Vietnam Country Profile

Land Administration

Individual Corruption

The US Department of State 2009 mentions numerous reports of official corruption and lack of transparency in relation to land expropriation and moving of people to make way for construction and infrastructure projects. Although it is legally required that resettled citizens be compensated, there are complaints that compensation is often inadequate or delayed. The owner may be paid as little as USD 40 per square metre even though the land is sold for more than USD 300 per square metre. There is reportedly evidence that local officials personally profit from this practice.

According to the International Federation of Surveyors 2006, local officials are known to abuse their positions to demand gifts or bribes while performing formalities related to land, to exploit state projects to appropriate land, to illegally sell state property and to illegally acquire state-owned dwellings. Such powerful local officials are suspected of land speculation on the island of Phu Quoc and elsewhere in Vietnam.

In July 2007, hundreds of farmers from the Mekong Delta region surrounded a government building in Ho Chi Minh City to demand the return of their land and punishment for abusive officials. Freedom House 2009 reports that such land disputes have become more frequent in the past several years.

Business Corruption

Several sources indicate that land management constitutes the most corrupt sector in Vietnam. For example, according to the World Bank Vietnam Development Report 2006, many companies report that they have experienced isolated cases of corruption as well as bribes being expected when dealing with land administration agencies. According to the US Commercial Service 2007, private companies operating in Vietnam face many rules concerning land use rights. Policies and laws on land are incoherent and have many loopholes, while supervision and enforcement of the law within land administration is fairly lax. Many companies operating in Vietnam do not possess Land Use Rights Certificates. This, combined with complicated and time-consuming procedures, paves the way for corruption, which occurs frequently in registration of property rights, registration of change of title, acquiring land information, cadastral land surveying and land use planning.

The USAID Vietnam Provincial Competitiveness Index 2008 reveals that, while companies report that they generally face a lower expropriation risk than they did in 2006 and 2007, companies have less confidence on average that they will experience a fair process in disputes concerning lease contracts than in 2006 and 2007.

Political Corruption

Sources continue to identify land administration as the most corrupt sector in the country. In relation to land reclamation for projects and accounting of land clearance and settlement, a 2008 study by the Finnish Embassy in Hanoi mentions cases of individuals and organisations illegally selling or sharing land for profit or bribing local officials to legalise land occupation. State expropriation of land for infrastructure, agriculture, resettlement and development projects frequently involves corruption or other irregularities. According to the International Federation of Surveyors 2006, the three most common types of corruption crimes related to land are: 1) taking advantage of state projects to appropriate or share land, especially in forestation, residential areas and resettlement programmes; 2) abuse of power to award favourable positions, low prices and land, such as large area land-lease plots, to expedite related formalities and to seek profit through land grants, especially for investment purposes; and 3) authoritarian behaviour, demanding gifts or bribes to perform formalities related to land, such as land allocation, land lease, land rights transfer, land use certificate granting, land compensation and site clearance.

According to the US Department of State 2009, corruption in relation to land use has been widely publicised in the press in an effort to pressure local officials to stop abusing their authority. Top land administration officials were charged with corruption relating to the allocation of land use certificates in February 2008. They were accused of altering and issuing land use certificates for plots that had been designated for other uses and for modifying land use certificates intended for families that had been displaced by development projects, and issuing them to their own family members and local officials instead.

Frequency

The World Bank & IFC: Doing Business 2010:
- The process of registering property and securing property rights is relatively cheap and easy in Vietnam compared to regional averages, requiring 4 procedures and taking 57 days at a cost of 1.1% of the property value.

World Economic Forum: The Global Competitiveness Report 2009-2010:
- Business executives give the protection of property rights in Vietnam, including financial assets, a score of 4.4 on a 7-point scale (1 being 'very weak' and 7 'very strong').

USAID: Vietnam Provincial Competitiveness Index 2008:
- In the best performing and worst performing province in this area respectively, 53% versus 21% of companies report that they receive fair compensation if their land is expropriated.

- On average, 65% of companies feel that land availability constrains their business expansion.