SRP MPs' letter to US Senator John Kerry on concerns over Oil Revenue transparency

KINGDOM OF CAMBODIA
Nation Religion King

NATIONAL ASSEMBLY

Senator John Kerry
Chair
Foreign Relations Committee
US SENATE
218 Russell Senate Office Building
Washington, D.C. 20515

August 12, 2010

Dear Senator Kerry,

We, the Parliamentarians of the Sam Rainsy Party of the Kingdom of Cambodia, are encouraged by the passage of the extractive industries transparency amendment to the recent finance legislation in the United States. The impact in Cambodia of this transparency provision will be significant as we approach the risk-laden task of managing of our newly discovered off-shore oil supplies.

Cambodia is ripe for disastrous extraction of our oil reserves. The use of our country's natural resources has been nothing short of tragic. We had an opportunity to turn mineral, timber and sand reserves into a sustainable flow of income for national development. Instead, 99-year concessions for enormous swaths of land were provided to companies in exchange for private pay-offs to a small number of associates at the top of the ruling political party. Environmental and social impact assessments are not performed. Quite to the contrary, the military is employed in forcing local residents off of land they have inhabited for decades,' and in denying access to the sites to environmental investigators.

We expect this pattern to repeat itself in our nascent oil extraction industry, which is why we welcome the United States' new law regarding transparency.

One of the challenges in Cambodia is that the government does not disclose its financial transactions with extractive companies. It appears that monies are paid directly by foreign companies to top government officials to access the rights to our resources. When payments are published by the companies, the Cambodian citizenry can then use this information to question where it is going.

Historically, payments published by companies have not matched the revenues listed in government documents. In particular, it appears that "signature bonuses" have been exploited as bribes, causing the more scrupulous among foreign extractive companies to walk away from the deal, leaving those with lower standards to manage our resource extraction. The rights to use our nation's natural resources are negotiated and signed away from public scrutiny, and the ensuing flow of funds from the companies to the government and its ministers is not published for us to examine.

This is why the legislation passed by the United States provides us with a beacon of hope. The Cambodian government does not publish information about the revenues gained from resource extraction and avoids questions from Parliamentarians on the matter. Under the new U.S. law, companies registered with your Securities and Exchange Commission are required to disclose their payments to foreign governments. This will provide the critical information necessary for the Cambodian opposition, civil society and press to hold our government officials accountable.

By passing this legislation, you have directly contributed to the fight against corruption in Cambodia. The globe is now well aware of the correlation between oil revenues, weak states and stagnant or decreasing development standards. You have taken an important stand against the likelihood that oil revenues will further line the pockets of Cambodian government officials. We in the Sam Rainsy Party will use the information newly available to the best of our ability.

Sincerely yours,
Members of Parliament of the Sam Rainsy Party

(Signed) Sam Rainsy, Nuth Rumduol, Son Chhay, Yont Tharo, Yim Sovann, Ly Srey Vyna, Tioulong Saumura, Pot Peou, Ke Sovannroth, Thak Lany, Mu Sochua, Long Ry, Kimsour Phirith, Chiv Cata, Kuoy Bunroeun, Chea Poch, Ho Vann, Kong Bora, Mao Munyvann, Chan Cheng, Eng Chhai Eang, Khy Vandeth, Cheam Channy, Tok Vanchan, Men Sothavarin, Khim Laky