Pech chanda District, Mondoulkiri province
Both parties must collaborate with line-ministries and other competent authorities to conduct field surveys in order to clearly identify the location of the concession.
Areas where there are evergreen forests, semi-evergreen forests, deciduous forests, national cultural heritages, mine potentials, natural conservation, mountains, lakes, sites protected by other laws and locations where people are living and productive shall be cut off from the concession area.
The contract will not be extended unless:
(1) the extension is to allow for the completion of remaining works or if the process is suspended due to the government abusing the contract; or
(2) a force majeure results stops Khaou Chuly Development Co from recovering the costs/expenditure or losses caused by the force majeuret, including the insurance of the project for the first concession period.
Oknha Khaou Phallaboth, Director of Khaou Chuly Development Co
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Size of concession area
The total concession area is 2,386 hectares.
In the first year, 386 hectares will be allocated. An additional 1,000 hectares will be allocated in each of the second and third years.
The size and location of the concession area can be changed by an official letter issued by the government once both parties have complied with the provisions of Art. 2.
The contract validates seventy (70) years effected from the date of issuance of concession land granting letter by the government to Khaou Chuly Development Co
Environmental impact assessment and management plan
Khaou Chuly Development Co shall prepare a preliminary environmental and social impact assessment document on the land use and development for the concession project. Khaou Chuly Development Co shall submit this document to the government to review and approve not later than 8 October 2008.
The contract shall be suspended if Khaou Chuly Development Co fails to fulfil any terms and conditions stipulated in the Environmental and Social Impact Assessment report.
Khaou Chuly Development Co will facilitate and coordinate with the government and relevant institutions in monitoring and evaluation of its operation regarding on the environmental impact assessment.
The government has the right to monitor and evaluate the implementation of Khaou Chuly Development Co's obligations, which include environmental protections.
Prior to the granting the location, Khaou Chuly Development Co and the government shall conduct a field study to identify the location of the concession area. Areas with evergreen forest, semi-evergreen forest, deciduous forest, mountains and lakes and sites protected by other laws, shall be cut off from the concession area. An inter-ministerial committee led by the Ministry of Agriculture, Forest and Fisheries shall ensure that investment supporting reforestation is carried out on degraded forest areas and that evergreen, semi-evergreen and deciduous forests are not cut down anarchically and replanted with industrial crops.
Khaou Chuly Development Co is required to submit a master plan, which shall contain a forest rehabilitation plan. It also bears responsibility for the protection and conservation of evergreen, semi-evergreen and deciduous forests in the conserved and protected areas within the concession area.
Khaou Chuly Development Co must carry out productions and activities such as land clearance, road construction and land utilization by respecting the terms and conditions to sustainably maintain the natural resources of the location and minimize their environmental impact.
If the contract is terminated due to the fault of Khaou Chuly Development Co, Khaou Chuly Development Co shall bear responsibility in accordance with the law and regulation in respect of damages to the environment and shall restore and rehabilitate the forest and environment to the same condition as before the contract was implemented.
Khaou Chuly Development Co must improve its operations in accordance with any guidance/advice from the government and relevant institutions in the matters related to environmental protection.
Khaou Chuly Development Co must pay taxes in accordance with the laws and regulations imposed.
Khaou Chuly Development Co can collaborate with partners in the investment of the concession land, provided that it obtains agreement from the government at least 30 days in advance.
Khaou Chuly Development Co can legally mortgage the land concession rights in order to secure financing for the investment, provided that the government agrees in advance. If the government does not agree, it must have reasonable/proper reasons.
Khaou Chuly Development Co shall pay the land fee every year according to the concessionary land rate defined by the Royal Government of Cambodia and competent institutions through the letter No. 803 dated 31 May 2000. The land fee shall be re-checked every 5 years.
If Khaou Chuly Development Co is late of fee payment up to 60 days, it shall be fined 2% per month on the amount of fee to be paid each year.
If locations that are not peacefully coordinated with the land owner, such as areas where people are living and productive are included in the concession area, an inter-ministerial committee led by the Ministry of Agriculture, Forest and Fisheries shall investigate and solve the problems encountered. It shall also identify and ensure that investment supporting reforestation is carried out on degraded forest areas and to ensure that areas with evergreen, semi-evergreen and deciduous forests are not anarchically cut down and replanted with industrial crops.
Khaou Chuly Development Co must consider the improvement of the livelihoods, health and safety of its employees, workers and their families by building suitable houses, hospitals, temples, schools and recreation centers. It must also secure that people who are living in the investment zone get the benefit of the investment project, including through the use of infrastructure, roads, schools and health centers and the creation of job opportunities linked to the investment project, including the integration of household farmers' production.
Khaou Chuly Development Co will provide the residents of the concession area with the benefit of the use of infrastructure, road, schools and health centers.
Khaou Chuly Development Co must create job opportunities linked with the investment project, including the integration of household farmers' production for people living in the investment zone.
Khaou Chuly Development Co must use the local labor force. In the event that Khmer experts are unavailable, Khaou Chuly Development Co can hire foreign experts to instruct on technical issues.
People living in the concession area will benefit from job opportunities linked to the project.
Khaou Chuly Development Co will provide job opportunities linked with the investment project, including the integration of household farmers' productions
Protections or benefits for employees, dependents, or others
Khaou Chuly Development Co must improve the livelihood, health and education of its employees, workers and their families by building suitable houses, hospitals, temples, schools and recreation centers.
The government and Khaou Chuly Development Co. must completely solve the issues of new resettlement in accordance with the effective procedures no later than 1 year from the date the contract is signed.
The government will not give permission to Khaou Chuly Development Co to include in the concession area locations that are not peacefully coordinated with the land owner, such as areas where people are living and productive.
Right to access concession area (non-contracting parties)
The technical ministries will conduct studies and explorations in advance in areas of the concession that overlap with mine locations. If the study finds that any area in the concession has more economic potential as a mine area, than the area will be allocated to mining.
National heritage objects or items existing either above or underground are state property. Khaou Chuly Development Co has no right to manage or utilize these resources. If Khaou Chuly Development Co discovers these items, it shall terminate the activities and inform the government immediately.
Areas where cultural and historical heritages have been found shall be cut off from the concession land location.
Social/human rights impact assessment and management plan
Khaou Chuly Development Co shall prepare preliminary environmental and social impact assessment document on the land use and development for the concession project. Khaou Chuly Development Co shall submit this document to the government to review and approve not later than 8 October 2008.
The contract shall be suspended if Khaou Chuly Development Co fails to fulfil any terms and conditions stipulated in the Environmental and Social Impact Assessment report.
The government can monitor and evaluate on Khaou Chuly Development Co's obligations under this contract. These obligations include:
- using local labor force;
- building suitable houses, hospitals, temples, schools and recreation centers for employees, workers and their families; and - securing people who are living in the investment zone to get proper benefit from the investment project, such as the use of infrastructure, road, school, health center and the creation of job opportunity linking with the investment project, including the integration of household farmers' production.
One purpose of this contract is to enable Khaou Chuly Development Co to construct a rubber processing plant and a wood processing plant, as well as to develop infrastructure to support production and the development of a rubber plantation.
Khaou Chuly Development Co can carry out all construction activities on the investment location by following the steps indicated in the master schedule and time schedule agreed by the government and the ministries concerned.
All construction of infrastructure, such as dams and canals that may affect the people and surrounding areas, shall be permitted by the government and/or relevant and concerned institutions.
People living in the concession area will be able to use the infrastructure, road, school and health center.
No later than 3 months after the date that the contract is signed and the responsibilities in Art. 2 have been fulfilled, Khaou Chuly Development Co must prepare and submit a master plan indicating the land utilization on the concession area to the government for approval.
The master plan must be supported by the relevant technical ministries and institutions and local authorities and communities. It must contain the following schedules: land use in the concession area; technical practices and technology used; forest rehabilitation plan; and economic-financial plan for long-term development.
The government must review and approve or make amendments to the master plan within 1 month of receiving it from Khaou Chuly Development Co.
If there is a dispute during the execution of the contract, Khaou Chuly Development Co and the government will peacefully resolve the dispute with an understandable manner. If Khaou Chuly Development Co and the government cannot resolved the dispute within two months, it shall be resolved by the courts of the Kingdom of Cambodia. The dispute could also be resolved through any international arbitration Khaou Chuly Development Co and the government agree to use international arbitration.
Khaou Chuly Development Co may transfer to a successor in accordance with the effective laws and regulations allowed.
Khaou Chuly Development Co cannot transfer the contract to a third party unless they have executed at least 30% of plantation development and an evaluation has been made by the government.
If the contract is assigned or transferred by either party, the legal successor of the transferring party must comply with transferring party's obligations under the contract.
The contract may be terminated: at the end of the contract duration; by agreement of both parties; when the government confiscates concession land for one of the reasons listed in Art. 12(c); or in accordance with a court decision.
After the contract is terminated, the concession land, including all crops, shall be transferred to the government for management. Buildings and infrastructure in utilizable condition within the concession land, and intellectual property rights shall be transferred to the government without compensation being paid to Khaou Chuly Development Co.
If the contract is terminated for any reason, no party may avoid its obligations as stipulated in the contract, including the payment of state/government and third parties' debts. If the contract is terminated due to the fault of Khaou Chuly Development Co, Kahou Chuly Development Co shall bear responsibility in accordance with the law and regulation in respect of damages to the environment and must restore and rehabilitate the forest and environment to the same condition as before the contract was implemented.
"Force majeure" refers to war, strike, civil unrest, heavy natural calamities occurred in the country that adversely affected to the project operation and/or the continuation of the development project.
If Khaou Chuly Development Co or the government are unable to fulfil their obligations within 6 months of a force majeure event, they can terminate the contract by giving advance written notice to the other party.
Khaou Chuly Development Co will submit to the government 6 monthly and annual reports on the progress and achievements of the implementation of the project