Foreign Direct Investment (FDI) in Land in developing countries

49television, manufacturing wood and stone carvings,silk weaving, and hospitals and clinics).Additionally, the Cambodian Constitution onlyprovides Cambodian citizens and Cambodianlegal entities with the right to own land. FDI inland can only be undertaken in joint ventures.Legal multi- and bilateral environmentCambodia signed altogether 21 BITs of whichonly three cover relevant investor countries forFDI in land (China, Thailand and Taiwan). 19In these agreements, a compensation for expropriationfor the investor is foreseen, based on anappraised market value. Additionally, protectivetrade measures like import restrictions to stabilisethe balance of payments are possible from bothcontracting partners and specific rules for disputesettlements are integrated.Legal domestic environmentDomestic law follows a very restrictive land policy:ownership of land is restricted to Cambodianpersons and legal entities only. A company isdefined as Cambodian if 51% is nationally held.Concessions are limited to 10,000 ha and rulesfor exceptions exist. An environmental impactassessment (EIA) is required and a national planto ensure food security has been adopted in 2008.Cambodia ranks worst of all case countries regardingcorruption which hinders the effective implementationof existing legal rules.Until 1989, all land in Cambodia was state ownedand land markets did not exist. After the end ofKhmer Rouge, land distribution took place basedon size of families, and possession rights weregranted for residing and subsistence farming.Temporary possession was established, whichallows tenants who had occupied the land for aminimum of five years the acquisition of a landtitle.According to the new constitution of 1993 and theLand Law of 2001, five main categories of landproperty can be distinguished:• Private land,• State public land (all areas needed for publicservices such as roads, river banks, etc.),• State private land (all other areas owned by thestate),• Communal land, and• Indigenous land.The first Land Law of 1991 was established toprovide the opportunity to register traditionalland use rights, but the government was not ableto manage the huge demand. As land pressureincreased dramatically, mainly caused by populationgrowth, social conflicts about land grewsteadily and were enhanced by missing land titlesand an unsatisfied cadastral system. In 2001, anew Land Law entered into force to accelerate theprocess of land registration and improve tenuresecurity. Temporary possession was removed.With the help of development organisations, anew cadastral system was implemented and about1.15 million plots have been registered.Private state land can be used for Social LandConcessions (SLC) and Economic Land Concessions(ELC). The Ministry of Land Management,Urban Planning and Construction (MLMUPC)is responsible for granting these land concessions.A sub-decree of SLC was established in 2003 toaccompany the implementation of the LandAllocation Project (LASED). It offers the poor anopportunity to apply for land for housing andsubsistence farming.In 2005, the land act degree was amended by theELC sub-decree, a mechanism established to grantstate private land not exceeding 10,000 ha toconcessionaires for agricultural exploitation up toa maximum of 99 years.Village workshop19 No data of entry available; no reasons available why this or that agreement has not entered into force yet.