Issue Description
The issuance of the Environment and Natural Resources Code in July 2023 represented a positive step toward greater openness and competition in the environmental consulting market. The Code provides the general legal framework for Environmental Impact Assessments (EIAs) and, notably, does not explicitly include nationality requirements for firms conducting EIAs, contrary to several previous drafts.
However, in February 2024, the Ministry of Environment issued Prakas No. 08 on the Conditions and Procedures for Registration and Recognition of Environmental Impact Assessment Consulting Firms. Article 9 of this Prakas requires foreign EIA consulting firms to partner with a nationally registered firm. According to Cambodia’s World Trade Organization (WTO) schedule of commitments (CPC 9409), Cambodia allows foreign environmental consulting companies to offer services both cross-border and through local establishment. As the schedule contains no additional restrictions or regulatory requirements for these services, Prakas No. 08 is contrary to this commitment.
Making such restrictions compulsory severely impedes market access for foreign firms. This limits competition and, consequently, reduces incentives to deliver high-quality, cost-effective EIA services.
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.
Recommendation
- Allowing international consulting firms to directly conduct Environmental Impact Assessments without local third-party involvement.
Specifically, EuroCham recommends amending Prakas No. 08 to remove the requirement for foreign EIA consulting firms to collaborate with local firms. Removing this obligation would help attract greater foreign investment, increase competition in the EIA consulting market which would ultimately improve the overall quality of environmental impact assessments in Cambodia.
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.
Featured in WB 2027: this issue has been updated in the Whitebook 2027, for the previous versions, please refer to the Whitebook 2024.
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.
In February 2024, the Ministry of Environment issued Prakas 08 on
Conditions and Procedures for Registration and Recognition of Environmental Impact Assessment Consulting Firm. Article 9 of this Prakas obliges foreign consulting firms to cooperate with an environmental impact assessment consulting firm.
You can find the prakas HERE and its unofficial translation HERE.
EuroCham Cambodia Green Business Committee Chairman’s Mr Mark Selby on the 7th of April 2025, at the 2nd Cambodia-Europe Public-Private Sector Dialogue raised this point, highlighting the adds unnecessary costs and complexity for companies, potentially deterring investment as businesses may seek more flexible alternatives in other countries with processes aligned to international standards that the article add.
EuroCham proposed a discussion on amending Prakas 08 to allow international firms to directly conduct EIAs, which would enhance competition, improve service quality, and increase investor confidence. Such an amendment would position Cambodia as a more attractive investment destination by promoting transparency and raising the standards of the EIA market. EuroCham urge the government to consider this change, which would benefit both the consulting industry and Cambodia’s overall investment climate.
At the Cambodia-Europe Public-Private Sector Dialogue held on the 7th of April 2025, the representative of the Ministry of Environment acknowledged the issue related to the quality of the EIA and confirmed that the Ministry is working to elevate the standards of the EIA conducted. He will take note and report to his management. H.E. Deputy Prime Minister, Sun Chanthol, will forward this issue to the Prime Minister and encouraged taking strong actions to improve the quality of EIA in Cambodia. Response from the DPM: He confirmed that the report of this dialogue will be forwarded to the Prime Minister and stressed the MoE to take strong actions to improve the quality of the EIA.
National Counterparts
Ministry of Environment