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SME chief complains of excessive red tape

Sok Chan / Khmer Times Share:
The Image of Ministry of Commerce. KT/Pann Rachana

The representative of the Cambodia Food Manufacture Association (CFMA) has requested a reduction in government red tape especially for the small and medium enterprises.

Keo Mom, Chairwoman of Lyly Kameda and the representative of CFMA says several government agencies do the same job and have the same responsibilites. This put more of a burden on local small and medium enterprises (SMEs), especially local food manufacturers processors.

Mom added that at present in order to put one products on sale, it requires to have a pre-sale check, testing, quality control and certificates from the Ministry of Industry, Science, Technology and Innovation, the Ministry of Health, as well as the General Department of Consumer Protection, Competition and Fraud Prevention at the Ministry of Commerce.

“If one product has to go through all these processes and many ministries involved, our production cost is high and not competitive in the market because those jobs overlap. The question is do we have do the quality check with all the relevant ministries or just have one ministry or entity to do it?” Mom asked.

“I think one ministry can do a quality check or control on the production and finished product and the Ministry of Commerce should check imported products then there will be no overlap.

They [the ministry) should be strict on imported products, but they are strict only on local products,” she added.

Mom is also concerned over overlapping taxation on branding and logos between the Phnom Penh Municipal and Taxation Departments. She added that the government should sort out this issue by allowing the taxpayers to pay only one institution such as the taxation department rather than other institutions.

“With these overlapping roles, we lose a lot of profit. The manufacturer gets less revenue and the law and regulation is complicated and and it all costs much money. Therefore, the SMEs do not want to officially register. She added it’s easier for importing companies so theyhave an advantage.

Mom pointed out that her company saw a 50 percent drop during the spread of COVID-19. Plus, the complicated procedures involved cost the company a lot of profit.

Chhea Layhy, director of the SMEs department of the Ministry of Industry, Science, Technology and Innovation, acknowledged that there are overlaps on the institutional duty and responsibility on the implementation regarding the quality control on products in the market.

He explained that the government has clearly set the Inter-Ministerial Prakas (directive) number 868 on the implementation and institutional arrangements of food safety based on the farm-to-table approach to improve the implementation of the food safety system for the protection of people’s health and to enhance Cambodian food export competitiveness, as well as set up institutional mechanisms for facilitating and coordinating activities from different ministries and competent authorities related to food safety. Layhy added that based on the Prakas, the Ministry of Agriculture will be in charge from the farm to slaughter houses, whereafter the Ministry of Industry takes over from food processing, packaging and standard checks as well as the finished products.

The Ministry of Commerce will check only on the quality of goods in the market and Ministry of Tourism and Health will check restaurants and food courts, while the General Department of Customs and Excise will work on product quality if the items are to be exported.

“This Prakas is to facilitate and relieve the burden of SMEs. In fact, we [the government] do not want SMEs to have much of a burden that makes it difficult to push local products. Our purpose is to encourage the sale of local products, so labelling, checking standards and quality and packaging is the job of the Ministry of Industry,” Layhy added.

“My suggestion is that I appealed to all relevant ministries to stick to their principles, the law and tasks that are assigned and put the issues on the table for discussion,” he added.

“We do not burden SMEs. We want the SMEs to develop their businesses. If there are more burdens their production costs will be higher, so it is difficult to compete with foreign products.”

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