Category Archives: Newsletters

Impacts of the COVID-19 and Measures taken by the Royal Government of Cambodia (Jun 2020)

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Introduction


As many countries’ borders were being closed due the pandemic and flights cancelled all around the world, Cambodia is deeply feeling the impact on the tourism sector.

In 2019, the Kingdom of Cambodia welcomed 6.6 million of tourists, which represents an increase of 7% over 2018. The sector generated about US$5 billion and accounted for 12% of the Cambodia’s Gross Domestic Product (GPD) and count around a million employees.


Since the crisis, The Ministry of Tourism (MOT) predicted that Cambodia could potentially loose around US$850 million which translates to about 3.5 percent of the county’s GDP and in a 10% loss of revenue from the tourism sector. The Royal Government of Cambodia (RGC) was quick to address the issues and implemented many regulations in order to relieve the pressure on the tourism’ actors.

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Updated Law on Payment of Seniority Indemnity under Cambodian Law and Regulation (May 2020)

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Introduction


On September 21, 2018, the Ministry of Labor and Vocational Training (MLVT) issued a Prakas (Declaration) on Seniority Payment (“Prakas No. 443”) which amended the Article 89 of the Labor Law. Under the Prakas No. 443 which is effective as from 2019 onwards, all FDC employees are provided severance indemnity which at least equal to five percent of employees’ wages to be paid during the length of contract. UDC employees are entitled to receive a seniority indemnity equal to 15 days of their wages and other benefits per year starting from 2019 onwards. It is worth noting that these employees shall also receive the back-seniority indemnity before 2019, equal to 15 days of their total seniority as well. For UDC employees, working in the textile, garment, or the footwear sectors, the back seniority indemnity shall equal to 30 days of total seniority in every one year.

However, numerous regulations have supplemented, clarified and changed the regime laid out in the Prakas no. 443.


On March 22, 2019, the Ministry of Labor and Vocational Training issued the Instruction no. 042 to reduce the number of the payment of back pays of seniority who are not in garment, textile and footwear sector from 15 days to only 6 days per year. In addition, on June 10, 2019, the Ministry of Labor and Vocational Training issued the notification No. 057 regarding the calculation of back seniority indemnity before 2019 for garment, textile and footwear sectors. According to the notification No. 057, the payment of seniority indemnity is provided to employees only 15 days per year.


Regarding the payment of Seniority Indemnity before and from 2019 onwards, pursuant to the Instruction No. 042/19 regarding the delay payment of back seniority indemnity, from 2019 to the end of 2021, workers/employees shall be paid only the seniority indemnity on each current year which equals to 15 days per year. However, from 2022 onwards, workers/employees shall be paid both seniority indemnity before and from 2019 which equals 15 days + 6 days (7.5 days + 3 days shall be paid in June; and 7.5 days + 3 days shall be paid in December).

Important note: On April 7, 2020, due to the impact of Covid-19, the Ministry of Labor and Vocational Training postponed the back payment of seniority indemnity before 2019 and the payment of seniority indemnity for 2020 until 2021, in order to let the business be able to cope with the amount of money to provide.

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Petroleum Law in Cambodia (May 2020)

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Introduction

A long-anticipated draft Law on Management of Petroleum and Petroleum Products (the “Petroleum Law”) was initially initiated in 1996, and finally adopted by The National Assembly of Cambodia in July 12, 2019.

The Petroleum Law was not the first legislation in Cambodia, meaning that the first introduced regulations in Cambodia are the Cambodia Petroleum Regulations (the “Petroleum Regulations”), dated September 28, 1991, adopted by Council of Ministers, and then was amended twice by Decision No. 73, dated October 10, 1995, and Decision No. 25, dated March 19, 1999.

The first Petroleum Regulations have played an important role in monitoring and managing petroleum activities and help to attract investors in investing in the country’s petroleum sectors. The Petroleum Regulations covers only the downstream business activities in the petroleum sectors, while the newly enacted Petroleum Law covers both downstream and upstream business activities by playing a role as a gap filler. Also, it contributes to implementing the key principles of international best practices in the petroleum industry, paving the way and opportunities for potential investors to boost their confidence in considering investing in Cambodia’s petroleum industry.

The Petroleum Law consists of nine chapters with 72 articles and its goal is to manage and develop petroleum resources sustainably and effectively in order to contribute to the socio-economic development for a long-term interest of the country. Its specific objective is to determine the competence and rules of managing petroleum industry. Concerning petroleum industry in Cambodia, there are two main business activities, including downstream activity and upstream activity. This petroleum business activity is under the competence of Ministry of Mines and Energy.

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