In 1914, the French colonial administration designated 17,000 hectares of mostly forest land at the basin of the Huong River in Quang Yen province of Tonkin as a protected zone for the city of Hai Phong. This decision aimed to address the city's concern about the close proximity between numerous coal mining concessions in Quang Yen and the Huong River which was one of the major sources of potable water for the city. Although the government and the city defended this environmental regulation as a necessary measure to protect water from mining solution, the preservation of this massive amount of forest land led to the expulsion of local ethnic communities whose livelihood had long depended on the forest and its river. The government also barred local extractive businesses including Dong Trieu coal mining company from developing any mining concessions which fell within the perimeter of this protected zone. Consequently, social, economic and legal conflicts led to more than two decades of lengthy negotiations, broken promises and illicit acts involving the city, the colonial administration, Dong Trieu coal company, and many other agencies. This dispute over water resource offers an important case study on the profound impact of environmental regulations as well as the many strategies, both legal and illegal, to challenge or circumvent the law. Drawing from diverse archival correspondences, this paper shed light on the conflicts between colonial environmentalism, the mining economy and the many communities that were caught in between.