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MINUTES OF 7TH

STWG-BDS MEETING

Time: 8:30 – 17:00 on 16/4/2015

Venue: Flower Garden Hotel – 46 Nguyen Truong To Str., Ba Dinh dist., Hanoi

I. Participants

Representatives of VNFOREST, Department of Scientific and International

Coorperation (DOSTIC), Department of Planning and Finance (DPI), national and

international organizations, programs, and projects related to REDD+ in Vietnam,

members of STWG-BDS and REDD+ Network.

II. Chairman

Chairman of the meeting is Dr. Nguyen Phu Hung – Director of DOSTIC -

VNFOREST

Co-chairman of the meeting is Madame Vu Thi Hien – Director of Centre of

Research and Development in Upland Areas (CERDA)

Secretary: Vietnam REDD+ Office

III. Main contents of the meeting

- Update on the progress of National REDD+ Fund (NRF) proposal and roadmap

for next steps;

- Share the information and practical experiences of CERDA’s project in Thai

Nguyen province;

- Propose to restructure and refunction the STWG-BDS and the establishment of

BDS core group;

- Present, discuss, comment to finalize the Draft methodologies for BDS design,

concept and principles for BDS design;

- Present, discuss, comment for Draft Working Plan for positive incentive

delivery piloting at site level linked with SiRAP in 6 piloting provinces of UN-REDD

Program Phase 2;

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IV. Conclusion

After listening to the presenters on the main topics to be discussed as well as

the inclusion of the comments of the participants, the chairman and co-chairman of

the meeting agreed to come up with the following conclusions:

1. Agree on the need of STWG-BDS restructuring and refunctioning as well as

the establishment of BDS core group. This core group will draft the TOR

for the STWG-BDS to be in charge of the main tasks: update the REDD+

negotiation process of UNFCCC, update and support VRO to share

information related to BDS to REDD+ Network members, discuss and

agree on the main orientations in developing BDS (methodologies, concept,

principles,…) and propose policy recommendations related to BDS with

specific topics to support for the REDD+ readiness in Vietnam with the

policy recommendations feedback mechanisms from authorities to

stakeholders.

2. Agree DOSTIC as a representative of VNFOREST continues to be the

chairman and Madame Vu Thi Hien – Director of CERDA to be the co-

chairman of the STWG-BDS.

3. Agree the secretary of STWG-BDS is the BDS Officer of VRO.

4. Agree the main task of the BDS core group is to develop the working plan

for the STWG-BDS, aggregate and report the STWG-BDS activities results,

collect all the policy recommendations and send to VRO for final

combination prior to submit to VNFOREST-MARD for consideration,

direction and policy recommendations feedback.

5. Agree on the members of the BDS core group, consisting of representatives

of the following agencies, organizations, programs and projects: DOSTIC-

VNFOREST, Vietnam Forestry University (VFU), Mr. Pham Xuan Phuong

– Research Institute for Sustainable Forest Management and Forest

Certification (SFMI), UN-REDD Program Phase 2, FCPF Project, Vietnam

Forest and Delta (VFD) project – Winrock International, Forest Trends,

CIFOR, ICRAF, JICA, CSDM, CERDA (those organizations who have

listed please contact to VRO if there is any comment)

6. Agree UN-REDD Program Phase 2 to coordinate with DOSTIC-

VNFOREST to aggregate, review the comments, finalise the proposal of

concept, principles and methodologies for BDS design as a basis to orient

the BDS consultation team to initiate the BDS development for Vietnam.

7. Agree UN-REDD Program Phase 2 to coordinate with DPI – VNFOREST

to aggregate, review the comments for NRF proposal to complete and

submit the final version to VNFOREST, MARD to consider and issue the

decision.

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8. Agree the detailed provisions about NRF, BDS will be invested in operation

regulation of NRF, BDS. In order to do that, the participation of relevant

stakeholders, especially the representative of Ministry of Finance (MOF),

MARD as well as UN-REDD Program Phase 2 and FCPF project is crucial,

inheriting the lessons learnt form other REDD+ projects.

9. Agree the next STWG-BDS meeting will focus on developing the working

plan in 2015-2016, in which the mechanism for policy recommendation and

feedback will be designed.

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ANNEX

I. Meeting materials

- Presentation on “Overview on proposal of NRF and next steps”

- Presentation on “Pilot result-based benefit distribution, initial results of

Pilot model of ethnic minority community-led REDD+ initiative in Thai

Nguyen province”

- Presentation on “Concept and principles for BDS design”

- Presentation on “Methodologies for BDS design”

- Presentation on “Draft Working Plan for positive incentive delivery piloting

at site level linked with SiRAP in 6 piloting provinces of UN-REDD

Program Phase 2”

II. Discussion

- Advanced payment for local people to implement REDD+ and results-

based payment

After the presentation of Mme. Vu Thi Hien - CERDA, Mr. Doan Diem

launched the idea that the advanced payment is inconsistent with REDD+

mechanisms which is results-based payment, and how to mobilize the advanced

payment from the Government for the initial stage. And how does the later

payment ensure local people to have significant income and encourage them to

participate. According to Mr. Diem, the World Bank's fund only advance after

2 years when the local people volunteer to participate, this way is more

feasible.

According to Mme Hien, it is difficult to ensure the protection of forests

without advanced payments. Advanced payment should be regarded as an

incentive to forest owners to protect the forest. Need mechanisms for

community to maintain the advanced payment, because mostly the

communities are poor and the protection of forests (especially in REDD +) or

socialized forestry sector is really challenging, time consuming and costly. The

Government also needs to think about this. May consider transferring the forest

protection payment as of 200,000 VND/ha/year by this time to conditional

REDD+ advanced payment. In fact, many evidences show that forest protection

is inefficient or ineffective for both immediate and long term, this transition

mechanism will reduce the pressure on the state budget, rather than having to

invest (not always effective) on forest protection contract. This investment will

turn into advanced payment and act as a condition to protect the forests;

otherwise the advanced payment will be withdrawn.

Mr. Pham Van Trung - VNFF provided additional information about

reviewing the proposals of a special mechanism issuance to manage the

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funding of international organizations and individuals as prescribed

management and use of ODA, the main objective is to technically support for

REDD+ activities based on bilateral and multilateral agreements, while the

main objectives of NRF remains the mobilization of results-based payment

resources.

Ms. Nguyen Thi Thu Thuy – Director of VRO, Deputy Director of UN-

REDD Program phase 2 and FCPF project, provided the information that FCPF

fund is the supporting fund for the readiness phase of the country to be eligible

to get the results-based payments, and this fund is part of the project. Carbon

Fund will conduct piloting results-based payments. The ERPD project will be

implemented in 2017-2020, and the Government of Vietnam has to find the

resources to implement the priority activities in this period. Until 2019, The

Carbon Fund will conduct the measurements based on which the country will

receive the payments on the amount of achieved emission reduction/absorption.

According to Ms.Thuy, the advanced payment is difficult, where the money

comes from. Especially in case the mobilization from other sources is unlikely,

the state budget will be used, and then the question is how much it should get.

And how much the advanced payment should be in the absence of a carbon

market, and the cost of carbon is unclear and uncertain. Ms. Thuy also

recommended Mr. Trung a need to put financial risk management into the NRF

proposal.

Mr. Tim Boyle - UN-REDD Regional Program, agreed with Ms. Thuy that

the financial management risk minimization is important for any fund. Should

have the participation of MOF’s representative. He also commented the need to

add NFMS in the operation diagram of the NRF, ensure the oversight of all

measures packages and activities carried out by different actors. Chairman of

Fund Management Board should not be the Deputy Minister of MARD, the

representative of MOF should be instead to ensure objectivity, avoiding an

agency plays two roles of implementing and financial management at the same

time.

JICA’s representative questioned how to ensure advanced payment are

sufficient to be able to perform at the local level? And how the funding from

the private sector are mobilized and used?

Mr. Pham Xuan Phuong implied to take risks in advanced payment, in case

the received payments are lower than the advanced payments. How do the

beneficiaries receive the money from NRF, through programs or projects?

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Accodring to Mr. Nguyen Huu Dzung - Coordinator of the UN-REDD

Program phase 2, the results-based payments by tons of CO2 equivalent will be

difficult to apply to small forest owners for whether or not their ability to

calculate. How will the money go to right forest manager, is there any solution

in the NRF proposal? If many investors contribute, and each of them is co-chair

of the Fund Management Board, then the system would be very cumbersome.

Mr. Pham Van Trung - VNFF answered the questions. Concerning risk

management and analysis, the issue will be discussed further in the NRF

proposal drafting group, will be specified in the Regulation for management

and operation of the fund. In the draft NRF proposal, there has been a

representative of MOF in the Fund Management Board already, and the

decision is made based on the principle of consensus. Regarding the

mobilization of resources from the private sector, which is the 3rd source as

stated in the proposal, will share the draft proposal to the participants for more

detailed information. Beneficiaries are paid based on results of PRAP

implementation, from which the Fund Management Board will make the

decision to pay.

Mme. Pham Minh Thoa added some points for the answers of Mr. Trung

regarding the basis for disbursement and benefit distribution, which are the

priority activities in PRAP and PRAP Monitoring Framework, possibly through

the PRAP implementation proposals matching with the priorities of PRAP.

Some other raised issues can not be placed into the NRF proposal that will be

considered for inclusion in the draft NRF operation regulation, after the fund is

established. Regarding the risk management mechanism, Mme Thoa said that

the solutions will be required and considered when developing NRF operation

regulation. Look forward to the contribution of the World Bank experts for

specific regulation of financial risk management from the Carbon Fund to the

ERPD project. For the advanced payment, since mostly the people who directly

protect and manage the forests are poor, they have to be advanced to start

immediately (this money is not gratuitous), will be settled when there are final

results (this result is not necessarily carbon). After the results are monitored

and verified satisfactory, they will be entitled to a bonus, incentive, after

deducting the advanced amount. In benefit distribution system, there is one

specific content about advanced source management, stating the source from

where, national budget or ODA.

Mme. Hien commented on the advanced payment, if people do not protect

the forest, they will be withdrawn this advanced payment. And if they are

allocated the forests for long-term, and well-organized then they can create

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interest from the advance. This both ensures the preservation of advance as

well as gets new extra income. To develop in the long-term and to avoid the

low efficient invests in forest allocation annually, think about the development

of investment projects specifically to build the capacity for people to ensure

they have enough capacity to develop and implement REDD+ as well as to

develop forestry sector, and they are fully capable of meeting legal and policy

requirements for forest owners and their livelihoods could depend on forest

resources.

- FPIC and gender issue in benefit distribution system

Ms. Thuy - CIFOR questioned concerning how FPIC and gender are

mainstreaming in benefit distribution system and is this necessarily to divide

equally as in many places people are not applaud to divide equally.

Mme. Thoa said that FPIC and gender mainstreaming should definitely be

considered in the BDS design process. The equal division was only suitable for

communities, groups and families who wish and have routine to do the same,

the same effect. However, making the benefit distribution plan must be open to

consult with local communities, beneficiaries, and it is they who make

decisions based on the geographical context and the wishes of the stakeholders

and beneficiaries.

- Why must establish a new fund for REDD+ and why should have a

special mechanism for ODA

NRF is a branch of VNFF, and cannot be merged since REDD+ has its own

management rules, methods of disbursement, supervision and participation also

vary.

And why we need to have a special mechanism for ODA, Mme Thoa

explained: Because REDD+ has specific requirements on financial

management and results-based payments, including the intermediate results;

Intermediate results achieved through ODA, this result needs to be assessed,

monitored and guaranteed to lead to the final result of reduced emissions and

carbon sequestration; ODA can be a good source for technical support, may

advance for people to be able to perform the activities. However, this needs the

smooth coordination and concentration of resources, otherwise the progress,

level and object of disbursements will not be ensured and the use of resources

for REDD+ objectives is not effective.

Mr. Nguyen Trung Thong – SNV had questions concerning the direct,

intermediate and indirectly results. How two later results will be determined,

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converted into carbon or payments from REDD+. The scale of benefit

distribution is that of NRAP or PRAP implementation? Implement plans to

achieve results, or to pay for results.

Mme. Thoa said that in the current context, if FREL/FRL is identified and

maintained at provincial level, it will be very expensive. Moreover, this was

not an international mandatory requirement. We can do at the regional level but

not necessarily at the provincial or local level. Therefore the evaluation of

PRAP implementation should have the intermediate results. Intermediate

results will be monitored and based to distribute the benefits, rather than the

specific carbon results. Indicators of intermediate results will be incorporated

into PRAP monitoring framework, may be indicators of afforested area on

forest land where has been converted purpose, growth rate, survival rates...

- Discussion on STWG-BDS stabilisation, establish core group and plan

for next meeting

Agree to establish the core group to advise, consult for STWG-BDS’s

activities. Require having a secretary to be in charge of communication,

information collection, and must be a staff of VRO.

Agree DOSTIC as a representative of VNFOREST continues to be the

chairman and Madame Vu Thi Hien – Director of CERDA to be the co-

chairman of the STWG-BDS.

Currently, the UN-REDD program and FCPF project are having activities

to support the Government to develop benefit distribution system; therefore

they should contribute and support the technical inputs for the discussion of

STWG-BDS.

What policy is of the Government’s concern should be ordered so that the

STWG-BDS could implement as annual working plan or in longer time since

the organizations need time to prepare.

All the participants shared the opinion that the content and objective of

every STWG-BDS meeting must be very clear and specific in order to ensure

full and effective participation of stakeholders. It has a great influence on how

the recommendations and results of the meeting will be transmitted to the

leaders, and how to get the response from the Government. And the

development of working plan for short, medium and long term is also very

important.

Mr. Nguyen Vinh Quang – Forest Trends expressed an opinion about the

limited participation of representatives from Government bodies, and

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questioned how to call for their participation. Actually, there is a dedicated

STWG for private sector, however hardly attract their participation, and this

STWG only met 2 times so far. Only 3 out of 6 STWGs has TOR, others don’t

including STWG-BDS.

- Piloting positive incentive delivery in 20 communes of UN-REDD

Program

Data processing method based on SiRAP should be expanded in the

absence of SiRAP. The project could not have SiRAP but there are certain

lessons about benefit distributions, add these lessons in the research.

Mr. Le Minh Tue - VFD questioned how to distribute money from the

central to local level. Mme.Thoa replied that at national level, benefit

distribution coefficient R is applied to ensure openness, transparency and

fairness with appropriate disbursement channels.

For the province, based on PRAP as the highest basis to determine priority

areas, possibly grassroots levels are village, commune, or protection forest

management, forest companies. Must have pilot areas selection criteria.

Benefits will be distributed to the community level, then the community to

share themselves.

20 Si-RAP will be attached in the annex of Working Plan for this positive

incentive delivery piloting at site level.

Mme.Thoa emphasized the pilot is done only within the UN-REDD

Program. Some institutions will be commissioning such as mediation

committee, GRM, participation of stakeholders in the identification of priority

activities, benefit distribution method to see whether it is suitable or not.

Thereby the efficacy, the rate for preventive risk management will be

evaluated. As a consequence, consider how national level benefit distribution

system should be designed accordingly to avoid cumbersome, complex and

reduce intermediate operation costs.

III. List of participants

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