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Consult local villagers to obtain information about the following aspects: ensure there is no overlapping property claims; ensure there are no conflicts between local communities and concession owners; verify that the area of a current ELC was not harvested prior to the allocation process.
A land concession can only be granted on State Private Land. The State Public Land can be reclassified to State Private Land, if the land has lost its public interest. Only land under Social Land Concessions can be privatized.
Land in Cambodia can be either state or privately owned.
• State land is divided into State Public Land (land that have a public interest value and cannot be subject of ownership (article 43)) and State Private Land (land that belongs to the state but does not have any public interest value and can be leased or privatized).
• Private land is legally owned or possessed either individually or jointly by persons or a company.
Only people or legal entities of Khmer nationality have the right to ownership of land in Cambodia (Land Law, article 8).
Occupation of land and request of ownership
Any person who has had uncontested possession of State Private Land for five (5) years before the Land Law 2001 came into force, has the right to request ownership of the land (Land Law, article 30). If possession has been less than five years, a person can get authorization to extend their possession up to five years to apply for title of ownership (Land Law, article 31).
A new occupant without a title to a property belonging to public bodies or private persons shall be considered as an illegal occupant (Land Law, article 34), and shall be forced to vacate the premises immediately (Land Law, article 43). Only the competent authorities may force illegal occupants to vacate the property. Removal can be effective only by court order upon the claim of the person who claims the property (Land Law, article 35).
Where the Forestry Administration has evidence that occupation of any land has been obtained through illegal clearing of state forest, the Forestry Administration has the right to issue a written notice, evicting and reclaiming ownership of the state forest without any condition (Forest Law, article 106).
Penalties for illegal occupation are provided in article 259 of the Land Law 2001.
Land rights for concessions (ELCs, Social Land Concessions, SLC)
A land concession can only be granted on State Private Land (Land Law, article 58) within a fixed-term by the concession contract. The State Public Land can be reclassified to State Private Land by Sub-decree no.129, if the land has lost its public interest (ADHOC, 2014).
Only land under Social Land Concessions can be privatised (Land Law, article 52).
The rights of a concessionaire during the period of the concession are the same rights as an owner, save for the right to transfer and sell the rights. The concessionaire is entitled to the protection of his or her rights by the competent authorities (Land Law, article 56), and may defend the land under concession, against encroachment or infringement (Land Law, article 56). The concessionaires may not make any alteration to the intended purpose of the land that causes damage affecting its natural structure or exploit it in such a way that it is destroyed at the end of the concession (Land Law, article 56).
Private land
The owner of a property may freely carry out clearing of lands and forests (logging) and their cultivation in accordance with his or her use purposes and in accordance with the Land Law (Land Law, article 88, 89).
If an encroaches has created plantations or undertaken construction and development, knowing the land belonged to someone else, the owner of the land is entitled either to keep the materials or to force the encroacher to remove them at the cost of the encroacher. The encroacher may receive a penalty in the form of compensation paid to the landowner if the removal caused any damage to the landowner. If the owner prefers to retain such plantations and works already done, he or she must reimburse the cost of the materials and labour (Land Law, article 98). However, if the alterations were made in good faith as provided for in article 38 of the Land Law (2001), the owner may not demand the removal of the said works, plantations or developments, but may either pay the cost of materials and labour; or to pay an amount of money equivalent to the increased value of the land (Land Law, article 98).
Any use of ownership that does not comply with the land rules but was binding by contract before the Land Law (2001) came into effect shall not be affected, but cannot be extended (Land Law, 2001, article 116).
Plantations
Plantations can be established on private land and state land. Private plantations are planted forest under registration and legal title.
The Forestry Administration (FA) has also established plantations on state land, managed by the FA. Through planting records, it is indicated that about 14,345 hectares of state land were planted between 1985 and 2011 (TWG-FR 2014).
Community forest
According to Chapter 9 of the Forest Law, local communities who manage a community forest have the rights to harvest forest products and NTFP within the demarcated forest area stated in the community forest agreement and in consistency with the Community Forest Management Plan. They may not sell or transfer any rights to anyone else. According to Chapter 6 of the Law on Protected Areas (2008) and the procedures of the Guideline on Community Protected Areas (2017), communities living near protected areas which are under the responsibility of the Ministry of Environment (MoE) have the right to establish a community protected area within the sustainable use zone of a protected area as established by MoE. They have the right to establish their own regulations for the community protected area. The CPA agreement needs to be approved by the General Department of Local Communities at the Ministry of Environment (CPA Guideline, 2017, Chapter 8).
Economic land concessions are concessions for agricultural use and industrial-agricultural exploitation, including large-scale plantations allocated through an economic land concession contract to a concessionaire.
Economic Land Concessions
• There is currently a moratorium on establishing new ELCs, and existing ELCs are being reviewed (Order 01BB on Measures for Strengthening and Increasing the Effectiveness of the Management of Economic Land Concessions, 2012). The moratorium did not apply to ELCs already in the approval process when the moratorium was implemented. As a result, at least 33 ELCs were granted after Order 01 was issued as of 2015 (ODC, 2015).
• ELCs shall be no greater than 10,000 ha (Land Law, article 59), and allocated for a maximum duration of 99 years (Land Law, article 61). A recent governmental review process led to a reduction of the duration of several ELCs to 50 years, and MoE announced in 2014 that ELCs issued after Order 01 would receive a lease of no longer than 50 years (ODC, 2015).
• ELCs established prior to the 2001 Land Law, which exceed the limit of 10,000 ha, are meant to be reduced. However, if such reduction would result in compromising the exploitation in progress of the concession established prior to the 2001 Land Law a concessionaire may obtain an exemption by the Council of Ministers (Land Law, article 59; sub-decree no. 146, article 39). Tree cutting for the purpose of land clearing is not considered exploitation in progress or a demonstration of meeting land development requirements under the concession contract.
• The issuance of land concession titles in several places relating to areas greater than 10,000 ha in favour of one specific person or several legal entities controlled by the same natural persons is prohibited (Land Law, article 59).
• An economic land concession may be granted only on land that meets all of the five criteria (Sub-decree 146, article 4):
1. The land has been registered and classified as state private land.
2. Land use plan 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 (see more under 1.10).
4. Land has solutions for resettlement issues, in accordance with the existing legal framework and procedures. The contracting authority shall ensure there will be no involuntary resettlement by lawful land holders and that access to private land shall be respected.
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.
• Sub-decree no. 146, Chapter 3 covers the procedures for initiating, requesting and granting economic land concessions.
• There are two permissible ways to establish economic land concession projects (Sub-decree no. 146, article 6):
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.
For solicited proposals, the technical secretariat shall widely disseminate the notice and shall specify the manner, place and time for submission of proposals with specification of the commencing and finishing dates for acceptance. The submission period shall not be less than 60 (sixty) days from the date of publication of the notice (Sub-decree no. 146, article 10).
• Economic land concession contracts granted prior to the effective date of sub-decree no. 146 on economic land concessions shall be revised. The following shall have been conducted (depending on each case) (sub-decree no. 146, article 37):
o Revise the concessionaire’s contractual compliance with the terms of the existing concession contract in consideration of the investment made, and to be made;
o Revise the land use fees and other revenue from the concession contracts;
o Hold a public consultation to solicit comments on the land concession activities within communes(s) where the concession land is located;
o If a concessionaire holds economic land concessions in excess of 10,000 hectares, it shall be requested that the concessionaire voluntarily reduce the concession land size or, if the concessionaire will not voluntarily reduce the size, attempt to negotiate a reduction;
o Request land ‘regularization’ as provided in article 42 of sub-decree no. 146 (and defined below), where it is stated that in the existing economic land concessions review process, the Ministry of Land Management, Urban Planning and Construction shall regularize the land within the overall area of the Economic Land Concession under review. Land regularization will include land parcel adjustments, adjudication of the land rights of occupants with land parcels under review, and demarcation and registration of the land through existing procedures.
Consult local villagers to obtain information about the following aspects; ensure there is no overlapping property claims; ensure there are no conflicts between local communities and concession owners; verify that the area of a current ELC was not harvested prior to the allocation process.
Social land concessions may be granted to provide land for residential purposes for families, or to facilitate economic development, or develop land that has not been developed.
Social Land Concessions
• Social land concessions may be granted to provide land for residential purposes for families, or to facilitate economic development, or develop land that has not been developed (sub-decree no. 19, article 3).
• Social land concessions granted for family farming purposes can be up to two hectares, but for some areas the size of social land concessions may be up to five hectares based on the characteristics and potential productivity of the land or the type of crop and labour (sub-decree no. 19, article 17). It is possible to establish plantations on the social land concessions.
• A social land concession for family farming shall be cultivated within twelve months of receiving the land and the land shall continue to be utilized in accordance with the conditions of the concession program.
• After correctly complying with the criteria of the social land concession program for five years, the recipient has the right to ownership of the land and may request ownership title (sub-decree no. 19, article 18).
Community Forests
• Community forests shall have a community forest agreement attached with: 1:50,000 scale maps including coordinates, a list of CF community members and community forestry management committee members, by-laws and regulations, objective of the management of the forest resource and certification of the sustainable management of the forest resource, and an inventory of the forest resource (sub-decree no. 79, article 25).
• Community forest agreements shall be in public hearing for 30 days before being reviewed and approved by the Forestry Administration Cantonment.
• Community forest agreement shall be in effect for no more than 15 years and can be renewed for an additional 15 years (Sub-decree no. 79, article 27).
National planning
A National Forest Management Plan shall be prepared by the Forestry Administration and approved by the Royal Government of Cambodia. This shall be used as a long-term planning tool to set priorities and activities on forest management. The National Forest Management Plan shall be reviewed and revised every five years to reflect changes in conditions and circumstances (Forest Law, article 9).
The National Forest Management Plan shall, among others, review the physical, environmental and social factors regarding forest resources, and estimate the volume of all categories of forest products and NTFP, as well as, designated forestlands, land to be reforested, and community forests.
Economic Land Concessions (ELCs) and Forest Plantations
The management plan for ELCs and plantations is usually included in the contractual document as requested by the Technical Secretariat and Contracting Authority (Sub-decree no. 146, 2005. articles 16, 24 and 25).
Annual Bidding Coupes (ABCs)
The Division Chief of the Forestry Administration shall prepare and submit management plans for production forest not under concession located in their jurisdiction to the Head of the Forestry Administration for review and approval. This is similar to management plans developed for forests under concession (Forest Law, article 21) (management plan for forest not under concession). Officials of the Forestry Administration, at all levels, national and sub-national, are the only government mandated staff to evaluate the numbers of timber volumes to be harvested for domestic demand. According to the Forest Law (2002), the evaluation is based on capacity of sustainable forest management rather than the demand of wood from markets.
Social Land Concessions (Sub-decree on SLCs, 2003)
No management plans are required for Social Land Concessions. It only refers to communal planning for proposing land allocation for landless families such as vulnerable families.
Community forests shall have in place a Community Forest Management Plan (Forest Law, article 43), developed by the Community Forestry Management Committee, and the Community Management Plan shall be reviewed by the Forestry Administration every five years or earlier if necessary (sub-decree no 79, article 30).
Forest clearing activities can only be allowed for the establishment of public and forest road construction, traditional slash and burn practices, conversion for quarrying, soil and sand excavation, mining, and other natural resources extraction.
Any individual, legal entity or community that intends to harvest natural timber and NTFP for commercial purposes must possess a harvest permit issued by the Forestry Administration (Forest Law, article 24).
Below are listed permits applicable for harvest timber and NTFP (Forest Law, article 25):
1. Permit to set annual harvest quota;
2. Permit to harvest;
3. Permit to use forest;
4. Permit to enter coupe for preparation.
The permits under article 25 of the Forest Law shall contain the following items:
1. The name of the permit holder;
2. The duration of the permit;
3. The specific location and boundaries of harvest area;
4. The quantity of timber products and/or NTFPs allowed to be harvested in a unit determined by the Forestry Administration;
5. Origin and destination of timber products and/or NTFPs being transported; and
6. Other items based on the type of permit required by the Forestry Administration.
The permits may be extended, based on an evaluation report of the Forestry Administration.
After suspending forest concessions, Annual Bidding Coupes were established to supply timber for domestic consumption. While they have now themselves fallen into disuse, with the last documented harvesting from a coupe occurring in 2013 (Global Forest Services, 2014). As a legal matter the Annual Bidding Coupes are issued through bidding at auctions (Forest Law, article 21). The production forest which are not under concession shall be managed with the priority use to meet domestic needs (Forest Law, article 20).
Economic Land Concessions (ELCs), plantations and private lands
Private landowners and concession areas where trees have been planted do not require a harvesting permit/ licence (TWG-FR 2014, p. 51).
Conversion timber
Forest clearing activities can only be allowed in the permanent forest reserve for:
• The establishment of public and forest road construction with approval from the authorities (article 31). All projects of public and forest road construction within the permanent forest reserve shall be subject to consultation with the concerned local authorities and communities and Environmental and Social Impact Assessment (ESIA) pursuant to article 4 of the Forest Law (see more under 1.10).
• Traditional slash and burn practices authorised under the Community Forest Management Plan (article 37). Communities can sell the timber to local markets.
• Conversion for quarrying, soil and sand excavation, mining, and other natural resources extraction, with a prior study-evaluation from MAFF and authorization by the Royal Government of Cambodia (article 35).
• Otherwise all forest clearing activities shall be prohibited within the permanent forest reserve (article 33).
A permit is required for conversion, and an EIA shall have been developed.
Seized timber
Any drifted, stranded, or sunk logs, and any unmarked or unclaimed timbers shall be seized as state property, and placed for public auction (Forest Law, article 74). A transport permit will be issued by Forestry Administration once bidding on the seized timbers is finished.
Onsite verification should confirm the place of harvest and confirm that no harvesting has taken place beyond the allocation boundaries.
Royalties and premiums shall be paid for timber and NTFP within the permanent forest reserve which are used for commercial purposes. The royalties and premiums shall be paid to the national budget through the Forestry Administration (Forest Law, article 52).
Royalties or premiums for the harvesting of forest products and NTFP is not required for private forests (Forest Law, article 52), or local communities under customary user rights or from forest communities under the community forest agreement (Forest Law, article 53). However, communities shall pay royalties and premiums on timber and NTFP sold and transported (Sub-decree no. 79, article 12). Royalties and premiums should be set after consultation with a Community Forestry Management Committee to support community development, equitable benefit sharing, and poverty alleviation (Sub-decree no. 79, article 13).
Royalties and premiums for any forest products and NTFP collected from the permanent forest reserve may be waived if for scientific purposes or to create an economic incentive to efficiently use forest products and NTFP (Forest Law, article 53).
Royalties and premiums shall be paid for all forest products and NTFP recorded in the “Book A” (recording book for wood harvesting) (Forest Law, article 55).
A delay in the payment of royalties and premiums can be allowed if the Forestry Administration has recognized the permit holder practicing sustainable forest management (Forest Law, article 56). If a permit holder does not pay royalties and premiums by the agreed scheduled date, the Forestry Administration can seize the forest products and NTFP, without exception, and detain such products as state property until legal resolution of the dispute occurs (Forest Law, article 57).
Before the issuance of a permit to harvest forest products and NTFP, a security financial deposit shall be made to guarantee payment of royalties and premiums by the potential permit holder. The amount of the deposit shall be stated in a concession agreement or annual forest products and NTFP quota permit.
The rates of VAT are as follows:
1. 0%: rate to goods exported from Cambodia and services consumed outside Cambodia
2. 10%: rate applies to all supplies other than exports and non-taxable supplies
The rates of VAT are as follows (GDTMEF, N.Y):
- 0%: This rate applies only to goods exported from the Kingdom of Cambodia and services consumed outside Cambodia. Exports are defined as including international transportation of passengers and goods.
- 10%: This standard rate applies to all supplies other than exports and non-taxable supplies.
A study by The NGO Forum on Cambodia (2015) found that VAT from timber is needed in general. However, the applicable legislation was not identified as part of this study.
Paragraph 3 of article 73 of Forest Law (2002) states that for all export and import of timber and NTFP, taxes must be paid according to the relevant laws of the country. Sealing of containers of timber and NTFP must be made by MAFF and Ministry of Commerce prior to transportation (paragraph 2, article 73 of Forest Law). Detailed information relating to taxes, export and import of timber, and NTFP should be stated on Prakas of the Ministry of Agriculture, Forestry and Fisheries.
The standard rate of corporate income tax for companies and permanent establishments who are classified as medium and large taxpayers is 20%.
For companies and permanent establishments who are classified as small taxpayers, the corporate income tax (CIT) rates are progressive, from 0% to 20% (PWC 2006–2018).
Prakas on The Profit Tax (2004) comprehensively states and determines profit taxes of different tax payers including profits derived from provision of services and salary.
Guidelines and regulations should be complied with during the conversion of forests.
The forests shall be protected against damaging activities caused by excessive exploitation, abusive forest clearing, forest ecosystem pollution, forest fires, shifting cultivation, diseases, noxious insects, and the imports of harmful forest vegetation and wildlife species. It is not allowed to obstruct boundary posts or distinctive sign marking of the forest boundary; nor to grid bark, poison, destroy, fell, or uproot any tree without technical necessity. It is not allowed to harvest forest products and Non-Timber Forest Product (NTFP) in violation of the authorized permit (Forest Law, article 32). It is prohibited to set fires in the permanent forest estates. However, the Forestry Administration (FA) is allowed to set fires or use fires to benefit forest management (Forest Law, article 36). It is prohibited to saw, slice or process logs within permanent forest reserves, and the use of chain saw within the permanent forest reserves is only allowed with a permit authorized by the Forestry Administration (Forest Law, article 38).
Before entering the annual harvest area, the forest concessionaire or forest coupe owner shall register all machinery, vehicles and chain saws with the Forestry Administration to obtain their identification tag and register at the Forestry Administration (article 70).
All projects for public and forest road construction within the permanent forest reserves shall be subject to consultation with local authorities and communities and an Environmental and Social Impact Assessment (ESIA) (Forest Law, article 31) (see more under indicator 1.10 of this report). The Cambodian Code of Practice for Forest Harvesting regulates selective logging in natural forest (applicable to ABCs) and contains the technical regulations for e.g. logging on slopes, buffer zones, and felling direction.
Forest Plantations and Economic Land Concessions (ELCs)
Forestry Administration shall monitor and provide technical aspects to all harvest and transportation of planted trees and record all volumes of logs in order to issue transport permits as stated on the tree plantation sub-decree no. 26 (2008) and Forest Law (2002).
Community forestry regulations are passed by the Community Forestry Management Committee (established by the local communities in the applicable area) consistent with the Forest Management Plan, and includes such things as rights of access and duties for community members and secondary users, user fees, benefit sharing, reporting requirements, fines for violations, etc.
Communities under a community forest agreement may not harvest forest products for selling or bartering within the first 5 years of approval of the Community Forest Management Plan (sub-decree no 79, article 12).
Mitigation of risks related to compliance with harvesting regulations requires on-site verification: verify that the annual allowable cut is not exceeded; verify legal compliance of all regulations relevant for harvesting
The forests shall be protected against damaging activities caused by excessive exploitation, abusive forest clearing, forest ecosystem pollution, forest fires, shifting cultivation, diseases, noxious insects, and the imports of harmful forest vegetation and wildlife species. It is not allowed to obstruct boundary posts or distinctive sign marking of the forest boundary; nor to grid bark, poison, destroy, fell, or uproot any tree without technical necessity. It is not allowed to harvest forest products and NTFP in violation of the authorized permit (Forest Law, article 32). It is prohibited to set fires in the permanent forest estates. However, the FA is allowed to set fires or use fires to benefit forest management (Forest Law, article 36). It is prohibited to saw, slice or process logs within permanent forest reserves, and the use of chain saw within the permanent forest reserves is only allowed with a permit authorized by the Forestry Administration (Forest Law, article 38).
Forest plantations and Economic Land Concessions (ELCs)
Commercial harvesting is not allowed within the protected areas. It is prohibited to harass or harm any endangered, rare or common wildlife species or its habitat. Within the permanent forest reserve it is prohibited to harvest:
1. Tree species whose diameter is smaller than the minimum diameter allowed to harvest
2. Rare tree species
3. Tree species that local communities have tapped to extract resin following tradition
4. Trees that yield high-value resin.
Protected area
The Forestry Administration shall prepare a management plan for protected forest to be approved by Ministry of Agriculture, Forestry and Fisheries (MAFF) (Forest Law, article 23). Commercial harvesting is not allowed within the protected areas (Law on Protected Areas, 2008, Act 43).
MAFF may propose to the Royal Government of Cambodia (RGC) to revise the classification of an area in the protection forest to production forest. This is on the provision that new study data by the Forestry Administration shows that the area has sufficient potential for extraction of timber and/or Non-Timber Forest Products (NTFPs). Otherwise, the harvesting of harvest timber products and/or NTFPs within the protection forest shall be prohibited (Forest Law, article 28).
Protected areas are under the jurisdiction of the Ministry of Environment (MoE).
Each protected area may include up to four (4) management zones (Law on Protected Areas, article 11.):
1. Core zone: management area(s) of high conservation values containing threatened and critically endangered species, and fragile ecosystems. Access to the zone is prohibited except for the purpose of research or national security and defense.
2. Conservation zone: management area(s) of high conservation values containing natural resources, ecosystems, watershed areas, and natural landscape located adjacent to the core zone. Access to the zone is allowed only with prior consent of the Nature Conservation and Protection Administration of the area, with the exception of national security and defense sectors. Small-scale community uses of NTFP to support local ethnic minorities’ livelihood may be allowed under strict control, provided they do not present serious adverse impacts on biodiversity within the zone.
3. Sustainable use zone: management area(s) of high economic values for national economic development and management, and conservation of the protected area(s) itself thus contributing to the local community, and indigenous ethnic minorities’ livelihood improvement. After consulting with relevant ministries and institutions, local authorities, and local communities in accordance with relevant laws and procedures, the Royal Government of Cambodia may permit development and investment activities in this zone, in accordance with the request from the Ministry of Environment.
4. Community zone: management area(s) for socio-economic development of the local communities and indigenous ethnic minorities and may contain existing residential lands, paddy field and field garden, or slush and burn agriculture (Chamkar).
All clearances and bulldozing for the purposes of building of public infrastructures is strictly prohibited within the core zone and conservation zone. However, clearance can be carried out in the sustainable use zone and community zone with approval from the Royal Government of Cambodia (Law on Protected Areas, article 36).
The Ministry of Environment develops a National Protected Area Strategic Management Plan (NPASMP) (Law on Protected Areas, article 15), which shall be renewed at least every 5 years, and shall be put up for consultation (Law on Protected Areas, article 17). NPASMP shall include objectives of the conservation, rehabilitation, prevention, suppression of illegal activities, and sustainable use of natural resources and ecosystems within an individual protected area. The current status of natural resources and ecosystems within each zone including flora and fauna species, genetic resources and socio-cultural aspects shall also be included in the management plan. Alongside this, recommended actions for successful achievement of the protected area objectives and the steps for implementation of management plan for priority protected areas shall be included (Law on Protected Areas, article 16). The most recent National Protected Areas Strategic Management Plan 2017-2031 can be found here: https://redd.unfccc.int/uploads/54_2_cambodia_nat_protected_area_strategic_plan_eng_27_jul_2017.pdf
The General Department of Administration for Nature Conservation and Protection shall develop an action plan for each individual protected area to be approved by the MoE and in accordance with the NPASMP. The Process for the development of the Plan shall involve coordination and consultations with stakeholders (Law on Protected Areas, article 18).
Amongst others, the content for such plans shall include (Law on Protected Areas, article 19): a detailed description of the activities allowed within each zone and accompanied by zoning category; as well as description of the available natural resources, their uses and land use status within the protected area; and a description of prohibited activities that run counter to the protected area management objectives.
Restrictions and protected species within the permanent forest reserve
It is prohibited to harass or harm any endangered, rare or common wildlife species or its habitat (article 49), and unless authorized by Ministry of Agriculture, Forestry and Fisheries in special circumstances, it is prohibited to harvest the following forest products and NTFP within the permanent forest reserve (Forest Law, article 29):
1. Tree species whose diameter is smaller than the minimum diameter allowed to harvest;
2. Rare tree species;
3. Tree species that local communities have tapped to extract resin following tradition;
Rare tree species was expected to be defined through a Prakas but this has not yet been issued as of September 2020. In its absence, FA officials and others use a list of agreed endangered or rare tree species, described as ‘luxury timber species (first quality)’ from 2000, based on a 1986 regulation for the classification of wood qualities (Global Witness, 2015).
Special action has been taken on Siamese Rosewood (Dalbergia cochinchinensis) when the government in 2013 banned its collection, storage and processing for domestic use and export (Order No 2BB, 2013).
Forest that is defined as religious by local communities, living within or near the forest shall be protected, as protection Forest observes religious, cultural and/or conservation purposes. It is prohibited to harvest any spirit trees, which may be specially marked and shall be identified in a Community Forest Management Plan (Forest Law, article 45).
The Environmental Law (1996) and Environmental Impact Assessment Guidebook (2012) require an independent capable team to develop the EIA report for the government ministries, MoE and MAFF, to review and endorse, if acceptable.
• Larger projects (including forest operations) shall include an Environmental and Social Impact Assessment in their Forest Concession Management Plan (Forest Law, article 19) in accordance with the sub-decree on Environmental Impact Assessments No 72. A project sponsor shall conduct an initial Environmental Impact Assessment (IEIA) (sub-decree 72, article 6), and a full EIA if a project tends to cause serious harm (sub-decree no. 72, article 8) is required for:
o concession forests (including plantations on agricultural land) ≥ 10,000 hectares;
o Logging operations ≥500 ha; and
o Land covered by forests if ≥500 ha.
The Environmental Law (1996) and Environmental Impact Assessment Guidebook (2012) require an independent capable team to develop the EIA report for the government ministries, Ministry of Environment (MoE) and Ministry of Agriculture, Forestry and Fisheries (MAFF), to review and endorse, if acceptable.
• Larger projects (including forest operations) shall include an Environmental and Social Impact Assessment (ESIA) in their Forest Concession Management Plan (Forest Law, article 19) in accordance with the sub-decree on Environmental Impact Assessments No 72. A project sponsor shall conduct an initial Environmental Impact Assessment (EIA) (sub-decree 72, article 6), and a full EIA if a project tends to cause serious harm (sub-decree no. 72, article 8) is required for:
Conversion
• Establishing projects for quarrying, soil and sand excavation, mining, and other natural resources extraction, conducted within the permanent forest reserves, shall require a prior study-evaluation from MAFF, and if causing adverse social or environmental effects, a Social and Environmental Impact Assessment shall be conducted (Forest Law, articles 4, 35).
• Authorization by the Royal Government of Cambodia shall be given, which shall state the protection and restoration measures of the site for quarrying, soil and sand excavation, mining, and other natural resource extraction. The holder of such rights shall be responsible to:
1. Avoid causing or aggravating soil erosion, damage to growing vegetation, damage to the hydrologic systems and water quality;
2. After project completion, to restore the site of quarrying, soil and sand excavation, mining, or other natural resources extraction, to their original state within the time frame set by the permit.
• One of the main objectives of The Cambodian Code of Practice for Forest Harvesting is to prevent soils from heavy erosion during and after logging activities. The code specifically states that logging is not allowed along water streams at least 50 m on either site of the waterways. Road building activities shall not cause erosion. Although large-scale forest concession timber harvest been suspended, the Code is implemented for the existing Annual Bidding Coupes (Forestry Administration, 2008, p. 19).
The labour law sets out rules for health and safety of workers and work-related accidents.
All establishments and workplaces must be set up to guarantee the safety of workers. Machinery, mechanisms, transmission apparatus, tools, and equipment must be installed and maintained in the best possible safety conditions. Management of technical work utilising tools, equipment, machines, or products used must be organised properly for guaranteeing the safety of workers (article 230).
Enterprises and establishments covered by the labour law must provide primary health care to their workers (article 238). The legislation furthermore covers how to deal with accidents. Health insurance is not compulsory for employees under the labour law. However, the employer is required to join the National Social Security Fund under the 2002 Law on Social Security. The Law on Social Security states employers and workers are required to pay contribution to the National Social Security Fund. The Cambodian National Security Fund is broken into three components including: occupational risk work injury or occupational disease; health care; and pension scheme.
However, for the first phase of the implementation of the Law on Social Security only the occupational risks component is applied, and the employer is required to pay the contribution for work injury scheme which is 0.8% of the assumed wage based on the employee’s monthly wage (Phallack 2012, p. 307).
The labour law sets out rules for employment conditions such as apprenticeships, labour contracts, collective labour agreements, general working conditions, specific working conditions for agricultural work, placement and recruitment of workers, union freedom and worker representation in the enterprise, settlement of labour disputes, strikes and lockouts, labour administration, and the labour advisory committee.
An employment contract shall be in place. The Labour Law provides the basic legal form and scope of a labour contract in Cambodia and details the rights and obligations of the employer and workers. Providing further guidance are Decree 38 on Contract and Other Liabilities of October 28, 1988 and the Civil Code. These two laws set out the basic rules of contract. Furthermore, the Civil Code provides a guideline for implementing a labour contract according to provisions of the Labour Law (Phallack, 2012).
Every person of Cambodian nationality working as a worker for any employer is required to possess an employment card (article 32). The employment card shall contain work for which the employer has been contracted for, the duration of contract, the agreed wages and the method of payment, as well as the successive contracts (article 34). The employment card is drawn up and issued by the Labour Inspectors at the request of the worker who shall present an identity card issued by the competent authorities and a certificate of employment issued by his employer (article 35).
Every employer shall keep a payroll ledger and keep it for three years after it has been closed (article 39) and shall include information about each worker employed by the enterprise on work performed, wage and holidays (article 40).
Collective agreements (labour law, chapter V) shall determine the working and employment conditions of workers and to regulate relations between employers and workers as well as their respective organisations. The collective agreement can also extend its legally recognised roles to trade union organisations.
The wage must be at least equal to the guaranteed minimum wage (article 104). For work of equal conditions, professional skill and output, the wage shall be equal for all workers subject to this law, regardless of their origin, sex or age (article 106).
The minimum wage is set by a Prakas of the Ministry in charge of Labour, after receiving recommendations from the Labour Advisory Committee (article 107). There are no such Prakas for the forestry sector.
The allowable minimum age for wage employment is set at fifteen years, and eighteen years for hazardous work.
Partial payment in kind is allowed but cannot be imposed (article 198). It is possible to pay part of the salary in rice (article 198-200). The payment in rice covered in the preceding article can be replaced by a payment in cash if the parties so agree. Payment in cash is the most common practice.
Workers and employers have the right to establish unions (Labour Law, chapter XI, article 266 and Law on Trade Unions, article 5).
• Risk of companies removing all luxury trees but not providing development and not re-building ruined roads (The NGO Forum on Cambodia, 2015).
• Conflicts are present between villagers and logging companies. There are cases of community leaders attempting to protect the forests by filing complaints at all levels of government, up to the prime minister, but have received no positive response; in contrast, armed forces were sent to support the companies cutting down the trees (The NGO Forum on Cambodia, 2015).
• Risk that policies and programs erode the customary tenure rights of those communities dependent on forest resources, rendering them unable to receive any legally recognized use or control right over lands that are essential for their livelihoods (Ironside, 2017).
• Indigenous communities protested to prevent companies from logging and repeatedly submitted petitions to the government without success. Community members were reportedly beaten and threatened by armed forces protecting the logging companies (The NGO Forum on Cambodia, 2015). Reports after a company moved in to occupy a forest in 2013, villagers were not allowed to enter. Department of Environment guards were stationed at the entrance of Virachey National Park, preventing community members, journalists or others from entering. People were not allowed to travel near the company’s headquarters and Villagers were also not allowed to work for the company (The NGO Forum on Cambodia, 2015).
• In general, enforcement of laws in all kinds, Forest Law, Protected Area Law, and Land Law, is very weak. The law enforcement tends to benefit those in positions of power or with significant wealth, if conflicts between the third-party rights (Customary People) and timber companies takes place (The NGO Forum on Cambodia, 2015). VIEW LESS
Forest Law considers rights of customary people to the same degree as indigenous peoples rights. In some cases, newcomers (normally whole families) from provincial towns to the communities, living as far as 5 km from natural forestlands (article 30, Forest Law), have used customary rights to harvest timber and Non-Timber Forest Products (NTFPs) for family consumption, as allowed by law. Either indigenous or newcomers can utilize timber and NTFP for daily family consumption.
Customary Rights in Permanent Forest Reserve
• Customary rights can be practiced within the permanent forest reserve. Practices conducted within or close to protected areas are governed by the Law on Nature Protection Areas, while the remaining areas are governed by the Forest Law, 2002.
• Customary use is defined in the Forest Law, article 40. Local communities living within or near permanent forest reserves, and who do not have a community title still has traditional user rights for traditional customs, beliefs, religions and living, and no permit is required to carry out these activities (Forest Law, article 40).
• The traditional user rights include the following (Forest Law, article 40):
1. The collection of dead wood, picking wild fruit, collecting bees' honey, taking resin, and collecting other forest by-products;
2. Using timbers to build houses, stables for animals, fences and to make agricultural instruments;
3. Grass cutting or unleashing livestock to graze within the forests;
4. Using other forest products and NTFP consistent with traditional family use;
5. The right to barter or sell NTFP shall not require a permit, if those activities do not cause significant threat to the sustainability of the forest. The customers or any third party who has collected NTFP from local communities with the purposes of trade, in a manner consistent with the provisions of this law, shall have the permit for NTFP transportation after royalty and premium payments.
• A local community cannot transfer any of these traditional user rights to a third party (Forest Law, article 40).
• The Forest Law, article 15 requires the concessionaires to ensure their forest operation does not interfere with customary user rights, where it takes place on land property of indigenous communities; and customary access and user rights practiced by communities residing within or adjacent to forest concessions.
Community Consultation Committee
• MAFF shall cooperate with the local authorities and all concessionaires to establish a permanent Community Consultation Committee. This shall be used as a coordinating mechanism for discussion and consultation on all issues of joint concern between the concessionaire and communities inside, or in the vicinity of the concession, for the purpose of protection and preservation of traditional rights of local communities. The Community Consultation Committee members shall be elected among the chairpersons of the Village Development Committees or from the chairpersons of social organizations (ANUKRET on Forest Concession Management, 5.5).
Community Rights in Relation to Economic Land Concessions (ELCs)
• ELCs can only be established on 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. Public consultations, with regard to economic land concession projects or proposals, with territorial authorities and residents of the locality shall also be conducted (Sub-decree no. 146, article 4).
Community Forest
• Any part of the permanent forest reserve can be allocated to a community living inside or near a forest area in the form of a community forest (Forest Law, article 41). A community forest can be allocated for 15 years, with possibility for extension.
• Local communities who manage a community forest have the right to harvest forest products and NTFPs within the demarcated forest area, as stated in the community forest agreement and consistent with the Community Forest Management Plan.
• Shifting cultivation practices are prohibited in natural intact forest in the permanent forest reserves, but local communities who traditionally practice shifting cultivation may conduct such practices on community land registered with the State. The FA authorises these activities as part of a Community Forest Management Plan. Forestlands reserved for shifting cultivation shall be identified by Sub-decree no. 83, 2009.
• The Community Forest Management Plan shall be prepared by the local community and approved by the Cantonment level of the Forestry Administration. The Plan shall be sent to the central level of the Forestry Administration and be reviewed every five years or earlier if needed.
• Planted or natural forest established as a community forest by a local community shall be consistent with a Community Forest Management Plan, and subject to the technical supervision and assistance of the Forestry Administration.
• The rules for establishment, management and use of a community forest are determined by sub-decree 219 on Community Forestry Management 2006.
• Ministry of Agriculture, Forestry and Fisheries shall recognize the religious forest of local communities, living within or near the forest, as protection forest serves religious, cultural or conservation purposes. It is prohibited to harvest any spirit trees, thus they may be specially marked and shall be identified in a Community Forest Management Plan (Forest Law, article 45).
Customary Rights in Protected Areas
• Communities living near protected areas, which are under the responsibility of the Ministry of Environment (MoE) have the right to traditional use and practices of natural resources, local customs, beliefs, and religions within a sustainable use zone defined by the MoE.
• The Ministry of Environment can allocate parts of sustainable use zone to communities residing within or adjacent to a protected area as the community protected area. The concerned community protected area shall enter into an agreement with the General Department of Nature Conservation and Protection Administration and the agreement shall be valid for a period not exceeding fifteen years and can be revoked if the community acts against the terms of the agreement and management plan (Law on Nature Protection Area, article 25).
• Access to traditional uses of natural resources and customary practices of local community and indigenous ethnic minority groups on family scale may be allowed within sustainable use zone and conservation zone (Law on Nature Protection Area, article 22).
• Shifting cultivation shall not be permitted in the core zone or the conservative zone in the protected areas (Law on Nature Protection Area, article 24).
• Local communities and indigenous ethnic minorities do not automatically have rights to clear or work forestlands in community protected areas, nor to practice agricultural farming, or to claim the land title, or to sell, lease, pawn, donate, share, divide or transfer the areas under its own management to any person or legal entity (Law on Natural Protected Area, article 26).
• The community protected area shall develop a natural resources management plan which shall be reviewed and approved by the General Department of Nature Conservation and Protection. The Plan shall be reviewed at least every third year. The Plan and the community protected area development activities shall be integrated into the commune development plan (Law on Nature protection Area, article 28).
Settlement
• Unless otherwise authorized by the RGC, it shall be prohibited to establish a new settlement along public or forest roads in the permanent forest reserve (Forest Law, article 31).
The PC-1 is only a summary of the timber being transported based on quality and volumes without reference to physical identification to log numbers, species and dimensions. The PC-1 can be issued for more than one truckload thus the quantity registered on a PC-1 may not match the volumes being transported on a specific truck. A log list is required to be attached as an associated document to the PC-1 and it can serve to trace the material on a specific truck to the licensed harvest area. The lack of clear identification of logs and associated volumes between the PC-1 and the log list can prohibit verification of the physical material against the documents to control against abuse (TWG-FR, 2014, Pp. 82-83).
Transport Permits
The transport of logs and timber requires a transport permit issued by the local Forestry Administration office.
• All forest products and NTFP transported within the country shall be accompanied by a transport permit issued by the Forestry Administration (Forest Law, Art 69).
• All forest products and NTFP must be moved from the forest to the stockpile at the permanent log landing within one month after harvest and shall be accompanied by a transport permit issued by the Forestry Administration (Forest Law, Art 69).
• All forest products and NTFP that have been stocked anywhere in Cambodia shall be accompanied by an authorized transport or stock permit issued by the Forestry Administration (Forest Law, Art 69).
• Transportation or stockpiling of forest products and NTFP without a required permit or not in compliance with the terms and restrictions stated in the permit(s) is illegal (Forest Law, article 74).
• In case of auction of seized timber a transport permit will be issued by Forestry Administration once bidding is finished.
The following Transport Permits are used within Cambodia:
• Transport permits PC-1 (Permit de Condure-1) for logs to be taken from the stockpile to a defined processing mill.
• Transport permit PC-2 (Permit de Condure-2) to transport timber products from mill sites to the domestic markets.
• PC/B (also referred to as PC-IMEX): transport permit to allow timber and NTFP exported or imported.
Hammer-stamp marks
The Cambodian Forestry Administration hammer-stamps are created in order to:
• Mark legal logs prior to transport from the forest log landing; or
• Mark illegal logs that are evidence of forest offenses.
The Forestry Administration hammer-stamp mark shall have a round shape engraving with abbreviated letters R.K. (read as Ro. Kar.), and an identification number beneath the abbreviation to identify each hammer-stamp. MAFF shall make the imprint of the hammer-stamp and record it as an archive at the Ministry of Interior and at the Provincial or Municipal Courts (Forest Law, article 65).
Cambodian Forestry Administration hammer-stamp shall be stamped clearly on logs by the Forestry Administration officer, as follows (Forest Law, article 66):
• Logs permitted to be transported from the forest stockpile to the final destination shall possess four (4) or more Cambodian Forestry Administration hammer-stamp marks, both at the base and at the end of the log; and
• Illegal logs impounded or detained by the Forestry Administration shall possess three (3) Cambodian Forestry Administration hammer-stamp marks in a triangular position as follows: the base, middle, and the end of the log.
All trees in the permanent forest reserve that are permitted to be felled shall have a mark of the Cambodian Forestry Administration hammer-stamp by sworn Forestry Administration officials.
Rules governing the use of this hammer-stamp shall be determined by the Prakas of MAFF.
Private hammer-stamp
Any forest concessionaire or forest coupe owner may have his/her private hammer-stamp for his/her personal use on timber products; however, the mark from this private hammer-stamp shall have different shape, size, and letters from those of the Forestry Administration hammer-stamp and before its use, the forest concessionaire or forest coupe owner shall make an imprint of the hammer-stamp for approval by the Head of Forestry Administration, and shall register the imprint at the appropriate Forestry Administration Office (Forest Law, article 67).
Hours for harvesting and transport
• It is prohibited to fell trees and collect or transport forest products and NTFP within the permanent forest reserve from eight (8:00) PM to five (5:00) AM, even with a harvest permit issued under the provisions of the Forest Law (Forest Law, article 68).
Prakas 986 defines the transfer price as ‘the price of goods, services, or property charged between related parties. Transfer pricing (TP) refers to setting the value of transactions (e.g. the sale or purchase of goods, royalties or interest etc.) between related parties using the most appropriate transfer pricing methodology. The transactions must be done in accordance with the arm’s length principle. Entities which transact with related parties must prepare and maintain transfer pricing documentation setting out related-party transactions and the transfer pricing methodologies used to justify an arm’s length value. Documents related to the transactions, such as invoices, must be kept for ten years and companies must disclose related-party transactions when filing their annual corporate Income Tax Return (CIT); and provide relevant transfer pricing documents if required by the General Department of Taxation (GDT) (PWC, 2017; DFDL, 2018).
“Prakas 986 is effective from the signing date of 10 October 2017, with no clear indication of the first fiscal year to be applied. However, considering many Cambodian enterprises have fiscal years ending 31 December and the annual corporate tax filing deadline is 3 months from fiscal year end, the assumption is that both the transfer pricing form and documentation should be completed by 31 March” (DFDL, 2018).
Failure to comply with the above requirements would lead to:
• Transfer pricing adjustments, which would result in additional tax.
• Tax penalties, which range from 10% to 40% of the additional tax for violations of the Law on Tax (LoT) according to article 133 of the LoT, plus an interest charge of 2% on late payment.
• A lawsuit filed by the local tax administration against enterprises for charges stipulated under the LOT.
Following products can be exported:1. All processed and non-processed timber products from plantations (planted forest) 2. Production forest not under concession is the supply is higher than the local demand 3. Production from legal sources of natural forest 4. Illegally logged timber seized by the authorities and sold through bidding.
• All processed and non-processed timber products from plantations (planted forest) can be exported (Sub-decree 131, article 1).
• Production forest not under concession shall be managed with the priority use to meet domestic annual needs for timber products and NTFP. These products may be exported only upon showing that the supply is higher than the local demand (Forest Law, article 20). The export shall be consistent with the annual quota set by the Royal Government (Forest Law, article 72).
• Production from legal sources of natural forest can be exported (Sub-decree no. 131, article 2), but needs to be processed prior to export. Logs (debarked or not); crude/ round or rough sawn timber; squared logs with a thickness or width of more than 25 cm, even when smoothed; and firewood and charcoal from natural forests cannot be exported (article 3 of the Sub-decree no. 131).
• Illegally logged timber seized by the authorities and sold through bidding can be allowed for export (Technical Working Group on Forestry Reform, 2014). See more about seized timber under 1.4 of this report.
• In 2016 a ban for wood export to Vietnam was announcement by the National Military Police Commander (Zsombor, 2016). Timber export ban, to Vietnam and anywhere else, has been declared by the official paper called Declaration No. 01 BB of the government of Cambodia, once in 1999, 2004, 2006, and in 2012. It is also widely mentioned in news media (Zsombor, 2016; O’Bryne, 2018; Davies, 2018).
• An export license is required for all timber and NTFP products, except products following traditional style. The products following traditional style are either timber or non-timber forest products (NTFP) used for traditional consumption, normally for use by ethnic minority families living near or inside forest domain. The main difference of traditional style forest products to non-traditional style is that they are for non-commercial and commercial purposes. For instance, timbers (and NTFP) for house construction and agricultural tools of the ethnic people are traditional style. The license shall be issued by the Ministry of Commerce with a supportive letter signed by FA/MAFF (sub-decree no. 131, article 7) (The NGO Forum on Cambodia, 2015).
• Import and export of forest and NTFP shall go through government official ports (sub-decree no. 131, article 11).
• Timber products and NTFP for export shall be inspected during loading into containers and sealed by the Forestry Administration official prior being transported to customs warehouse and stockpile area. Ministry of Agriculture, Forestry and Fisheries shall issue a Prakas to determine the sample of the seal to be attached to the outside of the container holding the goods for export (Forest Law, article 73).
The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) is an international agreement between governments. Its aim is to ensure that international trade in specimens of wild animals and plants does not threaten their survival (CITES, N.Y.).
Cambodia has ratified the CITES convention in national law, and trade in species listed on the CITES appendixes I, II and III, shall be regulated in order not to prevent further threats to the survival of these species (BNG Legal, 2012).
The import-export and re-export of any species listed in the CITES appendices require the prior granting of an import-export permit from the Scientific Authority (Forestry Administration) and Management Authority (MAFF) in Cambodia. An import-export and re-export permit is valid for a period of six months from the date which it was granted (BNG Legal, 2012).
The timber species Dalbergia spp. (Rosewood) and Diospyros ferrea (Black Ebony) are both listed on CITES Appendix II (CITES checklist), which means that trade must be controlled in order to avoid utilization incompatible with their survival (CITES, N.Y.).