VZCZCXRO1073
PP RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHPF #0741/01 1511117
ZNR UUUUU ZZH
P 311117Z MAY 07
FM AMEMBASSY PHNOM PENH
TO RUEHC/SECSTATE WASHDC PRIORITY 8490
INFO RUCNASE/ASEAN MEMBER COLLECTIVE PRIORITY

UNCLAS SECTION 01 OF 03 PHNOM PENH 000741 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EAP/MLS AND DRL 
 
E.O. 12958: N/A 
TAGS: PHUM PGOV ECON CB
SUBJECT: DRAFT LEGISLATION ON "LAND TAKING" RAISES EYEBROWS 
IN CAMBODIA 
 
 
¶1.  (U) Summary.  The Ministry of Economy and Finance (MEF) 
recently made available a draft expropriations law 
formalizing procedures for RGC confiscation of land for 
public projects.  At the same time, the MEF, with counsel 
from an Asian Development Bank (ADB)-sponsored East-West 
Management Institute (EWMI) consultant, announced it is 
drafting a subdecree creating procedures to assess the social 
and economic impacts of land confiscations; they expect the 
subdecree will be passed by the end of 2007.  Both drafts 
were a surprise to the NGO community which decries the 
legislation as an attempt to legitimize contentious RGC land 
grabs.  The EWMI consultant has defended the MEF's work and 
questions whether NGOs should play a defining role in the 
draft process as they now demand.  NGOs doubt RGC good 
intentions on land issues, attributing positive movement to 
cognizance of an upcoming Government-Donor coordination 
meeting and the run-up to the 2008 national elections.  End 
summary. 
 
THE LAW AND THE SUBDECREE 
------------------------- 
 
¶2.  (U) The Ministry of Economy and Finance (MEF) recently 
made available a ten-page draft law on expropriation that 
sets broad guidelines on land-taking procedures for public 
interest purposes and defines public interest activities. 
The law leaves specific land-taking procedures up to 
subdecrees but it lists fifteen types of activities 
considered in the public interest, such as construction of 
infrastructure projects, development of buildings for 
national protection and civil security, construction of 
facilities for research and exploitation of natural 
resources, and construction of oil pipeline and gas networks. 
 One article of the law states compensation for dwellers of 
non-titled locations or on public land -- squatters -- will 
include payments for the cost of moving residence or damages 
but not for the cost of the land.  According to an East-West 
Management Institute (EWMI) technical advisor, an 
expropriations law has been in the works since 2004 and this 
draft comes out of a drafting committee established in 
January 2006. 
 
¶3.  (U) The MEF appears to be more actively working on a 
44-page draft subdecree, entitled "Sub Decree on Addressing 
Socio-Economic Impacts Caused by Development Projects," 
institutionalizing compensation procedures when the RGC 
expropriates land for purposes serving the general public or 
national interest.  The Asian Development Bank (ADB) has been 
sponsoring a technical advisor, Patricia Baars, through the 
East-West Management Institute (EWMI) since June 2005 to 
assist the MEF in drafting the subdecree.  Baars and the MEF 
organized an all-day national consultation workshop on May 21 
for national- and local-level government officials to discuss 
the draft subdecree.  Government participants included senior 
ministers, secretaries of state and other high-level 
officials from nine ministries, and 22 provincial and 
district governors.  A few, select NGOs were invited to 
attend the conference for their input and involvement in the 
discussion. 
 
BUT NGOS LIKED THE OLD LAW 
-------------------------- 
 
¶4.  (SBU) NGOs find it problematic that they and the public 
have not been a part of drafting either piece of legislation. 
 Legal aid NGOs, such as the Community Legal Education Center 
(CLEC), fret that new legislation will codify current land 
acquisition practices that uproot what are already some of 
Cambodia's most vulnerable people.  High-profile land 
grabbing cases involving RGC officials are unfortunately an 
increasing part of the human rights NGO caseload in Cambodia, 
so interest in any new legislation is to be expected. 
Currently, CLEC relies on the Land Law of 2001 to push for 
fair compensation packages for their disenfranchised clients 
who have been controversially removed from land.  The 2001 
law does provide compensation and some protections for 
citizens faced with evictions and losing land.  The battle, 
NGOs say, has been enforcement and implementation of the law. 
 Naly Pilorge, Director of local human rights NGO LICADHO, 
worries new legislation would override the existing land law 
pushing legal cases on behalf of poor, evicted residents back 
to square one. 
 
NECESSITY OF COMPENSATION PROCEDURES 
------------------------------------ 
 
¶5.  (SBU) Baars told Poloff laws governing compensation 
procedures are necessary while the government continues to 
undertake development projects that require land acquisition 
and relocation of homes and businesses. Further, the MEF 
 
PHNOM PENH 00000741  002 OF 003 
 
 
officials with whom she has been working have good 
intentions, claims Baars.  She explained a section of the 
subdecree defining land use in the public and national 
interest that specifically excludes projects with purely 
economic development goals, including increasing tax 
revenues, creating employment, and general economic growth. 
If implemented, this article of the subdecree would be 
critical -- NGOs claim the RGC confiscates land in the name 
of public projects but the land is actually intended for 
private gain.  She points out the new subdecree's definition 
of "public interest," standards for taking land from 
indigenous communities, and stipulations on affected 
residents "who have no legal rights to the land," are all 
based on the existing land law.  Baars believes the draft 
subdecree compensation plan is so generous that the MEF's 
biggest problem will be finding the funds to ensure 
compensation meets the committed amounts.  Despite NGO 
disagreement, she feels the drafting of this law is a good 
exercise for the officials involved.  Baars maintains that 
the MEF has taken the subdecree seriously and she believes 
they have made a good-faith effort to write a fair law. 
 
QUESTIONS RING ABOUT NGOS' ROLE IN THE PROCESS 
--------------------------------------------- - 
 
¶6.  (SBU) Baars told Poloff she had always intended to 
include a two-week public comment period in the subdecree 
drafting process but that phase had been overcome by events. 
NGOs were blindsided when they heard about the subdecree 
three working days before the national consultation workshop, 
but eventually ADB and the MEF agreed to allow NGOs to 
participate.  By the time Poloff met with ADB Senior Social 
Development and Resettlement Specialist Marla Huddleston and 
Baars mid-day on May 21, Huddleston was consumed with anger 
-- during morning sessions, NGO participants openly 
questioned the RGC's intent in drafting the subdecree. 
Huddleston angrily told poloff that NGOs were lucky to be 
involved in the draft subdecree process at all because the 
government usually does not include NGOs on other legislative 
processes.  (Note: Contrary to this statement, the RGC has 
opened public comment periods and accepted ideas from civil 
society on past legislation such as when the government 
included NGO suggestions in amendments to the existing 
election law prior to the 2003 elections.  End note.)  The 
NGOs and the MEF have now agreed to a three-phase public 
comment period: first, NGOs have until June 22 to submit 
comments on the draft subdecree; next, the MEF will have two 
to three weeks to take comments into consideration and will 
call a meeting with three to four representative NGOs to 
discuss (roughly July 8); finally, the NGOs will have until 
July 24 for any follow-on comments.  Although they agreed to 
the calendar for comment, the NGOs then decided to boycott 
the afternoon sessions of the workshop.  In a private meeting 
the following day, Baars told Poloff that government 
officials in attendence did not even notice the NGO boycott 
and that she suspects they also were unaware of the extent of 
NGOs' distress over the issue.  She said she was unhappy 
about the long public comment period, which would never be so 
long in a U.S. law-drafting process.  The NGO demands for a 
voice during the entire drafting process is unrealistic -- no 
government relinquishes its role in drafting laws to NGOs. 
 
A POSITIVE TREND IN LAND DISPUTES? 
---------------------------------- 
 
¶7.  (SBU) Land grab cases throughout Cambodia are continuing 
with no apparent slowing in the number of cases recorded by 
NGOs.  On a positive note, the Council of Ministers is 
forcing Suy Sophan (a powerful local businesswoman and 
alleged to be connected to Hun Sen's father) and her 
development company (Phanimex) to give up their disputed 
claim to land by the Royal Palace in Phnom Penh. The Council 
of Ministers ordered the Ministry of Interior to find Suy 
alternative land.  The current draft of expropriation land 
legislation has the potential to be a sign of improvement, as 
well.  However, Yeng Virak of CLEC believes the positive 
moves are just an attempt for CPP popularity gains before the 
2008 elections.  Naly Pilorge at LICADHO suggests the RGC 
wants to appease donors in advance of Government-Donor 
consultations in June. 
 
¶8.  (SBU) Comment. The MEF is generally viewed by NGOs and 
the international community to be one of the more competent 
ministries of the RGC.  Despite this, NGOs we talked to are 
pessimistic about the impact the new legislation will have on 
land-grab cases.  If NGOs can offer realistic, constructive 
input during the subdecree public comment period, the MEF's 
response to comments will be a good indication of their 
willingness to ensure a fair law for Cambodia's poor who are 
displaced by land grabs. 
 
PHNOM PENH 00000741  003 OF 003 
 
 
 
¶9.  (SBU) Comment continued.  Regarding the negative NGO 
reaction to the draft legislation, the ADB has no one to 
blame but itself for the dilemma in which the Bank finds 
itself.  The RGC went out of its way to court NGOs and the 
opposition, Sam Rainsy, in joining the still-moribund 
national Land Dispute Authority, as the government realized 
that NGO buy-in would be crucial to the Authority's success. 
That, and the strong NGO role in supporting victims of land 
cases should have made the ADB sensitive to the NGO 
community's likely reaction to an ongoing drafting proccess 
to which they were not privy.  End comment. 
CAMPBELL