MINISTRY OF AGRICULTURE AND RURAL DEVELOPMENT
VIETNAM FORESTRY UNIVERSITY

STUDENT THESIS
PAYMENT FOR FOREST ENVIRONMENT SERVICES AT LAO CAI:
REALITIES, DIFFICULTIES AND RECOMMENDATIONS

Major: Advanced Curriculum in Natural Resources Management
Code: D850101
Faculty: Forest resources and Environmental Management

Student: Bui Dinh Luan

Student ID: 1053020845

Class: K55 Natural Resources Management

Course: 2010 – 2014

Advanced Education Program
Developed in Collaboration with Colorado State University, USA

Supervisor: Dr. Do Anh Tuan

Ha Noi, 11/10/2014


ACKNOWLEDGEMENT

To complete this report, I have received a lot of support from organizations and
individuals. Firstly, I would like to send my most sincere thanks to Dr. Do Anh Tuan Deputy Dean of faculty Silviculture-Forest University Vietnam who has dedicated guide

and help me throughout the research.
I would like to thank the cooperation and help of the staff of the People's
Committee and the agencies and units in Lao Cai province. Thank for help of local people
in the research areas of Lao Cai province who has enthusiastically providing information in
the process of research. This report is done over a period of nearly five months. Initially
practicing, learning about the field of scientific research, my knowledge is limited. Thus,
the inevitable shortcomings is certain, I would like to receive the valuable comments from
teachers and friends to complete my knowledge.
I sincerely thank you!


TABLE OF CONTENTS

ACKNOWLEDGEMENT
TABLE OF CONTENTS
LIST OF ABBREVIATIONS
LIST OF THE TABLES
LIST OF THE FIGURES
1.1. The necessity of research ................................................................................................ 1
1.2. Objective of research ...................................................................................................... 2
1.3. Subject and Scope of Research ....................................................................................... 3
CHAPTER II OVERVIEW ABOUT PAYMENT FOR FOREST ENVIRONMENTAL
SERVICES............................................................................................................................. 4
2.1. Overview about PFES policy in Viet Nam ..................................................................... 4
2.2. Some concepts relating to PFES in Viet Nam ................................................................ 6
CHAPTER III PAYMENT FOR FOREST ENVIRONMENT SERVICES POLICY AT
LAO CAI ............................................................................................................................. 13
3.1. Overview about forest and forest land in Lao Cai ........................................................ 13
3.2. Policy payments for forest environmental services in Lao Cai .................................... 14
CHAPTER IV METHODOLOGICAL AND RESEARCH METHODOLOGY ................ 17

4.1. Research Methodological ............................................................................................. 17
4.1.1. Systems approach ...................................................................................................... 17
4.1.2. Analytical Framework ............................................................................................... 18
4.2. Research methodology .................................................................................................. 20
4.2.1. Collection data/information ....................................................................................... 20
4.2.2. The method of analysis data/information: ................................................................. 21


CHAPTER V RESULTS AND DISCUSSION .................................................................. 22
5.1. Realities of imlementation payment for forest environment services at Lao Cai ......... 22
5.2. Achievements after 3 years implementation the policy on Payment for forest
environment services (2011_2013) ...................................................................................... 28
5.3. Some shortcomings, limitations and reasons ................................................................ 36
CHAPTER VI CONCLUSIONS AND RECOMMENDATIONS ...................................... 41
6.1. Conclusion .................................................................................................................... 41
6.2. Recommendations ......................................................................................................... 42
REFERENCES .................................................................................................................... 43


LIST OF ABBREVIATIONS
Abbreviations

Content

PFES

Payment for Forest Environment Services

QBVPTR


Forest Protection and Development Fund

NN & PTNT (MARD)

Ministry of Agriculture and Rural
Development

UBND

People’s Committee

QĐ

Decision

NĐ

Decree

CP

Goverment

PPC

Provincial People’s Committee

JC MARD - MF

Joint Circular between MARD – Ministry

of Finance

FPDF

Forest protection and development fund

TT

Circular


LIST OF THE TABLES

Table
5.1

5.2

5.3

5.4

5.5

5.6
5.7
5.8

Content
Eligible forest are paid from forest environment service in the basin

of hydropower in 2012
Eligible forest are paid from forest environment service in the basin
of hydropower in 20123
Summary of the involvement of stakeholders in the policy for
payment for forest environmental services
Revenues collect for Forest Protection and Development Fund in
period 2011-2013
Results of the implementation of payment for forest environmental
services in Lao Cai province
Summary results of the implementation of payment for forest
environmental services unit, object forest owners
Summary of the management and protection of forests in 2011 - 2013
Summary of the debt situation the money for forest environmental
services in 2011-2014

Page
25

27

28

30

31

31
34
36



LIST OF THE FIGURES
Figure
5.1
5.2
5.3

5.4

5.5

5.6
5.7

Content
Comparison of the involvement of the policy unit in payments for
forest environmental services
Total amount of forest environment services collected for FPDF
Results of the implementation of payment for forest environmental
services in Lao Cai province
Graph performances implementation results of CTDVMTR in Lao
Cai
Results of the management and protection of forests in three years
from 2011 to 2013
The number of violations in the work of forest protection and
management in the 3 years 2011-2013
The unpaid money of organizations

Page
29

31
32

33

35

35
36


CHAPTER I
INTRODUCTION
1.1. The necessity of research
The forest ecosystems play a very important role for human beings and habitat
maintenance, contributing to the sustainable development of each nation and the existence
of the Earth. Forests are not only provide raw materials such as timber and non-timber
products for manufacturing industries, but also more importantly maintain and protect the
environment, such as erosion limitation, water regulation, flood limitation, climate
regulation, landscape values, biodiversity conservation...
One hectare of forest annually makes about 300 - 500 kg biomass, 16 tons of
oxygen (30 tons of pine forest, 3-10 tons of plantation forests So, in the ecosystem of the
biosphere forest ecosystems are more productive and have an extremely important role to
humans, but so many centuries by the lack of awareness, knowledge, lack of experience or
for the immediate benefit, exploitation of forest values a "no thought to the future" has
made

deforestation,

serious


destruction,

simultaneously

with

the

process

of

industrialization and modernization of the country has been one of the main causes of
climate change.
Currently, Vietnam has about 40% of the population (in total more than 86 million
people) living in the mountainous highlands, who lives directly attached to the forest, the
majority of them are ethnic minority groups. These communities are disadvantaged / lack
of access to good conditions to improve their quality of life. From then setting out to ask
how people lived in the forest sector can improve livelihoods, enhance the quality of life
from forestry. After a long time the implementation of policy, the quality of natural forest
and natural forest were severely diminished. From the condition that the State has adopted
policies to encourage the development of forestry as Program 327, program of planting 5
million hectares of forest, forest policy beneficiaries (Decision No. 178/2001/QÐ-TTg
1


November 12, 2001). However, when the program ended, local people were fallen into
unemployment, the loss of direct support to sustain life, forest management and protection
were not good, deforestation for cultivation purposes continues to recur in a number of

localities. In order to maintain the environmental value of forest services and ensure
fairness for foresters, financial mechanisms for payments for forest environmental services
are becoming an effective solution in many countries to ensure sustainable financing for
sustainable management of forest resources. In Vietnam, implementing payments for forest
environmental services is defined as a consistent policy of the State in the development
trend towards fairness, and the general strategy of socialization contribute to forest
sustainable management forest resources
Lao Cai is a mountainous province of Vietnam and bordering with China ,evaluated
as a potential province on the implementation of the policy for pay for forest
environmental services in order to increase people's livelihoods and contribute to
sustainable forest management and development. The implementing payments for forest
environmental services in Lao Cai has some achievements for example: contribute to
protect forest and sustainable development forest. However, in implementing PFES in Lao
Cai still has many difficulties which reduce the effective of the PFES policy. This research
on “Payments for forest environmental services at Lao Cai: realities, difficulties and
recommendations” therefore being implemented with the aim to indicate difficulties in
implementing PFES at Lao CAI, contribute recommendations for local managers and
government about solutions in implementing PFES for effective in next time.
1.2. Objective of research
 Status of the implementation policy for payment for forest environmental services
in Lao Cai.
 Shortcomings and limitations in the process of implementing the policy for
payment for forest environment in the province and the causes.
2


 Proposing solutions to perform better the policy on payment for forest
environmental services in Lao Cai.
The analysis pointed out the achievements gained in the implementation process and
the problems and shortcomings in the implementation of payments for forest

environmental services locally, thereby contributing to policy recommendations / measures
to promote the implementation of effective PFES locally in the coming years.
1.3. Subject and Scope of Research
Subjects of study
 Implementation of policies on payment for forest environmental services in Lao Cai.
 The subjects used for PFES (Water supply Company, hydroelectric plants ...) in
Lao Cai.
 The subjects are paid (landowners, forest owners, community ...) for the PFES in
Lao Cai
 Local government and local professional agencies: Department of Agriculture,
Department of Natural Resources, Department of Forestry Ranger, Department of Forest
Development Fund for protection and development of forests ... Lao Cai.
Scope of the study:
 This study was carried out in Lao Cai province
 Analyzing and evaluating about implementation the policy on PFES in Lao Cai
province

3


CHAPTER II
OVERVIEW ABOUT PAYMENT FOR FOREST ENVIRONMENTAL SERVICES
Payment for environmental services of forests is committed to the contract on the
basis of voluntary and legally binding contract with the one or few buyers pay for
ecosystem which defined by paying cash or support for one or more of the seller and the
seller is responsible for ensuring a certain land uses for the determined period to create the
agreement ecosystem services.
Payment for forest environmental services is compensation for the provision of
ecosystem services from the forest. Compensation or support can manifest in many forms
(cash, in-kind support, tax exemption ...)

2.1. Overview about PFES policy in Viet Nam
Overview of PFES
The nature of the activities paid for environmental services is the creative
incentives and benefits for those who are currently using the system meaningful ecological
environment in exchange for their use of ecosystems in ways that protect or enhancement
of environmental services from forest to serve the interests of the majority population.
With this, the people of each community can benefit directly from the services from
protecting forest that they provided. In other words, those who provide environmental
services should be paid or reimbursement for what they do to maintain ecosystem function,
and the use of environmental services should pay for these services. Payments for
environmental services / ecology is considered an opportunity for increased income people
and increased options for sustainable livelihoods, external value of forest goods and forest
products.
In early 2008, the government has requested the Ministry of Agriculture and Rural
Development (MARD) making the policy about payments for forest environmental
services (PFES) for the Forest Sector. To implement this policy on a national scale, the
4


Government issued Decision: Date 10/4/2008 380/QD-TTg PFES policy in two provinces
of Son La and Lam Dong in 2008 and 2009. After two years of implementing the pilot,
payment policies for forest environmental services are evaluated successfully. Policy has
received high consensus of all levels and industries, people, especially consensus of 25
million ethnic minorities, poverty in forested areas. Policy has created new financial
mechanism contributing to forest socialization, poverty reduction and reduce the burden on
the state budget for the management of forest protection. Better forest protection, forest
quality is improved. The situation of deforestation, forest encroachment, illegal harvesting
of forest products, forest clearing for cultivation in the region ... paid for forest
environmental services has decreased significantly: Lam Dong reduced to 50% the number
of violations compared to the previous year; Son La is virtually no situation where illegal

logging and forest clearance for cultivation. As reported by Lam Dong province, the
poverty rate in the pilot districts decreased 15% compared to 2008, contributing to stability
and security order in the region (Ministry of Agriculture and Rural Development, 2011).
On 24/9/2010 the Government issued Decree No. 99/2010/ND-CP regarding payment
policies for forest environmental services. Decree includes 5 chapters and 25 articles, and
officially takes effect from 01/01/2011.
Up to now there are several provinces have been implementing decree 99/2010 /
ND - CP such as: Ninh Thuan, Lang Son, Quang Nam, Lao Cai... However, PFES is still a
rather new policy which is breakthrough so the implementation remains a challenge for all
levels and sectors.
Some mechanisms and policies related to PFES issued in Vietnam
The establishment and management of the Forest Protection and Development
Fund are defined in detail in Decree No. 05/2008 / ND-CP of the Government dated
01.14.2008. One of the basic tasks of the Fund is to receive and manage funds according to
regulations, including payment for environmental services of forests (PFES). Forest
5


Protection and Development Fund system is established under 03 levels: central, provincial
and communes with forests. Total amount of payments for forest environmental services
from hydropower plant and production and providing clean water companies was
estimated by 1,300 billion VND 2015 / year, not including payments from tourism
companies are business based on forest ecosystems
Some mechanisms and policies related to PFES issued in Vietnam
The establishment and management of the Fund for Protection and Development of
Forests (Forest Protection and Development) are defined in Decree No. 05/2008 / ND-CP
of the Government dated 01.14.2008. One of the basic tasks of the Fund is to receive and
manage funds according to regulations, including payment for environmental services of
forests (PFES). Forest Protection and Development Fund system is established under 03
levels: central, provincial and communes have forest. Total amount of payments for forest

environmental services from hydropower plants and production and providing clean water
companies are estimated to 1,300 billion VND/ year until 2015, not including payments
from the tourism companies which provide travel services base on forest ecosystems.
2.2. Some concepts relating to PFES in Viet Nam
According Decree 99/2010/NĐ-CP date 24.9.2010 of Prime Minister about policy
on payment for forest environmental services:
Forest environmental services:
Forest environment service means the provision of use values of the forest
environment to meet the needs of the society and people's life, including types of services:
a) Soil protection, restriction of erosion and sedimentation of reservoirs, rivers and
streams;
b) Regulation and maintenance of water sources for production and social life;

6


c) Forest carbon sequestration and retention, reduction of greenhouse gas emissions
by measures of preventing forest degeneration and forest area decrease and developing
forests in a sustainable manner;
d) Protection of natural landscape and conservation of biodiversity of eco-systems
for tourism services;
e) Provision of spawning grounds, sources of feed and natural seeds, use of water
from forests for aquaculture.
Principles of payment for forest environment services
a) Beneficiaries of forest environment services shall pay for these services to
owners of forests providing such services.
b) Payment for forest environment services shall be made in cash by direct or
indirect payment method.
c) Payment for forest environment services through forest protection and
development funds is the money users of forest environment services entrust the funds to

pay to forest owners providing these services.
d) Payment for forest environment services constitutes an element in the cost of
products using forest environment services and does not replace royalty or other payable
amounts as required by law.
e) Assurance of publicity, democracy, objectivity and fairness: compliance with the
Vietnamese legal system and treaties which Vietnam has signed or acceded to.
Forms of payment for forest environment services
1. Direct payment:
a) Direct payment means that users of forest environment services pay directly to
providers of these services.
b) Direct payment is applied when a user of forest environment services has ability
and conditions for making payment directly to the provider of these services without
7


having to go through an intermediary organization. Direct payment shall be made on the
basis of freewill contracts between users and providers of forest environment services
under this Decree under which the level of payment must not be lower than that set by the
State for the same type of forest environment service.
2. Indirect payment:
a) Indirect payment means that users of forest environment services pay to
providers of these services through the Vietnam forest protection and development fund or
a provincial-level forest protection and development fund or an agency or organization
performing the tasks of a provincial level forest protection and development fund as
decided by the provincial-level People's Committee;
b) Indirect payment is applied when users of forest environment services have no
ability and conditions for paying directly to providers of such services but have to make
payment through an intermediary organization. Indirect payment is made with the
intervention and support of the State and with prices of forest environment services fixed
by the State.

Payers and types of forest environment services which must be charged
a) Hydropower generation establishments shall pay for the services of soil
protection, restriction of erosion and sedimentation of reservoirs, rivers and streams and
regulation and maintenance of water sources for hydropower generation.
b) Clean water production and supply establishments shall pay for the service of
regulation and maintenance of water sources for clean water production.
c) Industrial manufacture establishment using water directly from water sources
shall pay for the service of regulation and maintenance of water sources for clean water
production.

8


d) Tourist service providers that benefit from forest environment services shall pay
for the service of protection of natural landscapes and conservation of biodiversity of forest
eco-systems for tourism services.
e) Liable to pay for the forest environment services of forest carbon sequestration
and retention; supply of spawning grounds, source: of feeds and natural seeds, use of water
from forest for aquaculture
Entities to enjoy payment for forest environment services
1. Entities to enjoy payment for forest environment services are owners of forests
providing such services, including:
a) Forest owners that are organizations with forests allocated or leased by the State
for stable and permanent use for forestry purposes and organizations that plant by
themselves forests on allocated forestry land areas certified by the provincial-level People's
Committee at the proposal of the provincial-level Department of Agriculture and Rural
Development;
b) Forest owners that are households or individuals with forests allocated or leased
by the State; village communities with forests allocated by the State for stable and
permanent use for forestry purposes; forest owners that are households and individuals or

village communities planting forests by themselves on state-allocated forest land areas
certified by the district-level People's Committee at the request of a specialized forestry
agency, certified by the commune-level People's Committee.
2. Organizations, households, individuals and village communities that have
concluded contracts on stable and permanent forest protection with forest owners that are
state organizations (below referred to as contracted households); forest protection contracts
shall be made and signed by the contractual parties and certified by the commune-level
People's Committee.

9


Levels of payment and determination of amounts of payment for forest
environment services
1. For hydropower generation establishments
a) The level of payment for forest environment services applicable to hydropower
generation establishments is 20 VND per kWh of commercial electricity. The electricity
amount used to calculate the amount of payment is that sold by a hydropower generation
establishment to electricity buyers under electricity trading contracts;
b) Determination of amounts of payment for forest environment services. The
amount of payment (in VND) for forest environment services in a payment period equals
the electricity amount (kWh) in the payment period multiplied by the level of payment per
kWh (20 VND/kWh).
2. For clean water production and supply establishments:
a) The level of payment for forest environment services applicable to clean water
production and supply establishments is 40 VND per m3 of commercial water. The water
volume used to calculate the amount of payment is that sold by a clean water production
and supply establishment to consumers;
b) Determination of amounts of payment for forest environment services. The
amount of payment (in VND) for forest environment services in a payment period equals

the commercial water volume (m3) in the payment period multiplied by the level of
payment per m3 of commercial water (40 VND/m3).
3. For industrial production establishments using water directly from water sources
To assign the Ministry of Agriculture and Rural Development to assume the prime
responsibility for, and coordinate with concerned ministries and branches in, submitting to
the Prime Minister for promulgation specific regulations on payers, level of payment and
methods of payment for this type of service.
4. For tourist service providers benefiting from forest environment services
10


a) The level of payment for forest environment services equals from 1% to 2% of
turnover realized in the period;
b) Determination of amounts of payment for forest environment services. The
amount of payment (in VND) for forest environment services in a payment period equals
turnover multiplied by the level of payment (from 1% to 2%).
c) To assign provincial-level People's Committees to specify payers including
travel and tourism accommodation business organizations and individuals located in their
respective provinces or centrally run cities.
Modes of payment for forest environment services
Forest types are paid including: protection forest, special use forest and plantation
forest. The amount of payment for a type of service to a forest owner shall be determined
by:
Total money is
The average

Forest area is paid

payment rate


by the user of forest

paid from forest
environment

=

x

x

for 1 hectare

environment

(VND/ ha)

services (ha)

Coefficient K

services per year
(VND)
Decree 99 provides that the coefficient K should be used as a basin for determining
the payment of PFES with different forest conditions. These conditions include: forest
status (the ability to create forest environment services); Forest type (special-use,
protection, production); Original forms of forests (natural forests or planted forests); the
difficulty or favorability level for forest protection (social factors and geography). PPC are
supposed to determine the coefficient K for payess of forest owners. Factor contracted
households, the coefficient K is regulated by the relevant authority.

MARD has issued Circular No. 80/2011/ TT- MARD DATED 23/11/2011
(Hereinafter referred to as Circular 80) guiding the method of determining the amount
11


forest environment service payment, which inclides the coefficient K. According to that,
the coefficient K is calculated for each batch of forest condition and covers 4
subcoefficients K:
- K1: forest status and forest reserves (defined in Circular 34/2009/TT-MARD
dated 10/6/2009 of the MARD)
- K2: the purpose of using the forest (special-use, protection, production).
- K3: according to the origin of forest formation (K=1 natural forest, plantations K= 0.9).
- K4: according to the difficulty level for forest protection (very difficult, difficult,
less difficult), including social factors and geography.
Lao Cai province applied K = 1

12


CHAPTER III
PAYMENT FOR FOREST ENVIRONMENT SERVICES POLICY AT LAO CAI
3.1. Overview about forest and forest land in Lao Cai
Lao Cai is a mountainous province in the northern border, with geographic
coordinates from 22,009 'to 22,052' north
latitude, from 103 031 'to 104 028 east
longitude:
- Northern bordered with Yunnan
Province - China;
- In the east bordered with Ha Giang
province;

- The south bordered with Yen Bai
province;
- To the west bordered with Lai Chau
province.

Forest area and forest land
According to Decision No. 3947 / QD-UBND 31/12/2010 Lao Cai provincial
People's Committee approved protection and development planning stages from 2010 to
2015 and orientations to 2020:
Lao Cai has a total natural land area of the province is: 638. 389.6 hectares, and
forestry planning 2010: 417,755.14 ha
By the end of 2010, the area of forested land are 327,755.1 hectares, including:
- Natural forest 258,450.0 ha
- Plantations 69.305,11 ha
13


- Land Size: 90000.03 ha
Forest type by functionality:
- Special use forest (conservation of genetic resources and forest ecosystems, flora
and fauna endemic forest ...) have: 46,070 ha; including: land with forest: 45,527 ha (Natural
forests: 44992.8 ha and 534.4 ha of plantation forest), land without forests: 542.6 ha.
- Protection forest (watershed protection, landscape protection) with: 170,089.1
hectares; including: land with forest: 147,341.5 ha (Natural forests: 131,686.2 ha of
plantation forests: 15655.4 ha) of forest land without: 22747.6 hectares.
- Production forest are 201,775.2 ha; including land with forest: 136,508.4 ha
(Natural forests: 81011.9 ha of plantation forests: 55496.5 ha) of forest land without:
65266.8 ha. Major area of plantation forest in the province is producing small wood and
wood materials serving for construction and paper processing, Plywood... and a part used
in civil furniture service for people's daily lives.

The area of forest land in the province has been planning for forest owners to
strengthen the protection and development of forests, as follows:
- State Enterprises (Bao Yen Forestry Companies, Van Ban and Bao Thang
Forestry Corporation) manages 22 305 hectares;
- Protective Forest Management Boards in districts, city manager: 156,157.7
hectares;
- Special use forest Management boards (Hoang Lien National Park, Hoang Lien
Van Ban) manages 46 070 hectares;
- Households and individuals manage: 48274.5 hectares.
- CPC and other forest owners manage: 145,128.3 hectares.
3.2. Policy payments for forest environmental services in Lao Cai
Sustainable development forestry economic is one of the key factors in the
sustainable development livelihoods of the people in province. To implement this goal,
14


Lao Cai province has promoted more positive activities to development the province's
forestry sector, implementation PFES is an important step. Lao Cai province has great
potential to implement payment for forest environmental services based on the potential
from development of small and medium hydropower plant. Besides, advantages from
developing tourism resort as well as a great potential for making payments for forest
environmental services from tourism activities. Implementing Decree No. 99/2010 / NDCP dated 24 March 09, 2010 of the Government, Lao Cai province has established Forest
Protection and Development Fund (Lao Cai is 1 in 5 provinces has established Forest
Protection and Development Fund in the country) in Decision No. 3719 / QD-UBND days
30/12/2011 of province people’s committee, this fund is directly under province people’s
committee. After two years in operation, Forest Protection and Development Fund has
many positive actives in the implementation of Decree 99 in Lao Cai. The policy was
promoting the effective; forest has sovereignty, interest of People who contracted for forest
protection are ensure; step by step improve awareness of people, mostly important is
improve household responsibility about forest protection, prevent illegal harvesting,

deforestation for cultivation,… Payment for forest protection made job, increased income
improve livelihood of people in the forested area, reduce invest for forest protect from
revenue of government, step by step contributing stable life of people who live in
disadvantaged regions, ethnic minority regions of districts. However, the effective of
deployment payments for forest environment services in province are very slow and
limited, is not commensurate with the potential / opportunity about implement payment for
forest environmental services is provincial Lao Cai. There are many reasons for limited in
implementing PFES in Lao Cai such as: because this is a new problem, complex to
implement, many problem need to be resolved. Especially it is reviewing, defining about
scope and boundary, forest owners (now Sa Pa District People's Committee is directing the
specialized agencies Communities People’s Committee combine with consultant
15


deployment reviewing, defining area and boundary of each forest owner in field to make
basis for PFES). However, reasons are generally, not concrete so it is hard to build
recommendations and resolutions for better implementation payment for forest
environmental services at province in next time, contributing improve livelihood of people
who have life base on life rely on forest.

16


CHAPTER IV
METHODOLOGICAL AND RESEARCH METHODOLOGY
4.1. Research Methodological
4.1.1. Systems approach
The concept of systems approach: Looking at objects in the system as a dynamic
system integrity development, the birth process through resolving inner conflicts, due to
the interaction between the rules of the system components. Outlines the nature of system

integrity through the discovery is:
a) The structure of the system,
b) the law of interaction between the components of the system,
c) Integrity (the integration).
Kind of philosophical approach, is the elaboration of the materialist dialectic, a
generalization of the method of cybernetics (Source: Dictionary encyclopedia Vietnam).
In this study, systematic approach will be used to review and analyze the solidarity
relationships in the policy mechanisms system about PFES according to the level of
central and local (Central => provincial => district => communal => village).

17


Hydropower
plants
Fresh Water
companies

Central
Policies

Using
services
Provincial
Policies

Travel
companies
Another
subjects


PFES

National
forest

Distric
Policies

Forestry
companies
Communities,
Households

Supplying
Services

Community
Policies

Another
subject

4.1.2. Analytical Framework
The success or failure of PFES and benefit-sharing mechanism depends greatly on
the institutional framework and the institutional settings (Archer et al 2008; Corbera et al
2009; Neef and Thomas 2009; Zabel and Roe 2009; Clements et al 2010; Vatn 2010). The
institutional framework decisions the relationship of factors involved in the program,
capital flow and distribute financial, motivating factors as well as the level of interest and
participation of the beneficiaries and the general output (Kosoy et al 2008; Corbera et al

2009). So, the first step in the research is to analyze the provisions of Viet Nam law on
PFES to recognize the support element as well as hindering the deployment PFES. PFES
18