Ensuring effective payment for forest environmental services.

(Baonghean) - The Forest Protection and Development Fund is a new and unique operational model, combining the characteristics of a financial institution with the responsibilities of a specialized forestry and environmental agency. With the guidance and support of the Provincial People's Committee and relevant departments and agencies, after three years of implementation, the Nghe An Provincial Forest Protection and Development Fund has basically achieved stable operations, and its initial tasks have yielded noteworthy results.

Negotiating and signing entrustment contracts with forest environmental service (FES) users is a crucial activity of the Nghe An Forest Protection and Development Fund. To date, the fund's three operational agencies have signed 14 entrustment contracts for FES payments, including 9 contracts with hydropower plants and 5 contracts with water supply facilities. Currently, the fund is in the process of negotiating to sign another entrustment contract with the Nghe An Water Plant.

Inspecting the planted forest at Khe Tron (Thanh Chuong). Photo: Van Doan

Thanks to proactive negotiations and implementation of entrustment contracts, the fund has remained stable and expanded its revenue sources despite difficult conditions. To date, the total amount of entrusted funds collected from various sources has reached over 125 billion VND, placing it among the funds with the highest revenue nationwide, significantly supplementing capital for forest protection and development, and promoting the socialization of forestry. This is in accordance with Decree No. 05/2008/ND-CP and Decision 3186/QD-UBND dated...21/8/2012Under the direction of the Provincial People's Committee, the Fund has implemented various measures to collect reforestation support funds from projects converting forest land use. To date, the revenue has reached 2.2 billion VND. The majority of this revenue has been allocated to units for reforestation in accordance with the National Assembly's Resolution on compensating for forest areas converted to other purposes.

Seedling nursery of the Thanh Chuong Protective Forest Management Board. Photo: V.D.

The unit responsible for reviewing the hydropower basins has achieved 100% of its planned target, essentially completing the review of the scope and boundaries of the basins of the operational hydropower plants. The review results have been approved by the Provincial People's Committee as a basis for implementing the next steps. In addition, for the Nam Pong and Chi Khe hydropower basins, the Fund's operational management agency is preparing the necessary documents and procedures for review to begin in early 2015. To date, the total forest area in the hydropower basins for which design documents and forest protection contracts have been approved by competent authorities is 98,000 hectares out of a total of 315,000 hectares of forest in the basins approved through the review results (only 32%). The slow progress in preparing forest protection design documents by forest owners and related units is one of the main reasons for the slow disbursement progress. To help forest owners and relevant units expedite this activity, the Forest Protection and Development Fund conducted a survey to develop a comprehensive plan outlining the required volume, funding, and proposed implementation solutions, which were then submitted to the Provincial People's Committee for approval and guidance on implementation.

At the same time, the Fund has proactively coordinated with media agencies to disseminate information about the Forest Protection and Development Fund and the policy on payment for forest environmental services through newspapers, the internet, television, training courses, conferences, etc. Through these communication activities, awareness of forest protection and the policy on payment for forest environmental services among target groups has been raised, but it is still uneven; therefore, it is necessary to further strengthen both the quantity and quality of communication in the future. To date, the Fund's operational management agency has disbursed cumulatively over 45 billion VND in forest environmental service payments and project support from revenue sources under Decree No. 05/2008/ND-CP to forest owners, corresponding to over 200,000 hectares of forest under protection contracts and over 500 hectares of forest regeneration support. As a result, the disbursement rate has increased. In 2014 alone, disbursements reached over 80% of the year's revenue, three times higher than the same period of the previous year.

Besides the efforts to achieve the above results, the Fund also faces difficulties: Due to the unique nature of the Fund for Ecosystem Services (PES) being established after some previous revenue sources were collected, and because a large portion of the forest area in hydropower basins had not been contracted out or had forest protection design documents prepared at the time the PES revenue was generated, a large amount of funds remained unspent over the past three years. Therefore, although the rate of PES payments has increased significantly recently, the overall disbursement rate remains low.

The majority of the watershed area (approximately 70%) has had its boundaries surveyed, but there is still no list or forest protection design for household, individual, or village community forest owners providing forest ecosystem services (FES) to serve as a basis for disbursing FES funds. Last year, forest management boards and forest ranger stations were assigned to carry out this task, but due to the large workload and lack of funding, the implementation progress was very slow. Given this situation, the Forest Protection and Development Fund has surveyed and compiled the needs for the workload, capital, and projected funding sources for approval. Accordingly, the Fund plans to save on management expenses to support the acceleration of this project. The fulfillment of the responsibility to declare and pay entrusted funds from some hydropower production facilities is also delayed and not in a timely manner according to regulations. To date, the cumulative outstanding FES debt has reached tens of billions of VND. Recently, the Government and relevant ministries have issued quite decisive directives on this issue. The Fund will continue to urge, remind, and advise on the establishment of inter-agency teams to inspect and handle units that deliberately delay paying the Environmental Protection Fund.

In 2015, the Forest Protection and Development Fund strived to further expand its revenue sources, advising the Department of Agriculture and Rural Development to coordinate with district authorities to direct units to accelerate the review and approval of forest protection design documents; at the same time, improving professional expertise and increasing both the quantity and quality of disbursements.

Mr. Tuan