Client Alert: Cambodia’s New Law on Construction

Sciaroni & Associates

2nd March 2020

The Law on Construction, which was promulgated by the Royal Kram No. NS/RKM/1119/019 dated 02 November 2019, aims to determine the principles, building technical regulations, rules and procedures for the management of the construction sector in Cambodia. This article reviews the major provisions in the new law.

The Law on Construction, which was promulgated by the Royal Kram No. NS/RKM/1119/019 dated 02 November 2019, aims to determine the principles, building technical regulations, rules and procedures for the management of the construction sector in Cambodia. This law is effective from 2 November 2019.

The competent authority which regulates the construction sector in Cambodia is the Ministry of Land Management, Urban Planning and Construction (MLMUPC).

A natural person who works as a construction professional (for example an architect or engineer) shall be registered at each relevant professional board of the construction sector at the ministry. Any construction professional is allowed to practice as a construction profession independently and shall have a license granted by the MLMUPC. Any construction professional who functions as a technical director of a licensed construction business or company is not required to have a license granted by the MLMUPC.

Every construction business practice shall have a license granted by the MLMUPC or a permit from Capital/Provincial Hall Administration according to the type of activity contemplated (i.e., Project Study Design License or a Construction License) Any person who holds a license as a construction professional or business practice shall enter into an insurance contract with an insurance company operating in the Kingdom of Cambodia and have an insurance certificate to assure liability for his/her profession or business practice.

Every construction project must comply with the fire safety regulations, as determined in the building technical regulations and provisions of fire prevention and extinguishment regulations.

Construction material, equipment, and products which are required to assure construction quality and construction users’ safety shall be accredited or certified for compliance with the building technical regulations by the MLMUPC or with Cambodian standards by the National Standards Council by having the Cambodian Standard Mark affixed or printed on them and by having a license to use the Cambodian Standard Mark. The production, distribution, import, sale, supply, and use of any construction material, equipment or product without Cambodian Standard Mark affixed on them, or without accreditation or compliance certification with the building technical regulations shall be prohibited in the case where the construction material, equipment or product is required to have the Cambodia Standards Mark affixed or to have accreditation or compliance certification with the building technical regulations.

All building or demolition work requires prior permission from the competent authority. The competent authority shall take measures to halt any building or demolition works without a building permit if the building or demolition work requires a permit.

Every design document used for building or demolition work shall be responsibly signed by an architect who holds a license or permits granted by the MLMUPC. A design document for building or demolishing a construction which requires a permit shall be certified for compliance.

Each building activity which requires a permit shall have a prior permit for construction site opening.

When the site is operational, every building or demolition work which requires a permit shall be checked and certified.

The occupancy of a construction which requires a building permit shall be permitted by the competent authority through a “certificate of occupancy”. A construction owner shall apply for a certificate of occupancy before using it or having it used. In addition, within a period of 2 (two) years after this law coming into force, the owner of any construction that has already been built without a permit or built-in breach of a permit prior to this law coming into force shall apply for a certificate of occupancy for his/her construction from the competent authority if the construction requires a building permit. The competent authority may provide an occupancy certificate for any construction that has already been built without a permit or built-in breach of a permit prior to this law coming into force if that construction does not cause danger to users and the public and does not affect public order.

Construction safety and quality control shall be conducted by construction controllers or certifiers who hold a license granted by the MLMUPC.

The construction law also provides minimum requirements for clauses to be stated in the construction or demolition contract. Construction or demolition contracts for private residential buildings which contain abusive clauses shall be null and void. In addition, the parties to a construction or demolition contract can set conditions precedent on obligations or rights arising from the contract.

A construction or demolition contractor shall have site liability insurance for building or demolition work which is the object of the construction or demolition contract to provide compensation for any damage, loss of property, injury, disability, or death of the workers or third party.

An architect shall be liable for paying compensation for any damage caused to other people if the design document of the construction has defect unless the design document complies with all existing required regulations.

While the building or demolition work is being carried out, the construction owner and the builder or demolisher shall be jointly liable for paying compensation for any damage in the case where building or demolition works or construction site management has any defect.

A construction certifier shall be liable for paying compensation for any damage caused to other people due to a defect of his/her certification work.

A construction owner, building manager, and construction lessee shall be jointly liable for paying compensation for any damage caused to other people in the case where the occupancy or management of the construction has a defect.

A producer of construction material, equipment, and product shall be liable for paying compensation for damage to others caused by a defect in their products.

Punishments in this law include a written warning, suspension or revocation of a license or a permit for construction professional practice or business practice, transitional penalty, a prohibition against the professional practice, forced demolition and/or rebuilding to the original condition, fine, and imprisonment.

Sciaroni & Associates, one of Southeast Asia’s leading professional services and investment advisory firms, has been providing skilled counsel and knowledgeable business insights for over two decades. Based in Cambodia, with legal offices in Laos and Myanmar, our experienced team of advisers brings considerable general and sector-specific expertise to the challenges confronting companies doing business in emerging markets. We are proud that our clients comprise many of the world’s premier companies, banks, financial institutions, governments and global development organizations.

For more information please visit www.sa-asia.com or contact us at info@sa-asia.com.

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Sciaroni & Associates

Cambodia
http://sa-asia.com

Sciaroni & Associates is a leading regional law firm headquartered in Cambodia with offices in Myanmar and Laos. Since 1993, the firm has been providing counsel to many of the world’s leading companies, international non-governmental organizations (NGOs) and national governments, including the Royal Government of Cambodia and foreign embassies to the Kingdom . Sciaroni & Associates has advised intergovernmental organizations, economic think tanks and development finance institutions, investment funds active in the region.

Led by a team of seasoned professional with decades of international experience, Sciaroni & Associates relies on its staff of international, Cambodian and Laotian advisors, paralegals and support personnel to provide expertise to our clients. Our team is organized into sector-specific practice groups to maximize the value and efficiency of our advisory teams.

For over a quarter century, Senior Partner Bretton G. Sciaroni has advised national and international clients regarding investments and operations in Cambodia and has been a leading contributor to the development of the Cambodian economy and private sector.

Of particular significance is the excellent working relationship Sciaroni & Associates has developed over the years with Cambodian governmental institutions. Mr. Sciaroni negotiated the first foreign investment in Cambodia under the 1994 foreign investment law and made significant contributions to legal development programs assisting Cambodian governmental institutions in drafting laws and regulations, and training government officials, including judges and ministerial staff, on legal procedures.

Adhering to stringent international best practices and the strictest ethics, the firm provides guidance in all facets of business and investment – including capital markets, infrastructure investment, banking and finance, mining and energy, dispute resolution, corporate law, real estate, licensing, labor, intellectual property and government relations.

Cambodia Public Sector Related Work

Since 2000 Mr Sciaroni has served with Cambodia’s Minister of Economy and Finance as a Co-Chairman of the Working Group on Law, Tax and Good Governance. The working group includes private sector members and governmental entities which seek resolution to issues in the business community. Mr. Sciaroni regularly serves as the head of the private sector delegation to the Consultative Group meetings, conducted jointly by the Royal Government of Cambodia and the donor community.

S&A's Historic Value

Sciaroni & Associates’ strengths lie in its long tenure as a premier professional advisory firm integral to fostering economic development and foreign investment in the region. Decades of experience by seasoned partners coupled with extensive work with government institutions, foreign governments and leading international companies provide the firm with a deep understanding of public-private partnership issues. Its focus on foreign investment into the region provides the firm with deep insight into crafting policies and rules that are understood and applicable in furthering the foreign investment interests of host governments. Sciaroni & Associates is well-positioned historically and regionally to provide knowledgeable counsel to a diverse client base to assist in optimizing their ability to operate in the developing Mekong region.

Bretton G. Scaironi , Senior Partner

Bretton has been a lawyer and investment advisor in Phnom Penh since 1993, making him one of the first foreign lawyers in Cambodia in the modern era. For over twenty years, Mr. Sciaroni has advised national and international clients with investments and/or operations in Cambodia and has been a leading contributor to the development of the Cambodian economy and private sector. In 1996, Mr. Sciaroni was named a Legal Advisor to the Royal Government in a decree signed by King Norodom Sihanouk. He has been reappointed to this position by Royal Decree in successive governments since 1999. The position carries with it the rank of minister. Mr. Sciaroni is a graduate of the U.C.L.A. School of Law and earned degrees from Georgetown University and Claremont McKenna College.

Joseph M. Lovell, Managing Partner

With over two decades of Asia-focused legal, business and investment experience, Joseph’s expertise includes cross-border investments, banking, corporate finance, securities, M&A and corporate law across multiple sectors. A member of the bar in New York, Texas and Hawaii, he holds MA and JD degrees from the University of Hawaii, pursued advanced studies in International Law & Diplomacy at National Chengchi University (Taiwan), and holds a B.S. degree from Georgetown University. Fluent in Mandarin, Joseph is conversant in French, Khmer and Thai.

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