Development of State Forest Enterprises in Vietnam

State Forest Enterprises (SFEs) had initially been established in Northern Vietnam with a centrally planned economy as an essential pillar. After reunification of the country in 1975, many new SFEs were established in Southern Vietnam and operated following the organizational management model as practiced in the North. Since 1993 most of SFEs were decentralized to provincial level. From 2005 to 2009 the SFEs were reviewed and rearranged to specific functions and tasks. Among altogether 413 SFEs, to date, there are now 151 State Forestry Companies (SFCs) operating. SFCs (full-named State Owned Forestry Single Member Limited Liability Companies)manage both natural and planted forests for timber production in Vietnam. The existing management mechanisms of SFCs were reformed in terms of the form but not yet in terms of content. The operational model for SFCs is not completed yet so that management cannot consequently follow the valid Law of Enterprise. Case studies in two SFCs, which manage natural forests in the Central Highlands of Vietnam, were conducted. The research show weaknesses and threats the SFCs such as poor forest governance, lack of capital and equipment, land-use conflicts with local communities, weak monitoring and evaluation (M&E) of performance, policy on standing tree tax, and existence of logging quota distribution. Restructure of SFEs is a critical need to effectively use the land and forest. Based on current status of SFCs it is to set out different forest management models. Outlook of different types of SFCs is given to promote economic viability, sustainable forest management, and improvement of the livelihood of local people