Van Kien Chuong Trinh - Eng

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Royal Danish Embassy Danida

Vietnam DenmarkDevelopment Cooperation in the Environment

(DCE)

2005 - 2010

FinalPROGRAMME DOCUMENT

104.VIETNAM.806 December 2004


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COVER PAGE

Country : Vietnam Sector: EnvironmentTitle of Document : Development Cooperation in the EnvironmentNational Agency : Ministry of Planning and InvestmentDuration : 5 yearsStarting Date : July 2005Overall Support : : DKK 250 million

The development objective of Development Cooperation in the Environment (DCE) is: "Implementation of theNational Strategy for Environmental Protection secures sustainable livelihoods and improved living conditions for poor people".

Description:

DCE has been designed in accordance with recently revised Danish Aid Management Guidelines, adopting asector programme approach. It retains the aim of promoting sustainable development and alleviatingenvironmental degradation, but poverty reduction has now become an overarching objective. Four out of fiveDCE components have been formulated through the extension of existing Danish Environmental Assistanceprojects. Components include:

Pollution Control in Poor Densely Populated Areas Environmentally Sustainable Development in Poor Urban Areas Cleaner Production in Industry Sustainable Livelihoods in and around Marine Protected Areas Capacity Development Support for Environmental Planning and Management

DCE has been formulated in-line with Government of Vietnam and Danida policies and priorities. It isintegrated with the national sector framework, specifically the National Strategy for Environmental Protectionand the national Comprehensive Poverty Reduction and Growth Strategy and draws upon lessons learned fromprevious and on-going projects and sector programmes in Vietnam. It has been designed to assist in facilitatingthe achievement of Government of Vietnam targets for economic growth and poverty alleviation in an

environmentally sustainable manner.

The density of poverty in Vietnam is highest around urban centres, river basins and the coastal areas.Demographic forecasts demonstrate increasing levels of urbanisation, with the proportion of the populationliving in urban areas increasing to around 45% by 2020 (and continuing to grow into the future). The urban poorare often obliged to live in the most polluted areas, often under worse conditions than the rural poor, in respectto access to basic services, clean water etc, in addition to having lost much of their social capital.

DCE will pilot activities that assist in building capacity for regional environmental management, whilstimproving the livelihoods and living conditions for the poor. Demonstrations will include working models onthe inclusion of gender development, HIV/AIDS awareness, and good governance in local developmentapproaches.

DCE is therefore concerned with providing regional examples, owned and implemented by the full range ofstakeholders, that generate improvements to living conditions in poor highly populated areas, and that arereplicated to further sites following DCE completion.

Criteria for the selection of provinces included poverty index, previous Danida experience, population densities,and level of environmental degradation. The programme will focus on a few provinces in north (Thai Nguyen,Phu Tho and Ha Nam), central (Nghe An and Quang Nam), and south (Ben Tre starting in year three) Vietnam.


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VIETNAM-DENMARK: DCE FINALPROGRAMME DOCUMENT 2005-2010

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TABLE OF CONTENTS

(Cover Page)List of AbbreviationsMap of VietnamExecutive Summary

1. INTRODUCTION 1

1.1. Context of this Document 1

1.2. Background 11.2.1. Assessment of the Ongoing Activities 21.2.2. Sector Programming on Environment 2

2. NATIONAL SECTOR CONTEXT 4

2.1. Economic and Social Context 4

2.2. Environmental Context 4

2.3. Administrative and Legislative Context 52.3.1. Political Structure 52.3.2. Partners with Responsibilities in the Environment Sector 52.3.3. Legislative Framework 7

2.4. Policy Context 7

2.5. Sector Budgets and Environmental Financing 7

2.6. Other Contributors of Financial and Technical Support 8

2.7. Status of Cross-Cutting Issues and Priority Themes 82.7.1. Relevant Issues and Themes 82.7.2. Gender Equality 92.7.3. Good Governance 92.7.4. HIV/Aids 92.7.5. Other Priority Themes 10

3. AGREED ASSISTANCE 11

3.1. Overall Strategy 113.1.1. Moving to a Sector-Wide Approach 113.1.2. Strategic Focus 11

3.2. Poverty Alleviation and Cross-Cutting Issues 133.2.1. Mainstreaming Poverty Alleviation 133.2.2. Measures to Address Cross-Cutting Issues 133.2.3. Measures to Address Priority Themes 14

3.3. Ownership and Use of Demand-Responsive Approaches 143.3.1. Promotion of Ownership 143.3.2. Demand-Responsive Approaches 15


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3.4. Geographic Focus 15

3.5. Programme Content 163.5.1. The Programme Development Objective 163.5.2. Selection and Development of Components 163.5.3. Immediate Objectives 173.5.4. Opportunities for Alignment 17

3.6. Technical Assistance 183.6.1. General Approach to Technical Assistance 183.6.2. Contracting International TA 193.6.3. Demand Responsive Contracting of Short-term TA 20

4. COMPONENT CONTENT 21

4.1. Programme Components 214.1.1. Introduction 214.1.2. Component Strategies and Design Principles 214.1.3. Selection of Demonstration Projects 22

4.2.

Pollution Control in Poor Densely Populated Areas 234.2.1. Basic Framework 23

4.2.2. Purpose and Strategy 234.2.3. Management Arrangements 244.2.4. Implementation Plan 24

4.3. Environmentally Sustainable Development in Poor Urban Areas 244.3.1. Basic Framework 244.3.2. Purpose and Strategy 254.3.3. Management Arrangements 254.3.4. Implementation Plan 26

4.4. Cleaner Production in Industry 26

4.4.1. Basic Framework 264.4.2. Purpose and Strategy 264.4.3. Management Arrangements 274.4.4. Implementation Plan 27

4.5. Sustainable Livelihoods in and around Marine Protected Areas 284.5.1. Basic Framework 284.5.2. Purpose and Strategy 284.5.3. Management Arrangements 294.5.4. Implementation Plan 29

4.6. Capacity Development Support for Environmental Planning and Management 294.6.1. Basic Framework 29

4.6.2. Purpose and Strategy 304.6.3. Management Arrangements 304.6.4. Implementation Plan 31

5. BUDGET 32

5.1. Component Budgets 325.1.1. Summary Budgets 325.1.2. Activity Based Budgets 32


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5.2. Programme Supervision and Coordination Budgets 33

5.3. Unallocated Funds 33

5.4. Summary Programme Budget 34

6. PROGRAMME MANAGEMENT AND ORGANISATION 35

6.1. Overall Approach 35

6.2. Organisational Structure 35

6.3. Management at Programme Level 376.3.1. Programme Coordination Committee 376.3.2. Programme Support Office at Central Level 376.3.3. Programme Implementation Manual 386.3.4. Provincial Programme Support Office 38

6.4. Role and Responsibilities of the Royal Danish Embassy 38

6.5. Management of Components 396.5.1. Central Level 396.5.2. Provincial Level 39

6.6. Management of Demonstration Projects and Use of NGOs 39

7. FINANCIAL MANAGEMENT AND PROCUREMENT 41

7.1. Overview 41

7.2. Budget Management 42

7.3. Fund management 42

7.3.1. General 42

7.3.2. MOFA/RDE 437.3.3. The PSO/PPSOs 437.3.4. The Line Ministries 447.3.5. Management of Funds for Demonstration projects 44

7.4. Fund Transfers from RDE to MOF/EFD 44

7.5. Financial reporting 45

7.6. Procedures for Procurement 45

7.7. Auditing Procedures 467.7.1. Internal Audit 46

7.7.2. External Audit 46

8. MONITORING AND REPORTING 47

8.1. Approach to Monitoring 47


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8.2. Joint Programme Reviews 47

8.3. Programme Level Monitoring 48

8.4. Component Level Monitoring 48

8.5. Indicators and Verification 48

8.6. Reporting 49

9. ASSESSMENT OF KEY ASSUMPTIONS AND RISKS 50

9.1. Context 50

9.2. Partners Involvement and Institutional Issues 50

9.3. Sustainability 50

9.4. Misuse of Funds and Corruption 51

9.5. Development and Immediate Objectives 51

10. IMPLEMENTATION PLAN 52

10.1. Timing of Key Events 52

10.2. Inception and Phasing in of Ongoing Projects 52

10.3. Programme Implementation Chart 52

Bibliography

Annex A Job Description for Long-term International Technical Assistance


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LIST OF ABBREVIATIONS

ADB Asian Development BankAR Annual ReviewCCC Component Coordination CommitteeCDS Capacity Development Support for Environmental Planning and ManagementCITES Convention on International Trade in Endangered SpeciesCM Component Manager

CMO Component Management OfficeCPI Cleaner Production in IndustryCPRGS Comprehensive Poverty Reduction and Growth StrategyCSC Component Steering CommitteeCSU Component Support UnitCTA Chief Technical AdvisorDAF Development Assistance FundDANIDA Danish International Development AssistanceDCE Development Cooperation in the EnvironmentDEA Danish Environmental AssistanceDKK Danish KronerDONRE Department of Natural Resources and EnvironmentDOST Department of Science and Technology (in a provincial administration)

DPC District Peoples CommitteeDPFA Demonstration Projects Fund AdministratorDSA Daily Subsistence AllowanceEMP Environmental Management PlansEPSF Environment, Peace and Stability Facility (of Danida)EU European UnionEIA Environmental Impact AssessmentFAO Food and Agriculture Organization of the United NationsGDP Gross Domestic ProductGOV Government of VietnamGSO General Statistical OfficeILTA International Long-term AdvisorISGE International Support Group on Environment

IUCN The World Conservation UnionLMPA Sustainable Livelihoods in and around Marine Protected AreasMARD Ministry of Agriculture and Rural DevelopmentMDG Millennium Development GoalsMOC Ministry of ConstructionMOET Ministry of Education and TrainingMOF Ministry of FinanceMOFA Ministry of Foreign AffairsMOFI Ministry of FisheriesMOI Ministry of IndustryMONRE Ministry of Natural Resources and EnvironmentMOST Ministry of Science and TechnologyMPAs Marine Protected Areas

MPI Ministry of Planning and InvestmentNA National AssemblyNEA National Environment AgencyNSEP National Strategy for Environmental ProtectionNSC National Steering CommitteeODP Ozone-depleting substancesODA Overseas Development AssistancePCO Provincial Component OfficePCC Programme Coordination CommitteePCDA Pollution Control in Poor Densely Populated Areas


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PFMA Programme Financial Management AdviserPIM Programme Implementation ManualPPC Provincial Peoples CommitteePPSO Provincial Programme Support OfficePSO Programme Support OfficePSU Programme Support UnitRDE Royal Danish EmbassySDU Environmentally Sustainable Development in Poor Urban Areas

SFMO Shadow Fund Management OfficeSME Small and Medium Scale EnterpriseSOE State Owned EnterpriseSOER State of the Environment ReportSSCI Small Scale Cottage Industry

TA Technical Assistance

UK United KingdomUNDP United Nations Development ProgrammeUSD United States DollarVAT Value Added TaxVEPA Vietnam Environment Protection Agency (at MONRE)VEPF Vietnam Environmental Protection FundVND Vietnamese Dong

WWF World Wide Fund for Nature


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Provinces of Vietnam with Danida sector support

ENVIRONMENT PROGRAMME PROVINCES

North: Thai Nguyen, Phu Tho, Ha Nam

Central: Nghe An, Quang Nam

South: Ben Tre (from year 3)


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EXECUTIVE SUMMARY

Introduction

This programme document outlines the agreed cooperation between the Governments of Denmark andVietnam in the Environment Sector for the five-year period from mid 2005 to mid 2010. Thecooperation builds on the ongoing Danish support to Vietnams Environment Sector that has committedmore than DKK 330 million since 1997. The new programme, to be called Development Cooperation in

the Environment (DCE), will be supported with DKK 250 million of Danish funds.

DCE retains the aim of promoting sustainable development and alleviating environmental degradation,but poverty reduction is an overarching objective. The poverty focus has been established by reference toVietnams Comprehensive Poverty Reduction and Growth Strategy and will be monitored againstVietnams Millennium Development Goals.

The preparation period for this programme was compressed to allow the programme to be appraised andapproved by the end of 2004. Most of the programme development was undertaken between January andMay 2004 by RDE, working closely with national partners in a Programme Task Force and ComponentWorking Groups. The findings were subject to wider consultation through workshops, bilateral meetings,and desk review at each level and at each stage of design.

Background

During the past decade, Vietnam has undertaken a programme of comprehensive economic reform.These reforms have facilitated remarkable success in achieving high levels of sustained economic growth,eliminating widespread hunger and attracting large inflows of overseas direct investment. The rate andsustainability of the growth is threatened by declining environmental quality, particularly of surface waters,and unsustainable use of natural resources. Moreover, pollution is blighting the lives of millions ofresidents and workers in and around densely populated areas. The challenge facing the Government ofVietnam (GOV) is therefore to bring pollution under control and restore environmental quality withoutundermining economic growth or its development and poverty reduction strategy.

GOV is in the process of revising environmental policy. A National Strategy for EnvironmentalProtection has been issued that sets targets for environment improvements, linked to Vietnams

Millennium Development Goals and the Comprehensive Poverty Reduction and Growth Strategy. NSEPidentifies four overarching objectives:

To reduce pollution gradually to comply with international norms by 2020 To improve environmental services To restore and preserve habitat (especially forests) To join international efforts to protect the environmentIts strategy for achieving these objectives centres around mobilising society to become more involved inenvironmental protection, increasing its capacity to do so, and providing the legal and technicalinstruments that are needed. DCE is designed to support this strategy.

Strategy and Content

The programme development objective is to ensure that:

"Implementation of the National Strategy for Environmental Protection secures sustainable livelihoodsand improved living conditions for poor people".

DCE has therefore been designed to be an integral part of Vietnams national sector framework, takingcare to ensure that due attention is given to alleviating poverty and securing the livelihoods of poor menand women. The intention is to facilitate a process to which multiple donors can contribute but which isultimately owned and directed by GOV. The development objectives at both programme and component


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levels represent, therefore, a vision of the future over a 10 -20 year horizon, outcomes of the GOVdirected efforts of many partners.

Vietnamese partners and Danida reviewers have emphasised that past and on-going assistance hasaddressed priority environmental needs, although without necessarily integrating poverty alleviation, andhas generally been very valuable. The approach to programme development has been, therefore, to buildon the existing portfolio, where it matches DCE objectives and priorities, but to reorient and expand thescope to integrate poverty alleviation and to address the cross-cutting issues and priority themes that are

central to Danish development assistance policy.

DCE strategy is to assist a gradual implementation of the National Strategy for Environmental Protectionby coordinating with other donors and GOV to ensure that the environmental management framework iscomplete and that capacity is developed in the full range of stakeholders. The components each directresources to different aspects of the framework and mobilise a wide array of stakeholders. The objectivesand parts of the framework that they target are set out in the following table.

Component Component Development Objective Main Aspect TargetedPollution Control in PoorDensely Populated Areas

The quality of the environment within poor denselypopulated areas is subject to effective local control andmaintained at acceptable levels.

Policy development and regulatoryframework at central level

Policy implementation andorganisation of institutions at

provincial level

Environmentally SustainableDevelopment in Poor Urban

Areas

Environmentally sound and participatory techniques areused to develop, implement and achieve compliance

with plans for urban land use and environmental serviceprovision.

Urban planning

Environmental service provision

Cleaner Production inIndustry

The livelihoods of people working in and living aroundindustrial enterprises benefit from controlled pollutionand improved resource use of industrial enterprises.

Large-scale Industrial Production

Small-scale and householdindustrial production

Sustainable Livelihoods inand around Marine Protected

Areas

Important habitats and associated biodiversity inVietnams marine and coastal waters are being restoredand protected without compromising the livelihoods ofsurrounding poor and vulnerable communities.

Participatory Natural ResourceManagement

Capacity DevelopmentSupport for EnvironmentalPlanning and Management

Stakeholders have the capacity to play an effective rolein the implementation of the National Strategy forEnvironmental Protection .

Capacity Development in theEnvironment

Opportunities for Alignment

MONRE has initiated an International Support Group on Environment to unify national andinternational investment in the environment under one policy framework and to channel resources to thehighest priorities. Average international contribution to the environment (excluding investment) isaround USD 40 million per year. Much of this addresses the priority needs in the forestry and terrestrialbiodiversity areas. Several interventions are underway where Danish funds have been used together withmultilateral, bilateral and NGO resources. Future opportunities are expected and activities to identify and

take advantage of them are built into component design.

In addition, integration and cooperation both between complimentary sector programmes (i.e. business,water and fisheries) and across programme components has been a sought. Cooperation will includetargeting the same partners with complementary activities and sharing Technical Assistance.


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Management

Programme strategy and overall direction will be determined and coordinated by Ministry of Planning andInvestment and Ministry of Natural Resources and Environment in partnership with Royal DanishEmbassy in a Programme Coordination Committee. The Programme Coordination Committee will beguided by a committee of the other ministries involved in programme implementation, or otherwisedirectly concerned. It will also supervise and monitor programme progress towards its objectives and

provide feedback to the partner governments.

A Programme Support Office will assist the Programme Coordination Committee in its operations. Itwill also act as a service provider for the components, supplying management tools and expertise as wellas acting as a conduit for the exchange of information and ideas. A Programme Implementation Manualwill be prepared by the Programme Support Office during the Inception Period. This will be the keyinstrument for carrying out its coordination and monitoring functions.

Overall management of component content, planning and expenditure will be the responsibility of aComponent Steering Committee, operating through a Component Management Office. The Chair andDirector of these will be provided by the central ministry in which the component is anchored. Provincialparticipation will be coordinated through a Provincial Programme Support Office anchored in therelevant Provincial Peoples Committee Vice Chairmans Office. Provincial representatives will also be

included in the Component Steering Committees. Management of demonstration projects will beexercised at the level of implementation. This may require engaging directly with community levelorganisations and NGOs who will be offered training where necessary.

Budget and Financial Management

Total DCE support amounts to DKK 250 million. Partnership contributions will be negotiated on a case-by-case basis determined by the character of the components. Contributions will be encouraged in kind asstaff, office space and other, as appropriate. Beneficiaries of demonstration projects will provide 10-50%partner funding, in cash or in kind. The overall breakdown of support is shown in the table below.

CategoryCost Head

TechnicalAssistance

Operatingcosts*

Investments Contingency Total

Budget in Million DKKProgramme Support Office and Supervision 8.3 14.7 0.6 0.4 24.0Pollution Control in Poor Densely Populated

Areas 13.9 9.9 36.7 4.6 65.0Environmentally Sustainable Development inPoor Urban Areas 8.3 8.5 20.4 2.8 40.0Cleaner Production in Industry 11.5 9.2 30.4 3.8 55.0Sustainable Livelihoods in and around MarineProtected Areas 6.3 8.9 9.1 1.6 26.0Capacity Development Support forEnvironmental Planning and Management 10.9 2.7 5.7 0.8 20.0Unallocated 20.0Total 250

* Includes review and auditing costs

Any necessary Programme and Component support staff will be recruited by the Government of Vietnam(GOV) following remuneration to be agreed between the GOV and RDE, but paid from the programmebudget. Programme related travel will be reimbursed according to EU - guidelines.

Annual budget approval will be the responsibility of the Programme Coordination Committee assisted bythe Programme Support Office. Component policy-making, coordination of activities, annual budgetapproval and allocation of budget within the component rests with the line ministries responsible and theComponent Steering Committees.


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Funds will be channelled, in the first instance, to a Programme Account controlled by the Ministry ofFinance, and from there to bank accounts for the Programme Support Office and the Components. Allfunds transferred from the Programme Account will be administered by the recipient organisations usingtheir own accounting systems. The Components may direct funds for demonstration projects to thirdparties, subject to suitable safeguards.

Royal Danish Embassy will appoint an external auditor to carry out an annual external audit of thefinancial reports.

Monitoring and Supervision

DCE will make use of GOV targets for environment and sustainability improvements, which are in turnlinked to Vietnams Millennium Development Goals and the Comprehensive Poverty Reduction andGrowth Strategy. At the national level indicators will monitor developments in the national sectorframework, programme inputs and the overall impact of DCE on the development objective.

Joint Programmes Reviews will be undertaken in years one, two and four so that both governments canassess the progress of the programme towards the agreed objectives and make recommendations forchanges. They will also provide an opportunity to decide how unallocated funds should be utilised and toconsider major revision to components.

Assumptions and Risks

Ongoing policy, institutional and legislative reform, coupled with real investment in the sector, shows thatGOV commitment to the environment and sustainability is continuing and secure. Main risks relate to:

Difficulties working at decentralised levels where availability of staff and resources may beconstrained and there is the potential for conflicts over jurisdiction and around the DCEapproach to compensation for GOV staff and management at the level of implementation

Sustainability, if funds needed to maintain DCE interventions are not be forthcoming and thecapacity established by the programme is allowed gradually to dissipate

Corruption or misappropriation of funds, especially indirectly by demanding payment for permitsor approvals, can cause delays and waste of technical assistance

External factors disrupt national development or change priorities, and delay achievement of theobjectives

Risk factors have been addressed in DCE design and measures to reduce them have been developed.

Implementation Plan

The detailed programme organisational structure and remuneration structure for necessary support staffemployed by the Government of Vietnam but paid for by the programme will be finalised by the RDEand MPI as soon as possible.

The programme is expected to begin in July 2005, with the appointment of an International Long-TermProgramme Adviser and the establishment of the Programme Support Office. There will be a six-monthinception period during which a Programme Implementation Manual will be developed and where

detailed budget will be prepared for each component. The Pollution Control in Poor Densely PopulatedAreas, Cleaner Production in Industry and Capacity Development Support for Environmental Planningand Management components will begin during the inception period. Two other components(Environmentally Sustainable Development in Urban Areas and Sustainable Livelihoods in and aroundMarine Protected Areas) will be started gradually by expanding the ongoing projects and will be fullyoperational by the end of 2005.

A Joint Programme Review and evaluation in 2009 will determine how Denmark-Vietnam cooperation inthe environment should proceed after the scheduled ending of DCE in July 2010.


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1. INTRODUCTION

This programme document covers the period 2005-2010. The document was prepared in consultationwith partners with a view to ensuring a high degree of ownership at all levels. The aim is to set out anagreed focus and strategic principles that are to govern the content of development cooperation in theenvironment between Denmark and Vietnam over the coming years. It also outlines systems and toolsfor managing implementation and monitoring effectiveness. The detailed programme organisational

structure and remuneration structure for necessary support staff employed by the Government ofVietnam but paid for by the programme will be finalised by the RDE and MPI as soon as possible.

1.1. Context of this Document

This document describes the agreed cooperation between the Governments of Vietnam and Denmark inthe environment (Development Cooperation in the Environment DCE). The DCE programme followson from earlier Danish Environmental Assistance (DEA) outlined in Section 1.2 below.

The preparation period for this programme has been accelerated, taking place between January and May2004, to allow the programme to be appraised and approved by the end of 2004. As a result someprogramme development activities have been carried out in parallel and some of the survey work has been

postponed until programme inception. Instances of such deviation from the norm are documented wherethey occur, nevertheless the document complies fully with the recommendations and requirements set outin the Danish Aid Management Guidelines (AMG) (1st Edition, August 22, 2003).

The development process is depicted below.

Oct Nov Dec Jan Feb Mar Apr May

Compressed Preparation Period

Expanded Concept Paper

Report on Programme Feasibility

Programme Description

Decentralised Pollution Control in Densely Populated Areas

Preliminary Programme Component

1.2. Background

Since 1997 DEA has been provided through the Environment, Peace and Stability Facility (EPSF) underthe framework elaborated in the Danish Strategy for Regional Environmental Assistance in SoutheastAsia. The DEA programme was developed over a number of years and is described in the documentDanish Environmental Assistance to Vietnam 2000-2004 approved by the Board of Danida in June2001.


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The document specified that the DEA would focus on four thematic areas:

Biodiversity Conservation and Sustainable Management of Natural Resources Sustainable Management of Coastal Zones and Marine Protected Areas Sustainable Development of Urban Areas and Industry Environmental Education and Awareness

Over the past six years, projects have been prepared in each of these thematic areas. By July 2003, theprogramme comprised 18 projects at various stages of the cycle (preparation to completion). Totalsupport has amounted to over DKK 330 million, of which DKK 130 million of support remains to beimplemented (December 2003).

1.2.1. Assessment of the Ongoing Activities

A recent evaluation of DEA to South East Asia, in which an Annex is devoted to assessment of theVietnam programme, reported that the programme was highly valued, both by beneficiaries and by co-financing partners. It further found that DEA had introduced good approaches into the treatment ofcross-cutting issues, and had generated policy lessons of value, both to the Government of Vietnam(GOV) and also other donors. It singled out achievements in capacity development for particular praise.

As part of the current preparation for programme restructuring, a thorough review of the programmestructure, content and management arrangements was undertaken. The focus was on drawing lessons forfuture component and programme design, but the review was able to confirm the main conclusions of theEvaluation Report. It also noted that GOV partners were very content that the project portfolio wastargeting areas of highest environmental priority. For this reason, all but one of the DCE components arebuilt around recently completed and ongoing projects under the DEA programme.

1.2.2. Sector Programming on Environment

Following the introduction of new policies by the Danish Government in 2002, the budget and modalitiesfor EPSF funded assistance have been under review. It has now been decided that EPSF will besucceeded by a facility that will be focussed on three thematic areas:

(i) urban and industrial environmental management(ii) sustainable energy and(iii) management of natural resources

DCE assistance committed to Vietnam for the period mid 2005 to mid 2010 amounts to DKK 250million. As described in A World of Difference: New Priorities in Danish Development Assistance 2004-2008, it retains the aim of promoting sustainable development and alleviating environmental degradation,but poverty reduction has now become an overarching objective. Moreover, the assistance has beendeveloped using a sector programme approach.

The poverty focus has been established by reference to the national Poverty Reduction Strategy Paper,which in Vietnam has been realised as the national Comprehensive Poverty Reduction and GrowthStrategy (CPRGS). Effectiveness of DCE in this regard will be gauged by use of Vietnams MillenniumDevelopment Goals (MDG), targets for which are included in the CPRGS. DCE targets the poor directly

and promotes sustainable community-based actions in poor densely populated areas. In parallel, it targetspollution hotspots, particularly around poor settlements.

The sector programme approach requires that DCE be part of Vietnams national sector framework,integrated with GOVs environment programme - specifically the National Strategy for EnvironmentalProtection (NSEP). Activities will concentrate on priorities identified within NSEP that contributesignificantly to poverty reduction and improve environmental health conditions of the poor. DCEcomponents have been developed through working alongside the national agencies responsible for theimplementation of these aspects of the NSEP. The key to long-term programme sustainability is


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therefore national ownership of assistance activities. Furthermore, where interventions includedemonstration projects, investments in infrastructure or service provision, criteria have been adopted toensure activities prioritise the poor.

The priorities outlined under the NSEP and CPRGS are primarily urban and poverty related (orconcerned with forest restoration and protection which are addressed by the development objectives ofother donors operating in the country). The DCE development objective has, therefore, been structuredas follows:

"Implementation of the National Strategy for Environmental Protection secures sustainable livelihoods and improved livingconditions for poor people".

DCE has followed an iterative development process working closely with national partners. It has beenformulated through a significant level of consultation, including workshops, working group meetings,review and appraisal at each level and stage of design.

Ministry of Planning and Investment (MPI), together with the Ministry of Environment and NaturalResources (MONRE) are the primary programming partners. However, many other ministries,committees and general departments as well as associated local-level agencies also have responsibilitiestowards the environment and these organisations were invited to join MPI and MONRE to form aProgramme Task Force which has guided preparation. DCE will continue to build on this productive

relationship throughout its implementation stages.

Together with MPI and MONRE, members of the DCE Task Force include representatives from:Ministry of Construction (MOC), Ministry of Education and Training (MOET), Ministry of ForeignAffairs (MOFA), Ministry of Fisheries (MOFI), Ministry of Industry (MOI), Institute of Urban and RuralPlanning, Institute of Chemistry, Research Institute of Mines and Metallurgy, and the Office ofGovernment (International Cooperation Department).


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2. NATIONAL SECTOR CONTEXT

2.1. Economic and Social Context

The national income of Vietnam, as measured by Gross Domestic Product (GDP), has been growing atan average of around 6% per annum since 1990 and reached 485 USD per capita in 2003. Vietnam

remains an agrarian society, with around 65% of the labour force working in agriculture, forestry andfisheries, although the share of agriculture in GDP is only 22% and diminishing. The service and industrysectors now account for most of the national income (38% and 40% respectively) and industrialproduction is growing rapidly.

Vietnam is one of the most densely populated countries in Asia with a population of nearly 81 millionpeople. Most of these belong to the Kinhpeople (ethnic Vietnamese), while the remainder (around 16%)comprise more than 50 different ethnic minority groups, most of whom live in the more remote andmountainous areas of the country.

It is commonly estimated that just over two thirds of Vietnams current population live in rural areas,concentrated in the two main rice-growing deltas: the Red River in the north and the Mekong in thesouth. During the past 30 years, however, people have begun to move from rural to urban areas seeking

available land and work. The urban population is now growing rapidly (at a yearly rate of around 3.7%).Migrants are often non-registered and illegally settling, restricting the availability of reliable data,nevertheless, according to the Vietnam Development Report 2004, approximately 5 million people movedfrom rural to urban areas between 1999-2003.

Vietnam has made remarkable progress across a broad range of socio-economic development measures.The most impressive is the fall in the poverty rate from well over 70% of the population in the mid-1980sto around 29% in 2002. Poverty varies regionally, both in terms of severity, and in the proportion of theurban to rural divide. The density of poverty is highest among the rural-urban migrants, in the riverdeltas, and along the coast. They are often obliged to live in the most polluted and least attractive areas inand around towns and cities: along polluted rivers, road, railways, in slums, near dumps and industrialareas. They often live under worse conditions than the rural poor (in respect to access to clean water andother natural resources, sanitation, housing, public services, etc.), and although they may have increased

income and better employment opportunities in urban areas, they have often lost the social capitalinherent in their village communities.

2.2. Environmental Context

Vietnam stretches over 1600 km along the eastern coast of the Indochinese Peninsula with a total landarea of about 33 million hectares. Two thirds of the country is mountainous or hilly but most of thepopulation lives in the northern, central and southern plains or along the long coastal strip. The widevariety of its bio-geographic zones has made it one of the ten most biologically diverse countries in theworld.

Recent economic gains have brought with them the usual environmental problems associated with rapideconomic and population growth including loss of natural habitats, overexploitation of natural resources

and pollution from industrial and domestic wastes.

Natural forest cover has fallen from 43 to 33% of land area over the last fifty years, and habitat loss(through encroachment) is contributing to a rise in the number of threatened species. The countrys richcoastal and marine ecosystems are also under threat with a loss of some 80% of mangrove forests, andvirtually all of the coral reefs at risk from over fishing and pollution.

The supply of potable water is well below demand in both rural and urban areas. In 2000, just over halfof the population had access to safe water, and only half of these had piped water facilities.


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Surface, ground and coastal water quality is declining due to untreated discharge of industrial anddomestic wastewater and agricultural run-off.

Waste generation has become an increasing problem in both small towns and cities. Waste is collectedfrom only just over half of households, and is disposed of in open dumps and landfills, mostly withouttreatment together with hazardous industrial and healthcare wastes.

Major industry often relies on outdated and heavily polluting technology and increased production has

often outpaced any pollution control technology. Small-scale cottage industries, originally promoted toboost the incomes of agricultural households, are located within residential areas creating localisedpollution hotspots.

The rapid increase in motorised transport has been accompanied by significant localised air pollutionespecially in the large cities.

2.3. Administrative and Legislative Context

2.3.1. Political Structure

The Communist Party serves as the main political force offering policy guidance to the NationalAssembly (NA) and the GOV. The NA is the supreme lawmaking body with 450 members. Elected

every 5 years, it approves major development objectives and economic growth targets, and appoints thePresident, the Government and the Prime Minister.

Vietnam is divided into more than 60 provinces (64 as of April 2004). Each province has an electedPeoples Council that proposes candidates for a Provincial Peoples Committee (PPC), which is thehighest administrative office at provincial level. The PPC has taxation authority, and is a recipient ofGovernment funds for social and development purposes. Each line ministry has a provincial departmentthat is responsible to both its central administration and the relevant PPC.

Similarly each province is subdivided into several (4-22, average 9.5) administrative districts with a DistrictPeoples Committee (DPC) and, occasionally, sub-departments of technical ministries. Districts arefurther sub-divided into communes and then to villages or wards. At village/ward level, the Head ofVillage/Ward is the link between the commune administration and the local community and the

representative of the state administrative system at grass root level. He/she has an important role inreconciling state law and traditional rules and, therefore, in local activities concerned with the protectionof natural resources.

2.3.2. Partners with Responsibilities in the Environment Sector

A new Ministry of Natural Resources and Environment (MONRE) was established in January 2003 toundertake the state functions of management of land resources, environment, water resources andminerals.

The reorganisation of MONRE is ongoing as changes in the legal framework are necessary to completethe transfer of areas of responsibility from other ministries. A similar reorganisation has begun in theprovinces and districts but completion is expected to take some time.

Several other ministries retain significant roles in the sector (some as partners in on-going DEA projects).

The MPI formulates national economic policies, prepares and monitors all socio-economicdevelopment plans and reviews major projects. In addition it is the initial entry point for allOverseas Development Assistance (ODA) to Vietnam, screening all donor assistance proposalsand monitoring on-going projects. Within MPI, the Department of Science, Education, NaturalResources and Environment (DSENRE) is responsible for environmental issues. DSENRE hasbeen the partner agency for the DEA.


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MOC is the Government body performing the state management functions in: Construction,construction materials, housing and office buildings, architecture, urban construction planning,rural construction planning, urban infrastructure and urban public utilities services.

MOFI is responsible for development, management and conservation of marine resources withinVietnams jurisdictional waters. MOFI has a responsibility for State management of all fisheries,including inland waters in coastal provinces and in the sea. It is the coordinating agency for oneof the current DEA projects involving the identification and management of Marine Protected

Areas.

MOI is the Government body performing the state management functions in the industriesincluding machine buildings (Mechanical), metallurgy, electricity, new energy, renewable energy,petroleum, mining, chemical industry (including chemical-pharmaceutical), industrial explosives,consumer products, food industry and, processing industry in the whole country. MOI also has aresearch function housed across 28 centres and institutions and, also includes a new Directoratefor Industrial Environmental Health and Safety.

Ministry of Agriculture and Rural Development (MARD) is concerned with agriculture andforestry in rural areas and this has included management of water resources, forests and terrestrialprotected areas as well as rural water supply and sanitation. MARD plays a key role in theimplementation of several protected area management programmes under DEA-Vietnam as well

as in the Agriculture and Water Sector Programme Support.

Ministry of Finance (MOF) provides unified State management in the fields of finance,accounting and State budget in Vietnam. Its role in ODA projects is to ensure that the agreedcounterpart funding is made available to the GOV partners.

MOET is responsible for overall policy-making and coordination within the educational system,and has approval privileges for all curricula in schools and universities.

Other potential partners/contributors to areas where Danida and Vietnam cooperate in the environmentsector include international and national NGOs. These may be directly involved in the programme asimplementers or partners, or benefit through involvement in capacity development activities.

International NGOs, of which more than 500 are registered with the GOV Committee for NGO Affairsin Vietnam, constitute an important reservoir of experience, particularly for community level actions.Many of them implement projects on rural and agricultural development, livelihood improvement,poverty reduction, gender empowerment, water and sanitation, and operate nationwide including in DCEprovinces.

In Vietnam many of the roles that might be played by NGOs are filled by mass organisations such as theFatherland Front, the Women's Union, and the Youth Union, which, although they are organised andfunded by the government, are largely grassroots focused and representative of local views. They play akey role as the political base of peoples power and many GOV social objectives, including povertyreduction and the provision of municipal services, are implemented through such groups. Otherorganisations that wish to operate legally as NGOs are required to register with and be supervised by agovernment entity, although they may have their own administrative structure and financing. Many of

these are also active in the environment sector.

All these types of NGOs will be involved in DCE activities, as implementers, TA providers andbeneficiaries. Their involvement will be particularly valuable in implementation at commune level and inactivities such as mobilising communities, raising awareness, development of indicators, and programmemonitoring. They will also be given the opportunity to contribute to and benefit from capacitydevelopment.


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2.3.3. Legislative Framework

The existing Law on Environmental Protection of Vietnam came into force from January 1994. In 1996 adecree was enacted which greatly expanded the range of penalties for violation of environmental laws andregulations relating to EIAs and audits, conservation of natural resources, trade in endangered species,exploration and mining, and a wide range of pollution infringements. This decree has not yet been fullyimplemented, however, and MONRE is now leading an effort to revise the framework legislation and is

aiming to submit a new Environmental Protection Law to the National Assembly sometime in the first halfof 2005.

Vietnam is increasingly participating in activities related to international environmental conventions and hasincluded its obligations in this regard in the NSEP.

2.4. Policy Context

GOV is in the process of revising environmental policy. Strategies for environmental protection andsustainable development have been prepared in the form of the NSEP to 2010 and a draft NationalEnvironmental Action Plan 2001-2005, the former having recently received Prime Ministerial approval.The documents set new targets for environment and sustainability improvements, linked to VietnamsMDG and the CPRGS. They also offer a commitment to make more resources available for

implementation of environment priorities. NSEP identifies four overarching objectives:

To reduce pollution gradually to comply with international norms by 2020 To improve environmental services and paying particular attention to surface water and drainage

dioxin contamination, soil, and urban greening To restore an ecological balance through restoration and preservation of habitat (especially

forests) and increased use of renewable power generation To join international efforts to protect the environment through implementing international

agreements and codes of practice in relation to industry (ISO 14001), genetic modification, and toeliminate the import of hazardous wastes

Its strategy for achieving these objectives centres around mobilising society to become more involved inenvironmental protection, increasing its capacity to do so, and providing the legal and technical

instruments that are needed. In parallel, GOV is committed to strengthening community participation inlocal development decisions. Recent legislation (Decree No. 79/2003/ND-CP) sets out procedures forinforming and consulting communities on development and land use plans and for ensuring theirparticipation in deciding on, supervising and inspecting certain construction projects.

2.5. Sector Budgets and Environmental Financing

Government spending on the environment sector can be difficult to determine with any precision becauseactivities are financed through many different agencies and may occur under several cost categories. In2002, total current expenditure by GOV was close to VND 79,000 billion (USD 5.2 billion). Some VND1,800 billion (USD 134 million) of this was allocated to the category science, technology andenvironment, but comparison with spending in 2003 suggest that less than 4% of this allocation wouldbe expended on interventions categorised as environmental. Defining the environment sector by the

sub-headings used in the NSEP, these include:

pollution prevention, control, treatment, disposal and remediation protection and sustainable use of natural resources (excluding forestry and commercial activities) nature conservation and biodiversity protection actions to improve environmental management capacity actions to encourage public participation others including disaster mitigation and poverty alleviation


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Most funds are provided through provincial budgets and capital investments, although information onthese is not available. Centrally managed current expenditure allocated through MONRE and other lineministries on these items comprised VND 70 billion (USD 5 million), in 2003, or roughly 0.1% of totalcurrent expenditure.

GOV is currently exploring a number of opportunities for revenue generation in the environmental sectorstarting with potable water charges that are expected to generate up to VND 100 billion (USD 7 million)per year. The Vietnam Environmental Protection Fund (VEPF) has been established to utilise part of the

revenue collected and use it in the co-financing of environmental investments.

A large proportion of environmental funding (as defined above) still comes from ODA since aroundUSD 2.1 billion, 5% of total ODA, is committed to environmental projects, implying an averageexpenditure of around USD 40 million per year.

2.6. Other Contributors of Financial and Technical Support

MONRE has initiated an International Support Group on Environment (ISGE) within its InternationalCooperation Department. This group is intended to unify national and international investment in theenvironment under one policy framework and to channel resources to the highest priorities, whileminimising overlap.

The other significant (over US$1 million) bilateral programmes in the general area of environment, morethan 20 of which relate to an aspect of afforestation or forest management, include:

Germany, Netherlands, Belgium, Japan: Social Forestry and Afforestation Germany, Netherlands, Japan: Natural Resources Management Germany, Netherlands: Coastal Zone Management Canada, Switzerland and Sweden: Industrial Pollution Management Canada, Switzerland and Sweden: Environmental Management Capacity Development

Major multilateral activities that affect the environment sector include the following (bolded items are co-financed by Danida):

EU: Social Forestry, Urban Planning in the Mekong Delta provinces (recently approved) World Bank: Waste Water, Capacity Development, Pollution Control, Coastal Wetlands

Restoration and Protection

UNDP: Environmental Management, (Agenda 21, environmental strategies and capacitydevelopment and education, disaster management, biodiversity and sustainable energy), Povertyand Environment Study

Asian Development Bank (ADB): Capacity Development for Pollution Minimisation, CoastalZone Management

Danida has previously worked, and in some cases is still involved, in every one of these areas. In eachcase, however, activities are complementary or in far-separated locations.

2.7. Status of Cross-Cutting Issues and Priority Themes

2.7.1. Relevant Issues and Themes

In all countries the way that environment sector issues impact on the everyday life and living conditionsof all the population is greatly influenced by policy and culture in the areas of Gender Equality and GoodGovernance (democratisation and human rights). Also of relevance in the sector in Vietnam is the issueof HIV/AIDS, because sectoral activities will present opportunities to address the pandemic at littleincremental cost. Other priority themes (globalisation, armed conflicts, and children and youth) are ofless immediate concern in the sector, but merit some attention.


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2.7.2. Gender Equality

Vietnam has produced a National Strategy and Plan of Action for Advancement of Women that recordssignificant progress in gender equality. Women account for 48% of those in formal employment andhave a literacy rate of 90.6% (compared to 95.3% for men). They comprise around 26% of nationalassembly members (the highest in Asia) and, while their level of participation decreases in localadministrations, it is still substantial (21% at district level and 16% at commune level). The picture is notall positive, however. Womens average income is only 78% of that of men, and they tend to be confined

to the least stable, transitory jobs. Gender equality is still not enshrined in all aspects of the legalframework. Womens participation in higher education is limited and their social opportunities areconstrained by disproportionate responsibility for household maintenance. Poverty and cultural resistanceto change traditional gender roles still persists particularly in rural areas, and among the poor, both ruraland urban, communities.

Therefore, although Vietnamese women are very much involved in and contribute to the formal andinformal economy, gender equality is still not seen in all segments of society. This is of particular concernin the environment sector because environmental degradation often affects the health and well-being ofwomen and children more severely. Moreover, the poor, women in particular, are highly dependent on theenvironment for their livelihoods and survival (food, income, energy, medicine, building materials).

2.7.3. Good Governance

Environmental degradation often impacts directly on the health and living conditions of those affected.Remediation therefore presents an opportunity to readily mobilise communities to work together and totake actions that immediately affect their everyday lives. There is a strong tradition of communitiesworking together to achieve local development objectives in Vietnam and the NSEP emphasises the needto mobilise the whole society in environmental protection work and the importance of socialorganisations .and civil society The organisations and legal framework to mobilise and involve peoplein environmental decision-making and management are in place (see Section 2.3). There is also somemovement towards the development of a more recognisably independent civil sector. The mainconstraint is capacity and awareness in all aspects of environmental management, and at every level ofstakeholder from central government down to individuals.

2.7.4. HIV/Aids

The incidence of AIDS and HIV infection in Vietnam is significant, although the levels have not yetreached the critical levels of some other countries. Ministry of Health estimated that the total number ofHIV infections in Vietnam was 59,000 in 2002 (the United Nations estimate was 150,000).

The AIDS pandemic is a huge source of human misery and places a burden on the entire population, notleast on women providing health care for the chronically ill. Impacts to the poor are also compoundedboth in terms of the proportion of the poor contracting the disease, but also in respect to the effect ofillness or death on a poor household, which can be devastating within an already vulnerable situation.

The growth and spread of HIV and AIDS in Vietnam has been highest among intravenous drug users.However, estimates suggest that the majority of new infections are now sexually transmitted, and thattransmission has increased among female sex workers. Currently the only technical means to prevent

sexual transmission of HIV is the proper use of condoms. These are, however, often of limited availabilityoutside major cities and may cost too much for poor people.

DCE design and implementation procedures will ensure that, where appropriate opportunities arise toincrease AIDS awareness, they will be exploited. (For example Danidas International Programme ofAction Against HIV/AIDS supports activities such as awareness raising in the workplace, which can beintroduced within the Cleaner Production in Industry (CPI) component). All capacity development andawareness raising activities present such opportunities, as do many demonstration projects, particularlythose concerned with the CPI component and the component Pollution Control in Poor DenselyPopulated Areas (PCDA), and interventions have been designed accordingly.


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2.7.5. Other Priority Themes

The themes of globalisation, armed conflicts, and children and youth are all relevant in Vietnam, but onlyof limited direct relevance to activities in the environment sector.

Globalisation: Vietnam embraces the concept and is pursuing policies of industrial expansion andincreased exports. In the environment sector, the need to participate in and implement international

agreements has been made a priority of the NSEP. Other globalisation issues that can be expected toaffect future policy in the sector concern trade and environment, in particular the increasing prevalence ofenvironmental labelling and the use of environmental and social criteria by multinationals in supply-chainmanagement.

Armed Conflicts: There were several major conflicts involving Vietnam in the latter half of thetwentieth century, but the country has not been directly engaged in a war since 1979. The directconsequences of war (refugees, destruction of infrastructure, social disruption etc.) have therefore, largelyreceded. One remaining effect of direct relevance to the environment sector is the residue of chemicaldefoliants used during the American war. These chemicals are blamed for birth defects and a variety ofhealth ailments among the exposed population. Moreover, a large area of land remains unsuitable foragriculture due to contaminated soils. Clean up of the contamination is a priority of NSEP.

Children and Youth: Vietnam has a high rate of literacy, which among people aged 15 and over iscurrently in excess of 90%. This is largely due to high levels of early school attendance - as of 2000, thepopulation of primary education graduates was just over 80%. However, the majority of Vietnams youngpeople enter into employment from around the age of fifteen, with only 17% graduating secondaryeducation. There are also a number of children engaged in labour from very early ages, particularly in ruralcommunities where their additional income can be vital to household survival. Demographic data showan increase in the overall numbers of urban youth (though this is not outside of the national urbanisationtrend). Street children remain in the major urban centres, but the issue is being actively addressed byGOV through increased orphanage and outreach programmes placing children with relatives or adoptivefamilies. In respect to the environment young people are particularly vulnerable to pollution, especially inthe early years of physical and mental development, and these risks are generally more prevalent in poorurban areas. For example, exposure of children to air pollution (particularly to very small airborneparticulates like PM10) during periods of lung development has been shown to increase susceptibility to

respiratory diseases in later life, while chromic intakes of led pollution from motorised transport can stiflemental maturity.

Human Rights: The Vietnamese reform process has promoted a range of improvements within thehuman rights area. At the same time, the Vietnamese authorities are increasingly willing to enter intodialogue with regard to human rights. In 2002, the government issued a decree, known as the grassrootsdecree, which aims to strengthen democracy in local communities. The decree contains a set ofprocedures for public hearings and other elements intended to involve the populace more into decision-making procedures. Despite significant improvements, however, issues are still reported relating tofreedom of expression, for example, and limitations placed on the right of association and assembly.Moreover, even though the constitution pledges religious freedom, the government attempts to restrictthe activities of some religious societies.


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3. AGREED ASSISTANCE

3.1. Overall Strategy

3.1.1. Moving to a Sector-Wide Approach

Vietnamese partners and the evaluations so far undertaken (see Section 1.2.1) have emphasised that past

and on-going DEA projects were focussed in the right areas and have generally been very valuable. Theapproach to DCE development has been, therefore, to build on the existing portfolio by transforming thelarger projects gradually into DCE components, where they fit into design objectives and priorities.Otherwise, they will be allowed to continue as individual projects, while being managed inside the DCEframework and concluded with a phasing-out period, during which measures will be taken to consolidatebenefits and promote sustainability, as necessary.

This process has resulted in the formulation of five DCE components. Details of components areprovided in Chapter 4, with full components documents comprising Appendix A, A1-A5. Theabsorption of DEA projects into the DCE programme is demonstrated below.

DCEComponents

PollutionControl in Poor

DenselyPopulated Areas(1)

(PDSA)

EnvironmentallySustainable

Development inPoor UrbanAreas

(SDU)

CleanerProduction in

Industry

(CDI)

SustainableLivelihoods in

and aroundMarineProtected Areas

(LMPA)

CapacityDevelopment

Support forEnvironmentalPlanning andManagement

(CDS)DEAProjects Environmental

Information andReporting

Improved SolidWasteManagement

MitigationMeasures inthe BuildingMaterialsIndustry (2)

Ho Mun MarineProtected AreasProject

CapacityDevelopment andProgrammeManagement

Industrial andUrbanDevelopment inViet Tri City

Industrial andUrbanDevelopmentin Viet Tri

City

Support toMarine ProtectedAreas Network inVietnam

Can ThoUniversity University ofAarhus Link in

EnvironmentalSciences

CapacityDevelopment forUrban Planningand Management

(1) New component, though existing project phased in(2) Project completed though new component builds on outputs

The remaining DEA projects are accommodated in several ways. Two projects in the Ca RiverWatershed will be completed by the end of 2005. It is planned to enlist an international NGO, usingfunds from Danidas NGO window to design and implement a follow-up project that will consolidatethe experience gained. The project 'Environmental Education in the Schools of Vietnam' with Ministry ofEducation and Training will be sustained by other Danida funds and absorbed into the NationalEnvironment Program for Schools. The elements in Vietnam of the Indochina Tree Seed Program will becompleted in the beginning of 2005 and thereafter included in the Agriculture Sector Program Support.

3.1.2. Strategic Focus

Vietnam is rapidly transforming into a modern industrialised economy. A major challenge is, however, tomanage the accompanying adverse social and environmental effects that would, if unchecked threaten therate and sustainability of the transformation. It is already apparent that the most threatening trends are


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rapid, unplanned urban development, declining environmental quality, particularly of surface waters, andunsustainable use of natural resources. Policy responses to these challenges have been appropriate andtimely in the production of a strategy - the NSEP - an action plan and the commitment of resources.

Vietnam is a highly ordered society. The root cause of much of the continuing and widespreadenvironmental degradation is lack of capacity to predict and understand the consequences of decisionsrather than deliberate neglect or failure to comply with the law. GOV recognises this and puts capacitydevelopment amongst the whole society at the heart of its NSEP. DCE supports this approach through

its choice of partners and its implementation strategy.

Following the Capacity Development in Environment (CDE) approach, where capacity in theenvironment represents the ability of individuals, groups, organisations and institutions to addressenvironmental issues (OECD-DAC, 1995), the components each promote integrated solutions andmobilisation of a wide array of stakeholders, but from a different entry point in the environmentalmanagement framework. PCDA and LMPA work through regulators, SDU through planners, CPIthrough polluters. CDS supports each component and facilitates integration of the programme outputs.

Furthermore each component is designed to maximise its impact and effectiveness by directing most ofits investments to a few locations whilst ensuring that they test and inform national policy. Each of thecomponents has, therefore, a presence in the responsible line ministry that will work with localgovernment agencies to develop demonstration interventions. These interventions will generate

improvements to living conditions in poor highly populated areas, and will be owned and implemented bythe local stakeholders, and their results will enable policy makers to design, cost and roll out policyinitiatives more quickly.

DCE has been developed to support GOV in NSEP implementation, taking care that due attention isgiven to alleviating poverty and securing the livelihoods of poor men and women. The substance of DCEstrategy follows from these considerations and may be summarised as follows:

To contribute where the need is greatest and where Danida can be particularly effective, especiallyby building on the ongoing and recently completed projects started under the previous DEAprogramme (only the PCDA component is completely new)

To ensure that specific capacity development and awareness raising needs are built into eachcomponent, whilst ensuring coordination, consistency and state-of the-art expertise across theprogramme as a whole

To focus interventions at the decentralised level (province, district, commune) whilst ensuringthat they are designed to test and inform national policy, and to facilitate the communicationsystems that will bring their results to the attention of policy-makers

To work at the decentralised level, through components managed by regulators, polluters andcivil society respectively, to develop integrated solutions to environmental problems

To assist GOV to mainstream poverty alleviation into Environmental Sector decision-making inVietnam and to ensure that supported interventions are focussed on improving the livingconditions of the poor

To use demonstration projects to raise the capacity for planning, management andimplementation of environmental interventions in the full range of stakeholders, including NGOsand to strengthen the influence and convening power of Department of Natural Resources andEnvironment (DONRE)


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3.2. Poverty Alleviation and Cross-Cutting Issues

3.2.1. Mainstreaming Poverty Alleviation

Degraded environments, including home and working environments, as often have severe negative effectson poor people. Their health, food security, work capability and livelihood activities may all be impaired

as well as their self-respect and their capacity to lift themselves out of poverty, or to act to improvedegraded environmental conditions. Poverty and environmental degradation are, therefore, ofteninterlinked: access to natural resources and a healthy environmental is a precondition for long-termpoverty reduction, whilst poverty reduction is necessary for sustainable management of natural resourcesand the environment.

Poverty reduction implies selective targeting of the poor, and helping them to reduce their vulnerability,improve their livelihoods (where a livelihood comprises the capabilities, material and social resources, andactivities required for a means of living), empower themselves, and make progress toward a permanentmove out of poverty. This implies pro-poor development policies and planning and actions. Theprogramme will assist environmental sector activities to become pro-poor. It will ensure that the needsand priorities of the poor are mainstreamed into the further development of national policy and regulationon the environment and into the development of capacity at all levels. Furthermore, all programme

investments will target the poor directly and promote sustainable community-based actions in poordensely populated areas. This will include targeting pollution hotspots, particularly around poorsettlements.

Vietnams MDG and CPRGS, highlight the role of improved environmental conditions and services inpoverty reduction and growth. The programme will seek to support and promote those elements withinthe NSEP that contribute significantly to poverty reduction and improve environmental health conditionsof the poor. The CPRGS has been used to help develop targets and indicators to assess the effectivenessof programme interventions in this regard. Where the programme activities include demonstrationprojects, investments in infrastructure or service provision, criteria will be developed to ensureinterventions prioritise the poor.

3.2.2. Measures to Address Cross-Cutting Issues

Gender Equality: Gender equality and womens rights and empowerment issues, are mainstreamedinthe programme. Decisions regarding priorities and resource allocation, and planning and programming,will take account of gender issues. Tools developed during component implementation will be explicitlyinclusive of gender criteria.

Quotas for womens participation have been factored into demonstration projects and stakeholdermeetings, and the needs of both men and women will be considered in all training and capacitydevelopment activities to ensure that their participation provides equal chances to benefit from andcontribute to programme components.

Environment: The programme is located within the environmental sector and all its components haveimmediate objectives that aim to improve some aspect of the environment of Vietnam. Danida

investments into infrastructure or other physical developments require Environmental Management Plans(EMP) to ensure that laws are obeyed and good practice is followed. Their function is to avoid actionsthat needlessly damage other environmental resources and to mitigate any adverse distributional effectscaused when new facilities are constructed. It is not however envisaged that DCE will require an internalEMP as component demonstration projects are targeting enhancements to environmental planning andmanagement activities, rather than the provision of physical infrastructure. Nevertheless, DCE isdesigned so that demonstration projects will also be identified through demand responsive approaches.Should an EMP be necessary as a result of potential projects identified and selected by project partnersand other stakeholders at provincial levels, then allowance will be made for this on a component specificbasis.


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Contributions will be encouraged either in the provision of staff or in direct financial contribution.Requirements at the provincial level will vary significantly, and will be dictated, in part, by the nature ofcomponent demonstration projects. The modalities will be elaborated as DCE is implemented.

3.3.2. Demand-Responsive Approaches

An essential part of securing beneficiary ownership and willingness to sustain programme interventionswill be to ensure that programme resources are deployed in response to a genuine demand. Component

management systems and arrangements for selecting demonstration projects have been developed withthis aim in mind. Potential beneficiaries will be informed of areas in which demonstration projects areplanned and encouraged to prepare proposals for funding. Training and technical assistance will beoffered to ensure that the proposals are feasible and comply with the aims and approaches of theparticular component and the programme in general. Target communities or groups (poor, minority,women, civil society) can be given special assistance. Demonstration projects will only be initiated after afully elaborated proposal has been received and approved.

All components will use this model for identifying and selecting demonstration projects. The procedureswill be fully elaborated in a Programme Implementation Manual (PIM), after further consultation withnational and provincial partners. The proposal will, however, certainly include details of theimplementation, management, supervision and financial management arrangements, the beneficiarycontribution, the plans for long-term maintenance, and any other information necessary to assess the

viability, sustainability and effectiveness of the intervention

3.4. Geographic Focus

DCE will focus most of its resources on a limited number of provinces. This focus will reduceadministrative burdens whilst allowing a significant influence and a familiar presence in the provinces inwhich it is concentrated.

The selection criteria used in the identification of focus provinces has included:

Danida experience in the province (including previous and on-going environment projects andprogrammes in other sectors)

Extent and nature of other donor activities in the province GOV priority, and needs identified in the NSEP Absorptive capacity of provinces and match of provincial needs with DCE focus Opportunities for component complimentarity Poverty and MDG index Industrial hotspots and prevalence of SSCIs

As part of the early selection process a matrix was formed to assist in short listing suitable provinces (seeDCE Feasibility Report). The quantitative analysis was supported by discussions, and provinces weresubsequently selected from the short list together with MPI and other DCE partners.

While DCE provinces represent some of the highest scoring groupings from the analysis, selection couldnot be as tight as might otherwise have been desirable because commitments made to ongoing projectpartners have been respected. A total of six provinces were selected as partners. Each will have access tosupport from all the components (except LMPA, which will only operate in coastal areas). During yearsone and two the programme will be concentrated in Northern Vietnam (Thai Nguyen, Phu Tho and HaNam) and the central region (Nghe An and Quang Nam). Extension of activities to an additionalprovince in Southern Vietnam (Ben Tre) will be considered in year three.


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3.5. Programme Content

3.5.1. The Programme Development Objective

The overarching objective of Denmarks development policy is to create lasting improvements in theliving conditions of the poorest sections of the worlds population through poverty reduction1.

DCE targets poverty and the environment and is aligned with the national sector framework. Activitieswill concentrate on priorities identified within the NSEP that contribute significantly to poverty reductionand improved environmental health conditions of the poor. The programme development objective has,therefore, been structured as follows:

"Implementation of the National Strategy for Environmental Protection secures sustainable livelihoods and improved livingconditions for poor people".

The assistance provided through the programme represents Danish support to Vietnamese endeavours inthe environment sector. The intention is to facilitate a process to which multiple donors can contributebut which is ultimately owned and directed by GOV. The development objectives at both programmeand component levels represent, therefore, a vision of the future over a 10 -20 year horizon, outcomes ofthe GOV directed efforts of many partners.

3.5.2. Selection and Development of Components

Partners in GOV were asked to lead the development process, with Technical Assistance (TA) fromDanida. Selection of components gave greatest priority to the following:

The potential to achieve poverty alleviation as well as environmental goals The opportunity for interventions to build upon what Danida has already achieved The opportunity to address current GOV priorities (notwithstanding the position of the

intervention in NSEP) The urgency of the matter for ODA Correspondence between the size of investment needed and that available in the programme Clarity of institutional responsibility and availability of a willing partner

The potential for cross-sectoral co-operation with other Danida Sector Programmes Significant relevant technical expertise in Denmark and the Asian RegionWorkshops were held with stakeholders (see Section 2.6) to identify component contents. The resultswere developed and refined through numerous working group meetings with international experts,national experts and anchor ministries. Component design was then finalised through a series of draftseach being subject to comment from component working groups, international experts and RDE. A DCEcompletion workshop was also held to offer partners from all provinces the opportunity for feedback onoverall programme design. The following sections describe the scope and contents of the componentsdeveloped through this process.

1 See Partnership 2000 http://www.um.dk/publikationer/fremmedsprog/English/policy-strategy/15.asp


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3.5.3. Immediate Objectives

Given that assumptions hold, and the programme components are implemented successfully, then theImmediate Objectives of the programme will derive from the Development Objectives of itscomponents. These are as follows:

The quality of the environment within poor densely populated areas is subject to effective localcontrol and is maintained at acceptable levels

The livelihood of people working in and living around industrial enterprises benefit fromcontrolled pollution and improved resource use of industrial enterprises

Environmentally sound and participatory techniques are used to develop, implement and achievecompliance with plans for urban land use and environmental service provision

Valuable habitats and associated biodiversity in Vietnams marine and coastal waters are beingrestored and protected without compromising the livelihoods of surrounding poor and vulnerablecommunities

DCE partners have enhanced capacity to play an effective role in the implementation of theNSEP.

The approach to poverty alleviation within each component has been addressed through the targeting ofactivities to the poor and at the local level, for example community level demonstration projects;community based management; capacity development in participatory approaches for the poor; povertyanalysis; and the prioritisation of gender and labour issues.

3.5.4. Opportunities for Alignment

Building on experience and capacity developed through previous and on-going Danida sectorprogrammes, and other development assistance, plays an important role in DCE advancement.In addition, integration and cooperation both between complimentary sector programmes (i.e. business,

water and fisheries) and across programme components has been a strategic aim.

The PCDA component will facilitate the close coordination of the capacity development activities of eachDCE component, and develop training activities targeting the strengthening of GOVs environmentalmanagement functions at the local level.

The following opportunities for alignment with Danida sector programmes have been identified (thecomponents are elaborated in Chapter 4):

PCDA - lessons to be learned from the Water Sector programme in respect to water supply anddrainage projects in densely populated areas, and UNDP Poverty and Environment Initiative

SDU - opportunities for linkage to Private Sector programme through mixed credit loans andother combined grant and loan mechanisms to finance demonstration projects. Lessons to belearned from willingness to pay studies under the Water Sector programme, and EU UrbanEnvironment Project

CPI - opportunities for sharing systems being developed under the new Business Sector supportprogramme, and specifically the integration of demonstration projects in Nghe An province


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LMPA - links to livelihood improvements for fishing communities under Water Sector trainingprogrammes, and also to the Environmental Resources and Aquaculture component of theFisheries Sector programme

CDS - uses training modules from all components and experience of DEA co-operation witheducational establishments

Prospects for complimentarity across DCE components have also been exploited. The CPI and the

PCDA component for example, provide complementary support for improved environmentalmanagement in terms of meeting compliance objectives (from the perspective of industry) and buildingcapacity in the enforcement of regulations (from the perspective of the local environmental regulator). Inaddition, these components also facilitate development of capacity around industrial ecology conceptstargeting local industrial clusters, and monitoring of the effectiveness of Cleaner Productionadvancements.

Moreover, a programme unit in each partner province (see Section 6.3) will provide a mechanism tocoordinate (combining, carrying out in parallel or phasing) demonstration projects from each of thecomponents so as to demonstrate integrated solutions.3.6. Technical Assistance

3.6.1. General Approach to Technical Assistance

DCE has given careful consideration to the use of TA with a view to ensuring an appropriate balancebetween support that is provided in the form of TA and support to local investments that directly benefitpoor people. In Vietnam there is an expanding reservoir of well-qualified local consultants. This will beutilised, when practical, to increase the efficiency of TA and to give additional support to the developmentof local capacity.

International consultants will only be used where their understanding of comparable situations in othercountries and their specialist skills bring substantial added value. Moreover, where international TA isused, the emphasis will be on skills transfer and assisting institutions and individual counterparts todevelop capacity that can be sustained without further support. Each component that uses internationalTA therefore has an exit-strategy whereby the TA will be gradually reduced and the role taken over bylocal partners. The challenge is to ensure that the component managers have qualified support at hand

when needed to use resources efficiently and in accordance with the overall implementation plan, buthave sufficient latitude to take control when they are ready. The programme will achieve this balancethrough the following design principals:

1. The programme and each component should have access to an advisor who is resident full-timein Vietnam, even if not full-time employed an the specific advisor role. This will be achieved bycombining advisor roles where the skill sets required are very similar

2. The programme will promote further development of capacity in the national consulting sector.Actions towards this will include making sure that international short-term TA is always pairedwith local TA so that the local partners benefit from on-the-job training. Other measures willinclude inviting consultants to training courses, workshops and study tours (private sectorconsultants will be asked to make an appropriate contribution to the cost) and helping to

establish a register of qualified consultants (as part of the CDS component)


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The implications of these principles for the programmes long-term advisors are as follows:

The Programme Advisor will be permanently present in-country but will divide his/her timebetween programme coordination and acting as advisor on the CDS component

The three largest components (PCDA, CPI and SDU) will have access to a full-time advisor forthe first two years of implementation, before the phasing out process be

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Van Kien Chuong Trinh - Eng