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Crafting sustainability: managing water pollution in Viet Nams craft villages

Sango Mahanty, Trung Dinh Dang & Phung Giang Hai


The spontaneous growth of Vietnams 2,790 rural craft villages has been a mixed blessing. Specialising in traditional crafts such as processed foods, textiles and furniture, as well as newer commodities, such as recycled products, craft businesses have expanded rapidly since Vietnam adopted the Doi Moi (economic renovation policy) in the mid-1980s. As with small scale rural industries in other developing countries, the expansion, modernisation and diversification of craft production in Vietnam presents significant development opportunities as well as environmental and social risks. This largely unregulated increase in industrial activity has reduced rural poverty and brought prosperity to rural entrepreneurs, but it has also generated dangerously high levels of pollution with attendant risks to human health. Since the 1990s, the Vietnamese government has developed several laws and initiatives to regulate industrial activities and control craft village pollution, such as the polluter pays principle. However, the small scale and dispersed nature of craft production has continued to defy effective management by the state, and pollution levels in craft villages have increased alarmingly. The Crafting Sustainability project aimed to provide a better understanding of the drivers of pollution, and policy approaches to better addressing them. Drawing on four cases study sites in the Red River Delta region of Northern Vietnam, this paper provides an overview of key findings and policy recommendations.

Discussion Paper 20

JUNE 2012

Crafting sustainability: managing water pollution in Viet

Nams craft villages1

Sango Mahanty, Trung Dinh Dang & Phung Giang Hai

Sango Mahanty ([email protected]) is a Research and Teaching Fellow in the Resource Management in the Asia-Pacific Program at the Crawford School of Public Policy, ANU.

Trung Dinh Dang ([email protected]) is a Research Associate in the Resource Management in the Asia-Pacific Program at the Crawford School of Public Policy, ANU.

Phing Giang Hai is Deputy Director of the Division of Strategy and Policy Research at the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD).

Mahanty, S, Dan, TD & Hai, PG 2012, Crafting sustainability: managing water

pollution in Viet Nams craft villages, Development Policy Centre

Discussion Paper 20, Crawford School of Public Policy, The Australian

National University, Canberra.

The Development Policy Centre is a research unit at the Crawford

School of Public Policy, The Australian National University. The

discussion paper series is intended to facilitate academic and policy

discussion. Use and dissemination of this discussion paper is

encouraged; however, reproduced copies may not be used for

commercial purposes.

The views expressed in discussion papers are those of the authors

and should not be attributed to any organisation with which the

authors might be affiliated.

For more information on the Development Policy Centre, visit

1 This research was undertaken by The Australian National University and the Institute of Policy and Strategy for Agriculture and Rural Development, Hanoi, and was supported by an Australian Development Research Award (ADRA0800080 Crafting Sustainability: addressing water pollution in Vietnams craft villages). We thank numerous participants for freely contributing their time and opinion, and Sophie Dowling for her excellent editing support and research assistance. Susan Mackay and Nanda Gasparini, former students of the Master of Applied Anthropology and Participatory Development, respectively contributed important data on villagers perceptions of risk and recycled paper commodity chains.

mailto:[email protected]:[email protected]://

Crafting sustainability: managing water pollution in Viet Nams craft villages

1. Introduction

Since the 1980s, when the Doi Moi2 reforms opened up the Vietnamese economy,

thousands of small to medium scale, informal craft manufacturing enterprises have

mushroomed in villages across the country (EPA 2009). Many of Vietnams 3,221 craft

villages3 are situated on major river systems, particularly the highly populated Red

River Delta region of Northern Vietnam. While the government has encouraged this

enterprise growth in order to address rural poverty and to counter rural-urban income

gaps and migration, regulators have struggled to manage the environmental impacts of

these burgeoning industries. Consequently, some 90 per cent of craft villages have

pollution levels well above the standards set by the national environmental protection

law (MONRE 2008; EPA 2009; The World Bank 2008)4.

Although pollution from craft production is relatively small compared to large-scale

industrial and urban waste, the associated health risks for producers and their

immediate neighbours make craft village pollution a matter of significant government

and community concern (MONRE 2008, 2006). This growing local and national concern

about water pollution in particular led the Australian National University and the

Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD) to

collaborate on research to produce a better understanding of the causes of the problem.

The Crafting Sustainability project sought to identify and understand the drivers of craft

village water pollution at the village, district, provincial and national levels, and to

recommend measures to address such pollution, thereby improving the economic,

social and environmental sustainability of craft villages in Vietnam.

2 The implementation of the Doi Moi (economic renovation) policy in 1986 sought to transform the Vietnamese economy from a centrally-planned to a market-oriented one. 3 This number refers to recognised craft villages where at least 30 per cent of households are engaged in off-farm activities (National Assembly of the Socialist Republic of Vietnam 2011). Each craft village specialises in one of the following specific areas of production: (1) food processing; (2) textile and leather products; (3) construction materials and masonry; (4) recycled products; (5) traditional handicrafts; or (6) other products (MONRE 2008, p. 4). 4 These documents note that water pollution overrides atmospheric and solid waste as a locus of community concern.

This paper is a synthesis of the studys key findings and sets out recommendations for

future policy development on craft village pollution. The paper is organised into seven

sections. Section 2 provides an overview of the study design. Section 3 summarises

existing knowledge about water pollution from craft villages in Vietnam. Section 4

discusses how the specific characteristics of craft villages differentiate craft production

from larger scale industries and contribute to the growth of pollution. Section 5

examines local responses to pollution, which is largely driven by the competing

priorities of livelihoods and pollution management. Section 6 reviews how existing

governance weaknesses contribute to pollution, particularly the limited state resources

and capacity, weak coordination and low levels of local engagement. Section 7 concludes

and makes recommendations to inform future policy responses to water pollution from

craft villages.

2. Research overview

2.1 Conceptualising water pollution

Water pollution occurs when waste exceeds the absorptive capacity of a water body,

whether from identifiable point sources, or from diffuse non-point sources (Nguyen et al.

2003). However, the causes of this seemingly mechanical process are far more socially


From an economic perspective, pollution is a negative externality that arises because the

environmental and social costs of pollution are treated as external to the production

process. Because the polluter does not need to bear the costs of pollution, reducing

pollution is not a factor in their production choices (Nguyen et al 2003, p. 8). This line of

thinking has given rise to the polluter pays principle, where polluting industries are

made to bear the cost of measures to prevent and control pollution, thus giving them an

incentive to reduce polluting behaviour (Colby 1991; Fischhendler 2007). This

approach has also been embraced by Vietnamese regulators, in the form of a pollution

fee. As with many developing countries, weak capacity and corruption has been a

barrier to operationalising this in practice (Fritzen 2006; ORourke 2004), particularly

as the approach was designed to regulate large industrial firms rather than small scale

industries. Furthermore, determining an appropriate price can be problematic where

the social costs of pollution are poorly understood, some pollutants have no safe levels,

and the interests of future generations cannot be readily quantified (Glazyrina et al


Given the sustained increase in levels of pollution in craft villages over the past two

decades, it is reasonable to suggest that the polluter pays approach has not succeeded in


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