EXPROPRIATION LAW PASSAGE REVEALS FLAWS IN THE

UNCLAS SECTION 01 OF 03 PHNOM PENH 000017 SENSITIVE SIPDIS STATE FOR EAP/MLS, DRL USAID FOR ASIA BUREAU E.O. 12958: N/A TAGS: PGOV PHUM EAGR SENV KDEM ECON CB SUBJECT: EXPROPRIATION LAW PASSAGE REVEALS FLAWS IN THE PARLIAMENTARY PROCESS REF: A) 09 PHNOM PENH 654, B) 09 PHNOM PENH 962 SENSITIVE BUT UNCLASSIFIED ¶1. (SBU) SUMMARY. On December 29, the National Assembly (NA) approved a new draft expropriation law, which has raised concerns with its wide definition of "public interest" projects that justify confiscation of private property and vague provisions on "fair and just" compensation. There was limited public consultation during the drafting process, and human rights NGOs and land-sector donors missed a narrow opportunity to provide substantive input into the law. During NA debate, Sam Rainsy Party (SRP) parliamentarians challenged specific articles in the law and questioned its timing, given that the majority of Cambodian land owners still lack hard titles. Cambodian People's Party (CPP) lawmakers, however, displayed little interest in debating or changing the law, and it passed without amendments in a vote along party lines. As a result, this process will reinforce criticisms that the legislature is essentially a rubber stamp for the executive. END SUMMARY. DRAFT EXPROPRIATION LAW REACHES NATIONAL ASSEMBLY -------------- -------------- ¶2. (SBU) On October 9, the Council of Ministers (CoM) passed a draft Law on Expropriation to the NA for debate and approval. Developed by the Ministry of Economy and Finance (MoEF) and based on French expropriation statutes, the new law aims to define the principles and procedures for confiscation of and compensation for private land to make way for infrastructure construction, rehabilitation, or expansion projects deemed to be in the "public and national interest". The MoEF plans to draft sub-decrees detailing the expropriation complaint procedure, the membership and structure of a new MoEF-led Expropriation Committee, and the process for compensation. ¶3. (SBU) The definition of "public interest" has been a contentious issue in some of Phnom Penh's high-profile land disputes (Ref A). The law attempts to alleviate this problem by including an extensive list of permissible public infrastructure projects, such as roads, airports, power stations, and construction for national defense and security. However, the last item on the list is a blanket clause permitting expropriation for any activity "as required by the nation in accordance with the determination made by the government." NGOs highlighted this and the lack of clarity regarding the definition of "fair and just" compensation as their top concerns. ¶4. (SBU) The draft law establishes an inter-ministerial committee led by the MoEF to implement expropriation measures. The committee would: 1) notify affected property owners of the timeline for a particular project; 2) announce the project publicly; 3) determine compensation based on the property's market or replacement price; and 4) set a deadline for owners dissatisfied with the results to file complaints with a separate Complaint Resolution Committee. Property owners are given one month from the time they receive compensation to vacate expropriated property, and an eviction cannot be carried out unless compensation has been provided, except for emergency situations. WHY A NEW LAW? -------------- ¶5. (SBU) The 2001 Land Law and Cambodian Constitution each include a provision that mandates fair and just compensation for land owners in advance of expropriation measures. SRP lawmakers have argued that because the Land Law addresses state seizure of private land, a separate expropriation law is unnecessary. According to an official at the MoEF, the regulations indeed initially began as a sub-decree to the Land Law. Nhean Somunin, a land law expert at the East-West Management Institute (EWMI),told Poloff that the MoEF had drafted the sub-decree with financial support from the Asian Development Bank (ADB) and technical support from EWMI. The sub-decree focused on addressing socio-economic impacts caused by development projects and provided a standardized process to support an expropriation provision already in the Land Law. ¶6. (SBU) However, human rights NGOs and some donors protested the lack of wider public consultation and criticized the provisions of the sub-decree as inadequate to protect land owners' interests. An ADB consultant acknowledged that there may have been weaknesses in the sub-decree, but countered that its passage would have filled a significant hole in the legal framework necessary to address the impact of state development projects. Critics argued that government expropriation was such a complex and important subject that it warranted its own law, passed by the NA, followed by a series of implementing sub-decrees. The MoEF subsequently abandoned the sub-decree and began to craft a separate statute. A MoEF official said that the RGC preferred a NA-approved law anyway, as it would be as a stronger legal instrument to cite when facing PHNOM PENH 00000017 002 OF 003 criticism from NGOs and donors over evictions. ¶7. (SBU) (NOTE: Although the sub-decree's critics got what they wanted, they now face an expropriation law that will be tougher to oppose because of its independent status. An independent expropriation law allows for legal activities beyond the scope of other laws, such as the seizure of private land without prior compensation in emergency situations, which the Land Law would not permit. However, ambitious opponents could try to challenge the new law on grounds that some of its provisions contradict articles of the Constitution. END NOTE.) NGOs, LEADING LAND DONORS HAVE LIMITED INPUT -------------- ¶8. (SBU) Unlike the relatively more open process for the draft circular on urban resettlement (Ref B),there was limited public consultation on the draft expropriation law. Even representatives of the ADB claimed in early 2009 not to have seen the draft, despite having worked with the MoEF on the original expropriation sub-decree and a related sub-decree on resettlement. In May 2009, the Cambodia Daily newspaper received an unofficial draft that was close to the final version of the law but could not be independently verified as many RGC officials were unfamiliar with the legislation. When human rights NGOs received an official copy of the draft law in October, after it had passed the CoM, they quickly organized public consultation sessions on the law, in which RGC representatives chose not to participate. ¶9. (SBU) At a December 9 civil society workshop on the draft law, NGOs presented an extensive list of issues and requested changes. A representative of German development agency GTZ, one of the largest donors involved in the land sector, advised the NGOs that changes to the draft law at that late stage were unrealistic, and recommended that they focus on one or two priority issues in a submission to the NA. However, the NGOs only narrowed the list down to 14 items before submitting it to lawmakers for review, and NA Vice President Ngoun Nhel quickly responded that legislators were unlikely to accept the majority of the proposed changes. ¶10. (SBU) Donor engagement with the NA on the draft expropriation law was similarly limited. In late December, the Canadian International Development Agency (CIDA),the other large land sector donor, organized a technical briefing through its Cambodian-Canadian Legislative Support Program (CCLSP) for the Cambodian Senate's Finance and Banking Committee; representatives of the World Bank and the UN Office of the High Commissioner for Human Rights (UNHCHR) conducted the briefing. As the briefing took place the same week the legislation was being debated in the NA, the World Bank had suggested that the Senate include NA members in the session. However, the World Bank representative, Daniel Adler, told Poloff that the Committee Chair, Chea Cheth, considered the topic "sensitive" and did not want to discuss it with Cheam Yeap, his counterpart at the NA. SENATOR: THE CPP CAUCUS IS WHERE DEBATE TAKES PLACE -------------- -------------- ¶11. (SBU) Adler described the briefing as lively, with the group of five CPP and two FUNCINPEC Senators discussing the controversial "public interest" definition in the draft law and how the Cambodian law compared to international standards. Senators also raised concerns about whether the law would reduce instances of land conflict, given the experiences of past state expropriations, as well as concerns over potential corruption in the implementation of the law. Adler said that Chea Cheth was very clear, however, that the Senate would recommend no changes to the law. (NOTE: Under Cambodian parliamentary procedures, the Senate does not pass laws; it can only recommend changes. END NOTE.) ¶12. (SBU) Chea found though that the technical briefing was informative, according to Adler, and he noted that similar exercises would be helpful in the future for lawmakers as they evaluate other important pieces of legislation. The Senator recommended technical briefings for future laws take place at the time of the CPP caucus, where CPP Senators and NA Members gather to discuss pending bills. According to Adler, Chea indicated that the CPP caucus was the point where real debate took place and changes were possible, behind closed doors; by the time a draft law reached the floor of the NA, the CPP would have already finalized its parliamentary position. NA PASSES LAW UNAMENDED, CHAPTER BY CHAPTER -------------- ¶13. (SBU) The following week on December 28, the NA opened debate on the draft law with SRP parliamentarians challenging specific articles in the law and questioning the timing of the new bill. SRP MP Yim Sovann questioned how the law could be implemented, given PHNOM PENH 00000017 003 OF 003 that the vast majority of Cambodian land owners still lacked hard titles. SRP parliamentarian Mu Sochua pushed for specific language clarifying property owner compensation and participation in the expropriation process. Others drifted into a broader debate about the definition of "public interest" and argued that many current development projects, such as economic land concessions, did little to benefit poor Cambodians and enhance national or public interests. ¶14. (SBU) CPP lawmakers displayed little interest in debating or entertaining changes to the law. NA Vice President Ngoun Nhel had told the press before the debate even began that the government wanted to speed up the passage of the law, so allowing changes that would require the draft to be sent back to the MoEF for revision would be "in opposition to the government's principle." Cheam Yeap, Chairman of the NA's Economy, Finance, Banking, and Audits Commission, co-drafted the law and insisted in the December 28 session that it was adequate in its current form to protect the interests of Cambodian land owners. Midway through the second day of debate, MoEF Secretary of State Ouk Rabun, who was present to answer questions, stated simply that no changes would be made to the draft. ¶15. (SBU) On December 29, the NA passed the final chapters for the draft law in a vote along party lines. The Senate will formally review it next, after which the King will sign it. Cheam Yeap announced that he expected the law to take effect by late January. COMMENT -------------- ¶16. (SBU) A clear framework for expropriation is without question necessary as Cambodia continues to require space for its infrastructure development. However, the law's open-ended definition of "public interest" projects may lead to more questionable but technically legal evictions of individuals from private land. Phnom Penh municipal officials, for example, have used the public interest argument to justify removal of urban poor communities (Ref A); now they will have a legal guideline under which to continue. In many countries, expropriation laws are purposefully vague given the variety of situations to which they might apply; rulings on issues such as "fair and just" compensation are often left to the courts. However, in Cambodia, impartial implementation of the regulations by the RGC and fair interpretation by the judiciary are unlikely. ¶17. (SBU) The journey of the law from the CoM to the NA also illustrated issues regarding NGO and donor engagement with the RGC, as well as some worrying flaws in CPP's use of majority status in the parliamentary process. NGOs' inability to focus their arguments cost them an already limited opportunity to potentially have input into the law. CIDA's last-minute Senate briefing revealed that it is still growing into its role as a leading land sector donor since the withdrawal of the World Bank (Ref B). Even if CIDA and the NGOs had been more focused and proactive, however, their influence would likely still have been limited. Actions of the CPP majority -- both in caucus and during opens sessions in the NA -- only serve to reinforce criticisms that the legislature is essentially a rubber stamp for the executive. ALLEGRA