Compensation and Resettlement Policies after Compulsory Land Acquisition for Hydropower Development in Vietnam: Policy and Practice

Abstract

Under Vietnam’s State land ownership regime, the Government holds supreme authority over compulsory land acquisition. The results show that many improvements in land acquisition policies have been made, but poor implementation measures largely cannot prevent or even mitigate the adverse impacts on displaced persons. In particular, ineffective compensation measures and a lack of production land and livelihood alternatives accelerate the resistance of communities displaced as a result of hydropower development. The close alliance between the local government and the investor, which is considered as an “interest group”, is the main factor that leads to the ignorance of benefits of displaced people within the compulsory land acquisition process.

1. Introduction

There are increasing global concerns surrounding compulsory land acquisition in the public interest [1]. Acquisition may inflict many adverse impacts on populations whose lands are expropriated [2,3,4,5] including loss of income and job opportunities (farm and non-farm jobs), a loss of livelihood assets (land, common pool resources), as well as access to public services, and the breaking-down of social networks [6,7,8,9,10]. Land acquisition indirectly produces effects related to wealth redistribution; as farmers receive different levels of compensation, severe tensions arise between governments and farmers that burden the implementation of land policy and planning [10,11,12]. The indirect impacts of compulsory land acquisition also may be substantial [11,10]. In some cases, food insecurity is a serious problem arising from compulsory land acquisition [4,13,14]. Social injustice arising from land acquisition is primarily related to inconsistencies in compensation policies in both horizontal and vertical dimensions. The former refers to variations that exist in the type and amount of land loss compensation received between different affected people whereas the latter implies differences in compensation types and amounts over time [15]. In spite of formal protestations, most forcibly displaced people are left poorer than before displacement. As a result, the term “sustainable development”—so often used to justify forced eviction—may be challenged. If the government of Vietnam aims to increase energy security and improve livelihoods through eviction, it is crucial to explore the causes of this paradox and to search for solutions that turn forced displacement into smart development opportunities [16].

The legal framework for land acquisition of Vietnam has seen significant improvements since 1993 [17,18,19,20,21,22,23,24]. From a country that did not have a land market in the 1980s, Vietnam shifted to a market-oriented land system. The most significant change was introduced through the 2003 Land Law that granted land users more rights, especially the right to compensation. More importantly, decision 34/2010/QD-TTg of the Prime Minister in 2010 laid out the foundations for compensation, support, and resettlement with respect to irrigation and hydropower projects; herein the criteria for compensation, support, and resettlement schemes were rigorously elaborated. However, land has become one of the most important issues in recent years; Vietnam is not an exception in the global context of compulsory land acquisitions. The issue is the subject of increasing debate across the country in the run up to the new land law, which will be issued by the National Assembly of Vietnam in 2013. The foremost reason for contention is inadequate compensation and poor resettlement planning that generates hundreds of thousands of grievances annually and in turn reduces the trust of citizens in the political system of Vietnam. From 2008 to 2011, central and local authorities together received about 1.57 million grievances of which some 42 percent was addressed. Recently, the resistance of evicted people has become fiercer. Land loss protesters dress in red, wave flags, and unfurl banners at Government offices in Hanoi and Ho Chi Minh City, especially during times of important political events [25].

Land acquisition for hydropower dam construction is a good example to showcase these issues. Hydropower is viewed as an effective means to increase national energy security and thus within the public interest that can make use of the compulsory eviction mechanism. The recent survey by MOIT [26] shows that there are 1,237 hydropower projects; within this figure, 899 are large-scale hydropower dams generating 24,888 MW of electricity. To date, 260 projects are operational, 211 plants are under construction to operate by 2017, and the rest is being licensed and registered. Additionally, there are 452 small-scale hydroelectricity plants either operating or under construction across the country. The construction of hydropower dams has displaced 44,557 households or about 200,000 people [17] and expropriated 133,930 hectares of land. Although hydropower dams have the potential to bring benefits in terms of power supply, flood control, and irrigation, their construction can harm ecosystems [3,27] and uproot local communities [28,29,30,31]. In fact, Scudder [32] claimed that large dam construction continues to cause impoverishment for resettled communities as well as and negatively affect millions of people living downstream. Also, a majority of studies revealed that the substantial losses in paddy land, sloping land, forests, grass fields, and water spaces lead to significant declines in farm outputs, as well as on-farm and off-farm income [17,18,20,33,34,35,36]. A salient feature of these displacements is that some 90 percent of the affected people in Vietnam belong to minority ethnic groups living in mountainous areas [33]. Although the MOIT survey [26] does not explicitly mention the number of grievances caused by hydropower projects, it reveals that there is a significant increase every year.

The question is that the State takes highly consideration on improving legal framework but these policies cannot put into practice to ensure the equitable development among the State, developers, and displaced persons in the case of hydropower dam development. Therefore, the objectives of this paper are to investigate issues generated by hydropower dam construction and displacement, or more specifically by resettlement and compensation schemes associated with hydro dams and to examine the root causes of these problems.

Following this introduction, we review important theories and concepts formulated to analyse the issues surrounding the compensation and resettlement plan. After that, we discuss the legal framework of land acquisition and the gap between policy and praxis. Then, we introduce about the case study on the A Luoi dam and the displacement it has caused, in which we elaborate the mechanisms of land acquisition, compensation, and resettlement and summarise the problems that have been voiced against the compensation and resettlement process. The causes of these problems are presented in the subsequent section. Finally, following empirical evidence, we discuss the root causes of these issues and their implications for resettled people and then draw conclusions from the discussion.

2. Analytical Framework

Following negative experiences in the past, when some of its large-scale dam construction projects sometimes had negative social and environmental consequences, the World Bank has emerged as an authority in careful design of planning procedures. The revised involuntary resettlement objectives of the World Bank in 2013 [37] state that “displaced persons should be assisted in their efforts to improve their livelihoods and standards of living or at least to restore them, in real terms, to pre-displacement levels or to levels prevailing prior to the beginning of project implementation, whichever is higher”. When compulsory displacement becomes inescapable, resettlement objectives must include minimised social risks and shocks, damage, and suffering; the protection of resettled people's well-being and rights; a facilitation of their rehabilitation among new hosts; and support for redevelopment and improved livelihoods at arrival sites [38]. To avoid impoverishment, good policy, proper resettlement planning and adequate resource allocation are critical [6,24,39,40,41]. The principle of Free, Prior, and Informed Consent (FPIC) as a precondition for resettlement is just one step in developing a level playing field between local communities and government-sponsored, large-scale development projects. World Bank policy (OP 4.12) requires the application of the principle of FPIC in the case of indigenous communities. However, rights of members of majority populations should also receive reasonable protection in law and policy frameworks [37]. The World Bank [42] also specified that the level of participation in a resettlement programme must be elevated to encompass collaboration and involvement in decision making instead of merely consultation and involvement in the execution of plans. In such cases, affected people are able to join a resettlement committee and participate in decision making or in designing resettlement programmes. Moreover, participation requires the involvement of multiple actors and organisations from local to national levels [20,41]. On the side of the project developer, participation may help to avoid unnecessary and costly development [42]. We believe that participation of affected people in arranging resettlement programmes helps diminish adverse effects and severe vulnerability and thus enhances the chances of success for displaced people to adapt to new places. Furthermore, dams for hydroelectric power must be designed to maximise environmental and social benefits [24] and ensure the rights and entitlements of indigenous people and ethnic minorities [43]. In addition, development projects should respect existing land and access rights including those pertaining to customary and common properties. Further requirements include transparency in the negotiation process, fair profit sharing amongst affected people, project developers, and local government, as well as ensuring environmental sustainability, guaranteeing livelihood restoration, and respect of the local land policies [44]. In addition, the World Commission on Dams [43] emphasised that good governance makes for common ground between stakeholders in the negotiation and decision-making process. This includes equity, efficiency, participatory decision making, sustainability and accountability as key characteristics, in line with the concept of FPIC. In the case of investment of private sectors, the Performance Standard 5 of the International Finance Corporation (IFC) also emphasizes that investors should negotiate settlements with landowners rather than depending on compulsory land acquisition mechanisms of the government. If compulsory acquisition is unavoidable, private companies should prepare a supplemental resettlement plan besides the one of responsible government agencies to fully address the relevant Performance Standard [45].

Such international policies with respect to involuntary resettlement have been introduced to Vietnam through loans and investment by the World Bank, the Asian Development Bank and the work of international organizations such as the World Dam Commission, and the International River Network. They have contributed significantly to the improvement of Vietnam’s resettlement policies, especially for cases of compulsory land acquisition for hydropower dam construction [33,20]. As a result, the Prime Minister in 2010 issued Decision 34/2010/QD-TTg in order to develop a clearer framework for compensation, support and resettlement policies. These aim to ensure that displaced people have places of settlement, can build a stable life with opportunities to develop production, raise incomes and incrementally improve infrastructure. The framework is intended to guarantee that they have better lives materially and spiritually in the long-term than before displacement as well as to emphasize harmonizing the interests of resettled people and already established inhabitants. The objective is quite similar to the World Bank’s. The framework also states that the implementation process of compensation and resettlement must ensure democracy, publicity, fairness, transparency, proper purposes, proper persons and effectiveness. It appears similar to the FPIC principle; however, it is not concretized into specific guidelines for successive phases of land acquisition, such as planning, land recovery, compensation, displacement, resettlement, and livelihood restoration. The compulsory acquisition process implies that all activities of compensation and resettlement are designed and carried out by the responsible agencies of local government and then presented to affected people with details on losses, compensation values, and resettlement plan. There is no policy to put the people to be displaced in the centre of decision making process. For example, although article 21 of Decision 34/2010/QD-TTg declares that affected persons have the right to inspect and supervise the implementation of compensation assistance, and resettlement scheme; local authorities as a rule do not include any members from displaced communities in the committees preparing compensation and resettlement at the district level. All members tend to be recruited from project developers and functional departments of local councils. There is thus a big gap between policy and practice of compensation and resettlement policy in Vietnam [3,20,23]. Since the majority of displaced people for hydropower dam construction belong to ethnic minorities [33], it would seem crucial to concretize the principle of FPIC in the planning and implementation process. Without this, the objectives of decision 34/2010/QD-TTg cannot be attained. Moreover, implementation and consultation should be undertaken by independent parties (e.g., local NGOs) to prevent local authority bias in favour of investors, as acknowledged in note 4 of Annex A- OP 4.12 by the World Bank [37].

When it comes to compensation for loss, it must not only be just or equitable, but also effective in benefiting the landowners [46]. That is to say that compensation in cash or land may not be sufficient to ensure that displaced people can restore and improve their livelihoods in the long term. This may require additional assistance such as training, etc.

Compensation for land is often complicated, particularly the estimation of land values. The market value is one option used. This is commonly defined as “the estimated amount that the land might be expected to realise if sold in the open market at valuation date after proper marketing between a willing seller and a willing buyer and they had acted knowledgeably, prudently, and willingly” [47,48]. Fair market value might be used exchangeable with market value, but there is a distinction between them. The fairness of market value herein reflects the estimated price for the transfer of a property between willing parties who have the respective interests of those parties. It is necessary to carry out the assessment of the price that is fair for those parties taking consideration on the respective advantages and disadvantages that each is able to obtain from the transaction. Meanwhile, market value entails the strong points that are not available to market participants generally to be ignored, and therefore the concept of market value is narrower than fair market value [48]. The International Valuation Standards 2011 [48] also differentiates between price and value. Price is the amount asked, offered or paid for an asset, value reflects the opinion that the most probable price to be paid for an asset in an exchange or the economic benefits of owning an asset. Because of financial capabilities, motivations and special interest of a given buyer or seller, the price might not reflect the true underlying value. As a result, market price is quite distinct from market value; they are equal when the market must provide sufficient information, efficient marketing, and prevailingly rational expectations. We can understand that the market price implies the negotiable capability of market value between market participants. In case of involuntary land acquisition, the government alone or in alliance with investors are willing buyers, but the affected landowners are often not willing sellers. As pointed out by Miceli and Segerson [49] that the compensation paid to owners by using market price, whose land is taken, is systematically less than the amount owners would ask for their land in a consensual transaction because acquired land owners always response to compensation value by their subjective value or reservation price that reflects the market value. According to this understanding, compensation at market value often under-compensates unwilling sellers. However, it is very difficult to know the owner’s subjective reservation price because self-interest induces owners to quote highly inflated values [50]. In addition, even landowners themselves may not know at what price they are prepared to sell. Another option is compensation at replacement cost. The replacement cost is equal to market value when the information about market value is reliable and comparable assets or acceptable substitutes are available for purchase. In most developing countries, however, conditions are insufficient to estimate market value and replacement cost, especially in remote and rural environment because the information on land prices is not reliable [47].

Vietnam is an example. The decree 123/2007/NĐ-CP defines the market price as “the actual market price of land use right transfer as results of common actually completed transactions between transferors and transferees under normal commercial conditions and without the influence of factors that cause sudden irrational price rise or decrease”. It also emphasizes that compensation price is valuated at market price. However, this is not put into practice when the government, especially the Provincial People’s Committee (PPC), often applies improper methods to valuate land by collecting prices from offices of land registration, notary, and tax records to construct a land price framework on a yearly basis. As a result, land prices in the compensation framework is often far lower than market price [23,24]. The study of World Bank [24] confirmed that more than 80 percent of resettled people in Vietnam are dissatisfied with compensation since land prices were much lower than market prices. Such differences in land prices between different valuation frameworks existing side by side lead to conflicts over land acquisitions throughout the country, especially on compensation rates (see Ty et al. [51]). The question is why provinces still retain the administrative pricing framework that is the cause of dissatisfaction. The first reason is that local governments want to boost capital investment by the private sector, especially Foreign Development Investment (FDI). Secondly, the government is also a major project developer, and therefore has an interest in modest prices for compensation costs [3]. The local government subsequently sells land at market prices through a competitive auction setting. Therefore, land investment often results in considerable revenues for provinces. For example, the revenue from land development, taxes and registration fees accounted for 15 percent of the total budget as reported by Thua Thien Hue province in 2012 [52] and more than 42 percent between 2003 and 2007 in Da Nang city [53].

In the case of hydropower development, land acquisitions are mainly located in the mountainous rural areas of the interior where the market price of land is not clearly defined because transactions are relatively rare [54]. The majority of tenancy contracts commonly take place between relatives; the social aspects of tenancy play a clear role in that tenancy contracts sometimes involve no rental payment [55]. Therefore, the compensation price is decided by Board of compensation, assistance, and resettlement (BCAR) based on the provincial price framework which results in lower than market prices. In particular, compensation prices and payment process are decided by the compensation committee at district and provincial level without negotiations with people loosing land [33,20]. For the time being, hydropower development in Vietnam is considered as a security purpose, not a commercial one according to the 2003 Land Law. As a result, the acquisition of land proceeds according to the compulsory mechanism. Besides this, there is also a voluntary land acquisition mechanism regulated in the 2003 Land Law. However, according to the World Bank [24], many private investors followed this voluntary procedure when investing in urban areas as they could thus avoid complicated administrative procedures with authorities at all levels. Conversely, voluntary procedures have not always been successful when rights holders of a small part of the needed land hold out in order to gain a windfall profit. The 2003 Land Law has no mechanism to resolve such situation [24].

3. Research Design and Methodology

3.1. Research Problem

In view of the problematique discussed above, this study addresses the issue of a dam-related resettlement project near Hue city in Central Vietnam: How can the process of compulsory land acquisition for hydropower dam construction be described and understood? What problems are voiced by displaced people with respect to compensation and resettlement? and why? And what are the implications for improved policies towards the rebuilding of sustainable livelihoods and ensuring the wellbeing of forcibly displaced people?

3.2. Data Collection and Analysis

This research project used mixed methods to gain insight into the process of land acquisition for hydropower dam construction. It collected secondary as well as primary data for analysis. Therefore, both qualitative and quantitative methods were applied to collect both factual information such as information about household size, income sources and household information concerning the thoughts, ideas and experiences of resettled people. Both methods have strengths and weaknesses. By combining both methods we aim at a comprehensive approach.

Secondary data was collected at the district-level Department of Natural Resources and Environment (DONRE) as well as at the hydropower company, including reports of the feasibility study, the environmental impact assessment, the land and property loss inventory, the land use survey, and descriptions of the displaced people. All legal documents on land recovery, compensation, and resettlement were downloaded from the online legal archive of Thua Thien Hue Documents.

3.2.1. Primary Data

The first interviews were conducted with district officials at the Department of Natural Resources and Environment and staff of the A Luoi Hydropower Company who were members of BCAR and involved in most activities of compensation and resettlement plan. This yielded general information on the A Luoi hydropower dam, including the process of investment, compensation, and resettlement. We also gathered their opinions about problems that occurred when implementing the compensation and resettlement package, e.g., the number and nature of grievances, and how these have been addressed. Also field visits have been undertaken to the A Luoi dam construction site on the border between Vietnam and Laos, in a location that is not publicly accessible. We further interviewed the former headman to get the historical A Den village to collect information on living conditions before and after resettlement, as well as their opinions about the compensation and resettlement package since the former village headman was involved in the BCAR activities. Following that, a focus group discussion was undertaken with 8 key persons, including the former village headman, three elders, two young people who are A Den households but also worked for the former commune as police and cadastral officers, the patriarch, and one leader of the host commune of the new resettlement. The focus group discussion reviewed the compensation and resettlement process that focused on the participation of A Den households in making decisions. This served to check the information collected at the district Department of Natural Resource and Environment (DONRE) and other sources. The main problems met have also been investigated at this meeting that helped us focus the subsequent household interviews on the principal problems after resettlement of A Den households. All 60 households of the village) have been interviewed in 2013 to collect household-level data as well as their experiences and views towards the compensation and resettlement scheme. The questionnaires covered such issues as the size of agricultural land and changes of income and food security after resettlement. After the household survey, we selected two households to have in-depth interviews on their experiences of compensation and resettlement. Household data was coded and analysed in SPSS 20. After screening the data, the descriptive analysis tool was used to present the relationship between selected variables in custom tables. Data from the generated tables and graphs were interpreted to answer the research questions. Finally, we had an interview with a former Vice Minister of Ministry of Natural Resource and Environment (MONRE) in September 2013 in Ha Noi to discuss the issues of compensation and resettlement policy and practice.

3.2.2. Limitation of Research

The recall method to collect data on conditions before and after resettlement relies on the memory of participants. This does not ensure absolute accuracy of household data, especially on income that was difficult to estimate exactly for households having both cash and subsistence income. The process of resettlement could have been experienced as negative, which might have induced participants to idealize the situation prior to resettlement. Households often did not disclose how much money they have received in compensation and often said “we have spent all compensation money because it was little”. We intend to undertake more research to add robustness to this issue, and answer other questions such as: who did benefit and managed to move upwards after resettlement? Who are most vulnerable after resettlement and move downward? Why? How do resettled people adapt to new settings? What are the roles of different stakeholders in mitigating and enhancing the results of resettlement policy?

4. Results and discusions

4.1. Study Site and Historical of Displaced People

In 2007, construction of the A Luoi hydropower dam started on the A Sap River, a branch of Mekong river system located on the border with Laos. Owned by the Central Joint-Stock Hydropower Company, the dam became operational in 2012 and aims to produce 686 million kW·h per year. The total area of land acquisition was over 2,080 ha, of which over 95 percent was crop and forest land. These lands were used by different types of landholders: communes managed 393 ha, the State Protection Forest Management Boards handled over 54 ha, and individual households used 1,633 ha. The dam and reservoir displaced 218 households (about 872 villagers), mostly ethnic minorities.

One of the affected villages, A Den, was selected for an investigation into the compensation and resettlement process, the grievances related to compensation and resettlement, as well as the magnitude of changes and consequences resulting from the dam construction. A Den village, Hong Thai commune, was located about 300 m from the commune office and 7 km from A Luoi Township (see Figure 1). It was situated in the valley between tributaries of the A Sap and Ta Rin Rivers. The village was divided into five blocks; each block consisting of several houses separated by a small concrete road. Each house was surrounded by a garden, usually planted with a mixture of crops including cassava, corn, coffee, vegetables and fruit trees. A barn was usually located near the house and was used to keep cows or buffaloes.

Figure 1. Map of the Can Tom 2 resettlement village, A Luoi district. Source: [56,57].

Figure 1. Map of the Can Tom 2 resettlement village, A Luoi district. Source: [56,57].

Besides the garden, wet paddy fields and fish ponds were located along the stream. Other agricultural land and forest tree plantations were situated at some distance from the houses. The total residential area of the village, 32 ha, was inhabited by 61 families or around 274 people of the Ta Oi ethnic group. The Ta Oi originated from Laos where they practiced slash and burn farming and used open areas for planting dry land paddy in addition to relying on the natural forest for food, medicines and raw materials. In 1972, Ta Oi people started moving from Laos to Vietnam to settle in Hong Thai commune, A Luoi district. They named their village A Den, which means “blissfully great harvest” in the Ta Oi language. Nonetheless, the move to Vietnam did not contribute greatly to their living conditions. However, livelihood conditions gradually improved from 1993 onwards when the Vietnamese government issued the land law and launched policies that targeted ethnic minorities. People were given more freedom to develop farmlands as access to land and markets improved. Also, access to education, health services, infrastructure and electricity were improved, as the village was located close to the administrative centre of Hong Thai commune.

In 2007, residents of A Den village received an announcement stating that the A Luoi hydropower plant would be constructed and the whole village would be evicted. Financial compensation for their loss of assets was given on 13 May 2010 and people were informed to move to the resettlement area or elsewhere in June 2011. Since November 2011, 61 households from A Den have been living in the relocation village named Can Tom 2. Located in Hong Thai commune, the resettlement site it is about 15 km from the old village. Table 1 shows some of the characteristics of the Ta Oi households. Their education level is quite low; two-thirds are farmers and nearly half of the residents are classified as poor. Observations also revealed that most labourers working in agriculture and forestry are young people who have obtained either primary or secondary education.

Table 1. Information of respondents represented to interviewed households (n = 60). Source: Authors’ household survey, 2013.

		# of Respondents	%
Ethnicity of interviewees	Ta Oi	58	96.7
	Kinh	2	3.3
Gender of interviewees	Male	24	40.0
	Female	36	60.0
Education level of interviewees	Illiterate	20	33.3
	Primary	14	23.3
	Secondary	19	31.7
	High school	7	11.7
Occupation of interviewees	Unemployed	9	15
	Farmer	42	70
	Carpenter	2	3.3
	Government official	7	11.7
Economic status of households	Non-poor	34	56.7
	Poor	26	43.3

Table 1. Information of respondents represented to interviewed households (n = 60). Source: Authors’ household survey, 2013.

		# of Respondents	%
Ethnicity of interviewees	Ta Oi	58	96.7
	Kinh	2	3.3
Gender of interviewees	Male	24	40.0
	Female	36	60.0
Education level of interviewees	Illiterate	20	33.3
	Primary	14	23.3
	Secondary	19	31.7
	High school	7	11.7
Occupation of interviewees	Unemployed	9	15
	Farmer	42	70
	Carpenter	2	3.3
	Government official	7	11.7
Economic status of households	Non-poor	34	56.7
	Poor	26	43.3

4.2. The Investment and Land Acquisition Process

The Prime Minister approved the proposal for the A Luoi hydropower project in 2005. The project was supported by the Ministry of Industry and Trade under the BOO (or the Build, Own, Operate) investment model. The investment capital was guaranteed by the Ministry of Finance via foreign loans to import facilities. The Development Support Foundation was responsible for implementing the displacement and resettlement programme as well as for producing the domestic facilities in support of the project. The Prime Minister’s decision also secured the sale of electricity to the Electricity Cooperate of Vietnam (or EVN) and facilitated Thua Thien Hue Provincial People’s Committee’s (PPC) project approval. In 2008, and because the investment was also consistent with the planning of hydropower and electricity development adopted by the Ministry of Industry and Trade (MOIT), Thua Thien Hue province granted the investment certificate to the Central Hydropower Join-Stock Company. The investor receives many incentives from the province. For example, the project does not have to pay income tax for 4 years from the start of dam operations; after this period, the investor only has to pay half of the regular tax for the next 9 years. Additionally, while other businesses must pay the regular income tax of 25 percent, the hydropower company pays only 10 percent income tax. The company also receives exemption from the land lease tax for 15 years as well as import taxes. Such financial incentives have prompted several private companies to look for hydropower investment opportunities in the Central provinces. After all, projects such as the A Luoi hydropower dam are lucrative. The dam has generated electricity since June 2012 through two power stations; the company expects to reach revenues of over 300 billion VND (or roughly 14.4 million USD) and a pre-VAT profit of 25.7 billion VND (approximately 1.2 million USD) in 2012 [58]. Vietnam is facing a shortage of electricity and has to import power from China. Since demand is increasing, profit seems to be secured over a longer term.

After the PPC approved construction of the dam in 2008, the Department of Natural Resources and Environment (DONRE) started collecting land use and cadastral maps of the affected area to delineate areas which would be flooded as well as to make land allocation maps for the hydropower company. Once the PPC approved the acquisition and allocation of land to the investor, information about those decisions were posted in the communes and villages. At that time, these notices served as the first information affected people received about their land loss. Households did not have any role within this process since the project was considered to be a technical issue to be decided by the province and district with the assistance of DONRE. People losing land under the scheme did not have the right to refuse land acquisition decisions; the land law awarded the government the right to take land back for reasons of public interest, national security and economic development. Affected people simply had to accept this regulation [59]. According to the 2003 Land Law, they are left with grievance rights, including denunciation and complaints about the compensation packages. Complaints here refer to appeals to review administrative decisions and the like when complainants have grounds to believe that such decisions or acts contravene laws and infringe upon their legitimate rights and interests. Denunciations are made by displaced people who claim that their legitimate rights and interests have been damaged by authorities against the law (interview with district officials, 2013).

Despite this established grievance process, it occurs after the compensation and resettlement procedure has already taken place. In the case of the A Luoi hydropower project, the investor first hired a consultation company to prepare a master plan for compensation, assistance, and resettlement for submission to the PPC for approval. After acceptance, the PPC established a management board to implement the ground clearance, compensation, assistance and resettlement (BCAR) process at the district level. In this steering committee, leaders of the district, finance department, and the hydropower company were represented. Other members included representatives of line agencies of the district. DONRE was responsible for mapping, land and property inventory, and land use certificate allocation. Commune leaders and representatives within the commune of the Fatherland Front Committee worked as a bridge between the BCAR board and affected households; they organised meetings with households to announce the details of land recovery, explained compensation and resettlement policy as well as persuaded people to accept the plan. Only one villager was invited to join the BCAR board; he was the village head who was also a district official. Next, the BCAR board photographed the properties of affected people to prevent households from planting more trees in order to claim more compensation. Right after recording the effects of the expropriated households were recorded, including houses, crops, forests, and other structures, the BCAR board sent the land appropriation decision to each household. After this, an asset inventory was conducted together with affected households, village heads, and commune cadastral officials. All information was used to assert the status of lands and assets in order to validate the rights of land users as eligible for compensation or not in terms of the provincial regulations. Then, the BCAR board decided upon the compensation prices for land, houses, crops, forest trees, and other assets according to the compensation pricing scheme of the province as well as the assistance package for each family. This information was sent to each family by commune officials from door to door and posted at the commune office in 2008. Payment then was distributed in several rounds for different affected households.

4.3. Compensation and Resettlement for A Den Households

The main principle of compensation was “land for land”, i.e., dispossessed land rights holders could receive an equal amount of land in the new settlement which in principle corresponded to their land loss. In cases where this was not possible, an additional payment would be provided to make up for the difference. Figure 2 shows that A Den households lost a considerable amount of land due to dam construction. The total area of the village was reduced by about 81 percent; each family lost around 2.8 ha on average, from 3.5 to 0.7 hectare on average. The loss of land and land-based properties was compensated in cash in May 2010 with each family receiving between 2,500 and 15,000 USD. In addition to the compensation, the investor supported displaced people with other types of assistance, including rice supplies for 24 months, electricity for one year, 80 USD for displacement-related costs, a one-time provision of fertilizer for improving soil quality, several agriculture trainings and 90 USD for job training, and several pigs, chickens, and ducks for livestock restoration. Furthermore, children of displaced families had free education for one year.

Figure 2. Production land of households in A Den village before and after resettlement (n = 60). Source: Authors’ household survey, 2013.

Figure 2. Production land of households in A Den village before and after resettlement (n = 60). Source: Authors’ household survey, 2013.

The district offered households a choice between two new places of residence after displacement in 2009. As the first option was located in a remote mountainous area, resettlers complained that they had to select the second option because it is closer to the centre of A Luoi Township, more convenient and accessible to the market and transportation, and on flat land (interview with former village headman). In reality, it is very difficult to find a suitable place for resettlement when free land is in short supply in the region. In November 2011, A Den households moved roughly 8 km from the old village to the new resettlement area named Can Tom 2 village in Hong Thuong commune where the investor constructed houses for the displaced households. Each family received a house surrounded by around 60 m² of garden land. The resettlement site is equipped with concrete roads, kindergarten and primary schools, gravity irrigation and a drinking water supply, electricity, a health clinic, community houses, and playgrounds.

4.4. Problems after Resettlement

Many grievances were aired during interviews with resettlers. Not only did they express their criticism verbally, but they also sent official grievance letters to the relevant authorities to voice their opinions about compensation and resettlement. According to the district-level DONRE, about 90 percent of resettled households accepted the compensation packages. In 2008, the Commune received 110 letters complaining about low compensation prices while 84 letters were sent to the district to denounce the measurement of land and property. In 2009, a collective letter on behalf of the whole community was sent to the district authority and the hydropower company to request more support for livelihood restoration and development in the new settlement. In addition, seven households appealed against the inappropriate recompense for houses, crops, and land. In 2010, 60 households did not accept the compensation price because of disputes over land boundaries among households in the course of the land inventory process. In 2011, households sent another collective letter to ask for compensation for the loss of coffee lands (interview with district officials, 2013). A survey among 60 households of former A Den households showed that grievances occurred constantly. The reasons are discussed in the following section.

Inadequate compensation due to low pricing, insufficient and unfair payment: In general, Ta Oi people in A Den village were not satisfied with the compensation. In fact, nearly 86 percent of households complained that the compensation amount was much lower than the value of what they had lost; more than 80 percent disagreed with compensation prices since they were low compared to actual market price observed in the region (see more in Figure 3). Affected households also said that they were compelled to accept compensation payments because it was the provincial pricing scheme; if the payment was rejected, farmers would be left with nothing once their land was flooded. Moreover, about 10 percent of households, especially women, did not know the exact amount of compensation. According to one woman, “I didn’t know about compensation my husband only told me that he received compensation money but spent all of it on extending the house and on petrol for transportation during displacement.”

Others were also dissatisfied with their compensation. A 39-year-old male Ta Oi villager said that he lost 2.95 hectares, including a garden of 1,250 m² where he kept livestock and grew fruits, vegetables, cassava, and maize. He also lost 1 hectare of forest land planted with Acacia, 1,500 m² of upland rice, reclaimed lands 15,000 m² as well as coffee land measuring 1,200 m². In the resettlement site, he received a land area of 12,800 m², including housing land of 200 m², forest land of 10,000 m², garden land of 1,600 m², and a rice field measuring 1,000 m². He did not get compensation for the land he contributed to the land pool for the coffee company. Therefore, he is strongly displeased with the compensation he received. Another 40-year-old Ta Oi male claimed that he lost 1.4 hectares of land. His garden, measuring 3,500 m², was used to grow fruits, bamboo, and to raise livestock. He also held 500 m² of residential land, and1 hectare of annual cropping land that he used to grow upland rice, cassava, maize, and coffee. He accompanied the company and district officials during his land survey and it was correct. He also went to 4 meetings with the commune authorities and company representative. However, they decided the compensation price of lost land, not him. Despite his previous assets, he received 1,800 m² of garden land and 200 m² of residential land in the relocation site. He did not receive compensation for the 1 hectare of forest land or for his coffee land. He said that he did not agree with the compensation price because it was much lower than the market price of land. Currently, he still has 8 ha of forest land in the old village, but it is located too far away to continue planting Acacia (In-depth interview, 2013).

Figure 3. Self-evaluation of respondents on compensation scheme (n = 60 households). Source: Authors’ household survey, 2013.

Figure 3. Self-evaluation of respondents on compensation scheme (n = 60 households). Source: Authors’ household survey, 2013.

In the previous settlement, A Den households planted Acacia, upland rice, cassava, and maize on reclaimed land but only half of them were compensated for this loss. In addition, 44 households reclaimed and contributed 26 ha of land to the Quang Tri coffee company land pool; they also worked as labourers for the company (household interview, 2013). They received income for their land contribution as well as for planting, monitoring, and harvesting coffee. Due to dam construction, this land was flooded but not compensated for. The hydropower company explained that as the coffee land was leased to the Quang Tri coffee company, they paid the coffee company for the loss of the coffee trees only. They were not expected to compensate households for this land, as this was not eligible under the provincial regulations. Those who lost land in this way sent a collective letter in 2011 to the commune, district, and to the investor to request cash compensation. In response, the commune requested the district and the hydropower company to estimate the value of the coffee land and to inform all affected households. In September 2011, the district confirmed that the value of compensation, around 133,000 USD, for this coffee land loss was correct. However, compensation for coffee land loss has not been paid to A Den households since 2011. Furthermore, the remaining land of displaced households, which is not being flooded by the dam, encountered with another problem when the coffee company went bankrupt in 2011 because they used the land lease certificate to acquire a loan from the Quang Tri Bank before that. Therefore, displaced households could not access to the remaining land not flooded any more because land belonged to the bank. As a consequence, the district had a plan to buy the land back from the bank because coffee plantation was set out as an agricultural development priority strategy of the district and to keep stable security in the district (interview with district officials, 2013).

Moreover, even though households could no longer access parcels of non-flooded land as it was blocked by the reservoir, farmers did not receive any compensation for this loss. More importantly, not all promised compensation money for flooded land and trees was paid out. Most resettled households only received half of the promised amount in cash; the rest that was to be compensated through the allocation of plots of comparable land was not given. Furthermore, the late payment of compensation package caused unfairness amongst land losers. This is because the prices for compensation were decided in 2007 after inventory, but payment was made in different years between 2008 and 2011. Meanwhile, every year the province adopted another price framework, often significantly increasing land prices. Also, market prices for crops like cassava had increased dramatically. Many of displaced households accepting payment in earlier years received less than later payments. As a result, resettled people who had received compensation in the earlier years were angry about what they perceived as unfair treatment. These farmers sent a collective grievance letter to the district and to the hydropower company to ask for compensation and for the change in pricing levels between 2008 and 2011. The province urged the company to accommodate these complaints so as to reduce the social and political tension in the region where several hydropower dams are still being constructed. Since the province provided the investor with many favorable conditions, it was felt they had to accept the decision of the province.

Low participation levels and lack of transparency in the compensation and resettlement process: As can be seen from Figure 4, some 55 percent of displaced households stated that the project developer determined the process of compensation and resettlement, while 45 percent indicated that the commune and district government had directed the process. Only 5 percent of the households, those who can be considered as village leaders, confirmed that they participated in resettlement site selection, along with district officials and the project developer. These findings illustrate the limited involvement of displaced people in the selection process of the resettlement area. Although 95 percent of households confirmed that information was transmitted through meetings in the commune office, households did not have a real bargaining position to negotiate their needs. The meetings served only for the dissemination of information after all decisions had been made by the province and district; displaced people could convey their opinion to the commune and district but it was not considered important at that stage. Participants said that they had voiced their opinions and needs in several meetings with the investor, district, and commune but that their views did not influence those decisions. The investor and authorities typically explained that all decisions were based on the policies of the Party and the State and implied that people must accept their decisions. Thus, the selection procedure of resettlement area was not a participatory process because it did not include the active involvement and consultation of the affected people. In fact, dissemination is a one-way transfer of information offering affected people no options for involvement in the decision making process [42].

Low commitment: As mentioned by resettled people in the focus group discussion, the investor and the district organised meetings with them and made many promises. Among these were that affected households would receive similar houses and plots as in the former village. In addition, the resettlement site would have sufficient electricity and an adequate water supply for drinking and agriculture. Households would also be allocated between 1.5 and 2 ha of land for farming and agro-forestry. Similarly, over 83 percent of households expressed strong disappointment about unfulfilled promises; they complain of poor housing quality and lack of repair work by the investor. Moreover, many bomb-holes dating from the war surround their houses. As these have not been filled, they cannot grow fruit trees and vegetables in their garden plots. Furthermore, households have not received the promised farm land. Annoyed, most resettled people stated that, “We haven’t seen the hydropower company since being resettled. They have disappeared already”. By the 2003 Land Law [59], the hydropower company does not have any responsibility for displaced households after the completion of resettlement construction and payment. While resettled people face many challenges in the relocation area, the company considers their duties in terms of compensation, assistance, and resettlement as finished. As a consequence, most resettled people are angry and so try to obtain more support from the hydropower company through the commune and district offices. Their needs cannot be met completely since the hydropower dam just started generating electricity and therefore the company cannot afford the costs; neither does the local government have the budgetary means to satisfy their demands. As a result, nearly 90 percent of affected households said that the construction of the hydropower dam has made their life worse than before.

Figure 4. Respondents’ evaluation of compensation and resettlement process according to FPIC principle. Source: Authors’ household survey, 2013.

Figure 4. Respondents’ evaluation of compensation and resettlement process according to FPIC principle. Source: Authors’ household survey, 2013.

Significant loss of income and deterioration of food security: Ta Oi resettlers report that before losing land to the hydropower project, each household could earn about 32 million VND (roughly 1,600 USD) a year. Of which, 59 percent of this income was sourced from crop production (cassava and rice); about 23 percent derived from livestock, 9 percent from government salaries, and 9 percent derived from wage labor, migration, and forestry and non-timber forest products (Household interview, 2011; see more in Table 2 about the distribution of income before and after resettlement). In contrast, currently each household only earns roughly 6 million VND annually; this is a reduction of 80 percent. The income from government jobs (only 7 households in the village) account for 85 percent of total village income, 11 percent is from wage labor, and 4 percent from livestock (Household interview, 2013). Figure 5 shows that there is a significant loss of income sources after resettlement. Currently, no household is able to generate income from agricultural production and forest. Households instead earn a very small income as day labourers on Acacia plantations in the region; this occupation is less-desirable as it is temporary and available only during the harvesting season. Poor households in particular have incurred income losses of up to 91 percent in comparison to the pre-resettlement situation.

Table 2. Household income distribution before and after resettlement. Unit: VND million (1 USD = 20 VND million). Source: Authors’ household survey, 2013

	Sum	Mean	Maximum	Minimum	Range	Variance	Standard Deviation
income before displacement	1,428	32	243	0	243	1,457	38
income after resettlement	263	6	75	0	75	215	15

Table 2. Household income distribution before and after resettlement. Unit: VND million (1 USD = 20 VND million). Source: Authors’ household survey, 2013

	Sum	Mean	Maximum	Minimum	Range	Variance	Standard Deviation
income before displacement	1,428	32	243	0	243	1,457	38
income after resettlement	263	6	75	0	75	215	15

Figure 5. Accessible income sources of households before and after resettlement (n = 60). Source: Authors’ household survey, 2013.

Figure 5. Accessible income sources of households before and after resettlement (n = 60). Source: Authors’ household survey, 2013.

Furthermore, as annual food production declined significantly after resettlement, food security is now a greater concern. The satisfaction of nutritional needs from subsistence food production dropped from 53.3 percent in the old village to 5 percent in the new settlement. Before resettlement all households produced food, with an annual average production of 5,798.7 kg per household, whereas now they produced only 93.1 kg per household annually. Not only do affected families produce less food for their own use, household expenditures on food have declined considerably. This implies that the resettled population has less money to spend on food than before. In the survey, 11 households have no income, in money or in-kind, and no food expenditures. These households are extremely vulnerable to the effects of food insecurity.

Moreover, all resettled households complained that they could not produce subsistence crops because their compensation land is too small. In addition, the land is not cultivable because of poor soil quality. Since the Ta Oi depend much on farmland and forest, losing farmland means that they lose the most important source of income and food. As explained by district officials, it was very difficult to find sufficient land in the region to allocate to resettled households because host communities already occupied the surrounding land. Presently, the land of host households in Hong Thai commune as well as the protected lands belonging to the A Luoi Forest Management Board encircles the resettlement site. As a result, resettled people cannot find land to continue to cultivate through their traditional slash and burn practices (interview with district officials, 2013).

Resettlement community disorder and lack of social cohesion: In addition to the 60 Ta Oi households from A Den village who account for 56 percent of the total population of the resettlement site, there are about 46 households resettled from other affected villages in five communes. Among these, Pa Co households comprise 36 percent and Kinh families make up 14 percent. As they live in separate areas within the same commune, the district decided to regroup them into Can Tom 2 village. However, as the Ta Oi and Pa Co do not want to live in the same village, each has requested separate villages. Each community had their own leaders and patriarchy in their previous villages who now want to maintain their role in their community. As the leaders of each community explained, Pa Co and Ta Oi are quite different ethnic groups who hail from different origins and are distinct in terms of culture and language. Nonetheless, they understand each other easily because percent of the similarities between their languages. Moreover, according to the survey with Ta Oi and Pa Co people, both groups speak the Kinh language fluently and their children study in the Kinh language in the same schools. At present, the district has not decided on the arrangement and name of the resettlement site, and they are awaiting directions from the province authority. The lack of a village administration board has caused many issues and there are no political, social, and professional associations such as a farmer’s union or unions for women or youths. These unions are typically a part of the political system in Vietnam and thus are present at all administrative levels of central, province, district and commune. The farmers union especially is essential since it organises many activities for farmers, such as sharing cultivation experiences, trainings, and social activities (interview with host commune leaders, 2013). Although the district assigned a temporal village headman, he said that he had no role except for participating in meetings organised by the commune and district committee. Many resettled people said that they did not know who their village leaders are. Therefore, it was difficult to find the temporal village headman. Additionally, people in the focus group discussions disclosed that while there is a health clinic in the resettlement site, there is no doctor to operate it. When they are sick, they go to the clinic of Hong Thuong commune where they are refused access because their health cards are eligible only in the old commune. Consequently, they have to rely on the clinic in the old location, which is located at some distance and so is inconvenient. There are also reports of conflicts between resettled people and host households in Hong Thuong commune as they practice slash and burn farming techniques on lands belonging to the host population. In retaliation, the host population has broken their water supply pipes (focus group discussion, 2013).

4.5. Discussions and Policy Implication

The implementation is mostly carried out by local authorities and the investor in this case study. In this alliance, local government tends to align with the investor as both stand to benefit from the project [60,61]. In Vietnam, many researchers point out the weaknesses of compensation and resettlement procedures, such as low compensation prices, low participation and lack of long-term commitment to share benefits with affected people. However, the root cause of those limitations lies in the fact that government from the central to the local level tends to favor project developers rather than people loosing their land. According to a former Vice-Minister, this type of coalition can be considered as an “interest group” (nhóm lợi ích) that is the biggest challenge for integrating sound principles for involuntary resettlement policies recommended by international organizations such as World Bank, ADB, and WDC, as well as for to the proper implementation of the good points of Vietnam’s land acquisition policies (expert interview, 2013).

Policy Implications

The results show the urgent need to improve the national development policy on electricity production and land acquisition for hydropower dam construction in Vietnam. This might start from changing the investment mechanism for hydropower. Currently, electricity in Vietnam is mainly generated by the Electricity Cooperate of Vietnam (EVN), a State enterprise. Although many private companies are constructing hydropower dams, electricity generation is still a closed sector. Only Vietnamese companies can take part in producing and selling electricity, whereas foreign companies can participate in the construction of dams. Therefore, we suppose that electricity is not a free market-based activity. This situation lends itself quite well to a host of benefit-sharing mechanisms that also account for the interests of those who have had to surrender their livelihoods in order to make hydro-power possible in the first place. As it is now, the investors need not consider the full cost of the investment in hydropower dam construction as the cost for resettlement and compensation is not well-defined. To date, there are few studies that carefully determine the balance between cost and profit of constructing hydropower dams if the investment includes the benefit sharing. Therefore, there is an urgent requirement to resolve the fundamental economic problem of hydropower projects, i.e., the accurate estimation of the real benefits and costs, including those of introducing suitable resettlement and benefit-sharing programs that also take the long term view. This is necessary to satisfy the legitimate concerns of all stakeholders, including government, developer, displaced people, and consumers. Only when a long-term benefit sharing mechanism is made compulsory for hydropower investment will displaced people be able to restore and improve their living conditions. To strengthen the effectiveness of the benefit sharing mechanism, the new Land Law under discussing must change the purpose of land acquisition for hydropower development from national security to that of a commercial goal, since all hydropower companies now invest for profit. All hydropower companies should be treated equally in electricity production and selling, including the responsibility to share profit, including state corporations such as EVN. The experiences of other countries, including China, Brazil, India and Japan, have shown several successful cases of benefit sharing models (Cernea and Mathur), turning of the impoverishment of displaced people into an opportunity for development [16].

A successful approach to compensating displaced people would need to address three concerns. First, it should enable resettled households to create a livelihood within their abilities. Younger people, with sufficient education and skills training, may be able to move into non-farm activities. However, displaced people especially older people, do not have such opportunities and thus need land for farming and access to forest and other common pool resources. Second—and this actually emanates logically from the previous point—people need to be actively involved in deciding and planning for their life and living conditions after displacement. Only real participation as enclosed in FPIC can prevent the bitterness and frustration that now often characterise resettled communities. The FPIC principle is fully carried out if the role of community-based organizations and local NGOs is strengthened in the process of land acquisition, compensation, resettlement, and in the benefit sharing mechanism.

5. Conclusion

The case study found that the majority of households were disappointed with the compensation and resettlement scheme. Complaints often mention the lack of arable land, poor soil quality, food insecurity, loss of income and job, loss of access to forest, inadequate and unfair compensation, and the difficult resettlement site. The efforts of the State to improve policy by issuing better land laws and specific guidelines for compulsory land acquisition for hydropower dam construction are not sufficient to result in effective compensation and resettlement policies. The process of investment and land acquisition for the A Luoi hydropower dam shows that the local government is exercising a top-down approach to compulsory land acquisition by imposing the planning and construction decisions, the compensation prices for losses by affected people, and the resettlement site selection. The participation mechanisms in the compensation and resettlement process for people losing land as well as other local NGOs and community-based organizations are not well-defined. The involvement of affected people in decision making is not mandatory in compulsory land acquisitions. There is no room for negotiation as all decisions are pre-determined without transparency. There is very poor consultation, collaboration, and little choice open for affected people in the compensation and resettlement plan. Hundreds of hydropower dams are being constructed and planned in the coming years, and therefore good governance measures of land acquisition must be urgently put into practice.