LAND RIGHTS ISSUES EMPHASIZE NEED FOR GREATER TRANSPARENCY

C O N F I D E N T I A L SECTION 01 OF 04 HO CHI MINH CITY 001005

SIPDIS

E.O. 12958: DECL: 11/10/2033
TAGS: PGOV PREL PHUM SOCI ECON VM
SUBJECT: LAND RIGHTS ISSUES EMPHASIZE NEED FOR GREATER TRANSPARENCY
AND LEGAL REFORM

REF: A) 07 HCMC 805 B) HCMC 674 AND PREVIOUS

HO CHI MIN 00001005 001.2 OF 004


CLASSIFIED BY: Angela Dickey, Acting Consul General, EXEC,
State.
REASON: 1.4 (b),(d)




1. (SBU) Summary: While few land rights organizers may want to
admit it, the GVN is paying close attention to the land use
issues that have resulted in demonstrations by provincial
farmers throughout Vietnam over the past few years.
Conversations with current and former GVN officials and economic
analysts at STAR and VNCI illuminated the history of land use
rights, the current complaints process for citizens and
companies, and the need for more reforms to ensure greater
transparency and legal legitimacy in the resolution process.
End summary.

GI Calls Process "A Significant Social Problem"
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2. (SBU) The explosive growth that has characterized Vietnam's
economic development has also created socioeconomic issues that
present complex governance challenges for the GVN. Land
management issues stemming from the GVN's post-1975
expropriation policies as well as more recent large-scale
development projects have led to land rights demonstrations in
many of Vietnam's cities and provinces. Land rights have become
one of the biggest and most complex issues facing leaders in
Vietnam today. During recent meetings with the Government
Inspectorate (GI) in Hanoi, officials acknowledged that the land
claims process "is a significant social problem for us" and
communicated a sense of urgency around land management issues.
"The State needs more land to use now for infrastructure and
development," said Deputy Inspector General Le Tien Hao, "Fast
economic growth means that this problem needs to be addressed
fast too."


3. (C) General Hao explained that land management in Vietnam
stalled during the war years, but revisions to the Land Law in
1988, 1993 and 2003 led to the system in use today. He cited
1993 as a watershed year for land rights in Vietnam, since this
was the first time individual land use rights--akin to
individual property rights within Vietnam's communist system of
state-owned land--were established via the system of using "red
books" that officially designated land plots and their users.
Following further changes to the law in 2003, these red books
allowed land users to buy, sell or lease land as well as use it
as collateral. An economic analyst at Dragon Capital who
co-authored 2007 Vietnam Competitiveness Initiative (VNCI)
report "Land Tenure and the Private Sector" said the
agricultural development of the 1990's could not have happened
without these red books, which gave farmers an avenue to invest
in their property and a means to raise capital.


4. (C) Former Ministry of Natural Resources and Environment
(MONRE) Vice Minister Dang Hung Vo discussed the changing nature
of land disputes over time. He estimated that prior to 2003, 70
percent of land disputes dealt with "historical claims," or
claims between people who had to leave their land during the war
years and those who assumed the use of their vacated properties.
The 2003 revisions to the Land Law sought to address these
legacy issues, Vo said, making them less of a problem now. But
as the pace of economic growth has increased in recent years,
complaints over government land recalls and related
administrative decisions now comprise the bulk of cases in the
system. At a September conference on land planning held by
MONRE and the National Assembly (NA) in HCMC, NA Standing
Committee member Tran The Vuong quoted a recent survey that
showed 80-90 percent of residents' complaints to state agencies
relate to land issues.


5. (C) The GI's General Hao said that land user registration
increased significantly after revisions to the Land Law were
made, but acknowledged that some households still have not
received their red books. Hao construed the land disputes in
Vietnam, however, as relatively sporadic and isolated to a few
difficult personalities and provinces. "We have a compensation
policy with which most people agree," said Hao. "A few don't,
and they complain. And those who complain have their own
reasons." The analyst at Dragon Capital shared Hao's view,
stating that land rights protests were more narrowly focused on
particular cases where the government's land administration and
dispute resolution procedures have been unsatisfactory. In
contrast to the opinions expressed by some land rights leaders
and political activists, the Dragon Capital analyst did not
think land rights protests were representative of broader
agitation for a democratic system. He cited the improved
economic status of many Vietnamese "with their motorbikes, TVs
and glasses of beer" as a definite disincentive for political
protest.


HO CHI MIN 00001005 002.2 OF 004


Complaints Process 101
--------------

6. (SBU) Both the GI and former Vice Minister Vo outlined a
fairly succinct complaints process for individual claimants.
The 2003 Land Law designates administrative procedures for two
types of complaints--disputes over land rights and titles and
disputes over land use and administration. The procedures vary
slightly depending on whether a claimant possesses documentation
(e.g. a red book) regarding the land in question. For
households or companies with a red book, the process begins when
they send a letter to the commune-level People's Committee
outlining their grievance. The Committee will then convene a
meeting, which includes the participation of the Fatherland
Front, to decide the case. If a claimant is not satisfied with
the commune's decision, they can escalate their case to the
district-level People's Committee for further review, where the
Committee must make a decision within 30 days. From there,
dissatisfied claimants can to the provincial-level People's
Committee, where reviews must be completed within 45 days.
Claimants with documentation can also choose to bypass the
administrative channel entirely and bring their case directly to
court. (Note: this is different than the U.S. system, where
administrative channels must generally be exhausted before a
plaintiff can bring a case to court. End note.) If there is no
documentation, households must submit their case to the district
People's Committee, while companies or organizations submit
their case to the provincial People's Committee.


7. (SBU) Administrative decisions like land clearances are
required to be made six months in advance of the planned action
and must include a written rationale. Disputes over
administrative decisions involving eminent domain, compensation
levels or site clearances begin with a claimant appealing
directly to the person or entity that made the administrative
decision. If an appeal to the decision-maker is unsuccessful,
complainants can choose between going to the courts or following
the administrative chain up through higher levels of government.
(Comment: Escalating issues through the various levels of
government is a common process for resolving a variety of
constituent issues in Vietnam, not just land claims. While
multiple bites at the administrative apple may provide more
chances for resolution, land rights activists say it also
provides more opportunities for corruption, inaction or
bureaucratic stonewalling. End comment.)


8. (C) GI officials stressed that the GVN is on the case when it
comes to the proper handling of individuals' land complaints,
noting that recent efforts to revise the Land Law have taken
their problems into account. "When we recall land for public or
private enterprise, we pay a lot of attention to the benefits of
those whose land is recalled," General Le Tien Hao assured. If
the reasons for the complaints are justified, then local and
central government agencies must respond. Even if authorities
determine the complaints are groundless, General Hao said, "We
still have social programs to help these individuals."
He cited recent handouts totaling USD $59,000 from central
government coffers to Ben Tre and Tien Giang provinces to
augment funds available for land compensation as one example.
The GI acknowledged that standardized compensation rates for
agricultural land are low, while rates for land zoned for
industrial or commercial use are much higher. When individuals
are paid according to the current agricultural value of their
land versus the future industrial value, disputes arise.
National Assembly Standing Committee officials also complained
that land use planning has been "illogically implemented"
nationwide, noting project contractors often retroactively pay
residents the value of their land at the date of the land
seizure, even if land prices have gone up in the meantime. In
addition, GI officials admitted district and provincial
officials "sometimes make mistakes or do the wrong thing,"
making the land transfer process less fair and transparent. Hao
stated that the GI has approached provinces in such cases and
asked them to "refocus" their land planning strategies to
benefit the people whose land is reclaimed. The GI has also
worked on securing stocks and equity in developed land for
individuals who are displaced.


9. (SBU) When asked about the finding of the 14 ad-hoc
inspection teams that were sent out by the central government in
response to the land rights protests in ho Chi Minh City in 2007
(ref A),the GI said the ad-hoc teams were used to double check
on reported cases of malfeasance by local officials and to
review unresolved cases and provide guidance on how to settle
them. Delegations to Tien Giang and Tay Ninh provinces
ultimately concluded that "the protesters' complaints were not
right," but recommended that the Prime Minister provide "social
support" to these provinces to ameliorate conditions that
displaced farmers faced. The GI also made specific
recommendations on relief measures. In Tay Ninh, they
recommended that the amount of farmland allocated to individuals
be increased from one-half to one hectare and that USD $1,000

HO CHI MIN 00001005 003.2 OF 004


should be provided for reconstructing houses and USD $500-750
loans be granted for business start-ups.
In Soc Trang, the GI directed the provincial People's Committee
to recalculate their compensation prices and in An Giang, the
central government ordered 1,000 parcels of land and additional
funds be provided to people adversely affected by land recalls.


10. (SBU) Former Vice Minister Vo was less optimistic regarding
the resolution process and estimated that 50 percent of all land
rights complaints go unanswered, indicating that in some cases
authorities are unwilling to hear the grievance in the first
place. Vo said he had heard of intimidation (police visits,
surveillance, etc.) directed at those making complaints and
claimed this was the "normal way" authorities dealt with
grievances, particularly in central areas of Vietnam. Vo said
some provinces handled disputes more transparently than others,
and identified Dong Nai province as having a "very open system"
where land claims cases were being handled effectively. He
attributed this entirely to the enlightened attitudes of
provincial leaders there.

Court Always A Last Resort
--------------

11. (SBU) GI officials said the real incentives for citizens to
use the administrative versus the legal system to resolve land
disputes were the social handouts that sometimes lie at the end
of the administrative process. According to the GI, if an
individual's appeal is ultimately rejected by the court system,
they are not able to access social programs or funding that may
be available because a legally binding decision has determined
their claims to be groundless. The fees associated with bring a
case to court further discourage individuals from pursuing a
judicial route. The GI said that people would rather "try their
luck" at winning over local officials and possibly receiving
social funds along the way rather than take a chance on the
court system. Former Vice Minister Vo said since district
courts did not issue decisions independently from the Party, the
lack of judicial independence renders court arbitration useless
for most complainants, particularly since they have to pay the
court fees. Vo said because the court system is weak and the
administrative decisions generally unfavorable, people become
motivated to protest.


12. (C) Support for Trade Acceleration (STAR) representatives
also gave Vietnam's judiciary mixed reviews in terms of their
ability to accurately interpret and apply legal revisions. One
STAR representative explained that the Soviet-style civil law
system was dealt a heavy blow in 1976 when law faculties and
professionals were either dismissed, reconstituted or reoriented
without being given strong leadership, clear directions or
guiding principles on how to reform itself. As a result, courts
in Vietnam are generally not respected by the National Assembly,
other branches of government or the general public. Despite
these drawbacks, the increasing number of cases entering the
court system in recent years requires--and
encourages--improvements in the judicial system. The STAR
advisor also noted that there is a concerted effort by the
central government to take its obligations under international
agreements seriously, which creates a climate more conducive to
reform.


13. (C) Representatives at VNCI said there is a sense that the
Central Government is generally upset about the improprieties of
provincial officials and that many businesses are also
frustrated by working with local authorities in Vietnam. With
respect to land clearance, one senior VNCI director said
businesses are willing to handle the land clearance negotiations
and cover compensation costs, but that often times they "can't
cut through the red tape and determine what the rules of the
game are."


14. (C) The VNCI polls small and medium enterprises about the
proportion of red books they hold for the land on which they
operate and asks businesses to assess the risk of government
expropriation they face. Experts and businesses generally
respond that the two biggest problems with respect to land
management are the unwieldy land use planning process and the
insufficient compensation scales established by officials in
each province, both issues raised regularly by land rights
activists. The Dragon Capital analyst we spoke with said
provinces face "liquidity issues" which lead them to a "chicken
or egg" dilemma. They need funds to compensate individuals when
their land is appropriated, but cannot get the funds without
first selling the land to developers--often at the higher
industrial zone rates. This encourages former landholders to
demand more compensation or file a grievance. The analyst said
provinces want to hand the process over to private actors in
order to speed up resolution of disputes and generate income
flows.

Potential Solutions

HO CHI MIN 00001005 004.2 OF 004


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15. (C) To address these issues, the private-sector expert
recommended improving leasing procedures and/or boosting
provincial revenues so that money from land sales is more
readily available for compensation. He also suggested the GVN
develop strategies to enhance central oversight over the
agencies responsible for implementing land use laws. VNCI
representatives said Project 30, a VNCI-supported initiative
that is beginning to address administrative reform, will also
take up land administration laws in coordination with MONRE, the
Ministry of Agriculture and Rural Development, the Ministry of
Construction and the Ministry of Finance. VNCI plans to develop
an inventory of administrative procedures and then take steps to
fill the gaps the inventory process illuminates.


16. (C) STAR representatives have also suggested the Government
Inspectorate establish a system of field-specific administrative
tribunals to decrease the burden on the ill-equipped legal
system and create arbitration bodies that would mitigate the
undue influence party committees have on local courts. MONRE
expressed interest in the ideas, but the proposal stalled over
concerns it would duplicate the systems already in place.
Recently , however, the GI has reached out to STAR again to
discuss the idea and suggested having a workshop on the subject,
though financing for such an endeavor is still a looming
question, STAR representatives say.


17. (C) Comment: Many land rights activists may have valid
claims, while many may not. What is clear is that in many parts
of Vietnam, getting a prompt and reasonable response from local
authorities has proved elusive, underscoring the need for
greater legal and administrative reform that will build more
trust and transparency in the dispute resolution process. The
lack of transparency has only served to strengthen perceptions
of injustice and foment the frustrations that have lead to land
rights protests--and the eventual arrests and trials of
organizers--across the country. While individuals within the
GVN and the private sector are increasingly acknowledging the
complex, sensitive and urgent nature of land rights issues in
Vietnam, agreement on potential solutions remains a distant
goal. End comment.


18. (U) This cable was coordinated with Embassy Hanoi.
DICKEY