Circular No. 80/2011/TT-BNNPTNT guides the method for determining payment for forest environmental services

CIRCULAR

Guidelines for determining payment amounts for forest environmental services

___________________________

The Government issues this Decree on mechanisms and policies to encourage forest protection, encirclement and regeneration of forests, afforestation, development of non-timber forest products, and increased income in connection with policies to quickly reduce poverty, sustainably and to support ethnic minority groups during the period 2015-2020.

Pursuant to Decree No. 01/2008/ND-CP dated January 3, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Agriculture and Rural Development; Decree No. 75/2009/ND-CP dated September 10, 2009 of the Government amending Article 3 of Decree No. 01/2008/ND-CP dated January 3, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Agriculture and Rural Development;

Pursuant to Decree No. 99/2010/NĐ-CP dated September 24, 2010 of the Government on policies for payment for forest environmental services;

The Ministry of Agriculture and Rural Development provides guidelines for determining payment amounts for forest environmental services as follows:

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular guides the application of coefficient K; determination of payment amounts for forest environmental services for forest owners and households under contract; and exemption and reduction of payment amounts for forest environmental services according to Decree No. 99/2010/ND-CP dated September 24, 2010 of the Government on policies for payment for forest environmental services for various types of services, including:

1. Protection of land, limitation of soil erosion and sedimentation in reservoirs, rivers, and streams;

2. Regulation and maintenance of water sources for production and social life.

Article 2. Applicability

The subjects applying this include state agencies; organizations, households, individuals, and village communities within the country; overseas Vietnamese, foreign organizations, and individuals involved in the supply, use, and payment for forest environmental services, and management of payments for forest environmental services.

Chapter II

APPLICATION OF COEFFICIENT K

Article 3. Coefficient K

1. Coefficient K is determined for each forest condition plot, serving as the basis for calculating the payment amount for forest environmental services for forest owners. Forest plots with the same condition within a watershed providing a specific forest environmental service have similar characteristics and share the same coefficient K. The coefficient K of each forest condition plot is integrated from component coefficients as prescribed in point a, Clause 1, Article 16 of Decree No. 99/2010/ND-CP.

A forest condition plot (hereinafter referred to as a forest plot) is an area of forest where there is only one relatively uniform forest condition. In cases where a forest owner has multiple forest plots, each forest plot will have its own coefficient K.

2. Component coefficients include:

a) Coefficient K₁: adjusts the payment amount for forest environmental services based on the condition and volume of the forest, including rich forests, medium forests, poor forests, and recovering forests. Coefficient K₁ has a value of: 1.00 for rich forests; 0.95 for medium forests; and 0.90 for poor forests and recovering forests. The condition and volume of the forest are determined according to Circular No. 34/2009/TT-BNNPTNT dated June 10, 2009 of the Ministry of Agriculture and Rural Development stipulating criteria for determining and classifying forests.

b) Coefficient K₂: adjusts the payment amount for forest environmental services based on the purpose of forest use, including special-use forests, protective forests, and productive forests. Coefficient K₂ has a value of: 1.00 for special-use forests; 0.95 for protective forests; and 0.90 for productive forests. The purpose of forest use is determined according to the three types of forest planning approved by the People's Committee of the province.

c) Coefficient K₃: adjusts the payment amount for forest environmental services based on the origin of forest formation, including natural forests and planted forests. Coefficient K₃ has a value of: 1.00 for natural forests; 0.9 for planted forests.

d) Coefficient K₄: adjusts the payment amount for forest environmental services based on the difficulty level of forest protection, including social and geographic factors. Coefficient K₄ has a value of: 1.00 for very difficult-to-protect forests; 0.95 for difficult-to-protect forests; and 0.90 for less-difficult-to-protect forests.

Article 4. Application of Coefficient K

1. The People's Committee of the province shall base on specific conditions of the locality and the coefficient K prescribed in Article 3 of this Circular to specify the detailed component coefficients K applicable within the provincial territory.

2. The Department of Agriculture and Rural Development shall take the lead in directing relevant agencies to determine the coefficient K for each forest plot for forest owners who are organizations, as stipulated by the People's Committee of the province, to serve as the basis for payment of forest environmental service compensation.

3. The People's Committee of the district shall direct relevant agencies to determine the coefficient K for each forest plot for forest owners who are households, individuals, or village communities, as stipulated by the People's Committee of the province, to serve as the basis for payment of forest environmental service compensation.

4. State-owned forest owners shall unify the application of coefficient K with the households contracted to protect the forest, which shall be reflected in the contract.

5. The coefficient K for a specific forest plot shall be reassessed when there is a change in the state and volume of the forest, purpose of forest use, origin of forest formation, and difficulty level in protecting the forest, upon proposal by the forest owner or through the results of annual forest inspection, as determined by the competent authority according to Clause 2 and Clause 3 of this Article.

Chapter III

DETERMINATION OF FOREST ENVIRONMENTAL SERVICE COMPENSATION FOR FOREST OWNERS AND HOUSEHOLDS CONTRACTED TO PROTECT THE FOREST

Article 5. Determination of funds transferred from the Vietnam Forest Protection and Development Fund to the Provincial Forest Protection and Development Fund

1. The Director of the Vietnam Forest Protection and Development Fund shall determine the amount of forest environmental service compensation to be transferred to the Provincial Forest Protection and Development Fund of provinces and centrally-administered cities, or organizations performing the functions of the Provincial Forest Protection and Development Fund as decided by the Provincial People's Committee (hereinafter referred to as the Provincial Forest Protection and Development Fund), for each payment object whose watershed area spans two or more provinces.

2. Time of determination: annually.

3. Determination of the amount to be transferred to the Provincial Forest Protection and Development Fund:

a) Step 1: Determine the average payment per hectare of forest from the services of a user of forest environmental services according to the following formula:

              (1)

Where:

- : Average payment per hectare of forest;

- B: Actual revenue from forest environmental service payments collected at the Vietnam Forest Protection and Development Fund in the year;

- Q: Operational costs related to forest environmental service payments of the Vietnam Forest Protection and Development Fund;

- S: Total area of forests participating in providing forest environmental services.

b) Step 2: Determine the amount to be transferred to the Provincial Forest Protection and Development Fund from the services of a user of forest environmental services according to the following formula:

B_1i =  x S­_1i        (2)

Where:

Ministry of Construction sets specific price_1i: Amount transferred to the Provincial Forest Protection and Development Fund i from a user of forest environmental services;

- The Office of Legal Document Supervision (Ministry of Justice);_1i: Area of forest providing forest environmental services of province i paid by a user of forest environmental services (  i = 1, 2, …, n).

c) Step 3: Determine the total amount to be transferred to the Provincial Forest Protection and Development Fund of a province according to the following formula:

A₁ =                   (3)

Where:

: Actual electricity delivered to the grid at the delivery point in the payment month.₁: Total amount transferred to the Provincial Forest Protection and Development Fund of a province;

- : Payment for forest environmental service j of a province (j = 1, 2, …,n).

4. In case the funds received from users of forest environmental services cannot be identified or have not been identified for the actual recipients, the transfer shall be carried out as follows:

The Vietnam Forest Protection and Development Fund shall transfer funds to provinces with an average forest environmental service payment per hectare lower than the national average in the year, according to the decision of the Minister of Agriculture and Rural Development.

5. The Vietnam Forest Protection and Development Fund shall notify each Provincial Forest Protection and Development Fund of the amount of forest environmental service compensation according to Form No. 1 attached to this Circular.

Article 6. Determining Payment Amounts for Forest Owners

1. The Director of the Provincial Forest Protection and Development Fund shall determine the payment amount for each user of forest environmental services to pay to the forest owner.

2. The determination of the actual payment amount for the year shall be carried out in the first quarter of the following year.

3. Determining the payment amount for the forest owner:

a) Step 1: Determine the average payment amount per 1 hectare of forest from the service provided by one user of forest environmental services:

- The average payment amount per 1 hectare of forest from the service provided by one user of forest environmental services is determined according to the following formula:

                  (4)

Where:

+ : the average converted payment amount per 1 hectare of forest for the forest owner based on coefficient K;

+ B₁: the actual revenue collected for forest environmental service payments in the year at the Provincial Forest Protection and Development Fund;

+ Q₁: management costs at the Provincial Forest Protection and Development Fund;

+ P: contingency fund (+/-);

- The Office of Legal Document Supervision (Ministry of Justice);_q/d: converted forest area based on coefficient K, calculated using the following formula:

Provincial People's Committees set specific prices_q/d =                  (5)

+ K_i: coefficient K of plot i (i = 1, 2, ..., n)

+ S_i: area of plot i providing forest environmental services (i = 1, 2, ..., n) that has been inspected and settled.

In the case where the average payment amount for 1 hectare of forest is lower than the previous year's payment amount, the Provincial Forest Protection and Development Fund shall submit a proposal to the Provincial People's Committee for approval of a plan to supplement from the contingency fund.

b) Step 2: Determine the payment amount for the forest owner from the service provided by one user of forest environmental services according to the following formula:

B₂ =  x S­_q/d                                (6)

Where:

Ministry of Construction sets specific price₂: payment amount for the forest owner.

c) Step 3: Determine the total payment amount for forest environmental services paid to each forest owner.

A forest owner with an area of forest providing forest environmental services to one or more users of forest environmental services shall receive all payment amounts from those services. The total payment amount is calculated according to the following formula:

A₂ =                                 (7)

Where:

: Actual electricity delivered to the grid at the delivery point in the payment month.₂: total forest environmental service payment amount for the forest owner;

- : payment amount for forest environmental service j for the forest owner (j = 1, 2, ..., n).

4. The Provincial Forest Protection and Development Fund shall notify each forest owner of the forest environmental service payment amount according to Form No. 2 attached to this Circular.

Article 7. Determining Payment Amounts for Households Receiving Forest Protection Contracts

1. The forest owner who is a state organization implementing contracts for forest protection with communities, households, or individuals shall be responsible for determining the payment amount for the contracted households.

2. The determination of the actual payment amount for the year shall be carried out in the first quarter of the following year.

3. Determining the payment amount for the contracted household:

a) Step 1: Determine the average payment amount per 1 hectare of forest from the service provided by one user of forest environmental services according to the following formula:

                                    (8)

Where:

+ : the average converted payment amount per 1 hectare of forest for the contracted household based on coefficient K;

+ Q₂: management costs of the forest owner.

b) Step 2: Determine the payment amount for the contracted household from the service provided by one user of forest environmental services according to the following formula:

B₃ =  x S­_q/d                                (9)

Where:

Ministry of Construction sets specific price₃: payment amount for forest environmental service for the contracted household.

c) Step 3: Determine the total payment amount for forest environmental services paid to the contracted household.

A contracted household with an area of forest providing forest environmental services to one or more users of forest environmental services shall receive all payment amounts from those services. The total payment amount is calculated according to the following formula:

A₃ =              (j = 1, 2, …, n)                   (10)

Where:

: Actual electricity delivered to the grid at the delivery point in the payment month.₃: total payment amount for forest environmental services for the contracted household;

- : payment amount for forest environmental service j for the contracted household.

4. The forest owner shall notify each contracted household of the forest environmental service payment amount according to Form No. 3 attached to this Circular.

Chapter IV

EXEMPTIONS AND REDUCTIONS IN FOREST ENVIRONMENTAL SERVICE PAYMENTS

Article 8. Conditions for Exemption or Reduction of Payment for Forest Environmental Services

1. The user of forest environmental services遭受自然灾害、敌害、火灾、地震、风暴、洪水、泥石流、龙卷风、海啸或山体滑坡等直接损害其资本和财产，导致其失去支付能力或必须停止运营、生产活动，并且不属于法律规定必须购买财产保险的对象。

2. In the case where the user of forest environmental services is an individual who has lost their capacity to act, died, or been declared dead or missing, and has no assets left to pay or no heir capable of repaying the debt on their behalf.

3. Where the user of forest environmental services is a legal entity or economic organization that has been officially dissolved or declared bankrupt under the law, and lacks capital or assets to settle debts with the provider of forest environmental services.

Article 9. Amount of Exemption or Reduction and Duration of Exemption or Reduction

1. Organizations and individuals may be considered for a full exemption of 100% of the payment for forest environmental services when the level of risk of damage to capital and property of the payer reaches from 70% to 100% of total assets or business plans; or in cases stipulated in Clause 2 and Clause 3 of Article 8.

2. Organizations and individuals may be considered for a maximum reduction of 50% of the payment for forest environmental services when the level of risk of damage to capital and property of the payer ranges from 40% to less than 70% of total assets or business plans.

3. Duration of Exemption or Reduction: calculated from the time of occurrence of the risk, according to the decision of the competent authority. After the exemption period, the user of forest environmental services must continue to pay for forest environmental services according to regulations.

Article 10. Documents for Application for Exemption or Reduction of Payment for Forest Environmental Services

1. A request for exemption or reduction from the user of forest environmental services: the document must clearly state the cause, content of the force majeure risk; the extent of damage to capital and property; the content of the request for exemption or reduction; and the duration of the requested exemption or reduction.

2. In the case where the user of forest environmental services is an individual as stipulated in Clause 2 of Article 8, the Forest Protection and Development Fund shall prepare a report to the Department of Agriculture and Rural Development (for individuals using forest environmental services within the administrative area of one province) or the Forestry General Department (for individuals using forest environmental services within the administrative areas of two provinces or more). The accompanying document includes:

a) The court's decision in cases of loss of civil capacity; the court's declaration of death or disappearance.

b) Death certificate in cases of death.

c) Confirmation document from the competent authority in cases where there are no remaining assets to pay or no heir or the heir is truly incapable of repaying the debt on behalf of the individual.

3. Confirmation from the local government where the organization is headquartered or the individual resides regarding the damage caused by force majeure natural disasters.

4. In the case where the user of forest environmental services is an economic organization, in addition to the aforementioned documents, the following papers are also required:

a) A record confirming the extent of loss and damage to capital and property in accordance with the law;

b) A plan to restore production and business operations.

Article 11. Procedure for considering exemption and reduction

1. In case of force majeure, the party using forest environmental services shall prepare one set of application documents for exemption or reduction of payment for forest environmental services and submit them to the receiving party. The receiving party is the Department of Agriculture and Rural Development (for organizations and individuals using forest environmental services within the administrative area of one province) or the Forestry General Department (for organizations and individuals using forest environmental services within the administrative areas of two or more provinces).

2. Time limit for receipt and initial examination of the application documents by the receiving party:

a) For directly submitted documents: within one working day from the date of receipt, the receiving party must notify the submitting party in writing about the validity of the documents.

b) For documents received through postal service: within three working days from the date of receipt, the receiving party must notify the submitting party in writing about the validity of the documents.

3. Within seven working days from the date of receipt of valid application documents for exemption or reduction from the party using forest environmental services, the receiving party, which is the Department of Agriculture and Rural Development, shall submit a proposal to the People's Committee of the province or the Forestry General Department shall submit a proposal to the Ministry of Agriculture and Rural Development to establish an on-site inspection team to verify the situation.

4. Within seven working days from the date of issuance of the establishment decision, the inspection team must conduct inspections, prepare an inspection verification record. Within seven working days after completing the inspection, the inspection team shall finalize the inspection record and send it to the Department of Agriculture and Rural Development or the Forestry General Department.

The on-site inspection verification record of the inspection team includes the following main contents: composition of the inspection team; verification time; time of occurrence of damage; estimated extent of damage; insurance issues; and recommendations for exemption and reduction.

5. Within seven working days from the date of receipt of the inspection verification record, the Department of Agriculture and Rural Development or the Forestry General Department shall prepare a summary report of the incident and recommendations for handling, along with a draft decision on exemption and reduction, to be submitted to the competent authority for consideration and decision.

Article 12. Authority to decide on exemption and reduction

1. The People's Committee of the province shall decide on exemption and reduction for organizations and individuals using forest environmental services within the administrative area of the province.

2. The Ministry of Agriculture and Rural Development shall decide on exemption and reduction for organizations and individuals using forest environmental services within the administrative areas of two or more provinces.

3. The decision on exemption and reduction made by the competent authority shall be sent to the Forest Protection and Development Fund, organizations and individuals using forest environmental services for implementation in accordance with regulations.

Chapter V

IMPLEMENTATION

Article 13. Effective Date

1. This Circular shall take effect 45 days from the date of signature.

2. During the implementation process, if there are any difficulties, organizations and individuals concerned are requested to promptly reflect them to the Ministry of Agriculture and Rural Development (through the Forestry General Department) for research and resolution./.