Sustainable Development in the Plantation Industry in Laos

The report analyzes the rapid growth of the plantation sector in Lao PDR and the institutional gaps in the investment approval process. It argues that while the Ministry of Planning and Investment (MPI) is the final decision-maker for large projects, it lacks the internal capacity and coordination mechanisms to effectively integrate environmental and social considerations into its decisions, relying instead on other agencies with their own resource constraints.

• Foreign direct investment in the plantation sector grew rapidly from $18.6 million in 2001 to approximately $665 million in 2007, representing 11 per cent of total foreign investment for that period.
• The Ministry of Planning and Investment (MPI) lacks comprehensive data on the plantation sector because it does not hold information on medium and small-scale projects (those with investment under $3 million and areas under 100 hectares) which are approved at the provincial level.
• The primary plantation crops in Lao PDR are para rubber (40%), eucalyptus (20%), and smaller shares of kathinnalong, jatropha, sugarcane (10% each), palm tree (5%), and others (5%).
• The plantation industry poses several risks to sustainable development, including the loss of traditional livelihoods, deforestation, loss of biodiversity, and soil degradation caused by the intensive use of chemical fertilisers and insecticides.
• Although the MPI is the final decision-maker for large investments, it currently plays a minor role in ensuring environmental and social issues are addressed, lacking its own environmental working group and specific criteria for approving projects on environmental merits.
• The Water Resources and Environment Agency (WREA) is the sole authority allowed to issue the environmental certificates required for legal project approval, but it suffers from severe human resource and budgetary constraints, particularly at the provincial level.
• The Ministry of Agriculture and Forestry (MAF) uses agricultural business certificates as a regulatory tool to ensure compliance, and the Forestry Law prohibits clearing primary or secondary forests and watershed areas for plantations.
• Environmental monitoring and evaluation are fragmented and poorly enforced; many companies fail to submit required regular reports, and the central inspection team in Vientiane finds it difficult and costly to monitor large-scale projects in remote areas.

APA

Voladet, S. (2009). Sustainable Development in the Plantation Industry in Laos. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/sd_plantation_laos.pdf

Chicago

Voladet, Saykham. Sustainable Development in the Plantation Industry in Laos. International Institute for Sustainable Development, 2009. https://www.iisd.org/system/files/publications/sd_plantation_laos.pdf.

Wikipedia

{{cite report |last1=Voladet |first1=Saykham |title=Sustainable Development in the Plantation Industry in Laos |publisher=International Institute for Sustainable Development |date=2009 |url=https://www.iisd.org/system/files/publications/sd_plantation_laos.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{voladet2009sustainable, author = {Voladet, Saykham}, title = {{Sustainable Development in the Plantation Industry in Laos}}, institution = {International Institute for Sustainable Development}, year = {2009}, url = {https://www.iisd.org/system/files/publications/sd_plantation_laos.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }