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.

<div class="horipane"><div class="title active">Description</div><div class="content"><table class="table"><tbody><tr><td class="fld"></td><td class="columns"><div class="less">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].</div><a class="seemore" href="#">See more...</a><div class="more" style="display:none">The DEZA project, covering a total area of 45,332ha (see project details), required the resettlement of more than 1,500 households from nine villages. During the first project phase (1997-2005), 1,111 families needed to be resettled to new areas. Compensation was quite low (26,000VND/m2), however, resettlement caused just a few complaints. During the second phase (2006 – 2014), another 8,297 families were affected, of which 701 needed to be relocated to new locations. While compensation payments were higher than during the first construction phase, people’s protests increased drastically and over 520 complaint letters were sent during 2010-2012. Reasons for this increase in complaints were reported to be partly related to differences in people’s perception of the project, as well as due to problems along to the resettlement process [1]. <br/><br/>During the first phase, the compensations received, although being comparatively low, were higher than their earnings from agriculture. Further, people reportedly also shared a common view on the needs for this project and consequently, they largely accepted to be resettled. However, during the second construction phase, the resettled groups received higher compensations as the first groups, due to a strong rise in land prices. These differences caused villagers, relocated during the first phase, to change their mind. On July 14, 2010 several hundred households who had previously accepted to leave the land, then returned to the oil refinery factory, protesting for higher compensations. They blocked the entrance of the factory, causing a stop of its activities [1]. Other reasons for the increase in protests were that during the second construction phase, compensations were not always paid in time, and sometimes, relocation areas were not immediately available for the displaced people. Some resettlement areas even overlapped with land of indigenous people, causing conflicts between the displaced and the indigenous. Many resettlement areas did not meet the promised “better living standards” and lacked basic needs supply such as access to clean water [1]. <br/><br/>Conflict over the DEZA project emerged hence largely during the post-resettlement process and due to a perceived injustice over compensation payments that followed the logic of the market value of land, rather than an understanding of equity among the affected land users. <br/><br/><a class="seeless" href="#">(See less)</a></div></td></tr></tbody></table></div></div><div class="horipane"><div class="title active">Basic Data</div><div class="content"><table class="table"><tbody><tr><td class="fld">Name</td><td>Dung Quat Economic Zone Authority (DEZA), Vietnam</td></tr><tr><td class="fld">Country</td><td><a href="/country/vietnam">Vietnam</a></td></tr><tr><td class="fld">Province</td><td>Quang Ngai province</td></tr><tr><td class="fld">Site</td><td>Bình Sơn District</td></tr><tr><td class="fld">Accuracy of Location</td><td>HIGH local level</td></tr></tbody></table></div></div><div class="horipane"><div class="title active">Source of Conflict</div><div class="content"><table class="table"><tbody><tr><td class="fld">Type of Conflict (1st level)</td><td>Infrastructure and Built Environment</td></tr><tr><td class="fld">Type of Conflict (2nd level)</td><td>Land acquisition conflicts<br /> Oil and gas refining<br /> Ports and airport projects<br /> Urban development conflicts<br /> Manufacturing activities<br /> Tourism facilities (ski resorts, hotels, marinas)</td></tr><tr><td class="fld">Specific Commodities</td><td><a href='/commodity/land'>Land</a></td></tr></tbody></table></div></div><div class="horipane"><div class="title active">Project Details and Actors</div><div class="content"><table class="table"><tbody><tr><td class="fld">Project Details</td><td class="columns"><div class="less">The 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].</div><a class="seemore" href="#">See more...</a><div class="more" style="display:none">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].<br/><br/>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].<br/><br/>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].<br/><br/>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].<br/><br/>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].<br/><br/><a class="seeless" href="#">(See less)</a></div></td></tr><tr><td class="fld">Project Area (in hectares)</td><td>45,332</td></tr><tr><td class="fld">Level of Investment (in USD)</td><td>4,850,000,000 (as of May 2015)</td></tr><tr><td class="fld">Type of Population</td><td>Semi-urban</td></tr><tr><td class="fld">Potential Affected Population</td><td>9,408 families affected, of which more than 1,500 families were displaced.</td></tr><tr><td class="fld">Start Date</td><td>1996</td></tr><tr><td class="fld">Company Names or State Enterprises</td><td><a href='/company/petrovietnam-company'>PetroVietnam Company <small>(PVN)</small></a> from <a href='/country-of-company/vietnam'><small>Vietnam</small></a> - <small>energy industry</small><br /><a href='/company/dung-quat-infrastructure-development-investment-co-ltd'>Dung Quat Infrastructure Development Investment Co., Ltd</a> from <a href='/country-of-company/vietnam'><small>Vietnam</small></a> - <small>infrastructure development</small><br /><a href='/company/technip-group'>Technip Group</a> from <a href='/country-of-company/france'><small>France</small></a> - <small>infrastructure, construction</small><br /><a href='/company/technip-geoproduction-malaysia-sdn-bhd'>Technip Geoproduction Malaysia Sdn. Bhd.</a> from <a href='/country-of-company/malaysia'><small>Malaysia</small></a> - <small>petrochemicals</small><br /><a href='/company/jgp-energy-kk'>JGP Energy K.K.</a> from <a href='/country-of-company/japan'><small>Japan</small></a> - <small>energy industry</small><br /><a href='/company/tecnicas-reunidas-s-a'>Tecnicas Reunidas, S. A. <small>(TR)</small></a> from <a href='/country-of-company/spain'><small>Spain</small></a> - <small>energy industry</small><br /><a href='/company/doosan-power-system'>Doosan Group <small>(Doosan)</small></a> from <a href='/country-of-company/republic-of-korea'><small>Republic of Korea</small></a><br /><a href='/company/sembcorp-industries'>Sembcorp Industries</a> from <a href='/country-of-company/singapore'><small>Singapore</small></a> - <small>construction</small></td></tr><tr><td class="fld">Relevant government actors</td><td>The Government of Vietnam<br/><br/>The Provincial Government of Quang Ngai</td></tr><tr><td class="fld">International and Financial Institutions</td><td><a href='/institution/vietcombank'>Vietcombank</a> from <a href='/country-of-institution/vietnam'><small>Vietnam</small></a><br /><a href='/institution/bnp-paribas'>BNP Paribas <small>(BNP)</small></a> from <a href='/country-of-institution/france'><small>France</small></a><br /><a href='/institution/mizuho-corporate-bank'>Mizuho Corporate Bank Ltd.</a> from <a href='/country-of-institution/japan'><small>Japan</small></a><br /><a href='/institution/the-bank-of-tokyo-mitsubishi'>The Bank of Tokyo Mitsubishi UFJ <small>(UFJ)</small></a> from <a href='/country-of-institution/japan'><small>Japan</small></a><br /><a href='/institution/nippon-export-and-investment-insurance-nexi'>Nippon Export and Investment Insurance (NEXI) <small>(NEXI)</small></a> from <a href='/country-of-institution/japan'><small>Japan</small></a> - <small>insurance, credit</small></td></tr><tr><td class="fld">Environmental justice organisations and other supporters</td><td>no information could be found</td></tr></tbody></table></div></div><div class="horipane"><div class="title active">The Conflict and the Mobilization</div><div class="content"><table class="table"><tbody><tr><td class="fld">Intensity of Conflict (at highest level)</td><td>MEDIUM (street protests, visible mobilization)</td></tr><tr><td class="fld">When did the mobilization begin</td><td>Mobilization for reparations once impacts have been felt</td></tr><tr><td class="fld">Groups Mobilizing</td><td>Farmers<br /> Fishermen<br /> Neighbours/citizens/communities</td></tr><tr><td class="fld">Forms of Mobilization</td><td>Blockades<br /> Official complaint letters and petitions<br /> Street protest/marches<br /> Occupation of buildings/public spaces<br /> Refusal of compensation</td></tr></tbody></table></div></div><div class="horipane"><div class="title active">Impacts</div><div class="content"><table class="table"><tbody><tr><td class="fld">Environmental Impacts</td><td><strong>Visible: </strong>Food insecurity (crop damage), Noise pollution<br /><strong>Potential: </strong>Air pollution, Biodiversity loss (wildlife, agro-diversity), Waste overflow, Surface water pollution / Decreasing water (physico-chemical, biological) quality</td></tr><tr><td class="fld">Health Impacts</td><td><strong>Visible: </strong>Mental problems including stress, depression and suicide<br /><strong>Potential: </strong>Malnutrition, Violence related health impacts (homicides, rape, etc..) , Health problems related to alcoholism, prostitution, Infectious diseases, Other environmental related diseases</td></tr><tr><td class="fld">Other</td><td>Potential health problems due to lacking access to clean drinking water in resettlement areas</td></tr><tr><td class="fld">Socio-economic Impacts</td><td><strong>Visible: </strong>Displacement, Land dispossession<br /><strong>Potential: </strong>Social problems (alcoholism, prostitution, etc..), Loss of livelihood, Loss of traditional knowledge/practices/cultures</td></tr></tbody></table></div></div><div class="horipane"><div class="title active">Outcome</div><div class="content"><table class="table"><tbody><tr><td class="fld">Project Status</td><td>In operation</td></tr><tr><td class="fld">Pathways for conflict outcome / response</td><td>Compensation<br /> Migration/displacement<br /> Application of existing regulations</td></tr><tr><td class="fld">Development of Alternatives</td><td>Affected families demand fair compensation and better resettlement areas</td></tr><tr><td class="fld">Do you consider this as a success?</td><td>No</td></tr><tr><td class="fld">Why? Explain briefly.</td><td>The voices of the affected people remained largely unheard [1]</td></tr></tbody></table></div></div><div class="horipane"><div class="title active">Sources and Materials</div><div class="content"><table class="table"><tbody><tr><td class="fld">Legislations</td><td><table><tr><td><p> Decree no. 29/2008/NĐ-CP dated 14 March 2008; Issuing regulations on industrial zones, export processing zones and economic zones<br/><a class="refanch small" href="http://vbqppl.mpi.gov.vn/en-us/Pages/default.aspx?itemId=97ff5cc9-b896-482d-80ee-3fc19f8a5841&list=documentDetail" target="_blank">[click to view]</a></p></td></tr><tr><td><p> 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<br/><a class="refanch small" href="http://kenfoxlaw.com/resources/legal-documents/governmental-decrees/2003-vbpl-sp-27381.html" target="_blank">[click to view]</a></p></td></tr><tr><td><p> 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.<br/><a class="refanch small" href="http://faolex.fao.org/cgi-bin/faolex.exe?rec_id=058640&database=faolex&search_type=link&table=result&lang=eng&[email protected]" target="_blank">[click to view]</a></p></td></tr></table></td></tr><tr><td class="fld">Links</td><td><table><tr><td><p> [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)<br/><a class="refanch small" href="http://asiafoundation.org/resources/pdfs/Publiclanddisputesreport.pdf" target="_blank">[click to view]</a></p></td></tr><tr><td><p> [2] Dung Quat Economic Zone Authority (DEZA) Webpage (accessed 15/06/2015)<br/><a class="refanch small" href="http://dungquat.com.vn/english/index.php?option=com_content&view=article&id=53&Itemid=99" target="_blank">[click to view]</a></p></td></tr><tr><td><p> [3] Talk Vietnam online (17/03/2015): "Dung Quat Economic Zone after ten-year establishment" (accessed 15/06/2015)<br/><a class="refanch small" href="http://www.talkvietnam.com/2015/03/dung-quat-economic-zone-after-ten-year-establishment/" target="_blank">[click to view]</a></p></td></tr><tr><td><p> [4] Quang Ngai Portal - Investment (accessed 15/06/2015)<br/><a class="refanch small" href="http://www.quangngai.gov.vn/eng/pages/qnp-intro-Investment-qnpstatic-181-qnpdyn-0-qnpsite-1.html" target="_blank">[click to view]</a></p></td></tr><tr><td><p> [5] Hydrocarbonstechnology.com online: "Dung Quat, Oil Refinery No.1, Vietnam" (accessed 15/06/2015)<br/><a class="refanch small" href="http://www.hydrocarbons-technology.com/projects/dung/" target="_blank">[click to view]</a></p></td></tr><tr><td><p> [6] Nippon Export and Investment Insurance, News Release (22/12/2006): "Vietnam/Dung Quat Economic Zone Project" (accessed 15/06/2015)<br/><a class="refanch small" href="http://www.nexi.go.jp/en/topics/newsrelease/002153.html " target="_blank">[click to view]</a></p></td></tr></table></td></tr><tr><td class="fld">Other Documents</td><td><table><tr><td><p><strong>Master Plan</strong> Source: http://www.business-in-asia.com/dung_quat_guang_ngai_vietnam.html<br/><a class="refanch small" href="https://file.ejatlas.org/docs/c___dungquat_plan.jpg" target="_blank">[click to view]</a></p></td></tr><tr><td><p><strong>Dung Quat Port</strong> Source: http://www.business-in-asia.com/dung_quat_guang_ngai_vietnam.html<br/><a class="refanch small" href="https://file.ejatlas.org/docs/c___dungquat_port_ship.JPG" target="_blank">[click to view]</a></p></td></tr><tr><td><p><strong>DEZA Industries</strong> Source: http://www.talkvietnam.com/2015/03/dung-quat-economic-zone-after-ten-year-establishment/<br/><a class="refanch small" href="https://file.ejatlas.org/docs/b__1649945-invest3.jpg" target="_blank">[click to view]</a></p></td></tr><tr><td><p><strong>DEZA Industries</strong> Source: http://www.talkvietnam.com/2015/03/dung-quat-economic-zone-after-ten-year-establishment/<br/><a class="refanch small" href="https://file.ejatlas.org/docs/b___1649945-invest2-500x331.jpg" target="_blank">[click to view]</a></p></td></tr></table></td></tr></tbody></table></div></div><div class="horipane"><div class="title active">Meta Information</div><div class="content"><table class="table"><tbody><tr><td class="fld">Contributor</td><td>A. Scheidel (ICTA-UAB) / arnim "dot" scheidel "at" gmail "dot" com</td></tr><tr><td class="fld">Last update</td><td>19/06/2015</td></tr></tbody></table></div></div>