I N 1994 governmental responsibility for investment activities in Cambodia was
transferred from the National Committee for Investment (NCI) to the Council for
the Development of Cambodia (CDC). This was made clear in the Investment Law of
August 5, 1994 which specifically states that the CDC is the "sole and one-stop
service organization responsible for rehabilitation, development and investment
Recently, a sub-decree on the organization and functioning
of the CDC was issued. By this sub-decree, the membership of the CDC is
formalized, the roles and responsibilities of each of the CDC's departments is
set out in detail, and a framework for the "one-stop service" aspect of the CDC
The clarification of the role of the CDC is welcome and
extremely timely, particularly in the investment sector. According to the latest
figures published by the Cambodian Investment Board, over 70 private investment
projects were approved by the CDC in the first six months of 1995. This
represents in excess of $400 million in investment and over 16,000 new jobs.
When compared to previous years, 1995 has to date been extremely
In an atmosphere of rapid growth, having a coordinated and
efficient body supervising the investment and development process is essential.
For investors and representatives of aid-giving countries to be aware of how
such a body is structured and the scope of its jurisdiction is even more
The Structure of the CDC
The CDC is composed of the following individuals who meet monthly to discuss
The two Prime Ministers (both co-chairmen); the senior minister in
charge of Rehabilitation and Development (vice-chairman); the senior minister in
charge of Culture, Arts, Land Management and Urbanization; and the ministers of
Public Works and Transport, Foreign Affairs, Economy and Finance, and Planning;
and the secretary-generals of the CDC, the Cambodian Rehabilitation and
Development Board, and the Cambodian Investment Board.
vice-chairman, and three CDC secretary-generals form the executive committee
which supervises and regulates the daily operations and has formal fortnightly
In an interesting move, the sub-decree has given the Second
Prime Minister the position of co-chairman (the chairmanship was previously held
by the First Prime Minister alone). It also provided for each of the
secretary-generals to be assisted by a deputy secretary-general - most likely
from the opposite political party.
The General Secretariat of the CDC
The General Secretariat is the overseeing body of the CDC and is under the
direct supervision of the secretary-general of the CDC. It has four
- Legal and Dispute Resolutions
- Finance and Administration
- Personnel Management
- Strategic Planning
Cambodian Rehabilitation and Development Board (CRCB)
The CRDB is the body charged with the supervision of public sector investment
and the responsibility of acting as the focal point for relations between the
government and donor countries, international organizations and NGOs.
Internally, the CRDB is also responsible for coordinating the use and allocation
of external aid among government ministries and institutions.
Cambodian Investment Board (CIB)
The CIB is the body that most private investors will deal with. Its role is
to promote and coordinate private sector investment, to initiate and manage
special development zones, to propose laws and regulations for creating a more
attractive investment climate in Cambodia and to coordinate relations between
investors and the relevant government ministries. The CIB also makes
recommendations regarding environmental impact assessments and the granting of
investment incentives to projects.
While the CDC is officially the sole
body governing investment and development in Cambodia, it is accountable to the
Council of Ministers and projects which involve any of the following factors
must be submitted to the council for its approval:
- a capital investment of over $50 million,
- politically sensitive issues,
- the exploration and exploitation of mineral and natural resources,
- the possibility of a negative impact on the environment,
- long-term strategy,
- Build-Own-Transfer (BOT), Build-Own-Operate-Transfer (BOOT),
Build-Own-Operate (BOO), or Build-Lease-Transfer (BLT) projects.
In establishing the CDC one of the primary concerns of the government was to
create a body which would allow "one-stop shopping" for those involved in
investment, rehabilitation and development activities. In other words, to create
an organization to act as the central coordinator of activities and relations
between government ministries, investors, NGOs and donor countries.
sub-decree sets out the basic framework of how the concept of one-stop service
is to function within the CDC. Details on the organization of the process are to
be given in internal regulations of the CDC.
The main structure of the
plan is to have officials from relevant government ministries appointed to the
CDC to assist in coordinating interministerial decisions. The officials
appointed must hold the rank of department chief or deputy chief, be considered
competent in their work and have the ability to communicate in foreign
languages, particularly English. Their authority must be delegated from the head
of their respective institutions.
Officials from the Ministry of Foreign
Affairs and International Cooperation, the Ministry of Economy and Finance, the
Ministry of Planning and the Cabinet of the Council of Ministers will be
appointed to the CRDB. Similarly, representatives will be appointed to the CIB
from the Ministry of Economy and Finance, the Ministry of Commerce, the Ministry
of Planning and the Cabinet of the Council of Ministers. Should a decision
require the input of other ministries, the secretary-general of the CRDB or CIB
may request such ministries to appoint an appropriate representative on an ad
The appointed representatives will meet regularly with
officials of the CDC. Decisions resulting from such meetings will be conveyed to
the secretary-general of the CDC for submission to the executive committee of
If the one-stop service planned by the CDC is eventually
established to a level where it is truly effective it will be most welcome. In
practice, however, after a brief period of centralization when the CDC was first
created, we have not yet seen any great changes in the status quo. At, present,
contact with the individual ministries remains an important part of establishing
and operating investment and development projects in Cambodia. Apart from being
inefficient and expensive for the investor or international organization
involved, such lack of coordination results in overlapping paperwork and
confused jurisdiction within the government itself.
The only way that the
concept of one-stop service will succeed is with full cooperation and support of
the ministries and institutions of the Cambodian government. For a variety of
reasons it is widely recognized that this support has not been evident to date.
Until it is received the CDC will never attain its full potential as a
centralizing body. It is for this reason that the presence of the Second Prime
Minister and the cross-party appointments in deputy secretary-general positions
may prove extremely beneficial to the CDC. A true centralizing body must be
Michael Popkin is a lawyer in the Phnom Penh office of Dirksen Flipse
Doran and Le.