Just after end the war in 1954 Vietnam established a series of logging sites contributing to economic rehabilitation and development of the country. These logging focused units had been superseded by State Forest Enterprises (Lâm trường) which bear the mark of the historic development of the forestry sector from the late 1950s up to the 1980s. Most of forest area in Vietnam was managed by a system for State Forest Enterprises (SFE) either directly under the Ministry of Forestry or provincial and district authorities. With the process of economic reforms (doi moi) SFEs have been subjected to various changes in terms of name, number, management areas, management objectives and mechanisms. From 413 SFEs (before the reform era, 1992), extending over milestones of reform, re-arrangement, conversion policies under a series of Decrees, Resolutions, and Decisions, to date, there are now 151 State Forestry Companies (SFCs) working. State Forestry Companies (still recently named State Owned Forestry One-Member Limited Liability Companies) are forestry units which manage most of the production forest areas in Vietnam. However, the reform of the existing management mechanisms of SFCs is done in terms of the form but not yet in terms of content. Operational models for SFCs are not really completed yet so that management could follow the Law of Enterprise. Case studies in two SFCs, which manage natural forest for timber production, include Ha Nung (Gia Lai province) and Dak To (Kom Tum province) in the Central Highlands of Vietnam. These studies clearly show a number of limitations and problems of enterprise and forestry governance related to new mechanisms – lack of capital, equipment, competence in planning, financial management and forest protection, administrative procedures in forestry, control of demand pressure on wood and land, quotas of logging distribution, standing charges, relationship and benefit sharing between SFEs and local people. However, mechanisms are needed to concretize the reform policies on both the national and local levels in order to overcome limitations and problems. This would serve to promote, financially stabilize and improve forest management leading towards sustainability and lasting improvement of the livelihood of local communities
