Past drafts of the Environment and Natural Resources Code of Cambodia stipulated that any new development project must conduct an Environmental Impact Assessment (EIA) through an accredited company which must be of Khmer nationality. While EuroCham is aware of some limited exemptions to this, whereby a foreign company has partnered with a Cambodian company to obtain a licence to deliver EIA consulting services, this is not widespread and the majority of foreign firms remain excluded. According to Cambodia’s World Trade Organisation (WTO) schedule of commitments, Cambodia allows foreign environment consulting services companies to offer EIA consulting services both cross-border and through local establishment (CPC 9409). The schedule has no additional restrictions or regulation requirements for offering environmental services in Cambodia. Furthermore, the “nationality clause” would serve to limit competition between EIA consulting firms by restricting market access. Limited competition would allow for inflated prices and a lack of incentive to provide a quality service.
Impact on business
On the basis of Cambodia’s schedule of commitments to the WTO, articles that restrict environmental consulting services to firms of Khmer nationality only, if approved to a law, would raise serious doubts about their compatibility with Cambodia’s international commitments. This could ultimately damage Cambodia’s credibility as an international trading partner and could discourage trade and investment. Furthermore, this issue can create additional costs and administrative burden for investors, and negatively impact Cambodia’s competitiveness and attractiveness as an investment destination. Many of our members require EIAs from international consultants for their own internal governance procedures. For these companies, the legally-required EIAs by accredited consulting companies in Cambodia represent additional costs and little additional value.
- Ensure that the nationality requirement for Environmental Impact Assessment consultancies is not included in the final Environment and Natural Resources Code of Cambodia.
We respectfully recommend that the Royal Government does not include the nationality requirement for Environmental Impact Assessment consultancies in the final version of the Environment and Natural Resources Code of Cambodia, as was done in previous drafts (Draft 6 on 20 November 2016 and Draft 7 on 31 December 2016). Additionally, we suggest that the consideration of EIA consulting accreditation applications be based only upon the competencies of the applying company, as this would encourage applications from a greater number of consultancies and ensure fair competition among service providers.
Removing the nationality clause would have a positive impact on the consulting market, as companies will be forced to improve the quality of services and price their services more competitively or risk losing their customers to competing companies that do.
Royal government of Cambodia
Initiative from Eurocham: The issue has been raised by the Green Business Committee within The White Book edition 2024 in the Recommendation No. 31.
The Ministry of Environment has issued the Environment and Natural Resources Code to the public on the 5th of July 2023 after promulgated by Royal Kram. The Nationality requirements is not explicitly mentionned within the law.
Ministry of Environment