Weekly news round-up / Week 48
As an agreement made in October between the CPP and CNRP is implemented, the role of spokesman for the National Assembly will now be split between two partisan representatives and one from the parliament’s secretariat. The role was previously held exclusively by CPP representative ChheangVun, who was criticized by the opposition party for perceived bias. The parliament will appoint National Assembly General Secretary LengPeng Long as a neutral spokesman whilst both parties will put forward their own appointees.
CNRP spokesman Eng Chhay Eang said the outcome showed compromise between the parties was possible.
The most recent draft of the Trade Union Law, approved in early November and obtained by Cambodia Daily on Monday 23rd November, is being described as union-friendly. It has maintained the controversial threshold of just 10 individuals required to form a union, which employers consider to be too low to counteract the obstacles of fractured union movements. It has also maintained a provision to give Most Representative Status to any union holding the support of 30% of more of the workplace (a July draft revised this figure down from an original 50%).
The new draft also raises the threshold for dissolving a union from 25 percent of members to 50 percent, and lets anyone proposing to lead a local union self-report their criminal record instead of having to obtain and submit an official government document. A vague article that gave the Ministry of Labor power to suspend a union considered to be collaborating with groups working against the national interest has been removed.
Ken Loo, secretary-general of the Garment Manufacturers Association in Cambodia, commented that the low threshold for creating a union and the lack of sanctions available to ministries were their main concerns.
A CPP-led legislative commission will review the document before a final vote. It is not yet clear whether the CNRP will participate in the review in light of recent political events.
Cambodia Daily has obtained the latest draft of a proposed Telecommunications Law that has been approved by the cabinet and is pending a vote in the National Assembly.
The draft differs from a mid-2014 version but retains many of its most controversial provisions, including a vague article concerning third parties listening to or recording conversations which is illegal unless “approved by relevant people or allowed by legal authorities.”
As with the previous version, the new draft also gives the Ministry of Posts and Telecommunications (MPT) the power to retrieve any service data from private providers and give them any instructions it chooses under what it determines to be unusual circumstances. The Ministry will also receive greater authority to sanction providers breaching any condition of their operating licenses.
Critics of the government’s efforts to regulate telecommunications worry about the vague wording of the law, which they say could enable the ruling CPP to use any new powers to stifle dissent that should be legally protected at a time when the Internet is becoming an increasingly powerful tool for the opposition.
Europe, European Businesses, EuroCham Members
In the year since it was first introduced in Cambodia, mobile-delivered insurance has proven to be one of the fastest-growing segments of the Kingdom’s insurance industry, providing affordable coverage to people who might not otherwise have access to insurance.
EuroCham member Smart Axiata now accounts for 40-50% of total individual life insurance policies in Cambodia having partnered with BIMA, the Cambodian arm of Swedish microinsurance provider Milvik, to offer customers the option to purchase insurance policies on their mobile phones from as little as $0.60 per month. Since October 2014, over 430,000 people have registered for Smart Life Insurance and this figure is growing by around 60,000 per month. Smart has also partnered with Forte Insurance to provide personal accident coverage.
Smart’s rise to become the largest provider of life insurance in Cambodia is built upon its accessibility and ease to register, particularly in rural areas, where insurers do not have offices. Another major life insurer in Cambodia, Manulife, has partnered with electronic payment system Wing to allow its policyholders to pay their life insurance premiums using their mobile phone.
Khmer Times Q+A session with James Zemke, Director-General of Star Auto, a EuroCham member and the authorized dealer of Mercedes-Benz in Cambodia.
Mr. Zemke recognizes the small size of the automobile market in Cambodia today and expects to sell only a dozen cars this year. However, he expects a significant increase in sales opportunities over the coming years on the back of robust economic growth – this optimism is reflected in the number of major international car brands investing in Cambodia.
The grey market poses a challenge for authorized dealers who, being fully tax compliant, cannot provide their vehicles at the same price-point. However, it is hoped that consumers will recognize the benefits of having a warranty from authorized dealers – grey market cars can be unsuitable for the Cambodian environment and can come with a range of mechanical problems. Star Auto have been investing in training their technicians to repair cars to the proper standards and encourage all Mercedes-Benz vehicle owners, including those who purchased from the grey market, to come to them for repairs rather than accept the risk of a below-standard service at other garages in town.
On Thursday 26th November, the European Parliament passed with a large majority a resolution calling on the Cambodian government to revoke the arrest warrant for opposition leader Sam Rainsy and criticizing the removal of deputy opposition leader KemSokha from the National Assembly. 567 of 630 parliamentarians voted in favor of the bill which asks the Cambodian government “to end political use of the courts to prosecute people.”
The European Union is Cambodia’s single biggest aid donor, having pledged 410 million euros (about $435 million) to the country for the period from 2014 to 2020. Some parliamentarians stated that the EU’s contribution should be re-evaluated if the parliament’s resolutions are not heeded in Cambodia.
Mr. Rainsy said he would now wait to see what the European Commission, the executive wing of the E.U., did with the resolution passed by the parliament.
Infrastructure, Development and Core Industries
Ouk Prachea, secretary of state at the Ministry of Commerce, has highlighted the Royal Government’s efforts to facilitate the growth of the IT sector in Cambodia and attract more tech companies to invest here.
The comments were made at a seminar organized by Microsoft in Phnom Penh. Microsoft is offered cloud computing and data analysis software to Cambodian companies, and stressed the importance of intellectual property protection. The use of counterfeit and unlicensed software creates major vulnerabilities to cyber security attacks.
Mr. Prachea said that in recent years, Cambodia has strengthened intellectual property (IP) protection, including a series of crackdowns and issuing a number of directives from the National Committee for Intellectual Property Rights designed to reinforce the country's stringent IP laws.
"The ministry has been working on simplifying the process for certificates of origin, IP registration and business registration to make them digital, accessible and efficient. E-commerce is the key trending area that we are pushing forward in, because we believe it is the next big thing for our economy and we need to be ready for it," he added.
Speaking at the ASEAN-US Summit in Kuala Lumpur, Prime Minister Hun Sen has urged the USA to expand the product types included in its Generalized System of Preferences for least-developed countries.
A 2005 WTO meeting saw developed-country leaders pledge to provide duty-free and quota-free status to at least 97% of products originating from LDCs. The percentage refers to product lines rather than volume. Unlike Australia, Canada and the EU which offer ‘everything but arms’ preferential access, the USA provides duty-free status to over 5,000 types of product from LDCs but excludes some major commodities like sugar, cocoa and tobacco.
The list of 5,000 covers most of Cambodia’s export types but not its major export – garments. Not eligible for the GSP scheme, Cambodian garment exports to the US are subject to Most Favored Nation tariffs of 10-15%. It is not anticipated that the USA will adapt the GSP to include garments in the near future.
A report released by the Youth Resource Development Program (YRDP), an NGO, and the Ministry of Labor has found that young Cambodians between 15 and 30 have a low unemployment rate of just 2.5% but that the majority of jobs (67.5%) are insecure and within the informal sector and only slightly over half have any kind of defined salary.
Average take-home pay sits at around $100 a month. About 47 per cent of Cambodia’s 4.3 million youths work in agriculture, significantly higher than in the service sector, which employs about 30 per cent. Industry and manufacturing jobs accounted for about 22 per cent of young people.
32% of Cambodians are now connected to the Internet, which still represents one of the lowest figures in the region. 50% of the Vietnamese population are online and 46% in the Philippines. Within ASEAN, Cambodia ranked higher than only Laos (14%) and Myanmar (9%).
22% of Cambodians use social networks such as Facebook, the majority of whom access social networks via mobile devices.