investments in these areas. At the same time pilot initiatives should begin to: (a) design the monitoring of unsustainable fish/shrimp aquaculture and see if a prohibitive land/pond tax or levy can be established; and (b) explore the feasibility of a prohibitive land tax to discourage unsustainable use of dry season irrigation water (to flush soil acid) for rice cultivation. Wetland Forest Protection 5.30 More than 60 wetland sites have been reviewed by the Biodiversity Action Plan. This includes swamps, marshes, lakes, reservoirs, mudflats, lagoons and saltflats, each with areas ranging from 50 ha to 300,000 ha (Annex 1, Table 27). Assessments have also been made on the biodiversity value, nature of threats to the ecosystem, and the status of survey and protection support. Priorities will have to be determined which take into account biodiversity value, extent and nature of threat, size of the affected area, and the size of buffer zones which have to be developed to ensure effective protection. Based on these criteria, the following options are proposed as top priority for consideration: (a) Cau Mau Mangrove Area (Minh Hai); (b) U Minh Melaleuca Forest (Minh Hai); (c) Haiphong/Cat Ba Island Mangrove and Mudflats (Haiphong); (d) Xuan Thuy and Cua Day Flats (Ha Nam Ninh); (e) Pha Tam Giang and Dam Cau Hai Lagoons (Thua Thien-Hue); (f) Thac Ba Reservoir (Yen Bai); (g) Hua Binh Reservoir (Hoa Binh-Son La). 5.31 Management plans for the wetland reserves will have to be prepared which set out: areas to be demarcated for protection, areas for rehabilitation or reafforestation and for "seed" multiplication, areas/households to be included in the buffer zones with the identification of income earning activities that are compatible with the protection process to be encouraged or promoted. 5.32 Land allocation and the design of joint protection compacts between beneficiary households and the local government authority, who, in turn, would provide support for improvements of their livelihood status, would also need to be undertaken. Account would have to be taken of the administrative structure judged to be the most efficient in implementing the plan, and in the training and technical assistance support which would be needed. Mangrove Rehabilitation and Reforestation 5.33 Such a program is needed, even if it is outside the special use/protection forest areas. Coastal protection, through the planting of mangroves, is important to the preservation of coastal-region commercial enterprises (e.g., shrimp ponds, agricultural production areas and rice farms). For such a purpose, the following zones for development need to be distinguished: - 90 - (a) protection zone (and its associated physical buffer areas); (b) rehabilitation or reafforestation zone; (c) integrated wetland forest/aquaculture; and (d) development or settlement zones (commercial crops including coconuts and rice, salt pans and processing facilities). 5.34 Because aquaculture ponds and farms are located near the coastal fringe and a crumbling coastline will endanger them, reforestation of a protection belt or zone approximately 300 meters in width (located between the sea and farms) would be crucial. This is particularly true for the typhoon free areas which do not need to be protected by dikes. Priority for such protection belts would be for the agriculture and/or aquaculture farms which are sustainable or have a chance of being sustainable. Two levels of protection should be distinguished for management purposes: a 'full-protection' sub-zone on the mudflats along the seashore, and a "medium-protection" sub-zone (behind the full-protection forests) to act as a buffer between the aquaculture farms (or the cropped areas) and the fully protected mangrove areas. In practice, the need for (and the nature of) such sub-zones varies from location to location. 5.35 The Mekong Delta Master Plan (c.f., Working Paper No. 5 - Forestry) offers useful guidelines on "best practice" reafforestation measures based on accumulated experience in this activity 8/. However, in erosion-prone beach areas, improved protection measures involving local residents and measures or policy tools to restrict deforestation of a strip from 500-1,000 meters along the coast should be considered. Accretion prone areas would require different development/protection approaches. 5.36 In addition to the protection belt, support is needed for (a) reafforestation of seriously degraded forest areas or barren lands (largely wastelands or ponds abandoned from shrimp aqua-culture); and (b) enrichment planting ("infilling") of partially degraded forests. In conjunction with the efficiency of reforestation and to ensure that the reforested areas would be adequately protected, joint protection arrangements similar to those for the present special/protected forests (para. 5.30) would also be needed. Criteria will also have to be developed for: (a) the selection of abandoned or soon to be abandoned shrimp farms for cost effective rehabilitation; (b) the development of community forests to be established to cater for the fuelwood and other wetland forest needs of the local communities; and (c) the role, if any, of private commercial plantations. Marshland Rehabilitation and Development 5.37 This is particularly critical for the acid sulphate soil areas of the Mekong Delta. Two areas requiring support stand out: (a) U Minh, the only sizeable area of Melaleuca forest (about 40,000 ha) remaining in Viet Nam (located in Minh Hai and Kien Giang Provinces). This area includes the U Minh (Vo Doi) protected forest, comprising about 4,000 ha that is administered by a special Management Committee under the jurisdiction of the Peoples Committee of Min Hai 8/ For example: reafforestation of Avicennia officinalis should be undertaken only where there is soft clay and sticky mud and there is little erosion risk. Where coastal erosion is significant, mangrove seedlings rather than seeds should be planted (except for Rhizovhora apiculata, which can be planted as propagu]es); arrangement of planting rows should be perpendicular to the destructive waves; and spacing between rows should be triangular rather than square. - 91 - Province. Protection of this area is not only essential, but must be combined with a larger natural buffer which would require substantial rehabilitation and various degrees of protection. (b) The Plain of Reeds, which extends over about 600,000 ha in the provinces of Long An, Dong Thap and Tien Giang in the Mekong Delta, has only about 47,000 ha of relatively scattered Melaleuca wetland forests remaining as extensive drainage took place in the Second Indochina War (often after initial destruction by napalm) leading to the conversion to agriculture and, in the more acid soils, the formation of barren lands. Water control and management is crucial to the maintenance of the Melaleuca forest area functions and in providing for improved agricultural/aquacultural options to the present main activity of floating rice cultivation. 5.38 A management program for U Minh requires: (a) a reassessment as to whether the "core" biodiversity area (the protected forest of 4,000 ha) is sufficient to effectively protect the valuable diversity of wetland fauna and flora or whether this "core" area should be adjusted. (b) an assessment of the feasibility of establishing a buffer zone comprising reafforested Melaleuca or other appropriate species with joint arrangements between households and governmental authorities on protection and restricted access to forest products (timber for pole or fuel, and non-timber products like resin and honey). (c) an exploration of the options for environmentally appropriate development on remaining acid sulphate soil areas to better understand the trade-off issues pertaining to (i) the appropriate technology for sustainable rehabilitation of adjoining degraded Melaleuca barren lands, (ii) the potential for replicability of alternative aquaculture-paddy-Melaleuca models which can replace the single-crop/floating rice model or the double-crop/rice-only model currently practiced, and (iii) the social (environmental) cost of expanding dry season rice area in the acid sulphate wetlands. 5.39 Item (c) above is applicable to the rehabilitation and development assistance to the Plain of Reeds as well. In exploring the potential for appropriate and economically viable rehabilitation of the ASS barren lands, support should be expanded for the experimental trials undertaken by various institutes (c.f., studies by ISA/FOS/CIRAD) involving appropriate water management, selected fertilizer (super-phosphate) use, and the use of acid tolerant varieties as alternatives to the relatively expensive ASS wetland reclamation system (which requires flushing of soil and water acidity). In rehabilitated paddy areas, it is important to explore the replicability of substituting aquafarming (two shrimp or fish harvests) and one-crop paddy to the present monoculture of two- crop paddy. This is being tried out in the Long Xuyen Quadrangle of the Plain of Reeds (e.g., Thot Not District of Hau Giang Province) and the My Xuyen area of Min Hai Province. Other possibilities include oil palm in areas with better water control. The advantage of oil palm, which can grow in these soils, is that the flushing of acid is needed only in the wet season. Finally, the implication for flood control infrastructure development also needs to be considered. Other Coastal Resource Management and Proeranis 5.40 In terms of the rehabilitation and improvement of coastal dikes, cautious expansion of this program is needed in the Central Coast, particularly in Ha Tinh province. Investment components - 92 - include: (a) low-cost rehabilitation of existing dike structures through the improvement of earthfill compaction, turfing, filter, rock revetments, and toe construction; (b) the collection and purchase of mangrove seeds and propagules; and (c) the planting and maintenance of mangrove propagules. Site selection, timely planning, and supervision are critical because components have to be completed before the typhoon season. The need is to: (a) Determine priorities among remaining dikes in need of rehabilitation using criteria of sustainability (technical and organizational) and size of communities affected. (b) Distill lessons from previous projects, especially with respect to cost effective technology improvements and the technical and economic feasibility of upgrading the dike standards to withstand high intensity typhoons; organizational and management structure; and eliciting greater comununity participation in maintenance of civil works structures and plantings. (c) Promote the awareness of environmental (non-quantifiable) benefits to instill greater responsibilities among various segments of the community. 5.41 Stabilization and Reafforestation of Sand Dunes. This program should be expanded in certain areas of the Central Coast. Although site selection for sand dune stabilization is less critical than for dike rehabilitation, supervision of timely planting and supply of Casuarina and other relevant seedlings are the limiting constraints. Continuous monitoring and evaluation of the WFP program for the transfer of lessons learned is another important aspect to concentrate on. 5.42 Coral Reef Protection. The top priority is identification of coral reefs for designation as special protection forests (marine parks) and, for presently designated areas, assessment of the need for adjustment of the protected area covered. A demarcation, protection, and management plan should then be developed for the selected areas. Strict enforcement of fishing restrictions (especially dynamite fishing and use of coral beds in surrounding buffer areas) should be instituted. Most important is the clear delineation of responsibilities among the agencies involved and the involvement of affected local inhabitants in the protection process. Monitoring Program on the Cumulative Impact on Wetlands of Pollution Sources in the Mekong Delta 5.43 To ensure that interlinked or environmentally negative reinforcing effects from various investments are monitored and taken into account in planning decisions and investment approvals, an environmental impact monitoring model should be developed with the capacity of: (a) monitoring the performance of (i) key degradation or pollution indicators in sensitive or vulnerable areas; and (ii) socio-economic indicators. (b) simulating the environmental effects of major investments in terms of their impacts on the above indicators. (c) simulating the effects of mitigation measures. 5.44 Planning models exist for water resources. Especially relevant are those developed by the Ministry of Water Resources for planning in the Cau Mau Peninsula. These models should be modified to achieve the capability described above. The need is to: (a) select the key indicators (both environmental and socio-economic); (b) evaluate existing environmental programs or planning models; and (c) design appropriate environmental monitoring sampling strategy to complement existing monitoring - 93 - programs. The strategy should include both time and spatial resolution aspects; choice of variables to monitor; sampling size, data storage; data analysis; and methods to incorporate monitoring results into project design and mitigation. C. Urban and Industrial Pollution The Framework 5.45 The current lack of environmental awareness and the limited capacity to prevent and abate industrial and urban pollution has led to serious environmental threats to human health in many urban areas. To avoid higher pollution costs in the wake of further growth in both industry and population, Viet Nam will have to be more proactive in preempting the worsening of its environmental problems and reap the full benefits of a more sustainable economic growth. The approach to urban pollution control should simultaneously consider household as well as industrial pollution, as the former constitutes the main pollution source at present and the latter will be important with the acceleration of industrial growth. 5.46 Improvement and maintenance of the urban environment cannot occur instantaneously, but rather require persistent effort with initial short-term focus on particularly pressing areas. In general, however, since both public and private resources are scarce, possible measures to improve environmental conditions must be considered in terms of their costs and benefits. With this in mind, priorities for pollution control and mitigation are needed in the following areas: (a) Short and medium-termn actions to improve urban waste management and clean-up of existing industrial pollution, including the preparation of urban master plans and supporting plans for water supply and treatment, and the establishment of enforceable standards and monitoring systems; (b) Measures to prevent pollution from new industries through the improvement of government capacities to screen potentially high-polluting projects at the licensing and application stage and thereby ensure appropriate mitigation measures; (c) Short-term actions to red'uce pollution and energy consumption by selected existing industries through low-cost, in-plant measures designed to improve energy and productive efficiency; (d) Short to medium term measures to reduce urban air pollution through the increased use of unleaded gasoline and the reduction of two-stroke motocycle engine use. (e) Short to medium term measures to modernize the domestic coal briquette industry, presently based on hand-press techniques, to improve the efficiency of coal utilization; (f) Initiate pricing and taxation measures which can improve the incentives for pollution abatement; (g) Training programs for new and existing environmental authorities at both the MOSTE and Provincial levels; and (h) Data base improvement and awareness campaigns. Proposals made by previous studies, reports and evaluations for tackling urban and industrial pollution problems, and issues are given in Appendices 5.B and 6.B (for waste water and air pollution, - 94 - respectively). Only the more important issues are selected for discussion below together with possible options and recommendations. The Issues, Options, and Recommendations Urban Master Plans and the Associated Sectoral Plans 5.47 To improve urban/industrial waste or pollution management and enhance the urban environment so that the residents' health is not unduly jeopardized, a number of short- and medium-term actions are needed. Foremost is the preparation of, and adherence to, urban master plans. Beginning with the large cities, urban master plans need to be developed which identify: (a) The evolving nature and long-term trends of both population and city area growth, taking into account, for example, natural population growth, migration, and trends in housing and industry growth. (b) Proper, stringent zoning of industrial, residential, waste disposal, and recreational areas based on calculations of expected population densities and identification of expected demand for services by each category of users in different areas of cities. Zoning should be arranged in such a way as to not only minimnize the possibility of industrial pollutants affecting households through the air or water, but with efficient delivery of household wastes in mind. (c) The framework necessary for phased improvement and development of: (i) city services, including water supply, sewage, and solid waste disposal, (ii) housing, and (iii) more efficient transport (which could ease stresses on urban air quality through decreased traffic congestions). Sufficiently-detailed urban master plans will pernit engineering and operational plans for services to be developed, improved and affordably financed. In addition, they aid in identifying areas for waste disposal and treatment, and thus allow for the physical separation of residential areas from industrial facilities which generate extensive noise, air, or water pollution. With proper land use planning, tracts of land should be specifically identified for water and wastewater treatment plants, reservoirs, sanitary landfills, and transfer stations. In addition, good planning may prevent unnecessarily expending resources to upgrade infrastructure in areas which will soon be replaced with new investments. 5.48 In the case of Viet Nam, urban master plans should also be considered within the framework of consistent sub-regional plans as urban development is likely to cause certain metropolitan areas to become intertwined. Three growth "nexus" areas are considered to be top priority: (a) HCMC/Dong Nai/Vung Tau; (b) Hanoi/Hai Phong/Quang Ninh; (c) Quang Nam/Da Nang. Care is, therefore, needed to ensure that proposals are consistent, particularly for the development of city support services, key pollution standards and their monitoring and enforcement, avoiding the reinforcing - 95 - effects of pollution and waste generation, and capitalizing on economies of scale in providing environmental services. 5.49 Within the overall framework of the urban master plan and, within it, the broad land-zoning plan, other sectoral plans will be important for: (a) Urban waste management, where plans would need to be based on projected growth in demand for waste services identified in the urban mnaster plans, including water quality management strategies, waste management strategies, required capacities of sewerage, drainage and solid waste disposal infrastructure and service. The waste management plans should also include studies of the cost of providing services, pricing, fee determination and cost recovery strategies for urban drainage, sewerage and solid waste removal companies. (b) Water supply and sanitation, which are closely linked to housing (especially with respect to the incorporation of health standards for public and private latrines) and waste management. Contrary to the past procedure of focusing primarily on the quantity of water delivered, water supply systems should be designed, constructed, and operated with the goal of attaining specific water quality standards. (c) Transportation, with an emphasis on mass transportation, traffic flow efficiency improvements, the promotion of energy efficient vehicles and fuels and the reformulation of transportation fuels to reduce emissions of key pollutants. This is particularly important for Hanoi and HCMC. (d) Rehabilitation and restoration of lakes, ponds, and canals, with particular emphasis on long-term impact studies at selected "vulnerable" (pollution prone) sites, especially areas where there is potential for groundwater contamination from polluted surface water or unlined, improperly-managed landfills and other sites. (e) Flood control protection, especially for Hanoi and Hai Phong. Focus in Hanoi, for example, should be on maintaining and strengthening existing perimeter dikes and drainage (pumping) systems; and in Haiphong, on pumping to control tidal floods. In the establishment of sectoral plans, account should be taken of alternative solutions with respect to cost effectiveness. For example, it is not clear whether the solid waste problems in HCMC and Hai Phong should be handled by immediately installing solid waste composting plants 2/. The most cost-effective solutions should be first researched, and inexpensive solutions which entail minimum damage to the environment (e.g., well-managed landfills) should then be selected. Similarly, in recommnending the establishment of separate sewerage systems, account should be taken of the affordability of users 10/. 9/ As recommended by Crippen Consultants in the 'Urban Waste Management Study: Hanoi, Hai Phong, and Ho Chi Minh City," 1993. Potentially casting doubt on the usefulness of the recommendation is the fact a solid waste composting plant in HCMC receives only 3 % of the city's total solid waste and is already not utilized near its capacity. 10/ Separate sewerage systems still comprise only a small part of major urban areas even in the newly emerging countries (eg. Korea, Malaysia). In Manila, only about 300,000 people are on sewerage pipes, and since the treatment works at the end of the system do not function and users cannot afford to bear even part of the cost of repair, recommendations have been made not to incur repair expenses. - 96 - 5.50 While planning exercises leading to urban infrastructure investments are underway, immediate measures are needed to manage existing human health risks and prevent further deterioration of waste management infrastructure in all three city sub-regions as follows: (a) purchase of capital operating equipment, such as sewer cleaning equipment and solid waste removal vehicles 11/ and training of urban sanitation company staff in their proper operation and maintenance; (b) emergency flood control measures; and (c) development and implementation of human resource development programs for the urban service companies. Industrial Pollution Control 5.51 Somewhat different pollution control strategies will be required for new firms and industries entering Viet Nam under the new policies which facilitate private investment. Entering firms have access to newer, cleaner technologies and more capital than the existing state industrial sector and other existing industries dominated by the state-owned enterprises. These generally utilize outdated, polluting technologies, and in many cases have uncertain futures under ongoing economic reforms. 5.52 In the case of new plants, it is essential to take advantage of Viet Nam's opportunity to minimize future pollution damage at least cost. A positive first step has been taken by requiring foreign investors to include pollution mitigation information in investment applications. To be successful in minimizing future pollution damage, however, the Govermment should undertake a three-pronged approach, including: (a) Immediate assistance to project-approving agencies, like the National Project Evaluation Board (NPEB) and the State Commission on Cooperation and Investment (SCCI) to improve environmental review of investment applications for potentially polluting firms and industries. The need is to ensure that appropriate environmental techniques will be utilized when applications are made for investment licenses (see Chapter VI, Section D). Such screening is needed in assuring that appropriate, preemptive measures are taken to prevent unsustainable pollution. As a recent environmental study on pollution mitigation in Thailand points-out,12/ in addition to the scale and structure of the economy and the efficiency of input and energy use (see para. 5.57-5.58 below), the types of production technologies in use are important in determining the continuing environmental impacts of production. With freer markets in Viet Nam, many other countries may be tempted to use Viet Nam as a pollution haven and exploit the opportunity to export their polluting industries to Viet Nam if proper industrial project screening mechanisms are not put in place and accurate and extensive environmental assessments are not made. II/ The vehicles presently being bought are wrong fbr the type of waste generated in Viet Nam. Cities buy renovated compactor trucks from Japan but the waste is so dense and wet that it cannot be compressed significantly. The trucks are cheap, but the cities would be better served with non-compressing units. 12/ Report Number 11770-TH, bThailand: Mitigating Pollution and Congestion Impacts in a High-Growth Economy,' February, 1994. - 97 - (b) Assistance to the Ministry of Science, Technology, and Enviromment (MOSTE) and selected provincial Environment Committees to develop a regulatory and procedural framework for pollution control. Effluent standards for selected priority industries, environmental assessment (EA) procedures, and siting guidelines for industrial plants, industrial estates and export processing zones must be included (see Chapter VI, Section D). (c) Targeting effluent monitoring of new plants with significant potential for pollution. Once proper pollution abatement equipment is installed in a factory, it would require resources to operate and firms may be tempted not to operate them to save such costs. This implies the need to monitor firms even after appropriate steps have been taken in designing and constructing the production and pollution control process. 5.53 Given the need to further clarify and operationalize the use of effluent standards and environmental assessment (EA) procedures, prevention and mitigation of potential pollution from new plants will likely be confusing. To minimize inconsistency in the identification of environmental conditions for investment licenses, the linking of (a) above to the development of standards and procedures by MOSTE and the DOSTEs is essential. Development of a strategy for using environmental monitoring data to promote compliance is also essential to: give credibility to the EA process and the agencies exercising environmental regulatory functions; and provide feedback for the EA process. 5.54 In the case of existine Rlants, the need is to develop a medium-term strategy to control effluents with adverse impacts on human health and urban infrastructure, taking into account other competing objectives like employment, and targeting the use of cost-effective pollution control expenditures. Given limited available data on pollution sources, loads, and impacts, the first step should focus on: (a) A survey of toxic and hazardous emission sources in HCMC, Hanoi, Hai Phong, and other selected industrial areas, with priority attention to those that pose the greatest risk to human health and can potentially damage sewerage and industrial waste treatment infrastructure. (b) The costs of alternative pollution control options for a few highly polluting industrial subsectors and highly polluted districts. Alternative options could include in-plant additions of pollution control equipment, in-plant rehabilitation, adoption of cleaner technologies, relocation of polluting plants in some circumstances, and common treatment facilities for small and medium industries. 5.55 Based on pollution source data and abatement cost/benefit estimates developed under the proposed surveys (para. 5.64 below) and with further clarification of decree 175/CP (see para 5.56 below), GOV should be in a position to develop a strategy for reducing pollution from existing plants. Such a strategy should assess the alternatives of: (a) establishing a program for developing compliance schedules for priority polluting plants, including awareness and compliance training of plant staff; and/or (b) a "polluter pay" taing mechanism. In either case, a practical ambient and effluent monitoring program needs to be developed. Given that some of these options will involve significant expense, it will be essential to involve all parties -- MOSTE, affected industries, affected levels of government, non-industry agencies (e.g. municipal governments and natural resource management - 98 - agencies), research institutes, and affected residents in the development of the strategy for control of existing industrial pollution 13/. 5.56 A number of institutional issues need to be resolved with respect to pollution control standards and regulations. There has been some clarification of the role of the Ministry of Science, Technology, and the Environment (MOSTE) in their development since passage of the NLEP. A start has been made in the clarification of MOSTE's role as the planner, "public administrator", and monitor of environmental protection in Viet Nam with the promulgation of the governmental Decree (No 175/CP), in October 1994, to guide the implementation of the NLEP. Decree 175 sets out the broad responsibilities of the new National Environment Agency (NEA), acting on behalf of MOSTE, and of the Ministries with respect to: strategic or policy planning, environmental or pollution monitoring, the promulgation and enforcement of regulations and the supervision of environmental assessments. These aspects are discussed in further detail in the chapter VI. Short-term Industrial Pollution Reduction 5.57 Alongside the above largely medium-term initiatives for abatement of pollution from existing plants, short-run actions are needed to reduce energy consumption and pollution through low-cost, in- plant measures to improve energv and production efficiency. Past experiences attest to the strong possibility that plant visits by experienced chemical and mechanical engineers can result in recommendations for housekeeping, maintenance, and improved process controls, all of which together can significantly raise energy efficiency, lower emissions, raise production, and even profits. Depending on the type of plant and the degree of managerial commitment, energy consumption can be reduced by 20-40 %. In some instances, plant operators may learn that pollutants may be recoverable for reuse or application in another industry. The problem is often simply a lack of information. 5.58 The potential to save energy may also justify a program in which the boilers of prioritized factories are audited and upgraded. One option is that firms be required to mnake small investments in combustion control instruments and in the training of boiler operators. A better alternative, however, is for provincial metropolitan govermnents (e.g., through their Environmental Committees) to organize and perform efficiency audits on a fee-paying basis together with a small matching fund mechanism to facilitate financing the recommended low-cost pollution control actions. Such audits can uncover cost efficient measures to reduce wasteful behavior of which plant managers may not be fully cognizant. From the mission's plant visits, potential "win-win" measures, in terms of both cost efficiency and the environment, may be found in the following instances: (a) Cement producers can benefit from the recovery of raw materials and combustion improvements; (b) Pulp and paper facilities can sometimes recover substantial amounts of raw materials from their effluents (e.g., in two plants it was observed that up to 40% of pulp is lost in waste water); (c) Textile plants can extract materials from their effluents as well as save costs through improved combustion; 13/ Some old/highly polluting plans may, through this process, be allowed to operate because of the 'social cost' of closure, but even in such instances it would be possible to insist that such plants improve their environmental performance through low cost control measures of a housekeeping nature (See para 5.57). - 99 - (d) Chemical and pesticide plants discard both intermediate and end products into the air which can often be recovered in a cost-effective manner; (e) Fertilizer and detergents are discarded into the water by their producers, as is sugar and its by-products. These can be recovered and marketed so as to raise firm profits and concurrently reduce pollution. In addition, if properly treated, urban household waste can be recycled and used in agriculture with reduced sanitation risks. An expansion of this activity through awareness campaigns and increased incentives and organizational support should be encouraged. 5.59 The above recommendations may be thought of as the first step in moving existing industries toward conforming with environmental standards and treatment of their wastes while the setting of waste and emissions standards is finalized and drafting of implementing regulations proceeds. These issues and the practical issues of how to control pollutants are discussed below in Chapter VI, Section D. Pricing and Taxation Measures 5.60 Consideration should be given to using market-based measures to lessen the incentives to pollute. The practical difficulties of monitoring should also be taken into account and these may mean that indirect policies rather than direct charges may be most cost effective. Marginal cost pricing for water can reduce wasteful domestic use as water supply systems are improved and constructed. But it must be realized that in the absence of metering, only a flat rate pricing system is feasible. However, pilot initiatives in specially crafted presumptive emission charges (See para 4.16) could be tried for industrial waste water in selected urban pollution "hot" spots for selected industries; and the feasibility of such a system should be evaluated immediately. Under such conditions, gradual transition toward indirect instruments may well be less distruptive to industrial growth. 5.61 For industrial firms, there are two commonly proposed direct policies to match firms' private costs with the societal costs of production. Firms can be charged per unit of emnissions or they can trade the right to pollute through a pollution permit mechanism. Properly instituting either approach requires extensive information and a credible commitment by govermnent to monitor and enforce breaches of pollution rights, which are also required if direct regulatory approaches such as emissions standards are used. The required information involves quantifying the economic damages of pollution and the appropriate levels of various pollutants -- information which has not yet been obtained in Viet Narn. Particularly lacking are standards for industrial waste water discharges (although standards have been established for water quality in rivers and other waterways). Fortunately, from a regulation/control standpoint, as state enterprises dominate large, polluting industries, GOV can institute pollution control measures directly while the necessary information, regulations, and oversight responsibilities are being strengthened, particularly for new investments. 5.62 On the basis of the observations above and in light of the growing prospect of demand- supply imbalances, the policy implications for water suoplv and water-related services are as follows: (a) Increasing attention must be paid to the metering and pricing of all water services, flexibility in the use and reallocation of water rights, and other methods of managing demand; - 100- (b) Consideration of the User-Pay principle should be given in-line with the overall water sector strategy set by government for water and water-related services. The essential element of the User-Pay principle is that an incentive is provided for the user to economize in the use of the service or natural resource. Users of the service would, in aggregate, pay the full costs of the provision of the service, and a quantity and quality-based charging system would divide the costs among users. (This is a more aggregate form of the more familiar Polluter-Pay principle, wherein the polluter (the firm) pays for the cost that its pollution imposes on society.] Under the User-Pay principle, subsidization by taxpayers and cross- subsidization among water service users would be minimal unless special 'social' reasons existed for their retention. Ideally, marginal cost pricing should be applied under the User- Pay principle. However, during the phase-in period, as recognized above, other considerations mnight limit the full implementation of marginal cost pricing. A detailed evaluation should begin immediately to set out a transition plan to introduce a user-pay system in selected urban areas to benefit from the new and upgrading investments of water supply and sanitation systems. (c) Policy should be such that financial subsidies are largely directed at the water system as a whole, and to one group of water service users only if explicit arguments for special treatment of that group can be made. 5.63 While the impact will not be instantaneous, training programs for MOSTE and provincial environmental authorities and other local authorities with environmental management responsibilities (eg. local building inspectors, tax collectors, equipment maintenance specialists) must be instituted immediately. There is currently a severe shortage of individuals with expertise in either the scientific or managerial disciplines applicable to environmental management. Since all categories above depend crucially upon informed decision-making, this must be rectified by having well-trained individuals placed in positions of authority as soon as possible. In addition, subprovincial (local) institutions such as those that are (or should be) issuing building permits, operating local drainage systems, inspecting plumbing or sanitation installations should perforn their functions most effectively. They need awareness raising and training, career and salary incentives, and the proper equipment to get their work done. Otherwise, progress that may be mnade in areas like environmental planning (urban master plans, land use capability, site-selection, standard-setting) may be undercut by weaknesses in these basic governmental functions. Environmental Data Improvement Monitoring and Awareness Campaigns 5.64 Immediate plans must be made to improve urban environmental data collection through a national urban/industrial pollution survey. All of the above items rely heavily on this information, yet data is lacking both quantitatively and qualitatively, and especially at the firm level. A rigorous inventory of industrial waste discharges is required and should include company names and locations, all of the products, by-products and intermediate inputs they produce, the raw materials they use as well as short process descriptions, and a measure and listing of the character and intensity of their polluting discharges. In conducting the survey, certain priorities will have to be considered. Focus should initially be placed on industries generally believed to be large contributors to pollution. But within this structure, at the firm level, intensity should be greatest on those firms which are thought to be most likely to survive market liberalization. By properly preparing for the survey, arrangements can be made to concurrently have assembled experts disseminate the aforementioned low-cost measures. Clear, well-publicized national support for the survey will greatly facilitate the process and may, in fact, be necessary. The survey will require extensive initial effort, but the long-run benefits of being able to manage the environment and avoid exorbitant damage will make the project cost-effective as well as protect the population from undue health risks. The data base should be designed so that it can be easily upgraded in two respects: to - 101 - account for entering firms; and to account for new pollutants or polluting activities as new information may arise. 5.65 Data for environmental monitoring should also include "vulnerable" canal/river waterways for key urban areas and key river estuaries. For the former, Hanoi is particularly important because pollution discharges have to pass along irrigation or drainage canals before they reach the main rivers, which are often above inhabited areas. In any case, for the major cities, it is necessary to establish a river and waterways quality improvement program. In support of this programn, the Government should establish a river/canal quality classification and monitoring system similar to those which have been in operation in countries such as Korea and Malaysia. With such a system in place, the Government will be able to develop coordinated strategies for all sectors impacting on the water quality in the catchment areas. 5.66 Advantage must also be taken of the potential for raising public awareness and concern to positively affect both government policy and finns' practices. Many pollution problems in Viet Nam are local in nature, and so the desire for individuals to protect the health of themselves and their families can be capitalized upon. The HCMC Environmental Committee, for instance, has a significant composition of trained and concerned private individuals impacting government policy directly. In addition, managers of urban industrial plants have expressed the sentiment that public toleration of severely polluting activities cannot last. Often, however, the public suffers from a lack of information. If this could be rectified through public awareness campaigns through, for example, emerging NGOs, Government may find an extremely low-cost way to apply pressure to avert polluting activities. Control of Urban Air Pollution 5.67 Since suspended particulate matter and lead are important pollutants for the large cities (Hanoi and HCMC) and the transport sector is a large contributor of these pollutants, fuel reformulation measures should be considered. The lead content in all grades of gasoline could be lowered and unleaded gasoline introduced at relatively low economic cost per ton of lead emissions reduced. Similarly, reformulating diesel by reducing its sulfur content and viscosity could also be highly cost effective given the importance of sulfur to the smaller constituents of suspended particulate matter. 14/ 5.68 Another area for reduction of suspended particulate matter relates to the use of four-stroke engines for motorcycles instead of two-stroke engines. Motorcycles are a major contributor to the key air pollutants in Hanoi and HCMC. The share of motorcycles in the vehicle population is already high and increasing at a rapid pace. Since virtually all motorcycles are equipped with the simpler two-stroke engines, for which a large expansion of domestic assembly is contemplated, their replacement with four- stroke motorcycles (or advanced two-stroke ones that incorporate timed fuel injection and crankcase lubrication) should be seriously considered as suspended particulate matter and hydro carbons can be substantially reduced. A phased approach via the revision of emission standards for these two pollutants could be introduced along the lines being considered by Thailand. If this is not done, there is a risk that with potential restrictions on two-stroke engines in Thailand and Indonesia (as is now the case in Malaysia), there may be large scale dumping in Viet Nam which will constitute a substantial remaining market. Reversing the situation then will be very difficult to accomplish. 14/ For details see World Bank Report No. 11770-TH, Thailand - Mitigating Pollution and Congestion Impacts in a High-growth Economy, February, 1994. - 102 - VI. INSTITUTIONAL AND LEGAL FRAMEWORK FOR ENVIRONMENTAL ACTION 6.1 This chapter: (a) briefly describes the principal agencies with environmental mandates in Vietnam; (b) analyzes key environmental institutional issues and, based on other Asian countries' experience, offers options for addressing them; and (c) recommends measures to develop an environmental regulatory framework and strengthen environmental management capacity in Vietnam. (Key recommendations are highlighted in bold print following the relevant discussions). A. Agencies With Environmental Mandates The Core Agencies 6.2 GOV restructured the State Committee for Sciences to form the Ministry of Science, Technology and Environment (MOSTE) in October 1992. Within MOSTE, the Department of Environment and Natural Resources (DENR) was renamed the National Environment Agency (NEA) after the enactment of the National Law on Enviromnental Protection (NLEP) in December 1993. The NLEP identifies key environmental management functions, but does not define the roles and responsibilities of NEA at an operational level, and NEA's capacity to perform these functions remains limited. 6.3 Determination of responsibility for project approvals under Vietnam's investment policy reforms (since 1988) is still evolving. Under current arrangements, project approval authority is divided among: (a) the National Project Evaluation Board (NPEB), under the chairmanship of the State Planning Committee (SPC), for projects over $30 million; (b) the SPC, for projects from $500,000 to $30 million; and (c) provincial People's Committees, for projects of $500,000 or less. The State Committee for Cooperation and Investment (SCCI) is the coordinating body for the processing of private investment applications. As a member of the National Project Evaluation Board (NPEB) and State Committee on Cooperation and Investment (SCCI), MOSTE has formal authority to comment on envirorunental aspects of investment applications. NEA currently provides comments on some of the larger investment proposals in the industrial and energy sectors, but lacks capacity to carry out systematic environmental review of all investment applications. 6.4 At the provincial level, many Science and Technology Conmmittees or Departments (particularly those in highly urbanized areas) have been reconstituted to form provincial Departments of Science Technology and Environment (DOSTEs) and, in some instances, separate Environment Committees (ECs) were established. These agencies are chaired by the Vice-Chairman of the People's Committee and include representatives of the line departments under the People's Committee. They also have formal authority to review and commnent on environmental aspects of investment applications and to resolve pollution-related disputes, but generally lack staff, knowledge of clean technology, and financial resources. 6.5 Hanoi enacted local regulations (including ambient and workplace standards and a plant inspection system) in 1991; and regulations (including workplace and effluent standards, inspections, and procedures for environmental evaluation of proposed investments) have been completed recently in HCMC. The Hanoi Environment Committee has been assigned several environmental planning tasks, - 103 - including preparation of a provincial environmental strategy for the year 2000, evaluation and classification of existing industries to determine which should be relocated, and authority to comment to the National Project Evaluation Board on environmental aspects of proposed investments at the provincial level. For all these tasks it needs assistance. Neither Hanoi nor HCMC has conducted a pollution source inventory or developed environmental siting criteria or local EA review procedures. HCMC has initiated regular ambient air and water quality monitoring, but neither city has an effective effluent monitoring program. 6.6 Fledgling environmental agencies in developing countries are typically small in size, underfunded, and frequently staffed by non-specialists who lack technical credibility. Yet environmental agencies are ordinarily expected to provide a broad vision for environmental policy formulation, pollution control and environmental assessment at the national level, and to discharge broad monitoring and enforcement responsibilities at the local level. Without careful planning, MOSTE and the DOSTEs will experience a growing gap between limited existing institutional capacity and expectations of immnediate and visible improvements in environmental quality. As a result, their credibility and effectiveness could need substantial strengthening. 6.7 Within the line agencies, Departments of Science and Technology have been instructed to add environmental protection to their mandates. The main ministries with environmental management functions include: Ministry of Agriculture and Food Industry (MAFI), Ministry of Water Resources (MWR), Ministry of Fisheries and Aquatic Products (MFAP); Ministry of Forestry (MOF), Ministry of Labor, Invalids and Social Affairs (MLISA), Ministry of Construction (MOC), Ministry of Health (MOH), Ministry of Energy (MOE), Ministry of Heavy Industry (MOHI) and Ministry of Light Industry (MOLI) 1/. Their environmental management roles and responsibilities remain to be defined on an operational level, however, and they lack sufficient staff with specialized training and experience in natural resource management and/or pollution control, as well as capacity to develop and implement sector-specific environmental guidelines and effectively use environmental management tools, such as environmental assessment. 6.8 While core line agency functions (e.g., agriculture, forestry, transport) at the central level are linked in terms to equivalent services or departments at the provincial and district levels, such formal linkage is only currently being established for environmental functions between MOSTE and the provincial DOSTEs or ECs. 6.9 Public involvement in environmental issues most frequently occurs when neighbors of polluting facilities complain to local Environment Committees. The few non-governmental organizations (NGOs) with environmental objectives generally lack technical expertise, and there are no formally established channels for them to receive environmental information or bring pressure to bear for relief from adverse environmental impacts. 1/ For a summary of their functions and responsibilities, see Annex 10. VIET NAM Chart 6.1: ORGANIZATION OF ENVIRONMENTAL MANAGEMENT (OFC|O H GOVERNMENT)_ STATE COMMITTEE FOR 1 1 PROJECT EVALUATION COOPERATION AND INVESTMENT BOARD CENTRAL (NATIONAL) . _____ I CORLEVEL MINISTRY OF FINANCE STATE PLANNING COMMITTEE MINISTRY OF CENTRAL SECTORAL MINISTRIES AUTONOMOUS SCIENCE, LEVEL SECTORAL MINISTRIES ~~UNIVERSITIES TECHNOLOGY AND SECTORAL ENVIRONMENT AGENCIES NATIONAL o ENVIRONMENT RESEARCH . STATE AGENCY INSTITUTES AND ENTERPRISES LABORATORIES (SEs) *~~~ . PROVINCIAL (SEs) l ENVIRONMENT COMMITTEES OR PROVINCIAL PROVINCIAL SCIENCE, PROVINCIAL LEVEL SECTORS OR PEOPLE'S TECHNOLOGY AND AGENCIES DEPARTMENTS COMMITTEES ENVIRONMENT DEPARTMENTS PROVINCIAL RESEARCH INSTITUTES OR LABORATORIES Administrative Relationship -.... Collaborative and Technical Guidance Relationship sadstw52001 - 105 - B. The Legal Mandates 6.10 Environmental legislation in Vietnam is comprised of: (a) a National Law on Protection of Environment (NLEP) enacted in December 1993 (see Annex 9) and Decree 175/CP to guide its implementation (October, 1994); (b) sector-specific laws and regulations that predate the NLEP; and (c) provincial environmental regulations and standards. 6.11 The new national Law on Environmental Protection (NLEP): (a) identifies in general terms the responsibilities of the state center, provinces, organizations and individuals to prevent and remedy environmental deterioration and pollution, and carry out specified environmental protection functions; (b) provides for development of environmental criteria (standards) and submission of environmental impact assessment reports on new and existing facilities; (c) provides for responsible parties to pay compensation for environmental damage; (d) establishes the right of individuals and organizations to petition for enforcement of environmental regulations; (e) calls for civil and criminal penalties for violations; and (f) encourages international environmental cooperation. Its implementing regulations (governmental Decree No 175/CP), issued in October 1994, provide broad guidelines for (a) division of responsibilities in environmental protection among the Ministries, provinces and peoples organizations; (b) envirommental environmental impact assessments; (c) environmental pollution prevention and disaster control; (d) financial sources; and (e) enviromnental inspections and standards. 6.12 The new Land Law (1993) enhances the role of the market in allocating and transferring land, provides for valuation of land for purposes of allocation and taxation, calls for an annual tax for all land, similar to the current agricultural land tax, provides for transfer of land use rights, limits land allocations to individual households, and identifies state land management functions. 6.13 The Law on Mineral Resource Exploitation (1989) contains provisions for environmental protection and occupational health in connection with the exploitation and processing of mineral resources. The Council of Ministers issued a Directive (No. 95/HDBT) on implementation of the Law on Mineral Resources in March 1992. The Ministries of Heavy Industry, Finance, Commerce and Tourism and the State Comrnmittee of Cooperation and Investment are preparing implementing regulations for that directive. 6.14 A Maritime Law was enacted in 1990, and ordinances have been formulated for protection and development of marine resources. Domestic legislation is being adjusted to conform to the 1982 Law of the Sea Convention, to which Vietnam is a party. Laws are also being prepared on the management of the Vietnamese Exclusive Economic Zone (EEZ) and continental shelf. 6.15 The Government is preparing regulations under the Gas and Oil Law and Mining Code, with assistance from ESCAP and Australia. National and overseas participants provided comments on the draft Mining Code at a round-table consultation in November 1991. 6.16 A Law on Labor Protection was promulgated in 1991, there is also a Code on the Protection of People's Health. A new Labor Code was enacted in June, 1994. The Investment Law (1987) requires foreign investors to provide for environmental and occupational health protection. 6.17 At the provincial level, Hanoi enacted local regulations including ambient and work place standards, and a plant inspection system in 1991. Effluent limits are sparse, however. Draft regulations, including workplace and effluent standards, inspections, and procedures for environmental -106- evaluation of proposed investments are under consideration in HCMC. Several other provinces have enacted regulations similar to HCMC's draft regulation. 6.18 It should be noted, however, that in the case of some of the sectoral legislation, implementing ordinances and regulations remain to be enacted. In some cases, regulations have been enacted but are not being implemented. C. Legal and Institutional Issues and Options Environmental Legislations and their Implementation 6.19 It is essential that environmental laws be clear and certain, both to promote environmental protection and to provide government agencies and investors the degree of certainty on environmental regulations that they need in order to invest. An examination of the various laws and regulations indicates that Viet Nam has made significant progress in terrs of the necessary scope and clarity towards an environmental program. The Foreign Investment Law and the NLEP (including Decree 175/CP) are important prerequisites in this progress. The latter regularizes the structure of administrative responsibility for environmental management at the State and local government levels, consistent with administrative mechanisms in other line agencies. This means that local environmental management authority is delegated to the provincial Departments of Science, Technology and Environment (DOSTEs) in parallel with that of MOSTE at the State or central level. Local departments are entitled to government budgetary funds for the staffing of these agencies. This is a generally positive step, formalizing a new administrative responsibility in a field important to local development efforts. However, there are some implementation concerns in those large cities which had already organized their own Environment Committees (ECs). The ECs had no legal powers, but they were typically chaired by the Vice-Chairman of the People's Committee and reported directly to the PPC. This structure gave them a high political profile and direct access to decision-makers, while enabling flexible staffing from other relevant provincial bureaus. Under the new DOSTE, the Environment Service may be somewhat isolated from decision-making in a relatively minor provincial department, facing new bureaucratic approval procedures to its decision-making proposals. Of the four cities which previously had ECs, only Ho Chi Minh City preserves the structure, which is now chaired formally by the Director of DOSTE. It remains to be seen whether new informal structures for coordination and management will arise at the local level to replace the ECs. 6.20 To clarify Viet Nam's jurisdictional responsibilities in the fields of environment and natural resources, and thereby improve decision-making, GOV should eliminate unnecessary or possibly confusing overlap between the relevant agencies. For example, it was reported that as many as nine national-level agencies have a role with respect to water utilization. There also appear to be inconsistencies between land, water, and forest laws, such as in sections dealing with definitions, permits, and dispute resolution. The omission of key agencies involved in environmental or pollution management would also need to be corrected in the relevant regulation. For example, marine pollution caused by petroleum operations provide that the Ministry of Heavy Industry has the authority to stop actions that threaten the marine environment, but no reference is given to the environmental responsibilities of other important agencies (e.g., Ministry of Water Resources and Ministry of Aquatic Products). GOV should undertake a comprehensive review of all environment-related legislation and regulations for clarification and improvement. To do so, the GOV should place environmental law expertise at the national law-making level, encouraging such experts to work cooperatively with a well-supported environmental law and regulation team permanently based in MOSTE with coordination in key DOSTEs. Simultaneously, technical assistance should be provided to train and place environmental - 107 - law drafters (lawyers, or skilled drafters) at the central national level and in MOSTE, as well as in appropriate sectoral agencies and several of the provincial Environmental Committees. These national environmental experts should, from time to time, also meet or receive technical assistance from outside legal consultants whose review may assist to clarify gaps or inconsistencies in the current environmental legal system. This method of technical assistance could build upon and continue in a mnanner similar to the training provided by the Government of Singapore for environmental inspectors. 6.21 In general, the draft regulations for large municipalities (especially Hanoi and HCMC) provide the basis for a comprehensive local regulatory framework. However, in addition to checking the consistency with NLEP and Decree 175/CP, the drafters of the HCMC and other provincial regulations should consider including additional measures, such as: (a) point-source emission and effluent standards; (b) detailed siting requirements for potentially polluting industries and businesses; (c) a requirement that businesses and household connect to public drainage and sewerage works, including payment of appropriate user fees; (d) industrial pre-treatment discharge requirements; (e) refinement of the penalty scheme for environmental violations, including per day schedules, so that penalties increase until the violations stop, and adjustment of penalties to reflect inflation; (f) extension of the environmental approval requirement to "reconstructed facilities" and "major modifications;" and (g) measures to ensure adequate enforcement, including staffing and training of DOSTEs and/or ECs. Institutional Design Issues 6.22 Considerable time and work will be required to build capacity within the lead environmental agencies to develop and effectively use environmental management tools. By considering the design 'issues outlined below and providing immediate support for initial actions to develop a regulatory framework, the Government can begin to address the needs for implementing the NLEP. 6.23 Institutional design issues frequently encountered by new environmental agencies include: (a) policy direction and cross-sectoral conflict resolution; (b) decentralization of environmental management functions to local and line agencies; and (c) public access to information and participation in environmental management. Viet Nam will have to make its own choices in these areas, but in so doing, it should consider the experiences of other countries and some basic requirements for effective environmental management. Policy Direction and Cross-Sector Conflict Resolution 6.24 The main venue for addressing environmental issues in development projects and investments to date has been the National Project Evaluation Board (NPEB) under the chairmanship of the SPC, to which MOSTE submits comments on environmental assessments of selected proposed investments. Although the NLEP and Decree 175 refer to dispute resolution mechanisms for intra- or inter-provincial environmental problems, it is not clear if the NLEP or Decree 175 provide for a supra- ministerial dispute resolution mechanism which offers environmental policy direction to the Government (and MOSTE) and resolves cross-sectoral conflicts between environment and development objectives or between sectors under specific projects. In terms of inter-provincial incidents, pollution or degradation problems, environmental conflict resolution rests with MOSTE, with appeal prerogatives to be directed to the Prime Minister for decision. In practice, the need for such a resolution has been essentially - 108 - reactive (after the incidents have occurred) rather than preventive (at the policy decision or pre-project investment approval stage, when consultation of affected parties needs to be undertaken). Some informal mechanism are emerging ("Club of 10", environment assessment review committees), but it is unclear whether they are enough. The experience of other asian countries may provide a guide for GOV to consider. 6.25 Several Asian countries have supraministerial "pyramid" structures above their environment- related ministries for conflict resolution. The differences in their composition and responsibilities, as discussed below, are instructive. In China, the State Environmental Protection Council (SEPC), which is chaired by the Vice-Premier of the State Council, includes representatives of 30 ministries, and the National Environmental Protection Agency is its secretariat. The SEPC meets quarterly to provide policy direction on environmental matters and is closely involved in negotiation and promotion of environmental legislation, but does not have a conflict resolution function. The National Environment Board of Thailand (NEB) has a similar structure. It is chaired by the Prime Minister, with the Office of Environment Policy and Planning of the Ministry of Science, Technology, and Environment acting as the Secretariat. NEB includes half the cabinet and has a policy mandate under the new environmental law. However, the Prime Minister chairs a large number of such special-purpose boards, and this limits the attention he devotes to NEB, and therefore its effectiveness. The NEB has also not been noted for resolving "interministerial" conflicts. 6.26 India has an interministerial dispute resolution mechanism whose scope includes environmental disputes. Environmental disputes are considered by the Cabinet Secretary, who convenes a meeting of the secretaries of the Ministry of Environment and Forestry and other concerned ministries. If this group cannot reach a solution, the dispute is remanded to a cabinet meeting chaired by the Prime Minister. Malaysia is considering establishing a National Environmental Council, which would be chaired by the Deputy Prime Minister, include elected officials, receive technical back-up from a secretariat jointly staffed by the Economic Planning Unit and the Department of Environment, and perforn both policy direction and conflict resolution functions, including mediation of federal and state roles in environmental management. In Sri Lanka, the National Environment Steering Committee, which is chaired by a Deputy Prime Minister, includes approximately ten Vice-Ministers, receives technical support from the environmental unit of the Ministry of Policy Planning and Implementation (not the weak and understaffed Ministry of Environment), and meets monthly to coordinate donor assistance under the National Environmental Action Plan. In Japan, the focus is very much a "bottom up" process where environmental policy or regulatory initiatives are first presented or pre-negotiated with the relevant firms, industries, ministries and affected households. The prenegotiated proposal is then sent by the Environmental Agency to the Central Environmental Council, cons.sting of representatives from academia, industry, citizens, workers' groups, and local governments. Deliberations by this council, in effect, serve as a "public hearing", as understood in Western terms. Final reconmmendations (not decisions) are transmitted to the Minister of the Environment Agency for finalization. For industrial pollution proposals, regulations require that they be further submitted to the Pollution Control Board (an inter-ministerial body chaired by the Prime Minister with membership comprising ministers from the relevant sectors or authorities) for final approval. 6.27 Given such options, GOV should carefully reevaluate the pros and cons of a supra- ministerial arrangement for resolving disputes or establishment of cross-sectoral environmental policies. It should take into account the following prerequisites to ensure the success of such pyramidal structure/mechanisms: (a) competent technical support by specialists who can articulate environmental impacts, costs, benefits and alternatives; (b) selection of an appropriate chairperson who will devote adequate attention to the council (for this purpose a vice-premier/deputy prime minister may be preferable - 109 - to the premier or prime minister); and (c) Government's continuing conmmitment and support for this structure. The study recommends that before any such supraministerial body is established, its fumctions (whether policy, dispute resolution or both) should be clearly identified and the institutional capacity to support it be carefully evaluated. Decentralization of Environmental Management 6.28 While enactment of umbrella legislation expressing national consensus on environmental goals, regulations and standards is desirable, when national-level consensus remains incomplete and implementation capacity an experience is limited at the central level, the best strategy may well be to experiment with pollution control measures and regulations at the provincial and local level first, and apply the experience gained at the local level to refine implementation regulations at the national level. The positive experience of other countries with such local initiatives suggests that capacity-building at the provincial level should be encouraged (or at least not constrained) by the national governrnent. In Japan, for example, municipal pollution control ordinances (starting in 1949) preceded the 1967 Basic Act for Environmental Pollution Control and its 1970 revision. In China, the State Council has authorized a dozen cities to design and implement local environmental management strategies on a trial basis, leading to framing of national legislation based on the results of the municipal trial efforts. Once local regulations are proven effective, it is easier to seek national legislation to legitimize and support further development of the regulatory framework. The advantage of obtaining concrete local experience before framing national legislation is that the resulting laws should be more realistic as well as more acceptable to affected groups at both national and local levels. The consensus resulting from working at the local level first is all the more important in low-income countries lacking the resources for comprehensive enforcement of environmental regulations. This appears to be the appropriate model for Viet Nam. 6.29 At least one city, Hanoi, is gaining experience with the implementation of local regulations (enacted in 1991). The HCMC Environment Committee has drafted environmental regulation, including ambient and effluent standards and local environmental investment application and inspection procedures. At least four local Environment Committees (Hanoi, Dong Nai, Tay Ninh and Vung Tau) have recently promulgated local environmental regulations and standards similar to HCMC's. The HCMC regulation, which was drafted several years after Hanoi's, sets standards for a more manageable number of pollutants according to the uses of the receiving bodies, and proposes a practical environmental application review process. The experience gained through such local experimentation should facilitate more durable consensus at the national level, especially in terms of feedback on the implementing regulations for the NLEP. 6.30 There are, however, a number of areas in which MOSTE needs to provide leadership to the DOSTEs or the ECs. These include: (a) completing the development and promulgation of national minimum amnbient and effluent standards, and ensuring reasonable consistency among provincial standards; (b) developing more detailed guidelines and delegating responsibility for implementation of environmental assessment procedures; (c) monitoring DOSTEs/ECs' environmental evaluation of investment project proposals; and (d) central oversight of local monitoring and enforcement of agreed standards. In cases where local governments do not show interest in developing environmental capacity and serious environmental problems exist or are likely, MOSTE may wish to consider seconding staff and/or providing initial funding and training for fledgling local environment units. 6.31 The configuration of local environmental protection bureaus in other Asian countries reflects the broader framework of decentralization in those countries and the availability of technical expertise at the local level. In Japan, the municipal Environmental Protection Bureaus (EPBs) were able to build technical credibility quickly in the early 1970s, due to the ready availability of technical expertise in - 110- environment-related disciplines at that level and an elaborate system for seconding of highly qualified technical personnel among line agencies, local EPBs and the National Environment Agency. China has local EPBs at provincial and municipal levels, and Taiwan at county and district levels. Korea has six Regional Environment Offices, each covering several provinces, as well as fourteen municipal/provincial Departments of Environmental Protection. 6.32 Given limited resources and technical expertise at this early stage in the development of environmental institutions, Vietnam may wish to consider a two-stage plan for development of local environmental management capacity. Under such a plan, strengthening of Departments of Science, Technology and Environment or the Environment Committees in all the provinces would be the ultimate objective. In the interim, however, a few Environment Committees, such as Hanoi, HCMC and selected other large provinces that have already undertaken environxmental initiatives, could be strengthened initialy, and could then offer environmental management services to other provinces on a regional basis. Some regional provision of services is already taking place between HCMC and neighboring provinces. 6.33 As noted above, the Science and Technology Departments of the line ministries have also been instructed to take on sectoral environmental management functions, but their roles and responsibilities remain to be more clearly defined. At the same time, as research institutes under the line ministries seek new mandates and sources of funds during the transition to a market economy, some institutes have proposed environmental management roles for themselves, thus complicating the situation. 6.34 The allocation of environmental management functions between MOSTE and the line mninistries needs careful consideration. While internalization of environmental objectives and management capabilities by the line ministries may be an ultimate objective, the disadvantages of premature environmental self-regulation by the line ministries could include: (a) conflict of interest between line agencies' development and self-regulatory functions, and a tendency to cut back on environmental unit staff and financial resources when budget cuts are made, given that these agencies' first priority would not be the environment; (b) initial lack of environmental technical expertise in the line agencies, and difficulty building a critical mass of environmental skills and experience in the line ministries; and (c) isolation and bypassing of MOSTE, which would have limited experience, technical or financial resources to offer to other agencies. At the same time, strengthening MOSTE to undertake sectoral environmnental responsibilities would also be unrealistic. The need is to identify the priority sectoral environment management problems or issues (e.g. soil erosion, industrial effluent discharge, acidification of water) which require attention. MOSTE and the concerned line agencies should agree on minimal national standards of "pollution", 2/ which have to be adhered to. Monitoring and enforcement between line agencies and MOSTE and between the center (either MOSTE or the ministerial line agency) and the Provinces should be sorted out in an orderly, consistent manner. 6.35 There would, in any case, be the need for MOSTE to: (a) build its own capacity to coordinate and provide technical support and specialized back-up expertise to the Environment Committees and line agencies in a more formalized arrangement than at present; (b) provide guidance to the line ministries' Science and Technology Departments on interpretation of environmental regulations and development and use of environmental management tools, including sectoral environmental assessment criteria and procedures, review and incorporation of EA findings into project design, and monitoring and enforcement of environmental conditions in project approvals and investment licenses; 2/ Soil Erosion can be considered as non point-source pollution and monitorable standards or guidelines can be set for cultivation with respect to maximum slopes and types of susceptible soils where mono-cropping of annuals cannot be permitted. - Ill - and (c) encourage and coordinate development of a cross-sectoral network of Ministerial Science and Technology Departments. Public Access to Information and Participation in Environmental Management 6.36 The membership of the few environmental NGOs in Vietnam consists mainly of civil servants and they lack autonomy. MOSTE and the Environment Commnittees generally respond to public complaints about existing or anticipated pollution from neighboring plants largely reactively, by fielding inspection teams, providing clean-up advice to plants, and mediating agreements on compensation or mitigation of impacts to be undertaken by plants. 6.37 The experiences of Vietnam's neighbors suggest that rising incomes and liberalization will stimulate higher public expectations and the growth of more autonomous NGOs. A key determinant of the effectiveness of MOSTE and the Environment Conmnittees will be their management of relations with NGOs and the public. MOSTE should share responsibility for environmental awareness-raising with NGOs. The more such public awareness-raising and education can be provided by NGOs, in cooperation with MOSTE, the greater MOSTE's leverage. In some industrialized countries, such as the Netherlands, the consensus-building, leverage-enhancing, and whistle-blowing functions of NGOs are considered so important that environrmental agencies provide financial support to NGOs. In the Unites States, the Environmental Protection Agency reports that of all the whistle-blowing cases of pollution, about 90% were the result of citizen reports rather than governmental monitoring and reporting. In fact, it is the adverse publicity resulting from such citizen reports (sometime with NGO support) which results in corrective action. 6.38 Key to strengthening NGOs' and the public's roles will be: (a) development of consensus on the public's "right to know" and procedures for making environmental data, such as ambient levels of priority pollutants, environmnental quality objectives and timetables, effluent standards, and point source emission measurements available to NGOs and the public; and (b) development and implementation of procedural points of access for NGOs and the public to influence environmental policy, planning, and projects, and to seek relief from environmental impacts. The NLEP and the implementation decree (1751CP), however, contain relatively little in the way of guaranteed public participation in environmental management. This gap in public participation arrangements should be remedied in the finalization of the regulations or ministerial instructions for the preparation and review of environmental assessments. D. Environmental Management Tools for Transitional Environmental Action 6.39 While environrnental policy and practice is still in transition in Vietnam, much has been accomplished by the Government of Viet Nam especially in the past year. For example, enabling legislation (NLEP) has been passed; and, within the framework of Decree 175/CP, MOSTE has introduced provisional EA guidelines and is close to a set of pollution standards for a large number of environmental pollutants. Furthermore, staff size of NEA has doubled and every province and municipality now has a functioning Department of Science, Technology, and Environment. More than 800 EAs have been completed, and a functioning environment impact assessment review process is in place although a number of gaps in coverage and operational clarifications need to be sorted out (see para. 6.40 below). 6.40 Furthermore, although broader pricing policy measures are possible (see Chapter IV), limited institutional capacity and apprehensiveness concerning their impact precludes the widespread use of market-based tools like pollution taxes and charges in the short term. A practical way to initiate - 112 - appropriate development of environmental management capacity would be to: (a) initially focus on the relevant environmental agencies' capacity to appropriately use a few key environmental management tools, including (i) the increasing use of environmental assessment, (ii) more focused and practical formulation and application of environmental standards, (iii) improved investment appraisal procedures incorporating EA findings, and (iv) selected inspections and enforcement; and (a) investing in human resource and organizational development. A prerequisite for the above is the improvement of environmental data collection and the establishment of key monitoring information and mechanisms (see paras 5.64 and 7.37 below). Environmental Assessment and Consultation 6.41 EAs have been prepared in Vietnam on an ad hoc basis in recent years, mainly for large power, hydro, and oil and gas projects (of which several EAs are retroactive and are intended to remediate damage already done in the absence of an adequate EA during project preparation). A regional environmental assessment has been prepared for the Mekong River Basin. However, there is no systematic screening of proposed projects to determine which require EAs3/; project proponents (Science and Technology Departments of line agencies, for example) have little or no capacity or experience overseeing preparation of EAs; many of the EAs do not meet international technical requirements; and review and incorporation of EA findings into project approvals are carried out on an ad hoc basis. 6.42 In terms of EAs, the NLEP and Decree 175/CP include definition of broad provisional guidelines and allocation of responsibilities between local and State (central) authorities, and (to a lesser extent) between MOSTE and the central line agencies. The guidelines state that the agencies cannot review their own EAs, and formalize the EA review committee procedure (e.g, through Evaluation Councils) which includes experts from State agencies, provincial government and local public organizations as appropriate. The broad representation of membership on EA review committees (which are required under the new regulations to include national, provincial, and sectoral expert representatives) should improve familiarity with the process in many government agencies and help link it with established planning procedures. Also there are specific time requirements for the review of the environment impact assessment reports, including the review of challenges to the EA decision. Overall, proposals for environment impact assessments are sound; and SPC and SCCI have indicated their endorsement of the formal EA review procedures for all investment projects. 6.43 At the implementation level, however, early feedback indicates the need for improvements/clarifications in the areas given below: 3/ The government has only issued a "negative" list of "projects that are not required to submit environmental impact assessment reports when applying for investment license". This list includes: consultant offices; offices; banks, financial offices; communications and related services; education and training; publication distribution agencies; schools; hotels of less than 50 rooms; trade centers an super markets; projects for installation/assembly of electronic and mechanic equipment; business services; garment sewing; food processing with productivity of under 100,000 tons per year production of construction materials with small capacity (bricks: less than 2 million per year, quarried stones: less than 100,000 tons per year); spinning/weaving (excluding dyeing, bleaching or design printing); commodity making (making shoes, office tools); wooden production (excluding wood processing); eating and drinking services; temporary living area of less than 500 families; and water supply in district towns. The impliction is that all other projects (irrespective of their size) would need to submit environment impact assessment reports. It may be preferable to have a "positive' list of project which require EAs. - 113 - First, basic environmental legislation contains little reference to public participation. 4/Although an Evaluation Council may be established to evaluate project environmental impact, public participation in this Council is optional. Today, most countries' EA legislation expressly provide a right of public participation either in the EA law or through associated legislation. (For example, in Germany and the United States, public participation is provided for in administrative procedure law). In addition, international lending agencies like the World Bank will not finance projects which require an environmental assessment unless there has been adequate public participation. Thus, the regulation should be supplemented instructions which establishes a clear right for the public and other interested and involved entities (physical and legal) to issue written comments on projects. There should also be a right to a public hearing to discuss the project before the EA is prepared, and then to comment on a draft before the EA is final, including the right to question the experts who prepared the EA. Second, no mention is made concerning the funding of EAs, especially for government owned projects. Similarly, it is not clear how governmental review costs (e.g., evaluation council) would be covered. Third, the jurisdiction of evaluation responsibilities is unclear (particularly MOSTE vis-a-vis central implementing Ministries) as are the conditions which require an Evaluation Council to be created (Article 14) and the meaning of "accountability of DOSTEs" (Article 6). Fourth, jurisdictional responsibilities among the "state agencies in charge of environmental protection" (Article 15, 1) are still unclear. In particular, who would be in charge of enforcing the EA evaluation decisions (Article 20)? The above gaps may well need to be remedied by SPC and MOSTE perhaps in the form of Ministerial Instructions for Environmental Impact Assessment. 6.44 Despite the lack of formal requirements, consultation on resettlement and compensation issues does occur on an ad hoc basis. Families living near the Tri An reservoir, for example, were reportedly consulted (it is not clear on what matters or at what stage of project preparation) and received compensation (it is not clear whether for land, houses or crops). Although improved infrastructure and medical care were provided in the receiving area, the resettled families reportedly found their resettlement arrangements unsatisfactory. Cases such as this and the increasing volume of pollution complaints in industrial areas are increasingly bringing consultation issues to the Government's attention. 6.45 Consultation is being developed for foreign supported projects on an ad hoc basis depending on what is the requirement of the project funding agency. GOV, in conjunction with the sectoral ministries and the provinces, should establish a common framework on broad, effective consultation for environment assessments. 4/ At the local level, Hanoi, and Ho Chi Minh City's regulations require local DOSTEs or Environment Committees to investigate pollution complaints brought by affected people. There is no provision, however, for ex-ante consultation during project preparation. - 114 - Environmental Standards and Regulatorv Instruments 6.46 The EA process alone cannot ensure adequate management of environmental impacts; linkage of EA to other tools, including standards and project appraisal, is also required. 6.47 The Ministries of Health and Labor administer national health and occupational safety standards, but there are neither national air and water quality standards nor national effluent standards to guide determinations of allowable discharges from point sources. Hanoi has amnbient fresh water and workplace standards, which omit some basic parameters but cover an unmanageably large number of other parameters, but no effluent standards. HCMC ambient standards appear to be reasonable and appropriate in terms of their stringency and the number of parameters covered. HCMC has also proposed effluent standards, which need to be further elaborated by industrial subsector. 6.48 Ambient standards, which set air and water quality goals and form the foundation of the regulatory framework, should cover a manageable number of parameters (probably in the range of 20) and should include both basic parameters that provide a general point of reference for evaluating environmental quality, e.g. particulates, dissolved oxygen and PH, and key human health parameters, e.g. sulphur dioxide, lead and mercury. Effluent/emission standards, which limit the total quantity or concentration of a pollutant discharged from a point source and are intended to achieve ambient air and water quality objectives, are essential yardsticks for evaluating the acceptability of predicted impacts. 6.49 The stringency of effluent standards for some pollutants varies significantly among industrialized countries, and reflects not only physical factors, such as the number and geographical concentration of point sources, the availability of state-of-the-art pollution control technology, and capacity to pay for it, but also national approaches to building consensus. The U.S., for example, has frequently adopted stringent ("technology-forcing") standards for which the technology capable of achieving the standard has not yet been developed. Japan, on the other hand, has generally adopted a more gradualist approach, featuring less stringent national effluent standards, which are incrementally tightened as increased financial resources and more effective technologies become available. An important feature of the gradualist approach is that it relies mainly on consensus with affected industries (which may be an elaborate and time-consuming process) and carefully targeted subsidies, rather than elaborate enforcement. An advantage of the gradualist approach is early incremental successes in industrial pollution control, which help build the credibility of the regulatory system. 6.50 The DOSTEs and Environment Committees should consider a dual approach to the setting and application of effluent standards, in which: (a) new industries would be subject to relatively stringent effluent standards covering the key health-based pollutants, and immnediate compliance would be a condition of licensing; and (b) existing industries would be subject to phased compliance schedules that would be tailored to the individual plant (within a reasonable range), and would be tightened as increased financial resources and more effective technologies become available. The DOSTEs and Enviromnent Committee could, for example, negotiate individually tailored compliance schedules with existing industries. Existing industries receiving external assistance, such as state enterprises engaged in an industrial restructuring program, should have more demanding compliance schedules than industries not receiving assistance. Similarly, state enterprises undergoing privatization should be held to a more demanding compliance schedule than state enterprises not undergoing privatization and existing private industries. MOSTE should monitor provincial ambient and effluent standards to prevent excessive variation among different provinces' standards which could lead to competition between provinces seeking to attract new investment by undercutting other provinces' standards. Once experience with ambient and effluent standards is gained in a few provinces, MOSTE should consider developing or refining national ambient and effluent standards, as necessary. - 115 - 6.51 Overall Assessment of HCMC and Hanoi Standards. Positive aspects of the HCMC standards include: (a) the manageably small number of parameters covered; (b) their distinction between new and existing facilities, with more stringent limits for new facilities; and (c) their classification of water bodies by use, with more stringent limits for waters used for drinking and domestic purposes, than for other surface waters. To further improve HCMC's standards, the Environment Committee should consider developing point source ernission/effluent standards for a few highly polluting industrial subsectors, in order to promote more cost-effective targeting of scarce regulatory resources. The Hanoi Environment Committee should consider revising their ambient standards, which are based on 1972 air quality measurements, along the following lines: i) reduce the number of parameters; and ii) consider more stringent limits for some parameters, according to the age of the facility and the use of the receiving water. Consistency with national standards should also be sought. 6.52 Investment Approvals and Licensing. Given improved regulations, EA review needs to be more clearly incorporated into project and investment appraisal procedures and EA findings need to be translated into environmental conditions attached to investment licenses. At the national level, the investment approval process administered by the National Project Evaluation Board (NPEB) and the State Committee for Cooperation and Investment (SCCI) would need to include environmental screening of proposed investments, preparation of environmental assessment for investments with potentially significant adverse impacts, and provision of technical advice on clean technologies, and environmental conditions should be attached to investment approvals. Under Decree 175/CP, the Hanoi and HCMC Environment Committees or (DOSTEs) and MOSTE are authorized to carry out EA review and conmnent on environmental aspects of proposed investments (if necessary, through evaluation councils). However, clear procedures and capacity for systematic environmental review are still lacking at both levels. Because of this, the Provincial People's Committees and NPEB/SCCI are unable to formulate appropriate and cost effective environmental conditions to be attached to investment licenses. These limitations need to be remedied in a phased manner. 6.53 Given MOSTE's present limited capacity and the urgent need to increase capacity to put in place implementable regulation/procedures and national environmental standards, the work of building capacity in these areas should be divided as follows during the next two years: (a) SCCI/NPEB should receive assistance to carry out environmental evaluation of investment applications and recommend appropriate envirommental conditions to be attached to investment licenses; (b) MOSTE should receive assistance to develop national standards and EA procedures and to coordinate with SCCI/NPEB and the DOSTEs and (c) selected DOSTEs or Environment Comunittees should receive assistance to develop local EA procedures, pollution source inventories, siting criteria and local effluent standards, as needed. 6.54 Inspections and Enforcement. The experiences of Hanoi's Board of Inspectors in carrying out environmental inspections illustrate some of the issues involved in developing a regulatory system with limited resources. In over 200 plant inspections in 1992, emissions exceeded air quality standards in 70% of cases. In a number of these cases, the inspection team mediated disputes between polluting plants and nearby residents, and suggested low-cost measures for reducing emissions. Exceptional closures occur occasionally (eg. the sulfuric acid plant in HCMC, which closed for nearly a year pending installation of pollution control equipment). However, given the financial difficulties of many firms, which have obsolete equipment and an uncertain future in light of recent trends in the industrial sector, the employment concerns of the municipal government and the lack of incremental resources for pollution control, most of the plants that are in violation can do little more than make small improvements in housekeeping, and the DOSTE or Environment Committee generally does not press them to do so. - 116- 6.55 To measure achievement of ambient quality objectives and ensure compliance with effluent/emission standards, an ambient and effluent monitoring program is essential. As noted above, available ambient and emission monitoring data in Vietnam are fragmentary, and scarce monitoring resources are not targeted to specific monitoring and enforcement objectives. Although the Hanoi Board of Inspectors has authority to levy fines of VND 50,000-500,000 (US$ 5-50), the fines are not set sufficiently high to affect polluting plants' behavior, and are not systematically enforced in any case. 6.56 If adequate attention is given to developing consensus on standards and compliance schedules earlier in the regulatory process, fewer resources will be required for enforcement. The resources allocated to enforcement in other countries vary inversely with attention devoted to building consensus on standards and compliance schedules. In the U.S., where standard-setting has, at times, been adversarial, enforcement has often required substantial resources. In Japan, where abundant attention is devoted to developing consensus, there is intensive monitoring but relatively little is spent on enforcement. Even if Vietnam should give priority to consensus-building and de-emphasize enforcement, a basic enforcement program, including legal sanctions for repeated violations, is essential. 6.57 Given limited resources, it is essential that the Environment Committees target a limited number of pollutants and industries that are within their monitoring and enforcement capacity. Without monitoring and enforcement, EA and development of a regulatory program can become a paper exercise. However, Vietnam cannot afford ambient and effluent monitoring and inspections that are not directly linked to decision-making. To use limited monitoring and inspection resources cost- effectively, monitoring and inspections should target new investments whose licenses indude environmental conditions, and toxic and hazardous emission sources. 6.58 The Ministry of Environment of Singapore provided training for environmental inspectors from HCMC in early 1993, and such training should be expanded. Singapore has also provided comments on HCMC's draft enviromnent regulation and standards, and has offered to assist the HCMC People's Committee to streamline its investment approval procedures. E. Local ParticiDation. Public Awareness. and the Role of the Private Sector 6.59 Institutional developruent alone cannot bring about efficient changes in behavior for improved environmental actions. An increased role for two complementary developments is essential: (a) local participation and consultation; and (b) private sector, including NGO, involvement. 6.60 Local participation and consultation remains one of the main weaknesses in the system of environmental action in Viet Nam. The report has already pointed out the areas where it is particularly important for local needs to be taken into account to ensure relevence and success: technology transfer; joint protection of convervation forests; pollution monitoring; and enforcement of standards, particularly for the urban and industrial sector. 6.61 Awareness of local agricultural and socio-cultural conditions and the increased participation of local communities and households are particularly important for technology transfer in the hill areas, where variation in micro-climate, terrain, and ethnic mix of the population make it difficult to generalize agricultural extension recommendations. Similarly, in the protection of valuable biodiversity and ecosystems against various degradation threats, joint household-local authority consultation and arrangements are essential. Households have to be able to understand the benefits they will derive from forest protection. If the livelihood of farmers or rural households are compromised by the protection effort and no alternatives are given to compensate for such a loss, the success of the protection effort can easily be jeopardized. - 117- 6.62 For urban and industrial pollution, it has to be realized that no matter how well laws and regulations are written, governmental capacity in monitoring and enforcement will continue to be limited (because budgetary funds are scarce and well trained personnel may not be readily available), and, as argued above, focused attention on a few priority areas is critical. Rather than waiting for environmental disasters to occur, attempts at effective pre-emptive monitoring must, however, include: (a) Giving local communities and households the opportunity to participate in programs and measures which will directly affect them. The community spirit nurtured through years of cooperative and communal activities may still be harnessed for the environmental good, especially in the North. (b) Greater involvement of non-governmental organizations (NGOs). Although no "true" environmental NGOs (ie. those which do not receive grant funding of any fomn from government) exist presently, many are beginning to function more independently as outside sources of funding increasingly become available. No regulations govem the formation of independent NGOs and many are established with permission (and some initial funding) from local authorities. Organizations with a country-wide network which are evolving into de facto NGOs include the Youth Organization (a union), women's groups (unions), and a number of professional associations or institutes (e.g. forestry, chemical, horticulture). (c) Greater involvement of the private sector. Although there has been little direct private sector involvement in environmental action (except as the polluter), there has been changes. Staff of various central or provincial state enterprises are already branching out on their own, initially on a part-time basis, to provide consultancy services to foreign investment firms (eg. design and construction of wastewater treatment plants for new factories) and local authorities (environmental monitoring, baseline studies). The Potential exists interalia for private initiatives in testing laboratories for environmental quality (especially water), environmental impact assessments, pollution monitoring, and soil analysis. -118- VII. AGENDA FOR ENVIRONMENTAL ACTION: SEOUENCING PRIORITY PROJECTS AND TECHNICAL ASSISTANCE A. Introduction 7.1 Given the enormous needs for development in Viet Nam and the limited financial, technical, organizational, and trained manpower capacity to tackle these needs, concerted attempts to identify developmental priorities are critical. Such an attempt was made in the previous chapters for the required environmental actions by major ecosystems and subsectors of the economy. Thus, for critical problems which can be tackled immediately, early identification of solutions will enable GOV to begin early implementation. At the same time, a start can be made in understanding and analyzing other problems which may be no less critical but, because they are substantially more complicated and run the risk of costly failure, have to be studied in greater depth. In the area of environmental action where interactions among cause and effect predominate, it is not only necessary to get the sequencing right for each subsector, but the sequencing will have to be linked to a broader multi-sectoral framework. Where the government's role is important, as is the case with the environment, successful environmental action also means that the sequencing and linkage have to be tailored to the government's capacity to plan, implement, and coordinate more efficiently. It is in improving all these aspects and funding the priority programs and projects that foreign assistance support is particularly important. The philosophy and approach for the integration and sequencing of environmental projects are outlined below. 7.2 Proposals for integrated action or management plans have been made in innumerable reports. But being able to achieve quickly integrated planning and implementation in any country is a myth. For a number of countries (e.g., Thailand), the prevailing governmental and political decision making structures make integrated planning such a daunting task that, after numerous attempts, they have, in effect, been abandoned. In the case of Viet Nam, the prospects for achieving integrated development is better. First, the discipline and experience from having been a planned or "controlled" economy can potentially be applied toward the planning of coordinated environmental action. Second, at the provincial (implementation) level, many of the sectoral services are provided under one agency (e.g., agriculture, forestry, and fisheries) unlike at the central level where they are in separate ministries. Nonetheless, to ensure success, the implementation plans and programs will have to be designed to minimize the need for integration. This could be done by: (a) packaging the program or project in "digestible" or implementable chunks; (b) initially limiting coordination to a few central agencies; and (c) consulting with the appropriate stakeholders at the design stage. Furthermore, if agency roles in the various programs are clearly delineated, the sequencing of development is appropriately designed, and the relevant budget is allocated in a timely manner, the need for closely supervising integration can be avoided. This is particularly true if the overall framework for development at the sub-sector or regional level has already been developed and broadly agreed upon by the key agencies and the affected parties. 7.3 The overlapping coverage of the plethora of plans and programs at the national and regional or sub-regional level (see figure 7.1) can appear overwhelming. The 1991 National Plan for Environment and Sustainable Development (NPESD) itself is related to at least ten plans or national programs. The problem that overlapping coverage poses for planning and implementation arises only if key elements of the framework for each program conflict with each other or important interlinked developments have been omitted. At the project level, however, these conflicts can either be avoided or resolved. Once the objectives are clear, the criteria for selection is established, and indicators to apply the criteria to are available, the choice of projects or project components (for implementation at the provincial or sub- provincial level) is usually unambiguous. At the project level, objectives are bound to be multi-purpose Chart 7. 1: NPESD and its Linkages with Other Plans, Programs, and Projects National Plan for Environment and Sustainable Development National Level Plans Upland/Hill/Mountain Areas Coastal/Lowland Areas RegionaVSub-Regional Level Plans and Programs RegionalSub-Regional Level Plans and Programs Provindial aned Sub-Provincial Programs and Prawects Provincial and Sub-Provincial Programs and Projects - 120 - and would therefore encompass key elements from other sub-sectoral plans; hence, any overlap which might exist can be resolved at the project area level. 7.4 Project sequencing is particularly important because if project development were to await the detailed preparation of various "action plans," by the time these plans are completed, some of the ives of the project may not be fulfilled since proposals would have already been overtaken by events, or the environmental damage resulting from having to wait may be made much more costly or even irreversible. In the context of Viet Nam, which has only recently been opened to development support from the West, the first generation projects are usually not difficult to decide upon. Because of their urgency, they are, in any case, likely to be listed among the top priorities of each action plan or program proposed. A start on the urgent projects and initiating further data collection and analyses on second generation projects would ensure that appropriate sequencing can be achieved. The focus in the preparation of various master plans should, therefore, be on getting the objectives, developmental framework, and broad principles and guidelines right. It should be able to anticipate the evolution of key development stages and ensure that the necessary modification in emphasis and approach is consistent with the evolving conditions (e.g., when increased trained manpower is available 'or lessons from implementation experience necessitates changes). This means that action plans, to be living documents, would have to be designed with built-in flexibility to incorporate these changes. 7.5 The more important projects/programs to be supported by foreign assistance are discussed below with respect to the rationale for selection and the requirements for sequencing in line with this approach. In the process, important linkages with respect to other projects or technical assistance will also be discussed. Underlying all the proposed technical assistance is the need to ensure that the relevant TA is carefully sequenced with the assembling of the necessary staff, facilities, and equipment. B. Proiects and Technical Assistance for Forest/Watershed Protection and Barren Land Development 7.6 Foreign assisted projects with this emphasis would have to combine proposals from and support the implementation of the Tropical Forestry Action Plan, the Biodiversity Action Plan, the Barren Lands Program (Decree 327), the Watershed Management Plan, and the Sedentarization/Settlement Program. The focus of these projects would be essentially on the joint protection of priority special use or protection forests and the simultaneous provision of opportunities for affected households to improve their incomes and livelihood. In addition, attention should also be given to the development of unused (barren) lands with the greatest agricultural potential, including the upgrading of existing ethnic minority sedentarized areas or settlements to achieve higher incomes. The objectives/rationale, broad components and status of preparatory work of such projects are summarized below. Objectives 7.7 The objectives of projects of this genre are: (a) to improve the protection of vital (high biodiversity value) forests; (b) to improve the economic use of degraded forests or barren lands; (c) to strengthen the provision of support services for agroforestry and highland agriculture; and (d) to improve the government's capacity to plan, implement, and coordinate natural resource management programs at the national and, provincial levels. The achievement of these objectives would, in turn, result in more sustainable natural resource management and poverty alleviation. - 121 - Components 7.8 Projects with such objectives can be classified into two broad categories with their respective components outlined below. 1. Conservation Forest Area Protection and Development In priority provinces which contain high biodiversity value forests and potentially severe threats to their viability, such project:s should undertake: (a) Demarcation/protection and management in priority conservation forests (special use and protected forests), including preparation of management/implementation plans, construction and equipping of ranger stations, and survey, mapping and monitoring activities. (b) Biodiversity conservation and enhancemnent in the selected priority conservation forests including biological inventories and research; ecosystem rehabilitation; and training and technical assistance. (c) Buffer zone development, including agro-forestry development to provide for: (i) local area needs of fuelwood and other forest products; (ii) support for the development or promotion of environmentally compatible employment or income generating activities to relieve pressure on protected areas (e.g., communal forestry, mixed species reforestation high value tree crops, eco-tourism, small village enterprise); (iii) introduction of low-cost technology to reduce land degradation and stabilize soils; (iv) extension and marketing support; and (v) selected infrastructure development (water supply, health posts, irrigation) for 'vulnerable" areas (representing high incursion risk or poverty). (d) Development of institutional capacity to support the implementation of the above components and to conduct a public education/environmental awareness program. II. Barren Land DeveloRment In priority provinces which contain barren hill land with the best prospects for reclamation and stabilization, such projects should undertake: (a) Provision of productive technology transfer support services (extension support for agro- forestry and farming systems combining livestock and conservation-based forage production, adoption of cost-effective watershed protection measures, and the supply of improved planting material, input supply and credit) that are relevant to the agro-ecological, cultural, and livelihood conditions of the sedentarized or settled communities. (b) Encouragement of appropriate non-agricultural income improvements and employment opportunities (cottage industry, eco-tourism). (c) Support for minor irrigation and watershed projects in the relatively less accessible, level highland areas or minor watershed valleys to improve food crop (rice) production and reduce the need for expanding rainfed food crops onto erosion-susceptible slopes. This would contribute to the improvement of food security and environmental management. - 122 - (d) Upgrade the provision of "basic needs" services and selected infrastructure improvements (household water supply, health, education, and appropriate roads/bridges construction), especially in newly sedentarized ethnic minority communities where the need is greatest. (e) Improve the capacity of settlement agencies to plan for and improve land allocation and better manage settlement areas that are suitable for agriculture. Preparation Framework and Focus 7.9 Project support proposals should be broadly consistent with the major action plans and programs discussed above. They should also take into account the proposals in the relevant provincial development plans to ensure consistency, reduce overlap, and see that issues critical to project success are carefully discussed and consulted at the relevant levels from peoples committee officials to the affected communities. Finally, institutional arrangements to ensure project success should be carefully evaluated. 7.10 Priority Site Selection Process and the Seguencing of Project Preparation. For barren lands with good development potential (para. 5.13), priority project sites can be considered through an iterative process of: (a) first, undertaking ecosystem-based land resources mapping of priority provinces with significant unused "barren" lands; and then, in conjunction with erosion maps and information on soils, climate, slope, geology and seismology, classify the relevant districts into classes of erosion susceptibility (see paras. 5.13 and 5.15 above); (b) compiling or updating socio-economic data of affected communities with emphasis on the ethnic minority groups being assisted; (c) concurrently, compile or update indicators of livelihood unsustainability like the relative shortage of rice fields, rural family income status, and relative shortage of basic needs or social infrastructure for the districts under consideration; and (d) identifying the relevant districts with the best agricultural potential (particularly for forest plantations and forest/fruit tree home gardens) taking into account existing or potential accessibility and the availability of markets. 7. 11 In terms of choosing the priority conservation forests for forest protection project support, the assessment of the Biodiversity Action Plan provides the initial basis for sequencing the selection process (paras. 5.12-5.20). Choice of priority areas should be undertaken on the basis of biodiversity value, the nature of the threats to the conservation forest, and the developmental potential of the buffer zones. Initial assessments indicate the following prospects for first generation projects support with the relevant province(s) given in parentheses (see Annex 1, Table 26): (a) Muong Nhe (Lai Chau); (b) Pu Mat (Nghe An); (c) Hoang Lien Son (Yen Bai, Lao Cai); (d) Cat Ba (Hai Phong) in association with wetland/protection areas; (e) Vo Quang and Ho Ke Go (Ha Tinh); (f) Bach Ma (Thua Thien-Hue); (g) Nam Ka (Dac Lac); (h) Thuang Dong Nai (Lam Dong); and (i) Cat Tien (Dong Nai). Status of Preparatorv Work 7.12 .; number of bilateral initiates have already begun in highland area development, particularly in the Northern Midland/Mountain Region (especially in the provinces of Son La, Yen Bai, Tuyen Quang, - 123 - Hua Binh and Lai Chau) and the Central Highland Region (primarily Dac Lac and Lam Dong). In addition to Sweden and Denmark, projects have been prepared for financing through the assistance of Australia, New Zealand and the Netherlands. Initiatives are in process to prepare a large part of the projects listed above through: (a) CIDA funding to undertake the site-selection data, especially the eco-system based land resources mapping and erosion susceptibility classification for priority districts (para. 7. 10 (a)) and some socio-economic information [para. 7.10 (b)]. (b) a 107 million yen grant funding from the Japanese Policy and Human Resources Development (PHRD) Fund for a Forest Protection and Barren Land Development Project to be financed by IDA, with possible complementary funds from CIDA for a pilot site. Technical Assistance for Natural Resource Management Planning and Implementation 7.13 The following areas need priority support: (a) Sector and project planning, analysis, monitoring, and evaluation. This is particularly important for the planning departments of the natural resource ministries like Forestry, Water Resources, Agriculture, and Fisheries (Aquatic Products); and for the State Planning Committee (SPC). Provincial staff involved in the above projects should also be given a chance to participate. IDA's Economic Development Institute (EDI) is designing a 3-year training program in conjunction with the SPC for these purposes starting with the forestry sector. In these courses, the environmental implications of each of the implementing ministries' work would be taken into account. (b) Rural Land Use Planning is particularly important with respect to (i) the preparation of land (erosion) susceptibility maps (para. 5.15 and Annex 2); (ii) sedentarization or settlement area planning; and (iii) land allocation. (c) Reevaluation of the organization, planning and implementation of the "Barren Lands" (Decree 327) Program (paras. 2.17-2.18). TA is needed to: (i) refine the data base for decision making, monitoring, and evaluation of program impact; (ii) elaborate the processes for project development, planning, and implementation with emphasis on those for consultations and involvement of the private sector, NGOs and affected parties; (iii) refine the criteria for project selection; (iv) improve financial allocation and budgetary processes; and (v) improve mechanisms for interministerial coordination at the central, provincial and local levels. (d) Linking research and extension for appropriate farming systems in the highland and mountain regions. TA is needed to evaluate the results of ongoing research and pilot initiatives in hill area development, especially in the barren land areas. In standardizing the - 124 - land forms, agro-ecological, and socio-economic conditions characterizing the lessons leamt, successful models can be more easily replicated. C. Proiects and Technical Assistance for Wetlands Protection. Rehabilitation and Management 7.14 Foreign assisted projects with this emphasis will also support the Government's reforestation program of the Tropical Forestry Action Plan, the aquaculture development program, and the barren lands program. The focus of these projects will essentially be one of joint wetland/forest protection and the simultaneous provision of opportunities for affected households to improve their incomes and livelihood. The objectives/rationale, broad components, and status of preparatory work of such projects are summarized below. Obiectives 7.15 They are to: (a) improve the economic use of formerly forested wetlands, especially those which have been seriously degraded through unsustainable shrimp aquaculture in the coastal areas with acid sulphate soils in the Mekong Delta; (b) improve the protection of vital wetland ecosystems that contain critical biological diversity and provide nurturing functions for fisheries; and (c) strengthen the provision of support services for the forestry and aquaculture subsectors in the critical wetland and surrounding areas. These objectives cater to the requirements of the programs and plans mentioned above. Components 7.16 For projects of this genre, the components would comprise the following: (a) rehabilitation of degraded mangrove and melaleuca forest areas through reforestation and promotion of altemative uses of abandoned or about to be abandoned shrimp aquaculture ponds and holdings; (b) demarcation, protection, and appropriate management of mangrove areas and inland marshes, to preserve and, where needed, to improve their fishery nurturing functions and their rich biodiversity; (c) land allocation and investment support to local communities to encourage joint protection of wetlands and support of environmentally benign income generating activities and enterprises; especially in areas buffering the protected areas; (d) institutional development to upgrade the effectiveness of the efficiency of support services for forestry and fishery, including the promotion of private sector and local people's participation; and (e) development of a framework or model to monitor cumulative environmental impact of project investments in the Mekong Delta, starting with the provinces encompassing the project areas selected for priority focus. - 125 - Preparation Framework and Focus 7.17 First, broad proposals should be consistent with the relevant plans which impinge on the project's development proposals (eg., the Mekong Delta Master Plan, Biodiversity Action Plan, and the Tropical Forestry Action Plan). Second, the Development Plans for wetlands in the province should be reevaluated, taking into account (a) the priority of intra provincial sub-projects; (b) the interlinkages of other developments affecting the wetlands development program (e.g., wetland reclamation for rice in high acid sulphate soil areas, water polluting industries which affect the nurturing conditions of the coastal environment for fisheries); and (c) the required policy and institutional/organizational measures that would be needed to ensure successful implementation. Third, identification of environmental impact indicators which can be used for monitoring of cumulative effects from project investments; and refining existing models to perform the task. Criteria for Site Selection 7.18 Refinement of criteria for site selection and identification of the specific areas and enterprises to be supported should be undertaken at two levels: (a) selection of participating provinces; and (b) selection of state enterprises. 7.19 The choice of priority provinces or sub-provinces should be based on (a) the assessment of the Biodiversity Action Plan's review of the biodiversity value of the Wetlands, the extent of incursion threat, and the prospective area of buffer zone support (Annex 1, Table 27); and (b) the prospects for successful rehabilitation of the degraded wetland itself (based on the most appropriate developmental models for the conditions encountered and the institutional capacity for implementing sustainable aquaculture or mixed aquaculture and agriculture systems and wetland forest rehabilitation). For coastal mangrove areas, initial assessments indicate that for the South, Minh Hai and Soc Trang provinces in the Mekong Delta fulfill these conditions best. For the North and the Central regions, respectively, Hai Phong or Ha Nam Ninh and Phu Yen are likely to be the best candidates for priority support. For the inland marshes, the most important is the Vo Doi (U Minh) forest covering parts of Minh Hai and Kien Giang Provinces 7.20 Given the historic evolution of wetlands management in Viet Nam, it is the state enterprises (SEs) which have the best staff and working experience. Thus, site selection should also include districts or subdistricts where the best performing state enterprises (both central and provincial) are presently operating. Since wetlands protection and development involves forestry, fisheries, and agriculture, any of these sub-sector SEs could be selected for support by the project. While State Enterprises are being selected for efficacy in project management and imnplementation, project area coverage could extend beyond the areas under the jurisdiction of each selected enterprise to ensure adequate coverage to achieve project objectives. Such an approach would be akin to the outgrower programs associated with nucleus estates for tree crops development projects in many East Asian countries. At the end of the project (which could take five to ten years), the provincial government should be in a position to take over the running of the support services for the project and integrate it into the provincial services, the state enterprises (whether they be forestry, fisheries or agriculture) would become indistinguishable, and the productive portions of the enterprises could be considered for privatization. During project preparation, technical assistance could be given to assess the management experience and establish a transition program for those enterprises which can be privatized. - 126 - SeguencinR 7.21 For priority areas fulfilling the selection criteria given above (e.g., Minh Hai), project sites for both mangrove development and Melaleuca development should be chosen for project preparation (first generation projects). New aquaculture development should be limited, pending a more detailed assessment of the experience from potentially sustainable mangrove-aquaculture systems. Paddy- aquaculture promotion in existing paddy areas can begin immediately after identifying the successful models and the areas of focus. In the meantime, land use and water resources data would need to be collected for monitoring proposes, and design for a program to monitor cumulative environmental effects would also need to begin. These initiatives, especially in monitoring waste water impacts on the mangrove ecosystems, are necessary to ensure that the impact of other provincial activities (industry, agriculture) can be taken into account. In the selected buffer zones, consultation and involvement of local households in joint forest protection and in the planning of resource management and buffer zone activities are critical. Status of Preparatory Work 7.22 GOV has been given a 42.4 million yen (about US$ 400,000) grant from the Japanese Policy and Hunian Resources Development (PHRD) Fund to undertake preparation of the above project with IDA acting as the executing agency. The Dutch government is in the process of finalizing technical assistance support of US$ 2.8 million for a project on the "Rehabilitation of Mangrove Forests, Mekong Delta, Viet Nam." Project preparation initiatives are also being considered by the Asian Development Bank, SIDA, and other bilateral agencies. With the framework for preparing such investment initiatives (paras. 7.17-7.21 above) accepted by both GOV and the donor commnunity, duplication and conflicts will be minimized. Technical assistance on cumulative impact monitoring is being reviewed by CIDA. D. Technical Assistance Support For Urban/Industrial Pollution Screening and Abatement Introduction 7.23 As discussed in Chapter V, Section C, planning for pollution abatement requires that environmental considerations be taken into account at the planning stage in: (a) the preparation of urban master plans and the sectoral plans and projects in support of them (especially those for land use planning, urban waste management, water supply and sanitation, transport, flood control); and (b) the screening of potentially high polluting investment projects at the approval and licensing stage. In addition, present toxic or hazardous pollution sources (the "black points") will have to be evaluated so that a plan for reducing pollution from existing plants can be developed. Such a plan would include a program for developing compliance schedules for unambiguously high polluters on a case-by-case basis after plant level pollution data is first collected and analyzed, and/or a broader "polluter pay" taxing mechanism (see pilot approach proposed in para 7.47 below). It would also include awareness and compliance training of affected plant staff and a targeted effluent monitoring system. - 127 - 7.24 Such initiatives are necessary to fulfill the obiectives of: (a) averting the potential adverse impacts on human health and improving the conditions for expeditious abatement and mitigation; (b) reducing the negative impact that polluted urban waters have on productive and other fragile resources downstream; (c) increasing public awareness (both households and finms) of the adverse costs of their actions and encouraging public interest, involvement, and behavior adjustments. 7.25 Technical assistance will be required to support the initiatives proposed above. However, the discussion below focuses on the sequencing requirements and linkages among various plans and investment projects, rather than on detailed content, to enable urgent needs to be more readily accommodated while crucial information can be collected for longer term action. Technical Assistance for Urban Master Plans and Urban Sectoral Plans/Programs 7.26 Focus, Linkage. and Sequencing. With more than half of the urban population residing in Hanoi, Hai Phong, HCMC, and Da Nang, the importance of focusing initial technical assistance on the three "nexus" city areas (HCMC/Dong NaiNVung Tau, Hanoi/Hai Phong/Quang Ninh, and Quang Nam/Da Nang) is unquestionable. Such a choice allows for the start of pollution abatement where there are particularly pressing population and industrial environmental stresses; and it takes advantage of the Environment Committees which have the greatest experience and implementation capacity. Individual city master plans can proceed ahead of the "nexus" plans because overlaps or conflicts are unlikely to occur in the short term; but it is important to anticipate the confluence areas as individual city expansion plans are being prepared. 7.27 For each city, there should be provision for interaction between the urban master plan and the complementary sectoral plans, which can best be facilitated through proper sequencing and allowing for flexibility and adjustment. The focus of urban master plans should be first on: (a) setting the framework, principles, and guidelines for urban land-use zoning based on assessments of existing land use and land capability for various uses; and (b) undertaking data collection and projection of key variables in urbanization (e.g., population and industry growth; housing expansion). Subsector planning, like the preparation of the waste management plan, can then begin after notional zones are earmarked (e.g., for water/wastewater treatment plants, reservoirs, land fills, and transfer stations) and demand for waste services have been estimated. In planning for wastewater management, agricultural and industrial reuse of treated municipal effluents should be explicitly considered, especially at the decentralized level. This could be, say, six months into the preparation of the urban plan. Since an Urban Master Plan is already in hand for Hanoi, a waste management plan could first be prepared there, followed by HCMC, Hai Phong, and Da Nang. 7.28 If in the course of preparing the sector plan it is found, for example, that providing the waste management infrastructure in the land which has been zoned for that use by the master plan entails excessive costs, both the master plan and the sector plan could be adjusted accordingly. The former could, for instance, accommodate the allocation of another site and/or the latter could explore alternative cost-saving technologies for the allocated site. The same would be applicable to water supply/sanitation - 128 - and other urban sub-sector plans. For sanitation, especially separate sewerage systems, long term phasing should be considered only as affordability of households improve. 7.29 Proiect preparation for the more urgent priorities under the plans for water supply and sanitation or solid waste management can begin without much controversy as the investment requirements are mainly rehabilitative in nature. For HCMC, Hanoi, Hai Phong, Da Nang, and possibly Hong Gai and Camn Pha (in Quang Ninh Province north of Hai Phong), the following quick gestation investments have been proposed for the implementation through Provincial Committees and coordinated by the Ministry of Construction (MOC): (a) an initial phase of the rehabilitation of outdated and dilapidated water supply networks and treatment facilities which are expected to extend to the year 2000; (b) repair, maintenance, and cleansing of pipes, canals, and retention ponds to improve the efficiency of sewerage and drainage systems; and (c) providing and upgrading operating facilities such as vehicles, laboratories, and other equipment. Except for the construction of new landfills in Hanoi and Hai Phong (where the associated problems can be avoided through proper site criteria and landfill design), the negative enviromnental impacts of the proposed infrastructure improvements themselves should be minimal. Technical assistance support would be needed to assist MOC and the five involved provinces in: (a) establishing design and materials for construction works; (b) supervising the implementation of water supply and sanitation plans; (c) implementing institutional improvements; and (d) extensive training for technical, administrative, and managerial staff. At the same time, evaluation of the cost structure of SEs providing water and sanitation services and the feasibility of a phased introduction of a user pay system [para 5.63 (b)] should also merit TA support. 7.30 Status of Preparatorv Work. In a few priority areas, project preparations can benefit from previous and ongoing efforts. The following studies are now complete: (a) a water supply plan for Hanoi (sponsored by FINNIDA and JICA); (b) a water supply and sanitation plan for Hai Phong (FINNIDA); and (c) the national-level Water Supply and Sanitation Sector Study (UNDP/World Bank). In addition, the following studies are currently underway: (a) a sanitation plan for Hanoi (financed by JICA); (b) the National Water Supply Strategy (expected in 1994); and (c) the National Urban Sanitation Sector Strategy (expected in 1994) by the MOC. Additional support is expected for: (a) Hanoi Traffic Improvement Plan (AIDAB); (b) Urban Master Plan for Danang (AIDAB); (c) Water Supply and Sanitation Plan for Danang (AIDAB or French Govermnent Assistance); (d) Haiphong Port (JICA); and (e) Hanoi Transport Plan (SIDA). Technical Assistance for Early Screening of Investment Proiects 7.31 Rationale and Requirements. In the absence of national standards and environmental assessment procedures that are ready for implementation, the main project approving agencies like the National Project Evaluation Board (NPEB) and the State Commission on Cooperation and Investment (SCCI) are attempting to undertake their task in an environmental policy and procedural vacuum. While the EA and pollution standards issues are being addressed (see paras. 6.41-6.53), technical assistance is required to assist these agencies in identifvinae and attaching apDroDriate environmental conditions to new investment licenses. First, criteria will need to be developed on what type of projects would need pre- screening. The elaboration of such criteria would be dependent on the results of other technical assistance - 129 - support programs like the national urban/industrial pollution survey (see para 7.37 below). Second, guidelines would need to be issued for a review of pollution status, site location, and the polluting effects of various technologies to be introduced by projects being screened. Catering to these needs would require not only the assistance of an experienced technician but one who has demonstrated concerns for human health and environmentally conscious management of resources. The TA would also need to have access to discretionary funds to call in specialists who can assist in the technical review of specialized technologies. This would enable the screening process not to reject high pollution proposals outright but allow those involved to recommend alternative, less polluting technologies which could still enable the investment options to be viable. 7.32 At the same time, technical assistance is urgently needed to complete the preparation and enactment of implementing regulations and procedures for EAs. Emphasis should be on (a) the delineation of agency responsibilities; and (b) the guidelines for the respective EA preparation and use. Improvements needed on the guidelines contained in the present draft EA regulations should stress: its use as a decision-making process rather than a "study process used to predict consequences to the environment", consistency with the basic environment law, and more operational guidelines concerning the types of projects which need EAs and the broad procedures for their preparation, including those for consultations. 7.33 Particularly critical is the technical assistance which needs to be provided for the establishment of subsector sDecific environmental standards at both the national, provincial, and metropolitan levels, and between existing industries and new industries (paras. 6.49-6.51). At the national level, a review of proposed standards is necessary, starting first with popular pollution-prone industries and processes. The results of the proposed national urban/industrial pollution survey (see para. 7.37 below) will be useful. At the provincial level, focus should be on a more limited number of highly polluting industries. Priority should be given to Hanoi (as the development of standards there is the furthest along) and HCMC. 7.34 Finally, adequate monitoring of pollution would need to be approved as part of project screening. With such an action, enforcement of standards and regulation would be made much easier once the project/investment begins operation. This requirement would eventually become part of a national strategy for pollution monitoring (see para. 7.36 below). 7.35 Status of Preparatorv Work. The Asian Development Bank (ADB) and Canadian Intermational Development Agency (CIDA) are providing some strengthening of EA training, while the Singapore government has participated in training environmental inspectors in HCMC. Technical Assistance for Pollution Abatement and Monitoring Support 7.36 Requirements and Focus. Technical assistance support is needed for: (a) the national urban/industrial pollution survey (para. 5.64 above); (b) the recommendations for low-cost pollution reduction practices at the firm level (paras. 5.57-5.58 above); and (c) developing a national strategy for pollution monitoring and enforcement including the development of compliance schedules. - 130 - Although separate in terms of overall objectives, these efforts have to be undertaken in a coordinated manner. The objective of the pollution survey is to give the policy maker an idea of the extent of the existing pollution problem (especially amongst the pollution-prone industries and firms.) This information could be important for the items (b) and (c) above, depending on how the surveys are conducted. Priority coverage and sequencing would be important; and the role of central and local (provincial/metropolitan) agencies in the process have to be worked out. 7.37 Initial focus of the national urban/industrial pollution survey should be on the pollution- prone industries or firms in Hanoi and HCMC, which together account for at least 50 percent of new investment licenses (1992). (Already, the HCMC Environmental Committee has identified 46 of its worst polluters). This initial survey should provide a rigorous inventory of industrial waste discharges for a limited number of highly polluting firms (see para. 5.64). To permit a more general monitoring of pollution and effluence, a sample of industrial firms and locations could be chosen for a less rigorous inventory of indicators. The choice of firms for the second type of survey could be linked to the objective of identifying-potential firms for a low-cost industrial pollution reduction program, especially the "win-win" plant improvement measures mentioned in para. 5.58. Similarly, the choice of locations would be important for both the national strategy for pollution monitoring and enforcement, and the pollution survey of highly polluting firms. While these two pollution survey components could be treated as separate exercises deserving separate support, they would be undertaken by the same agencies and technical assistance support should be jointly given to both. Packagin2 Technical Assistance for Environmental Action 7.38 Because of unmet needs, the eagerness of donors and, most importantly, the complex interlinkages of the technical assistance support in the area of environmental action, special care and thought has to be given to the designing of such support. Technical assistance should be efficient and economical. It is impractical, for example, to have separate technical assistance teams to support each of the programs mentioned above. First, there is limited absorptive capacity on the part of government. Second, if divergent views emanate from multiple teams providing assistance on interlinked development, where the approach for one (e.g., pollution abatement) depends on the approach of another (e.g., setting of standards), the situation could be made worse rather than better. Furthermore, because of the multiplicity of agencies/institutes/ministries involved in urbanlindustrial investments and services, scattered individual support, if conflicting, could also be counterproductive and make matters worse. 7.39 Technical assistance for environmental action, at least for the urban and industrial sectors, has to be designed as a consistent package which covers: (a) the requirements for establishing standards; (b) undertaking and overseeing EAs; (c) initiating relevant pollution surveys; and (d) establishing a monitoring system with MOSTE as the central point of authority. At the same time, parallel support should be given at the level of the project screening agencies (i.e., NPEB and SCCI) and Provincial Environment Committee levels. An Environmental Technical Assistance Support Program should be established, and should be earmarked for activities at each level, as follows. 7.40 At the MOSTE level, the TA will assist in: (a) developing environmental assessment procedures and ministerial instructions to implement NLEP and Decree 175/CP including those for environmental screening, for preparation and review of EAs, and for allocation of EA and investment review responsibilities between national core agencies and the central implementing agencies. - 131 - (b) developing national environmental standards, including effluent standards for a few priority highly polluting industries, monitoring provincial environmental standards in order to ensure a reasonable degree of consistency, and preventing competition among provinces seeking to attract new investment by undercutting others' standards; and (c) identifying procedures for screening and environmental review of EAs and investment applications by NEA staff and for a clearer integration of such review into SCCI and NPEB's appraisal process. (d) supervising the preparation of ministerial instructions or management guidelines on environmental protection of various technologies linked to industries earmarked for priority monitoring (e.g., chemical, cement) with a focus on "what to watch out for" and what options exist. (e) providing technical and capacity building training to MOSTE and SPC staff for dissemination and monitoring of the above. 7.41 At the SCCI and NPEB level, the TA will assist and train SCCI and NPEB appraisal staff (with MOSTE support) in carrying out environmental review of investment applications with potentially significant adverse impacts, by: (a) identifying priority project types and locations to be subject to in-depth environmental review; (b) reviewing environmental assessments and related data on priority projects, if available, and identifying any additional information on baseline conditions, predicted impacts, and alternatives to be requested from project proponents; (c) recommending appropriate clean technologies and other environmental conditions to be attached to investment licenses, or, where predicted adverse impacts are sufficiently serious and are not amenable to cost-effective mitigation, recommending rejection of the investment application on environmental grounds; and (d) identifying and engaging specialist consultants to assist in environmental review of priority projects, as needed, and provide environmental review training to NPEB and SCCI staff. 7.42 At the provincial metropolitan DOSTE or environment committee level (probably starting with the core "nexus" cities of Hanoi, HCMC, and Da Nang), the TA will assist and train staff in: (a) developing detailed procedures for environmental assessment of local projects, including environmental screening, preparation and review of environmental assessments, environmental review of local investment applications, and evaluation of proposed mitigation measures; (b) conducting a pollution inventory, as part of the national survey, to identify high pollution industries to be subject to regulation, and developing and applying local siting criteria for projects in the industry, energy and infrastructure sectors; (c) developing and applying local effluent standards for a few priority highly polluting industries, which would be consistent with national standards and reflect local priorities and - 132 - carrying capacities, and developing phased compliance schedules for priority existing highly polluting industries; and (d) developing local monitoring programs, including ambient monitoring of a few parameters, and emissions monitoring of priority industries as part of the national strategy for monitoring and enforcement. 7.43 In addition, the TA will convene coordination meetings and workshops (to ensure discussion and feedback among the three levels) and provide training on environmental screening, EA review, application of standards, and siting criteria and evaluation of mitigation measures. 7.44 After training and building the capacity of the core metropolitan DOSTE or environment committee and its supporting institutions, support could extend to neighboring provinces using trained staff in these cities as the nucleus for the expanded support. E. Technical Assistance For Appropriate Use of Market Based Instruments 7.45 Chapter IV, Section A has discussed the issue pertaining to the choice of policy instruments for environmental action. It concludes that: (a) The selection of direct and indirect instruments should be undertaken on a case-by-case basis to ensure appropriate measures for the "appropriate" pollution problem, industry/subsector or finm/household. (b) In order to implement either of the categories of policy tools, the minimal requirements of (i) background statistics and monitoring information concerning the pollutor or the pollution process, (ii) implementing regulations, (iii) pollution standards, and (iv) institutional capacity will have to be met first. (c) Final choice of policy tool to use should be based on those which have: (i) the higher relative pollution/degradation reduction impacts; (ii) the lowest relative costs of abatement; and (iii) the greatest ease of administration. [With the difficulty of assessing (i) and (ii), (iii) is usually chosen as the most important criterion by default]. As the minimal prerequisites or requirements [item (b) above] are being developed, certain activities could be considered for more detailed evaluation and for pilot initiatives in using more indirect instruments for environmental action. These are discussed below together with an outline of the technical assistance that would be needed to prepare and implement the pilot initiatives. 7.46 The objective of the TA is to: (a) evaluate the relative applicability of direct and indirect policy instruments for existing or potentially damaging pollution activities; and (b) initiate pilot projects in increasing the use of indirect policy instruments. The selection of areas, industry, firms/households for the TA activity should be based on the following: (a) the high pollution impact activities which can be cost effectively mitigated; (b) the affordability of the affected entities with respect to their ability to pay the taxes, levies, or fees to be imposed; and - 133 - (c) the availability of existing administrative mechanisms and/or the ease by which they can be redesigned to implement the new tools to be implemented. 7.47 Based on the report's assessments, the following are possible options for expanding the use of indirect tools: (a) Waste water pollution in the large cities (para 3.12), particularly HCMC (eg. Bien Hao- Dong Nai industrial estate) and Hanoi. This could include waste water emmission levies based on existing water treatment costs and/or "presumptive emission charges" based on calculated emissions that are based on standardized assumptions on the technology, age, and location of targeted industries or firms; (b) Highland area expansion of annual crops into steep-sloped land in areas with high land (erosion) susceptibility (eg. classes 4 and 5) with the possibility of prohibitively high land taxes combined with rebates for erosion control plantings or other such measures (para. 5.21) (c) Acid sulphate soil areas of the Mekong Delta where unsustainable shrimp aquaculture has expanded most and where remaining concentration of mangroves and back mangroves are under greatest threat (para. 5.29). Three provinces (Minh Hai, Soc Trang, and Kien Giang) are the most suitable candidates for pilot initiatives in using presumptive land taxes; (d) Red River Delta-Estuary/Ha Long Bay area (paras. 2.51-2.52) where pollution from waste water, solid waste, and coal mining waste require a wider variety of indirect policies. 7.48 In developing the pilot initiatives, the following requirements or guidelines should be considered: (a) develop a limited number of measures for each pollution control activity (eg. for urban wastewater - perhaps two water quality indicators; for Mekong Delta - acidity in selected channels or water ways). (b) develop standards for tie identified measures; (c) construct fee schedules and their ranges in conjunction with the standards developed; and (d) evaluate administrative feasibility, staff availability and training needs. Consultation with affected parties would be a prerequisite and it may be necessary to "negotiate" the fee schedules. - 134 - ADDendix 1 Page 1 of 1 WORKING GROUP PARTICIPANTS AT THE WORKSHOP ON ENVIRONMENTAL POLICY AND PROGRAM PRIORITIES (NOVEMBER 3-4, 1994) Working Group 1 - Natural Resources Nguyen Cong Thanh, JT-Envi Consultants Ton Gia Huyen, General Department of (resource person) Land Administration Vu Quyet Thang, National University of Ha Working Group 3 - Institutional Development Noi (Secretary) Dr Nguyen Ngoc Sinh, Chairman Le Duc Nam, Ministry of Water Resources Mr Truong Manh Tien , MOSTE Do Dinh Sam, Forest Science Institute Vice-Minister Prof Le Quy An, MOSTE Nguyen Van Truong, Institute of Ecological Prof Nguyen Viet Pho, National Association Economy for Conservation of Nature Pham Binh Quyen, National University of Ha Prof Le Thac Can, National Enironment Noi Research Program Tran An Phong, National Institute for Dr To Linh, Office of Govemment, Agricultural Planning and Projection Department of Science, Technology and Vu Cong Lan, National Institute for Environment Agricultural Planning and Projection Maj-General Ho Thanh Minh, Ministry of Mai Huu Dua, MOSTE Defense Tran Thi Nhu, MOSTE Mrs Phan Quynh Nhu, Ha Noi Dept of Nguyen Hoang Yen, MOSTE Science, Technology and Environment Luong Ngoc Thuy, Institute of Fishery Dr Huynh Thi Xuan, Vice-Chair, People's Economics and Planning Committee, Dac Lac province Tran Lien Phong, MOSTE Prof Pham Xuan Nam, Vice-President, Rob Crooks, World Bank National Centre for Social Sciences, Ha Noi Peter McNamee, Peter J. McNamee Ltd. Dr Do Nam, Director, DOSTE, Thua Thien (resource person) Hue Mr Peter Marriott, CIDA Advisor, Bangkok Working Group 2 - Urban and Industrial Choeng-Hoy Chung, World Bank Pollution Dr Stephen Tyler, IDRC (resource person) Pham Ngoc Dang, Centre for Envimonmental Engineering of Towns and Industrial Areas Workshop Coordination and Report (Chairman) Preparation: Gregory Woodsworth Dinh Van Sam, Center for Environmental (Consultant to IDRC) Science and Technology (Secretary) Ngo Duc Lam, Deputy Director, Institute of Energy Lai Thi Ngoc Quynh, Institute of Energy Nguyen Van Vinh, Ministry of Light Industry Nguyen Khac Kinh, MOSTE Chu Thi Sang, MOSTE Lam Minh Triet, Ho Chi Minh City Polytechnic University Phung Chi Sy, Institute of Tropical Technology and Environmental Protection Le Khac Thanh, DOSTE, Da Nang Dao Viet Tac, DOSTE, Hai Phong Ho Si Nhiep, Director, Environment Centre, Ministry of Construction Le Van Trinh, National Institute of Labour Protection Nguyen An Luong, National Institute of Labour Protection Nobuko Ichikawa, World Bank Nguyen Thai Lai, Ministry of Construction Nguyen Duc Khien, DOSTE, Ha Noi AppendIx 2.A1 Degradaion of Uphis Foredt Ecoyst_ - Acdivity awd p: Examples frm Pnt Studin Situation: Total foresed area in 1991 was 9.6 mfi. ha. or about 29% of the country. Estimates of the extent and quality of the forest vary widely. Twelve percent of the population or 7 tot mil. people live in forest or whit used to be fored dand_ DEGRADATION ACTPITY IMPACT JKEY LOCATION EXAMPLE I) Removal of forest cover due to aicultural Environm degradation of foret 1.0) Remaining forest resources= 9.6 mil.ha mm iSSi. Deforestation estimate expansion, grazing. logging and hifing resource base leading to: range fromn at 0.2 tul.ha/yr rmapi to 0.02 mil.ha/yr TC cultivation, collection of fuel wood, nd fire 1.1) Change in vegetation due to logging * Northern Mountains and Cenral Highlands 1.1) Since log expot ban in 1991, logging hs decreased. 3.5 mil.m3 were extracted in 1991. There is an additional 30 to 50% illegal logging TC 1.2) Watershed degradation * Nothern Mountains 1.2) There are 2.3 mil.ha of protected watersheds nd 3.3 mil.ha unprotected TC 1.3) Degradation of productive forest into * Most severely affected areas are Northern 1.3) Barren land in 1943=3.0 mnl.ha, in 1975=10.5 mil.ha, in 1983-13.8 mil. 'barren lan1 Mountains, North Cenral Coast, and South ha, in 1985=14.S rlil.ha, and in 1991=14.6 mnil.ha TC wNCz2Samau 191"I Central Coast 1.4) Erosion and consequent sedimentation * Red, Da and Dong Nai rivers, and nost 1.4) Annual volume of sediment flowing into the ea is about 250 mil.tons, of of rivers, lakes and reservoirs rivers in the central region are under threat which 120 mil. tons come from the Red River and 90 mil. tons from the Mekong inrP7, 1.4) Every year 5% of the productivity of Hoa Binh dam is lost to sedimentation Esm02. Da Hin River Hydro Project has a sediment deposit rate of is 10 cm/year 1.4) Forest land in the north cleared for manioc/es loses 86-105 tons/hayr of topsoil, nonnal soil loss in s multi-toried forest with 70-80% cover is sbout I ton/bl/yr RPM p42 1. 5) Change in vegetation due to perennial * Central Highlands and North Eat Mekong 1.5) Perennial agriculture expanded by 0.25 mil.ha from 1935 to 1991 TC agricultural expansion O O L U , n , n 1.5) The forest in the Central Highlands has been replaced by cofTee, tea, and rubber 7rAPf p7 1.6) Loss of carbon sequestering * Global 1.6) From 19S5 to 1991, 0.1 mil.ha of forest was destroyed and 0.03 mil. ha of forest was planted TC ODLVm i9ais 1.7) Loss ofsustainable fuel wood supply *Red River Delta nd Norhern Midlands 1.7) Anal demand for fuelwood= 27 mil.nt as compared to a sustainable supply of 35 mil.nit (air dry equivalent) TC 1.7) 46% of biomass energy from household use comes from fuel wood TC 1.t) Loss of wildlife habitat * Cetral Highlands and Northern Mountains I .) Special use forest ares is 0.73 mil.ha TC 0ompds 1.9) Dsmage to infrastructure and * Northern Moutain, Northern Midlands, 1.9) During floods in town of Muong LAy in 1990 four bridges swept sway. *griculture and North Central Coast homes, schools and offices flatened and 30 dead or missing. In Son La, 50 killed and houses, bridges and roads destroyedor dmaged in 1991. InQuang Ninh, 30 dead and 1200 houses destroyed or damaged in 1992. 2) Depletion of soil nutrients ad forest 2.0) Degradation of forest into 'barren ld * Northern Mountains, North Centrl Coast, 2.0) Itinerant shifting cultivator holdings estimated at 0.2 mil.ha. Area regenerative capacity by successive cycles of and South Central Coast, Central Highlands deforested per year due to sedentary shifting cultivation = 0.04 mil.ha TC nn sifting cultivation 1991 > ox A~ceonyn of citatims are given Appendix?74 DEGRADATION ACTIVITY IMPACf KEY LOCATION EXAMPLE 3) Dwn costruction Flooding of forest leading to a change in: 3.1) Wildlife habitat ' Cenbal Highlands 3. 1) Deforestation due to hydro-power nd irrigtion projects estimated at 0.03 mil. h/yr TC M=psl 3.2) Water Table ' Location of major dams 3.3) Flood mitigation * Location of najor dam 3.4) Dry seaon cropping ' Location of najor dam 3.5) Resdtlement * Ho Binh 3.5) About 0. 15 mit. people have not yet been resetled am p10 3.6) Watcr borne diseas * Location of Major dans 3.7) Fishery resource productivity ' Unomwn 3.7) A miisundtanding between Fisheries and Water Resources staff led to failure to stock the Hoa Binh dam 3.8) Reduced saline itnatsions in deltas ' Red River Delt 3.8) Dry eason flow downuream frm Hoa Binh dun has increased 3.9) Household water supply a Tri An Dam (South) 3.9) Construction of Tri An dam provides fresh water to an area of 0. mi.l ha 3. 10) Seismic activity a Hoa Binh 3. 10) Danger exists because seisnic activity in the Hoa Binh dun ar increased 10-15 tina from 1969-1991 5) Hunting, harvesting non-wood forest Removal of animals, nd plants, leading to products and trade in endangered species the. 5.1) Degradation of animal biodiveriity ' Only ares left with substantial wildlife is the 5.1)71 of 1307 animal species arelteatenedTC wu plol Cetral Highlands and Noslhem Mountaim 5.1) 2,269 birds and 1000 reptiles are exported per year TC waup,o 5.2) Degradation of plant biodiversity ' Northern Mountainm (Hong Lin Son, Ngog 5.2) Al least 10% of the etimated 12,000 vascular species are endemic TC Linki Lam Vien) and Central Highlands FX 5.2) 338 of 8000 plant species are threatened TC WIUJ07 5.2) 6000 orchids are exported per year TC wwooi 00 ox Appendix 2.B: Upand Fort EcosyteMs - Obiectivs* ProeraMs and Recomend oM from Pam Studs OBJECTIVSESPROGRAMS STATUS INSTITUTIONS CRITICAL CONSTRAINTS i RECOMMENDATIONS FOR FURTHER _________________________ _ _________ I . _AC TION Objective: Protection nd Rcforestation of critical watersheds snd conservation forests Expand the number of conservation forests to include * Biodivesity Action Plan (complete in ' MOF(l) Absence of property rights; deficient Initiate relevant surveys and ground high biodiversity and critical watershed areas 1994) information/awareness demarcation * Choose priority areas for protection and Demrcae conservation forests and prepare support management plamn ' 1991 Forestry Protection and Development * MOF(I), NC(A), ' Only 2.5% of designated areas have Act COM(L) received approved management plans ' I million ha (87 sites) are desirt for special use; doubling this quantity is intended trAp p9 C Joined CITES ,,w Ban logging in critical watershed areas; Enact use restrictions based on land slopes ' Undeveloped ' MOF(I), Monitoring and enforcement costs may 'Place bans on farming agricultural crops on * 1975 Iand use criteria (PM Decision #278) MAFI(I) preclude actual implementation steep slopes; strengthen government apparatus modified by TFAP ' Attractive agroforestry practices on steep to enforce regulations regarding bans and more slopes are 'practically unknown' TPAP p92 sustainable practices own P34 Reforedt over-hrvested aren ' Both SIDA and WFP (No. 2720) have ' MOF(I) Conrnon property elements imply s lack of reforestation and/or afforestation projects; incentives for anyone to undertake such some local govenvent programs mirror projects; when undertaken, often there is thew biasedness toward intensive production Plant mixed tree species for fuelwood and timber in * Conduct research on indigenous tree species selected watshed areas Ongoing (VIE/86/027) 'MOF(A), FRI(I) ' Common property resource; informational and establish seed sources TPAPP97 *Uniform plantations (especially pines) have shortages and project costs had significant pest damage nr'p,w Conduct extensive landuAse.4and-suitability NIAPP 'Complete survey for Northern Midlands and coprative survey * Initiated at 1:250,000 scale for whole of C Insufficient cooperation between NIAPP, Mountains at 1: 100,000 scale; standardize soil Viet Nam; complete at 1: 100,000 scale for FIPI, MOF Catchment Managemen, and maps to FAO classification system and GIS Central Highlands GDLM systems between FIPI and NIAPP ' Land-use plans should incorporate socio- Utilize land-us planning and economic incentives to COM economic conditions and receive local input in ancowage more efficient use of forest nd watershed 'Planning largely based on shortsighted, ' Information shortages; institutional planning selecting areas, species, and harvesting resourcea technical production considerations and capacity lacking techniques trmp ' Privatize land rights further and design joint C MOF protection/forest management compacts with C Since 1988, over 7 million ha of forest land ' MOFs position as direct manager of households began to come under family mangement resources instead of advisor working in 75A 14 * provincial conjunction with households TrA ,Pe C Stumpage fees have, to some extent, been goverments * Raise stumpage fees and improve the instituted collection percentage TAraP C Initiate community-focused forestry Adopt sustainable forest management techniques in d MOF, MAFI, extension and documentation survey TFAP pt? local enterprises Indeve ope MSTE ' Informabon shortagesi'r7mplement programs of selecive felling o) * Lack of incentives due to property rights management systems 7rArp7 and also consider 0OQ deftintions natural reforestaion TrAr7 w I-.. OBJECTIVES/PROGRAMS STATUS INSTITUTIONS CRITICAL CONSTRAINTS RECOMMENDATIONS FOR FURTHER ACTION Objecdive: Reduce ecosystem presures by sedetarizing shifting cultivators Encourage ridatarAtion in specific regions fr ' Since I961, GOV hus engtged in 3 phases * DCFS ofthe * Controlling sponta migration 'Better land-use plarning specific productive purpose of resetling S million people, in pan under MOF(I), COM(L) * Inornation and capacity to choose target * Review prudence of sedentarizing itit the FLxed Cultivation nd Sedentarization areas and encourage efficienl use of land shiing cultivators on a case-by-cae basis Program (1968, with modifcations in 1982 with regard to socio-conomuc factors * In potential cases for resettlement, review the and 19S9) * Programs have been over-calized and altanative posibility for local labor non-specific wTA Wm absorption, accounting for industrial growth ' Resolve land-use issues nd improve land ' MAFI, MOF, tenure ecurity isues before sedentarization Allocate land right and thereby make sedantization ' The anignment of long-term lnd-ue COM 'Infomationsl deficiencies regarding land more attractive rights started in 1989 with COD Decree No. suitability and production techiques for 72/HDBT sutainable land-use ' Lnd Law enacted in 1993 ' lack of inplementing regulation for Land 'Legislative the neceuary impIementing Law reguations Objective: Prevent undue raini on foreb from exessive den for fiutwoods Popularize fuel efficieat stoves * Several projects ongoing MM P1a3 MOF(l) 'Funding for research and distribution of 'Extension services to disseainate energy- MOE(A), IOE, improved techoloy saving tedniques and technologies DOA, FRI 9O Esablih ommumity-level fuehwood plaitations * Initiated (VIE/86/027) ' MOF(I) 'Nor-availability of rural credit, low price of fuelwood; high rate of nrowommercial, self- gathered use Reduce household fuvlwood cnuwpion tlhough ' Undeveloped ' MOF ' Infornation; difficulty in enforcing rules 'Raise the use of coal as a substitute fuel; cnoic inceniver and collecting potential fluelwood extradion promote local briquette manufacture mm p2 fees initiate diesel-powered rural electrification ri p92; promot plotovokair R&D mm p" OQ 1 (Dim 4t1 :. : : I-.. Appendix 3.At / Degradation of Wetland and Marine Coastal Ecosystems - Activity and Impact: Example from Past Studies Situation: The seas and continental shelf of Viet Nam cover an aea of about 1.0 mil. km'. The country has 3260 km of coastline including the large Red and Mekong River estuarine and delta systems which together comprise 15.7%ofthe total area ofthe country and support 42%ofits population- Coastal waters contribute some S0-90% of all marine fisheries productionNpEsDpwl66. Viet Nams marine coastal zones comprise a diversity ofecosystems, including islands, mangrove swamps, tidal flats and sea grass beds, estuaries, beaches, and coral reefs. Extensive fresh water and brackish water wetlands partially covered with back mangroves (melaleuea) are found in the Mekong Delta and on Ca Mau Peninsula_ DEGRADATION ACTIIVITY IMPACT KEY LOCATION EXAMPLES I) Clearing of forest cover for 1. 1) Depletion of forests * Mangrove deforestation in 1. 1) Between 1983 and 1992 Minh Hai Province lost 60,000 ha (54%) of mangrove forest agricutture, aquaculture, housing. 1.2) Acidification of soils and surface waters Mekong Delta due to due to the development of shrimp ponds; forests near HCM City have been reduced to a low fuelwood and poles 1.3) Decline in fisheries through degradation of aquaculture development and scrub EWp72 spawning and fishing grounds fuelwood collection 1.4) see 2. 1) and 2.2) below 1.4) Loss of biodiversity * Deforestation of coastal 1.5) 90,000 ha require sand dune fixation or wind break/ shclerbelt protection system TsAP 1.5) Encroachment of agricultural land through sand forests covering sand dunes and P42 intrusion protecting shores and sea dikes 1.6) In central Viet Nam, every year or two in most provinces dikes are breached by 1.6) Increased occurrence of dike failure along whole coastline overtopping and erosion due to inadequate dike structures and absence of protection forests; 1.7) Loss of wind breakers as protection during strong * 70-80% oftyphoons pass every three to five years, there is massive breaching of dike systems and large areas are winds through the central region inundated WFP4617p4 1.8) Increased shore erosion 1.8) Erosion ofbetween 10 and 25 n/yr presents a serious problem along 640 km (20%) of coastline rss 13 2is. Clearance of mangroves is main cause for increase in coastal erosion at the east coast of Ca Mau Peninsula mDmme l pi9 2) Over-exploitation of fisheries 2. 1) Decline in commercial fishery production Whole coastline, especially 2. 1) Ctches in near-shore waters of Mekong Delta exceed estimated Maximum Sustainable 2.2) Losa of aquatic biodiversity nonhem provinces Yield 1 s,75; threatened species of economic value include: Clupanodon issa, Dorosoma n Mvtilus smaraedinus. Haliotus diversicolor,Panilurus S. MesSD pg 2.2) 70 species are endangered NpE,w,is, 3) Coral mining and harvesting 3. 1) Destruction of coral reefs Almost all coral reefs About 70 genea and 200 species of corals have been identified some ofwhich are and use of environmentally 3.2) Decline in fisheries becoming rare and are threatened Nsw p4 4 duamging fishing techniques 3.3) Losa of aquatic biodiversity * Coral are mined at Son Tra Peninsula (Da Nang) to be used in whitewash and lime 3.4) Loss of storm protedion production o0 ps. Future tourism development may pose further threat 3.5) lnaceaed shore erosion 4) Expanaion of agricultural land, 4. 1 ) Habitat destruction/modification Mekong Delta 4. 1) Vast wetlnd areas have been drmined and reclaimed for agricultural production agricultural intensification, 4.2) Decline in fisheries through loss of feeding and 4.2) The construction of salinity barrier could have detrimental impacts on coastal and irription spawning grounds estuarine fisheries through interruption of natural supply of nutrients and seasonal spawning 4.3) Habitat degradation through change in hydrology migration sDMMI pl4. nd soil quality 4.3) Future wata resource development may result in rise in salinity intrusion of the order of 4.4) Increased water acidification 4-6 km on the mainstream branches in coastal Mekong Deha plain and of 25-35 for the 4.5) Increased occurrence of erosion, sedimentation West Vaico Rivr MDMPsI P14 and flooding 4.4) Large-scale raised bed excavation caused severe acidification of surface water in Long 4.6) Habitat degradation through pollution by An and Tien Giang provinces sDmpEr piso nutrients and agrochenicals 4.5) In the Mekong Delta, many of used chemical pesticides have a high residual toxicity 4.7) increase in infection rates of water-bome and with serious ecological consequences, such as massive death of fish and shrimp locally water-related diseases Mewmml p,si a 37; pesticide residues have been detected in several species of fish; 4.8) Loss of biodiversity eutrophication is commonly found in areas with stagnant water MDeJwnI P57 4.7) New settlements and eutrophied stagnant water bodies in coastal zone contribute to increase in infection rates (typhoid fever, hepatitis, malaria, dengue haemorrhagia fever. encephalitis) in Mekong Delta MDMwrns ppss A 36. MDMieD p24 elD rD X o x 'Acronyms of citations are given in Appendix 7. DEGRADATION ACTIVITY IMPACT KEY LOCATION EXAMPLES 5) Urban and industrial pollution 5. 1) Diseases through water contamination Localized uinpact near industries * The discharge of untreated sewage into major rivea is estimated at 120 mit. mi for Ha 5.2) Habitat degradation through pollution with and cities Noi, 70 mil. m' for Hai Phong, 34 mi. m5 for Viet Tri, nd 300 mil. m' for Ho Chi Minh nutrients and toxics City, there are other 396 setlements in the coatal zone wEsnrepis3. 5.3) Coral bleaching ' Microbiological pollution of surface water by sewage is probably the most serious problem 5.4) Decline in fisheries in the Mekong Delta; high concentrations of faecal colifornm bacteria are correlated with a 5.5) Loss ofbiodiversity high incidence of water-related disease infections, such as disihoea. dysentry, typhoid and cholera; eutrophication is commonly found in areas with stagnant wate se,a p,5 W ,7 Estimates of pollution from Bach Ho show that, in 19991. about 70% oftotal water disposed into the sea was untreated human waste and that untreated industrial waste represented only I % of the total pollution eim pn * All industrial wastewats from the existing 3,000 industrial enterprises are discharged without proper treatment wana pI ' Future development of coastal mineals may resuk in the disposal of untreated mine wastea into rivers and the ses NPDP32 * Themanl power plants projects could threaten mangroves and fisheries in Phu My, 0 Mon rps * Pluaned deep port for coal exports could affed touristic potential of Ha Long Bay NPnD pal 6) Oil exploration and shipping 6.1) Decline in fisheries Localized impact near 'Majoroil tanker route goes through East Sea offthe coast (transport volume ofapr. 200 (regular activities and potential 6.2) Despoiling of beaches exploration sites and ports; ail. tons of oil per year uAp27), oil discharges from tankers are estimated at 20 tons per year large-scale oil spill) 6.3) Loss of biodiversity constant threat of major oil spill disaser along whole ccoatline * Ducto oceanorphilc conditions,seacurrents anidwinds will tend to bring the oil slick to Vietnanmee shor in case ofnmajor oil Spill ADS p210 * Every year since 1975, oil spotting and pollution have been found on Vung Tau beaches; oil did not originate from Viet Nam mm p,n Samples taken alongthe coast of Viet Nam in 19S9 indicate thathe concentration of carbon in the water was lower than the hamnful limit to aquatic life (0.05 mg/t) at 14 sites and exceeded the limit at S sites (0.05 to 0.09 mg/I) scinpi2s ' There have been four documented oil spills which were small in scale and caused no widespread damage SiPR pl). NVIZpEI ' Crude oil production at Bach Ho now amounts to 110,000 barrels per day inapis; on the average, some 1% of oil extracted is spilled in normal operations AOSP2 7) Up-dream activities 7. 1) Habitat modification/destruction through changes Estuaries 7. 1) Siltation from river nmoffs threater Hue Lagoons nd estuaine ecosystems in Mekong (deformation, dam projects. etc.) in sedirnentation rates and hydrology Delta c.upis 7.2) Siltation of Cor Reefs 7.2) Siltation pose greatest threat to cora reefs at CatB Isl ndan 0.,pi 7.3) Nutriefit pollution 7.5) See 2.3 7.4) Decline in fisheries 7.7) Due to Hos Binh dam, the salinei fresh water interface has moved apr. 20 km seaward 7. 5) Loss of biodiversity rmSi 7.6) Inased shore erosion 7.7) Salinization Remark Freshwater pollution issues are included in Appendix 5, policies concerning agricuhure in Appendix 4, and general forestry/wateshed policies in Appendix 2. > 00 1 m m o x O X Appendix 3.B Wetln ad Marine CosI - Oblectvs Progrmd frm Pat Studis OBJECTIVES/PROGRAMS STATUS INSTITUTIONS CRITICAL CONSTRAINTS RECOMMENDATIONS FOR FURTHER ACTION ObJectle: Establish framework for weland and coastl nrm ecosyams developrent pluaning and anagement Support reseawch into ecoqysm iventonres * Limited infornation available on functioning linkages and boundaries NIpioi and development potential of ecoyst * MSTE(l) reseach 'Data compiled and tored by different Coordine nd assist inventory of naural institutes agencies N.m, S resources and esytemr functioning , , 3Sa Establish Gcograph Informnaion and *Biogeogrophical infornation networks * Tedhical nd funding assisbnce for Monitoring Systo to support planming operated by NIDC ' MSTE(I), NIDC(I) *Lack oftechnical expertise and high establishment of eogrphical Infornation and initial investment cost rws si,ss Monitoring System NnMW .P _ *2 Establish intituional fiamework for *EA now required by the Foreigp Investnent develpment planning which integrates coastal, LAw * COM(L) MSTE(1j * IItitutionSi capacity *Technical assistance for cstablishment of watershd regioland sectoral aspects and all involved ministries *Lack of guidelines institution finmework and training wmsr ix coordinaes governmt AgenCICs wN ,a02 * Lack oftedhnical expertise in integrated Integrate wetland and coastal ecosytem into development plaining and multiple-use watershed management Enad legilation and regutaory program for rni agessiMtnn tEa P 7 vtgrded development plaing * LAw on the Environmet paed in 1994 *COM(L), MSTE(l) ' Tepeicel asswe regl to dgft regulations nd * Specific implementing regulations we guidelines for planning rEv ,so 41 lacking Enact lad zoning plan *MSTE(I) * Many wetland sites are not within forestry boundaries Wp77 'Capacity-building and training in EA and land Stregthen irStiton cqmcitY in PerformmgZiigNPB EA 'EA not undertaken on a regular basis and MSTE(l), private zonng there is inexperience in incorporating insit * Previous practice nadequte environmental irrmp in decisionmking ' LAck of technical expertise and equipmentt4%w,5m Go D ox ff7 ff -J OBJECTIVESIPROGRAMS STATUS INSTITUTIONS CRITICAL CONSTRAINTS RECOMMENDATIONS FOR FURTHER Objective: Establish alternative development models and strategies on sustainable yield basis Suppot applied research e Several working groups in State Program on MMP(I), MOA(I), Inadequate financial support and 'Financial and technical support of applied the Rational Utilization of Natural Resource MOF(I), MSTE(l), staffing of reearch institutes research NWP"PP 42 and Environmental Protection (52-02) and NCSR(I), research 'Lack of credit and technical extension 'Analyze and support indigenous management other reearch activities ADe pP9 97 AWD p751.rc3 institutes support regimes PI"5 'Research program on the Iltional Utilization of Mangrove Ecosystem for Shrimp Fanning 1992-1995' Hi Develop demonstration projects on sustainable utilization and rehabilitation of ecosystems Models exist t several forest enteprise MOF(I) MOA(I) NDfp102 MMP(I) Promote only integraed coastal aquaculture and mangrove forestry that is suftinable * Integrated Coastal Zone Management Plan ICOM(L), MSTE(A) Lack of cooperation between sectoral Seek integration of sectoral activities Improve legislation covering conversion of NPEO posd ivitiesDevelop and implement integrated mangrove mangroves to other uses Dwnwo a ameo dipeet nertdmnrv aauaculture management model LmcFeo rpesmp Develop income g0amrting projects, such as *MIST[, MOF(I DeeoUrism g pD nrtn Tourism Master Plan may not be adequAte MCIST(l) MOF([) Absence of well-defined property ights Suppon land tenure reforms of ~~~~~~~~~~~~~~~~~~~and zoning policy F- Assist in the promotion and markceting of n MOF(I)g MOA(l), products from n sinably manged ecosystens Limited local initiatives MMP(I) (honey, aromatic oils etc.) Objective: Management of forests to sustain the upply of fuelwood nd other protective savices Establish conmunity-based fuelwood Initiated pilot programs EuMMApi ss pNPw , i 49 MOF(I) Inexperience in managing and Esrtblish land tenure system for community plautions 'Low success rate of previous state establishing plantations forestry afforestation programs sApl15 ' Lack of incentive due to coimmon Increase establishment offuelwood plantations property nature of the resource from 0.1 to 0.2 mill, ha per year iTsPpiOs WFP project 4304 Give financial assistance to cover high initial Establish protecion forets: MOF(l) Open access areas for fuelwood investment costs of reforestation programs On snd dunes collection still available - Along sa sores ' Protective function demands - Along sea dikes conservative management 'WFP project 4617 Dissminaue fuel efficient stoves 'MOF(l), MOE(I), Lack of commercially viable IOE (A), DOA(I), manufacturing and distribution of fuel Ii FRI(I) efficient cook stoves Improve rural access to coal, promote local 0 l * Some ongoing projecs on improved briquette manufaduring and expand rural : Reduce fuehvod comnption through cookstove development nd dissemination es'rA MOE(I) Lack of alternative sources creates electrification EsaW ,nS promotion of *h r".7tive energy sources p2plIJJ incentives for fuelwood collection OX piat. _nof_ .e-_Ali. - _-.ysou_ce- OJECTIVESIPROGRAMS STATUS INSTITUTIONS CRITICAL CONSTRAINTS RECOMMENDATIONS FOR FURTHER ACTION ObjectIve: Preserve the productivity of the marine fisheries by managing for sutainable yield Regulatory Program: * Ban deatnuctive fishing methods ' No ban on smal mesh fish nets ' COM(L), MMP(I) T There are no protected sea areas except ' Develop regulations concening fishing gear ' Restrict coral destruction ' No action pending * COM(L), MMP(l) 12 fisheries control zones Wm pI nd seasons to enhance natural propagalion of mplernent law ofthe sea' ' Adustnent of domestic legislation in progress ' MMP(I) 'ladequate monitoring and enforcement fisheries stocks os.uupi AI3Pt capacities *Enhanc-e enforcement capacity by providing ' Prwect and rehabilitate spawvning nd feeding * Project on Rational Utilization and Protection * COM(L), MMP(I), ' Lack of updated inventories training and improved equipment *uorpi a grounds an ban fisLing during brceding season of National Resources of Estuanne Ecoystems MMF(I) ' Lack of public awareness nvet mane resources and environment durig bredig seson in Viet Namn mpsD pSI icp,A*mP2 ' Restore spaviwng and feeding grounds tIrough rehabilitation and sustainable use of ecosystems I Public education progrars about importance of fisheries habitats and sustainable management Development of Alternative Income and Protemi Provide technical, organizational and financial Sources: assistance for development of deep sea fisheries * Pronwde deep wa filiries land freshwater fish culture NmwPa" * Dcvlop fihea fish cuhure ' Laws on manageret of exclusive econon_c * MMP(I) Lack of technucal equipment and credit zone Wandcnint tal shelf inpreparationA ro MMP(l) availability > -J. n LD o x -I OBJECTFVESJPROGRAMS STATUS INSTITUTIONS CRITICAL CONSTRAINTS RECOMMENDATIONS FOR FURTHER Objeedive: Protection ofhabitats and Active involvement of local gove ents and endangered species (the general fimnework is individuals AwDpis outlined in App. 4.4 Sect 5) Develop National Wdeland and Marine Coistal * In 1987, 8 wetland areas were declared * COM(L). MSTE(A) ' Absence of well defined legal and ' Disseminate protection laws and regulations Ecosystem Consrvation Program and seek protected AWDp751; GOV nounced tha apr. 30 insitutional framework among regional, judiciary and police authorities integration into systemn of national parks and wetland and mrnine coastal reas will be ' LAck of support frorn law enforcement NMES ^ naure reserves included into comprehensive system of agencies ' Seek intl cooperation in establishing and protected areas xiA 6 'Heavy pressure on resources due to poor monagemnt of Marne Protected Areas oant * Cat Ba nd Con Dao Islands were declared living conditions and open access ' Extend already protected areas to include protced areas TiAf pidi charader coastal marine ecosystems iTAP,3I ' MOA(t), MMP(l). * Conduct reseach and identification mission on Develop inventories and mnaigenent plans for ' 61 inouant wetands are identified in the MOF(l), MSTE(I). Lack of knowledge about ecosystem weand and marine coastal ecostiem sPsDnp 137 protected aeas BAP Tis CRES functioning and inportance 'Monitor the status of wild species Npsmpioi ' WWF Project No. VNOOI I provides tniningequipment,and funds for identification of mnsine proected areas a4P p7I ' Managemnt plai are in preparation AWDp75 . Intetat assistance at Tra nChim Reserve a- 'In 1937, Viet Namn signed Ramiar 'kImplemnent Rsmsar EUD PilS convention, declaring the Xuan TFuy area in ' MMP(I) MOA(l), Inyleanek RAMSAR convention the Red River Delta an inteOmtionally proected MOF(I) 'Absence of legislation welandAWD,7S2 ' Cooperative sub-regiona projects in wetnd preservation starting 'COM(L) MMP(I) St hehn ae fteat a-i 'Absence of well-defined lepgl nd itiftutional franework I Lack of properly tramied monitoring and e-nforcement personnel ' Undeveloped 'IMLXMTEA Designate preservationk areas that can be Sea tUnI Protect -e ggrd ban the COM(L MSTE(A) ' Absence of legislation gurded durmg turtle breeding season N p7 sale of btswe egg seek hitnariona ' Enforcement costs coopration ' In preparation ' COM(L),MMP(l) Conpete Red book ' LAck of coopertion between national ' Education center constructed by CRES ' COM(L), MSTE(A) and regional level Educate local population about services Enviiunendal education ' Lack of public awarenes of produced by protected ecosystems conservation needs elm 0 OBJECTIVES/PROGRAMS STATUS | INSTITUTIONS CRITICAL CONSTRAINTS RECOMMENDATIONS FOR FURTHER j_ ___. _____. __ _ =_____________________ ACTION Objective: Prevent deterioration of walr quality and natral resources from urban, industrial, mining and shipping activities (a general policy is outlined in App.6.3 SedL I) Integrate water quality control into coastal planning and management frarework MSTE(l) Administrative andjurisdicional Integrate water quality control into Coutal uncertainties EiR pT Management Authouity Establish water quality monitoring network ' Laboratory facilities are available al VITTEP ' MWR(I), MSTE(I) ' Monitoring facilities limited to HCMC *Expand monitoring capacity to cover whole Es" the coast line and wetlanids Ban the dumping of oil a Enacted 1990 ' COM(L), MMP(l) ' Difficult to monitor Establish regulations on environmental protection in marine petroleum opeation Establish legislation for oil cxploration and stipping In preparation (UNDP projet) * COM(L), MHI(I) ' Accelerate work on a national oil spill MSTE(A) contingency plan EssW pW, DWp61 Develop integrated disaster planning and " * High coat of training and control mitigation progrm mat Vung Tau equipment submit an oil spill action plan as Contro the discharge of human wastes into * iie oioigi oeubnaes ~ *OIM K *Lack of facilities and public awareness water resources' Limited monitoring in some urban areas has MSTE(A)MWR about adequate disposal/usage of human Promote low-cost treatment technologies for begun (i.e. Hanoi and HCMC) MSTE(A) wastes reuse of human man animal waste hDminei pa, Water supply and sanitation plans have been studied in seleded urban areas Fd D 0 t UO. ox Appeudi 4.A Degradati ofArable [md - Acdhv1y d Lmpat: Exapks fboam Pad sImle Sibtatios Total cuhtivated area in 1991 ws 7.0 mil. ha or 21%ofthe laua ant Cuhivd are.per capita deared from 0.26 ha in 1940 mc,ueto 0.l ha an 1991. Aveage fnn saze in 1991 ws 0.4 ha. Tol cuhivated ame can be expanded into the 1.0 nmillion ha ofiat barren land and the 11.0 million ha ofupland b n lnd This expaion mus be coamidered in the ontext ofthe nhet ssepbbility ofthe landto ddaioration andto a poputmion ts rat of 2. 1% per year. DEGRADATION ACTIVrTY IMPACT KCEY LOCATION EXAMPLE I) Expsion and intI sfication of Modification of grmud cover leading to erosion 1.1) Erosion isloclly serious in awe where population as high in relation to io productivity agimta land use and and thal coincide with roeds and oher ewnomnic activiti 1. 1) Susceptibiity of the lnd to deterioration: 43%=low. 37%-medium, and 21 %=high TC ws 1 1) Moftopeoil ' Highlad .2) 0.5 nil. ha is larized TC uCpa17 1.2) Formation of lateritic soib * Midlands on periphery of 1.3) Atodl of 0.09 ml ha require snd dune fixation ind/or protteion by vind breaka WArp25 Red River Delta (Other anate put this ae at 2.0 ml, ha) * Ceaal coCst 1.4) Amal soil lo in upland rice plots: 5-6% slope- l001 50nmiha, 19-20% dope- 250- 1.3) Encroachment of sand dunes on agricultil * River sysam 300nt/ha, >30% slope- 350nt/h Nsw areas 1.5) In Red river delta aI ntidxnds 0.76 ril. ha ae cultivaed beyond the suainable limit 1.4) Sedimetation of watefways * Red river delta and midlassb t* Over cropping kading to: 1.5) Decline in productivity 2) Minerl exploration and ining Modification of soil profik vegtafion and activities surface draeage leading to: 2.1) Los of productive agriculural land * Quang Ninh 2.1)0.002 anil. ha ae disbebhd by miing am pia. 2.1) 100 mil.ma of overburden accumulated na,iss 2.1) 60% ofcoal is extrded from open pit mines, mot ofthis as in the Norit emaiss 3) Incorrect and/or over application of Surface runoff and seepage of chemical resuling pesticide an fertilizers an: 3.1) Conftmination of potable water * Red River & Mekong dehas 3.1) Residues in 35 sample ofhuman fat: Lindane= IOppm, DDT=35ppm TC XSapuS2 (groundwater and urface wajer) 3.2) In Northern and Southern Central Coastal zones and Hanoi provinces, P20) is under- 3.2) Noneconamical overuse or undause of utilized, while Nitrogen is over-utilized in the South fertilizers * Red River & Mekong deltas 3.3) Soil contamination does not appear to be a problem 3.3) Contamination of soil * Red river 3.4) Eutrophication of water bodies 3.4) Avg. annual fertilizer use- 79 kgtha crop land TC wam pi * Red River & Mekong dehas Crop los due to: 3.5) Loss ofbenefacial predator inets 3.5) Avg. annual pesticide use is sbout 1.15 kglha(l991)' TC 3.6) Secondary infestations 3.6.3.7) In 7 Mekong Delta sites FAO Intercountry IPM Program found that long spmying 3.7) Increased pest rcsistence killed the Brown Plant Hoppers natural enemies 3.S) Pesticide handling risks at reail and on 3.8) FAO Intercountry projec study found regular incidents ofpesticide poisoning from famns handling with varying health irpacts. and MOH health survey found 15% of ral HHs store pesticides at home 4) Problem soils, saisonal flooding Human alteration of soil and water resources and sea water intrions resulting in: 4.1) Saline soils ' Mekong delta 4.1) 0.7 mil.ha (or 70% of the area in the country)A>s p4 4.2) Actual acid sulphate soils (AAS) * Mekong delta 4.2-4.3)1.7 mil.ha of acid sulphate soils (AAS and PAS)An.f4, or 78%/ ofthe area in the 4.3) Potential acid sulphate soils (PAS) country 4.4) Salinization of irription water * Ca Mau peninsula 4.4) Salinity in Ca Mau peninsula can reach 761Wwwp2a _ m 1~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ X Acronyn. of citaiom ae given in Appendix 7. Z Apendix 4.B Arabie Land - Objectives, Prolraa and Reconunendadons frownm Pat Studis OBJECTIVES/PROGRAMS STATUS INSTITUTIONS CRITICAL CONSTRAINTS RECOMMENDATIONS FOR FURTHER ACTION Objective: Reduce land deterioration Research nd extension oroarm: Conduct on-site trials of soil stabilization and * Ongoing ' MSTE(A, 'L Ack of funding for research ' Resesarch owuld provide locally focused advice on agro-forestry teclmiques MAFI(I), ' Poor infrastructure makes is difficuft for extension the right species nd best seed sourcewrFP NIAPP(I) agents to visit famers ' Conduct a soil survey. The 197S survey is Prepre land capability maps ' Ongoing ' NIAPP(l) outdate&Ama,79 Contour planting and tr rcng ' Pilo projects initiaed 'MOF(AJ MAFI ' Current soil classification systen does not match ' Introduce contour planting and alley copping vEpo :DR&T international standards * Explore traditional sustainable famning syta Agro-foresiry * VAC and Taugys integrated 'MAFl, MOF(1) farning system populrized Maxinize benefits from nulti-cropping ' Initiated demonstration plots ' MAFI Develop non-apicutural mean of ' MET, MLISA, enploymnn, especially densely populated MU areaKm sm,i Plat Snd dunes wtWemAm' p7 * 0.07 ril. ha of MOF land has *MOF been allocated for the purpose of sand dne fixation and 0.09 for coal protectiomwmN pis Mirnize pod ht ve losses * UInnon MOF(I) 'Low availability and high cost of post hv ' Extend low coat apriae technology MAFI(t) technology Objecdve2 Rehdc lxnd deterioration Land mwe r Establish a fornna land tenure system LAnd use righb can be gpnted to I MAFI(I), ' Absence of cadastral surveys ' Sinplify land allocation and on site tenure HHs for up to 60 yrsN ,s3 COM(L) Alocate property rights to barren lands' A total of 4.393 nil. ha wa 'MOF(l), ' Conflicts of property rights between native usmn and ' Support land allocation and on site extension allocated by mid-199 Ilsas.m.s s,i COM(L) immigrants aCtivitierT'sP POS ' High cost of relocation Allocate property to redisributing populaion There is ongoing redistribution 'GDLM(l), Suitable sites have not been properly identified from Red River Delta to Central MOF(I) Highla__ Objectve: Reduce land deterioration Economnic adiustment Proarn: 'Doi Moi reforms initiated in 'COM(L) ' High inflation 1986 and substantially reinforced ' Agricultural taxes are based on an assessment of land Develop conunodity market in 1989o0110,24 productivity that is equal to an effective rate of ' Individual land users need greater freedom of choice 0%GDW p24 to decide what to do with the land the are allocated sN p26 Strengthen planning process 'ALL. MAFI(I) ' Fornerly land use planning in agriculture was only 'Encourage cost accounting by state enterprises. D Strengthen plaming proccss ALL, MAFI(1) ~~~~~~~~~concerned with the setting of production targets for districts and collectivess"25 r D I~~~~~~~~~~~~~~~~~~~~~~~~~ :J O'.X o x 4-t OBJECrIVK&VROCRAMS S8ATUS IN8TITUTIONS CRITIAL CONMTRAINTS RECOMMRNDATIONS FOR FURTHER ACTION Objeee: -Raedeepopulaionprimwe i -elyRmmfomw E"ow 1o11 huahilks IM Law of People's healh e MEr, MLISA, * Consirevulyshin rve faioly plaming hevim MAi cesceplive p1tecaion MOPH Dmoition of t ional family pl_mg uiucaon method choice. Develop helth mave t dihmeb with move away frem cenmaz infontaien qwUrmwMpS 'nability ofOOV to provide adequate saces to POulation feCdjud . redimibtion, and * ince 1976 3.92 niL people MOL(A) MAFI eoh w m,gra' * Undui.ke poltion amblization fow _manble ailizaion esecally in Red Rive Delst have been elded on 0.75 ntl hL :DOMP deveo t UNDP Poied Profils *nd Nonhern Midluak Objsed": Rational developnt of minel tuoures to avoid gi evely on Rapdly iroduce. pmlgts d ei m Drft daae * MOE(A), * No exisig precedmd for developing law * Begn ten lnd ru ation tedmobgi 1dern techology MAFI(I) Develop m_mig kw * COM (L) 0 Aceknlte dring of mining lawVm,167 Objeey: Raioal ue of falizer nd _ides Exknion gd Pi projec gated * MAFI:PPRI * Avaiable ornic nmawial is usually wed for fuel ' Lack of knowledge by famc regarding correct Enxrawe use of orgmc fertlizm ( lnd *Pilct proeCd diteduAG * MAFI:PPRI threiolds for pedicide use nd apiro te dmical Conunucate IPM field reearch resut to farmwr NW rim nwmmy"mpn dzw~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~tiogi imeaaed extemion activities a Provie on frm dbmmostrations in the safe handIng ExuWd IPM medology * Featilizer subsidies rnoved in COM(L) of peatkide 1989 nintiate coct labeling ifpe picids Rentw tives for ov e f paticio and feitrlizs by elning subsidies 0 N IbIS O3JECTIVESIROCRAMS STATUS INSTITUTIONS CRITICAL CONSTRAINTS RECOMMENDATIONS FOR FURTHER ACTION Objeacve: Iuepated suainrable use ofthe Mdong deltca oils Develop sverly acd sulphde "oIs for * State Prouw 02-01 ano 60-02 ' MAFI(I) ' Need for detailed in_a n a'mnmt Food prodtucion nefax to be balanced with the natAnl forestry (epecielly Melc Sp-) deal with zoning and plannig in developqat ofoher ramoee widhout aignitcaitly th Mekong dela with a view to adver envn cont euencesvu 1l the wis exploitaion of weland ' Difftial plaiting of melaleucca tresan cidic re$051VC1K p177 area ad floating rice on betaer soilL ' PledI Sh twm flood col liited to the month MOF(I) of Augp Long term flood contr n sikw flooded ' MAFI(1) cm"rs puft of dehe ' Proped lIgrtidon practices to avoid wder low ng * MWR(I) ' Develop irription tough gaer pM capaity. nd salinization MAFI(A) nrurl ekctrification, nd addition flood protectiom~ 1. Ofth 11TAk M"ddt h. 1"13P1.MW,PKV1FIpntWbV b) T.47Uia&9j I d i. iW5-. ll 1p4 5--1&7k-WW 0 N OQ N 0 a ONM **91 Appendli 5.A' Degradation of Fresh Water Ecosystems - Activity and Impact: Eiamples from Past Studies Situation: Viet Nam has a tropical climate with high rainfalls and floods in the wet season and water shortages and low water lcvels in the dry season. There are 15 major rivers with drainage basins exceeding 3,000 km' each, of which the largest and most important are the Mekong (flow volume 520.6 km') and the Red River (122.02 kin'). Coverage of urban sewerage systems is very low in Ha Noi and Ilai Phong (20-35%) and probably is overestimated in HCMC (60%). Urban water systems were constructed several decades ago and the construction of new networks has not kept pace with urban growth or with the deterioration of the old sy5tem. DEGRADATION ACTIVITY IMPACT KEY LOCATION EXAMPLES I) Urban and industrial 1. 1) Contamination of potable water ' HCMC, Ha Noi, Hlai 10) The discharge of untreated sewage into major rivers is estimated at 120 mil m3 for Ha Noi, 70 wastewater discharge 1. 2) Contamination of washing, cleaning and Phong mil. m' for Hai Phong 34 mil. m' for Viet Tri, and 300 mil. m' for HCMC wMsC D1X2z. There are no transportation water operating treatment plants for domestic sewerage and industrial effluents uwes i 1 3) Contamination of water used for irrigating 1.0) A1l industrial wastewater from the existing 3,000 industrial enterprises are discharged without food crops resuling in reduced yields proper treatment wssss t3 1.4) Reduction of tourist or recreational activity 1.0) In HCMC area, organic waste from households contributes 60%, inorganic waste from small- 1 5) Reduction in adequate water quality to scale industries (textiles) 30% to pollution loads srRs's7 support conunercial fisheries 1. 1) Of 436 urban centers with a population over 5000, only 100 have piped drinking water covering 1.6) Degradation of aquatic biodiversity 47% of the urban population wss 6. The quality of urban water supplies is poor, generally not neeting 1 7) Eventual groundwater WHO standards wsalis contamination 1. 1) In Ha Noi, there are signs of occasional hygienic contamination of groundwater, high 1. 8) Corrosion of existing water concentrations of inorganic and organic nitrogen in some wells vn 26 supply infrastructure 1. 1) The mortality and morbidity profile in Viet Nam is characterized heavily by diseases that are linked to water supply and sanitation rnNar ri 1.3) Pollutants released by Pha Lxi ThermaI station into surface water may reduce agricultural productivity by 25% on pr. 30,000 ha which would tramnate into an amual loss of apr. USS 7.5 mil. 1.6) The level of dissolved oxygen is below the level which supports fish (4 mg/l) in Ha Noi and almost nil in HCMC ADie o 2) Dischare of solid and 2.1) Contamination of potable water aqd auifema Urban areas and industrial 2.0) In Ha Noi, for example, from an estimated tol arnount ofsolid waste produced daily (19S0 m'), heardoa wage (ustn and 2.2) Co rminatisn of oil sites about 50S (90 in') are collected uwwn. In Hai Phan, the collected percentage is 70% and in industrial) 2.3) Advrely affects downteam water HCMC it is 90% u~ 29. The collected amuts are trpoted to landfills with iadequate ecosysem and aquaculure provisions for leachate treadtent nd collction uws so 2.0) Sewage and solid waste discharge have deposited aludge layer in the city canls of Ha Noi and Hai Phong uwm: 3o 2.0) As much as 10% ofmarketable coal production is lost during transportation on water ma,s 3) Erosion Eom ariculte and 3.1) High waebrurbidity 'North and cralregions 3.1) During the rainy saon, totl average sift loads ofmajor river are between 150 and 450 hfty acivities 3.2) Water soug in uputreans aa due to tonalknVtyr sosvil isk=zed runoff 3.3) Reduction in hydropoww plant life_pn 3.4) L ofaoil nutients lbt 00 X D 'Acraor of citafions are given in Appendix 7.t __________________________~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~~~~~~~~~4 DEGRADATION ACTmVIY IMPACT KEY LOCATION EXAMPLES 4) Application of pesticides. 4. 1) Contamination of potable water (human * Rural areas 4.0) 33% of rural families have well or rainwater collection tank, but only 40% of those meet quality fertilizers and night soil in health) standards of MPH was io agricuhure 4.2) Accumulasion oftoxins in food chain 4.1) Pesticide residues have been found in 35 samples ofhuman fat, Lindane = lOppm, DDT= 35 4.3) Destruction of aquatic life and reduced ppm ICi 1n yields in aquaculture 4. 1) Microbiological pollution of surface water by sewage is probably the most serious problem in the 4.4) Eutrophication of water bodies Mekong Delta. Only midstream water of the Mekong and Bassac meets the EEC standard of 2000 MPN/100 applicable to the abstrdction ofraw water by treatment plants for drinking water. High concentrations of faccal coliform bacteria are correlated with a high incidence of water-related disease infectionrs Dmie 54.jn 4. 1) In sone areas of the North 95% of population has intestinal pasites whneas in the South the rate is about 40% wssus0 4.2) Pesticide residues have been detected in several species of fish wi&ss ,7 4.3) In the Mekong Delta, many of the used chemical pesticides have a high residual toxicity with serious ecological consequences, such as massive local death of fish and shrimp seaui ns17 4.4) Eutrophication is commonly found in areas with tagnant water m ,iw s, _ 4.4) Eutrophied stugnant water bodies contribute to the increase in infection rates (typhoid fever, hepatiti, malaria, dengue haemorsiagia fever, encephalitis) in Mekong Delta eex.e-ss s3. M,e,u 24 5) Irigation projecs and othe 5. 1) Contamination of potable water Mekong delta Future water resourc development imy result in rise in slinity intrusion of the order of 4-6 km on prjects imirg slinty 5.2) Reduction in agricultural yields and water the maintream branctes in the coal Mekong Delta plain and of 25-35 km for the Wet Vaico River hirusion supplies for livestock Mwu1 I m :> b x LQ d Bz5. Fresh Water Econads - Obled s P a Reconmedsdos hm Pu Studles ___ OBJECTIVESPROGRAMS STATUS INSTITUTIONS CRrITCAL CONSTRAINTS RECOMMENDATIONS FOR FURTHER ACTIONS Objehe: Develop regulatory capacity for pollution ' Peoples comnittac of Ha Noi and control on national nd local level HCMC have Envirn l Sectics Cacity-building program: I) Stelen projedpprOving agencics EPC in HCMC has scientists nd some MSTE(l) IURP/ 'Lack oftechnical equipment Give technical asistance to national and laboratory equipment MOC(I), NPEB(I), local lnsufficient staffing local agencies (trainirg and equipment) 2) Edablish asistance progrpsn to industries ' MSTE has no capacity to effectively govenenats * No monitoring and enforcement capacity * Establish laboratory facilities in northern (housekeeping. maintenance and enarg conservation review EAs 'Lack of technical expertise Viet Nam Eswit advice) ' Lack of coordination between different ' Strengthen th relationship to 3) Build naional database on pollution and establish Scanered information on pollution agencies UNEP/IRPTC for information and national registry for toxic chericals available from research institutes technology transfer on safe managemen of 4) Establish permanent monitoring and plat toxic substances inspection program * Support recruiting and training of capable 5) Develop technical skills technical staff for regulatory agencies 6) Establish labortory faclities I Support development of laboratory 7) Initiate resarch program on pollution control facilities Identify priority list of pollutants with l Regulatory Propr: 'Absence of national legal system nost significant hlth impacts I) Establish framework for integrted land-use zoning a COM(L), MSTE(A), governing emnissions ' Focus on establishing emission limits for urban nd industrial developmerit MPH(A) eas Is 2) Establish guidelines for environmenl review 'Foreign Invetrment law requires review a COM(L). MSTE(A) a Accelerate dafting of mining law mm se pRom of inthstrial projects of Eas by MSTE 0 Develop legislation for integrated Iand 3) Develop national wmbient quality nd industrial a Ha Noi has extemive list of ambient a COM(L), MSTE(A) use planming and establish mechanism for it amisions guidelines quality standards a Facilitate training in EA appraisement 4) Develop regpliom for the storage transpmaton ' COM(aL) NPEB(nI) and incorporation into decision-making nd use of toxic chemicas nd hazardous substa MSTE(I), local 5) Regulate pollution from coal mining nd governnents a Lack oftechnical expertise and triaportation activities a Mining LAw being drafled * NPEB(l), MSTE(I), operational cacity (staffing) local governemt Objecive: Reduce cotaaination of water ystem a MOC(I), MPH(I), a Initiate industrial waste pretreatment through solid and hazardous wates and toxins MSTE(l), city nd program provi ncial governments ' Separte medical waste Disposal program: a Initiate industrial and urban recycling I) Develop snitary landrills program 2) Improve waste collectin traspouaon and ' Identify and select appropriate sites for disposl landills N9w1i 3) Incinerate solid waste 4) Encourage recycling ow m ORJECTIVESFPROGRAMS | STATUS | INSTITUTIONS 1 CRITICAL CONSTRAINTS 1 RECOMMENDATIONS FOR I _________ j ____________________________ j FURTHER ACIiONS ObjedUve: Matain nd iW ove urban nd rural water -tem Institution-building program: * MPH(A), MWR(A), ' Lack of technical expertise and 'Improve operation nd maintenance of I) Fsablish central orgaization for supervision and MOC(A), MLISA(A), experience in planung, design and project the water supply system by developing support ofprovincial and cty water upply and MSTE(A). city and managerent in sector institutions human resources WU5.41 sanitation companes provincial goverments ' Concentte monitoring cfforts on effluent 2) Strangen sector istitutiom (operational capacity control eus * and human refouces) I Collect daa on water related illnesse 3) EFtblish monitoringystem of water quality and Noe 234 effluent Urban developent program (long-term): 'Prepre mater plan for main urban I) Prepare urban waer supply master plans Maaster plan for Ha Noi has been ' MOC(I), MPH(A), city ' Ldck of operational caacity (dstffing W areass, including sanitation and drainage prepared and is plaumed for HCMC gov eu rs equipment) problems M 41 2) Develop urban naser pluas including sanitation ' Sewerage and Drainrage Master Plan is * Give technical assistunce for review of and drinag apecas under prepation in Hai Pong national water tariff policy Ws. 43 3) bitiate i rstudure int s ' Goverrfnt policy of full cost recovery, Begin metering water WaM-4 4) riprove financial peformmance of water upply tariffi set by individual companies companies to decreae public subsidies Ia Identify pnority am for short-tenn Waer upply and tredUnet progran (short-term): Ha Noi Water Supply Projec rehabilitation w4i I) Rdehbilitste and develop new _at ies ' ADB project under prepartion for 'MOC(I), 'No comrehensive wate metering ystem ' Implemnt emergency measures for the 2) Enct short-term improvemnts in swerge an HCMC MSTE(I),MWR, MPH, in place rehabilitation and extension of water drainage infrctrte City governments ' LAck of funds to undertake remediation systeun in the big cities W55 U42 3) Eblish tAe exchrne' ndeworka ctivities ' Survey existing toxic and hazaidow 4) onte waste wstn reduction rees and recyclig effuent soure 5) adatsn exitig effuent u nd nd Install in-plant pre-tvat.ment and train abemet raegy uesm 'Study proper instituion of Rural wat supply and santtion progran: emisiiom tax or pollution permit systm I) Conduct provial wate supply and saitiaion 'Natinal Master Plan on Rural Drinking * Assist in provincial water supply and revievw Water supply and Sanitation drfted 'MLISA(I), MAFI(I). National plan needs to be updated m sanitation plans 2) Carntrol the disrge of hurnan wa into water ' MOLIUNICEF nral wter supply and provincial governments complemented by provincial plnning ' Promote low-cost treatent techiologies rCsontrces sanitation projecs ' Access to crdit for reuse of huan and auumal waste 3) ImplAmentvsim waterl and ptsanitation technologies ' High value of night soil as agricutural ' Expand wellItap construction progran 4) Asss envirosnmental impactof coal mine MAn fertilize PHroR 234. WISS 34 enact pollution condrol mneure 'Increase efficiency in coal induotry Remark Policies concrning agriculture are included in Appendix 4, forestry and watershed policies in Appendix 2. Industrial policy issues, such as product and efficiency issues re not considered in this section. I r0 0 0 eDIn Appendix6A' DegradationotAirQuality-Activity andImpact: ExamplesfromPasitStudles Situation: Except for a few specific areas in the major cities, there is little information available about ambient air quality in Viet Nam. Low rates of urbanization and industrialization may give the impression of fairly good air quality. However, this is not so. The urban energy sector is based on pollution-intersive energy sources, electricity from coal-burning thermal stations, wood, charcoal, coal and petroleum being the most significant sources. Light and heavy industries based upon outdated technologies are centered around urban areas and the density of motor vehicles and motorcycles in the cities his already high and increasing. There is a fairly high incidence of respiratory isease athough it has not been clearly shown that this is caused by air pollution or other factors. DEGRADATION ACTIVITY IMPACT KEY LOCATION EXAMPLES 1) Inustrial and residential 1. 1) Respiratory problems and other human ' Localized in industrial zones, 1.0) International standards for particulates appear to be nonnally exceeded in the main three emissions, primarily from the heahh effects particularly Ha Noi, HCMC, Hai cities; in 19S9, the levels measured for SO2 and CO are generally high or exceed the burning of coal, wood and oil 1.2) Reduced visibility (mostly from cement Phong, Uong Bai, and Ninh Binh intemational standard ranges. In Ha Noi, suspended particles show concentrations in the range plants) 0. 15-1.0 mgtmr (WiHO guideline: 0.07), S02 measured 0.05-0.5 mg/mr (WHO: 0.35), CO2 2- 1.3) Acid rain leading to ecosystem 10 mg/mr, nd CO I-5 mg/m' (WHO 30). In HCMC, dust measured 0.5-1.5 mg/mr (WHO: degadation 0.07) and SO2 levels were in the rSnge of O 5-2 mg/ml (dry season) and 0.25-1 mg/ml (wet 1.4) Declines in agricultural yields season) (WHO: 0.35) cur2 In Hai Phong, suspended paticulates measure 1.4-4.2 mg/m' around its cement factory vsss 22 1.0) SO2 emissions are estimaed at 40,000 t/yr in HCMC eRwrs-s. Hourly emission at Thuong Dinh industrial area (Ha Noi) can reach 630 kg of CO2, 52.2 kg of sulfide, 57.6 kg of CO, nd 0.6 kg ofNO2lczwms2 1.0) In a 1990 survey of63 industrial plants, 17/ had exsive dsat concentrations ad 17% discharged toxic waste such as benzene, lead and mercury. High concentions of the major air pollutants eem to be correlated wilt the location of light indudries caw'As 1. ) in a medical exanmof 9214 people in 90 industrial units in Hanoi (SI -5), 44.6%ofwork force suffered work related illnes and 24.4% had pneumonia c, 1. I) In a 1991 MPH survey, public and private heakth provider in 3 province fotnd 27% of patients were treated for acute respiratory infections na,7t 1 1.) In 193S, morbidity from respiratory infection = 257 per 100,000 or 0.257% Hrmn 1. 1) The incidence of nose, throat nd lung disease is significantly higher in contaminated areas than elsewhere Npasroepis 1.2) In HCMC average dust ernission - 2.56 M(g/s), permissible level about 0.07 mg/rm 1.4) It is estinmated that air pollution can cause a 10 to 20% reduction in agricultural yields 2) Traportation emissions 2.1) Health probems ' Localized in urban areas 2. 1) In 1990/1, HCMC had registered 700,000 motorbikes and 75,000 other vehicles, Ha Noi 2.2) Noise pollution had 34,000 can nd trucks and 200,000 motorcycles and Hai Phong 12,000 can and trucks and 30,000 motorcycles. Many transport vehicles are older and not well maintained. All gasoline is leaded cas'A 2.1) Lead concentations on a hourly basis were estimated at 0.004-0.001 mgtm' for Ha Noi and 0.001-0.002 mg/m' for HCMC caws2 2.2) For Ha Noi, noise surveys indicated 24-hour average levels of75-79 dB cwA2s I. In HCMC, noise lewls reach 10 dB on the main streets icm is 3) Particulate matter from mining 3.1) Increased respiratory problem r ' Localized in mining areas 3.0) Open pit coal mines in the north has created extensive coal dust pollution "r.o coal, tone et. 3.2) Reduced visibility o x 'Aae,yi of ciat are even in Appendix 7. ehi' Appendx &6B Air Q2a!lt - Obtves, Profna and Recommendations from Past Studies OBJECTIVES/PROGRAMS STATUS INSTITUTIONS CRITICAL CONSTRAINTS RECOMMENDATIONS FOR FURTHER ACTION Objective: Preserve air quality at acceptable MOE(I), MHI1(I) MLI(I), leves while allowing industry and mining MPII(A), MSTE(A), city activities to continue governments (1) * Establish air emission limits which re readily wonitored and enforced mm es Short-term abatement progam: ' Limited pollution control capacity and * Establish national database on pollution I Establish regulatory and procedural experience * Assist in implementing low-cost pollution framework for pollution control in new plarns * Lack of financial resources in control actions dentiry main polluters and implement low- * Enviromnent Conmmittee of govermment agencies and state enterpriies ' Establish boiler audit and upgrading program cost in-plant measures for pollution control HCMC identified 42 highly * Lack of technical skills and equipment * Upgrade or install particulate control systems * Control particulate emissions from coal fired polluting plants at Ninh Binh, Uong Bi and Pha LAi power plants * Existing pollution control stations em pse arrangements minimal or ineffective Ensure that no high-sulpher fuel oil is used for themal electir generation e ,s3 Medium-term pollution control progm: Raise smokestacks/install scrubbers m Fost public participation in monitoring pollution by establishing procedural franework * No enforcement capacity a Develop ahernative pollution control options ' Unclear regulatory and procedural 'Initiate training programn in the development ' Encourge development of clean household process and possible conflict of interest in and implementation of pollution control fuels and technology regulating esnissions caused by sate- instruments tn aIntegrate Snv ieeaal concemu into energy owed eepriss a Study the proper institution of an emissions tax policy a Som research on cle ing, * Lack of and limited access to or pollution permit system easily-lit fuels is ongoing environmiental data Start training programs on environmental * Most investigations into pollution a Lack of technical expertise aspects of energy policies are initiated by compidns of residents in surrounding areas (15- 20/ month in Ha Noi) Objective: Improve air quality in cities by * MCTPT(l), COM(L), reducing vehicular anisons MSTE(A), city goverments (I) Urban developmen program: * Itegrate tramption issues ito urban Lack of technical expertise and a Initiate training programs for integrated urban muepla institutional framework for integrated planning a Upgrade urban btaportation system (public urban planning I Give technical assisance for establishment of -apot and road ytem) a Lack of fia ncial resources for institutional framework (transportation unit) infrastructure investnents a Promote fuels with low lead content Extension Program: a Start public education programs on use of a Promote use of 'public trasportation 'Existing public transportation system efficient transportation means ' Encourage use of bicycles and motorbikes outdated ' Educate govemnment and city officials on through provision of facilities for cyclists a Negative social attitudes to bicycles advantages of bicycle and motorbikes 'z ' Remark: Pollution control regulatory capacity is included in Appendix 4.2. Energy sector policies, such as increasing energy efficiency and promoting renewable sources, are not included ti i-4 o x - 156 -Avdix 7 Page 1 of 2 Appendix Acronvms for Government Organizations and Documents Reviewed A. GOVERNMENT ACRONYMS COM Council of Ministers (drafts and implements laws, budgets for national assembly approval) COS Council of State (implements laws and supervises other state organs) CRES Center for Resource and Environmental Studies (U. of Hanoi) DFCS Department of Fixed Cultivation and Sedentarization, MOF FRI Forestry Research Institute GEF Global Environment Facility GOV Government of Viet Nam IOE Institute of Energy IURP Institute for Urban and Rural Planning, MOC MAFI Ministry of Agriculture and Food Industry MCIST Ministry of Culture, Information, Sports, and Tourism MCTPT Ministry of Communication, Transportation, Post, and Telegraph MIET Ministry of Education and Training MFA Ministry of Foreign Affairs MEI[ Ministry of Heavy Industry MLI Ministry of Light Industry MLWS Ministry of Labor, War Invalids, and Social Welfare MMP Ministry of Marine Products MND Ministry of National Defense MOA Ministry of Agriculture MOA/DOMP Ministry of Agriculture/Division of Production and Marketing MOA/DR&T Ministry of Agriculture/Division of Research and Training MOA/PPRI Ministry of Agriculture/Plant Protection Research Institute MOC Ministry of Commerce MOCN Ministry of Construction MOE Ministry of Energy MOF Ministry of Forestry MOFIN Ministry of Finance MOI Ministry of Interior MOJ Ministry of Justice MOPH Ministry of Public Health MSTE Ministry of Science, Technology, and Environment MWC Ministry of Water Conservation MWC/WPMI Water Resource Management and Planning Institute NA National Assembly (national legislative body) NC Nationalities Council (represents the interests of ethnic minorities) NCSR National Center for Scientific Research NDC National Defense Council (military) NIAPP National Institute for Agricultural Planning and Projection, MAFI NIDC National Infonration and Documentation Center Apoendix 7 Page 2 of 2 SCS State Committee of Sciences SPC Supreme Peoples Court (highest judicial body) VITEP Viet Nam Institute of Tropical Technology and Environmnental Protection Parentheses following organization acronyms indicate the following: (I) Implementing (A) Administrative (L) Legal B. LIST OF MAJOR DOCUMENTS ASR Agriculture Sector Review (FAO - 1990) CRIP Urban Waste Management Study for Hanoi, Haipong, and Ho Chi Minh City (Crippen Consultants - 1993) ESIPR Energy Sector Investment and Policy Review, yellow cover (WB-1992) ESIV Environmental Studies in Viet Nam (SIDA - 1989) FESR Fuel Wood and Energy Sector Review, draft (FAO - ?) This is a report lent to us by Paul Ryan FIV Forestry in Viet Narn (FAO - 1990) GIMFD General Identification Mission, Forestry Developments (FAO - 1990) GIMFISHD General Identification Mission, Fisheries Developments (FAO - 1990) GfIMMR General Identification Mission, Main Report (FAO - 1990) GSO General Statistics Office of Viet Nam, Agriculture and Forestry 1976-1991 HPNSR Health, Population, and Nutrition Sector Report, green cover, (WB - 1992) ICESD International Conference on Environment and Sustainable Development (UNDP - 1990) KRAM Viet Nam Wetlands, Mission Draft (Kram Kimel, May 1993) MDMP Mekong Delta Master Plan, draft, (Government and UNDP - 1989) NPESDPP National Plan for Environment and Sustainable Development Project Profile NPA National Progam for Action for the Survival, Pprotection & Development of children in the socialist republic of Viet Nam (Government - 1991) NCS National Conservation Strategy (IUCN - 1985) RFPM Report of the UNDP/FAO Forestry Progranmming Mission (UNDP - 1986) NPESD National Plan for Environment and Sustainable Development (Govemrnent and UDNP - 1989) RFRA Report on Forest Resource Assessment, (FAO - 1990) ROV The Regreening of Viet Nam (Kempf - 1990) RNCS Review on Nature Conservation System, (FAO - 1990) RWMN Review of the present status of Watershed management and future needs for immediate action in Viet Nam (FAO - 1990) SFN Northern Viet Nam: Farmers, Collectives, and the Rehabilitation of Recently Allocated Hill Land (Social Forestry Network #12a-1991) TFAP Tropical Forestry Action Plan (Government and FAO - 1990) TFAPFS Tropical Forestry Action Plan Fuel Wood Sector Review (FAO -?) UNCED Viet Nam National Report to UNCED, (Government - 1991) VIEP Viet Nam Environmental Issues Paper, Memorandum from Richard De Silva 9WB-1990 WBESB World Bank Environmental Source Book (WB - 1991) WSSSS Water Supply and Sanitation Sector Study (UNDP and WB - 1990) - 158 - Appendix 8 - ~~~~~~~~~~~Page l ot 3 Appropriate Farming Systems in the Rehabilitation of Degraded Upland Areas This appendix briefly summarizes (a) the improved cropping systems (the "best practices") that have been adopted in the midland and highland areas in Viet Nam; and (b) potential systems from other countries which can be extended to Viet Nam. 2. Some of the more important technologies or measures that are presently practiced in Viet Nam are summarized below by location and community:' * A limited number of Muong Thai and Nung ethnic groups living in low hill areas or adjacent to the plains have succeeded in changing their cultivation mode to stable, intensive cultivation. They make terraces, irrigate, make fish ponds, and plant trees with marketable products. This is known as the VAC experience. * In some of the mountain areas of the North and Northwest, rotational farning combining short term and long tern crops such as tea, aleurities montana, cinnamum, illicium, verum, soy bean, etc. is successfully practiced. * Land shortage, particularly in the more accessible Northern Midlands, and some intensive extension work, has led to the introduction of highly valued cash crops like cinnamum cassia, coffee, tea, black pepper, pears, persimmnons, and plums in home gardens. Such crops facilitate intensive farming techniques. * Inter cropping various bean species with maize in many Northern provinces such as Cao Bang, Lang Son, Lai Chau, Son La. * Hedge row intercropping (ie "alley" cropping between leguminous barrier hedges) in some Southern Provinces. i Taungya system in the establishment of Melia azaderach plantations used in Than Hoa and Hoa Binh Provinces. * Multicrop gardens with fruit trees are well developed by Tay and Nung minorities. * Well organized protection of forest for natural regeneration has been observed practiced in some areas of Son La. * Stick hole planting method (zero tillage) is practiced by various tribes to improve water retention. * Agroforestry is broadly applied such as combination of cinnamum cassia and dry rice, maize etc. I/ More details on traditional and improved systems are given in (a) Hoang Hoe, 'Some Facets of Agroforestry in Viet Nam,' a paper presented to the Export Consultation on Agroforestry in the Asia-Pacific Region, May 1990; and (b) Do Dinh Sam, ' National Background Paper on Shifting Agriculture in Viet Nam,' presented at a Chiang Mai (Thailand) Workshop on Shifting Cultivation, August 1992. - 159 - ADDendix 8 Page 2 of 3 3. More details are needed concerning the conditions under which each of them has been successful, so that replication can successfully be promoted. Based on past studies, certain prerequisites are essential for technology transfer: (a) The technologies with the best chance for replicability must be sufficiently remunerative in terms of fulfilling household subsistence needs or increasing net cash income from the farmers' efforts. The cash crop alternatives given above are feasible for relatively accessible areas but consideration should still be given to the market absorbability of the products. The conceptual model often used to demonstrate the objectives and strategy of Decree 327 - of stratified forestry, agro-forestry, and food crop production down the hill-side -- assumes a degree of homogeneity across the people, farming systems, and agro-ecological zones of Viet Nam that does not exist. While an approach of farmer settlement linked to state enterprise activity is a viable and presently a sensible option (provided home garden land allocation ensures that food security is not subsumed by cash crop production), its linkage to reforestation and erosion control needs further reassessment. For instance, forest plantation, especially long rotation forest, appears to be financially unattractive relative to current shifting cultivation systems (Annex 1, Table 23). Already some farmers are avoiding taking up land allocations that would require afforestation, as government's incentive payments for tree planting and plantation management [an establishment grant of up to D 2.5 million (US$ 238) per hectare and maintenance allowance of up to D 50,000/halyr (US$ 5/halyr)] are too low, particularly because they carry a risk of non-compliance on the part of government. (b) In terns of erosion control measures, soil conservation technology that emphasizes biological conservation measures would be preferred to the construction works (e.g. most terraces for annual crops) which require large excavations. The biological measures include the establishment of so called wash stops or cross slope barriers consisting of grass strips, trash lines, hedge rows, stone lines, soil banks, or a combination of these measures. A simple model evaluating the net economic returns from: (a) grass strips and mulching; (b) earth bands; and (c) terraces (Annex 7) indicate the greater cost effectiveness of vegetative erosion control techniques [item (a)] compared with excavation techniques [items (b) and (c)]. For the former, sediment deposits gradually build up in front of the vegetative structures, developing them into bench terraces in any case. The time for this process to be completed, however, depends on the rate of soil erosion and the intensity of tillage. 4. The best prospect for income enhancement and more sustainable production in the highland areas will have to be the introduction of fodder/fuelwood production technologies, many of which are being adopted by smallholder farmers in other S.E. Asian countries, particularly Indonesia, Thailand, the Philippines, and Malaysia. They include: (a) Shrub and tree legume establishment, which is likely to be the most important strategy because many shrub/tree legumes are hardy and multi-functional. They offer substantial benefits in terms of erosion control, improved soil fertility, live fencing and fuelwood and timber supply, including some high value cabinet timbers. The main elements of a shrub/tree legume strategy, using direct seeding wherever feasible, could include: * establishment in blocks and as live fencing in house compounds or as hedgerows on crop boundaries; Atmendix - 160 - Page 3 of * close planting in rows within alley-farning systems in continuously cropped areas; * close planting on contour lines for erosion control; * rehabilitation of degraded forest allocated to irdividual farmers with fast rotation leguminous wood pulp species, using a 7-10 year cycle including a cropping period after tree harvest, and within young stands as part of a contained and sustainable shifting cultivation program. (b) Legume undersowing of crops, Box 1: Benefits of Ley Farming Systems particularly maize and cassava or even plantation crops, using either broadcast or inter-row cropped food Ley farming systems incorporating beef and dairy cattle or fodder legumes. This has have been successfully developed in Thailand's infenile already started in the Northern uplands'. The recommended system involves a two- Hills. The legumes would assist in paddock, 4-year rotation using two year leys of macroptiliumm atroourrureum or stylosanthes hamata in the maintenance of soil fertility and combination with upland crops including maize, cassava ground cover, provide additional and roselle. The comparison of a 1.3 ha ley rotation with high protein forage for traditional upland farming showed a 22.7% lift in net feeding/grazing with crop stubble, income with a ley/beef rotation cattle system and a 199.8% and formn the basis for a Icy farmning lift in net income for ley/dairy cattle farming systems before allowance for the benefits of increased soil fertility system (See Box 1). and reduced erosion. Integrated livestock/Iley farming systems offer a means to better exploit Viet Nam's (c) Legume reinforcement of grazing extensive areas of acidified infertile lowland and upland lands could be achieved without soils and should be a feature of applied forage legume modifying traditional grazing research in those localities. management as road verges are a/ Gibson, T. World Animal Review 61, pp. 35-43. readily accessible for oversowing and can be used to establish a seed bank (especially Stvlosanthese sDD) from which livestock would carry seed into surrounding pasture land and crop verges. (d) Conservation based forage strategies could include forage reinforcement of soil conservation structures; direct seeded or transplanted trees or grasses (e.g. Vetiver zizanoides) on ploughed contour lines; leguminous tree re-enforcement of degraded forest; and legume introduction into protected hillsides for subsequent cut-and-carry livestock feeding. 5. In summary, conservation based forage production offers a low cost, smallholder implementable tool for land conservation. It also provides income generation opportunities through forage seed production, livestock feed, and fuelwood production which in turn improve smallholder farner perception of the value of land conservation. CHINA C oBong7 CHINA ( EO \ ~~~~~~~C o\ 1 \L1 ) ~~~~~~~~~~~~~~~~~~~~TH~ALAND O MALAYSIA LAO PEOPLE'S D,.h l9gomDm -20, DEMOCRATIC B.(s YNnhh VIET NAM PROVNCE REPUBLIC 2 5 t PROVINCES t_ ~ ~~~~~~~~~~~~~~~~~~~~~ Lain Choo NATIONAL CAPITAL Lai Chou O PROVINCE HEADQUARTERS 3 Lao Cai 1 ROADS 4 Vinh Phu - iRnh RAILROADS 5 Tuyen Quang 6 Ho Giang K VIENTIANE 22 HoTh RIVERS 7 Yen Boi PROVINCE BOUNDARIES 8 Coo Bang 9 Bac Thai - \ \ \\t INTERNATIONAL BOUNDARIES 10 Lang Son 1 I Quang Ninhi 12 Ha Bac 13 Hoi Hung t %) DWG Ho ~~~~~~14 Ho ra,y 4\ ^ , 15 HQj Phong 16 Thoi Binh 17 Hoa Binh THAILAND 18 NamI-Ho 19 Ninh Binh 20 Thanh Hoc 21 Nghe An 22 Ho Tinh Q15 } 2 °23 Quang Binh 15- 24 QuongTri 2 J 9 A 25 Thuo Thien Hue 26 Quang Nam Do Nang 27 Quang Ngoi / X \ 30 28 Kon Tum C. 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