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Private sector urged to get involved with infrastructure development

Source: Vientiane Times, June 5, 2017
Infrastructure development under the Build-Operate-Transfer (BOT) model is taking shape in Laos as the government requires huge capital investment to improve road networks and other facilities.
Lao economists have supported the initiative, saying that with the government’s limited funding, it’s critical to encourage the involvement of the private sector to develop infrastructure.
Independent and experienced economist Dr ManaSouthichak told Vientiane Times last week that “private investment in developing roads or expressways is a good way to reduce the government’s budget burden, but the government needs to ensure the integrity of the project as well.”
Dr Mana referred to a toll on Road No. 16 in Champassak province where the government allowed Duangdy Bridge-Road Construction Company to upgrade the road and collect fees from motorists for a period of 45 years.
The toll road generated large numbers of complaints from members of the public since the developer started to collect fees from motorists in August last year.
“This project is not fair for the public,” Dr Mana said, saying that private companies needed to be allowed to build new roads (not upgrade existing roads) and collect fees from motorists. Those who do not want to pay the fees can then use the existing roads.
A senior economist at the National Economic Research Institute, Dr Leeber Leebouapao agreed with this opinion, saying the government needed to create options for local people, not forcing them to pay the tolls.
Currently, Laos plans to build an expressway from Vientiane to northern and southern parts of the country to facilitate transport as well as boost economic growth.
A planned Vientiane-Vangvieng expressway over the distance of 113.7 km is under a feasibility study. The project, which is estimated to cost US$1.4 billion, is set to be developed in parallel with the existing Road 13 North and the Laos-China railway project.
Another planned expressway will be built from Vientiane’s city centre to Xaythany district over the distance of 14 km, passing through 13 villages in Xaysettha district and six villages in Xaythany district.
The government recently approved construction of the project which expected to cost between US$150 million and US$200 million.
Nevertheless, Dr Leeber is optimistic that the private-public partnerships will help the government attract capital from private investment to sustain economic growth.
In 2016, the overall investment across Laos increased above the set plan by 24.2 percent year-on-year, driven by private sector and bank credit, according to the government’s latest report.
The government planned to mobilise 34.5 trillion kip last year but more than 42.85 trillion kip has been pumped into the investment sector, representing 33.1 percent of Gross Domestic Product.
However, domestic and foreign private entrepreneurs represent more than half of the entire investment sector.

Laos prime minister concerned over banana plantations

Source: Reuters, May15,2017
http://www.reuters.com/article/us-china-silkroad-laos-pm-idUSKCN18B0N8
The prime minister of Laos has voiced concern over widespread chemical usage on banana plantations after a Reuters report on Chinese-run farms in the Southeast Asian country.

Laos' Prime Minister Thongloun Sisoulith delivers a speech  in Hanoi, Vietnam 26 October 2016.  REUTERS/Luong Thai Linh/Pool

Laos’ Prime Minister Thongloun Sisoulith delivers a speech in Hanoi, Vietnam 26 October 2016. REUTERS/Luong Thai Linh/Pool

Local land handovers unauthorised: Minister

Source: Vientiane Times, May 30, 2017
http://www.vientianetimes.org.la/sub-new/Current/Curr_Local.html
Community land which has been handed over by village authorities to investors should be all taken back as collective property because the actions of local authorities are against the law.
Minister of Natural Resources and Environment Mr Sommad Pholsena tabled this direction in debate at the recent session of the National Assembly (NA).
The assembly quizzed the government about the spread of village authorities giving community land to investors, individuals, companies and organisations for rent or granted in exchange for community roads or other infrastructure facilities.
“I would like to propose the National Assembly as well as Local People’s Assemblies annul the land authorisations made by village authorities,” Mr Sommad said. He referred to the Land Law, which he said gave clear stipulation on the allocation of agricultural land use rights.“The district or municipal administration is in charge of considering and approving the allocation of land use rights for agricultural land under its management to individuals and organisations to use by issuing land certificates to them,” the minister stated from article No.18 of the law.
“These land certificates are valid for three years. During this period, if land has been used in conformity with objectives and regulations, and if there is no objection or claim, or those claims have already been settled, then the individuals and organisations have the right to apply to the land management authorities at the provincial or city level for the issuance of a land title for long-term use rights,” he continued reading the stipulation in the law.
Mr Sommad also highlighted the spread of offences made against stipulations in the law regarding allocation of forest land use rights, use of land around bodies of water, and determining the scope of construction land use rights.
He promised to inspect the offences related to the responsibilities of his ministry such as the issuance of land titles. In an example, he spoke about village chiefs selling community land to private companies or individuals, who later received land titles from the ministry.
Such issuance of land titles would include cases when private companies or individuals wanted to use the land to secure investment finance, according to the minister. He asked NA members and members of provincial people’s councils to keep a close eye on these activities and inform the ministry about any related offences.

Xayaboury Suspends Banana Farms

Source: Lao News Agency (KPL), 26/5/2017

http://kpl.gov.la/En/Detail.aspx?id=24794

Phouthong Sivongsa

(KPL) ‘Xayaboury authorities have permanently suspended plantations of aroma bananas totally sized more than 360 ha, and plan to grow alternative cash crops to replace banana farming.’

The Planning and Cooperation Division under the Xayaboury Provincial Agriculture and Forestry Department told local media on May 24 that the Xayaboury Governor issued an order suspending aroma banana farming and banning further expansion of banana farms last year.

Laos-China railway construction ‘progressing well’

Source: Vientiane Times, May 17, 2017

http://www.vientianetimes.org.la/FreeContent/FreeConten_Laos111.html

Construction of the Laos-China railway is gathering steam with many tunnels being bored despite rainfall, officials said yesterday.
All three tunnels in LuangNamtha province are being bored with the Boten Tunnel having progressed the furthest at more than 50 metres, project coordinator for LuangNamtha province MrChanthachoneKeolakhone told Vientiane Times yesterday.

Plans gather steam for railway linking Vientiane to Vietnamese seaport

Source: Vientiane Times, May 18, 2017

http://www.vientianetimes.org.la/FreeContent/FreeConten_Plans.html

Work is gearing up for the planned building of a railway to connect Vientiane to the Vung Ang seaport in Vietnam after the two countries agreed to move forward with the project.

Final wrap up and showcase meeting of QDF project

By Admin

On 28 April, 2017, Village Focus International (VFI) organized the QDF (Quick Disbursement Fund) project Wrap-up and showcase workshop. The meeting was organized in outdoor zone of Village Focus International office, and presented about the consultation communication tools for improving Land Acquisition Processes in line with FPIC (Free Prior and Informed Consent) standards that was a joint effort between different civil society organisations and an agro-forestry company, and was led by VFI, Stora Enso Laos (SEL), RECOFTC Laos, LIFE Consortium. The project was supported by Mekong Region Land Governance (MRLG) project. In this meeting also opened space for attendee to discuss and ask questions to the team from VFI, RECOFTC Laos and representative from agro-forestry project, Stora Enso Laos.

15 mining projects see concessions revoked

Source: Vientiane Times,5May,2017

Fifteen mining operations have had their concessions revoked after investors failed to implement their projects as agreed after they were granted concessions by the government.
Speaking at the ongoing ordinary session of the National Assembly last week, Minister of Energy and Mines DrKhammanyInthirath said “Some companies just held [concessions without implementing them] purely in order to resell them.”
The government suspended consideration of new mining projects a few years ago, saying it wanted to take steps to better regulate the mining industry after learning that a number of projects had failed to observe the agreements they had signed with the government.
DrKhammany said his officials began carrying out inspections in 2016 and found that almost 20 mining operations were not in compliance with the agreements and stood to lose their concessions.
The findings were submitted to the Ministry of Planning and Investment, which subsequently annulled the concessions previously awarded to 15 projects.
The fate of other projects that comply poorly with agreements is currently under consideration, DrKhammany added.
As of 2016, some 657 companies had been granted permission to carry out surveys and excavation as part of 942 projects. Of these, 226 companies had been authorised by the central government to undertake 392 projects.
Since 2003, when investment in mining began, until 2016, the sale value of mineral commodities exceeded US$13 billion with almost US$2 billion in taxes and royalties paid to the government, DrKhammany said.
He added that the mining sector had boomed and generated huge revenues from 2011-2016 driven by the spiralling of commodity prices on the world market, especially gold and copper, in 2012. The sale value of mining products from 2011-2016 hit US$8.8 billion with US$1.2 billion in taxes paid. Prior to that, from 2003-2010, the sale value of mining products was just US$4.3 billion with US$688 million paid in taxes.
DrKhammany said the sale value of minerals took a dive in 2016 when commodity prices on the world market slumped, including gold and copper.
In the first nine months of 2016, the sale value was just US$964 million, generating only US$41 million in taxes.
“The sale value [of mineral products] for the whole of 2016 was less than US$100 million. The sale value depends on the market price of minerals,” DrKhammany said.

Vietnamese investment in Khammuan booming

Source: Vientiane Times
Date: May 3, 2017
By Time Reporter
http://vientianetimes.la/FreeContent/FreeConten_Vietnamese.html
Over 20 new investment projects worth millions of US dollars have been proposed to Khammuan provincial authorities by Vietnamese entrepreneurs, pending official approval.
A senior official from the Khammuan provincial Department of Planning and Investment, MrXaysanaKhotphouthone, told Vientiane Times yesterday that Vietnamese investment is booming in Khammuan, notably in the mining sector.
“The 20 new proposals submitted by Vietnamese investors are mega projects worth millions of dollars and we are considering various aspects of their proposals, particularly funding,” MrXaysana said.
“There are two main reasons why Vietnamese are coming to invest here. One is that Khammuan has abundant mineral resources including potassium, lead and gold. The second is that Laos and Vietnam are neighbours, which makes the import-export process easier.” 
Vietnam is currently ranked the second largest foreign investor in Khammuan after China. So far, 19 investment projects worth over US$500 million have been carried out by the Vietnamese. 
Most of their investments are in the mining sector, particularly the excavation of potassium, lead and other minerals.
However, timber for export is one sector that has become unpopular since the province enforced the Prime Minister’s Order No. 15 issued on May 13. The order bans the export of all types of unfinished wood products including timber and logs, and is considered a significant move in the battle to clamp down on the illicit timber trade.
While the mining sector is increasingly popular among foreign investors in the province, agriculture has not grown as anticipated with only a few investors building factories to process crops for export.
Critics say it’s vital to create more favourable conditions and incentives to increase investment and exports in the agriculture sector as this would drive economic growth in the long run since minerals will one day be exhausted. 
In the recent past, investment from Vietnam decreased slightly as many entrepreneurs encountered financial difficulties, affecting the sector.
During the first visit made by Vietnam’s Prime Minister Nguyen XuanPhuc last week in response to an invitation from his Lao counterpart MrThonglounSisoulith, the two premiers witnessed the signing of nine agreements.
One of those agreements was the signing of the VungAng seaport development joint venture in Vietnam’s central Ha Tinh province.
Deputy Head of the Khammuan provincial Administrative Office, MrVannavongVongphachanh, said minerals from Khammuan were mainly exported through the VungAng port to Vietnam and China.
This is the shortest route to a seaport from Laos. Since the opening of the third Friendship Bridge in November 2011, linking Thakhaek district in Khammuan province to Thailand’s NakhonPhanom province across the Mekong, more goods have been transported along this route.

Gov’t to get tough with dishonest land concession holders

Source: Vientiane Times, April 28, 2017
http://www.vientianetimes.org.la/FreeContent/FreeConten_Govtto.html
The government will use tougher measures to regulate concession projects by withdrawing land if no progress is made on the proposed project, while also pushing for authorities at various levels to participate in the process.
ThatlungSEZ
Prime Minister Thongloun Sisoulith on behalf of the government made the promise yesterday in response to National Assembly (NA) members’ queries concerning issues surrounding land concessions, which were raised at the ongoing debate session.
The government acknowledged that many concession projects have been awarded, but investors often did not fulfill their obligations with regard to the contract and relevant laws. Many acquired land for the purpose of handing it over to other investors, thereby making a profit.
“If an investor who has been given a concession is found not to proceed with the stated project in the time frame agreed, I ask local authorities to actively investigate and report their findings to the government,” Prime Minister Thongloun said.
He urged the relevant ministries to urgently take action when they received a report indicating possible misconduct.
The issue of investors refusing to obey the requests of local authorities was also raised by Assembly members. In response, Mr Thongloun said concession deals and other development project agreements made at the central or local level must be signed off by local authorities.
Also up for discussion was encroachment onto state land by investors in addition to the land area stated in the concession contract.
“In this case, local authorities have the right to use measures directly to prevent encroachment at the first stage before it continues any further. The authorities should not wait for orders from the government,” Mr Thongloun said. “If local authorities are unable to influence the situation, please inform the related sector or ministry so they can deal with the matter,” he added.
Taking possession of land without putting it to good use not only delays the country’s development but denies other developers the opportunity to use land productively.
“If land is handed over and no development takes place, it will be withdrawn. I want the business sector to understand this,” the prime minister said.
“Effective investment and the implementation of development projects that follow the law will help to strengthen the economy,” he added, noting that the government would not allow a monopoly in investment, but supported competition.
Mr Thongloun told Assembly members that the government had carried out a study on the positives and negatives of the Law on Land, saying a lot of shortcomings were uncovered.
The government is improving its policies before submitting them to the Politburo, which is expected to propose a resolution by the Party Central Committee in order to tackle the issues surrounding land use, according to Mr Thongloun.

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