Joint Circular No. 20/TT-LB guiding the management of investment capital for the central North region's specialized planting area for paper raw materials.

JOINT CIRCULAR

Guidelines for managing investment capital in the central North region's specialized cultivation area for paper raw materials

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Pursuant to Decision No. 328-CT dated December 3, 1987 of the Chairman of the Council of Ministers on mechanisms and policies to be implemented in the central North region's specialized cultivation area for paper raw materials. The Ministry of Finance and the Ministry of Forestry provide detailed guidelines on the management and utilization of various sources of investment capital in state-owned forest farms, cooperatives, households, etc., within the paper raw material area as follows:

I. GENERAL PRINCIPLES

1\. Capital for constructing the specialized cultivation area for paper raw materials in the central North region shall be invested through: state budget funds, forest nurturing funds, self-owned capital, credit capital, and joint venture capital.

2\. The Vinh Phu Paper Raw Materials Production and Service Joint Stock Enterprise (referred to as the Joint Stock Company) is the investor for the entire paper raw material area, the entity receiving construction investment capital and must:

- Bear responsibility before the State for managing and using investment capital according to the State plan effectively.

- Participate in guiding the management and utilization of self-owned capital and other sources of capital of state-owned enterprises, cooperatives, and households investing in the construction of the paper raw material area.

3\. Management of construction investment capital in the region must comply with current regulations on the management of construction investment capital of the State.

II. SOURCES OF INVESTMENT CAPITAL AND SCOPE OF USE

1- Construction Investment Capital Sources

- State budget funds (including aid funds)

- Forest nurturing funds retained at the unit

- Self-owned capital of units

- Credit capital

- Joint venture capital

2- Scope of use of capital sources

a) State budget funds and forest nurturing funds are used for the following purposes:

- Investing in planting the first cycle from land preparation to when the forest reaches maturity and is ready for exploitation.

- Building infrastructure serving production and public welfare facilities serving the lives of forestry workers.

- Constructing trunk roads outside the intensive cultivation area, prioritizing investment in planted forests and natural bamboo forests with high yields to supply raw materials for the Vinh Phu Paper Factory according to annual plans.

b) Self-owned capital, credit capital, and joint venture capital are invested for the following purposes:

- For state-owned forest farms: investing in construction of production facilities and other services (excluding the purposes mentioned above in point a).

- For cooperatives, households, and individuals: supplementing the pre-allocated state budget capital that is insufficient for planting, caring for, managing, and protecting the forest and building infrastructure serving production and the welfare of forestry workers.

 III. MANAGEMENT OF INVESTMENT CAPITAL

1- Work on establishing capital plans:

Annually, based on new planting targets, construction investment volume targets assigned by the State, guidance standards prepared for the next year, and economic contracts between the Joint Stock Company and state-owned forest farms, cooperatives, households, and private entities, the Joint Stock Company establishes a capital plan for the entire region, reporting it to the Ministry of Forestry and the Ministry of Finance.

The construction investment capital plan established by the Joint Stock Company must reflect the following contents fully: the value of completed construction products reported up to the end of the reporting year that have not yet been allocated or lent capital for investment; the value of completed construction products in the planning year that meet the criteria for allocation or lending capital for investment; the value of completed construction products in the planning year but must be transferred to the next year for allocation or lending; the total amount of allocated or lent capital for investment in the planning year divided according to months suitable for each completion time of construction products; the value of construction products prepared for the next year requesting temporary advance payments in the planning year and reduced allocations of the next year (determined as a percentage of the approved budget estimate).

For aid funds: annually, based on production tasks, assigned construction investment plans, and aid plans received, the Joint Stock Company establishes a plan for the use of materials and equipment and calculates their value in Vietnamese currency according to the prescribed exchange rate, supplementing it into the construction investment plan sent to the Ministry of Forestry and the Ministry of Finance and settling accounts for this work volume.

Based on the plan and actual use of aid materials, the Ministry of Finance processes the recording of income into the State budget and expenditure for the investor.

2- Allocation of investment capital

a) Based on the announced plan, the Ministry of Finance allocates investment capital to the investor according to the plan and progress of implementation as stipulated by the Ministry of Finance.

b) During the year, upon completion of each construction phase: planting, nurturing... (technical stop points reasonably defined - as specified by the Ministry of Forestry), both parties A-B conduct acceptance of completed construction products (the acceptance committee members as stipulated in Part II - Section 2, 3.2 of the Circular of the Ministry of Forestry and the National Construction Management Committee No. 155 TT/LB dated December 29, 1986). Based on the acceptance record and price sheet, the Joint Stock Company processes payment procedures for state-owned forest farms and advances capital to cooperatives, households, individuals...

c) Advance capital for cooperatives, households, individuals... is carried out as follows:

- Conditions for receiving advance capital: Possess land within the planned specialized cultivation area for paper raw materials that has been allocated according to state regulations; Have construction workforce; Commit to implementing technical procedures correctly, using capital for the purpose stated in the contract; Sign a direct contract with the Joint Stock Company or state-owned forest farm for the entire cycle. - Amount of advance capital: Ensure sufficient for direct costs and include 15-20% construction surcharges compared to the approved budget estimate.

3- Management of assets and settlement of capital

a) Asset management:

a1. For local state-owned forest farms:

All areas of planted and nurtured forests... carried out by local state-owned forest farms according to signed contracts, when the first stage (closed canopy forest) ends, the Joint Stock Company is responsible for transferring all to these state-owned forest farms for management and continued investment. The transfer includes the entire volume of closed canopy forests (quantity and quality); Implementation of investment, remaining issues, and ongoing solutions.

a2. For cooperatives, households, individuals:

After completing Phase I (closed canopy forest), cooperatives, households, and individuals continue to implement the signed contracts until the forest reaches its main harvesting age. The Union transfers management responsibility and recovers the invested capital to state forestry farms (central or local depending on each farm's management and geographical control capabilities). The Union is responsible for inventorying and monitoring the entire value of physical assets and capital funds transferred to units to fulfill the contracts (annually and until contract termination).

b) Capital settlement:

 b1.For state forestry farms, cooperatives, households, and individuals: They must settle capital annually with the Union. The Union is responsible for reviewing and accepting the settlement of the units.

- State forestry farms: Implement the current reporting and settlement system.

- Cooperatives, households, and individuals: When settling, they must clearly demonstrate the following contents: Quantity and quality of planting and care (actual performance and according to signed contracts; investment capital received actually and according to contracts). Value of materials and services provided by the Union (actual receipt and according to contracts); determination of receivables, payment time, and method. Upon completion of investment and bringing the forest into harvest, cooperatives, households, and individuals must settle all projects. The Union is responsible for reviewing and accepting the settlement. Based on this, both parties proceed with contract termination procedures. b2.For the Union: The Union implements the current reporting and settlement system (separating two parts: directly managed by the Union and part contracted with units).

4- Recovery of investment capital :

State budget investment capital is recovered when the forest begins main harvesting, at the rate of forest maintenance fees calculated based on approved production quotas.

a) For state forestry farms:

State forestry farms recover state-invested capital through the Union using the state-prescribed forest maintenance fees.

b) For cooperatives, households, and individuals:

The state does not charge interest on advanced investment capital. Investment capital is recovered through standing timber products. When there is a harvest, cooperatives, households, and individuals must submit standing timber products to the state (according to the approved production quota m3/ha, excess over the quota remains for the cooperative or individual to enjoy) corresponding to the ratio of state-advanced capital to annual investment cost adjusted for market prices. State forestry farms receiving standing timber products (as specified in point a2-section 3-part III of this circular) must allocate sufficient forest maintenance fees (from the portion of recovered products according to state-advanced capital) for continuous Cycle II investment.

 IV. ARTICLE TRANSITION PROVISIONS

This Circular takes effect from January 1, 1989. Previous regulations contrary to this Circular are no longer enforceable. Any issues encountered during implementation should be promptly reported to the Ministry of Finance - Forestry for resolution. Guidelines for handling losses due to natural disasters such as pests, forest fires, and contract violations will be separately issued.