Vietnam is considering changing a crucial procedure in the land acquisition system: in some projects, the requirement of waiting for 'compensation and resettlement to be completed' before acquiring land will no longer be adhered to.
According to a report by Reuters on August 19, the Vietnamese National Assembly is discussing amendments to the Land Law this week. Under the current Land Law of 2024, compensation, support, and resettlement programs must first be approved, and the government can only make decisions regarding land acquisition after the resettlement work is completed. The new draft proposes that for certain important or urgent projects, land acquisition can be carried out before all procedures are completed, thereby accelerating clearance and construction. The amendment is expected to be submitted to the National Assembly for further review in October this year, and it is planned to come into effect on March 1, 2027.
This seems to be just a simple swap of the order of two programs, but in reality, it has touched the most sensitive aspect of Vietnam’s land system.
Vietnam implements a system where land is owned by the whole population. The state manages land on behalf of everyone, and residents have the right to use land protected by law. Therefore, under the state’s legal system for land expropriation, the practice of "compensating and resettling first, then taking back the land" actually constitutes an important procedural safeguard: at least until residents hand over their homes and land, the government must first determine how much compensation will be given and where they will be relocated.
Now, Vietnam is preparing to open up this procedure.
The reasons given by the Vietnamese Ministry of Agriculture and Environment are quite practical: this regulation has become a bottleneck in progress for some projects, especially key national projects and emergency public investment projects. It also affects projects that have gained support from most land users, but remain stalled due to a few remaining plots of land. Another proposal suggests that if a land acquisition project has obtained the consent of over 75% of the land area and over 75% of the land users, the local government can approve the acquisition of the remaining land after the negotiation period ends.
This anxiety stems from Vietnam’s increasingly radical growth goals.
The Vietnamese government hopes to maintain an annual economic growth rate of at least 10% by 2030. However, projects such as highways, urban renewal, industrial parks, and housing construction require a large amount of land. According to Reuters, a golf project involving the Trump family in the north, as well as the renovation of the Red River along the river in Hanoi, which could affect up to 200,000 people, have been delayed due to compensation and resettlement disputes. For an economy that tries to continue its rapid expansion through infrastructure and investment, the pace of land acquisition has already started to directly affect the speed of project implementation.
Therefore, what this round of reforms truly aims to solve is a typical development problem: Should a large project be suspended indefinitely just because there are still minor compensation disputes among the majority of people who agree with it?
However, changing the requirement for “compensation completion” from a prerequisite to a procedure that can be completed later also means that risks will change accordingly. Once the land has been cleared and construction has begun, residents may have less leverage in compensation negotiations. At the same time, more rights related to land acquisition will be delegated to local governments, making the ability and flexibility of local authorities to implement such measures even more important. Therefore, the relevant committee of the Vietnamese National Assembly has specifically requested that clear criteria be established for determining which projects truly belong to “national and public interests” in order to prevent the abuse of land acquisition rights.
It is clear that the Vietnamese government has also realized this. On the other side of the draft, the resettlement guarantees are strengthened. It is proposed that the housing and living conditions of residents whose land is expropriated should, in principle, not be lower than the original level. The evaluation criteria include not only housing, but also employment, income, education, healthcare, and public services. Those who have their homes expropriated will also have priority in obtaining land for resettlement in better locations.
Thus, this reform led to an interesting system exchange: the government wanted to make the rigid procedure of “compensating first and then dismantling” more flexible, and compensate for it with higher compensation and resettlement standards.
The problem is that the former addresses the speed of engineering work, while the latter relies on the subsequent implementation by local governments.
For Vietnam, this may be one of the most difficult contradictions in the high-growth strategy for the next few years: land must flow to projects more quickly, but the faster these projects progress, the more important it becomes to ensure that the people whose lands are taken do not have to pay the price for growth.
