Land Law should be fixed for fairness
VietNamNet Bridge - Creating legal procedures for land acquisition and compensation is certainly the most sensitive issue in the amendment of the 2003 Land Law.

To avoid “grow first, clean up later”

UN project in Vietnam

Since Doi Moi (renovation), the State has issued four Land Laws: The Land Law 1987, the Land Law 1993, the amended Land Laws in 1998 and 2003.

The application of these laws requires a large number of bylaw documents (decrees, joint circulars and administrative guidelines). The amended 2003 Land Law will be approved in 2013.

The Land Law 1987 abolished the cooperative model and the State allocated land to farmers. The farmers were given a limited number of land use rights in 20 years.

In the 1993 Land Law, the State extended the land use right for farmers and allowed foreign investors to lease land. This law also recognized the value of land and the State has the right to value the land when it is converted to urban and industrial purposes.

The adjustments in 1998 increased protection of land use rights for domestic enterprises a lot. To increase the attractiveness to foreign investment, the Government had to keep land prices at low level and the land compensation was equivalent to just 10 to 30 percent of the market value.

The expansion of the market economy in Vietnam has increased the production value of the land. Domestic and foreign investors, the land users in urban areas require their land use rights to be guaranteed.

The Land Law 2003 has solved this problem. The law has expanded the scope of protection of land use rights of land users, including the benefits attached to the land as the land use rights and land contribution as capital to establish a company. The land use rights allocated to investors and families for the purpose of building houses became the private property ownership which is protected firmly.

In contrast, there is not any fundamental change in the 2003 Land Law relating to agricultural land. The land allocation time of 20 years is still a big question: continuing to allocate land or abolish it? Farmers can exchange and transfer land, but they do not have the rights to decide the change of the land use purpose. When agricultural land is converted into non-agricultural land, farmers receive compensation based on agricultural land prices. The compensation is determined by the State.

This adversely affects the distribution of wealth in the country and increases social unrest. Compensation for land and the site clearance serving investment projects has faced growing opposition from citizens. In the past five years, the number of complaints and denunciations related to land has doubled, to 12,000 cases a year.

The National Assembly put the amendment of the Land Law in its agenda. It is needed to have special attention to create and ensure the rights of agricultural land and forest land. Vietnam needs to respond immediately to these problems to create fairness in law on distribution of welfare and ensure social harmony.

From the above analysis, we propose six modified groups in the 2003 Land Law, including protection of property rights to land of farmers, improve transparency and consistency in the law relating to land, flexibility in the form of agricultural land use, strengthening the accountability of the conversion process for investment projects, improving accountability and administration of land management, supporting the process of commercialization of land (agriculture).

Protection of property rights for farmers

As being analyzed in the article, the currently framed Land Law is very beneficial for domestic and foreign investors, residents in urban areas and facilitates officials who benefit from this. Currently, domestic enterprises are demanding to be treated equally with foreign investors. Specifically, they ask to pay rent "once" and have the right to use land as capital. The current lease term for commercial projects is 50 years. For housing projects and development projects, this time is permanent.

Meanwhile, Vietnamese farmers are disadvantaged. Strengthening the protection of the land use rights of the farmers will increase costs for investors in land acquisition. Although this is certainly inconvenient for local authorities and other relevant agencies that are accustomed to cheap land acquisition to promote industrialization, urbanization, but it helps ensure social justice. This will ensure the achievement of the development and fairness among farmers, investors and the authorities.

Enhancing consistency and transparency

Ensuring the land-related interests of the farmers requires to modify not only the 2003 Land Law, but also to change the legal framework to support this law. To maintain consistency in the entire legal system, the changes of other laws are also very useful. This will require amendments to the regulations on asset and wealth in the Civil Code 2005, amendments to the Land Planning Law 2008 to enhance the participation of the people; and the amendments to the Housing Law 2008 and the Law on Real Estate Market 2008.

To improve the transparency of laws and ensure the law to be simple and easy to understand for users, from a technical perspective we propose the Government should codify the administrative documents (guidance, interdisciplinary circulars, decrees and decisions) relating to land into the law system. For example, the government can codify bylaw documents relating to agricultural land and land compensation into the Law on Land Conversion and Compensation.

Increasing flexibility in the use of agricultural land

The above discussion has provided detailed multidimensional gaps for farmers when they attempt to optimize the use of the land they are allocated. While domestic and foreign investors are free to commercialize the right to use, Vietnamese farmers do not enjoy such benefits.

The Government continues to set low limits for private agricultural land for farmers, not investors. The 2003 Land Law provides different purpose of agricultural land use types and it is very rigid in how farmers use that land. This prevents farmers from using their land for appropriate purposes to take advantage of opportunities in the domestic and international market.

Legal procedures for land acquisition

Without fundamental changes to the Land Law, it will still reflect the State's interest focused on the recovery and conversion of land to promote industrialization. If the business community at home and abroad are better organized and have more options to influence the process of drafting the law, the rights of farmers will not be noticed much, particularly for the agricultural land that is considered as "needed for conversion to development."

Creating legal procedures for land acquisition and compensation is certainly the most sensitive issue for the amendment of the 2003 Land Law. Complying with the legal procedures will enhance equity and help limit to the lowest level complaints and denunciations related to land.

Strengthening accountability and oversight in the government’s land management

When power is divided from the central government down to the 63 provinces and 17 state-owned groups, the enforcement of law and administrative rules need to be strengthened.

Moreover, when land is scarce and valuable asset, it should be the top priority for the prevention of corruption related to the ineffective land allocation and use. Strengthening the accountability of state agencies in land-related activities requires the participation of citizens, social organizations and the media in the process of policy development and implementation. Specifically, administrative decisions must have the supervision of the legislature and the judiciary.

The public services supporting the commercialization of land

The role of the State in the management of land has changed when Vietnam follows the path of modernization. From the initial role as the one that allocate land and provide land-intensive services (schools, hospitals, infrastructure and management), the State's role has shifted from direct intervention in short-term decisions (lease term, land conversion, land prices, etc.) to the adjustment and operation of the market when it has completed the above roles. This requires a broad legal framework for land use, land-use plan of the country, land tax (and property).

Ho Dang Hoa, Le Thi Quynh Tram, Pham Duy Nghia and Malcolm F. McPherson
Vietnam; Land Law; farmer; land management; land tax; land use rights