Mineral anarchy reigns in "Far-East" Cambodia mineral resources exploration

Monday, October 9, 2006
Laws Unclear as Cambodia Opens to Prospecting

By Erika Kinetz and Van Roeun
The Cambodia Daily

Mining is not explicitly banned under the 2001 law on mineral resource management and exploitation; the 2002 sub-decree that established the Mondulkiri protected forest; or the 2002 Forestry Law.

Peace, stability, and improving infrastructure mean that once-inaccessible gold and oil in Cambodia are now up for grabs.

The Cambodian government has been encouraging foreign companies to prospect by granting growing numbers of Australian, Chinese, US and European firms permission to explore for mineral resources across the country.

But as recent events inside the Mondolkiri protected forest show, the laws governing this development are often unclear and its management can be muddled. And that, observers say, is not only bad for the environment, it’s bad for business.

The story in Mondolkiri province began Aug 26, when Gold Metal Group Co Ltd signed a memorandum of understanding with the Ministry of Industry, Mines, and Energy allowing it to search for gold in a 204-sq-km region of Pech Chreada district, just inside the boundary of the Mondolkiri protected forest.

Three days later, Hy Sophal, provincial director for the Forestry Administration, issued a directive ordering more than 100 people living and mining in that same area to cease their unlicensed, and thus illegal, mining activity and leave by Sept 30.

So far, about 80 people have voluntarily left the forest to make way for the concession, according to local officials and NGO workers. Whether the authorities will have to forcibly remove the people still in the forest remains unclear.

Officials from Gold Metal Group visited the Pech Chreada site about two months ago, but have yet to begin work, said Kong Pisith, director of the provincial Department of Industry. The firm has yet to apply for an exploration license, said Ministry of Industry officials in Phnom Penh.

Employees of Gold Metal Group, which has an office on Street 200 in Phnom Penh, referred questions to the director of the company, a French national who, they said, was abroad and could not be reached for comment. Pin Sin Phuong, a secretary to the director, declined comment on the investment

Whether Cambodian laws allow mining in a protected forest was a question that people interviewed—from government workers to lawyers and environmental activists—could not answer, except for Ministry of Industry officials.

Mining is not explicitly banned under the 2001 law on mineral resource management and exploitation; the 2002 sub-decree that established the Mondolkiri protected forest; or the 2002 Forestry Law, they said.

However before permission for full-scale mining is granted, an environmental impact assessment must be done and the Ministry of Agriculture and the Ministry of Environment must be consulted. Failure to do so is punishable by fines of $1,250 to $2,500 and/or six months to two years in prison under the 2001 law on mineral resource management.

Conservation groups say the way mining concessions are granted leaves much to be desired. Environmental impact statements are often not easy for the public to access, they said. And in practice, gold mining, whether undertaken by individual prospectors on a gritty circuit of jungle mines or by corporate concession, has bred both environmental and social malaise. Rivers change color; fish die; trees vanish; people get killed in mining accidents or sick from cyanide and mercury poisoning; and pits are left in the forest long after the gold is gone.

Coordination should take place from the very beginning to ensure that, as economic growth surges, the nation's forests—and especially its protected forests— remain the biodiversity havens the law intended them to be, wildlife protection groups said.

"It's important to coordinate right from the beginning," said Seng Teak, the country director of the World Wildlife Fund.

That did not happened in Mondolkiri where a host of people, including provincial Governor Lay Sokha and his Chief of Cabinet Svay Sam Eang, said they had not been informed of the deal with Gold Metal Group.

Ministry of Industry officials said Oct 3 that a letter was now being drafted to inform Lay Sokha and the Ministry of Agriculture, which oversees the protected forest of the Aug 26 agreement.

One Ministry of Industry official said on condition of anonymity that his ministry is not required to inform other agencies before permitting such early-stage exploration. "After we've done it, we inform them," the official said.

Combatting illegal mining activity remains a problem.

"The problem we have is mineral anarchy," said the Ministry of Industry official in Phnom Penh.

Anarchy, the official said, ranges from gold diggers in Mondolkiri, to the men who collect limestone in Kampot province, and the people who dredge sand in small boats in front of the Royal Palace.

All that unlicensed activity not only discourages foreign investment, it also cuts into the stream of royalties that might otherwise flow into state coffers. "To us, it is a wasted resource," said the official. "Expensive material should be used for a higher purpose."

But as Cambodia struggles to end this anarchy, the stragglers in the Mondolkiri protected forest and thousands of others like them must confront a precarious future.

"They need to find another job," said Than Sarath, a spokesman for the Forestry Administration.

And that ultimately, is the real challenge.