Issue Description
The Ministry of Land Management, Urban Planning and Construction is currently rafting a Construction Law which will incorporate a Building Code, setting safety and quality standards for construction projects, with the support of international expertise. This Building Code would provide more rigorous and effective regulation over safety standards within the Cambodian construction sector, as there are currently relatively limited provisions in place. At present, while the developers of large construction projects often voluntarily adhere to an international set of standards, it is not uncommon for developers and or contractors to cut corners in pursuit of higher profit margins on smaller projects. As a result of poor construction standards, there have been a number of worker fatalities over recent years.
EuroCham welcomes this initiative and hopes to continue to facilitate dialogue between the Royal Government of Cambodia (RGC) and the private sector, through our Real Estate and Construction Committee to ensure that the new standards will be robust yet also practical so as not to deter investment.
There is a need to further consider how to effectively adopt the Code upon its completion. Monitoring compliance will require a body of trained staff who can independently check and verify the implementation of building standards on construction projects. In practice, it can be challenging for governments to develop the capacity to implement such checks, and authorities in some other countries opt to authorise independent certification bodies from the private sector to carry out this task.
Impact on business
The RGC clearly recognises the importance of introducing an effective Building Code to minimise safety risks, protect people in Cambodia, and encourage investor confidence. The highest authorities within the RGC have also publicly commented on the risks that lax building standards can pose to the real estate sector’s growth and sustainability.
In terms of the content of the standards, due consideration needs to be given to how standards compare to those in other countries — to create a set of standards unfamiliar to investors would create additional adaption and certification costs which could potentially discourage foreign investment. Conversely, a robust yet practical set of building standards would increase investor confidence without creating too many burdensome costs.
Recommendation
- Consult with the private sector to ensure a practical set of building standards.
Effective implementation is key to ensuring the success of the Building Code and enhancing safety standards and investors’ perceptions of fair competition within the Cambodia real estate market. Therefore we respectfully recommend that the Royal Government of Cambodia:
- Base the Building Code upon an existing set of international standards that is familiar to current and prospective investors. From this base, adaptations can be made to better suit the specificities of the Cambodian context. For example, whereas a European standard of roof strength needs to be able to withstand heavy snowfall, this would be unnecessary in Cambodia. However, there may be other hazards to consider that are not accounted for in the base set of foreign standards. The end product of this process will be a ‘Cambodian standard’ but we recommend that this standard is congruent with existing international standards;
- Consult with the private sector to determine what would be the most effective method of implementation of the new building code. The authorisation of an independent certification body from the private sector may be one option to consider;
- Consider including a requirement within the Building Code for all development projects to prominently display a signpost that lists the construction companies working on the project. This serves to increase transparency and enables appropriate regulatory bodies to ensure only licenced and certified companies are operating on a construction project.
Royal government of Cambodia
Initiative from Eurocham: The issue has been raised by the Real Estate & Construction Committee within The White Book edition 2024 in the Recommendation No. 59.
The Ministry of Land Management Urban Planning and Construction announced on the 18th of Agust 2023, that the adoption of the technical construction standards, will follow the EuroCode. (Announcement can be found here).
The MLMUPC started to work with the European Union, through the E-READI program to finalize the adoption of the EuroCode standard.
National Counterparts
Ministry of Land Management, Urban Planning and Construction