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ELC earnings underwhelm

Labourers harvest sugar cane at a plantation in an economic land concession
Labourers harvest sugar cane at a plantation in an economic land concession owned by Phnom Penh Sugar Company in Kampong Speu last year.

ELC earnings underwhelm

The Cambodian government earned about $80 million leasing economic land concessions and forests to private companies over the last three years, according to a report from the Ministry of Economy and Finance released last week.

The January report, signed by Prime Minister Hun Sen, found that the ELC system, which is managed by the Ministry of Environment and the Ministry of Agriculture, Forests, and Fisheries (MAFF), faced significant challenges such as low revenues collected from rental fees and a lack of proper implementation from both ministries.

The lands granted to private companies are vast: in 2013 alone, 230 companies were granted ELCs with a total size of almost 2 million hectares.

Over 1.3 million hectares were granted by the MAFF to 122 companies, while 618,500 hectares were granted by the Ministry of Environment to 108 companies, the report said.

According to government guidelines, ELC concessionaires are to pay an annual rental fee of $5 per hectare of cleared land starting from the sixth year of their purchase, and the fee is subject to a 1 per cent increase every year afterwards.

Human rights watchdogs claim the leasing of ELCs and forests has a more negative than positive impact to the economy, citing environmental concerns and lack of revenues to the government.

Am Sam Ath, senior investigator for rights group Licadho, said that the government’s ELC revenue did not reflect the true value of the lands and forests which the government granted for use by private companies.

“Many companies did nothing with the land,” he said.

“I think the government has to think before leasing land or forests for companies to invest in – we can keep forests on land that gives us more revenue rather than giving the land to a company.”

On May 9, 2014, the MAFF and the MoE issued a joint Prakas on “Strengthening [the] Management of ELCs” and agreed to set rental fees based on the size of cleared land permitted by both
ministries.

But Sam Ath said that the action taken by the government did not work.

“If the government set proper regulations for companies to follow, it would be great. But when companies do nothing with the land, and just clear all the trees and let the government take the land back, it is worthless.”

MAFF spokesman Eang Sophalleth declined to comment as he had not seen the report.

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