Dung Quat Economic Zone Authority (DEZA), Vietnam

Where is the promised “better life”? Hundreds of households, displaced by the Dung Quat Economic Zone Authority (DEZA) project, have complained over post-resettlement issues and unfair compensation schemes.


Description

The Dung Quat Economic Zone Authority (DEZA) project, located in Quang Ngai province, was established to set up a large special economic and industrial zone, including Vietnam’s first oil refinery [1;2]. It was approved by the Prime Minister in 1996 and constructed within two project phases, between 1997 and 2014 [1].

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Basic Data
NameDung Quat Economic Zone Authority (DEZA), Vietnam
CountryVietnam
ProvinceQuang Ngai province
SiteBình Sơn District
Accuracy of LocationHIGH local level
Source of Conflict
Type of Conflict (1st level)Infrastructure and Built Environment
Type of Conflict (2nd level)Land acquisition conflicts
Oil and gas refining
Ports and airport projects
Urban development conflicts
Manufacturing activities
Tourism facilities (ski resorts, hotels, marinas)
Specific CommoditiesLand
Project Details and Actors
Project DetailsThe purpose of the Dung Quat Economic Zone Authority (DEZA) project, formerly called Dung Quat Industrial Zone, is to develop an economic zone in the province. The economic zone is organized in several functional areas, such as industrial parks, non-tariff zones, export-processing zones, as well as entertainment venues, tourist areas, residential areas and administrative areas [1;2].

The DEZA project covers an area of 45,332ha, composed of 10,300ha for the industrial zone; additional 24,280ha for other purposes, and 10,752ha of sea area [1]. It required the acquisition of 2,900ha of land use rights from around 1,500 households [1]. (Note that in Vietnam no private ownership over land exists, being state property. Land use is regulated via land use rights). Nine villages are located in the DEZA area: Bình Sơn District: Bình Hòa, Bình Phú, Bình Phước,Bình Đông, Bình Thạnh, Bình Chánh, Bình Trị, Bình Hải, and Bình Thuận [1]. The Dung Quat Infrastructure Development Company was responsible for handling clearance and compensations [1].

In May 2015, it was reported that DEZA licensed 122 projects, with a total registered capital of 10.4 billion USD and a total invested capital of 4.85 billion USD. 22 of these projects are Foreign Direct Investment (FDI) projects. For the year 2020, DEZA wants to achieve a total implemented investment of 10 billion USD [3].

Among the major investment projects within DEZA has been the 2.5 billion USD Dung Quat Oil Refinery, operated by state-owned PetroVietnam Company, with a capacity of 6.5 million tons of crude oil per year. The refinery has been a central component of the DEZA proposal since its planning in 1995. It was largely constructed by contractor Technip Group, including Technip France (France), Technip Geoproduction (Malaysia), JGP (Japan) and Tecnicas Reunidas (Spain) [4]. Investment came partly from the Government of Vietnam, as well as from the Bank of Foreign Trade of Vietnam (Vietcombank), which arranged a 250$ million USD loan for the project [5]. A 300 million USD loan was secured for the project from BNP Paribas; the Mizuho Corporate Bank, Ltd.; the Bank of Tokyo Mitrsubishi UFJ, Ltd.; and the Australia and New Zealand Banking Group Limited. The loan was insured by Nippon Export and Investment Insurance (NEXI) [6]. Also the contractor companies arranged loans amounting to 500 million USD [5].

Other major investment projects in the DEZA zone include for example the Doosan Heavy Industry Complex (Doosan Vina) from the Korean Doosan Group, the Dung Quat Shipyard, the Vietnam Singapore Industrial Park, and a 1,200 MW Thermal Power Plant with a registered capital of 2.5 billion USD, the latter two projects both established by Sembcorp Group (Singapore) [3].

The project was established via several decisions and resolutions: The Prime Minister’s Decision No. 207/TTg (1996) approved the general plan; Decision No. 553/TTg (1996) established the Management Board; Resolution No. 07/1997/QH, (1997) established the Dung Quat Oil Refinery Factory; Prime Minister’s Decision No. 514/TTg defined investment in Dung Quat No.1 Oil Refinery Factory; The 2005 Prime Minister issued Decision No. 50/2005/QĐ-TTg established the Dung Quat Economic Area based on Dung Quat Industrial Zone [1].
Project Area (in hectares)45,332
Level of Investment (in USD)4,850,000,000 (as of May 2015)
Type of PopulationSemi-urban
Potential Affected Population9,408 families affected, of which more than 1,500 families were displaced.
Start Date1996
Company Names or State EnterprisesPetroVietnam Company (PVN) from Vietnam - energy industry
Dung Quat Infrastructure Development Investment Co., Ltd from Vietnam - infrastructure development
Technip Group from France - infrastructure, construction
Technip Geoproduction Malaysia Sdn. Bhd. from Malaysia - petrochemicals
JGP Energy K.K. from Japan - energy industry
Tecnicas Reunidas, S. A. (TR) from Spain - energy industry
Doosan Group (Doosan) from Republic of Korea
Sembcorp Industries from Singapore - construction
Relevant government actorsThe Government of Vietnam

The Provincial Government of Quang Ngai
International and Financial InstitutionsVietcombank from Vietnam
BNP Paribas (BNP) from France
Mizuho Corporate Bank Ltd. from Japan
The Bank of Tokyo Mitsubishi UFJ (UFJ) from Japan
Nippon Export and Investment Insurance (NEXI) (NEXI) from Japan - insurance, credit
Environmental justice organisations and other supportersno information could be found
The Conflict and the Mobilization
Intensity of Conflict (at highest level)MEDIUM (street protests, visible mobilization)
When did the mobilization beginMobilization for reparations once impacts have been felt
Groups MobilizingFarmers
Fishermen
Neighbours/citizens/communities
Forms of MobilizationBlockades
Official complaint letters and petitions
Street protest/marches
Occupation of buildings/public spaces
Refusal of compensation
Impacts
Environmental ImpactsVisible: Food insecurity (crop damage), Noise pollution
Potential: Air pollution, Biodiversity loss (wildlife, agro-diversity), Waste overflow, Surface water pollution / Decreasing water (physico-chemical, biological) quality
Health ImpactsVisible: Mental problems including stress, depression and suicide
Potential: Malnutrition, Violence related health impacts (homicides, rape, etc..) , Health problems related to alcoholism, prostitution, Infectious diseases, Other environmental related diseases
OtherPotential health problems due to lacking access to clean drinking water in resettlement areas
Socio-economic ImpactsVisible: Displacement, Land dispossession
Potential: Social problems (alcoholism, prostitution, etc..), Loss of livelihood, Loss of traditional knowledge/practices/cultures
Outcome
Project StatusIn operation
Pathways for conflict outcome / responseCompensation
Migration/displacement
Application of existing regulations
Development of AlternativesAffected families demand fair compensation and better resettlement areas
Do you consider this as a success?No
Why? Explain briefly.The voices of the affected people remained largely unheard [1]
Sources and Materials
Legislations

Decree no. 29/2008/NĐ-CP dated 14 March 2008; Issuing regulations on industrial zones, export processing zones and economic zones
[click to view]

Decree No. 22/1998/NĐ-CP (1998) on compensations for damage when the state recovers land for use in purposes of national defense, security, national interests and public interests
[click to view]

Decree No. 84/2007/ND-CP additionally stipulating the grant of land use right certificates, recovery of land, exercise of land use rights, order and procedures for compensation, support and resettlement upon land recovery by the State, and settlement of land related complaints.
[click to view]

Links

[1] Australian Aid, The Asia Foundation and T&C Consulting, 2014. Public Land Disputes in Vietnam: A Multi-Actor Analysis of Five Case Studies with an East Asian Comparative. (accessed 15/06/2015)
[click to view]

[2] Dung Quat Economic Zone Authority (DEZA) Webpage (accessed 15/06/2015)
[click to view]

[3] Talk Vietnam online (17/03/2015): "Dung Quat Economic Zone after ten-year establishment" (accessed 15/06/2015)
[click to view]

[4] Quang Ngai Portal - Investment (accessed 15/06/2015)
[click to view]

[5] Hydrocarbonstechnology.com online: "Dung Quat, Oil Refinery No.1, Vietnam" (accessed 15/06/2015)
[click to view]

[6] Nippon Export and Investment Insurance, News Release (22/12/2006): "Vietnam/Dung Quat Economic Zone Project" (accessed 15/06/2015)
[click to view]

Other Documents

Master Plan Source: http://www.business-in-asia.com/dung_quat_guang_ngai_vietnam.html
[click to view]

Dung Quat Port Source: http://www.business-in-asia.com/dung_quat_guang_ngai_vietnam.html
[click to view]

DEZA Industries Source: http://www.talkvietnam.com/2015/03/dung-quat-economic-zone-after-ten-year-establishment/
[click to view]

DEZA Industries Source: http://www.talkvietnam.com/2015/03/dung-quat-economic-zone-after-ten-year-establishment/
[click to view]

Meta Information
ContributorA. Scheidel (ICTA-UAB) / arnim "dot" scheidel "at" gmail "dot" com
Last update19/06/2015
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