Michael Kirk (1996):
Land Tenure Development and Divestiture in Lao P.D.R.

2. Land, Forestry and Water Legislation

Principles of the New Legislation

At the end of the 80s it became evident in Laos that a lack of individual incentives for the preservation of agricultural land, forests and water as well as the prevalence of State property rapidly accelerated the plundering of the production basis. The uprooting of families, their migration and the resettlement all as an immediate result of the war additionally aggravated the destruction of resources. The evacuation of entire villages and the resettlement of upland dwellers to the lowlands created a strong, partly ethnic-based tension, increased the uncertainty over property rights to land and placed local customary tenure regimes under scrutiny (see II.6). It was hardly possible any longer for local authorities to be able to control and put a stop to the clearing of land on sloping areas and the deforestation in the vicinity of villages (Hirsch et al. 1994). Accordingly, the pressure grew for a entirely new conception of statutory laws for land, forests and water, obviously initially induced more by international development organizations than by a change of viewpoint amongst those responsible in the line ministries.

Above all else, the trial-and-error process of the building up of institutions of a market economy system is reflected in the currently valid land legislation. [FN 3] A variety of decrees, orders, regulations and circulars have attained legal power which have an impact on land and resource tenure, utilization rights and land titling. These new decrees were worked out under great pressure of time, put into force, constantly remodified [FN 4] or completely repealed. Only very few of them so far have the full status of "law". In exceptional cases, some regulations from the socialist period are still valid.

Observers of the processes rightly criticize an uncoordinated proliferation of laws, decrees, etc., giving rise to inconsistency, overlapping, uncertainty of definition, and confusion between and across government departments at all levels (Gaston 1995a). Whether or not Laos at the same time were able to act as sovereign state remains open, since government officials and expatriate consultants have hastily drawn up a new legislation to provide a legal basis for the new land use patterns promoted by international development agencies and conservation bodies (Colchester 1992). On the other hand, one must acknowledge the enormous achievement of the attempt to work it out within only a few years, to coordinate the legislation between line ministries, and to begin ist implementation at the local level. [FN 5]

In important parts, the current resource-related legal framework is already of high consistency, framework laws have in part a "package" character, and together with enforcement conditions, they are mutually reinforcing (see II 3.-4.). The achievement can be all the more acknowledged as the statutory law had to do justice to the very complex objectives of the Laotian State on the one hand and international donors on the other (Gaston 1995a:5):

• Provision of a system of secure, tradable use rights and legally enforceable titles for selected categories of land and selected patterns of land use;
• Provision of incentives for individuals as well as for community groups or villages to manage particular land categories in a sustainable manner;
• To guarantee that land can be used as collateral in newly formed land markets;
• A complete change in the role of the Government to emphasize zoning, demarcation and provision of assistance to rural and urban land users so as to improve land use practices and to solve conflicts over resources;
• To improve resource mobilization for the allocation and transfer of land through the introduction of a new set of land taxes;
• To ensure that the benefits of more efficient land markets are equitably shared within society: not just between urban and rural stakeholders, or between the various socio-economic strata, but above all in relation to gender issues as well;
• Reasonable consideration of the complex customary rights in forest utilization.

In Lao PDR, the fundamental principals and regulatory norms governing rights to agricultural and forest lands are actually enshrined in the Constitution from 1991, the Property Law (1990), the Land Decree (No. 99 from 1992), the Decree on the Use of Forests and Forest Lands (No. 169 from 1993) and the Decree regarding the Allocation of Land and Forest Lands (No. 186 from 1994) (see Fig.1). [FN 6] They are in the majority the result of the NEM policy of filling the rule-of law vacuum left by the socialist State in that not only individual but also communal rights to agricultural land and forests are set down, and the role of the private sector is strengthened.

Figure 1: Land, Forest, and Water Related Legislation in Lao PDR

By looking at Figure 1, one can suspect just how extensively the State still also has to, or wants to operate with decrees. While these decrees are not "laws" in the technical sense, they attract a degree of authority which in many ways is equal to that of laws under "western" legal systems (Lao PDR 199_a). These become enacted by the Government and get signed by the Prime Minister without having to go through the process of legislation. The National Assembly has its own Legal Committee for consultation for questions in drafting laws. (Regulations, instructions which are looked upon as instruments of implementation but which comprise basic rules and definitions can be enacted by the line ministries alone.)

Decrees present themselves as perfectly flexible instruments for gathering experience for putting a new system of laws into action, and these, in the case of unsuitability, can be quickly altered, as in the case of the land tax (Schneider/El-Erian 1994). But they also cause planning uncertainty and a loss of motivation for implementation organizations and participating actors, to transmit such ad hoc regulations at the local level, put them into action and thus in the long term, to create trust amongst the population.

Property related Legislation

The Constitution explicitly sets down the bases for the property related institutional environment in Articles 13 and 17. It expressly ensures that the State protects various property systems "...all forms of state, collective and individual ownership" (Art.14). The possibilities for acting which these property rights open to the participants are named: "... rights to governing, rights to using, rights to transferring and the rights to inherit property of organizations and individuals" (Art.15). With this, the protection of private ownership for Laotian and foreign investors is particularly emphasized.

Statements about land ownership in the Constitution have obviously been kept consciously ambivalent. It is not expressly defined that all land continues to remain State property. All that is set out is that there is land which is under the ownership of the national community. For this land, "...the state ensures the right to using, transferring and inheriting it in accordance with the law" (Art.15). Since no Land Law has thus far been passed, any interpretation of the valid property regimes has to be derived from the Land Decree (see below).

The Property Law passed in 1990 summarizes, conversely, five different property categories extensively and in great detail. With its strong emphasis of the role of State and collective property, and with its characteristic linguistic style, this law is strongly marked by the socialist society. Land, water, forests, water and land animals are defined here as natural resources "...belonging to the national community, represented by the state". At the same time it is stated that "...the state may grant the right of control, use transfer and inheritance to other organizations, economic units and individuals" (Art.4).

Thus the Constitution and the Property Law acknowledge that natural resources reveal varying spatial expanses, differ from one another in yield potential and intensity of use, are also varyingly controllable, and therefore have to be differently managed and administrated - as was the case before 1975 - through various resource tenure regimes (Kirk 1994). This happens according to yield expectations, and to production and transaction costs for their control and enforcement: for irrigation land more or less as individual private property, for village fields and forests as common property, for commercial plantations as the private property of corporations, for protected forests as state property or as a village, i.e. communal property. But in all cases, the State has reserved preferential responsibility for resource allocation and resource management since 1989. Thus, in the following, just how far the participation of individuals and communities are guaranteed and promoted will be all the more critically analyzed.

The Property Law regulates above and beyond this - as is the case with the Land Decree - at least to a certain degree, the divestiture of the production cooperatives where there is a case of mismanagement, and makes possible "...the granting of the land of former cooperatives to other economic units or individuals without any liability for compensation" (Art. 12). It goes explicitly into the question of secondary rights as encumbrances which the owners may have to accept, e.g. road or drain passage (Art 49 and 50).

The Land Decree (No. 99) as the central point of land legislation cements unequivocally for post-Socialist Laos one more time "...that the State owns the land on behalf of Lao nationals who are granted rights of land use" (Art.1). It also codifies land use rights for the 85 percent of the population which, as farmers and forest users, live directly off the land. These long-lasting negotiable utilization rights are very similar to the private ownership of land, for they expressly allow the sale and mortgaging. The Decree allows Lao citizens to acquire land through inheritance, assignment, transfer, lease, sale or through the clearing of land (Art.3) and ensures the protection of ownership rights against encroachers. Individuals lawfully possessing and using land gain the right to receive a land title (Art.6). What can be directly deduced from this is the support of the legislator for the setting up of a national Registry Office and the allocation of negotiable land titles. [FN 7]

With the Land Decree, the far-reaching rights of the State as a landowner are set in regulating land allocation, land use and the issuance or titling and the rights of the state to tax different categories of land use (Art. 2). The possibility of land possession within the framework of the "forest land assignment policy programmes" is explicitly mentioned which was later elaborated in Decree 169. The Land Decree does not only provide the framework for property rights regimes, it also underlines the possibilities of improving resource mobilization from the allocation and transfer of land through the introduction of land taxes, new zoning procedures and programmes for registration and titling. It sets out broad regulations for land use planning and land management. Thus it can be explained why guidelines for the coordination between line ministries and for implementation were fixed in the concluding articles.

Thus the Land Decree creates preconditions to overcome the so far strongly fragmented land markets in that urban investors are also able to acquire attested land rights in rural areas. Customary rights only grant this, as in other Asian and African countries, to non-members of owner groups and to "strangers" to a very restricted degree (Kirk/Adokpo 1994). The advantage of this nation-wide standardization of access rights to land are faced, of course, with the complex problems of the stripping of customary land rights, for the defining of resource legislation as statutory law is also connected with the danger of the undermining and long-term suppression of the traditional rights of the rural population (see II 5).

For its advocates, the Decree not only strengthens the rights of urban investors. It likewise strengthens the legal position and negotiating power of the rural population: the clear regulations for possession which are comprehensible to all parties have been created by this Decree. These regulations comprise strong incentives of legal possession which go towards stabilizing resource management (Chantaviphone 199_). In addition it allows the continuation of traditional property regimes, e.g. rice growing in the river valleys where individual private rights to rice fields exist alongside communal ownership of pasture land (Groppo et al. 1995).

Even if the Decree is criticized by liberal economists because of the established position of state ownership of land, it is undisputed that it sets out the most important fundamentals for secure and - theoretically - enforceable rights and establishes the rights to inheritance, sale and lease provided that land taxes are paid (Gaston 1995a). [FN 8] As a generally valid law, it does not only specify the principles of participation of Lao citizens in the land market, but also devotes particular attention to the temporary rights of foreign residents, foreign organizations and expatriate individuals. [FN 9]

Legislation and Restitution Claims

The strict differentiation between Lao and foreign investors may likewise appear to be over-regulation and a relic of the isolationist policy of the socialist era; this differentiation reflects above all the uncertainties about economic and social objectives and throws light on unresolved internal conflicts of the Government:

1. The State leaders fear the effects of free, uncontrolled capital, the effect of land and labor markets on socio-economic differentiation, the growing inequality of the distribution of wealth, as well as the effect of economic domination by neighboring countries, in particular Thailand. Extensive land purchases by foreign entrepreneurs and land speculation in (peri-) urban areas are already beginning to show themselves and are forming politically explosive material.

2. The core problem of restitution of land ownership still remains for those who left their country for political reasons after 1975. With the Land Decree, the Government has set down a restrictive line with regard to such claims (Art. 8 and 9): assignment, the transfer and transaction of rights of possession and use of land after fleeing the country are not recognized (Art.5). Individuals loose their rights of possession and use of land "...for a period of 10 years for having fled abroad, fled their place of origin during the war, except for certain cases which will be decided by the Government."

So far, the Laotian State has - in contrast to neighboring Cambodia - strictly avoided the stripping of ownership rights, and has kept open, at least partially, the back door to restitution claims through the Land Decree: "However, in the case of individuals having fled to participate in the struggle for national liberation, the state will appropriately reconsider their cases if applications are lodged before January 1996" (Art.8). In reality, the Land Decree supersedes an older Decree Concerning Land of Persons Who Fled Lao (No. 129 from 1989) which had clearly dismissed every restitution claim. (According to unofficial information, this decree has already been partly suspended.)

Thus the Land Decree remains, perhaps consciously, ambiguous in its message. In view of the wide-reaching financial, economic and social implications of the recognition of restitution claims, it is not surprising that there was no information about the treatment of these cases at the end of 1995. Rather, reference was made to the awaited enactment of a Decree with regard to pending restitution issues in 1996.

Legislation on Land Taxing

The Decree on Land Tax (No. 50 from 1993) was issued in order to reinforce the implementation of the Land Decree. It not only regulates calculation and levying of the land tax, but also defines above all the various land categories such as construction land, agricultural land and other zones (Art.4). Currently it is also being used as a very coarse instrument for land valuation which is performed using the simplest of categories. Land valuation is primarily supposed to serve the establishment of a land tax calculation base. This means that the Land Tax Decree has a double relevance for land legislation: the land categories, which play a central role in the implementation of the land use policy and land management at the local level, are not taken from the Land Decree, but rather from an extensive additional Decree (II 6). Another aspect is that there are only indications in this Decree about land valuation. The basic precondition is for the use of land as collateral and for mortgages. But land valuation will also be necessary in a case of compensation payments where dispossession takes place in the public interest.

Taxing land and yields from agricultural production as an incentive or a disincentive has a long tradition in Laos. In the socialist phase, there was a strictly progressive tax on marketable surpluses from private cultivation. [FN 11] The progression was lightened in 1980. On the other hand, there were tax incentives to join cooperatives. The result of this was escape strategies developed by the farmers in that they carried on shifting cultivation in the forests so that taxing in this case created an unwanted system of incentives towards destroying resources. Now the Land Tax is set out as a flat tax with only low rates of taxation based on the yields to be paid in cash and no longer in kind. High-yielding land is taxed at a lower rate than low-yielding land, i.e. the effect is regressive. The last reduction in rates of taxation took place in 1993.

The question remains as to why the Land Tax in Laos has such an emphasized role. In 1992/93 it only contributed 2 percent to tax income although agriculture and forestry contribute about 60 percent to the GDP (World Bank 1995a). Since a simple system of land registration is being set up in rural areas for establishing a basis for tax calculation (see III), the presumption remains that there are other reasons alongside fiscal considerations. Through the land tax, a nation-wide land survey is being urged along by the Registry Office. The basis for village land use planning etc. makes it possible to use land as collateral.

Legislation on Land Management

The Decree on the Management and Use of Forests and Forest Land (No. 169 from 1994) plays the key role in future resource legislation in Laos. For the first time it allows the participation of the local population in land allocation. In addition, it offers a broad spectrum of contractual arrangements for resource utilization and for avoiding conflicts between stakeholders in the case of clearly defined property rights. In this respect, it reflects to a high degree the concepts of international donors about desirable land tenure regimes and land use patterns.

The national significance of forests is recognized in this Decree, and agroforestry utilization is also put on a legal footing from which about 55 percent of the population lives directly. The Decree ought to overcome the decade-old state of lawlessness conditioned by State ownership without active resource management and enforcement, since this in particular has led to open access and an enormously high rate of deforestation and commercial logging. The pressure from international environmental organizations, which point out the forest destruction in neighboring Asian countries (Thailand, Malaysia) and demand the preservation of biodiversity, has also decisively shaped the form of the Decree (Colchester 1992) (see VI).

Three aspects are relevant for the land legislation:

1. It offers an extensive definition of forest and forest land, which shows how narrowly agriculture and forestry are interwoven with regard to land tenure and land use.
2. It basically recognizes the complex customary land tenure regulations for agricultural land, pasture and forests (see II 5).
3. Together with the Land Decree it will form a pillar for the new Land Law, the passing of which was planned for the working period of the National Assembly in February, 1996. [FN 12]

Decree 169 provides village communities with written, long-term rights of access and utilization through which communal rights are also integrated into the statutory law (Chantaviphone 199_). The communities are empowered to protect land against uncontrolled access in collaboration with one State. [FN 13] This is surely the central prerequisite for the maintenance of communal property, but it is taken for granted that enforcement by the (Forest-)Police, and local jurisdiction is guaranteed. At the same time, the Decree also comprises the obligation of the villages in the question of resource protection through reafforestation and the prevention of bushfires.

In summing up, a weak point of the land and forest legislation in Laos is without doubt to be found currently in the unclear delimitation of various land categories and thus in the scope of the Decree: in view of the wealth of forests and the economic significance of agroforestry systems, one can scarcely differentiate between "agricultural" and "forest land". According to Decree 169, "forest land is all areas under the management of the Ministry of Agriculture and Forestry whether covered with forests or not, but are not used for or defined as permanent agricultural land." But permanent agricultural land has until now not been legally defined: there are references to it in the Land Tax Decree where not only irrigation rice land but also upland rice fields, which come under forest land, are included into the category "agricultural land". Nor does a Temporary Provision on the Management and Use of Agricultural Land from 1990 make the situation clear regarding the intensively used irrigation areas in the river valleys. [FN 14]

It remains to be emphasized that the existing land related legislative framework is comparatively consistent in terms of property rights and the use of forests and forest land; it is quite vague, ad hoc and not comprehensive in terms of permanent agricultural land. This in part is an expression of the various capabilities and the implementation capacity of the Department of Forestry and the other Departments which are responsible for agriculture in a narrower sense (II 4).

The Decree on the Allocation of Land and Forest Land for Tree Plantation and Forest Protection (No. 186 form 1994) also gives priority to questions of land use and defines the rights of Lao citizens, forests and forest products to be used for daily private consumption, so that - in a preliminary way at least - customary rights remain acknowledged. Furthermore it guarantees a broad spectrum of property rights and utilization forms for forest plantations. Temporary and permanent transfers of plantation land through inheritance or mortgaging are secured through civil law. Wood from reafforestation belongs in principle to those private citizens, village collectives or legal entities who have established the plantation or who hold the rights to the land. After a period of three years in which working of the land in accordance with the regulations has to be proved [FN 15] , the rights can be registered. In equal status to private enterprises, the State secures a long-lasting transfer of land to "villages, institutions and communes" (Art. 2) for its occupation and protection. Once again, this Decree also underlines the key role of the State in the allocation of this land, in particular in cooperation with foreign investors in the form of joint ventures or through the permission and control of contractual regulations between the village population and foreign investors (II 4). [FN 16]

Weaknesses in Decree 186 can be seen in the treatment of sanctions in the case of the mishandling of rights which have been dispensed by the State. Here the Decree remains vague, and refers to Decree 169. Moreover, there are no regulations either for the registration of legal titles for plantations, or for the transfer of these rights. So far, these are neither covered by the planned Land Titling System (III), nor are they taken into consideration in the simple registration of land through the Land Decree.

All in all it should be positively emphasized that the Land Decree as well as the Decrees 169 and 186 combine successfully to form a general legislative framework of Decrees which specify resource-specific ownership, utilization and transfer rights. With that, the legal framework for regulating access to and use of agricultural land and forests has been extensively set up - in contrast to the treatment of questions of property rights where water is concerned (see below). The implementation of these laws, however, still needs time, and has to be enforced by a local Administration which is heavily overworked (II 4).

So that there is a consistent and practicable land legislation in order to be able to make legal security, long-term investments and clear contracts possible, what is needed - and is still lacking - is a standardized system of land registration, as well as a Mortgage Law in order to be able to secure long-term credit through landed property, and to be able to open up additional strata of the population possibilities for acquiring land. In the mid and long term this would also have a positive effect on the distribution of wealth in the country. The way encumbrances in general and mortgage debts in particular can be identified and set down in the Registry Office, is closely tied to the organization of land titling. Of basic significance here is the point of intersection between capital and land markets, the successful interaction of which can only be made possible through land registration, and securities based on collateral. Although land is already used informally as collateral, the position of creditors (banks) and debtors (land owners) in front of the courts and in the eyes of the State Administration is unclear and is marked by great uncertainty on the part of all those concerned.

Water Legislation

The significance of irrigated farming shows how closely land and water legislation are bound up together. Thus far, access to and use of both surface and ground water resources, has not been legally regulated. Actually, water is not priced and is virtually free (Claridge 1995, World Bank 1995b), and legal incentives for the economical use of water and for maintaining its quality do not exist at all. Thus far the State has expansively used its property rights to water resources [FN 17] particularly in the former large irrigation areas and also for hydropower.

The Laotian State has recognized this legal vacuum: there exists a draft of a Water Law from 1994. Its objective is the regulation and protection of water resources. As owner of water resources, the State apportions utilization rights whereby a differentiation must be made between three systems: basic rights of use (domestic, family, community needs and cultural purposes), medium rights of use (small weirs or dams to be used for hydropower generation or irrigation, livestock and fisheries) and large-scale rights of use (large reservoirs for hydropower and irrigation). The law also deals with secondary rights, i.e. encumbrances which land owners have to put up with. The environmental consequences of water usage are also dealt with in detail (harmful effects of water, erosion control and protection, etc.). The links with land utilization are at least partially taken into consideration here.

Criticism of the draft refers on the one hand to inconsistencies and a lack of coordination with the other resource legislation, and as well to the lack of regulations needed for rights to wetlands which make an important contribution to food security and to the maintenance of biodiversity (Nanni 1992, 199_). Compensation remains unregulated in the case of users who are dispossessed of their water rights in the interest of the State. It is also unclear in what form water rights should be registered: a central national water register is indeed favored, but at the same time, such a decision shows once again the tendency of the State to over-regulate. All the same, the interdependence between farm land, forests and water in Laos reflects administratively that those responsible for water rights and water utilization are settled in the Department of Forestry (Claridge 1995).

Environmental Legislation

Measured against neighboring countries, Laos is still able to show high biodiversity. In order to protect it, 18 regions are identified in the Decree on the Establishment of National Biodiversity Conservation Areas (No. 194 from 1994). These special conservation areas cover about 12 percent of the area of Laos (FOMACOP 1995). [FN 18] The State as owner has enacted extensive utilization bans in these protected areas, including the exploitation of mineral resources and hydropower. Turning land into farm land is strictly forbidden. Together with Decree 169, this decree regulates the use of buffer zones. The local population receives extensive utilization rights whereby, interestingly, these buffer zones have so far not been demarcated.

The most recent land and forest legislation have thus already taken up environmental issues in a far-reaching way, and have demonstrated ways for preserving the natural basis for production: local, participatory resource management; market-based contract solution between stakeholders and mechanisms for economic compensation exist. "The protection of the Environment is a priority of the Government, but as yet there is no comprehensive and consistent legal framework" (Schneider/El-Erian 1994:108, fn. 5). It remains unclear how far this legislation is covered by the Environmental Law planned for 1996, and above all what the connection will be between this law and others. A reminder was made in the Environmental Action Plan (EAP) in 1993 about the completion of the regulatory framework for environmental assessment (EAP 1993). In this plan, a cohesive legal framework governing procedures used in environmental planning and management is certainly called for, but clear plans and which elements a framework ought to comprise are not stated. [FN 19] If the Environmental Law forms a superordinate general outline, which basic new aspects should it deal with, or does it restrict itself to solutions for coordination requirements between State offices and the private sector? In how far does it also present itself as a legal instrument for international cooperation for the protection of water resources and forests, for example through the Mekong Secretariat?

Conclusions

The enormous achievements with the build-up of a legal and regulatory framework for agricultural and forest lands since 1989, are indisputable. However, basic criticisms and warning remarks as a frame of reference must be taken seriously:

• Lao politicians and officials as well as national and international environmental and human rights groups complain - with contrary intentions - about the speed, the often ill-considered ways of proceeding, and the strong influence of the donor community involved in the building-up of the new legal framework.
• Ordo-liberal economists criticize the influence of the State which is still to big. They are petitioning for a legal framework which uncompromisingly sets up unlimited private ownership rights and leave the formation of land tenure regimes within deregulated land markets to solutions for negotiations (Coase-solutions).
• Legal experts complain about the imprecise language of the legislation which is partly determined by translation problems, but also through the indiscriminate borrowing of legal terms from foreign cultures (private ownership, mortgage, collateral etc.). In Laos of all places (as well as in Cambodia), the character of the legislation is influenced by international consultants and State officials (the Land Titling Program is based on the Australian Torrens System; the Order on Customary Rights is influenced by the experience of consultants in Africa; after 1989, Soviet/Russian consultants still had an influence on the first of the new decrees). Thanks to this, the legislation is becoming heterogeneous, possibly even incompatible, and the Ministry of Justice does not even have the authority in its capacity as coordinator to remove these contradictions.
• The constant attempt to overload laws and decrees with a flood of regulatory details is particularly problematic. It would be more sensible to work these details into implementation and enforcement ordinances which are still outstanding. Administrators miss these regulations and complain about the lack of reality in a piece of legislation which corresponds to centralist thinking and scarcely has the requirements for application and enforcement at the local level in view.
• Project managers fear that implementing and coordinating the statutory law, which still has to be done, will be too much for local authorities. Any amount of over-regulation will make their daily tasks more difficult; projects especially are often the first to experience the impracticability of the legislation and the lack of ability to be able to put it into action (Jones 1995).

In summing up, one must keep in mind that further systematizing the legislation is still necessary: in the actual land related legislation, it has till not been properly determined what is agricultural land and what is forest; what is also still missing is the construction of a system of land registration which is connected with decisions about how far an extensive land registry ("Grundbuch") solution which includes all encumbrances ought to be striven for. Although the government has shown up to now a strong commitment to draft and adopt a new Land Law experts criticize that it still remains unclear and is not well defined on crucial issues.

It must be made clear whether or not plantation land as well as water rights and encumbrances connected with water should be included in this more complex system. There remains a contradiction in all measures for improvement which cannot be resolved: the process of legislation is time consuming, above all in its implementation. In the years given for the process of transformation, the tasks at hand can scarcely be achieved; on the other hand, the expectations of the stakeholders are high. A workable legal framework justifies the trust advanced by the Lao citizens and foreign investors towards the State and in their estimation of the chances of improvement in the future. A crucial problem is the enforcement of the new rights and obligations at all levels and thus also the capabilities of an independent judiciary.