Joint Circular No. 26/TT-LB guiding the implementation of policies for investment in forestry economic zones pursuant to Decision No. 95-CP dated March 27, 1980 of the Council of Ministers.

CIRCULAR

JOINT MINISTRY OF FORESTRY-STATE PLANNING COMMISSION-MINISTRY OF FINANCE-STATE BANK

NO. 26/TT-LB DATE JULY 17, 1981
GUIDELINES FOR IMPLEMENTATION OF POLICIES ON INVESTMENT AND CONSTRUCTION
IN FOREST ECONOMIC ZONES ACCORDING TO DECISION
NO. 95-CP MARCH 27, 1980 OF THE COUNCIL OF MINISTERS
(PUBLISHED IN THE OFFICIAL GAZETTE 1980 - ISSUE 6-PAGE 119)

To implement Decision No. 95-CP dated March 27, 1980 of the Council of Ministers on construction policies for new economic zones, to apply appropriately to the production and business conditions and resettlement work in forestry. The Joint Ministry of Forestry-State Planning Commission-Finance-State Bank provide guidelines for planning, management, allocation, payment, settlement of investment capital, materials, food... for constructing forest economic zones and resettlement areas as follows:

A. PRINCIPLES OF INVESTMENT

1. Investment must be synchronized, concentrated, and completed thoroughly, first focusing on deepening investment to consolidate and enhance the effectiveness of existing and ongoing production facilities; investing in specialized production areas such as raw material for paper pulp, mine pillars, specialty products, large timber for basic construction and export, following intensive cultivation methods in afforestation and building high-quality resettlement bases.

The provision of capital and other material factors (labor, materials, food...) to forestry economic units must be balanced, synchronized, adequate, and timely according to approved plans, closely aligned with production and construction schedules, ensuring seasonal timing in forestry production (planting, harvesting), while strictly managing investment capital according to planning, design, state plan indicators, and economic-technical norms.

2. Construction of technical infrastructure for production units (forest-industrial complexes, forest farms, enterprises, cooperatives, agricultural-forestry production groups, resettlement bases...) and common projects for each forestry economic zone shall only be carried out after conducting surveys, planning, and designing, or comprehensive planning approved by competent authorities and recorded in the state plan, budget plan, and annual credit plan.

Forestry economic units established before the issuance of this joint circular that have not yet had approved planning and design tasks must have long-term production directions of at least five years approved by the Minister of Forestry (for centrally managed units) or the Chairman of the People's Committee of provinces and cities (for locally managed units). After two years from the date of allocation under this system, they must have approved planning and design tasks to continue receiving allocations and loans.

For projects allowed to design and construct simultaneously (as decided by the authority approving the design task), each project component must have a detailed estimate for that component. Within six months to one year (depending on the type of project) from the start of construction, a complete design and estimate for the entire project must be available. In special cases where the project needs to continue construction beyond this period, a written request from the project's supervising agency must clearly specify the deadline for obtaining all necessary investment procedure documents as stipulated by the state, to continue receiving allocations and loans.

3. The supervising agencies for investment (Ministry of Forestry, Provincial People's Committees) must accurately determine production directions to develop appropriate investment plans for each region and production unit (forest-industrial complexes, forest farms, enterprises, cooperatives, agricultural-forestry production groups, resettlement bases...) and bear responsibility before the Council of Ministers for the effectiveness of capital utilization.

Units receiving investment must have establishment decisions from competent authorities with investors as prescribed by the state. Investors must responsibly use land, resources, funds, materials, and food according to planning, design, policy, and regulations.

Specifically, for resettlement bases of ethnic minorities in remote, difficult-to-reach areas with underdeveloped economies and low management levels, although investment procedures may be adjusted, they must still meet the following conditions:

- Annual basic construction plans approved by the state;

- Detailed estimates for construction projects: estimates for operating expenses of the base receiving capital and notification of capital approval from the supervising agency;

- Management organization for capital.

B. SCOPE OF UNITS ELIGIBLE FOR INVESTMENT AND APPLICATION
OF CAPITAL MANAGEMENT METHODS ACCORDING TO DECISION NO. 95-CP.

I. THE FOLLOWING STATE ENTERPRISES AND COLLECTIVES ARE FULLY APPLICABLE TO THE POLICIES ON INVESTMENT AND CONSTRUCTION OF NEW ECONOMIC ZONES ACCORDING TO DECISION NO. 95-CP.
Forest-industrial complexes planned as specialized production areas for raw materials for paper pulp, mine pillars, specialty products, large timber for basic construction and export; state-owned forest farms established after the issuance of this joint circular (hereinafter referred to as forest economic zones).

1. For state-owned economic units.

2. For collective economic units.

- Newly established cooperatives and agricultural-forestry production groups that relocate people from elsewhere to manage and operate forest economic zones to supply products to the state (hereinafter referred to as newly established cooperatives and production groups in the zones).

- Resettlement bases nationwide.

II. THE FOLLOWING STATE ENTERPRISES AND COLLECTIVES PARTIALLY APPLY THE POLICIES ON CONSTRUCTION OF NEW ECONOMIC ZONES ACCORDING TO DECISION NO. 95-CP.

1. For state enterprises:
State-owned forest farms established before the issuance of this joint circular, from now on, if workers bring their families to join or recruit additional personnel to build the forest farm, they will be eligible for the policies for workers and their families building new economic zones as specified in Sections II, III, and V of Decision No. 95-CP.
2. For collective economic units:

1. For state-owned economic units:

State-owned forest enterprises established before the issuance of this joint circular, from now on, if workers bring their families along or recruit additional personnel to build the forest enterprise, they shall be subject to policies for workers and families building new economic zones as stipulated in Sections II, III, and V of Decision No. 95-CP.

2. For collective economic units:

a. Cooperatives and production groups in forestry and agriculture that already exist within the central forestry economic zone shall be allocated land and forests to manage and operate for the purpose of supplying products to the State, and shall receive central budget investment support for forest planting capital, care, repair, and natural forest regeneration improvement (hereinafter referred to as cooperatives and production groups that already exist within the region).

b. Cooperatives and production groups in forestry and agriculture that currently exist but are outside the central forestry economic zone, if they are allocated land and forests by local authorities to manage and operate for the purpose of supplying raw materials to meet local needs or for the central government, shall receive local budget investment support as specified in point a above. Depending on the annual self-financing capacity of the local budget, the standards, norms, and unit prices guided by the Ministry of Forestry shall be applied.

C. DETERMINATION OF INVESTMENT CAPITAL.

To align with the characteristics of forestry production, the provisions regarding sources of investment capital shall be implemented according to point 2, Section II of Decision No. 32-CP dated February 11, 1977, and point 2, Section I of Decision No. 95-CP dated March 27, 1980, based on the following principles:

- The State budget shall allocate basic construction capital for production works, works serving production and common living conditions within the region; administrative and public service works of units and allocation of costs for regional economic forestry development and settlement.

- The State Bank shall provide loans to state-owned forestry economic entities that meet the criteria of being economically viable and having identified sources of funds to repay the loans as stipulated by the State Bank.

I. THROUGH STATE BUDGET FUNDS:

1. Basic construction investment capital.

a. For works serving the entire forestry economic region and settlement, directly managed by the Ministry of Forestry:

- Production works such as major irrigation facilities from the main water source to the plot; roads connecting the main road with production areas, reforestation areas, and residential areas; dams, bridges, retaining walls, culverts; construction of power lines (wires, poles, low-voltage substations).

- Works serving living conditions such as primary schools, kindergartens, pre-school classes, hospitals (including internal equipment), stores, bus stations, libraries, clubs, recreational facilities, water supply works for daily use...

- Administrative and public service works, research and experimental works such as office buildings, experimental stations, survey planning teams...

b. For the state-owned economic sector:

• Forest farms, state-owned enterprises engaged in logging, reforestation, and supporting reforestation (including border district forest farms in the north).

• Forest farms and military enterprises engaged in forestry activities according to Decision No. 381-CP dated December 25, 1980.

- New mechanical manufacturing enterprises established within the quota.

- State-owned forestry economic enterprises operating under the accounting system of dependent joint forestry-industrial associations.

c. For the collective economic sector and settlement:

c.1. For newly established cooperatives and production groups within the region and settlement bases.

c.1.1. Land clearing works for forest planting, supporting forest planting, and caring for forests in the first three years, repairing and improving natural forests.

c.1.2. Land clearing works for building paddy fields, initial land improvement, building and improving pastures, internal transportation and irrigation works within the unit.

c.1.3. Public welfare works such as kindergartens, pre-school classes, some classrooms of primary schools, grassroots health clinics (including internal equipment), cooperative stores, water supply works for daily use to meet the requirements of expanding area and increasing labor.

c.1.4. Office buildings, meeting halls.

In addition to the state budget investment support as specified in point c.1 above, settlement bases of ethnic minorities outside the region shall also receive one-time subsidies for long-term tree planting, specialty tree planting, and construction costs for collective livestock shelters.

c.2. For cooperatives and production groups already existing within the central forestry economic zone, the central budget shall support forest planting capital, care, and repair as specified in point c.1.1 above.

c.3. For cooperatives and production groups outside the region, local budgets shall support according to their own capacity, applying point c.1.1 above.

All construction works invested in cooperatives, production groups in forestry and agriculture, and settlement mentioned above, the State will only invest once initially, thereafter cooperatives and production groups must use accumulated capital or their own income to invest in subsequent times.

2. Costs covered by the state budget through public service funding.

a. For common works of the region (including both state-owned, collective, and settlement).

Costs for regional planning and design work.

b. For collective economic units.

- Costs for purchasing supplies for the collective living of workers preparing ahead (if any): management costs and subsidies for workers and their families going to build the forestry economic region and ethnic minorities implementing settlement as specified in Part II of Decision No. 95-CP.

- Costs for subsidizing cadres as specified in Part IV of Decision No. 95-CP.

- Settlement bases specifically receive partial subsidies for the cost of caring for long-term trees, specialty trees, and initial costs for seeds and chemical fertilizers for short-term tree planting.

c. For state-owned production units in forestry, settlement management boards.

- Costs for organizing collection points, reception stations for workers and people going to build the forestry economic region and implement settlement.

- Costs for training and technical education for cooperatives, production groups in forestry and agriculture, and settlement bases.

- Costs for propaganda and mobilization of people to build the forestry economic region, mobilize settlement, and serve cultural life in the forestry economic region and settlement.

- Costs to subsidize families of cadres, employees (including those transferred and newly recruited); families of soldiers, defense employees accepted to build the forestry economic region or state-owned forest farms according to the national plan, applied as stipulated in Parts II, III, and V of Decision No. 95-CP.

- Operating costs of county and provincial settlement management boards.

II. USING STATE BANK LOANS.

Construction projects financed by state bank loans for development must be production and business activities that can directly calculate economic efficiency and ensure repayment to the bank within the prescribed time limit.

Borrowing units must be independent economic accounting entities with full legal status. The specific borrowing targets are:

1. The State Bank invests in construction projects, complete according to approved design tasks (including production components, production support, housing, public welfare, and other basic construction works) for transport enterprises, supply of forest products enterprises, wood processing and forest product enterprises, specialty enterprises, technical supply enterprises, and mechanical enterprises. For newly established machinery manufacturing enterprises, only projects below the quota are invested in.

2. All forestry production and business units are eligible for State Bank loans for investment in technological improvements, production rationalization, utilization of production waste materials, and production of consumer goods, and for auxiliary production bases under current lending regulations.

3. The State Bank provides fixed capital and working capital loans to cooperatives, production groups in agriculture and forestry, and settlement bases according to current cooperative and agricultural production group lending regulations.

4. The State Bank also lends to household members of cooperative members, employees relocated to forestry economic zones who genuinely lack capital for family sideline economic activities.

III. INVESTMENT AND CONSTRUCTION FOR CONTRACTING CONSTRUCTION UNITS, ROADS AND ARCHITECTURAL BRIDGES BY THE STATE BANK AND VIETNAM CONSTRUCTION BANK (FORMERLY VIETNAM ARCHITECTURE BANK) SHALL BE ISSUED AND LOANED ACCORDING TO CURRENT REGULATIONS.
AND TO BE LOANED IN ACCORDANCE WITH CURRENT REGULATIONS.

IV. IMPLEMENTATION OF THE ABOVE INVESTMENT CONTENTS
MUST BE ACCORDING TO THE UNIT PRICE LIMIT SET BY THE MINISTRY OF FORESTRY
AGREED WITH THE MINISTRY OF FINANCE AND THE STATE BANK
AS REGULATED AND GUIDELINED.

Public welfare facilities of state-owned economic units must use part of the unit's welfare fund (if available) according to the existing regulations.

D. MANAGEMENT LEVELS OF CAPITAL, MATERIALS, AND RICE FUNDS FOR FORESTRY ECONOMIC ZONE CONSTRUCTION.

Due to the characteristics of constructing forestry economic zones and settlement bases, capital management is regulated as follows:

I. CAPITAL FROM THE CENTRAL GOVERNMENT BUDGET INVESTED IN
THE MINISTRY OF FORESTRY INCLUDES:

1. Central forestry economic zone common projects.

2. State-owned economic establishments both inside and outside the central forestry economic zone as stipulated in point b, Article 1, Section I, Part C above, managed by the central government.

3. Cooperatives and production groups in the central forestry economic zone eligible for investment under Decision No. 95-CP as mentioned in points c.1 and c.2, Article 1, Section I, Part C above.

4. Settlement bases throughout the country.

5. Operating expenses for the central forestry economic zone and settlement work.

II. CAPITAL FROM LOCAL GOVERNMENT BUDGETS INCLUDE:

1. State-owned forest farms, state-owned forestry enterprises, and administrative and service forestry establishments directly managed by localities, falling within the scope of investment objects specified in this circular (point b, Article 1, Section I, Part C).

2. Cooperatives and production groups within the scope of local budget support investment as stipulated in point c.3, Article 1, Section I, Part C of this circular.

3. Operating expenses for objects managed by localities under Decision No. 95-CP policy.

III. MANAGEMENT OF BASIC MATERIALS (iron, steel, wood, cement, fuel...), RICE FUNDS FOR FORESTRY ECONOMIC ZONE CONSTRUCTION AND SETTLEMENT BASES SHALL BE IMPLEMENTED LIKE CAPITAL MANAGEMENT AS STATED IN SECTIONS I AND II, PART D ABOVE.

(iron, steel, wood, cement, fuel..., foodstuffs) for constructing forestry economic regions and settlement bases shall be managed according to the capital management regulations set forth in Sections I and II, Part D above.

E. SOME REGULATIONS ON PLANNING WORK, ISSUE, PAYMENT, AND SETTLEMENT OF CAPITAL.
I. PLANNING WORK

The Ministry of Forestry and People's Committees of provinces and cities base on national plan indicators assigned, guide subordinate units to build economic plans simultaneously with financial plans from the grassroots level up.

1. Planning for the Ministry of Forestry's management.

1.1. Central state-owned forestry economic units base on the Ministry of Forestry's guidance to prepare plans from the grassroots level, compile annual and six-month plans, and submit them to the provincial People's Committee for comments before submitting to the Ministry of Forestry for approval.

1.2. Provincial and municipal forestry departments (settlement offices) prepare plans and compile plans of settlement bases in counties and provinces, submit them to the provincial People's Committee for comments before submitting to the Ministry of Forestry.

1.3. Cooperatives and production groups within the central forestry economic zone have plans prepared by the county agricultural and forestry department under the guidance of the provincial forestry department. The provincial forestry department compiles and reports to the Ministry of Forestry.

1.4. The Ministry of Forestry reviews and compiles all plans directly managed by the Ministry hereinto, sends them to the National Planning Committee, and forwards them to the Ministry of Finance and the Central State Bank before submitting to the Government for approval.

To ensure synchronization in basic construction of the central forestry economic zone and settlement bases, these projects are recorded in the central forestry economic zone and settlement construction funds directly and uniformly managed by the Ministry of Forestry. Large specialized projects are recorded in investment plans for each sector managed by the Prime Minister when approving the planning and central forestry economic zone and settlement bases such as transportation, water conservancy, complex technical bridges. The planning and investment plan compilation for projects in the region must be combined with county construction.

2. Local Plans:

Local state-owned forestry economic units base on the guidance of provincial and municipal people's committees to implement as in point 1.1 above and send to the provincial forestry department and the provincial planning committee, the provincial forestry department, and related sectors to work with the provincial planning committee before submitting to the provincial and municipal people's committees for approval.

The provincial planning committee compiles these plans into the local general plan, works with the National Planning Committee and the Ministry of Forestry to submit to the Government for approval.

The Provincial Planning Committee shall consolidate these plans into the local general plan and work with the National Planning Committee and the Ministry of Forestry to submit to the Government for approval.

The annual and six-month plans at the central or local levels must clearly define the sources of investment capital for basic construction projects, including state budget investment funds, State Bank credit, and distinctly allocate two types of basic construction capital and operating expenses according to the format provided by the Ministry of Forestry and within the time frame set by the State for annual planning.

II. PROCEDURES FOR ASSIGNING PLANS AND ALLOCATING CAPITAL, MATERIALS, AND RATIONS.

1. Regarding the plans directly managed by the Ministry of Forestry.

Based on the plan approved by the Government, the Ministry of Forestry assigns plans to centrally-affiliated state-owned economic units under its jurisdiction to implement. For investment capital plans for settlement areas, cooperatives, and agricultural and forestry production groups in the central forestry economic zones, the Ministry of Forestry assigns these plans to settlement area management boards and provincial forestry departments to organize and implement.

To ensure centralized and unified management of investment capital, materials, rations, etc., for central forestry economic zones and settlement areas, based on construction progress and usage conditions, the Ministry of Forestry has the authority to adjust funds, materials, and rations within the total investment amount already approved by the Government.

2. Regarding the plans directly managed by the Provincial People's Committees.

Based on the allocation plan coordinated in the industry-wide plan reviewed by the Council of Ministers, the Central State Planning Commission assigns plans to each province for implementation according to the tasks, functions, and authorities of the locality. The Provincial People's Committee assigns targets from the plan to provincial forestry departments to assign to facilities in accordance with the general format applicable to other units in the locality.

III. METHODS OF MANAGEMENT, DISTRIBUTION, AND LOANING OF INVESTMENT CAPITAL FOR FORESTRY ECONOMY AND SETTLEMENT AREAS.
1. Regarding investment methods.

- For central forestry economic zones and settlement areas directly managed by the Ministry of Forestry, or entities directly managed by localities; all entities funded by the state budget are distributed by the Vietnam Investment and Construction Bank (formerly the Construction Bank) according to national plan targets allocated by the Ministry of Forestry or the local People's Committee (both types of capital: basic construction capital and operating expenses).

- For entities funded by investment credit, the Vietnam Investment and Construction Bank also provides loans according to national plan targets.

2. Payment and settlement systems.

a. For entities directly managed by the Ministry of Forestry.

State-owned economic units:

Quarterly and annually, state-owned economic units report on capital settlements and material and food usage to the forest-industrial unions and forestry companies for review and consolidation, which are then submitted to the Ministry of Forestry (other subordinate units send their reports for review). Capital settlement reports must be confirmed by the local investment and construction bank. Material and food usage reports must be confirmed by the material and food distribution management agency and reviewed by the provincial People's Committee before submission to the Ministry.

Collective economic units and settlement areas.

- Semi-annually and at year-end, based on unit reports, county agricultural and forestry bureaus and settlement area management boards consolidate capital settlement reports and regular material and food usage reports, sending them to provincial forestry departments and settlement area management boards. Capital settlement reports must include comments from local banks.

Provincial forestry departments and settlement area management boards, authorized by the Ministry of Forestry, review settlement reports from counties and consolidate comprehensive settlement reports for this portion of the capital, submitting them to the Ministry of Forestry and the Central Settlement Area Management Board.

The Ministry of Forestry consolidates both parts of the settlement reports to prepare a comprehensive settlement report with the central budget (Ministry of Finance) for the capital it directly manages, simultaneously sending it to the State Bank of Vietnam (Vietnam Investment and Construction Bank).

b. For entities directly managed by local People's Committees.

State-owned forestry economic units report on capital settlements and regular material and food usage quarterly and annually to provincial forestry departments.

Collective economic units, cooperatives, and agricultural and forestry production groups report regularly on capital and materials semi-annually to county agricultural and forestry bureaus for consolidation and reporting to provincial forestry departments.

Capital reports from facilities and counties must be confirmed by the local investment and construction bank.

Provincial forestry departments review settlement reports for state-owned units and counties; they consolidate both parts of the settlement reports to prepare a comprehensive settlement report with the local budget (Provincial Financial Departments) and simultaneously send it to the local investment and construction bank.

All settlement reports mentioned above must be prepared according to the prescribed system and formats within the specified deadlines as guided by the Ministry of Forestry and the Central Settlement Area Management Board.

Additionally, central and local state-owned forestry economic units must also implement periodic rapid reporting systems sent to the Ministry of Forestry and provincial forestry departments according to current statistical reporting regulations.

G. IMPLEMENTATION ORGANIZATION

1. As of July 1, 1981, the management and distribution of all sources of capital for forestry economy and settlement areas will be transferred to implement the new system stipulated in this joint circular, applied in the spirit of Decision No. 32-CP and Decision No. 95-CP.

Within the scope of each entity and source of capital, the State Bank and the former Construction Bank have the responsibility to transfer the management and distribution of capital and loaning according to the provisions of this joint circular. The handover shall be conducted through mutual agreement between the two banks in accordance with the current system and must be completed by August 31, 1981.

Within the scope of each target group and source of funds from the State Bank and the old construction bank, they have the responsibility to transfer the tasks of managing and disbursing capital and lending capital in accordance with the provisions of this joint circular. The handover shall be regulated by both banks in accordance with current regulations and must be completed by August 31, 1981.

2. As of July 1, 1981, within the scope of allocated capital and according to its functions, the Vietnam Investment and Construction Bank shall be responsible for organizing both budgetary funding and loan disbursement effectively to maximize the comprehensive impact of all state investment capital for forestry facilities and resettlement sites nationwide, ensuring the continuity of investment activities within an economic unit through both budgetary funds and credit funds, without interrupting the implementation of investments already scheduled in the plan.

3. The People's Committee of provinces and cities shall be responsible for managing and comprehensively implementing all forestry economic facilities under local management in accordance with planning tasks, design plans, state plans, and the provisions in Decision No. 95-CP and this joint circular; at the same time, they shall perform the functions of local authorities towards central forestry economic regions and resettlement areas directly managed by the Ministry of Forestry located within their territorial jurisdiction as stipulated currently and in this joint circular.

4. The Forestry Departments, Resettlement Committees have the responsibility to assist the People's Committee of provinces and cities in managing the implementation of plans, distribution, management, and utilization of capital, materials, and food for investment objects directly managed by the locality as specified in this joint circular; concurrently, they serve as agencies assisting the Ministry of Forestry in inspecting, guiding, directing specialized operations, and economic financial management for objects directly managed by the ministry within the local territory and jurisdiction.

The Planning Commission, Financial Departments, State Bank, and Local Vietnam Investment and Construction Bank, and supply agencies for materials and food according to the functions of each sector shall cooperate closely to assist the People's Committee of provinces and cities in organizing implementation, inspection, supervision, ensuring that the construction of forestry economic regions and resettlement areas complies with the provisions in Decision No. 95-CP and this joint circular; promoting the effective and economical use of capital, materials, food, etc., to achieve high economic efficiency.

5. This joint circular replaces Circulars No. 12-TT/LB dated May 12, 1978, issued by the Ministry of Finance and Forestry; No. 14-TT/LB dated December 20, 1977, issued by the Ministries of Agriculture, Forestry, Finance, and the State Bank; No. 9-TT/LB dated March 24, 1979, issued by the Ministries of Forestry, Finance, and the State Bank; and specific provisions related to the forestry sector in Joint Circular No. 21-TT/LB dated February 17, 1978, issued by the State Planning Commission, Ministry of Finance, and the State Bank. Previous regulations conflicting with this joint circular are hereby abolished.

During implementation, if any difficulties arise, relevant entities, sectors, and levels should promptly report them to the joint ministries for appropriate resolution.