Directive 08/CT-TTg on timber and non-timber forest product processing industry

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Directive No. 08/CT-TTg dated March 28, 2019 of the Prime Minister on a number of tasks and solutions for fast and sustainable development of timber and non-timber forest product processing industry for export
Issuing body: Prime Minister Effective date:
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Official number: 08/CT-TTg Signer: Trinh Dinh Dung
Type: Directive Expiry date: Updating
Issuing date: 28/03/2019 Effect status:
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Fields: Export - Import , Industry

SUMMARY

To strive to raise export turnover of timber and non-timber forest products to USD 11 billion in 2019

On March 28, 2019, the Prime Minister issues the Directive No. 08/CT-TTg on a number of tasks and solutions for fast and sustainable development of timber and non-timber forest product processing industry for export.

Accordingly, the development objectives of the timber and non-timber forest product processing industry are as follow:

- In the coming 10 years, the timber and non-timber forest product processing industry will become a spearhead economic sector in Vietnam’s production and export; build Vietnamese timber and non-timber forest product brands, striving to turn Vietnam into one of the world’s leading nations in manufacturing, processing and exporting timber and non-timber forest products of prestigious brands in the world’s markets;

- To strive to raise export turnover of timber and non-timber forest products to USD 11 billion in 2019; between USD 12 billion and USD 13 billion by 2020; between USD 18 billion and 20 billion by 2025…
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THEPRIME MINISTER

 

THE SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness

No. 08/CT-TTg

 

Hanoi, March 28, 2019

 

DIRECTIVE

On a number of tasks and solutions for fast and sustainable development of timber and non-timber forest product processing industry for export[1]

 

Timber and non-timber forest products are Vietnam’s sixth important export item and unceasingly record high growth rates with an annual average growth of over 13% during 2010-2018. In 2017, the timber and non-timber forest product processing industry’s export turnover reached more than USD 8 billion, with timber and timber products accounting for USD 7.66 billion, up 10.2% from the 2016’s figure and fulfilled the goal three years ahead of the schedule set in the 2006-2020 forestry development strategy. The timber and non-timber forest product processing industry’s export turnover reached more than USD 9.38 billion in 2018, a year-on-year increase of 15.9%, representing over 23% of the agriculture and rural development sector’s export turnover, of which export turnover of timber and timber products contributed around USD 8.909 billion with a trade surplus of over USD 7 billion, making up 85% of the whole sector’s trade surplus value. Vietnam’s timber products have been exported to 120 countries and territories and rank second in Asia and fifth in the world in export turnover, accounting for 6% of the world’s timber product market share and there remains plenty of room for development.

With around 4,500 enterprises recruiting tens of thousands of workers and more than one million farmer households planting raw material forests, the timber and non-timber forest product processing industry has truly become a spearhead economic sector in the national economy. The development of timber and non-timber forest product processing industry for export promotes afforestation development, protects the environment, creates sustainable livelihood for rural and mountainous farmer households and contributes to successful implementation of the forestry sector restructuring program.

Despite recognizable achievements, the timber and non-timber forest product processing industry is facing not a few challenges and difficulties, e.g., the sources of supply of raw materials possessing high quality and sustainable forest management certificates remain limited; chain-based linkages between forest growers and enterprises from the stage of creating new seedlings to processing and exports are loose; investment in silvicultural infrastructure is not paid with due attention; tax and land concentration policies for developing material zones reveal many shortcomings, small-sized enterprises can hardly access credit sources to expand their production and business; development of corporate and national brands for timber products has not yet been paid proper attention; international trade conflicts and frequent changes and adjustmentsin policies of material exporting nations and timber product importing nations exert great impacts on the timber and non-timber forest product processing industry; and free trade agreements and treaties to which Vietnam has acceded to bring about both opportunities and challenges to Vietnam’s timber and forest product processors.

To bring into play attained achievements, surmount difficulties and overcome challenges and potential risks to create breakthroughs for fast and sustainable development of the timber and non-timber forest product processing industry for export, the Prime Minister requests ministries, sectors, localities and enterprises to effectively implement the following contents:

I. VIEWPOINTS AND OBJECTIVES

1. To develop the timber and non-timber forest product processing industry toward sustainability, effectiveness and modernity on the basis of deep integration into regional and global markets; to use timber materials of lawful origin; to apply advanced technologies and modern equipment and ensure environmental standards in production.

2. In the coming 10 years, the timber and non-timber forest product processing industry will become a spearhead economic sector in Vietnam’s production and export; build Vietnamese timber and non-timber forest product brands, striving to turn Vietnam into one of the world’s leading nations in manufacturing, processing and exporting timber and non-timber forest products of prestigious brands in the world’s markets.

3. To strive to raise export turnover of timber and non-timber forest products to USD 11 billion in 2019; between USD 12 billion and USD 13 billion by 2020; between USD 18 billion and 20 billion by 2025; to gradually increase the proportion of export turnover of intensively processed products with Vietnam’s brands and high added value in the total export turnover.

 

II. TASKS AND SOLUTIONS

1. To strictly comply with the Law on Forestry adopted by the National Assembly in 2017 and its guiding texts so as to simplify administrative procedures and create a favorable investment environment for people and enterprises engaged in processing timber and non-timber forest products for export and sustainable forestry development; to formulate the 2021-2030 forestry development strategy, review and complete the forestry master plan, work out plans to develop material zones and the processing industry in accordance with the Law on Forestry.

2. To further implement capital support policies, create conditions for enterprises in terms of land and sites for construction of timber manufacturing and processing plants and facilities. To encourage and support enterprises to associate with one another to form centralized timber supply and processing areas (including also industrial parks providing auxiliary services for timber processing). The State shall allocate funds or assist enterprises to build 1 large-sized timber import and distribution center (a material timber wholesale market) to feed processing facilities associated with timber and non-timber forest product handicraft and industrial complexes.

3. To increase investment in scientific and technological research and application in processing timber and non-timber forest products for export; to bring creative thinking to Vietnam’s timber products and enhance design capacity to create high-value products bearing Vietnamese brands, and build Vietnamese timber and non-timber forest product brands to create growth momentum for the timber and non-timber forest product processing industry in the coming time.

4. To accelerate large timber plantation and supply timber materials with sustainable forest management certificates to meet the demand of the international market; to study and apply science and technology in material production from selecting and creating seedlings, controlling and ensuring the quality of seedlings for afforestation to intensive forest plantation, forest tending, timber harvest so as to improve the yield, quality and value of planted forests; to develop sustainable material zones to satisfy increasing demands for materials of the timber and non-timber forest product processing industry serving the domestic market and export.

5. To develop and expand value chain-based linkage models between forest growers and processing enterprises. To boost training of human resources, especially high-quality human resources, for timber processing industry. To prioritize investment in top research and training centers to turn out high added value products; to strengthen linkages and coordination between enterprises and training centers, attaching importance to synchronous training and harmonious combination among university, intermediate and technician training in line with practical development requirements and technologies of the timber and non-timber forest product processing industry.

6. To promote the application of science and technology at all enterprises; to effectively use materials and diversify products, reduce costs and product costs, increase their productivity, efficiency and competitiveness in international and domestic markets; to pay attention to building brands for Vietnamese exported products and ensure manufacturing will reach international market’s standards; to strive to have at least one product of the forest industry listed as a key national product.

7. To speed up market development, build and promote Vietnam’s timber and non-timber forest product brands; to build a system of information on product markets and standards, promote e-commerce for timber and non-timber forest products; to effectively implement treaties to which Vietnam has acceded, attaching more importance on the domestic market; to prioritize resources for trade promotion programs at home and abroad, invest in large exhibition centers in correspondence with the timber processing industry’s development potentials, and in the immediate future, upgrade the existing VIFA-EXPO fair in Ho Chi Minh City into an international fair of Vietnam’s timber processing industry in couple with annual honoring and selection of prestigious brands.

8. To effectively disseminate information on, promote and mobilize people and enterprises to change their awareness about the use of timber of lawful origin, shift from using natural forest timber to planted forest timber and from extensive plantation to intensive plantation, and combine small timber tree plantation with big timber tree plantation so as to ensure sufficient material sources to meet the development demand of the timber processing industry toward using assorted types of timber and diversifying products, including interior and exterior wooden products, wood boards, chipboards and wood pellets with the group of interior and exterior wooden products of high added value playing the key role. To adopt public procurement policies, prioritizing the use of timber products made in Vietnam from domestically planted forest timber of lawful origin and meeting environmental sustainability standards in order to promote development of the domestic timber market.

9. Associations of timber and non-timber forest product processors shall proactively move toward international integration, fully implement international commitments and strictly comply with international law; gradually improve production capacity, renew technologies and enhance corporate governance to create diverse new high-quality products, thus meeting domestic and international markets’ demands; provide public information on and mobilize their members to boost the manufacturing and trading of legal and sustainable timber, resolutely “say no” to the use of materials of unlawful origin.

III. ORGANIZATION OF IMPLEMENTATION

In order to attain fast, effective and sustainable development of the timber and non-timber forest product processing industry for export, the Prime Minister requests ministries, sectors, localities, enterprises and associations to timely implement the following key tasks:

1. The Ministry of Agriculture and Rural Development shall:

- Assume the prime responsibility for, and coordinate with related ministries and sectors in, studying and adjusting land mechanisms and policies, studying and applying scientific and technological advances in all stages of production from seedling, planting and tending of forests to processing, and studying policies on coordination between forest growers and processors based on the value chain of forestry products.

- Assume the prime responsibility for, and coordinate with the Ministry of Industry and Trade, Ministry of Finance and related ministries and sectors in, studying and adjusting human resource training mechanisms and policies, investment and tax policies, simplifying administrative procedures, developing auxiliary industries and logistics serving sustainable development of the timber and non-timber forest product processing industry.

- Formulate a scheme to develop the forestry industry into a sustainable forestry economic sector in line with the Law on Forestry and the new situation and in compliance with free trade agreements and other treaties to which Vietnam has acceded and submit it to the Prime Minister for promulgation.

-  Assume the prime responsibility for building a timber legality assurance system and relevant laws on certification of origin for legal timber; develop a database system to classify timber and non-timber forest product processors.

- Assume the prime responsibility for, and coordinate with the Ministries of Planning and Investment; Finance; and Industry and Trade and other related ministries and sectors in, determining key programs and projects prioritized for development investment in order to create fast and sustainable development breakthroughs in the timber and non-timber forest product processing industry for export.

- Coordinate with related ministries and sectors in submitting to the Government for approval the VPA/FLEGT agreement with the European Union; take the initiative in negotiation on mutual recognition of regulations on legal timber to develop export outlets for timber and non-timber forest products.

- Step up the implementation of the scheme on sustainable forest management and forest certificates approved by the Prime Minister in Decision No. 1288/QD-TTg of October 1, 2018; set up a system of forest certificates to promote sustainable forest management and grant Vietnam’s forest certificates; coordinate with the Ministry of Science and Technology in formulating a scheme on development of key products and national products.

- Assess the situation of using timber materials to propose solutions for creating sources of materials of lawful origin and high quality from domestically planted forests so as ensure sustainable supply of materials for the timber processing industry for export; assume the prime responsibility for, and coordinate with ministries, sectors, localities, enterprises and associations in, assessing the overall situation and efficiency of timber manufacturing and processing (interior woodwork, timber used in decoration and construction, semi-finished wood products, woodchips, wood pellets, artificial wood boards, etc.), so as to work out development orientations for the coming years.

- Further provide and disseminate information and guidance on market  demands, regulation on origin of legal timber and importing countries’ standards of timber and non-timber forest products to forest owners and associations and enterprises of the timber and non-timber forest product processing industry.

2. The Ministry of Finance shall:

- Assume the prime responsibility for, and coordinate with related ministries and sectors in, studying and promulgating public procurement policies with priorities given to the use of timber products made in Vietnam using planted forest timber of lawful origin.

- Coordinate with the Ministry of Agriculture and Rural Development in controlling the import of timber and timber products into Vietnam to ensure legality of timber.

- Prioritize budget funds for human resources training programs of the timber and non-timber forest product industry.

- Prioritize budget funds for trade promotion and brand building and promotion brands of Vietnam’s timber industry. Consider the allocation of funds to build a large-scale wooden furniture exhibition center in Ho Chi Minh City.

- Coordinate with the State Bank of Vietnam in studying and proposing to the Prime Minister for consideration the provision of financial support from the State’s development investment credits for the development of material zones and the timber and non-timber forest product processing industry for export.

3. The Ministry of Industry and Trade shall:

- Study and improve mechanisms and policies to develop domestic and export markets; promote Vietnam’s timber products and brands in the international market.

- Formulate and submit to the Prime Minister a scheme on upgrading the VIFA-EXPO Fair into an international fair in association with annual honoring and selection of prestigious brands of the timber processing industry.

- Assume the prime responsibility for, and coordinate with the Ministry of Agriculture and Rural Development and Ministry of Finance in, working with related agencies to reach consensus on the imported timber management mechanism to ensure legality of imported timber.

4. The Ministry of Planning and Investment shall:

- Guide the implementation of the Government’s Decree No. 57/2018/ND-CP of April 17, 2018, on mechanisms and policies to encourage enterprises to invest in agriculture and rural areas; annually allocate medium-term capital for ministries, sectors and localities to effectively implement the Government’s Decree No. 57/2018/ND-CP.

- Coordinate and reach agreement with the Ministry of Agriculture and Rural Development on methods for making statistics on the acreage and output of timber harvested from planted forests and other types of timber nationwide, ensuring that the announced data accurately reflect the reality to serve the setting of development orientations for the industry.

5. The Ministry of Science and Technology shall:

- Assume the prime responsibility for, and coordinate with the Ministry of Agriculture and Rural Development and other related ministries and sectors in, investing in the research and application of hi-tech and advanced technologies in selecting and creating seedlings, planting and tending forests, harvesting and processing timber and forest products with the aim of raising productivity and quality, developing new products, promoting Vietnam’s brands; recognize industrial designs and utility solutions for timber and non-timber forest product processing technologies; propose the Prime Minister to approve the decision to include forest products into the list of key national products.

- Assume the prime responsibility for, and coordinate with the Ministry of Agriculture and Rural Development, related ministries and sectors and associations in, reviewing the system of forestry-related national standards and technical regulations, building the system of barcodes and numeric codes and taking measures to trace the origin of timber and non-timber forest products.

6. Provincial-level People’s Committees shall:

- Organize the dissemination of information on restricted harvest of young forests and trading of large-sized timber to people and enterprises to protect the ecological environment and create sources of large-diameter timber for production, and raising the efficiency of planted forest business.

- Prioritize the allocation of budget funds for supporting the planting of production forests under the Prime Minister’s Decision No. 38/2016/QD-TTg of September 14, 2016, and the Government’s Decree No. 57/2018/ND-CP on mechanisms and policies to encourage enterprises to invest in agriculture and rural areas.

- Effectively organize the implementation of the Party’s and State’s lines and policies; deploy investment incentive and support policies for fast and sustainable development of the timber and non-timber forest product industry.

- Focus on the implementation of support policies, creating conditions for enterprises regarding land and sites for construction for timber manufacturing and processing facilities and plants. Encourage and support enterprises’ linkages, zone off and support infrastructure construction so as to form centralized timber supply and processing zones (including also industrial parks providing auxiliary services for timber processing) in their localities.

- Support and create conditions for timber and non-timber forest product processing associations to organize exhibition fairs, introduce products and promote trade and facilitate their members’ access to preferential credits under current regulations.

- Ho Chi Minh City shall study the allocation of state budget funds and land or adopt policies to lure investment in, socialize and support enterprises in building 1 large-scale wooden furniture exhibition center with an area of at least 60,000 m2.

7. Timber and non-timber forest product processing associations shall:

- Provide more market information to their members to increase proactiveness and prevent potential risks; promote the communications about importing countries’ laws and system of accountability for legality of timber; build brands and fine images of the timber and non-timber forest product processing industry for export. Coordinate with the Ministry of Industry and Trade and Ministry of Agriculture and Rural Development in organizing international fairs of Vietnam’s timber processing industry on the basis of the VIFA-EXPO, laying down criteria and organizing exhibitions together with the annual honoring and selection of prestigious brands.

- Enhance linkages among members; protect members’ lawful interests; serve as a bridge linking state agencies and enterprises; tighten solidarity and fight against bad and false information on the country’s timber and forest product processing activities for export.

Ministers, heads of ministerial-level agencies, heads of government-attached agencies, chairpersons of provincial-level People’s Committees, and timber and non-timber forest product processing enterprises and associations shall implement this Directive.-

For the Prime Minister
Deputy Prime Minister
TRINH DINH DUNG



[1]Công Báo Nos 377-378 (07/4/2019)

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