Decision No. 187/1999/QD-TTg On Reforming the Organization and Management Mechanism of State-owned Forest Enterprises

DECISION

Regarding the reform of organization and management mechanism of state-owned forest enterprises

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PRIME MINISTER

Pursuant to the Government Organization Law dated September 30, 1992;

Pursuant to the Law on State-Owned Enterprises dated April 30, 1995;

Based on the Law on Forest Protection and Development dated August 19, 1991;

Pursuant to the Land Law dated July 14, 1993 and the Law Amending and Supplementing Certain Provisions of the Land Law dated December 2, 1998;

Pursuant to the regulations on restructuring organizations and reforming management mechanisms for state-owned agricultural enterprises issued together with Decree No. 12/CP dated March 2, 1993 of the Government;

At the proposal of the Minister of Agriculture and Rural Development and the opinions of the Ministries of Planning and Investment, Finance, Labor - Invalids and Social Affairs, the Government Organizational and Cadre Board, the State Bank of Vietnam, and the General Director of the General Department of Land Administration.

Pursuant to …;

Article 1. Objective:

To reform the organization and management mechanism of state-owned forest enterprises with the goal of enhancing the production and business efficiency of forest enterprises, playing a leading role in forestry production, serving as a center for providing materials, technology, processing, and product consumption services for households and individuals engaged in forestry and agriculture, contributing to the protection and development of forests, and promoting economic and social development in the region.

Article 2. Principles for reforming the organization and management mechanism of state-owned forest enterprises:

1. Continue to maintain and strengthen state-owned forest enterprises in areas with concentrated large-scale forestry land that require direct state management and investment, which other economic sectors find difficult to undertake; in remote areas to serve as nuclei for economic and social development, ensuring national defense and security in the area.

2. Ensure that state-owned forest enterprises can fully exercise their autonomy in production and business activities; forestry workers must truly be specific owners of the forest areas they lease, eliminating state subsidies in the business operations of forest enterprises.

3. Ensure the harmonious resolution of interests between workers and the state and forest enterprises, and between forest enterprises and localities.

Article 3. Organization of restructuring existing state-owned forest enterprises:

1. State-owned forest enterprises maintained and strengthened to operate under a business mechanism:

a) State-owned forest enterprises currently managing natural forests classified as productive and protective forests with low urgency.

b) State-owned forest enterprises planting industrial raw material forests.

The main tasks of state-owned forest enterprises are afforestation, protection, nurturing of forests, harvesting and processing of forest products, supplying raw materials to industrial processing facilities and other consumption needs of the national economy.

In addition to these main tasks, forest enterprises may engage in comprehensive agriculture, forestry, fisheries, industry, and service activities to effectively utilize labor potential, land, and assigned forest resources.

For areas of protective forests with high and medium urgency intermixed with productive and protective forests with low urgency managed by forest enterprises, where the area does not exceed 5,000 hectares to establish a Forest Protection Management Board, such areas will continue to be managed by state-owned forest enterprises according to the regulations for protective forests.

The protection and afforestation of very urgent and urgent protective forests are considered public welfare activities, carried out by forest enterprises according to the tasks assigned by the state.

2. Conversion of state-owned forest enterprises into Forest Protection Management Boards

Convert state-owned forest enterprises with 5,000 hectares or more or over 70% of the managed forestry land within the planning area for urgent and very urgent protective forests (established according to the Prime Minister's Decision or the People's Committee Chairman's Decision of the province or city) into Forest Protection Management Boards operating under a public service economic unit with revenue generation. Areas of productive forests and intermixed forestry land with protective forests are also transferred to the Board for afforestation, protection, exploitation, and utilization to generate revenue for the budget.

3. Conversion of state-owned forest enterprises to other types of business organizations:

State-owned forest enterprises encountering difficulties in production and business management, managing productive forest areas from 1,000 hectares or less, intermixed with agricultural land and near residential areas, should be converted into suitable business organizations to provide services for agricultural, forestry, and industrial production.

When converting, there must be a plan submitted for approval by the competent authority to determine the land requirements for the new organization's activities, transfer the forest and remaining land area to the local authorities for allocation or leasing to organizations, households, or individuals according to the law.

Article 4. Management and use of forests and forestry land:

1. Provincial People's Committees and municipal people's committees directly under the central government, along with the competent agencies of the forest enterprises (if any), shall review the area of land and forests of the forest enterprises that have not been granted land use rights certificates, clarify the boundaries on maps and on-site of the land allocated to the forest enterprises for management.

By the end of 2000, provincial and municipal people's committees directly under the central government must complete the allocation of land and issuance of land use rights certificates tied to the allocation of forests to state-owned forest enterprises under the guidance of the General Department of Land Administration and the Ministry of Agriculture and Rural Development. The remaining land and forests transferred back to the local authorities for allocation or leasing to organizations, households, and individuals, including forest enterprise staff and farmers in the locality, according to the law.

2. Grant long-term stable management and use rights to state-owned forest enterprises based on the three types of forest planning (special purpose, protective, and productive), classify forests according to their status, clearly define the area and quality of specific forests as a basis for inspecting forest enterprises in terms of forest protection, development, and use according to current regulations.

By the first quarter of 2000, the Ministry of Agriculture and Rural Development must issue regulations on procedures for allocating and leasing forests, methods for classifying forests, and determining forest quality when allocating and leasing to serve as a basis for guiding all levels and sectors in implementation.

3. For naturally occurring productive and protective forests with low urgency, forest enterprises must implement silvicultural techniques to nurture and enrich the forest, and are permitted to harvest and use the forest according to approved forest management plans and harvesting designs by the provincial People's Committee.

Annually, when the exploitation plan is approved, the forest farm must coordinate with the contractor (organization, household, individual) to unify the exploitation plan and supervise the exploitation process. The forest farm has the right to organize its own workforce for exploitation, or to subcontract another unit to exploit through a competitive bidding process.

4. For production forests that are planted forests, the forest farm has the right to decide the timing, method of exploitation, and to develop a replanting plan after exploitation. Timber harvested from planted forests can be freely circulated on the market.

5. For very critical and critical protective forests that are natural forests managed by the forest farm, the forest farm is permitted to harvest dead, fallen, diseased, stunted, aged, and overly dense trees, up to a maximum intensity of 20% according to the approved exploitation design by the provincial people's committee.

For natural bamboo and rattan forests, when the coverage reaches 80%, exploitation at a maximum intensity of 20% according to the approved design by the provincial people's committee is allowed.

6. For weak and very weak protective forests that are planted using state budget funds, the forest farm is permitted to harvest auxiliary trees; to fully utilize secondary forest products.

When the main forest trees reach the harvesting standard, the forest farm is allowed to harvest in rotation cycles, with an intensity not exceeding 10% of the area already planted into forest, through selective cutting, strip cutting, or small patch cutting under 1 hectare in weak areas and under 0.5 hectares in very weak areas.

The forest farm must implement reforestation measures within twelve months following exploitation.

Article 5. Labor policy:

1. Households of forestry staff (including those currently working and those retired due to disability or retirement) residing legally within the area, who have not been allocated residential land, shall be recommended by the forest farm to the local authorities to allocate and issue certificates of land use rights for residential purposes.

2. The forest farm collaborates with the commune people's committee (ward, town) to request the district, city, or provincial people's committee to allocate and issue certificates of land use rights for agricultural and forestry production to households of forestry staff eligible for land allocation according to Decree 64/CP dated September 27, 1993, Decree No. 85/1999/NĐ-CP dated August 28, 1999, and Decree 02/CP dated January 15, 1994.

The amount of land allocated equals the average area allocated to local farmer households.

3. For forestry staff who cannot be reassigned work during organizational restructuring and lack conditions for retraining to change professions, they will be allowed to resign according to current regulations. In areas facing financial difficulties, if the person resigns voluntarily, their severance pay may be settled with the value of the production forest that is planted by the forest farm. After exploiting the forest, the person receiving severance pay based on the value of the forest trees must return the land to the forest farm or continue to contract with the forest farm. If the person resigning requests to reside within the forest farm area, the local authority is responsible for registering their permanent residence and allocating agricultural and forestry land in areas with favorable production conditions, equivalent to the average allocation given to local farmer households.

4. While implementing Clauses 1, 2, and 3 of this Article, if the locality no longer has land available for allocation, the forest farm may propose the local authority to use its own land to allocate to the households mentioned above, but it must follow planning guidelines, ensuring that the forest farm's land is not fragmented and must remain within the planned land reserve for the forest farm.

5. For forestry staff currently employed, contracting land and forests from the forest farm, but not receiving salaries according to the state-defined scale and instead earning income from production results through contracted land and forest management, they must contribute to social insurance and enjoy social insurance benefits according to special government regulations concerning social insurance policies for workers in state-owned agricultural and forestry farms.

Article 6. Financial policy:

1. Proceeds from the sale of timber and primary forest products upon forest exploitation are allocated as follows:

- To settle costs for forest establishment by the forest farm, if applicable (including payment of contracts for households, individuals, and organizations contracted to plant, protect, and nurture forests according to the contract terms), to cover expenses for exploitation, transportation, and product consumption;

- To fulfill financial obligations to the State;

- To establish forest funds according to legal provisions.

2. The State will provide the state-owned forest farm with the full amount of corporate income tax revenue to invest in forest regeneration and other public duties of the forest farm according to the approved budget by the provincial people's committee.

3. The State will transfer to the state-owned forest farm the capital sourced from the state budget previously invested in the forest farm for planting production forests to supplement the forest farm's own capital.

4. The state-owned forest farm will benefit from state investment support policies to implement projects for protecting, encircling, nurturing, and enriching natural forests, similar to the centralized wood raw material plantation project stipulated in Government Decree No. 43/1999/NĐ-CP dated June 29, 1999, regarding state investment credit development.

5. The state budget will invest 100% of the funding according to the approved budget by the provincial people's committee for the state-owned forest farm to build essential infrastructure serving production and public duties including:

- Planting, protecting, and nurturing very critical and critical protective forests managed by the forest farm.

- Building essential infrastructure serving production in the concentrated raw material forest planning area (main road system, docks, yards, etc.).

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

Article 7. Reforming internal management organization within the forest farm:

1. State-owned forest farms must implement long-term land and forest contracting according to Government Decree No. 01/CP dated January 4, 1995.

When implementing the assignment of forestry land and forests to households and individuals, the forest management unit must establish a contract clearly stipulating: the rights, responsibilities, and obligations of the assignee and the assignor; ensuring that the assignee can invest capital and labor with confidence in caring for, protecting, and developing the forest; the assignee shall enjoy a reasonable proportion of the main products extracted from the forest.

Additionally, the assignees of state-owned forest management units' forestry land and forests also enjoy secondary products harvested from the forest (excluding rare and precious forest products as specified in Decree 18/HĐBT dated January 17, 1992); they may invest in planting intercropped agricultural and forestry trees to increase income and improve living standards.

2. State-owned forest management units may organize specialized labor teams to directly carry out production tasks in difficult forest areas if assigning these tasks to households or other organizations and individuals would not be effective.

3. State-owned forest management units may use forestry land without existing forests and utilize the advantages of the forest management unit (in terms of capital, technology, market, etc.) to form joint ventures and associations with employees, households, and organizations and individuals both domestically and internationally to plant forests, combine agricultural and forestry production, process, and sell forest products, while providing services for economic entities in the area to plant, protect, and develop forests.

4. State-owned forest management units cooperate with forestry inspection agencies to arrange dedicated forestry inspectors to monitor the forest management unit, assist the director of the forest management unit in directing the specialized forest protection force, patrol and protect the forest, handle cases of encroachment on forest resources, including compelling the parties involved to compensate for damages and recover assets for the forest owner in accordance with the law.

5. Each forest management unit only needs a director, deputy director, chief accountant, and a number of technical and operational specialists. At the production team level, only a team leader and a technical officer are required.

Article 8. Implementation organization:

The Ministry of Agriculture and Rural Development, in collaboration with the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Labor, Invalids and Social Affairs, the General Department of Land Administration, and related sectors, shall direct provincial people's committees and state-owned forest management units under the General Companies to develop restructuring plans for the organization and management of state-owned forest management units according to this Decision and complete implementation of the plans by the year 2000.

Article 9This Decision takes effect fifteen days after the date of signature; all previous regulations contrary to this Decision are abolished.

Article 10. Ministers, heads of ministerial-level agencies, and chairpersons of provincial people's committees directly responsible for organizing the implementation of this Decision.