PRIVATE SECTOR ENGAGEMENT ON REDD + IN VIETNAM, CURRENT AND POTENTIAL FUTURE

1. PRIVATE SECTOR ENGAGEMENT ON REDD+ IN VIETNAM, CURRENT AND POTENTIAL FUTURE Prepared by Vu Thanh Nam Vietnam administration of Forestry (VNFOREST)

2. Content 1. Current private sector on forestry in Vietnam 2. Overview of REDD+ Activities in Vietnam 3. The Sub-technical working group on private sector engagement (the STWG) 4.Relevant policy and international initiative on forestry relative to REDD+ in Vietnam 5. Potential future contribution of the private sector to REDD+

3. I. Current private sector on forestry in Vietnam • Forests areas managed by private sector - Total forest areas in Vietnam: 13.3 mil of ha - Total natural forest: 10.3 mil of ha; plantation: 3.0 mil of ha; - Private sector: Householders, private companies, communities. SOURCE : MARD 2010

4. 2. Certified forests managed by private sector (FSC) - 1,000 ha of certified forest owned by one group householders in Quang Tri province. SOURCE : MARD 2010

5. 3. Wood processing owned by private sector - Wood products export turnover in 2011: 4.1 billion USD - Wood chip export account for 70% of production from private sector - Domestic market mainly occupied by private sector. SOURCE : VIFOREST 2011

6. II. Overview of REDD+ Activities in Vietnam 1. Organization of REDD - Sept 2009, established the National REDD network take lead by (Ministry of Agriculture and rural development – MARD), and the REDD+ working group. - January 2011 founded the Steering committee on REDD+ Chaired by the Minister of MARD; - Established National REDD office under VNForest - Establishment of Sub- technical working group on REDD: MRV (Vnforest and FAO co-chair), BDS (chair by VN Forest and CERDA), Private sector (VNForest and Forest trend), forest Governance (VN Forest), Local implementation (VNForest and SNV)

7. 2.UN-REDD programme phase I - Project period implementation: 2010-2012; - Objective: Enhancement of capacity of both technical and legal framework for central and local level in order to prepare conditions to Vietnam can implement REDD. - Project site: 2 districts in Lam Dong Province, the Central highland, Vietnam - Activities: + Capacity building and information sharing: for both central level and Provincial level; +Capacity building for district and commune level, including householders, community. + International experience sharing on REDD; especially Mekong river sub-region countries

8. 3.The REDD+ National programme 3.1. Phase II: the period 2011-2015: - Preparation of conditions to implement REDD+ in Vietnam; - Reducing carbon emission from deforestation and forest degradation, enhancement and conservation of carbon stock in forests and SFM in the 8 pilot provinces; - Payment for reducing carbon emission and enhancement of carbon stock in 8 pilot provinces. 3.2.Phase III: The period 2016-2020: - Completion of MRV system of REDD+ - Completion of BDS; - Documentation to meet UNFCCC requirement; - Information providing.

9. III. The Sub-technical working group on private sector engagement (the STWG) 1. Objectives. To encourage private sector involve the REDD+ process implementation in Vietnam 2. Activities - Information and experience sharing; - Capacity building; - Policy dialogue; - Cooperation opportunities seeking; 3. Initial outputs; - 3 meetings were organized; - Contribute to revise legal documents on REDD+ in future

10. 4. Challenges - Level of understanding of private sector on REDD is very low; - It is not clear how private sector can engage in what specific activities in REDD in future. - There are no legal framework and investment guiding for private sector in to voluntary carbon market. - Two companies (Forest finance, Truong Thanh signed several MOU) have already to invested in carbon voluntary market in Vietnam, however, there is so much risk (price in the market, buyers, economics, infrastructure development). - Who own carbon and carbon credit as not yet a clear answer; - There are no policies, regulation on carbon right’ and benefit sharing.

11. IV. Relevant policy and international initiative on forestry relative to REDD+ in Vietnam 1. Specific relevance policies on REDD+ 1.1. Approved policy - Forest strategy period 2006-2020; - Forest protection and development period 2011-2020 - Policy on forest protection - Policy on forest environmental service payment; - Policy on forest plantation development to 2015; - The government decree on State enterprise restructure - National Strategy on climate change 1.2 Drafted policy - Legal documents on Carbon business; - Carbon payment benefit sharing

12. 2. FLEGT regulation (EU) - To minimize illegal timber harvesting and illegal timber and timber products trade in to EU market. - Vietnam timber products turnover export to EU account for 30%. - A large number of timber for wood processing sector of Vietnam import from different countries. - Vietnam have to adjust timber imported sources and develop domestic legal material and apply sustainable forest management. - Vietnam has negotiated VPA with EU since 2009 and plan to sign agreement at the end 2012.

13. V. Potential future contribution of the private sector to REDD+ 1. Which areas private sector can contribute to REDD+ - Invest finance into forest or co-management (protection, silviculture, carbon stock enhancement…) - Apply SFM and forest certification; - Utilisation of legal timber sources - Carbon trading

14. 2. Should the Government need to do? 2.1. Information providing - Continue to provide information relating to REDD+, carbon market… - Organize meeting among carbon supplier (forest owners), investor, trader… 2.2. New policies development - Identification of carbon right’ - Benefit sharing mechanism on carbon payment • - Legal documents on carbon, REDD+ preparation • - Clear policies development for private sector invest to REDD

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