Land Law clean up

Parts of the Land Law are set to be bulldozed

According to the Ministry of Natural Resource and Environment (MNRE), which helped draft the document, the decree seeks to change parts of the law related to land recovery, allocation and leasing, and compensation for resettlement, particularly for farmers whose land is transformed for industrial use.
The Ministry of Finance (MoF) worked with the MNRE to draft the decree, coming just half a year after five other decrees were issued to amend the Land Law, which took effect last July.
Minister of Natural Resource and Environment Mai Ai Truc told Vietnam Investment Review that it would be up to the government to issue a new decree that encompasses all of the amendments and supplements proposed by the six past decrees.
“Several of the regulations do not suit practical life, while some issues are not governed by laws,” he said.
Truc said rules on land allocation and leasing should be added to the new decree, as investors are complaining of unnecessary hurdles in acquiring land for production.
The Land Law stipulates that land for business and production must be auctioned, although in cases where only one investor applies, an auction is not held and the land cannot be leased. Therefore, Truc said, sole investors should be allowed to lease or allocate the land at prices set by the market.
He said land for building houses for low income people should also not be auctioned, because auctions drive up prices so high that low income people cannot afford to buy houses.
The decree also addresses the part of the Land Law that says land prices are set annually by municipal and provincial people’s committees based on market value in normal conditions.
In many cases, Truc said, these set prices are lower than market levels, with many displaced residents complaining that compensation is lower than it should be.
“It is common that land prices set by localities now are lower than market value. So, prices should be redefined in order to protect the rights and interest of those whose land is recovered by the state,” Truc said.
According to MNRE surveys, many displaced farmers have had difficulty finding employment after being relocated.
“There is nothing else for them to do to earn a living,” Truc said.
One solution is to resettle these farmers near industrial zones so that they can earn income by providing services to businesses, he said.
“We, the natural resource and finance ministries, have agreed on solutions on land prices and compensation support in the spirit that those farmers whose land is recovered would not become poor. The state is accountable for supporting these people,” he said.
According to the MNRE, the implementation of the Land Law, which experts say is one of Vietnam’s most comprehensive legal documents, has had a positive effect on the real estate market.
Truc said the law had contributed to curbing land prices, mitigating problems with property transactions and strengthening land management.