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Business from a legal perspective

A partner at Bun & Associates, Antoine Fontaine, who was in December made president of the French Chamber of Commerce in Cambodia, says members hope to influence commercial law

CEO TALK
By Steve Finch

The judiciary system is not that good. it's getting better and better, but it’s not very good now."

What plans does the chamber have for 2010?
It was our first meeting of the year [on January 21] … and we had the general meeting on December 10 where we elected a new board of directors. And there are four Cambodians on board, so we are the French-Cambodia chamber of commerce, but the fact is we are more Cambodian than French. It means we want to have more Cambodians in our chamber.

The other point is that now we would like to help our members to be more involved in Cambodian development and to be more efficient for themselves.

As the newly elected president of the chamber, how will you do things differently?
In fact, there are three steps. The first milestone was at the very beginning: The chamber of commerce was just a business club, and so we just organised one meeting every month, as many other chambers do now.

And afterwards during the second five-year period we organised the first career forum, which is one of the biggest events in Cambodia with normally 10,000 visitors in a week and one big gala at the end of the year.

From my point of view we are beginning the third step, which is to be a real chamber, which means that we have to … help our members work closely with the government and to operate together.

We need to work together with everybody, even with your own competitors. We can share, not all information of course, but we can share … some sales centres … or we can create some special training for your staff.

Maybe members have the same needs, so it’s less expensive to have an expert that comes for everybody. We already have a commission for employment and training, and so ... our agenda is split into different sectors [of the economy].

That’s something you’ve done for the first time?
Yes, the first time. There are 12 [sector groups] in fact. So … it covers every sector. And actually we are not sure that every sector will work – it depends on the will of the members.

We discussed [this] with IFC [International Finance Corporation]….

The IFC at the end of the year, the working groups of the forum for the public-private sector, have to create a secretariat before leaving … for the different groups. Some of them aren’t working very well, and so our intervention can be to lead those groups … according to our experience.

So, for example, the agro industry, we’d like to work on that … and we could help the current working group in order to be more efficient … to support them and to provide them with other specific techniques and ideas and experiences.

How is this going to work in practice?
It’s very new. It’s our idea … and we knew we had a need for it, especially because most of our members are SMEs, and the point is now we have most of the laws which were made during the past.

Those rules are from the government-private sector. The problem is – in that forum – most of the stakeholders are internationals.

And so they have to defend their own point of view, regarding the rules of their own countries, and they are not really aware of the issues that every SME – and of course Cambodian company – has to deal with every day.

We would like to help the government in order to have more efficient laws for everybody, not only for … big foreign investors because from our point of view the law is a very cultural aspect of a society. We need to give them feedback about what the SMEs deal with every day.

Some [Cambodian laws] are totally unique and stupid for SMEs – they are really for multinationals.

Aside from this issue relating to SMEs, what other problems regarding business law does the French chamber of commerce hope to address?
The first problem is of course these laws, which means that there is a big difference between the theoretical law and the practical, in practice.

One of the big issues is … that many of our members don’t have the human resources needed to implement that law and to invest in that law.

So, in many cases they just work with that prakas [edict] … which is in fact the local law.

There are in fact two levels: the official law, which is theoretical, but we have to compare with that law as well because that law can be used against you.

So you have to be in compliance both with formal law and practice, and sub-decrees and prakas, and sometimes it is very, very difficult because they are often in opposition with each other.

The other big, big issue is that when we make law in Cambodia in many cases it’s just copy and paste, and so the problem is when you copy and paste sometimes it’s not done very well.

But of course [in such cases] you forget all the case law, all the jurisprudence, and all the regulations as well.

So … the consequence is that they are not very adapted to the culture and Cambodian system.

Last year was difficult in terms of business, do you and your members expect things to be better in 2010?
It’s hard to say because it depends on the sector.

In fact, we are optimistic in Cambodia because growth will not stop [in the longer term], and there are many sectors which are coming on now….

[In] the agro industry … there is the Australian investment [by Indochina Gateway Capital Ltd, a fund advised by former Australian finance minister Peter Costello], and there are many others.

The agro industry is very important, and it creates a lot of employment and value for Cambodia.

The other sectors are tourism – many places on the coast like Koh Kong … can be extended as well….

And so in terms of tourism there are many things to develop.

In some sectors it is very difficult, especially for many SMEs in fact … sometimes they just didn’t earn any money – they have to live, so its very difficult.

Have some of your members experienced serious financial problems due to the economic crisis?
Yes, sure. And some of our members take time to pay the fee for the CCFC (French Chamber of Commerce in Cambodia) … when you make only US$1,000 profit how can you do it?

Which sectors in particular – among your members – have been hit badly?
Hospitality and restaurants … but it’s not only [those sectors].

What can Cambodia do to improve the investment climate for foreign firms?
Definitely to create stable law. The judiciary system is not that good. It’s getting better and better, but it’s not very good now.

The second thing of course is to be compliant with the WTO requirements…. So it depends whether the government wants to be more strict. On many things, you just want to apply the law, but one of the problems – as I said – is to have good law to be applied.

The other issue is, because of that, [is that businesses] have to be adaptable.

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