On 7 May 2012, the Royal Government of Cambodia issued an Order on the Measures to Strengthen and Increase the Effectiveness of the Management of Economic Land Concessions (the “Order”).
This Order calls for an immediate and temporary moratorium on the issuance of Economic Land Concessions (“ELCs”). This is a type of land development introduced by the 2001 Land Law in order to allow investors to clear state private land for industrial or agricultural exploitation projects for 70 years in order to develop intensive agricultural and industrial-agricultural activities with a high level of capital, and to increase employment opportunities in rural areas.
The Order, in addition to requiring the relevant competent ministries and authorities to implement the policies and conditions issued in this Order, requires that they make sure companies abide by the principles that apply to the development of concessions, which provides that companies which are granted concessions that include land within a community are not allowed to develop the particular community’s land which should remain developed by local farmers and residents.
Further, the Order specifically states that the Government will seize ELCs from companies that have already obtained approvals from the Government but that “have failed to develop the land under concession [or] failed to comply with their contracts and the legal procedures in force by chopping down trees for sale, grabbing more land, keeping the land free, re-selling the land, [or] conducting business without respecting the contractual conditions, abusing the lands of people or communities”.
Lastly, the Order provides that ELCs already approved in principle by the Government before the date of issuance of the Order will continue to be implemented in accordance with the legal principles and procedures currently in force. We have undertaken consultations with the Department of Planning of the Ministry of Agriculture which confirmed that only ELCs already approved by a Sor Chor Nor letterbefore the date of the Order shall continue to be implemented in accordance with the legal principles and procedures currently in force. All other projects for which a Sor Chor Nor letter has not yet been issued will be suspended.
At this point in time, we have not obtained any guidance as to when the moratorium will be lifted, nor how the review of existing ELCs will be conducted by the authorities.
If you have any questions about this Legal Update, please send us an email to: cambodia@dfdl.com
29 May 2012
