Most of foreign-invested forest planting projects in Vietnam belong to Chinese investors, with modest investment capital, according to a government’s report.
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According to the report, presented by Minister of Planning and Investment Vo Hong Phuc at the National Assembly session last week, there are two projects that lease forest land to foreign investors for wood processing in Vietnam.
The government began licencing projects that lease forest land to foreigners to plant forest and process wood in 1995, with nearly 10,000 hectares leased to Japanese investors.
By August 10, 2010, Vietnam had eight wholly foreign-owned forest leasing projects. However, only one project is forest planting. The remaining projects are forest planting and wood processing.
The total registered capital of these projects is $280 million but only $22 million has been disbursed. Meanwhile, the total area of forest land allocated to these projects reaches up to 342,000 hectares.
Only one foreign-invested forest leasing project in Binh Dinh province was licenced by the government between 1995 and 2006. Since 2006, under the Investment Law, local governments have granted licences to seven projects. On March 9 2010, the government instructed local authorities to stop licencing new projects.
The report said that forest planning projects enjoy special investment incentives so they are exempted from corporate income tax for 11 years or the whole duration so their contribution to the state budget is negligible. So far, eight foreign-owned forest planting projects have paid a total of only 24 billion dong of taxes.
The government has denied access to areas that are important for defence and security to the foreign investor in Lang Son province.
The government also instructed the Ministry of Planning and Investment to tighten the control over licencing forest leasing projects.
Prime Minister Nguyen Tan Dung on March 10 instructed local governments to postpone leasing forest land to foreign investors.
Dung acted following the concerns raised by retired Lieutenant General Dong Sy Nguyen, who protested saying that among the areas being leased were tracts of old-growth forest, forests in watersheds and in strategically significant border locations.