Decree No. 200/2004/ND-CP On the Reorganization, Modernization, and Development of State-owned Forest Enterprises

DECREE OF THE GOVERNMENT

On the arrangement, reform, and development of state-owned forest farms

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

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

Pursuant to the State Enterprise Law on November 26, 2003;

Based on the Land Law dated November 26, 2003;

At the request of the Minister of Agriculture and Rural Development,

DECREE:

PART I

GENERAL PROVISIONS

Article 1. Scope of regulation and applicable subjects

1. This Decree stipulates the arrangement, reform, and development of state-owned forest farms.

2. This Decree applies to state-owned forest farms, state forestry enterprises assigned or leased land for management, protection, and production and business activities related to forestry (hereinafter referred to collectively as state-owned forest farms).

Article 2. Objectives of organizational and management mechanism reform for state-owned forest farms

1. To use land resources effectively; manage, protect, develop, and sustainably utilize forest resources.

2. To enhance the efficiency of production and business operations of state-owned forest farms.

3. To create additional jobs and income for workers; contribute to poverty alleviation, economic and social development, and national defense security in the area.

Article 3. Principles for reorganizing state-owned forest farms

1. The arrangement and reform of state-owned forest farms must be consistent with local socio-economic development plans, particularly forestry development plans.

2. Clearly distinguish between types of forest farms performing public service tasks and production and business tasks:

a) Forest farms primarily engaged in production and business activities must operate and account according to market mechanisms.

b) Forest farms mainly performing public service tasks shall be converted into Forest Management Boards and operate under the mechanism of revenue-generating public institutions.

3. Enhance the effectiveness of state management over forests; the State will directly invest and manage special-use forests, very critical and critical protective forests, and remote natural forests that cannot be contracted out to the people. Remaining areas of natural forests will be transferred to organizations, households, and individuals for self-investment and business (encirclement and nurturing, regeneration) and to benefit from the results of forestry production and business.

Chapter II

REFORM OF THE ORGANIZATIONAL STRUCTURE OF STATE-OWNED FOREST FARMS

Article 4. Reform of the organizational structure of state-owned forest farms

1. Forest farms currently managing mainly planted production forests, land planned for planting production forests, and mainly managing naturally occurring production forests with concentrated areas should be reorganized into Forestry Companies based on production and business plans (from planting, caring for, protecting, developing forests, harvesting, processing, and marketing timber products).

2. Forest farms currently managing mainly protective forests with an area of 5,000 hectares or more, and special-use forests with an area of 1,000 hectares or more (in exceptional cases, smaller areas may apply) shall be converted into Protective Forest Management Boards and Special-Use Forest Management Boards and operate under the mechanism of revenue-generating public institutions.

3. Forest farms currently managing small forest land areas (less than 1,000 hectares), interspersed with agricultural land, near residential areas should be reviewed and adjusted to appropriate scales and converted into revenue-generating public institutions providing services such as seedling production, model application, and technology transfer to farmers in the region.

4. Areas of production forests that are naturally poor, small and scattered protective forests, special-use forests; areas of degraded land and other lands, lands not effectively utilized by forest farms under Clauses 1, 2, and 3 of this Article shall be reclaimed by local authorities and transferred or leased to entities in accordance with laws on land and laws on forest protection and development.

5. Dissolve forest farms falling into the following categories:

a) Forest farms suffering continuous losses for three years or more without effective remedial measures; forest farms with small areas but no need or conditions to convert into service units; forest farms that do not need to be retained.

b) Local authorities shall reclaim land from dissolved forest farms and transfer or lease it to organizations, households, and individuals for forestry production and business activities in accordance with laws on land and laws on forest protection and development.

6. Pilot shareholding reforms for forest farms owning planted forests with relatively favorable production conditions, close to economic centers, and with few ethnic minority laborers. Initially, pilot shareholding reforms for forest farms engaged in planted forest business linked to processing facilities, including preferential share sales to producers supplying raw materials to these processing facilities.

Chapter III

REFORM OF MANAGEMENT MECHANISMS

Article 5. Management Mechanism of Forestry Companies

1. State-owned Forestry Companies with 100% state capital operate under the Law on State Enterprises. When transitioning to a limited liability company with one member or undergoing shareholding reform, they shall operate under the Enterprise Law.

2. State-owned Forestry Companies with 100% state capital shall implement shareholding reform for processing bases, agricultural and forestry products, trade, and services according to Decree No. 64/2002/NĐ-CP dated June 19, 2002 of the Government on converting state-owned enterprises into joint-stock companies; sell shares to raw material producers; pilot shareholding reform for planted forests.

3. Forestry Companies may choose various forms of forest and forestry land contracts to organizations, households, and individuals to effectively protect, plant, and exploit forests in accordance with the provisions of the law.

4. Forestry Companies may utilize their advantages (capital, technology, market...) to form joint ventures or associations with households, organizations, and individuals both domestically and internationally to plant forests, combine agricultural and forestry production, process and consume products, and provide services in accordance with the provisions of the law.

Article 6. Operation Mechanism of Forest Management Boards

1. The People's Committees of provinces and centrally governed cities (hereinafter referred to collectively as provincial-level People's Committees) decide on the establishment of Forest Management Boards. The functions, tasks, powers, organizational structure, and staffing of Forest Management Boards shall be implemented in accordance with Decision No. 08/2001/QĐ-TTg dated January 11, 2001 of the Prime Minister on issuing the Forest Management Regulations for Protective Forests, Specialized Forests, and Naturally Occurring Production Forests.

2. Forest Management Boards may be assigned as the main entities for projects on contracted forest protection and restoration; poverty alleviation projects in buffer zones funded by the state budget to support forest protection.

3. Forest Management Boards shall implement financial mechanisms in accordance with Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government on the financial system applicable to public service units with revenue.

Chapter IV

SPECIFIC SOLUTIONS

Article 7. On Land

Provincial-level People's Committees shall direct the resolution of the following land-related matters:

1. Coordinate with competent agencies to review the land of state-owned forestry farms currently managed and used within the province.

2. Resolve disputes and violations of land laws (land encroachment, disputes, and violations of state-owned forestry farms) definitively for each specific case in accordance with the law.

3. Review and adjust the land use planning of state-owned forestry farms to be consistent with economic and social development plans, forestry development plans of localities, and the results of land reviews of state-owned forestry farms. Based on these, provincial-level People's Committees shall determine or adjust the area and boundaries of land allocated to Forestry Companies and Forest Management Boards planned to be established.

4. Implement land allocation and leasing.

Provincial-level People's Committees shall base on the land use planning of state-owned forestry farms that have been determined to decide on land allocation and leasing to organizations in accordance with the following provisions:

a) Allocate land without collecting land use fees for: Forest Protection Boards, Specialized Forests Boards; forestry farms transitioning to public service units with revenue; land for producing seedlings, building models for applying and transferring technological advancements to farmers in the region, and land used for public purposes in Forestry Companies.

b) Lease land or allocate land with collection of land use fees for areas of land used by Forestry Companies for business purposes.

c) Provincial-level People's Committees shall organize the measurement, establish land records, and issue land use right certificates to Forestry Companies, Forest Management Boards, and organizations in accordance with the law on land.

Local budgets shall ensure funds for land reviews, boundary demarcation, land allocation, and issuance of land use right certificates to Forest Management Boards and Forestry Companies.

5. For areas of land not included in the planning for allocation to Forestry Companies and Forest Management Boards, provincial-level People's Committees shall decide on recovery and prioritize allocation of such land to ethnic minorities who do not have or do not have enough land for production and residence at the average level in the locality. The management and use of recovered land must comply strictly with the law on land.

6. Resolving residential and production land for households and individuals who are employees of Forestry Companies.

District-level People's Committees shall be responsible for allocating land and issuing land use right certificates to households and individuals who are employees of Forestry Companies in the following cases:

a) Residential land: for households and individuals (including those currently working, those retired due to health reasons, retirees, and those who have resigned) with legal household registration in the area but have not yet been allocated residential land.

For households and individuals who were previously allocated residential land by forestry farms (already settled and living stably) but have not yet received land use right certificates, district-level People's Committees where the land is located shall be responsible for issuing land use right certificates for these cases.

b) Production land: households and individuals who are employees of Forestry Companies and are unemployed due to restructuring shall be prioritized for land allocation to stabilize agricultural, forestry, and aquaculture production.

The amount of land allocated to households and individuals who are employees of Forestry Companies shall be equal to the average land area allocated per capita for households in the locality as stipulated by provincial-level People's Committees.

c) The land fund for allocating residential and production land to households and individuals who are employees of Forestry Companies shall be taken from the existing land fund of the locality. If the locality does not have a land fund, it shall be taken from the land fund of the forestry farm after adjusting the planning for allocation.

State-owned forestry farms shall be responsible for handing over all documentation regarding the land fund to be recovered to provincial-level People's Committees where the land is located.

Article 8. On management and use of forests

1. Provincial People's Committees under the Central Government, Ministries, sectors, and State-owned Holding Companies shall direct competent agencies to review and clearly define the area, boundaries, and status of state-owned forest farms' managed forests on maps and in the field; for planted forests, the value of the forests must be determined to serve as a basis for formulating plans for restructuring, modernizing, and developing state-owned forest farms.

2. Forest transfer: based on plans for restructuring, modernizing, and developing state-owned forest farms, provincial people's committees shall coordinate with ministries, sectors, and state-owned holding companies with state-owned forest farms to transfer forests to Forestry Companies and Forest Management Boards.

3. Provincial People's Committees shall reclaim and develop plans for managing and using forest areas not included in the planning assigned to Forestry Companies and Forest Management Boards.

State-owned forest farms shall be responsible for fully transferring files regarding the area of reclaimed forests and forestry land to the provincial people's committee where the forests are located.

4. The management and use of forests shall be carried out in accordance with Decision No. 08/2001/QĐ-TTg dated January 11, 2001, of the Prime Minister on the issuance of the Forest Management Regulations for protective forests, special-use forests, and naturally produced production forests.

Article 9. On assets and finance

1. State-owned forest farms shall organize asset inventory and revaluation, handle outstanding debts according to regulations applicable to state enterprises undergoing restructuring and modernization.

2. State-owned forest farms shall transfer to provincial people's committees (or units authorized by provincial people's committees to manage) assets invested in and currently managed and used to serve common needs in the area, including roads, irrigation works, schools, and health clinics. At the same time, they shall transfer the power system to Vietnam Electricity Corporation for management, which was invested in and built by the forest farm to serve the common needs of the local population.

The transfer of roads, power systems, irrigation works, schools, and health clinics from forest farms to local management shall be implemented in accordance with Decision No. 255/2003/QĐ-TTg dated December 1, 2003, of the Prime Minister on the transfer and handling of loans and investment in assets such as roads, power systems, irrigation works, schools, and health clinics of forest farms to localities and Vietnam Electricity Corporation management.

3. The State Bank shall guide organizations and individuals receiving transfers and debts from forest farms concerning assets and forest areas formed with bank loans.

In cases where assets and forest areas formed from credit funds when forest farms transfer to management boards (public service units) encounter difficulties, the state will consider support according to the mechanism stipulated in Article 2 of Decision No. 255/2003/QĐ-TTg dated December 1, 2003, of the Prime Minister.

4. The Ministry of Finance shall guide the transfer of assets, forest trees, perennial orchards, and investment values in land reclamation and improvement between forest farms and related parties.

5. Annually, based on plans and tasks for planting, managing, and protecting protective and special-use forests assigned by competent authorities, the state budget shall ensure funding for implementation in accordance with the State Budget Law and current legal documents.

6. Proceeds from the sale of timber and other forest products harvested from natural forests, Forestry Companies may use for the following purposes:

a) To cover costs for establishing forests by Forestry Companies (contracts with households, individuals, and organizations undertaking afforestation, protection, and nurturing of forests under contractual agreements), to cover expenses for harvesting, transportation, and consumption of forest products.

b) To fulfill financial obligations to the State.

c) To establish funds as prescribed by law.

7. If Forestry Companies also undertake social functions, security, defense, and other public welfare tasks, those functions and responsibilities shall be funded by the state according to approved projects and plans and must be separately accounted for.

8. Forestry Companies managing production forests that are depleted natural forests in need of nurturing and recovery and not yet permitted to harvest timber (located in remote, mountainous areas with many ethnic minority groups) shall be supported by the state with funding for managing and protecting these forest areas according to the mechanism for protective forests.

Article 10. Regarding labor in state-owned forest enterprises

1. State-owned forest enterprises shall review the number of officials, employees, and workers currently employed up to the time of restructuring and renovation. Develop plans for arranging officials, employees, and workers of the forest enterprise in a way that maximizes their suitability with their capabilities and specialties.

2. Handling surplus labor: during the process of restructuring and reorganizing production, those officials and employees of the forest enterprise who cannot be assigned work shall be resolved according to the policy stipulated in Decree No. 41/2002/NĐ-CP dated April 11, 2002, of the Government on policies for surplus labor due to restructuring of state-owned enterprises. Specifically, for positions of Director, Deputy Director, and Chief Accountant, the provisions of Resolution No. 09/2003/NQ-CP dated July 28, 2003, of the Government supplementing Resolution No. 16/2000/NQ-CP dated October 18, 2000, of the Government on streamlining staff in administrative agencies and public service units shall be implemented.

3. Officials and employees listed in the Forestry Company who are working and receiving salaries from the company or not receiving salaries but earning income from production results through land, forest, and tree plots contracted from the company shall have the company responsible for implementing relevant legal regulations on labor protection, social insurance, and health insurance.

4. For officials and employees who have contracts, if they still receive wages based on job levels, the contracted work must be reflected in the labor contract according to current regulations. If wages are calculated based on the results of the contract, the form of wage payment must be clearly specified in the labor contract.

Article 11. Science and technology policy

1. Forestry Companies shall be supported by the State to develop and promote the application of new scientific and technological advancements, high technologies in production and processing, especially high-yield and quality forest tree varieties; establish new breeding bases using cuttings and shoots to supply industrial raw material plantations; transfer new scientific and technological advancements and provide forestry advisory services and market information to farmers in the region.

2. Encourage extensive cooperation, joint ventures, and collaborations between Forestry Companies and investors, central, regional, and local research institutes, schools, and centers to protect genetic resources, select, breed, and produce high-yield and quality crop and livestock varieties with strong market competitiveness.

Chapter V

IMPLEMENTATION

Article 12. Responsibilities of Ministries and Sectors

1. The Ministry of Agriculture and Rural Development shall take the lead and coordinate with relevant ministries and sectors to guide localities and ministries in developing proposals for restructuring, renovating, and developing existing state-owned forest enterprises; review these proposals to submit to the Prime Minister for approval.

Establish a Steering Committee from the central level down to the provincial level to implement the Government's Decree on restructuring, renovating, and developing state-owned forest enterprises. At the central level, the Chairman of the Steering Committee shall be the Minister of Agriculture and Rural Development, with members being representatives of leaders from relevant ministries and sectors.

The tasks of the Steering Committee include promptly addressing difficulties and challenges, consolidating sectoral and local plans to present to the Prime Minister for decision.

2. The Ministries of Finance, Natural Resources and Environment, Home Affairs, Science and Technology, Labor, Invalids and Social Affairs, the State Bank of Vietnam, and other relevant ministries and sectors shall guide the implementation of functions within their management scope to carry out this Decree.

Article 13. Responsibilities of the provincial People's Committee

1. To develop the Scheme for reorganizing existing state-owned forest enterprises, submit it to the Prime Minister for approval in the first quarter of 2005, and organize and direct its implementation.

2. To direct relevant specialized sectors to guide and inspect the development of land use plans, forest management schemes, production and business plans (for forest enterprises converted into Forestry Companies); dissolution plans and transformation schemes (for state-owned forest enterprises required to be dissolved or transformed into Forest Management Boards and other forms of business); approve these plans and schemes so that the Companies and Forest Management Boards can organize their implementation.

Article 14. Responsibilities of State Corporations

1. To develop the Scheme for reorganizing existing state-owned forest enterprises and submit it to the Prime Minister for approval (for Corporation 91); submit it to the directly managing ministry for the ministry to submit to the Prime Minister for approval (for Corporation 90) in the first quarter of 2005.

2. To coordinate with local functional agencies to direct Forestry Companies to review land and complete procedures to request the provincial People's Committee to transfer, lease, and issue land use right certificates to subordinate Forestry Companies.

3. To coordinate with local functional agencies where there are Forestry Companies to guide companies in developing land use plans and forest management schemes to be submitted to the provincial People's Committee for approval.

4. To guide Forestry Companies in developing and approving production and business plans for subordinate Forestry Companies and direct the companies to organize their implementation.

Chapter VI

IMPLEMENTING PROVISIONS

Article 15. Effectiveness and Responsibility for Implementation

1. This Decree shall take effect fifteen days from the date of publication in the Official Gazette.

2. All previous regulations contrary to this Decree are abolished.

3. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial people's committees under central cities shall be responsible for implementing this Decree./.