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Logo of Phnom Penh Post newspaper Phnom Penh Post - Lifespan of ELCs slashed by gov’t

Lifespan of ELCs slashed by gov’t

The government has declared leases on plantations will be limited to 50 years, slashing the length of some existing concessions in half, though neither ministry responsible for overseeing the move would confirm the legal basis for doing so.

The decision was announced in a press release issued by the Ministry of Environment yesterday, with its chief of cabinet, Srun Darith, saying the policy would be implemented on new and already- existing economic land concessions (ELCs).

“Most of the existing ELC companies have no contract. For those companies with contracts, they will be reviewed,” he said.

Eang Sophalleth, an undersecretary of state at the Ministry of Agriculture, confirmed his ministry would also be implementing the plan.

“All I can say is it’s the will of the government; I cannot clarify the reason,” he said.

According to the Environment Ministry statement, the government has already implemented the reduction on 16 ELCs previously set to run for between 70 and 99 years, covering almost 100,000 hectares across Mondulkiri, Ratanakkiri and Kampong Speu provinces.

Those ELCs were among 113 companies controlling almost 630,000 hectares reviewed by the government.

After being discussed by an inter-ministerial committee, the investment rights for 23 projects covering more than 90,000 hectares were revoked because the companies involved had not complied with the principles or procedures set out under the original agreements.

A further four projects covering more than 32,000 hectares had been handed back to the government voluntarily, while four more projects were drastically reduced in size from almost 15,000 hectares in total to less than 1,300.

Eighteen other projects on more than 100,000 hectares were given between six and 12 months to meet agreed upon parameters, while decisions on 16 projects covering more than 76,000 hectares remained outstanding.

The remaining 32 projects, which cover more than 216,000 hectares had yet to be evaluated.

The decision to drastically reduce the duration of ELC leases was met with dismay by business representatives yesterday.

Seng Rithy, country representative for Vietnam Rubber Group, which has interests in 18 ELCs covering 90,000 hectares across five provinces, all of which have 70-year leases, said that while the company would accept the decision, they felt the new rule should not be implemented on existing contracts.

“For those who have not signed [contracts], it’s OK,” he said. “But if existing companies [who already have contracts] could keep the original contracts, it would be transparent and prevent investors from worrying.”

Meanwhile, head of the land and natural resources rights section at rights group Adhoc, Latt Ky, questioned the legal basis of the decision, saying it violated the principles laid out in the 2011 Land Law, under which a sub-decree established 99-year lease concessions.

“Why have they allowed 99-year [leases] in the first place? And what reasons do they have for reducing them to 50 years? I believe while the government may have good reason for that, there should be an amendment to the related laws about setting the time,” he said.

Last week, Adhoc published a report on land rights, which warned of grave consequences for Cambodia’s rural communities if the transfer of land into the hands of wealthy local and foreign interests was allowed to continue unabated.

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