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Cablegate: Vietnam -- Candidate for the Un Commission On

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 06 HANOI 002630

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E.O. 12958: N/A
TAGS: ECON EAID EAGR KSCA SENV TSPL VM
SUBJECT: VIETNAM -- CANDIDATE FOR THE UN COMMISSION ON
SUSTAINABLE DEVELOPMENT'S WATER INITIATIVE

REF: STATE 275504

1. SUMMARY: Post nominates Vietnam as a candidate country
for the water initiative of the UN Commission on Sustainable
Development (see reftel). Vietnam has an incredibly diverse
geography with accompanying water issues. Vietnam has a
national water plan, and on-going research projects with a
wide range of international donors, NGOs, and UN agencies.
However, Vietnam still needs outside assistance in
developing and implementing an integrated water resource
management plan that highlights safe water systems at the
household level and uses innovative financing systems to
build the most crucial water projects in a timely fashion.
An investment in clean water in Vietnam would improve the
prospects for its present and future workforce. Post stands
ready to work with the Department to undertake such an
effort in Vietnam. END SUMMARY.

2. GEOGRAPHY - Blessing and Curse: Vietnam has an incredibly
diverse geography -- ranging from dry mountainous regions
along the border with China and Laos to the mangrove swamps
along the coast to the vast tidal basin of the Mekong River
Delta. That incredible breadth of geography also accompanies
a vast span of water issues. Vietnam must address water
management (and disaster mitigation) issues associated with
the annual floods in the Mekong River Delta, flash floods
along the central coast regions, and droughts in the dry
northern regions (where water harvesting is key). Along the
coast and in the Mekong River Delta, there are many efforts
to delay, or reverse, the salt infiltration and heavy metal
accumulation arising from both natural and man-made
activities.

3. BACKGROUND: Per reftel, Post conducted an in-house
evaluation of Vietnam's existing water strategies and
programs. Vietnam has a national water strategy, developed
with the assistance of various donors. However,
implementation of that plan lags behind schedule. No doubt,
Vietnamese officials would welcome the chance to review
their existing plans and to development a comprehensive
water resource strategy by working hand-in-hand with the
proposed multi-agency/multi-donor expert teams. Per reftel
instructions, we have not contacted national or provincial
water resource mangers, but there is a wealth of information
and experience that needs better coordination and a more
priority-ranked approach to tackling the most critical
needs. It would also be vital to obtain close support from
the international NGOs, World Bank, and UN agencies working
here on an impressive, but scattered, array of water-related
initiatives.

IMPORTANCE OF WATER AND WASTEWATER SERVICE
------------------------------------------

4. There is a persistent correlation between a country's
prosperity and the quality of its water supply coverage. The
World Bank recently calculated that a dollar spent on
provision of sanitation buys more health than a dollar spent
on health services. Subsequent to the World Summit on
Sustainable Development in Johannesburg in 2002, in
recognition of the importance of water, the United States is
committing almost a billion dollars to improve access to
water and sanitation, promote watershed management and
proper hygiene practices, and increase the productivity of
water. While many parts of the Vietnamese government (and
donors working here) would agree on the importance of water
and sanitation issues, there is little true coordination of
regional (e.g., Mekong River Commission), national,
provincial, and district level projects.

5. According to a recent World Bank/Danida study, over the
last five decades Vietnam has lost more than 80 percent of
its mangrove forests/swamps. About 96 percent of Vietnam's
coral reefs are severely threatened by human activities.
Although the marine catch (offshore fishing) has doubled in
recent years, the catch per unit of effort is quickly
declining. Moreover, a 1991-2000 study found that floods in
the Mekong River Delta were become more severe. Meanwhile,
four areas in central Vietnam are showing evidence of
desertification.

LEVEL OF BASIC WATER AND SANITATION SERVICES
--------------------------------------------

6. Presently, only 36 percent of Vietnam's 80 million people
have access to piped water. Roughly 50 percent of urban
populations are covered by piped water works and in major
cities this figure is upwards of 70 percent
coverage. Shortages and intermittent flow are usual, and 80
percent of household water sources are below national
quality standards. In general, more affluent neighborhoods
receive better coverage than poorer communities and slum
areas.

LEVEL OF HOST GOVERNMENT COMMITMENT
-----------------------------------

7. The GVN has set out its objectives for the water sector
in a number of programs and goals, including:

-- a) institutional and management reform to enhance and
attract participation of all sectors and to transform the
water supply companies into more commercially-oriented
enterprises;

-- b) investment and financial reform; more specifically,
transforming from subsidized management to a commercially-
oriented mechanism, phasing in tariff increases, and linking
tariff levels with the operational and investment
requirements of water companies; and

-- c) improving the effectiveness and quality of urban
services by enhancing the capacity of water supply companies
and sewerage and drainage companies to cover operational
costs and generate investment resources to expand and
improve services.

STATUS OF VIETNAM'S STRATEGIES/PLANS
------------------------------------

8. Vietnam is currently embarking on a national water
program to expand piped water coverage in rural areas. It
is also attempting to reform subsidized state-owned water
utilities so that they operate as profitable state-owned
commercial enterprises.

9. URBAN WATER: For urban water supply and sewerage,
ordinances in 1998 and 1999 focused on increasing coverage
levels, improving sector management, and achieving the
financial viability for service providers. The main GVN
regulation on urban water is Decision 63, dated March 18,
1998, on "Guiding Directions for the Development of Urban
Waster Supply until 2020".

10. NRWSS: The National Rural Clean Water Supply and
Sanitation Strategy (NRWSS) focuses on a demand-driven
approach in which rural people are educated about health and
hygiene. The NRWSS was defined by GVN Decision 104 on August
25, 2000. Details of the NRWSS strategy, the law, progress
reports, and technical details can be found on the Center
for Rural Water Supply and Sanitation (CERWASS) web site at:
www.cerwass.org.vn/english. CERWASS is an administrative
unit under the Ministry of Agriculture and Rural Development
(MARD). In addition, each province has a provincial center
for rural water issues (pCERWASS).

11. DEMAND DRIVEN MODEL: The GVN, with strong support from
several donors, especially DANIDA (Danish International
Development Agency) and UNICEF, is piloting a rural water
strategy in three provinces -- Dak Lak, Ha Tinh, and Nghe
An. A major emphasis of the pilot is on the development of a
"demand driven approach" in which rural citizens are
educated about health and hygiene and hence increase the
demand for water supply and sanitation systems. To date, the
model seems to be working and is expected to be sustainable.
If results continue to be good, the "demand driven" model
will be used in the remaining (50+) provinces.

12. RIVER BASINS: The regional Mekong River Commission was
established in April 1995. Master plans on water resources
for the Red River delta and the Mekong River delta are under
preparation.

13. UNIVERSITIES: In addition to GVN, donor, and NGO
activities, many of the Vietnam's universities are also
pursuing water-related research topics. The two leading
universities in the Mekong River Delta (Can Tho and An Giang
Universities) are both studying water resource issues
ranging from improving irrigation systems to better
sanitation treatment. Given that both universities are
situated near the Mekong River, they have a stake in making
sure the river basin remains safe, secure, and sustainable.

DEGREE OF COORDINATION AMONG GOVERNMENT MINISTRIES
--------------------------------------------- -----

14. Total investment over the period 1991-2001 for 139
projects was valued at $335 million ($100 million domestic
and $235 million ODA). Higher levels of investment for water
and wastewater projects are expected in the near term,
including 31 approved projects valued at US$450 million in
bilateral and multilateral ODA.

15. The GVN is also exploring how to apply financial
incentives (e.g. low interest rate loans or longer-term
loans) to improve water sector investments and apply
decentralized public and private mechanisms to manage water
and wastewater service. In addition, tariff systems are
under review, and several more innovative water utilities
have developed business management and performance models to
enhance the performance and service delivery among service
providers in urban water supply and sanitation. Public
awareness campaigns have also been used to raise awareness
of the need to increase water tariffs, which in some cities
only cover 30-50 percent of the actual cost of water
production and delivery.

16. Coordination between ministries is vital, as Vietnam
has more than 10 ministries actively involved in various
aspects of water and sanitation issues. For many issues,
the National Environmental Agency (NEA), formerly under the
Ministry of Science and Technology (MOST) and now under the
Ministry of Natural Resources and the Environment (MONRE),
is the lead agency. In addition to those organizations, the
Ministry of Agriculture and Rural Development (MARD), the
Ministry of Construction (MOC), the Ministry of Fisheries,
the Ministry of Industry, the Ministry of Planning and
Investment, the Ministry of Public Health, the Ministry of
Transportation, the General Department of Meteorology and
Hydrology, and the National Center for Natural Sciences and
Technology are key players.

17. A recent report, "Vietnam Environment Monitor 2002" by
the World Bank, Danida, and NEA noted, "...These ministries
and agencies are highly segmented with limited cooperation
among them. There are significant functional overlaps,
making coordination time consuming and resource intensive,
and accountability difficult."

EXISTING MECHANISMS FOR ADDRESSING WATER ISSUES IN VIETNAM
--------------------------------------------- -------------

18. GOVERNMENT: Mechanisms for addressing water issues in
Vietnam are categorized as governmental and donor support
institutions. Governmental institutions include the Agency
of Water Resources and the Forest Protection Department
under the Ministry of Agriculture and Rural Development
(MARD), Land Resources Management Department under the new
Ministry of Natural Resources and Environment (MONRE), the
Ministry of Construction (for urban public works) (MOC), and
the Preventive Medicine Department of the Ministry of Health
(MOH).

19. DONOR: Donor support mechanisms include DANIDA's Support
Implementation of National RWSS Strategy; MARD/DANIDA's
Water Support Program Strategy; Vietnam-Australia Water
Resources management Assistance Project; World Bank Water &
Sanitation Program; UNDP Capacity Building for Disaster
Mitigation; and various other bilateral and multilateral
projects. There is an active water issues donor working
group trying to coordinate (or at least inform) on-going
activities.

20. NGO: Several NGOs have recently founded a water issues
working group. More than 30 groups (NGOs, donors, and
several GOV agencies) are represented on this new working
group, which several U.S. NGOs are helping organize.

OTHER DONOR ACTIVITIES ON WATER
-------------------------------

21. The Finnish government provided the first bilateral
development effort in the water sector between 1985 and 1990
for Hanoi. Expansion of water supply coverage has been
emphasized in development plans since 1991. During the
period 1991 to 2001, 139 projects were completed, some of
them at very high cost. There are about 50 ongoing
investment projects being implemented with funds from the
World Bank, Asian Development Bank, United Nations, Japan,
France, Australia, Finland, and Denmark. In the rural
sector, DANIDA, UNICEF, and AusAid are a few of the larger
donors. Contracts have been signed for four BOT projects,
most of them in Ho Chi Minh City.

22. AusAid's water and sanitation project is targeted at
three towns (280,000 people) in the Mekong River Delta. The
project aims to address a wide range of issues to ensure its
ongoing success and sustainability. More information about
this project can be found at http://www.3deltatowns.org

23. IWMI: The International Water Management Institute, one
of the 16 research centers of the Consultative Group on
International Agricultural Research (CGIAR), has sponsored
several research projects in Vietnam. One of the projects
focused on developing pro-poor irrigation interventions
while also reviewing soil conservation and water management
issues. A more recent project studied the environmental and
human health aspects of wastewater irrigation. That study
examined the infection patterns of various internal
parasites associated with wastewater irrigation and also
undertook a national survey to assess the extent of
wastewater use for agriculture and aquaculture. IWMI's main
partners for those studies included, the Vietnamese Center
for Irrigation and Water Supply Research, the National
Institute of Hygiene and Epidemiology, the Veterinary and
Agricultural University, the Vietnamese Institute for Water
Resources Research, and Danida.

24. IWMI's 5 research themes are: 1) Integrated Water
Management for Agriculture; 2) Sustainable Smallholder Land
& Water Management Systems; 3) Sustainable Groundwater
Management; 4) Water Resource Institutions & Policies; 5)
Water, Health and Environment. Additional details about IWMI
can be found at http://www.iwmi.org

25. NGOs: Several U.S. NGOs are active in water issues. The
Catholic Relief Service (CRS) has worked on disaster
response measures, as well as disaster warning systems.
USAID and UNDP have also funded activities to mitigate and
migrate people away from disaster-prone areas. The Church
World Service, in part funded by a USDA commodity
monetization, has a three-year project to improve rural
water supply and sanitation facilities in four rural
provinces. Their main target has been to improve water and
sanitation facilities at rural clinics, primary schools, and
kindergartens to build a demand-driven model leading to
better water systems. Many other NGOs have water issues as
part of a comprehensive approach to village-level
development.

FEASIBILITY OF COMMERCIAL AND/OR SOCIAL MARKETING FOR
ADDRESSING WATER AND HYGIENE ISSUES
--------------------------------------------- --------

26. Social marketing for water/hygiene is conducted through
government and non-governmental programs. Government
initiatives include health extension through health clinics,
Women's Unions, and schools, which are located throughout
the country at the commune level. Methodologies are limited
to pamphlets, posters, and public service (radio/PA)
announcements. In poorer rural areas, access to alternatives
(e.g. latrines, water pumps, soap) is more limited in supply
than awareness of proper hygiene.

POST SUPPORT - US-AEP
--------------------

27. USAID/Vietnam, an office of the USAID Bangkok Regional
Development Mission, recognizes the far-reaching impact of
improved access to services for selected vulnerable groups
(Strategic Objective - SO2) and cleaner cities and
industries in Asia (SO3). USAID/Vietnam's SO3 is
implemented through the US-Asia Environmental Partnership
(US-AEP), a regional program operating in six Asian
countries: India, Indonesia, The Philippines, Thailand, Sri
Lanka, and Vietnam. Programming focuses on policy and
governance, urban management and industrial management.
28. US-AEP has been working to promote efficiency,
transparency and improved service in the water sector by
promoting networking and sharing lessons among water
utilities in Southeast Asia (Indonesia, Malaysia, the
Philippines, Thailand, and Vietnam). To strengthen this
regional network (entitled SEAWUN), US-AEP developed a
follow-on project entitled Certification and Training
Support for Professional Associations in Water (CATSPAW),
which comprised of a series of regional workshops in each of
the cooperating nations. In Vietnam, US-AEP has partnered
the American Waterworks Association (AWWA) and Water
Environment Federation (WEF) with the Vietnam Water Supply
Association (VWSA), which is the center for professional
development and knowledge sharing among Vietnam's 68 water
companies (in 61 provinces) and scattered municipal
wastewater treatment facilities under construction.

29. In FY04, US-AEP/Vietnam will support the Water for
People (WFP) initiative, whose goal is to help the most
impoverished people improve their livelihoods through access
of sustainable drinking water. This 3-year, $700,000 project
aims to strengthen the capacity of VWSA to deliver
affordable piped water through an effective and sustainable
certification and training program for mid- and lower-level
managers. The methodology and lessons learned will be
incorporated into VWSA's expanded national information
sharing and training system. Full cost recovery, a process
to wean public utilities off subsidies, is a core objective
of the initiative.

30. To address both urban water quality and sanitation
issues in Ho Chi Minh City, US-AEP/Vietnam is actively
implementing a community based environmental management
project in Ho Chi Minh City (HCMC) to restore the water
quality in the Tan Hoa - Lo Gom Canal. Key Vietnamese
partners include the HCMC People's Committee, HCMC
Department of Natural Resources and Environment (DoNRE) and
Institute of Environment and Resources (CEFINEA) of the
National University of HCMC. As an initial phase of this
project, The Asia Foundation (TAF) awarded a grant to
CEFINEA to assess environmental challenges surrounding the
canal, complete a citizen awareness campaign, develop a
pilot cleaner production demonstration project and complete
a community action planning process. In addition, US-AEP
through its State Environmental Initiative (SEI) program
awarded a grant to Portland State University to assist in
strengthening stakeholder participation in the restoration
of the Tan Hoa - Lo Gom Canal. In FY03, US-AEP has received
a matching grant from EGAT's Making Cities Work partnership
in FY03. The combined 2-year $500,000 project involving TAF,
PADCO and Portland State University aims to pilot community-
based environmental management along the Tan Hoa-Lo Gom
Canal, a water drainage that suffers from industrial
pollution and unplanned settlement/slums.

31. US-AEP also supports a $200,000 project entitled
Socialization of Solid Waste, which provides technical
assistance, training, and study exchanges to the HCMC
People's Committee and DoNRE. The project aims to increase
the efficiency of solid waste collection services, thereby
reducing the cost burden on city revenues, and improve the
legal status and working conditions of informal waste
collectors. The project consists of technical assistance
provided by ICMA for the legal framework and a TAF grant to
a local NGO to develop a pilot "syndicate" for the informal
sector in District 5. Implemented by IIE, study exchanges to
Hong Kong and Taiwan on privatized transfer and disposal
schemes and to India to learn lessons on empowering informal
waste collectors are taking place.

32. To address water resource issues at the landscape level
in HCMC, US-AEP has developed a partnership with the
National Oceanic and Atmospheric Administration (NOAA),
Office of Response and Restoration (ORR), Hazardous
Materials (HazMat) Response Division and PetroVietnam (the
primary oil spill responder) and Vung Tau DOSTE. In FY04,
this activity will focus on implementation of NOAA training
and inception of a SEI grant to the University of Oklahoma
for oil spill fingerprinting with PetroVietnam. With
implementing support from PADCO, US-AEP will seek to expand
the partnership to other relevant institutions in Vung Tau
and HCMC, including the port authorities and oil companies
operating in the project area, and secondly to strengthen
inter-agency and private sector coordination in responding
to oil spill pollution. US-AEP will also explore
opportunities to leverage interests in Oklahoma and Houston,
TX (e.g. the Port Authority of Houston and ConocoPhilips) in
the partnership.

POST SUPPORT - USDA
-------------------

33. FY-99 USDA: Under a FY-1999 USDA Section 416b commodity
donation (25,000 metric tons of wheat) to the Government of
Vietnam roughly $3 million dollars was generated to fund
various rehabilitation projects in 17 central coast
provinces following severe flooding in 1999 and 2000.
Projects included repairing schools, medical clinics, roads,
and hospitals.

34. FY-2003 USDA: Under a similar program in FY-2002/2003,
USDA worked to sponsor irrigation systems in three central
provinces, a good aquacultural practices project, and
various new clinics and primary schools.

35. SCHOOL LUNCH: Under a FY-2002-2004 program, USDA has
been sponsoring a school milk and nutrition program in
selected poor areas of Vietnam. A small part of that program
has been to disseminate sanitation and health information in
the selected (400+) primary schools.

36. NGO CONSORTIUM: Under a FY-2002 NGO consortium
monetization, USDA partially funded the safe water and
sanitation projects of Church World Service in 4 provinces.
CWS has a three-year project to increase the rural demand
for safe water. See paragraph 25 for more details.

37. RECOMMENDATION: Post believes that Viet Nam would be
an excellent candidate country for the water initiative of
the UN Commission on Sustainable Development. Besides the
reasons give above, there are clear demographic and economic
justifications for its candidacy. Vietnam is the fastest
growing economy in Southeast Asia this year. Over half of
its population is under the age of 30 so that programs to
improve water supply would improve the prospects for its
current and future work force. In recent years, Vietnam has
made impressive strides to eliminate poverty. It is now
very highly regarded as a high-quality manufacturing site
for garments and textiles. For these reasons, an investment
in clean water here can pay big dividends in the future.

BURGHARDT

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