Fair Sharing of Mining Revenue Mining activities cause negative environmental and social impacts. Different from manufacturing sector, mining activities normally require large land area for mine development. In addition, mines are normally located in the remote areas where local people are dependent on natural resources for their incomes and livelihoods.Therefore, mining not onlye affect other resources such as land, water, forest, ecosystem but also livelihoods of local communities.

According to current policies, there are around 15 revenue types in mining sector. The revenues are maily allocated to local buget (except revenues from oil and gas sector). Among them, royalty and environmental protection fee are important revenues and positively contributing to local budget. In 2013,local governments collected 7,462 billion VND royalty and 1,836 billion VND environmental protection fee. In some mining provinces such as Quang Ninh and Lao Cai, environmental protection fee contribute around 500 billion VND and 200 billition in Lao Cairespectively.
According to State BudgetLaw, Tax Management Law and other related policies, mining revenues must be effectively spent for sustainable development and benefit harmonization between related stakeholders (the State, local communities and investors). The Article 5 (Mineral Law 2010) also clearly stated that #mining revenues must be allocated for localities where mining activities are carried out are allocated mining revenues for social and economic development) and investors have responsibility to support localities and communities. Recently, DecreeNo158/2016/N#-CP include clear local content requirements at Articles 15 # 16 Chapter 3. However, these requirements are not properly implemented in practice due to lack of guideline and oversight mechanism at the local level.

On the other hand, the Government has collected mining environmental protection fee from 2006 to raise revenues for environmental compensation. In mining provinces, environmental protection fee is one important revenue forstate budget. According to Article 8, Decree No 164/2016/ND-CP, environmentalprotection fee must be collected and spent for environmental compensation in the mining area. However, environmental fee revenues are not properly spent for environmental compensation. Mining revenues are normally not spent to improve environmental and develop livelihoods for affected communities.

In 2015 # 2016, Vietnam Mining Coalition supported Tax Policy Department (Ministry of Finance) to revise Decree 74/2011/N#-CP on environmental fee in mining sector. On 24th December 2016, the Government issued Decree No 164/2016/N#-CP which clearly requires provincial governments to allocate environmental protection fee revenue for environmental purposes inthe mining areas. On theother hand, the provincial tax agencies are also required to disclose data on how much fee revenues collected and spent in the province.

Therefore, current legal framework on mining local contents have been improved. However, in practice, revenues havenot been managed in transparency manners and satisfied universal needs of the people. That led to environmental consequence and social conflicts in many mining area in Vietnam. Policy compliance is still weak area due to:

# Lack of guideline for policyimplementation at local level.
# Lack of mechanism for people mornitoring and oversight in mining management.
In this context, the project is proposed with objectives:
# Promoting transparency and fair sharing of mining revenues
# Strengthening implementation of local content requirements.
# Empowering local communities for oversight in revenue allocation and mining management.

In 2016 # 2017, Institute of Policies and Strategies on Natural Resources and Environment (ISPONRE) has conducted asurveyon benefit sharing from mining sector in 8 provinces (Cao B#ng, Thái Nguyên, Ngh# An, Qu#ng Ninh, Bình Thu#n, Lâm ##ng,#). In addition, ISPONRE is implementing 3 year project with overall objective of developing benefit sharing mechanism in 7 naturalresources and environmental sector.Therefore, the outcomes of this project will directly contribute to policy making process.