Agreement between Vietnam and Finand on the Financial Support to the Multi Donor Trust Fund for Forests 2004

AGREEMENT BETWEEN THE GOVERNMENT OF SOCIALIST REPUBLIC OF VIETNAM AND THE GOVERNMENT OF THE REPUBLIC OF FINAND ON THE FINANCIAL SUPPORT TO THE MULTI DONOR TRUST FUND FOR FORESTS

The Government of Socialist Republic of Vietnam ("Vietnam"), represented by the Ministry of Agriculture aqd Rural Development (MARD), and the Government of the Republic of Finland ("Finland"), represented by the Ministry for Foreign Affairs of Finland, jointly referred to as "the Parties", have,

on the basis of the Agreement on General Terms and Procedures for Development Cooperation between Vietnam and Finland signed on 8^th April, 1992, and on the basis of consultations on the development cooperation held in Helsinki on 4th June 2003 between the representatives of the two Governments,

agreed, in respect of the Financial Support to the Multi-Donor Trust Fund for Forests in Vietnam ("the Programme") as follows:

ARTICLE I

Scope and Objective

1. The Programme shall be implemented in accordance with the Memorandum of Understanding on the Establishment and Management of the Trust Fund for Forests in Vietnam 2004 - 2007 (MoU), with annexed Operational Principles, Guidelines and Procedures, signed on the 23^rd of June 2004 and attached as Annex to this Agreement, as well as in accordance with the possible later amendments of these documents. During the transition phase, MARD, through the Forestry Sector Support Program Coordination Office (FSSP CO), will manage the Trust Fund with support from technical assistance. Technical Assistance support will be delivered through a separate arrangement by mutual agreement between the contributing donors and MARD.

2. The overall objective of the Programme is the sustainable management of forests and the conservation of biodiversity to achieve a) protection of the environment, b) improved livelihoods of people in forest dependent areas, and c) enhanced contribution of forestry to the national economy.

The Programme has four specific objectives (1). Aligning ODA support more closely with the agreed priorities identified in the FSSP framework. (2). Improving the poverty targeting of ODA support to the forest sector, consistent with the Comprehensive Poverty Reduction and Growth Strategy (CPRGS). (3). Harmonizing aid delivery from ODA to the forest sector through reducing transaction costs on the Government of Vietnam, and (4). Supporting a transition towards a sector wide approach to ODA support in the forest sector.

Priority will be given to providing support activities that address pro-poor and sustainable approaches to forest management at policy level and piloting at implementation level.

ARTICLE II

Principles of Co-operation

1. Respect for human rights, democratic principles, good governance and the rule of law shall form the basis for the co­operation between Vietnam and Finland and constitute the essential elements of this Agreement.

2. The Programme shall be implemented in accordance with the principles of transparency and open dialogue.

ARTICLE III

Competent Authorities and Implementing Agency

1. The Ministry of Agriculture and Rural Development of Vietnam and the Ministry for Foreign Affairs of Finland, represented in Vietnam by the Embassy of Finland, shall be the Competent Autho­rities in matters relating to this Agree­ment.

2. The responsibility for the implemen­tation of the Trust Fund lies with the Ministry of Agriculture and Rural Development through the Forest Sector Support Program Coordination Office which shall also have the right to represent itself in matters pertaining to the implementation of the Trust Fund and not affecting the overall responsibilities of Vietnam.

ARTICLE IV

Financing by Finland

1. The initial contribution of Finland to the implementation of the Trust Fund in 2004 - 2007 shall, on a grant basis and subject to annual parliamentary approval in Finland, be a maximum of 1,869,914 Euros (one million eight hundred sixty nine thousand n_ne hundred fourteen Euros).

2. Any remaining balance of the Finnish contribution and the interest accrued thereto shall, upon the completion, be returned to Finland i_ proportion to Finland's contribution towards the Programme, unless otherwise agreed by the Parties.

ARTICLE V

Financing by Vietnam

1. Vietnam shall cover the costs as agreed in the MoU as its contribution to the implementation of the Programme.

ARTICLE VI

Disbursements

1. Finland shall make payments against a written request by Vietnam into the bank account agreed upon by the Competent Authorities. The payments shall be made in Euros. All funds contributed to the Trust Fund will be co­mingled and held in a dedicated bank account and will be denominated in Euros.

2. The first payment shall be made by Finland within 45 days of this agreement coming into force. Subsequent payments shall be made annually in accordance with the actu'al progress of the Programme. Finland will indicate commitments and indicative contributions to the Programme at annual Trust Fund replenishment meetings, and Amendments to this Agreement shall be made accordingly.

3. Vietnam shall keep proper financial records in accordance with professionally accepted bookkeeping rules and practices as stated in the MoU.

ARTICLE VII

Procurements

1. Vietnam shall take care of procure­ments for the Trust Fund, in accordance with generally accepted principles and good procurement practices, following the procedures specified in the MoU.

LARTICLE VIII

Information

1. The Parties shall:

(a) promptly inform each other of any event or situation which might affect the implementation of the Programme; and

(b) ensure that all relevant authorities and organisations are informed of this Agreement and the Programme.

2. Both Parties shall have the right to disseminate information about the Programme, including this Agreement, to the general public and other interested parties.

ARTICLE IX

Monitoring, Reporting and Evaluation

Reporting on the implementation of the Programme as well as monitoring and evaluation shall be performed in accordance with the procedures specified in the MoU.

ARTICLE X

Auditing

1. Auditing of the Programme shall be carried out in accordance with the provisions of the MoU.

2. Vietnam shall permit the represe­ntatives of Finland to carry out any inspection or audit in resnect of the implementation of the Programme. Such an inspection or audit may also be initiated by Vietnam.

ARTICLE XI

Suspension

1. Finland shall have the right to suspend in whole or in part the financing if:

(a) Finland considers that Vietnam has seriously failed to fulfil one of the essential elements referred to in Article II of this Agreement.

(b) Finland considers that Vietnam has seriously failed to fulfil any other obligation under this Agreement, including as specified in the MoU, or the Agreement on General Terms and Procedures for Development Cooperation;

(c) the management of the Programme is deemed to be unsatisfactory; or

(d) a condition has arisen which interferes or threatens to interfere with the implementation of the Programme or the attainment of the objectives and purposes of the Programme.

(e) the suspension is warranted by a fundamental change in the circumstances under which the Programme was started.

2. The suspension shall cease as soon as the event or events which gave rise to suspension have ceased to exist.

3. Finland reserves the right to claim repayment in full or in part of Finland's support if it is found to be misused.

4. Before suspending the financing or claiming repayment Finland shall consult Vietnam and the other donors with a view to reaching a solution in the matter.

ARTICLE XII

Liability

1. Finland does not bear any responsi­bility or liability to any third party with regard to the implementation of the Programme.

2. Vietnam shall bear all the risks arising from the implementation of the projects and programmes under this Agreement. Vietnam shall be responsible for dealing with claims which may be brought by third parties against Finland, Consulting Agencies or any member of their Personnel or against a person employed by Finland. Vietnam shall hold Finland, Consulting Agencies or any member of their Personnel or a person emplbyed by Finland harmless in respect of claims and liabilities arising in connection with the implementation of the projects and programmes under this Agreement.

3. Paragraph 2 above shall not apply where a claim or liability arises from gross negligence, willful misconduct or criminal conduct established by a court of Vietnam to the satisfaction of Finland.

ARTICLE XIII

Special Provisions

1. Other obligations of the Parties are specified in the MoU. The implementation of Finland's support to the Programme shall also be governed by the provisions of the Agreement on General Terms and Procedures for Development Cooperation, unless otherwise provided for in this Agreement.

2. In case of any inconsistency between this Agreement and the MoU, this Agreement shall prevail.

ARTICLE XIV

Entry Into Force, Termination, Amendments and Settlement of Disputes

1. This Agreement shall enter into force on the date of its signature and remain valid until all the obligations under this Agreement have been duly fulfilled by the Parties, unless terminated earlier by either Party by giving a notice in writing to that effect three months prior to the termination.

2. Should either Party consider it desirable to amend any provision of this Agreement it may request consultations with the other Party through its Competent Authority. Any amendment shall be agreed upon in writing between the Competent Authorities.

Done in Helsinki on November 11th, 2004 in two originals in the English language.

FOR VIETNAM

Nguyen Bich Dat

Vice-Minister, Ministry of Planning and Investment

FOR FINLAND

Paula Lehtomaki

Minister for Foreign Trade and Development

ANNEX

Memorandum of Understanding on the Establishment and Management of the Multi-Donor Trust Fund for Forests in Vietnam 2004 - 2007, with annexed Operational Principles, Guidelines and Procedures.