Strengthening the role of vietnam forest protection and development fund in the enforcement of the policy on payment for forest environmental services

F UNIVERSITY, HANOI
VIETNAM NATIONAL
VIETNAM JAPAN UNIVERSITY

PHAN THI QUYNH HOA

STRENGTHENING THE ROLE OF
VIETNAM FOREST PROTECTION AND
DEVELOPMENT FUND IN THE
ENFORCEMENT OF THE POLICY ON
PAYMENT FOR FOREST
ENVIRONMENTAL SERVICES

MASTER'S THESIS

PUBLIC POLICY

Hanoi, 2019


VIETNAM NATIONAL UNIVERSITY, HANOI
VIETNAM JAPAN UNIVERSITY

PHAN THI QUYNH HOA

STRENGTHENING THE ROLE OF
VIETNAM FOREST PROTECTION AND
DEVELOPMENT FUND IN THE
ENFORCEMENT OF THE POLICY ON
PAYMENT FOR FOREST
ENVIRONMENTAL SERVICES

MAJOR: PUBLIC POLICY
CODE: PILOT

RESEARCH SUPERVISOR:
Dr. NGUYEN NGOC HUY

Hanoi, 2019


TABLE OF CONTENTS
ABBREVIATIONS .................................................................................................ii
LIST OF TABLES AND FIGURES ....................................................................... iv
LIST OF ANNEXES ............................................................................................... v
ABSTRACT ........................................................................................................... vi
ACKNOWLEDGEMENT ..................................................................................... vii
INTRODUCTION......................................................................... 1
LITERATURE REVIEW .............................................................. 5
Review some models of PES implementation in the world ......................... 5
PES program in Costa Rica .............................................................. 5
Programs targeting watershed services in China ............................... 7
Payment for ecosystem services in Japan .......................................... 9
Payment for Environmental Services program in Cambodia ........... 14
PFES policy and VNFF in Vietnam .......................................................... 18
PFES policy in Vietnam ................................................................. 18
VNFF in implementation of PFES policy ....................................... 24
Review some reports on VNFF and PFES ................................................ 26
2.3.1. Report on 8 years of operations of forest protection and development
funds and 5 years of implementation of the PFES policy ............................... 26
Report on reviewing 10 years of organization and operation of forest

protection and development funds from 2008 – 2018 ..................................... 29
RESEARCH METHODOLOGY................................................. 34
Data collection method ............................................................................. 34
Methods of data processing and analysis .................................................. 35
RESEARCH FINDINGS............................................................. 37
VNFF’s organization and operation .......................................................... 37
Implementation of PFES policy ................................................................ 40
Some specific results from interviews and surveys ................................... 42
General evaluation on VNFF .......................................................... 43
Stakeholders’ understanding about VNFF ...................................... 44
DISCUSSION ............................................................................. 47
Organization and human resource............................................................. 48
Legal regulations and guidelines on PFES policy ..................................... 49
PFES management and utilization ............................................................ 50
CONCLUSION AND RECOMMENDATIONS ......................... 52
Conclusion ............................................................................................... 52
Recommendations .................................................................................... 52
References ............................................................................................................. 55

i


ABBREVIATIONS

ADB
BoD
CBD
CCICED
CIFOR
CITES

CPC
DARD
ES
EWS
FCPF
FES
FONAFIFO
iPFES
MARD
M&E
MoF
MPI
MU
NGO
OECD
PES
PFES
PFPDF
PPC
PPSA
RAMSAR

Asian Development Bank
Board of Directors
Convention on Biological Diversity
China Council for International Cooperation on Environment
and Development
Center for International Forestry Research
Convention on International Trade in Endangered Species
Communal People’s Committee

Provincial Department of Agriculture and Rural Development
Environmental services
Eco-compensation for Watershed Services
Forest Carbon Partnership Facility
Forest Environmental Services
Fondo de Financiamiento Forestal de Costa Rica (National
Forestry Financing Fund of Costa Rica)
“Improving Payment for Forest Environmental Services”
project
Ministry of Agriculture and Rural Development
Monitoring and Evaluation
Ministry of Finance
Ministry of Planning and Investment
Management Unit
Non-Governmental Organizations
Organization for Economic Co-operation and Development
Payment for environmental/ecosystem services
Payment for Forest Environmental Services
Provincial Forest Protection and Development Fund
Provincial People’s Committee
Pago por Servicios Ambientales (payment for ecosystem
services program in Costa Rica)
Convention on Wetlands

ii


REDD+

SLCP

UN
UNCCD
UNDP
UN-REDD
Programme
VFDS
VNFF
VNFOREST
WCS

Reducing emissions from deforestation and forest degradation,
conservation of existing forest carbon stocks, sustainable forest
management and enhancement of forest carbon stocks
Sloping Land Conversion Program
United Nations
United Nations Convention to Combat Desertification
United Nations Development Programme
The United Nations Programme on Reducing Emissions from
Deforestation and Forest Degradation
The Vietnam Forestry Development Strategy
Vietnam Forest Protection and Development Fund
Vietnam Administration of Forestry
Wildlife Conservation Society

iii


LIST OF TABLES AND FIGURES
List of Tables
Table 2.1 River basins between Vietnam and China ................................................ 7

Table 2.2 Payment level to partner producers ........................................................ 10
Table 2.3 Types of forest in Japan ......................................................................... 11
Table 2.4 River basin between Vietnam and Cambodia ......................................... 14
Table 2.5 Policies and strategies related to PES in Cambodia ................................ 14
Table 2.6 Total entrusted contracts as of Oct 2018 ................................................ 31
Table 2.7 The PFES collection as of Sep 2018....................................................... 31
Table 4.1 Update changes in VNFF structure & operation ..................................... 37
Table 4.2 PFES amount paid for forest owners in 2018 ......................................... 41

List of Figures
Figure 2.1 FONAFIFO’s organization structure....................................................... 6
Figure 2.2 Programs of Kanazawa’s Five-Year Action Plan .................................. 13
Figure 2.3 Community-based ecotourism program in Cambodia ........................... 17
Figure 2.4 Milestones of developing PFES policy ................................................. 19
Figure 2.5 Payment level for FES users ................................................................. 21
Figure 2.6 PFES distribution mechanism ............................................................... 22
Figure 2.7 PFES stakeholders ................................................................................ 23
Figure 2.8 VNFF’s Organizational structure .......................................................... 25
Figure 2.9 Development of PFPDF quantity as of 2015 ......................................... 28
Figure 2.10 Status of FPDFs from 2009 - 2018 ...................................................... 30
Figure 3.1 Subjects of survey and interview .......................................................... 35
Figure 4.1 Statistics of general evaluation on VNFF .............................................. 43
Figure 4.2 Satisfaction rate .................................................................................... 44
Figure 4.3 Stakeholders’ understanding about VNFF............................................. 45
Figure 4.4 VNFF’s activities in implementing PFES policy................................... 46
Figure 5.1 VNFF MU Human resources ................................................................ 48

iv

LIST OF ANNEXES

Annex 1. List of legal documents related to implementation of PFES policy ......... 58
Annex 2. List of handbooks on PFES policy implementation ................................ 62
Annex 3. List of provincial forest protection and development fund ...................... 64
Annex 4. Survey form for VNFF’s staff ................................................................ 66
Annex 5. Survey form for provincial forest protection and development fund ....... 72
Annex 6. Survey form for VNFF’s users ............................................................... 77
Annex 7. Survey form for VNFF’s stakeholders .................................................... 81

v


ABSTRACT
In line with the international trend, the policy on payment for forest environmental
services (PFES) in Vietnam has created a stable financial source for forest protection
and development, increases the contribution of forestry sector in the national
economy, improves livelihoods and helps to stabilize the life of forest workers. More
specifically, this policy has been applied throughout the territory of Vietnam,
enhancing the role and responsibility of the entire society in forest management and
protection activities. To achieve that success, Vietnam forest protection and
development fund (VNFF) plays a very important role in the implementation of the
policy. This report will analyse in detail of VNFF with the role of an entrusted fund
to mobilize, receive and utilize social resources for forest management, protection
and development. Through studying legal documents in Vietnam, evaluation reports
on VNFF and PFES as well as analysing data collected from surveys and interviewing
stakeholders, many difficulties have been shown in the process of VNFF’s
organization and operation which affects the effectiveness of the PFES policy
implementation.

From

these

findings,

the

author

would

propose

some

recommendations to strengthen the role of VNFF in the enforcement of the policy in
the coming time.

vi


ACKNOWLEDGEMENT
I am really happy because I managed to finalize the thesis “strengthening the role of
Vietnam Forest Protection and Development Fund in the enforcement of policy on
payment for forest environmental services” within the timeframe assigned by the
Vietnam Japan University, Vietnam National University, Hanoi. This report cannot
be completed without the great supports and absolute trust of professors, relatives and
colleagues.
First of all, I would like to express my deep gratitude to my supervisor, Dr. Nguyen

Ngoc Huy, who directly guided and gave me valuable comments on my thesis. Even
he is very busy, but he has always spent a lot of time and efforts to direct me
throughout the process of researching and completing this report.
In addition, I would like to sincerely thank the all professors and staff working in
Vietnam Japan University, especially in the public policy program who dedicated to
convey valuable knowledge and help me in the process of learning and researching.
Finally, I am also thankful to my family, friends and colleagues who have always
encouraged me and provided me utmost support to complete all assignments in the
process of studying as well as finalizing this topic.
Although there are many attempts, but this research topic will not free of
shortcomings, I look forward to receiving the comments of professors, experts,
friends and colleagues so that my topic can be better completed.
Hanoi, 31 May 2019
Phan Thi Quynh Hoa

vii


INTRODUCTION
In recent years, initiative of payment for environmental/ecosystem services (PES) has
been widely adopted in the world. It is considered as one of effective tools to support
environmental protection and biodiversity conservation. According to Wunder, PES is
defined as “a voluntary transaction where a well-defined environmental service (ES) is
being “bought” by a (minimum one) ES buyer from a (minimum one) ES provider if
and only if the ES provider secures ES provision” (Wunder, 2005). After many years,
this definition is broadened by Tacconi "A PES scheme is a transparent system for the
additional provision of environmental services through conditional payments to
voluntary providers" (Tacconi, 2012). The payment is conducted based on a voluntary
agreement between providers of environmental services and users of these services.
Some (PES) programs have the direct involvement of the providers and users but some

others, they need the support from Government and intermediate organizations to work
as a bridge between the users and providers.
Users of environmental services (FES user) are the beneficiaries of the environmental
services such as hydropower companies, water supply, tourism business companies,
industrial production facilities, etc. They use natural resources for their production and
business such as water, ecological system, forest environment therefore they are defined
to pay for the environmental services they use. Providers of environmental services (FES
provider) are those involving in protecting the environment and living in the areas that
providing environmental services.
PES in Vietnam is linked to the payment for forest environmental services (PFES). This
term is clearly regulated in the Government Decree no.99/2010/ND-CP dated 24
September 2010 (Decree 99). It is understood as “a provision and payment relationship
in which users of forest environment services pay to providers of these services”1. This
policy is firstly implemented in Lam Dong and Son La from 2008 to 2010 according to

1

Article 3, Decree no.99/2010/ND-CP dated 24 September 2010 of the Government on
the policy on payment for forest environment services
1


the Decision 380/QD-TTg dated 10/4/2008 of the Prime Minister and then is applied at
the national level as the Decree 99 of Government and encouraged the participation of
all people to the forest protection. The PFES policy has created a new, stable financial
mechanism, contributing to better forest protection (VNFF, 2018).

Forest protection and development fund (FPDF) is an intermediate agency to receive
the indirect payment of FES users to pay for FES providers in Vietnam, it was
established by Government Decree No.05/2008/ND-CP dated 14 January 2008, in

which defined as “a state financial institution, with legal entity, having specified seal,
and able to open an account at a bank or State treasury according to statute law”2. The
system of this fund is set up from the central to the provinces that have forests and plays
as the entrusted role to ensure the successful implementation of the PFES policy.

Vietnam Forest protection and development fund (VNFF) is the central fund of forest
protection and development. It was established by the Decision of Ministry of
Agriculture and Rural development (MARD) no. 114/2008/QD-BNN, dated 28
November 2008. This is considered as a lead agency to receive and coordinate the PFES
in Vietnam.
The fact of implementing the policy during the pilot phase until now as well as the result
from surveys, some shortcomings and difficulties have been defined such as not all
environmental services stated in the Government’s regulations are paid, pending
payment of forest users, direct payment has not been applied, the limitation in PFES
monitoring and evaluation. These shortcomings affected a lot the implementation of the
PFES policy. Decree 99 regulated five types of forest environmental services to be paid
includes: (i) Soil protection, restriction of erosion and sedimentation of reservoirs, (ii)
Regulation and maintenance of water sources for production and social life, (iii) Forest
carbon sequestration and retention, (iv) Protection of natural landscape and conservation
of biodiversity, (v) Provision of spawning grounds, sources of feed and natural seeds,

2

Article 6, Decree No.05/2008/ND-CP dated 14 January 2008 of the Government on
the forest protection and development Funds
2


use of water from forests for aquaculture3. Despite of clear regulations on types of FES,
FPDFs only collected PFES from hydropower companies for the first type, clean water

suppliers for the second type, some tourism business companies for the forth type. Even
though, some of these FES users still delay the payment, that affect the disbursement to
the forest providers. The collection for the industrial companies and aquaculture
facilities is piloting, the service of carbon sequestration has not been implemented which
show the gaps in the policy consultation and enforcement. At present, only indirect
payment has been conducted through the FPDFs, FES users have not paid directly to
FES providers and the PFES monitoring and evaluation is still limited which set higher
requirements for FPDFs, especially the VNFF.
Based on the analysis and evaluation from legal documents of Vietnam, some PES
models of other countries as well as the surveys for relevant stakeholders of VNFF and
PFES in Vietnam, the author expects to provide a comprehensive information of
VNFF’s position during the implementation of PFES policy. Therefore, the aim of this
report is to clarify the major causes of shortcomings and difficulties that VNFF
encountered while operating, then propose some recommendations to strengthen the role
of VNFF in the implementation of the PFES policy. To achieve those objectives, the
following questions will be answered in the report including:
- What shortcomings and difficulties has VNFF encountered while operating and
complying PFES policy?
- What are key recommendations to strengthen the role of VNFF?
This report contains six Chapters with general introduction in Chapter 1; reviewing
some typical PES models of other countries, legal regulations and some previous reports
on VNFF and PFES in Chapter 2; description of research methodology in Chapter 3.
Chapter 4 provides some findings after literature review and conducting surveys to
relevant stakeholders. Chapter 5 will discuss VNFF’s organization and human

3

Article 4, Decree no.99/2010/ND-CP dated 24 September 2010 of the Government on

the policy on payment for forest environment services

3


resources, legal regulations and guidelines on PFES policy and PFES management and
utilization. Finally, Chapter 6 will conclude and propose some recommendations to
strengthen the role of VNFF in the future.

4


LITERATURE REVIEW
In this chapter, some models of PES implementation from countries are reviewed to
clarify the foundation of the PES schemes in the world and provide useful lessons for
Vietnam. In addition, with the review of actual PFES programs and the performance of
VNFF in Vietnam in the past years, the PFES policy will be presented in detail, thereby
determining more clearly the factors affecting role of VNFF.
Review some models of PES implementation in the world
The author will firstly review and inherit some results of researches on the international
experience of implementing PES schemes, especially focus on some cases such as: the
PES program in Costa Rica; programs targeting watershed services China; payment for
ecosystem services in Japan; and payment for environmental services programs in
Cambodia.
PES program in Costa Rica
The payment for environmental service in Costa Rica is called Pago por Servicios
Ambientales (PPSA) program. This is a national program to conduct payment for the
landscapes protection and biodiversity conservation, carbon storage and hydrological
services with the purpose of reducing the rate of deforestation in Costa Rica.
PPSA is managed by Fondo de Financiamiento Forestal de Costa Rica (FONAFIFO), a
national forestry financing Fund, established under the Forestry Law no. 7575 in 1996.
The objective of the fund (i) promote, for the benefit of small and medium producers,

forest management, reforestation, afforestation, plantations and agro-forestry; and (ii)
collect funds for the payment of ecosystem services4. This is the governmental
institution that has instrumental legal status and supports for forest conservation by
issuing Forest Conservation Certificates (CCB) that landowners can use to pay taxes and
fees to Government. FONAFIFO uses this taxes and fees to fund for PPSA program.
According to the approval of the Ministry of Environment, Energy and

4

Article 46-51 of the Forestry Law no. 7575 of Costa Rica dated 16 October 1996

5


Telecommunications (MINAE), the administrative structure of the FONAFIFO
(FONAFIFO, 2008) is presented as below:

Figure 2.1 FONAFIFO’s organization structure5
As shown in the Figure 1, the Ministry of Environment, Energy and
Telecommunications (MINAE) is the management agency that makes policy on forestry
sector. The FONAFIFO’s board of directors includes five members, of which three
representatives are from the public sector and two remaining members are from the
private sector. This is the administration agency to advise MINAE on forestry policy.
Five subordinate divisions and departments with their functional units have the role to
support the FONAFIFO’s General Directorate conduct activities approved by MINAE.
The environmental services defined in PPSA include (i) mitigation of greenhouse
emissions through emissions reduction and carbon fixation, capture, storage or
absorption; (ii) protection of water for urban, rural or hydroelectric use; (iii) biodiversity
conservation for conservation, sustainable use, scientific investigation or genetic
enhancement; and (iv) protection of ecosystems or scenic natural beauty for tourism or

science (Forestry Law - Law No. 7575, Republic of Costa Rica, 1996). PPSA program

5

Source: FONAFIFO’s website via link />
6


of Costa Rica contributed a lot to increasing the forest coverage of this country from
less than 30% in 1980s to 54% in 2015 (Juhern Kim, Roger Madrigal, Francisco Alpizar,
and Silvia Rojas Fernandez, 2016). The PES model in Costa Rica shows the important
role of the Government in establishing the state-authority to manage and implement the
PES program.
However, this model is also facing some challenges, for example, even FONAFIFO uses
the payment from hydropower companies and water users to fund for PPSA, but no legal
requirements on the payment level is identified and FONAFIFO negotiates with users
and comes to agreements with them. It seems that the payment by water users is good
but there are some limitations in charging for biodiversity and carbon services. In Costa
Rica, the payment for biodiversity services is mainly come from the Global Environment
Facility and the financing from local tourism industry is not recognized significantly.
The beneficiaries from carbon service are difficult to be defined.
Programs targeting watershed services in China
China and Vietnam share a long border and have territories located in the Mekong basin.
Both countries have great potential of hydropower development through the below river
basin (McElwee, P., Thanh, N.C., 2014).
Table 2.1 River basins between Vietnam and China
River basin

Location

in Basin area in Basin

Vietnam

Vietnam

area Note

outside
Vietnam

Bang Giang – Ky Northwest

13,260 km2

1,980 km2

Cung
Hong River

Share

basin

with China
Northeast

169,020 km2

82,340 km2

Share

basin

with China
Cuu Long (River Cuu
of Nine Dragons)

Long 761,417 km2

Delta

724,252 km2

Share

basin

with

Trung

Quoc,

7

Lao,

Thai

Lan,

Cambodia

Note: Data compiled from the Report on reviewing 3 years of PFES policy
implementation in Vietnam (2011-2014) conducted by McElwee, P. and Thanh, N.C.
Along with the rapid economic growth in China is the degradation of natural resources
and the increase of environmental problems. Factors related to this degradation also
include rapid urbanization, expanding population and economic development demand.
Moreover, integration into the international market has increased the competitive
pressure that lead to the use of more and more natural resources. The increase of
environmental protests and disputes require China's Leaders to have the movements in
the environment policies.
The term of “eco-compensation” was firstly mentioned by China Council for
International Cooperation on Environment and Development (CCICED) in a research
project to advance ecological protection. The eco-compensation scheme is tested with
both upstream and downstream populations of China to protect river sources. Chinese
Government conducted Eco-compensation for Watershed Services (EWS) with
providing incentives for the local governments in watershed for to ensure the ecological
security in this area and better water quality management. This program is implemented
through the direct payment from the government to individual and community suppliers
of ecosystem service. It also focuses on the institutional and political aspects of payment
(Zhen, L., & Zhang, H, 2011). EWS is considered as a tool to regulate the relationships
between agencies at different administrative levels, and this encourages the government
to create more positive environmental policies and to take more measures by offering
economic incentives (Wang, H., Dong, Z., Xu, Y., & Ge, C, 2016). The principles of
PES implementation are defined according to the responsibilities and role of
stakeholders involving in ecological conservation programs. As of 2016, the ecocompensation has been legally mandated in the amended Environmental Protection

Law, however, the eco-compensation still lacks a sufficiently strong regulatory
foundation (ADB, 2016), thus, it is needed to have government regulations in line with
market-based economic tools, and mechanisms for ecosystems management to ensure
the sustainability of provided services.
8


Another program in China is Sloping Land Conversion Program (SLCP) with the
purpose of reducing soil erosion and desertification and increasing forest coverage. This
program covers 25 provinces of China. Bare hills and agricultural slopes are converted
to afforestation. The farmers who involve in this program will be compensated. For the
converted sloping area, the farmers will receive compensation in cash or annual in-kind
of grain or free saplings for the plantation period. Both grain and cash subsidies are
compensated for 8 years if ecological forests are planted and for 5 years if economic
forests are planted (Zhen, L., & Zhang, H, 2011). This is the first national PES program
in China that encouraged the participation of households based on voluntary basic for
land management, thus integrated the environmental protection objectives. In order to
implement the program, many agencies were involved, include the State Forestry
Administration, Ministries of Land and Resources, Agriculture, and Water Resources,
departments from forestry and grain supply, etc. Each agency has specific tasks and role
in compensation delivery, land contract management, dealing with disputes, measuring
land area for conversion, distributing saplings, monitoring results of conversion, etc.
(Kolinjivadi, V. K., and T. Sunderland, 2012). Some challenges of the program are
recorded include the sloping area may be converted to agriculture production right after
the completion of the scheme, in some areas, the farmers have no choice because their
neighbours and village selected to participate in the program. This requires the solutions
from the policy – makers to achieve the sustainable conservation objectives.
It can be said that the local governments are lead agencies in developing and
implementing PES schemes in China. The role of Government and market is very
important to establish the compensation schemes. However, the centralization

government system should be established with the close collaboration among agencies.
The central level should also provide more specific guidance, legal and financial basis
for the local to develop the PES schemes.
Payment for ecosystem services in Japan
Japan frequently suffers natural disasters like floods, earthquakes or typhoons therefore
this country recognizes clearly the important role of natural ecosystem. A lot of PES
schemes have been developed for many years, focusing on the ecosystem services of
forest and water resources. The subjects involving in these programs including urban

9


residents, local government, consumers or companies who pay for the natural resources
or ecosystem services. In Japan, there are three types of payment schemes include: (i)
direct negotiation between the ecosystem services suppliers and the beneficiaries (or
providers); (ii) governmental intervention by environmental taxes and (iii) trading
schemes of ecosystem services (Hayashi, K., & Nishimiya, H., 2010). The third type of
payment scheme on ecosystem services trading is not mentioned much in the materials
that the author can access, therefore this report only reviews some PES models related
to the type one and type two as stated above.
One good example of payment according to the direct negotiation is implemented in
Kumamoto prefecture, Kyushu island. In this area, the groundwater is very important,
that provides freshwater for all residents. Thus, they pay a lot of attention on
groundwater recharge. The recharge capacities of Shirakawa river basin is known as 5
times or more than that of other areas (Hayashi, K., & Nishimiya, H., 2010). To avoid
the decrease of groundwater, the companies which have production activities in this
region negotiate directly with farmers to flood their paddies in the summer. Under the
government policy on groundwater protection, Sony Semiconductor Kyushu
Corporation conducted the started project of groundwater recharge in 2003 with the
close participation of the local agricultural cooperative, farmers and Kumamoto City.

To operate its semiconductor plants, the company uses groundwater extracted from the
ground. According to the project of groundwater recharge, the company called for the
volunteer from the local producers to flood their rice paddies after harvesting, then water
will be drawn from Shirakawa river to permeate back to the ground (Conserving water
by recharging ground water in Kumamoto, 2010). Therefore, the groundwater in this
area is recovered. The payment is defined as below:

Table 2.2 Payment level to partner producers
Days of flooding

Payment amount (Yen/1,000 m2)

30 days

11,000

60 days

16,500

10


90 days

22,000

Note: Information is compiled from Sony Semiconductor Kyushu Corporation, 2009
/>In addition, the employees of the company also join in planting and harvesting rice
grown in this area with less pesticides, per kilogram of rice is sold with the higher price.

This activity encouraged employees to offset water consumption. One kilogram of rice
grown is believed to recharge 20-30m3 of groundwater (Hayashi, K., & Nishimiya, H.,
2010).
Regarding the payment agreement with the governmental intervention, the forest
environmental taxes have been applied for many prefectures in Japan. Forests plays
important role in mitigating climate change, preventing floods and landslides, absorbing
CO2, providing habitats for various living species, etc. Types of forest in Japan as
follow:
Table 2.3 Types of forest in Japan
Unit: Thousand hectares
Types of forest

National forest

Non-national forest

Total

Natural forest

4,690

8,690

13,380

Plantation forest

2,370

7,980

10,350

Total

7,060

16,670

23,730

Others

1,370

1,370

Note: Source: Forestry Agency, survey on status of forest resources (31 March 2007)
The non-national forest mentioned in the Table 2 is around 70% of total forest area,
includes forest area under private management or local governments. Most of this area
is managed under the willingness of forest owner. With the area of plantation forest, it
requires the management of human. To protect and manage non-national forest, the local
government uses the environment tax revenue collected from beneficiaries of forest
ecosystem services. This revenue is commonly reserved in a fund to pay directly for
11


forest owner for their management, especially for key watershed area. Toyota City
collects conservation fee for the use of tap water and keeps in its tap water conservation

fund. This fund has been used for the conservation purpose including tree thinning and
forest measuring (Hayashi, K., & Nishimiya, H., 2010). Kochi Prefecture is another
example of around 30 prefectures uses this environment tax program to implement
activities on forest protection. This prefecture collect tax per person and uses for
activities like tree thinning, converting unmanaged forest area into natural mixed forest.
The case of Kanagawa Prefecture is very interesting. They call for the involvement of
citizens to discuss on how to conserve and restore forests and water source in the area.
This is a very effective way to gain the awareness and agreement of residents for the
local policies on this issue. Therefore, general actions and implementation programs are
developed in the Basic Policies and Five-year action plans for Conservation and
Restoration of Water Source Environment (Forest environment tax in Kanagawa
Prefecture, 2007). The figure below will describe the specific programs conducted by
Kanagawa prefecture.

12


Figure 2.2 Programs of Kanazawa’s Five-Year Action Plan
These programs encourage the participation of many citizen, experts, organizations in
the conservation and restoration of forest protection and water source.
Japan has a lot of PES schemes at the local level. The implementation methods and
models depend on the characteristics of each region as well as lifestyle habits but mostly
focused on forest management, water source conservation and agriculture ecosystem
services. Even there are many successful models, but some challenges are also defined
such as the environment tax policy is mostly conducted by prefectures and applied for
their residents, therefore the other beneficiaries of ecosystem services are less paid

13

attention. The PES schemes are implemented separately in different regions thus its lack
of connectivity and systematic in the implementation.
Payment for Environmental Services program in Cambodia
Cambodia has common border with Vietnam, so it has an important strategic position
on economy, politics, society, national security and defence in the region. Both countries
are in the lower Mekong Basin with great potential for hydropower generation. The river
basins shared with Vietnam as below table (McElwee, P., Thanh, N.C., 2014):

Table 2.4 River basin between Vietnam and Cambodia
River basin

Location

in Basin area in Basin

Vietnam

Vietnam

area Note

outside
Vietnam

Sai Gon - Dong South East

40,294 km2

6,700 km2

Nai

Share

basin

with Cambodia

Cuu Long (River Cuu
of Nine Dragons)

Long 761,417 km2

Delta

724,252 km2

Share

basin

with
Cambodia,
Trung

Quoc,

Lao, Thai Lan
Note: Information collected from report on reviewing 3 years of PFES policy
implementation in Vietnam (2011-2014) conducted by McElwee, P., Thanh, N.C.

At present, a legal framework has not been developed for applying PES nationally,
however, Royal Government of Cambodia approved some important policies and
strategies that mention this scheme.

Table 2.5 Policies and strategies related to PES in Cambodia

14


Policy/strategy

Year

of Brief content

approval
Law

on

protected 1993

areas

Manage and implement the preservation of
biological resources and sustainable use of
natural resources.

Law

on 1996

Provide regulations to address environmental

Environmental

protection, management of natural resources

Protection and Natural

and public consultation

Resource
Management
(environment law)
Law on community

2002

Provide

basic

framework for

the

rural

communities in forest management

Forestry law

2002

Regulate

the

forest

management

under

jurisdiction of the Ministry of Agriculture,
Forestry and Fisheries (MAFF)
National

Green 2009

Regulate the green growth implementation

Growth Roadmap
REDD+

Readiness 2010

Roadmap

Develop REDD+ planning during the readiness

phase, the UN-REDD Programme National
Document, and Readiness Preparation Proposal
(R-PP) of the Forest Carbon Partnership
Facility

National

Forestry 2010

Develop six programs, include: (i) forest

Programme for 2010-

demarcation, classification and registration; (ii)

2029

conservation

and

development

of forest

resources and biodiversity; (iii) forest law
enforcement and governance; (iv) community
15

Policy/strategy

Year

of Brief content

approval
forestry;

(v)

capacity

and

research

development; and (vi) sustainable forest
financing.
National Policy and 2013

Promote green economy, green finance and

Strategic

green investment to balance between economic

Plan

for

Green Growth 2013–

and social development, and the environment

2030
National

Strategic 2013

Development
(NSDP)

for

Plan

Regulate the importance of natural resources
protection and sustainable development

2014–

2018
National biodiversity 2016

Provide a comprehensive strategic document

strategy and action

for biodiversity conservation and management

plan

in Cambodia and represent an important
milestone for the future
Note: information compiled by author

In Cambodia, the implementation of PES schemes has come mostly from the
international donors and multilateral agencies. Conducted PES schemes focus on
biodiversity and watershed conservation, recreation/landscape beauty, and carbon
sequestration and storage (Naret, H., & Sopheak, K., 2016). Subjects involve in the
implementation of PES schemes include the Kingdom of Cambodia, government
agencies like Ministry of Environment and Ministry of Agriculture, Forestry and
Fisheries (MAFF), local authorities at provincial, district and communal levels,
international organizations, local NGOs and households.
One example of PES implementation with the support of Wildlife Conservation Society
(WCS) is the biodiversity conservation through bird nest protection and community –
based ecotourism in the Northern plains including Kulen Promtep Wildlife Sanctuary
16