When an FDI project needs land, site-clearance compensation often becomes a flashpoint between affected households and the FDI enterprise — even though, legally, the enterprise is rarely the proper respondent. Misidentifying who the dispute is really against is why many cases drag on, delaying projects and souring community relations.
The legal nature of the dispute
Under the Land Law 2024 (68/2024/QH15), effective 1 August 2024, the State recovers land and the compensation, support and resettlement plan is prepared, appraised and approved by the competent state authority, with details set out in Decree 88/2024/ND-CP. A household’s grievance therefore targets the decision approving the compensation plan — an administrative decision — not the FDI enterprise. In proceedings, the enterprise appears only as an interested party.
Three steps in the right order
Step 1 — Dialogue and negotiation: households work with the compensation/site-clearance task force and the commune-level People’s Committee to clarify calculations and request adjustments to unreasonable points in the plan. This is the fastest, cheapest step and should come before harder legal measures.
Step 2 — Administrative complaint: under the Law on Complaints 2011 (02/2011/QH13), affected land users may complain about the compensation-plan approval decision to the chairperson of the issuing People’s Committee, then escalate to the next higher level if unsatisfied.
Step 3 — Administrative litigation: under the Law on Administrative Procedures 2015 (93/2015/QH13), Article 30, individuals may sue administrative decisions on compensation, support and resettlement upon land recovery before the competent People’s Court. Mind the limitation period so the right to sue is not lost.
What the FDI enterprise should and should not do
The enterprise should: cooperate by providing project information to the clearance authority, track each step’s progress, and keep a good-faith dialogue channel with the community. It should not: strike “off-plan” compensation deals directly with households to “speed things up” — such payments lack a legal basis for accounting, risk being treated as non-deductible expenses, and may complicate the dispute further. Any additional support must be transparent and documented.
Frequently asked questions
1. Where are compensation disputes between households and FDI firms resolved?
First through negotiation with the compensation task force and local authorities. Failing that, an administrative complaint under the 2011 Law on Complaints, and ultimately a lawsuit against the compensation-plan approval decision under the 2015 Law on Administrative Procedures.
2. Can the authorities mediate compensation disputes?
Yes. The commune-level People’s Committee and the compensation task force are responsible for organising dialogue and explaining the plan. Settlement at this stage shortens timelines considerably compared with prolonged complaints and litigation.
3. Which court hears site-clearance compensation lawsuits?
Lawsuits against administrative decisions on compensation upon land recovery fall under the People’s Courts pursuant to the 2015 Law on Administrative Procedures. Claimants should prepare the challenged decision, evidence of loss, and observe the limitation period.
4. What can the enterprise do when disputes delay the project?
The enterprise cannot intervene in the compensation plan’s substance, but it may request the competent authority to accelerate clearance and consider adjusting the investment project’s implementation schedule under investment legislation where delays stem objectively from the State side.
This article has been quality-reviewed by the FLAW AI Legal Council. Content is for legal reference only and does not replace lawyer advice for specific cases.
