Concessions

Concession owned by Vietnamese Rubber Group. Photo by Oxfam GB Asia, taken on 22 December, 2010. Licensed under CC BY-NC-ND 2.0.

A land concession is a grant of rights over an area of land for a specific purpose. In Cambodia land concessions can be granted for various functions, including agribusiness and redistribution of land to the landless and land-poor.¹ The Special Rapporteur on human rights issues to the United Nations has noted that concessions have been a considerable source of land conflict throughout Cambodia as disputes arise between private companies granted concessions on land occupied by local communities.²

Land concessions: The basics

An economic land concession (ELC) is a long-term lease that allows a concessionaire to clear land in order to develop industrial-scale agriculture, and can be granted for various activities including large-scale plantations, raising animals and building factories to process agricultural products.³ A social land concession (SLC) is a land concession responding to a social purpose that allows beneficiaries to build residences on granted land or to cultivate it for subsistence.⁴ There are other forms of concessions as well, such as tourism concessions, but the legal framework for these concessions is largely undeveloped.

The government’s policy as defined in the National Strategic Development Plan (NSDP) 2009-2013 placed significant emphasis on granting ELCs, with the goal of developing the industrial agricultural sector to build and sustain economic growth and accelerate poverty reduction.⁵ Following the suspension of new ELC grants and review of existing ELCs in 2012, the NSDP Update 2014-2018 focuses on redistributing land to the landless and land-poor as SLCs through utilization of confiscated land from ELCs in violation of their contracts and legal regulations. Further, the government proposes to continue to encourage private sector participation in building infrastructure.⁶

Since the 1990s, land concessions have been granted in Cambodia for various purposes. In 2001 the Land Law formalized the legal foundation for granting land concessions for agricultural and social purposes. It also provided for the existence of concessions for the use, development and exploitation of state land such as mining, port, airport, industrial development, and fishing concessions; however, unlike ELCs and SLCs, the 2001 Land Law does not govern these other concessions. Sub-decree No. 146 on Economic Land Concessions and Sub-decree No.19 on Social Land Concessions elaborate on the legal procedures for ELCs and SLCs, respectively.

According to multiple NGO reports, land concessions have been the source of land conflicts, including land grabs, forced evictions, and natural resource exploitation.⁷ Reports state that many Cambodians are exposed to such risks due to the lack of formal land titles, insufficient land registration and poor implementation of the law.⁸ Land that is not registered as private land is de facto state private land, which can be allocated as land concessions. While the government has achieved success in issuing more than 3.8 million land titles,⁹ many households do not own title to their land.¹⁰ Additionally, NGOs report that forced evictions primarily occur after the granting of an ELC, and that evictions can become violent as companies use security personnel or state security forces to protect concessions.¹¹ Urban populations, particularly those living in slums, are at also risk of being forcibly evicted as land values rise.¹²

The Special Rapporteur to the United Nations on the human rights situation in Cambodia has stated that forced evictions can result in violations of economic, social and cultural rights as communities are forced from their homes and into insufficient resettlement communities.¹³ Such forced resettlements are frequently characterized by an increase in poverty, limited access to income, debt accumulation, health issues, violations of civil and political rights, social stigmatization, and harm to familial and community units, according to NGO reports.¹⁴ Further, the Special Rapporteur has stated that the government and judiciary are often unwilling or unable to regulate the conduct of concessionaires and fail to remedy violations.¹⁵ It also has been reported that SLCs can result in the eviction of former residents, and that corruption, mismanagement and nepotism are an issue in the distribution of SLCs.¹⁶

While recognizing the numerous violations of land rights against vulnerable households recorded by NGOs, it is important to point out that some do not have strong legal claims to ownership. Such households may not meet the requirements for legal possession under the 2001 Land Law.¹⁷ For example, they may have commenced their occupation after 2001, and therefore their possession may be deemed illegal by the government. In other cases, households may occupy property that is legally registered as belonging to another person or entity.

In some cases, the lines of legality over the property rights of concessionaires and communities are blurred. Some of those evicted as illegal occupants of state public land have seen their property reclassified by government and leased as a concession to a private company. Perhaps the best-known example of this is the capital’s Boeung Kak Lake land conflict. Authorities asserted that families living in the Boeung Kak Lake area lived illegally on state public land and were therefore illegal occupants. However, as commentators –  including the authors of a World Bank Inspection Panel Report –  noted, many households lived in the area around the lake on state private land and, therefore, many have been eligible for ownership titles.¹⁸ Despite these strong claims, authorities long leased the area where over 4000 families lived to a developer, in an act NGOs asserted contravened laws relating to the management of state public land.¹⁹ In response, the authorities reclassified the area as state private to legalize the lease, though NGO reports dispute the validity of retrospective legalization.²⁰ Observers noted that once the land was reclassified in this way, residents located across the site – whether located on the lake or not – could reasonably claim legal possession.²¹ The majority of residents, however, were prevented from becoming owners and evicted from the site.

Aside from land rights issues, concessions also have a significant environmental impact, the most observable of which is the deforestation of significant tracts of land for agricultural plantations, according to the Special Rapporteur.²² A 2013 University of Maryland study reported a loss of 7 percent of forest cover over a 12-year period, the results of which include increased flooding and altered wildlife habitats.²³ Companies have been accused of clearing forestry areas before the proper legal process for granting concessions has been completed.²⁴ Further, alleged inconsistencies in the zoning process of protected areas have resulted in deforestation in protected areas.²⁵

Economic land concessions

Formalized in the 2001 Land Law, an economic land concession (ELC) is a long-term lease that allows a concessionaire to clear land in order to develop industrial-scale agriculture.

Policy and legal framework

As stated in the National Strategic Development Plan (NSDP) 2014-2018, the government’s vision is to modernize Cambodia’s agriculture and transform the sector to use new technologies and techniques, and to diversify agricultural activities in an environmentally sustainable way.²⁶ The overall objectives of ELCs are to promote long-term investment in high-capital agro-industrial activities, increase rural employment and livelihood opportunities, encourage investments in ELCs, and generate state revenue.²⁷

The main legal framework for granting and utilizing ELCs is set out in the 2001 Land Law and Sub-decree No.146 on Economic Land Concessions. Key provisions in the environment and forestry laws also apply.  The Ministry of Agriculture, Forestry and Fisheries (MAFF) is the government entity that has the legal authority to grant ELCs; however, the Ministry of Environment (MoE) has also granted ELCs.

According to the 2001 Land Law and Sub-decree No.146, ELCs can be legally granted only on state private land.²⁸ In addition, the law states that ELCs cannot exceed 10,000 hectares, and that the same person or legal entity cannot hold several concessions that total more than 10,000 hectares.²⁹ The legal maximum duration of an ELC lease, under Sub-decree No. 46, is 99 years.³⁰ If a concessionaire does not comply with the legal requirements, then the concession can be cancelled.³¹

All ELCs require a contract between the concessionaire and MAFF, setting out the purpose of the concession, its duration and its area.³² A concessionaire cannot sell the land and cannot transfer the ELC to another, unless the authorities create a new ELC contract.³³ Sub-decree No.46 sets out the process for obtaining an ELC in more detail. The land must first be registered as state private land. It must also have a land-use plan adopted by the Provincial State Land Management Committee and the development of the ELC must be consistent with this land use plan.³⁴

Before an ELC can be approved, an environmental and social impact assessment must be completed in accordance with environmental law and regulations. Additionally, “solutions for resettlement issues” must be in place; however, the sub-decree expressly states that there cannot be involuntary resettlement of lawful landholders, and access to private land must be respected. Further, public consultations must first be held with local authorities and residents of the area.³⁵

Discrepancies in data related to ELCs

It is difficult to assess exactly how many ELCs have been approved, which concessions are active, and how much state revenue has been raised in the process. According to MAFF data, between 1996 and June 2012, MAFF signed ELC contracts with 118 companies covering a total land area of 1,204,750 hectares.³⁶ However, some NGO reports have claimed the figure is closer to 2 million hectares.³⁷

A government report, quoted in the state-run Agence Kampuchea Presse, has combined the figures for MAFF and MoE for the first time, in September 2015. According to the news report, a total 1,934,896 hectares of ELCs were granted to a total of 230 companies, of which 122 companies received licenses from MAFF while 133 others received licenses from the MoE.³⁸ The total figure for land area is not far off what NGOs have been estimated. The government reported earning $80 million from ELCs since 2012.³⁹ 

Concerns regarding the implementation of the government’s ELC program

Over recent years communities, local and international organizations, UN agencies, and development partners have raised many concerns about the impact of ELCs on communities and the environment. Both local and international media frequently report on cases of communities losing land to concession holders. The Special Rapporteur reports that communities living on land granted in concessions are often subjected to forced eviction, involuntary resettlement or poorly designed relocation.⁴⁰ This can often increase poverty by limiting access to income generation, water and sanitation, electricity, health services and education.⁴¹ Currently, there is no legal framework to regulate evictions by private entities.⁴² Further, ELCs allegedly have led to deforestation as large tracts of forestland are cleared for plantations.⁴³

Another major concern among NGOs is that consolidating large tracts of land in the hands of fewer and fewer people is contributing to the increasingly inequitable division of Cambodia’s land. Meanwhile, landlessness has risen to 20 percent, and 40 percent of households have farmland measuring less than 0.5 hectares – the minimum required for subsistence agriculture.⁴⁴

In addition, the U.N. reported that restrictions on the size and ownership of economic land concessions were not being enforced, and that individuals were circumventing the maximum 10,000 hectare limit.⁴⁵ The UN also reported that many ELCs have been granted within forests reclassified as state private land.  According to the Land Law, state public land can only be reclassified if it loses its public interest.⁴⁶ It has also been reported that many concessions that have been granted within Cambodia’s protected areas classified as “sustainable use zones.”⁴⁷

The impact of Order 01: suspension of new ELCs and review of existing concessions

In May 2012, Order 01BB on Measures for Strengthening and Increasing the Effectiveness of the Management of Economic Land Concessions suspended approval of new ELCs and called for a review of existing ELCs.⁴⁸ However, the moratorium did not apply to certain ELCs already in the midst of the approval process.⁴⁹ As a result, at least 33 ELCs were granted after Order 01 was issued.⁵⁰ In October 2014, the MoE announced that these ELCs would receive a lease for no longer than 50 years.⁵¹

According to Order 01, ELCs not in compliance with the law will have their contracts seized.⁵² Alternatively, noncompliant ELCs may be subject to cuts in land area, as well as reductions in the duration of their leases. In July 2015 the MoE announced that, of 16 ELCs under review, those with lease durations greater than 70 years were reduced to 50-year lease durations.⁵³

The MLMUPC began reporting cuts to ELC areas in May 2013,⁵⁴ but it was not until August 2014 that the commission to assess ELCs was established.⁵⁵ Several ELCs have been cancelled or re-sized. Though multiple government sources have reported on the volume of ELC land area seized, Open Development Cambodia is not aware of an official and comprehensive list of all ELCs reduced or cancelled under Order 01. An NGO report published in July 2015 found that the review and cancellation of ELCs merely targeted dormant concessions but avoided concessions involved in land disputes and those that exceed the legal size limit.⁵⁶

Order 01 also calls for adherence to a leopard skin policy, such that ELCs in the pipeline should be delineated to avoid encroachment on occupied and cultivated land,⁵⁷ and a joint prakas issued in 2014 called on existing concessions to comply with this policy.⁵⁸ Yet another NGO report published in June 2015 stated that the effectiveness of the leopard skin policy on land tenure was limited.⁵⁹ As stated in NSDP 2014-2018, the government plans to use land from cancelled ELCs to give land grants to poor and land-poor families as SLCs;⁶⁰ however, it is largely unclear how land retaken from ELCs will be used.⁶¹

Future prospects

The recent suspension on new ELCs suggests that the government recognizes the issues raised by civil society with ELCs. Although the Order 01 land titling campaign may have resolved some conflicts between local people and concessionaires, the survey process did not cover all ELCs, and indigenous communal land titles and forested areas were not included.⁶² It also remains to be seen what impacts the campaign will have on productivity of concessions.

Other concessions

The 2001 Land Law provides for concessions that have neither agro-industrial nor social purposes; these were designated use, development and exploitation concessions (UDECs). The Land Law does not govern these concessions.⁶³ Although these and other concessions exist and have been granted, the legal framework governing them is largely undeveloped. The 2007 Law on Concessions was passed to govern projects that provide infrastructure to the general public through private investment.⁶⁴ However, this law requires a sub-decree to be effective,⁶⁵ and such a sub-decree has not yet been passed.

Related to concessions

• Land classification
• Social land concessions
• Land transfers
• Land tenure and titling 
• Environment and natural resources
• Human rights

Last updated: 1 November 2015