Myanmar Passes the Industrial Zone Law


Pyidaungsu Hluttaw, Myanmar’s highest legislature, has approved the highly anticipated comprehensive Industrial Zone Law on May 26.

Myanmar industrial zone land property construction

The statue has 20 chapters and 75 articles. The bill was drafted and announced in August 2019.

The contribution of the industrial sector to the GDP of Myanmar who heavily relies on agriculture was only 10.5 percent in 1990-1991 and significantly increased to 33 percent in 2013-2014, 35 percent in 2014-2015, and 35.4 percent in 2015-2016. The government is aiming to increase the contribution of the industrial sector to 37 percent in 2030-2031.

Yet, the country did not have a strong legal framework to regulate around sixty industrial zones spread across the country, 29 of which are in Yangon, and to protect both investors and the local community. This law is hoped to fill that blank.

Article 32 of the law allows investors or developers to use the land for 50 years with two 10-year possible extensions.

According to Article 34 (B), the investors who have acquired the lands in the industrial zone must obtain approval from the Regional Industrial Zone Management Committee for his or her project timeline and action plan and implement the project per the proposed project timeline approved by the committee.

If the investor fails to implement the project in the proposed timeline, he or she shall pay 10 percent of the value of the acquired land as fines every year or will have to give up the permit or grant of the use of lands.

Under Article 57, illegal squatting, building roads, or establishments without in the industrial zones are prohibited. Anyone who breaches this prohibition will face not more than three years of jail terms and/or fine.

The law also prohibits any vandalism or destruction of an investor’s business in the industrial zone or development of the industrial zones, under Article 62. Penalties for breaking this article is K500,000 to K2 million.

All the legal cases are under the authority of the police force.

Development of the industrial zones and industrial sector infrastructures, raw materials, cheaper and better logistics, technology, and market, all of which require a strong and fair legal framework. Otherwise, the industrial zones can lead to problems or in the worst-case scenarios to conflicts.

The law is hoped to address the sky-high land price issue; lack of reliable electricity, good road infrastructure, capital, and human resource development; frequent workers versus employers conflicts; illegal squatters issues; and out-of-date rules and regulations.

Before the enactment of the Industrial Zone Law, certain laws can be entertained as related to the industrial zone such as Factories Law (1951), Private Industrial Law (1990), and Small and Medium Enterprise Development Law (2015).

 

By Min Thu Aung