THE Government of Cambodia recently enacted an Environmental Protection and Resource

Management Law that will impact on private investors throughout the Kingdom. The

extent to which investors are likely to be affected by the new environmental law

will depend, to a large degree, on the sub-decrees that will be issued. These will,

hopefully, further clarify this law and define specific guidelines. In the meantime,

businesses need to be aware that environmental protection measures are starting to

be put in place and other ministries, in addition to the Ministry of Environment,

are likely to be inspecting and requiring various reports or monitoring the activities

of those projects with which they have been previously associated.

The Ministry of Environment is a fairly new ministry, having been established first

by royal decree in October 1994 and in January 1996 it received a legislative mandate.

Even before its official establishment as a ministry, the Ministry of Environment

began work on an environmental protection law. Its early goal was to develop a comprehensive

law, with specified procedures for environmental impact assessment, and to establish

new institutions with specific responsibility for aspects of environmental management.

At some point the Ministry decided to simplify its approach to this draft law in

the interests of focusing its energies on a more narrow topic - that of making the

Ministry the agency primarily responsible for environmental management and to clarify

institutional roles and responsibilities.

Unfortunately, the new law does not clarify many of these institutional issues. The

roles and responsibilities of various ministries are not clearly defined, leaving

the investor with no certainty as to which ministry will oversee its particular environmental

issues.

Chapter 3 of the Environmental Protection and Resource Management Law requires that

environmental impact assessments be prepared for public and private activities and

that these be evaluated by the Ministry of Environment prior to submission to the

Royal Government. This chapter goes on to state that assessments will also be conducted

for already existing activities. The exact nature and format of these assessments

is unspecified and a future sub-decree will define the parameters of these assessments.

Additionally, the law specifies that this sub-decree (or another one) will define

which projects, by nature, size, activity or other characteristic, will be required

to prepare an environmental impact assessment. However, a different provision in

the law seems to contradict this by requiring that all projects and activities have

an environmental impact assessment. Hopefully, this variance in application will

be clarified.

Since this chapter specifically calls for environmental impact assessments for investment

projects, future investors can expect submission of this document to be an additional

requirement when seeking investor status and investment incentives at the Cambodian

Investment Board.

The Ministry of Environment is given only a research and advisory role in the area

of natural resource management. The law, which requires that the Ministry of Environment

work with "concerned ministries" with regard to resource sustainability,

will require the investor to work even more closely with ministries other than the

Ministry of Environment with regard to environmental issues. For example, a palm

oil plantation that required approval from the Ministry of Agriculture will most

likely be contacted by this same ministry, rather than the Ministry of Environment,

with regard to natural resource management in the palm oil project.

The same regard for "concerned ministries" is demonstrated in the environmental

protection provisions of the new law. These provisions require the Ministry of Environment

to collaborate with these same "concerned ministries" to inventory the

sources, nature and quantities of pollutants and toxic and hazardous wastes. Again,

the exact manner in which this will be done is left to a future sub-decree which

will, presumably, include more specific information on ministry authority to prevent,

reduce and control pollution.

Another area in which the Ministry of Environment is mandated to collaborate with

concerned ministries is in imposing monitoring, record-keeping and reporting requirements

on pollution sources, including "natural resource development activity."

However, there are no standards to monitor and inspect against in order to verify

compliance, so it is unclear to what extent the Ministry of Environment will attempt

enforcement of this provision prior to a sub-decree clarifying these matters.

The law gives the Ministry of Environment the authority, again in collaboration with

concerned ministries, to conduct inspections if it finds that an activity is "adversely

affecting the environment." There are no definitions of "adversely affect"

and these inspections are supposed to be regulated by a future sub-decree. It is

unknown to what extent the Ministry may begin conducting inspections prior to such

specific guidelines. It is a specific violation of the law if any person obstructs

or refuses to allow inspection officials to conduct such an inspection. The law subjects

the first time offender to a fine of between 500,000 and one million Riels (about

US$185 to US$370) with the specific amount negotiated between the offender and the

Ministry of Environment. In the event of repeated offenses, a larger fine may be

imposed by a court which may also subject the offender to specified terms of imprisonment.

A specific treasury account to "finance environmental protection and the conservation

of natural resources" is to be established but procedures for the fund's operation

or criteria for selecting projects to be funded have not been specified in the law.

- Roberta Thami is an attorney associated with international law firm Dirksen

Flipse Doran & Le.