Environment Ministry to Reduce ELC Terms to 50 Years

The Environment Ministry announced Tuesday that it has slashed the contract periods of 16 companies granted economic land concessions (ELCs) and said that all concession-holders in the country would soon see their lease terms reduced by decades.

According to a statement released by the ministry, the 16 companies had been granted a total of 96,098 hectares in wildlife sanctuaries or national parks in Mondolkiri, Ratanakkiri and Kompong Speu provinces.

“The government has reduced investment period contracts from 99, 80 and 70 years to 50 years,” the statement said of the 16 firms, the first to see their terms shortened as part of a new government initiative.

“The Ministry of Environment wishes to state that the government has already decided, as a policy, to reduce the [contract] period to 50 years for all investments on ELCs.”

The statement added that the ministry has inspected all 113 ELCs it had granted as of the 2012 moratorium on new concessions—covering a total of 629,298 hectares—and penalized holders who violated the terms of their agreements with the government.

“[A]s a result, the government confiscated 90,682 hectares from 23 companies because those companies did not respect the policies and procedures that the government laid out,” the statement said, adding that the state previously confiscated 148,501 hectares from 26 other firms.

Srun Darithy, deputy director of the Environment Ministry’s cabinet, said the land had been revoked because the companies had breached their contracts, but refused to explain what, exactly, they had done wrong.

He added, however, that some of the confiscations were also the result of land disputes.

“Some of the land [the ministry] carved up for the villagers and some of the land the Ministry of Environment will control,” he said.

When asked why the ministry had decided to reduce the maximum length of a lease, Mr. Darithy replied that 50 years would still be enough for concession holders, most of whom grow rubber, to turn a decent profit.

“We considered [this], and calculated that 25 years for a rubber plantation would be enough time to make money from the business,” he said.

However, Philippe Monnin, technical adviser for Siat Cambodia, a local rubber company, said that while it only takes 12 years to make back an investment in a rubber plantation, it takes 30 years to fully exploit a generation of rubber trees.

A 50-year lease limit, he said, was “not suitable, because you will expect only one generation and you will not invest properly and build proper infrastructure.”

(Additional reporting by Chris Mueller)

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