Since 2004, the Government of Vietnam has laid the foundations for a nation-wide program of Payments for Forest Environmental Services (PFES). Most crucially, Decision No. 380 dated 10th of April, 2008, facilitated the piloting of PFES in Lam Dong and Son La provinces, while Decree 99 mandated PFES application nationwide. The rationale underlying PFES is a simple one: it connects local forest managers with the users of forest environmental services. Downstream beneficiaries of upstream forest protection pay forest managers for watershed management and protection. Yet, in practice, PFES necessitates radical changes in the institutional design of forest) programs. In a long run, it is necessary to set up a direct relations between service users and service providers to ensure effective operation nation-wide. Of which, due attention should be placed on (i) PFES awareness raising to all relevant stakeholders
(ii) specific regulations on tasks, functions, rights and obligations of relevant stakeholders and (iii) strengthening participation of and empowerment to local community during decision making, implementation and monitoring process.