The New Environment and Natural Resources Code (ENR Code) is set to come into effect on 29 June 2024. The ENR Code introduces important changes aimed at promoting eco-friendly practices in Cambodia, with efforts to have a balance between economic development and responsible and sustainable management of natural resources and ecosystems.

1. Highlights

• • Environmental Compliance: The ENR Code imposes measures to comply with environmental standards, including emissions control, pollution control, climate change, environmental impact assessment, hazardous waste management, and sustainable practices.
  • Natural Resources Management: The ENR Code sets up framework for the sustainable use of natural resources, such as air, land, water, minerals, and protected areas and forests, prioritizing preservation and responsible extraction.
  • Environment-related Fees, Royalties, Premiums and Funds: The ENR Code sets key economic and financial rules for the investments in the sector, along with rules and procedures for effectively managing all environment-related fees, royalties, premiums, and funds.
    • New ADR Mechanism: The ENR Code establishes new ADR mechanism and procedures for resolving disputes related to environment and natural resources. The mechanism will be led by either the Ministry of Environment or the Ministry of Mines and Energy, depending on the subject matter of the dispute.
  • Expected New Regulations and Guidelines: Future regulations and guidelines are anticipated to tackle particular issues under the legal framework established by the ENR Code. It is essential to closely monitor ongoing developments and updates in this area.
  • Penalties and Consequences: Non-compliance with the ENR Code may result in substantial penalties and legal consequences (including monetary fines and imprisonment).
  • Regulatory Impact: Businesses across various sectors will be impacted, such as property development, construction, manufacturing, mines and energy, agriculture, ecotourism, infrastructure development, and financing.

2. Key Business Opportunities

• • Green Infrastructure Development: Investment in eco-friendly infrastructure projects such as renewable energy installations (solar, wind), green buildings, sustainable transport systems, and urban green spaces.
  • Ecotourism Activities within Protected Areas: Ecotourism projects within protected areas will benefit from a robust legal framework and future guidelines, providing owners, operators, and stakeholders with secure legal support across all stages of the project.
  • Corporate Social Responsibility (CSR) Enhancement: Aligning with sustainable practices demonstrates commitment to CSR enhances your reputation among stakeholders and investors who prioritize sustainability.
  • Innovation and Technology Integration: Following the ENR Code may require investing in green technologies and innovations, creating opportunities for partnerships with technology providers and consultants focused on sustainable solutions.

3. Action Points for Businesses

• • Compliance Assessment and Strategy: Review current environmental policies and practices against the new regulatory requirements. It might be required to develop a compliance strategy to ensure alignment with the regulatory requirements.
  • Risk Management and Mitigation: Conduct a risk assessment to identify potential liabilities and operational risks associated with non-compliance. It might be required to implement risk management measures and mitigation strategies to safeguard against legal and financial consequences.
  • Documentation and Reporting: Establish protocols for accurate and timely documentation of environmental compliance. Ensure that all required reports and submissions are prepared in accordance with regulatory deadlines and guidelines.
  • Training: It might be required to have comprehensive training sessions for relevant staffs to understand the new regulatory requirements and its implications, and their roles in the compliance.
  • Legal Counsel Engagement: Given the complexity and potential legal implications of the ENR Code, seek guidance on interpreting specific regulatory requirements, navigating compliance challenges, and preparing for potential enforcement actions.

Implementation of the ENR Code brings both challenges and opportunities for businesses. Business owners and operators are strongly recommended to address relevant requirements for legal compliance and risk mitigation. Take decisive action now in order to position your organization for sustainable growth and resilience.

For additional information, please contact our leagl expert ING Sophealeak or HUOY Tongkin.