Overal Status of Economic Land Concession in Cambodia

Overview

In 1992, the situation of national economy of Cambodia was transferred from the planning to free market basis. The Royal Government of Cambodia has opened for both local and foreign private investment in agriculture sector. In this sector, the Royal Government of Cambodia focuses on the investment in economic land concession for agro-industrial plantation. The major goal of this opening is to provide free (non use) land for agricultural and ago-industrial plantation, and processing for export, which is expected by the government to create the jobs and generate income for the people living in the rural area.

Until April 2010, the Ministry of Agriculture, Forestry and Fisheries (MAFF) requests to the Royal government of Cambodia for contract cancelation of 41 companies with total land area of 379,034 ha. At the present, there have been 85 contracted and validated companies with total land area of 956,690 ha located in 16 provinces.

Economic Land Concession under 1,000 hectares

After enforcement of sub-degree on economic land concession on 27 December, 2005, 47 companies individually less than 1,000 ha have been granted by provincial authorities in 9 provinces as following:

• 8 companies in Kratie
• 2 companies in Preah Vihear
• 10 companies in Kampong Thom
• 1 company in Pursat
• 4 companies in Kompong Speu
• 3 companies in Kompong Cham
• 6 companies in Rattanakiri
• 1 company in Stung Treng
• 2 companies in Uddor Meanchey

Negotiation on reduction the area more than 10,000 hectares

The 9 economic land concession companies with land area of more than 10,000 ha are subjected to negotiate for reducing the area to 10,000 ha (According to Sub Degree No. 146 on Economic Land Concession).

In 2007, MAFF has negotiated with 5 ELC companies as a phase I, while 4 ELC companies have agreed on the reduction of their land area to 10,000 ha, and the remaining 1 company have canceled the contract. However, MAFF negotiated 4 companies in 2008.

At the present, MAFF has requested to cancel contract of 1 company, 1 company has agreed to reduce their land area to 10,000 ha and the remaining 2 companies are under monitoring their activities of implementation.

Review existing Economic Land Concession

From May to June 2009, MAFF has set 5 working groups for reviewing and evaluation exiting all economic land concession companies in 16 provinces.

In July 2009, working groups submitted reports to MAFF for evaluation all companies.

After receiving the report, MAFF has evaluated and guided to 38 companies, which are slowly nor late in implementation process and has also proposed to the RGC for cancellation of SOR CHOR NOR and contracts, in the result, the RGC has canceled 5 companies, while the land area equal to 40,171 hectares.

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Objective

The overall objectives of the Economic Land Concessions are the following:

• To develop intensive agricultural and industrial-agricultural activities that requires a high rate and appropriate level of initial capital investment;
• To achieve a specific set of agreements from the investor for developing the land in an appropriate and perpetual manner based on a land use plan for the area;
• To increase employment in rural areas within a framework of intensification and diversification of livelihood opportunities and within a framework of natural resource management based on appropriate ecological system;
• To encourage small as well as large investments in economic land concession projects; and
• To generate state revenues or the provincial or communal revenues through economic land use fees, taxation and related services charges.

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Justification

The following terms have the meanings defined below:

• Economic Land Concession refers to a mechanism to grant private state land through a specific economic land concession contract to a concessionaire to use for agricultural and industrial-agricultural exploitation.
• Industrial-agricultural exploitation refers to:
  • cultivation of food crops or industrial crops including tree planting to be tree plantation.
  • raising of animals and aquaculture,
  • construction such as a plant or factory and facilities for the processing of domestic agricultural raw materials, or
  • a combination of some or all of the above activities.
• Contracting Authority refers to the authorities who have the legal power and exercise such power as granted by the Prime Minister to enter into Economic Land Concession Contracts on behalf of the Royal Government of Cambodia and who carries out duties in accordance with provisions of this sub-decree.
• Regulatory Institution refers to an authority who has the legal power to issue and enforce rules and regulations governing the activities or facilities that are the subject of the Economic Land Concession Contract.
• Technical Secretariat refers to the Technical Secretariat for Economic Land Concessions

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Criteria

An Economic Land Concession may be granted only on a land that meets all of the following five criteria:

1. The land has been registered and classified as state private land in accordance with the Sub decree on State Land Management and the Sub decree on Procedures for Establishing Cadastral Maps and Land Register or the Sub decree on Sporadic Registration;
2. Land use plan for the land has been adopted by the Provincial-Municipal State Land Management Committee and the land use is consistent with the plan;
3. Environmental and social impact assessments have been completed with respect to the land use and development plan for economic land concession projects;
4. Land that has solutions for resettlement issues, in accordance with the existing legal framework and procedures. The Contracting Authority shall ensure that there will not be involuntary resettlement by lawful land holders and that access to private land shall be respected; and
5. Land for which there have been public consultations, with regard to economic land concession projects or proposals, with territorial authorities and residents of the locality.

Evaluating Economic Land Concession proposals shall be based on the following criteria:

• Increase in agricultural and industrial-agricultural production by using modern technology;
• Creation of increasing employment;
• Promotion of living standards of the people;
• Perpetual environmental protection and natural resources management;
• Avoidance or minimizing of adverse social impacts;
• Any linkages and mutual support between social land concessions and economic land concessions; and
• Processing of raw agricultural materials, to be specified in the concession contract.

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Procedure

Process of Implementation

There are two permissible ways to initiate economic land concession projects:

1. Solicited proposal, where a Contracting Authority proposes a project for solicitation of proposals from investors.
2. Unsolicited proposal, where an investor proposes a project proposal to the state for approval

Initiating Economic Land Concessions through Solicited Proposals
A Contracting Authority may initiate an economic land concession project by taking the following preparatory steps:

1. Develop initial project documents proposing an Economic Land Concession project in a form established by the Technical Secretariat, includes the information specified in Article 8 of this sub-decree.
2. Send the initial project documents to the Technical Secretariat for preliminary study and recommendations based on Article 3 and Article 5 of this sub-decree.
3. Consult with relevant Provincial Land Use and Allocation Committee and Regulatory Institution regarding the economic land concession project;
4. Arrange for the conduct of an initial environmental and social impact assessment of the proposed economic land concession project.
5. If the initial environmental and social impact assessment indicates a medium or high degree of adverse impact, arrange for the conduct of a full environmental and social impact assessment.
6. Prepare a complete set of project documents, which shall include all of the recommendations and reports from the steps enumerated above, and which shall be the basis for the Terms of Reference for Solicited Proposals.

Initiating Economic Land Concession Projects through Unsolicited Proposals
The prioritized method for granting economic land concessions is through competitive solicited proposals; however, a Contracting Authority may consider an unsolicited proposal where the proposer promises to provide exceptional advantages to achieving the purposes of economic land concessions in situations such as below:

• the introduction of new technology
• exceptional linkages between social land concessions and economic land concessions
• exceptional access to processing or export markets

A Contracting Authority shall not consider an unsolicited proposal if the proposal relates to land that is the subject of Solicited Economic Land Concession Project for which a Notice has been published.

Original source please link here: http://www.elc.maff.gov.kh/en/news/12-elc-status.html