An FDI project won investment policy approval for a twenty-hectare site, yet site clearance has dragged on for more than two years because dozens of households reject the compensation plan: the specific land price sits far below surrounding transaction prices, perennial crops and auxiliary works were priced under outdated unit rates, and several households demand resettlement plots instead of cash. The investor faces schedule pressure under its investment registration certificate, while the local authority warns that an uncleared site may eventually expose the project itself to recovery.
The legal framework: compensation on State recovery under Articles 91 and 95 of the 2024 Land Law
The Land Law No. 31/2024/QH15, effective from 1 August 2024, lays down in Article 91 the principles of compensation, support and resettlement when the State recovers land: land users whose land is recovered are compensated with land of the same use purpose where the land fund allows, or in money at the specific land price decided at the time the plan is approved; compensation must be democratic, objective, fair, public, timely and lawful. Article 95 then sets the conditions for compensation for land, tied to land category, legal documents evidencing land use rights and lawful current use. Beyond the land component, a plan also covers damage to assets attached to the land, outstanding investment costs in statutory cases, livelihood stabilisation support, vocational retraining support and resettlement arrangements for households losing residential land.
One practical point matters greatly in the FDI model: the investor is usually not the body that issues the compensation plan. Land recovery, approval of compensation, support and resettlement plans, and payment organisation belong to State authorities and the local compensation organisation. The investor advances the compensation funding under an arrangement with the locality, and that advance is offset against land rent or handled under the project financial rules. Consequently, when households complain about a plan, the administrative respondent is the State authority; the investor suffers indirectly through schedule and opportunity cost rather than standing as direct disputant against each household.
Applying the rules: where clearance disputes usually ignite
The first flashpoint is the specific land price. The competent authority decides it based on land valuation results, but households compare it with real transaction prices nearby and conclude it is far too low. Disputes escalate where adjacent parcels receive sharply different prices, or where valuation and payment dates sit so far apart that the compensation no longer buys equivalent land. The second flashpoint is the inventory count: measured area differing from the certificate, structures built after the recovery notice being excluded, and perennial trees priced at annual-crop rates. Every small error in an inventory record becomes a separate complaint thread.
The third flashpoint is resettlement and support. Households losing all their residential land often insist on resettlement plots instead of money while the local resettlement land fund is not yet ready; the enterprise waits for the site but holds no legal tool to settle with residents itself, since coercive recovery belongs exclusively to State authorities when statutory conditions are met. For the investor, the most effective self-protection is paper-based schedule management: record that late site handover is not the enterprise fault, apply to adjust the project schedule accordingly, and keep the file to avoid being characterised under the delayed-progress ground in Clause 8 of Article 81 of the 2024 Land Law. In parallel, the enterprise may support the locality in communicating the plan and may fund voluntary top-ups for especially hard cases, but these must be transparent so they are not read as breaking the common price level.
Checklist for investors when clearance stalls over compensation disputes
When clearance stalls because compensation is contested, an FDI investor should concentrate on the matters that actually sit within its authority and interests:
- Ask the locality for clearance progress by household group: agreed, complaining, not yet inventoried, so that handover dates can be forecast zone by zone instead of waiting for the entire site.
- Minute periodic working sessions with the local compensation board, recording which stage is delayed and the revised committed dates, building the progress evidence file for the project.
- File to adjust the implementation schedule in the investment registration certificate to match the late site handover, avoiding exposure under Clause 8 of Article 81 of the 2024 Land Law.
- Verify how the advanced compensation funding will be settled: the mechanism for offsetting against land rent, the vouchers required and the finalisation timeline, to prevent a financial dispute with the local budget.
- Never settle side payments with individual households outside the approved plan; any voluntary additional support must be documented with the locality and accounted for transparently.
Frequently Asked Questions
What can be done if site clearance compensation is unsatisfactory?
Land users should first test the compensation plan against Articles 91 and 95 of the 2024 Land Law: the basis for the specific land price, the inventory results and the support items. If errors appear, they may comment while the plan is publicly posted, request a re-inventory, or complain against the land recovery decision and the decision approving the compensation plan. For the investor, the task is to press the locality to re-examine well-founded complaints, because only State authorities can amend the plan.
How is the compensation amount calculated?
Compensation has several components: money for the land calculated at the specific land price at plan approval under the principles in Article 91 of the 2024 Land Law and the conditions in Article 95; compensation for houses, structures and assets attached to the land at residual value or provincial unit rates; outstanding investment costs in statutory cases; plus livelihood stabilisation support, vocational conversion support and resettlement where residential land is recovered. There is no single percentage for all cases; each household receives its own plan based on the inventoried status.
Where do we complain if we disagree with the compensation plan?
Residents complain against the land recovery decision and the decision approving the compensation, support and resettlement plan to the person who issued them, within the ninety-day period under Article 9 of the Law on Complaints No. 02/2011/QH13. If dissatisfied with the first resolution, they may complain to the immediate superior or bring an administrative lawsuit. The investor is not the complaint addressee, but should flag long-running complaints to the locality for inclusion in its handling plan.
Can we sue in court over compensation?
Yes. A land user may bring an administrative lawsuit against the land recovery decision and the compensation decision under the Law on Administrative Procedures No. 93/2015/QH13, asking the court to review the legality of the decisions, including the recovery ground, inventory procedure, valuation and plan approval. Note that filing suit does not automatically suspend enforcement of the recovery decision; the claimant may ask the court to apply interim emergency measures where statutory conditions are satisfied.
This article has been quality-reviewed by the FLAW AI Legal Council
