Vietnam: Reforms Needed to Improve Transparency and Reduce Corruption in Land Management, According to Two New Reports

January 19, 2011

Hanoi, Jan 20, 2011: A combination of policy reforms, greater transparency, and enhanced accountability can help reduce the threat of corruption related to land management.

A new report, commissioned by the Embassy of Denmark, the World Bank, and the Embassy of Sweden “Recognizing and Reducing Corruption Risks in Land Management in Vietnam” systematically examines the process of obtaining a land-use rights certificate and the processes associated with land acquisition and allocation. The study identifies the policies that make corruption so profitable, and the problems that make it so difficult to stop.

“Corruption related to land is an important challenge for Vietnam. We hope this report will help point the way toward reforms that will make corruption less likely,” said John Nielsen, Ambassador of Denmark.

The report draws on a combination of nationwide surveys of firms and households, and detailed provincial case studies. While many sources, including the government’s National Anticorruption Strategy to 2020, suggest that the problem of corruption in land management is formidable, it is important to keep focused on solutions rather than problems. “It is natural to wonder about the level of corruption, but it is much more important to understand the reasons for the corruption and what can be done to reduce the risk,” said Victoria Kwakwa, Country Director of the World Bank.

Several current policies make corruption related to land unusually profitable. The practice of compulsory land acquisitions, especially when prices are set below market values, creates large uncontested profits for some, and this can contribute to corruption. “Sometimes such acquisitions are needed, for example when building a road or a public project, but direct negotiations are better for private projects,” said Professor Dang Hung Vo, a contributor to the report. “When compulsory land acquisition is needed, an independent mechanism for determining prices is needed to bring them more in line with market prices. This would help reduce the large number of complaints about compensation.” 

Other policies also create incentives for corruption. The process of obtaining a land-use rights certificate was found to be unnecessarily complex and time consuming. This creates incentives to cut corners by working through intermediaries or by making unofficial payments. Reducing corruption also calls for strengthening the accountability of officials. For many stages of the processes related to land management, the system of accountability is not sufficient to deter corruption.

Building accountability calls for new approaches for both the officials who handle land transactions and for those entrusted to investigate allegations of wrong-doing. Income and asset declarations for key officials, if verified and made public as in many other countries, could provide a stronger tool for fighting corruption.

The report also highlights the importance of transparency for controlling corruption. Although many documents are required to be made public, such transparency rules can only be effective if they are well implemented. Survey Report on Information Disclosure of Land Management Regulations, a parallel study commissioned by the World Bank and carried out by the Vietnamese think tank DEPOCEN, systematically examines how well various transparency provisions are implemented in practice. Although nearly all websites had instructions for obtaining a “red book”, other key documents were much harder to find, either online or in any other form: for example very few communes provide open access to the decisions approving compensation, support, and resettlement plans.

The report argues that improving transparency would make corruption more difficult to hide and would provide citizens and the business community with confidence in the integrity of decisions that affect them.”

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