Law on Administration of Factory and Handicraft

Article 1: This law govems ail factories and handicrafts throughout Kingdom of Cambodia which are under the lcading and administering authority of the Ministry of Industry. :\1ines and Encrgy without affecting authorities of other concemed ministries and institutions.

Article 2: Factories and Handicrafü, in this law mcan buildings, places or vehicles for producing and transfonning raw material or semi-final product 1to a new product or/and for perfomüng other activities such as assembling. 1 repairing, testing, packing. fillmg. maintenance, storage or improvement to 1 satisfy the market demand 1

Article 3: Factories and handicrafts. which arc under the leading and administering authority of the Mm1stry of lndustry, Mines and Energy. are as follows: 1. Food, beverage and tobacco 2. Textile, wcaring apparel and leathcr product 3. Paper product 4. Chemical, rubber and plastic product, exccpt oil and gas industry 5. Non-metallic minera! based product 6. Basic metal 7. Fabricated metal, machincry and equipment 8. Other sectors such as: Production of jewelry, decoration material, music instrument. sport equipment, toy and office equipment. -1- CHAPTERII Establishment and Operation Part l Factory

Article 4: The establishment of factory, as speeificd in article 3, shall have pennit from the Ministry of lndustry, Mines and Energy with the approval of the concemed institutions. The establishment of factory is targeting on: Preparation of location or / and the construction of building for the factory operation. Construction of building for installation of machinery for the factory operation. Machinery installation in a building. place or vehicle for the faetory operation. Raw material for the factory operation.

Article 5: The factory owner shall be govemed by this law and may be physica\ or legal entity. The factory owner can manage the factory by him/herself or authorize othcr to manage the factory on histher behalf. But in any case. the factory owner shall be legally liable for ail activities of the factory and its products quality to consumers. -2-

Article 6: Quality control, standard detcrmination, registration, and standard mark ofproduct shall comply with the cxisting laws.

Article 7: The Ministl) of Industl)', \1ines and Encrgy shall provide any certificates concemmg the production in accordmg with the application of the factory owner if it deems to be necessary.

Article 8: The Ministry of Indu<;try, Ylines and Energy shall reply with its dccision to the applîcant for the factory establishment within a maximum period of 7 (seven) working days from the date of the receipt of the complete and correct apphca11on. ln case of rejcction of the application. the Ministry of Industry, Mines and Energy shall cxplain clearly the reasons of its decision.

Article 9: Bcforc starting the operation of the factor)', the factory owncr shall inform to the Ministry ofindustry, Mines and Energy within the minimum pcriod of 15 (tiftcen) days in ad\ance.

Article 10: For the establishment and opcration of factory, the factory owner shall give priority to Cambodian Enginecr and technician. The conditions of the recruitment of foreign engineer and technician shall comply with the cxisting laws. -3-

Article 11: For the expansion or the establishment of branch or the relocation of the factory. the pem1it shall be obtained from the Ministry of lndustry, Mines and Energy.

Article 12: The expansion of factory means a 20 (twcnty) % mcrease of the original capacity by: 1. The increase of nurnber of machineries or the change of machineries. 2. The modification for preparation or expansion or construction of building. 3. The change of product item or the addition of the product item. 4. The expansion of the factory space. The establishment of branch mcans the establishment of new production base which produces the product to support the mother factory. The relocation is the change of the old to the new location of the factory.

Article 13: ln case of change of factory owner, the new owner shall apply for recognition as the factory owner to The Ministry of lndustry, Mines and Energy within a maximum period of 10 (ten) working days from the date when he get the right to be the new factory owner. The Ministry of Industry. Mines and Energy shall reply to the factory owner within a maximum period of 4 (four) working days from the date of the receipt of the application. -4-

Article 14: In case of <leath or lcgal disability of the foctory owncr. the legal successor shall apply for recognition as the factory owner to the Ministry or lndustry, Mines and Energy within a maximum period of 45 (forty fivc) working days from the date of <leath or legal disability. The successor may tcmporarily operate the factory until therc is the recognition as the factory owner from the Ministry of Industry. Mines and Energy.

Article 15: The factory owner shall infonn to the Ministry of Indust1y, Mines and Encrgy in writing within the minimum pcriod of 1 (one) 111011th prior to the date of the permanent cease of the operation. Beside the case of the force majeure, the continuous cease of opcration within the pcriod of 12 (twelve) months shall be decmed as permanent ccase of the factory operation. In this case, the Ministry of lndustry, Mines and Energy shall invalidate the establishment perrmt.

Article 16: The factory owner shall prcsent the establishment pem1it and other permits at an appropriate open place in his/her factory, where it is casy to visually view.

Article 17: In the case that the establishment permit and other pcrmits have been lost by œrtain reasons. the factory owncr shall apply for anothcr pcnnit or a replacement letter from the Ministry of Industry, Y!ines and Energy within a maximum period of 15 (fiftcen) days from the date ofloss. -5-

Article 18: Each factory shall have name and the signboard shall be written in Khmer while it shall be bigger than and on the top of other languages. The factory owner shall install his/her factory signboard in front of the factory, whcre it is easy to visually view. Changing of the name of factory shall be approvcd by the Ministry of Industry, Mines and Energy.

Article 19: The factory owner shall provide accurate data and neccssary reports in accordance with the determination of the Ministry of Industry, Mines and Encrgy.

Article 20: The factory owner, who is not under the authority of the Ministry of Industry, Mines and Encrgy, shall have the factory registration at the Ministry of Industry, Mines and Energy. and provide data and reports as prcscribed in aiiiclc 19.

Article 21: Data and reports, provided by the factor-y to the Ministry of Industry, Mines and Energy, are professional secrets of the factory. These data and reports shall not be publicly releascd unlcss there is permission from the factory owner.

Article 22: Factory owner. who is under this law, shall be obligcd to pay service fccs specified by the joint announcement of the Ministry of Industry, Mines and Energy and the Ministry of Economy and Finance. -6- Part Il Handicraft

Article 23: The handicraft is pennitted to establish and operate as long as the handicraft owner infonn the local authority and register at the provincial / municipal department of Industiy, Mines and Energy whcre hislher enterprise is located within maximum period of 7 (sevcn) days following the operation date, except the kind of handicraft specified by the announcement of the Ministry oflndustry, Mines and Energy, which shall be applicd for pcm1it from the Ministry of Industry, Mines and Energy prior to the opcration. The fonnality of the establishment and opcration of handicraft and othcr concemcd provisions shall be specified by the announccmcnt of the Ministry of Industry. Mines and Energy. CHAPTER III lndustrial Safety

Article 24: The set-up of ail areas in the factory shall comply with the technical conditions set by the announcement of the Ministry oflndust1y, Mines and Energy. No pcrson without technical skill shall be hircd or assigned to set up the factory.

Article 25: Ali areas in the factory shall be ensured and maintaincd with appropriate light and enough ventilation, and shall be ensured that it is free of accident primarily caused by radio activity, noise, vibration, light, ray, smcll, steam. hcat, smokc, dust and other pollutants. -7-

Article 26: Factory shall have fire-cxtinguishing system which includcs: 1. Firc alarm system and tire extinguishcr utilities 2. ·•Fire Caution" sign at neccssary places 3. At least t\VO cmcrgency exits at cach tloor 4. Rcscuc ways for fire fighting trucks 5. Othcr escape means 6. Compact plan for evacuation in cmcrgcncy.

Article 27: \1achincries and part of machineries. which may eventually cause accident, shall have envers or protecting equipment. Arca of factory. which may cause serious accidents, shall be surrounded by fcnce.

Article 28: '"Accident Caution·· SÎ!c,'11S or "Prohibition" signs shall be placcd at location where accident may occur.

Article 29: The use of explosive, tlammable matcnal, poison, dangerous chemical or gas in the production shall comply with the technical conditions that ensurc safety Article .30: Steam boilers, stcaming systems. cquipmcnt or tanks with high pressure shall be controlled by the :vlinbtry of Jndustry, Mines and Energy before being allowed to operate. During the operation, the control of the abovc-mentioned equipmcnt shall be donc in phase specified by the Ministry oflndustry, Mines and Energy. -8-

Article 31: Beforc being dumped, ail kinds of industrial wastes shall be complied with the standard for discharge of waste and hazardous substances set by the regulation of competent institutions. lt is strictly prohibitcd to dischargc tox1c industrial \\ astes or hazardous substances polluting or affecting em ironment without coming across the treatment. Industrial waste, which is to be reused. shall be thoroughly stored \\ ith specifications and technical conditions.

Article 32: Ali kinds of industrial waste, which cannot be treated, or have been treated but are still toxic or consist of toxic substances causing pollution or affecting cnvironment or consist of radioact1\ e substance shall be controllcd and pcm1ittcd by competent institutions bcforc being discharged or transported to other place for storage or other purposes.

Article 33: Factory owner shall be liable for the discharge, clcaning and storagc of ail kinds of industrial waste of the fac tory.

Article 34: Within the enforcement of this law, the Ministry of Industry Mines and Energy has the authority to issue regulations or rcquest the Royal Governmcnt to issue sub-decrcc to administcr the factory. -9- CHAPTERIV Supports and Inccntives

Article 35: Supports and incentivcs for the development of large size factory shall be implemented in accordance with the law on invcstment of the Kingdom of Cambodia.

Article 36: For medium and small factories and handicrafts. supports and incentives arc approvcd by the Royal Governmcnt. Types. si/.es and fom1s of the supports and incentives shall be spcc1fied by sub-dccrce. CHAPTER V Control and Inspection of Factory

Article 37: Competcnt officiais of the Ministry of Industry. Mines and Energy arc eligible to enter the factory anytime in the working hours in accordancc with a specified or a non-specified date to control the quality. factory situation, machine,y, other means or activity whcre the factory owncr violates the provisions of this law. ln neccssary case. the inspection of the facto1y is carried out by: 1. Taking the product sample with an appropriate quantity for quality analysis togcther with othcr concemed document. 2. Invcstigating, halting or restraining the product. material, raw- material and concerned document which may cause accident to human or assct of the factory or the surrounding area. 3. Qucstioning or summoning facto!) owner. manager, employcc or worker in the factory to clarify information or to request for infomrntion and document. -10-

Article 38: The Ministry of lndustry. Mines and Encrgy has the authority to temporarily cease the aetivity of any factory established \\ ithout permit from the Mimstry of lndustry, Mines and Encrgy for a specified period to order the facto1y owner or manager to adjust the mistake. If the adjustment is propcr and complctcd on time, the Mmistry of Industry. Mines and Energy shall issue the permit to the factory. If the adjustmcnt has not been carried out or is not proper or not on timc, the Ministry of Industry, Mines and Encrgy has the authori~ te 1•.sue the announceml!nt of the permanent clos ure of the fac tory. The order of temporary ccase of the production or the announcement of permanent closure of the factory shall be publicly prcsented in from 0f the factory or rcleascd in the press.

Article 39: The Ministry· of lndustry. Mines and Energy has the authority to o:-de:- the factory owner or manager to tcmporarily cease the entire producuo"!"' li!' certain sections of the factory for a specified period so as the factor:, owner or manager makes the adjustmcnt or improvcmcnt in cases: Serious technical mistakes as prescribed in at1icle 24. The production process which does not comply with the permit of the Ministry of Industry. Mines and Encrgy. The production whieh may cause accident to human or destruction of as sets inside or outside the factory. TI1e factory owner or manager intentionally disrespect the order lctter of the Ministry of lndustry, Mines and f'.nerg) -11- If the adjustment is proper and completc<l on time, the Ministry of lndustry, Mines and Encrgy shall issue permit the factory to restart the production. If the adjustment has not been carried out or is not proper or not on timc, the Ministry of In<lustry. Mines and Energy has the power to issue the announcement of the final closure of the fadory. The order of temporary cease of the production or the announcement of permanent closure of the factory shall be publicly presented in front of the factory or rclcase<l in the press.

Article 40: The Ministry of Industry. Mines and Energy has the authority to sen<l the order lctter to the residence or the factory of the factory owner or manager who shall directly reccive this letter or by registered letter with the signature for receipt. In case that factory owner or manager refuse to accept the order letter of the Ministry of Industry, Mines and Energy. the Ministry has the authority to invite authoritics or police oflicers as witnesses to accompany with it. If the factory owner or manager is not in the residencc or in the factory, the ordcr letter can be given to any person who is legally related to the factory owner or manager. If there is no person receiving the order lettcr on behalf of the O\Vncr or manager. the Ministry of Industry, Mines and Energy shall stick that lettcr at the entrance or the gate or at the residence of that factory owncr or manager with the presence of the authorities or police officers as witnesscs. After what prescribed in the above paragraph are executed, the order letter is decmed to be rcceived by the factory owner or manager . • 1 ?-

Article 41: In case that thcrc is any incident or accident 10 the factory which leads to the complete cease of operation for more than 7 (seven) days, the factory owner or manager shall infonn in writing to the ~inistry of Industry, Mines and Energy within the maximum period of 10 (ten) days following the date of that occurrence. At the time when the above incident or accident occurs. the Ministry of Industry, Mines and Energy shall inspect the factory and enforce article 37 or 39, paragraph I ifnecessary.

Article 42: Officers of the Ministry of Industry, Mines and Energy shall present identification card and the letter of mission to the factory owner or the contact person during the inspection. The inspection of the factory shall have proper and clear minute. CHAPTER VI Penalties

Article 43: Any handicraft owner, who has not informed the local authority in writing, and not registered at the municipal or provincial department of Industry, Mines and Energy where his/her enterprises are located, as specified in article 23 paragraph 1, shall be subject to fine penalty from 500,000 Riels (five hundred thousand Riels) to 2.500,000 Riels (two million five hundred thousand Riels). -13- Any person who establishes handicraft, specified by the announcement of the Ministry of Industry. Mines and Energy as prescribed in the article 23 without pennission or violates article 23 or other provisions relating article 23 paragraph 2 of this law, shall be subject to fine penalty frorn 1,000.000 Riels (one million Riels) to 5,000.000 Riels (five millions Riels).

Article 44: Any factory owner, who violates miicle 11.13.14, 15 paragraph 1. articles 16, 17,18,41 paragraph 1. shall be subject to fine penalty from 2,000,000 Riels (two million Riels) to 10.000,000 Riels (ten million Riels).

Article 45: Any factory owner, who violates article 24, shall be subject to fine penalty from 5,000,000 Riels (tive million Riels) to 25,000,000 Riels (twcnty five million Riels). If there is the accident caused by violation of the above article, the facto[)' owner shall compensate ail the damage to the victims. ln this case. the competent officiais of the Ministry of Industry, Mines and Energy shall refer the case to the court for judgment in accordance with the existing \aws.

Article 46: Any factory owner, who violates article 26,2ï.28,29.30, shall be subject to fine penalty from 2,000,000 Riels (two million Riels) to 10,000,000 Riels (ten million Riels) . In the case that this violation causes the fatal accident to human or destruction of asset inside or outside the factO[)'. the competent officiais of the Ministry Industry, Mines and Energy shall refcr the case to the court for decision on the compensation of damages in accordance with the prcjudgment, and on penalty in accordance with existing laws . -14-

Article 47: Any persan who does not provide report or provide inaccurate report or violates article 19 is subject to fine penalty from 10,000,000 Riels (ten million Riels) to 50,000,000 Riels (fifty million Riels) and to penalty as specified in penalty law.

Article 48: Any person, who operates the factory, violale article 38 paragraph 1 and article 39 paragraph 1 of this law, shall be subjcct to fine penalty from 20,000,000 Riels (twenty million Riels) to 100,000,000 Riels (one hundred million Riels) or to imprisonment from 6 (six) months to 1 (one) year. In the case of violation of article 39 paragraph 3 of this law, he/she shall be subject to fine penalty from 30.000.000 Riels (thirty million) to 150,000,000 Riels (one hundred and fifty million Riels) and to imprisonment from 1 (one) to 3 (three) years.

Article 49: Any persan. who violates the article 4. 9, 20. shall be subject to fine penalty from 10,000,000 Riels (ten million Riels) to 50,000,000 Riels (fifty million Riels). In the case that this violation causes the fatal accident to human or destruction of asset insidc or outside the factory. the competent official of the Ministry lndustry, Mines and Energy shall refer the case to the court for decision on the compensation of damages in accordance with the prejudgment and on penalty in accordance with existing laws. -15-

Article 50: Any factory owner, who violates article 10 and article 25, shall be subject to fine penalty and compensation in accordance with labor law.

Article 51: Any factory owner. who \ÎOlates article 31. 32, 33 ofthis law, shall be subject to fine penalty and compensation in accordance with the law on environmental protection and natural resources management.

Article 52: Any competent official, who violates the article 8 paragraph 1 and article 21 of this law, shall be subject to administrative punishment in accordance with law on joint-articles of the civil servants or to fine penalty between 2,000,000 Riels (two million Riels) to 10,000,000 Riels (ten million Riels) and to imprisonment from 6 (six) months to 1 (one) year or any certain penalties.

Article 53: Any person. who resists the enforcement of this law, shall be subject to fine penalty from 2,000,000 Riels (two million Riels) to 10,000,000 Riels ( ten million Riels), and to imprisonment between 1 (one) month to 6 (six) months.

Article 54: Any person, who commits the violation and not resolve the cease to this violation, shall be subject to double fine penalty in accordancc with the violations of each article in this chapter. -16-

Article 55: For any fine penalty from 500,000 Riels (five hundred thousand Riels) to 10,000,000 Riels (ten million Riels), the competent official of Ministry of Industry Mines and Energy have authority to impose the transitional fine. In the case of refusai to pay transitional fine. competent official of Ministry oflndustry, Mines and Energy shall refer the case to the court. CHAPTERVII Transitional Provision

Article 57: Subsequent to time when this law takes into effect, ail factories and handicrafts which arc already established without establishment certificate or permit or not yet registered, shall be completed with the formality in accordance with the provisions of this law at the ministry Industry, Mines and Energy or at the municipal or provincial department of Industry, Mines and Energy where they are located within the maximum period of 6 (six) months. In the necessary case, this period can be fu1iher extended to the additional period of 3 (three) months. -17- CHAPTER VIII Final Provision

Article 58: Ali provisions contrary to this law shall be abrogated. Phnom Penh, 23 June 2006 King's Signature NORODOM SIHAMONY Have submitted for the King's Signature Prime Minister Signature HUN SEI'i Have infom1ed to the Prime Minister Minister oflndustry, Mines and Energy Signature SUY SEM -18-