Joint Circular of the Ministry of Agriculture and Rural Development - Ministry of Finance No. 109/2000/TTLT/BNN-BTC dated October 20, 2000 guiding the implementation of Decision No. 187/1999/QĐ-TTg dated September 16, 1999 of the Prime Minister on renovating the organization and management mechanism of state-owned forest enterprises.

 

JOINT CIRCULAR

Guidelines for implementing Decision No. 187/1999/QD-TTg dated September 16, 1999 of the Prime Minister on reforming the organizational structure and management mechanism of state-owned forest enterprises

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 The Prime Minister issued Decision No. 187/1999/QD-TTg dated September 16, 1999 on reforming the organizational structure and management mechanism of state-owned forest enterprises. The Ministry of Agriculture and Rural Development and the Ministry of Finance provide guidance on the implementation of the main contents as follows:

I - SUBJECTS OF APPLICATION OF DECISION 187/QD-TTg

The subjects of application of Decision No. 187/1999/QD-TTg include:

1- State-owned forest enterprises;

2- State-owned enterprises (companies, factories...) assigned forests and forestry land by competent state authorities to produce and trade in forestry products; companies with subsidiary state-owned forest enterprises operating under dependent accounting.

II - REORGANIZATION OF STATE-OWNED FOREST ENTERPRISES

Based on the current status of existing forest enterprises, reorganize them into three types as stipulated in Article 3 of Decision No. 187/QD-TTg, specifically as follows:

1- Maintain and consolidate the following state-owned forest enterprises to operate under a business enterprise mechanism:

a- State-owned forest enterprises currently managing natural forests and planted forests within the planning area for production forests and less critical protective forests.

b- State-owned forest enterprises planting industrial raw material forests (paper raw materials, artificial board raw materials, wood pole raw materials, specialty raw materials, bamboo and reed raw materials...).

State-owned forest enterprises have the primary mission of managing, protecting, planting, and nurturing forests, harvesting and processing timber and other forest products, supplying raw materials to industrial processing facilities and other economic needs of the national economy. In addition to these primary missions, forest enterprises are entitled to engage in comprehensive operations such as agriculture, industry, fisheries, services... in order to effectively utilize and enhance all potential labor, technology, land, and forest resources allocated to them.

For the above-mentioned forest enterprises, if they are currently managing areas of very critical and critical protective forests interspersed with production forests and less critical protective forests, but the area does not exceed 5,000 hectares, then separate those areas into independent protective forest zones managed by their own management boards. Continue to allocate those protective forest areas to the forest enterprises according to the protective forest regulations. The protection and planting of very critical and critical protective forests are considered public welfare tasks of the forest enterprises, funded by the state budget to implement the assigned tasks.

2- Convert the following state-owned forest enterprises into Management Boards of Protective Forest Zones:

a- State-owned forest enterprises with forest land areas of 5,000 hectares or more within the planning area for very critical and critical protective forests (established according to decisions of the Prime Minister or the People's Committee Chairperson of the province) and occupying 70% or more of the total forest land area allocated to the forest enterprises.

b- For state-owned forest enterprises with forest land areas of 5,000 hectares or more within the planning area for very critical and critical protective forests, but occupying less than 70% of the total forest land area allocated to the forest enterprises, separate the planned area for protective forests to establish independent protective forest zones with their own management boards, or transfer the protective forest areas to adjacent protective forest zone management boards (if available). The forest enterprises will only manage the remaining areas planned for production forests and less critical protective forests. If conditions are not yet suitable for establishing independent protective forest zone management boards, continue to allocate the protective forest areas to the forest enterprises according to protective forest regulations, and consider this as a public welfare task of the forest enterprises.

When converting forest enterprises into Management Boards of Protective Forest Zones, the areas planned for production forests and less critical protective forests interspersed within the protective forest zones shall be transferred to the Management Boards of Protective Forest Zones for management, protection, planting, harvesting, and utilization according to production forest regulations.

3- Convert the following forest enterprises into other business forms:

Forest enterprises currently managing forest land areas of less than 1,000 hectares, interspersed with agricultural land, located near residential areas, and facing difficulties in production and business shall be converted into other business forms such as agricultural and forestry service enterprises, agricultural and forestry product purchasing stations, seedling nurseries... to provide services for agricultural and forestry production in the region.

During conversion, the forest enterprises must develop plans to submit to the People's Committee of the province (for provincial-level forest enterprises) or the central ministry in charge (for centrally-managed forest enterprises) for approval. These plans must clearly define the land requirements needed for the new organization's business and service activities, while also developing measures to address the policies for surplus staff when reorganizing the forest enterprises. Transfer the forest and forest land areas to local authorities to allocate or lease to organizations, households, or individuals according to current laws.

III - REVIEWING THE AREA OF FORESTS AND FORESTRY LAND; ALLOCATING LAND AND FORESTS TO STATE-OWNED FOREST ENTERPRISES

The People's Committee of the province directs relevant departments and localities to review the area of forests and forestry land managed by forest enterprises to reorganize the forest enterprises and complete procedures for issuing certificates of land use rights and allocating forests to the forest enterprises.

1- Contents of the review:

a- Regarding land: Clearly determine the area and boundaries on maps and on-site of various types of land managed by the forest enterprises:

- Area of land planned for production forests and less critical protective forests including: natural forests, planted forests, and land without forests.

- Area of land planned for very critical and critical protective forests including: natural forests, planted forests, and land without forests.

- Area of agricultural land and other types of land such as residential land, fixed fields, ponds, orchards... of households.

- Area of forestry land that the forest enterprises are unable to utilize.

b- Regarding forests: Clearly define the status, area, and quality of the forests managed by the forest enterprise. For production forests and less critical protective forests which are natural forests: the forest enterprise must review and adjust the forest management plan and establish a production and business plan for each five-year period, submit it to the People's Committee of the province for approval to implement. Review every five years and develop plans for the next phase. The content and method of implementation shall be in accordance with Directive No. 15LS/CNR dated July 19, 1989 of the Ministry of Forestry, now the Ministry of Agriculture and Rural Development, on the construction of simplified forest management plans for forest enterprises.

2- Method of review:

Based on the results of the forest inventory according to Directive No. 286/TTg dated May 2, 1997 of the Prime Minister and Directive No. 24/CT-TTg dated August 18, 1999 of the Prime Minister on the comprehensive land inventory in 2000, the Department of Agriculture and Rural Development and the Department of Land Administration shall advise the Provincial People's Committee, together with the District People's Committee and the competent authority of the forest enterprise (if any), to direct the People's Committee of the commune where the forest enterprise is located, along with the Director of the forest enterprise, to review and clarify the above contents.

3- Allocation of land and issuance of certificates of land use rights linked to the allocation of forests to state-owned forest enterprises.

Based on the review results, separate the residential land, agricultural land, and forest garden areas of households, the forest area, and forestry land that the forest enterprise is unable to utilize from the total land area of the forest enterprise; transfer them back to local authorities to allocate or lease to organizations, households, and individuals according to Decree No. 64/CP dated September 27, 1993 of the Government promulgating regulations on the allocation of agricultural land to households and individuals for long-term stable use for agricultural purposes; Decree No. 85/1999/NĐ-CP dated August 28, 1999 of the Government amending and supplementing certain provisions of the regulations on the allocation of agricultural land to households and individuals for long-term stable use for agricultural purposes and adding the allocation of salt-making land to households and individuals for long-term stable use; Decree No. 163/1999/NĐ-CP dated November 16, 1999 of the Government on the allocation and leasing of forestry land to organizations, households, and individuals for long-term stable use for forestry purposes.

The remaining forest and land area, the People's Committee of the province shall proceed with the procedures for allocating land and issuing certificates of land use rights linked to the allocation of forests for state-owned forest enterprises to use stably and long-term for forestry, agriculture, and fisheries purposes.

The procedures for allocating land, allocating forests, and issuing certificates of land use rights shall be in accordance with the guidance provided in Circular Joint No. 62/2000/TTLT-BNN-TCDL dated June 6, 2000 of the Ministry of Agriculture and Rural Development and the General Department of Land Administration on the guidance for allocating land, leasing land, and issuing certificates of land use rights for forestry.

4- Implementation costs.

The source of funds for reviewing and issuing certificates of land use rights for forest enterprises shall be allocated from the local budget according to the approved budget by the competent authority.

IV- RESPONSIBILITIES AND LIMITS OF STATE-OWNED FOREST ENTERPRISES IN THE MANAGEMENT AND USE OF ALLOCATED FORESTS.

1- State-owned forest enterprises are responsible before the State for the conservation and development of the allocated forest capital. Forest enterprises are allowed to exploit and use forests in accordance with Clauses 3, 4, 5, and 6 of Article 4 of Decision No. 187/1999/QĐ-TTg.

2- The Director of the forest enterprise has the main responsibility for organizing the management and protection of the allocated forestry land and forests handed over by the State; cooperate with the forestry inspection agency to arrange forestry inspectors specifically to monitor the forest enterprise, assist the Director of the forest enterprise in directing the specialized forest protection force of the forest enterprise to patrol and protect the forest, handle cases of infringement on forest resources, including compelling the perpetrator to compensate for losses and recover assets for the forest owner in accordance with the law.

3- On the basis of the allocated forest capital and land, the approved forest management plan, other resources, and the socio-economic situation of the locality, the Director of the forest enterprise shall develop a production and business organization plan, submit it to the People's Committee of the province (for forest enterprises under provincial administration); ministries and sectors (for forest enterprises under ministries and sectors); and the Corporation (for forest enterprises under the Corporation) for approval and implementation.

V- POLICIES FOR WORKERS

1- Resolution of residential land for households of forest enterprise cadres, workers, and staff.

The Director of the forest enterprise is responsible for reviewing the residential land of households of forest enterprise cadres, workers, and staff (including those who have retired or left due to health reasons) residing within the area managed by the forest enterprise, and proposing local authorities to allocate land and issue certificates of residential land use rights for households without residential land or currently using forest enterprise land for housing in accordance with current laws:

a- For households without residential land, the Director of the forest enterprise shall coordinate with the People's Committee of the commune where the forest enterprise is located to examine and process the proposal to the People's Committee of the district to allocate and issue certificates of residential land use rights for them as for local residents.

b- For households currently using forest enterprise land for housing, based on the planning approved by the competent authority, the forest enterprise shall coordinate with the People's Committee of the commune where the forest enterprise is located to propose the People's Committee of the district to consider and formalize the issuance of certificates of land use rights for these households.

2- Resolution of forestry land and agricultural land allocation for households of forest enterprise workers:

2- Resolution of the transfer of forestry land and agricultural land to households of forest enterprise workers:

BASED ON THE PLANNING APPROVED BY THE AUTHORIZED AUTHORITIES, THE FOREST MANAGEMENT DIRECTOR IS RESPONSIBLE FOR COORDINATING WITH THE PEOPLE'S COMMITTEE OF THE LOCAL COMMUNE TO CONSIDER AND RECOMMEND THE PEOPLE'S COMMITTEE OF THE DISTRICT TO ASSIGN LAND AND ISSUE AGRICULTURAL AND FORESTRY LAND USE RIGHTS CERTIFICATES TO FOREST MANAGEMENT STAFF WHO MUST RETIRE DUE TO PRODUCTION REORGANIZATION AND REDUCTION IN STAFF NUMBERS, WHO ARE ENTITLED TO ONE-TIME BENEFITS OR BENEFITS FOR A SPECIFIED NUMBER OF YEARS, AND TO THE CHILDREN OF FOREST MANAGEMENT STAFF WHO HAVE REACHED WORKING AGE BUT HAVE NOT YET OBTAINED PERMANENT JOBS WITHIN THE FOREST MANAGEMENT AREA AS PROVIDED FOR IN CLAUSE 3 AND CLAUSE 4 OF ARTICLE 7 OF DECREE NO. 64/CP OF SEPTEMBER 27, 1993; DECREE NO. 85/1998/NĐ-CP OF AUGUST 28, 1998; AND DECREE NO. 163/1999/NĐ-CP OF NOVEMBER 16, 1999 ISSUED BY THE GOVERNMENT, AT A LEVEL EQUAL TO THE AVERAGE AREA ASSIGNED TO LOCAL HOUSEHOLDS.

3- SETTLEMENT OF SOCIAL INSURANCE REGIMES AND REGISTRATION OF RESIDENTIAL HOUSEHOLD REGISTERS FOR FOREST MANAGEMENT STAFF WHO ARE RETIRING:

a- DURING THE PROCESS OF PRODUCTION REORGANIZATION, FOR THOSE STAFF MEMBERS WHO ARE SURPLUS AND FOR WHOM THE FOREST MANAGEMENT UNIT IS UNABLE TO PROVIDE EMPLOYMENT OR TRAINING TO TRANSFER THEM TO ANOTHER OCCUPATION, THEY SHALL BE ALLOWED TO RETIRE UNDER THE CURRENT REGIME. IF THE FOREST MANAGEMENT UNIT HAS FINANCIAL DIFFICULTIES AND THE PERSON CONCERNED AGREES, THE TERMINATION PAYMENTS MAY BE MADE IN THE FORM OF THE VALUE OF THE PLANTED FOREST PRODUCTION OF THE FOREST MANAGEMENT UNIT.

WHEN MAKING TERMINATION PAYMENTS IN THE FORM OF THE VALUE OF THE PLANTED FOREST, THE FOREST MANAGEMENT UNIT MUST ESTABLISH A COMMITTEE TO EVALUATE THE VALUE OF THE PLANTED FOREST AT THE TIME OF PAYMENT, RECORD THE DECREASE IN THE VALUE OF THE ASSETS MANAGED BY THE FOREST MANAGEMENT UNIT, AND COMPLETE THE PROCEDURES FOR HANDING OVER THE FOREST TO THE PERSON REQUESTING RETIREMENT. AFTER HARVESTING THE FOREST, THE PERSON RECEIVING THE RETIREMENT REGIME IN THE FORM OF THE VALUE OF THE PLANTED FOREST MUST RETURN THE LAND TO THE FOREST MANAGEMENT UNIT AND BE GIVEN A CONTRACT TO CONTINUE USING IT (IF DESIRED).

b- IF THE PERSON WHO IS RETIRING WISHES TO LIVE IN THE FOREST MANAGEMENT AREA, THE LOCAL ADMINISTRATION IS RESPONSIBLE FOR REGISTERING THEIR PERMANENT RESIDENCE AND ASSIGNING AGRICULTURAL AND FORESTRY LAND AS PROVIDED FOR IN SECTION 2 OF PART V ABOVE.

4- LAND FUND FOR ASSIGNING HOUSING LAND AND AGRICULTURAL AND FORESTRY PRODUCTION LAND TO HOUSEHOLDS OF FOREST MANAGEMENT STAFF.

THE LAND FUND FOR ASSIGNING HOUSING LAND AND AGRICULTURAL AND FORESTRY PRODUCTION LAND TO HOUSEHOLDS OF FOREST MANAGEMENT STAFF AS PROVIDED FOR IN SECTION 1 AND SECTION 2 ABOVE SHALL BE DRAWN FROM THE CURRENT LAND FUND OF THE LOCALITY. IF THE LOCALITY DOES NOT HAVE A LAND FUND, THE FOREST MANAGEMENT UNIT SHALL REQUEST THE LOCAL ADMINISTRATION TO TAKE LAND FROM THE FOREST MANAGEMENT UNIT FOR ASSIGNMENT, BUT THIS MUST BE ACCORDING TO THE PLAN AND MUST NOT FRAGMENT THE FOREST MANAGEMENT UNIT'S LAND. THE FOREST MANAGEMENT UNIT SHALL ALSO REQUEST THE PROVINCE PEOPLE'S COMMITTEE TO SEPARATE THE AREA OF LAND FROM THE FOREST AND FORESTRY LAND ALLOCATED TO THE FOREST MANAGEMENT UNIT.

VI - FINANCIAL POLICY

1- FOR STATE FOREST MANAGEMENT UNITS THAT OPERATE ON A BUSINESS BASIS AND OTHER STATE ENTERPRISES THAT USE FORESTRY LAND AND ENGAGE IN FOREST BUSINESS.

STATE FOREST MANAGEMENT UNITS ARE STATE ENTERPRISES THAT IMPLEMENT FINANCIAL MANAGEMENT ACCORDING TO DECREE NO. 59/CP OF OCTOBER 3, 1996, DECREE NO. 27/1999/NĐ-CP OF APRIL 20, 1999 ISSUED BY THE GOVERNMENT REGARDING AMENDMENTS AND SUPPLEMENTS TO THE REGULATIONS ON FINANCIAL MANAGEMENT AND BUSINESS ACCOUNTING FOR STATE ENTERPRISES ANNEXED TO DECREE NO. 59/CP OF OCTOBER 3, 1996, DECREE NO. 56/CP OF OCTOBER 2, 1996 ON PUBLIC SERVICE ENTERPRISES, AND GUIDELINES ISSUED BY THE MINISTRY OF FINANCE FOR THESE DECREE, AND THE FOLLOWING PROVISIONS:

a- MANAGEMENT OF CAPITAL AND ASSETS OF STATE FOREST MANAGEMENT UNITS:

THE ASSETS OF STATE FOREST MANAGEMENT UNITS INCLUDE FIXED ASSETS AND MOVABLE ASSETS FORMED FROM LONG-TERM INVESTMENT FUNDS, SHORT-TERM INVESTMENT FUNDS, INCLUDING PLANTED FORESTS FROM STATE FUNDS AND OTHER FUNDS.

NATIVE FORESTS ASSIGNED BY THE STATE TO STATE FOREST MANAGEMENT UNITS FOR MANAGEMENT ARE NATIONAL RESOURCES, AND STATE FOREST MANAGEMENT UNITS ARE RESPONSIBLE FOR MANAGING THEM ACCORDING TO THE LAW ON FOREST PROTECTION AND DEVELOPMENT AND THE CURRENT REGULATIONS ON FOREST MANAGEMENT.

ANY ASSETS LEASED, LOANED, HELD IN TRUST, PROCESSED, SOLD AS AGENT, OR STORED BY THE STATE FOREST MANAGEMENT UNIT DO NOT BELONG TO THE STATE FOREST MANAGEMENT UNIT.

- THE LEGAL CAPITAL OF THE STATE FOREST MANAGEMENT UNIT IS THE MINIMUM CAPITAL REQUIRED TO BE ESTABLISHED ACCORDING TO THE LAW.

- THE REGISTERED CAPITAL OF THE STATE FOREST MANAGEMENT UNIT IS THE STATE CAPITAL LISTED IN THE CHARTER OF THE STATE FOREST MANAGEMENT UNIT.

THE STATE FOREST MANAGEMENT UNIT MUST PUBLICIZE ITS REGISTERED CAPITAL AND ANY CHANGES TO IT.

- THE STATE CAPITAL AT THE STATE FOREST MANAGEMENT UNIT IS THE TOTAL VALUE OF THE ASSETS MANAGED AND USED BY THE STATE FOREST MANAGEMENT UNIT LESS THE AMOUNTS OWED AT THE REPORTING DATE.

- ASSIGNMENT OF CAPITAL TO THE STATE FOREST MANAGEMENT UNIT: THE STATE FOREST MANAGEMENT UNIT IS ASSIGNED THE CURRENT STATE CAPITAL AT THE FOREST MANAGEMENT UNIT AFTER BEING INSPECTED AND VALUED ACCORDING TO THE CURRENT STATE REGULATIONS. THIS INCLUDES THE FOLLOWING ITEMS:

+ FUNDS FOR FOREST PLANTING INVESTED BY THE BUDGET OR WITH A BUDGET SOURCE (INCLUDING BOTH PAST AND PRESENT) ASSIGNED TO THE STATE FOREST MANAGEMENT UNIT FOR MANAGEMENT AND USE.

+ THE ENTERPRISE INCOME TAX RETURNED BY THE STATE TO THE STATE FOREST MANAGEMENT UNIT FOR FOREST DEVELOPMENT (EXCLUDING THE PORTION OF ENTERPRISE INCOME TAX USED FOR PUBLIC SERVICES) FROM THE STATE CAPITAL ASSIGNED TO THE STATE FOREST MANAGEMENT UNIT.

b- MANAGEMENT OF REVENUE, EXPENSES, AND COSTS OF PRODUCTS AND SERVICES AT STATE FOREST MANAGEMENT UNITS:

- MANAGEMENT OF REVENUE:

THE REVENUE OF THE STATE FOREST MANAGEMENT UNIT INCLUDES REVENUE FROM FORESTRY BUSINESS ACTIVITIES AND INCOME FROM OTHER ACTIVITIES.

INCOME FROM THE SALE OF FOREST PRODUCTS AND OTHER INCOME FROM CRITICAL AND VITAL PROTECTIVE FORESTS BELONGS TO THE REVENUE OF THE STATE FOREST MANAGEMENT UNIT.

THE STATE FOREST MANAGEMENT UNIT MUST ACCOUNT FOR REVENUE FROM FORESTRY BUSINESS ACTIVITIES, RELATED FORESTRY BUSINESS ACTIVITIES, AND OTHER BUSINESS ACTIVITIES SEPARATELY TO DETERMINE THE RESULTS OF EACH BUSINESS ACTIVITY.

RELATED FORESTRY BUSINESS ACTIVITIES INCLUDE: COMBINED AGRICULTURE, FORESTRY, AND FISHERY, TOURISM, AND FORESTRY SERVICES.

- MANAGEMENT OF EXPENSES AND COSTS.

Business operation costs include expenses related to the business operations of state-owned forest farms such as: seedling costs, raw materials, materials; depreciation of fixed assets; forest management and protection costs; wages; wage-like allowances; contributions made according to state regulations such as: health insurance and trade union fees; external service costs; other monetary expenses...

Expenses for planting, caring for forests, managing and protecting, encircling and regenerating protective forests that are very weak and weak, as well as other public welfare activities assigned by the state, and expenses from other sources of funding must be accounted for separately, not included in the production and business costs of the forest farm.

c- Management of allocation and use of capital from corporate income tax:

The corporate income tax (including forestry business and other businesses and services) provided by the state to state-owned forest farms for reinvestment in forest regeneration and funding to implement public welfare tasks as approved by the provincial People's Committee, Ministries, or Central Sector Departments.

The corporate income tax returned to the forest farm is the amount of tax already paid to the state budget (quarterly or annually). The forest farm pays corporate income tax into which level of budget, that level of budget will return it. Any unused portion of this fund in a year may be carried over to the next year.

The allocation process of funds shall be implemented in accordance with the provisions of the Ministry of Finance in Circular No. 25/2000/TT-BTC dated March 30, 2000, guiding the refund of taxes already paid to the state budget.

The documentation for the allocation of funds includes:

- Decision approving the budget by the competent authority.

- Plan documents on capital and volume issued by the provincial People's Committee (for forest farms under local administration), or Ministries, Sectors (for forest farms under central administration).

- Completion certificate between the forest farm and households or units undertaking contracts (if applicable).

- Confirmation of the corporate income tax payable by the tax authority and the actual tax paid to the state treasury.

Based on the above documentation, the financial agency shall carry out the allocation as follows:

+ For corporate income tax paid by the forest farm into the central government budget, the Ministry of Finance shall review and allocate.

+ For corporate income tax paid by the forest farm into the local government budget, the Department of Finance and Prices shall review and allocate.

Specifically, for the corporate income tax of central state-owned forest farms paid and allocated into the local government budget, the Department of Finance and Prices shall handle the allocation procedures and report to the Ministry of Finance.

d- Profit distribution system after tax and management of funds within state-owned forest farms.

Annual profit is the result of the business operations of state-owned forest farms, including profits from business activities and profits from other activities.

Business activity profit is the difference between total revenue and the full cost of products and services consumed during the fiscal year of the state-owned forest farm.

Other activity profit is profit from financial activities where income exceeds expenditure, including: leasing assets, securities trading, interest income from deposits, interest from loans, dividends from shares, and profits from joint ventures and cooperative investments, reversal of investment securities impairment reserves...

State-owned forest farms must separately account for profits from forestry business activities and profits from other service business activities.

After paying corporate income tax according to the Corporate Income Tax Law, the annual profit of state-owned forest farms is allocated to enterprise funds and used according to Circular No. 64/1999/TT-BTC dated June 7, 1999, issued by the Ministry of Finance, guiding the post-tax profit distribution system and management of funds in state-owned enterprises.

e- The state budget invests 100% of the funding according to the approved budget by the provincial People's Committee, Ministries, or Central Sector Departments for forest farms to build essential infrastructure serving production and implementing public welfare tasks including:

- Planting, nurturing, and protecting very weak and weak protective forests.

- Building essential infrastructure serving production in concentrated wood raw material planning areas (main road systems, docks, etc.).

- Implementing tasks aimed at supporting economic and social development, ensuring national defense and security in highland, deep, and remote areas.

g- State-owned forest farms are entitled to state investment support policies to implement projects for protecting, encircling, regenerating, and enriching natural forests, similar to the concentrated wood raw material planting project regulated in Decree No. 43/1999/NĐ-CP dated June 29, 1999, of the Government regarding state credit investment development.

2- For Forest Protection Zone Management Boards:

Forest Protection Zone Management Boards operate under the mechanism of economic public institutions with revenue, manage finances according to current regulations, and can allocate part of the surplus from income exceeding expenditures, as stipulated, to plant and protect forests.

The state budget provides funding to implement tasks of planting, caring for, managing, protecting, and nurturing very weak and weak protective forests according to plans approved by the competent authority.

The management of basic construction investment capital, afforestation, nurturing, and protecting forests by state-owned forest farms and Forest Protection Zone Management Boards shall be carried out in accordance with Joint Circular No. 28/1999/TT-LB dated February 3, 1999, of the Ministry of Agriculture and Rural Development, the Ministry of Planning and Investment, and the Ministry of Finance; Decision No. 251/QD-TTg dated March 23, 2000, of the Prime Minister on supplementing and amending payment procedures for the implementation of the new 5 million hectare forest planting project and other current laws and regulations.

VII- REFORMING MANAGEMENT ORGANIZATION WITHIN STATE-OWNED FOREST FARMS

1- Regarding production organization:

a- Forests and forest land assigned by the State to forestry enterprises must primarily implement stable contracts for organizations, households, and individuals according to the Regulations on the Assignment of Land for Agricultural, Forestry, and Aquaculture Production in State-Owned Enterprises issued pursuant to Decree No. 01/CP dated January 2, 1995 of the Government. Additionally, forestry enterprises may apply other forms of contracts suitable to specific conditions and circumstances of the enterprise. Encouragement is given to workers' and farmers' households within the area to accept contracts or joint ventures and cooperatives with forestry enterprises to operate under farm models.

When implementing forest and forest land contracts, forestry enterprises must jointly establish and sign contract agreements with the contracting parties, clearly defining the rights and obligations of both the contracting and receiving parties; ensuring that the receiving party can invest capital and labor in forest care, protection, and development with confidence, and receive appropriate shares of products when forests are harvested.

b- Besides household-based contracts, forestry enterprises may organize teams, units, and professional labor groups to directly carry out production and business tasks of the enterprise (management, protection, regeneration enclosure, and afforestation...) in difficult forest areas where household or other organizational and individual contracts would be ineffective; providing services for planting trees and animals; material, technical, and living services; harvesting, processing, and marketing agricultural and forestry products...

c-State-owned forestry enterprises may use forest land without existing forests and utilize the advantages of the enterprise (capital, technology, market...) to form joint ventures and cooperatives with forestry employees, farmers' households, and domestic and foreign organizations and individuals to plant forests, combine with agricultural and forestry production, processing, and marketing of forest products, while providing services for economic entities in the area to plant, protect, and develop forests.

 2- Regarding organizational structure:

To align with new production organization and management mechanisms, the management organizational structure of forestry enterprises needs to be reorganized to be streamlined and effective, specifically as follows:

- At the forestry enterprise level: there shall be a Director, Deputy Director, Chief Accountant, and a number of technical specialists to assist.

- At the production team level: there shall be a Team Leader and one technical staff member to assist.

For forestry enterprises engaged in diversified industries, the Director of the forestry enterprise may request the direct supervisory authority to approve the establishment of specialized departments to assist the Director in managing the production and business activities of the forestry enterprise as with other state-owned enterprises.

VIII-IMPLEMENTATION

Based on the above guidance, the Director of the Department of Agriculture and Rural Development, the General Directors of State-owned Forestry Enterprises shall take the lead, together with the Department of Finance and Price Control and relevant provincial and municipal authorities, to develop restructuring plans for the organization and management mechanism of state-owned forestry enterprises for approval by the People's Committee of the province (if the forestry enterprise belongs to the locality) and the Ministry overseeing the sector (if the forestry enterprise belongs to the central government). The plan must be completed by the year 2000./.