ABC Radio Australia
Earlier this month, the Cambodian government announced it has outlawed so-called "facilitation fees" - paying small sums of cash to civil servants for services such as issuing forms or filing tax returns.
It might not sound like much, but it has sent a bolt through Western businesses in Cambodia.
Presenter: Robert Carmichael
Speaker: Stephen Higgins, CEO ANZ Royal Bank; Matthew Rendall, partner at law firm Sciaroni & Associates.
CARMICHAEL: For 15 years Cambodia's donors pushed Phnom Penh to do something about corruption, and finally - last year -the government passed an anti-corruption law.
It followed on the heels of another law - the new Criminal Code. The laws contain a list of corruption offences that were meant to come into force later this year. Last week the government announced it had moved that date forward to August 1st.
You might think - so what? That doesn't sound like much. The government didn't think so either, but buried deep inside the new Criminal Code - Article 605 to be precise - was a line that has got Western businesses spooked.
It all revolves around facilitation fees, which are small sums of money you pay civil servants to get things done here - two dollars to buy a copy of a form, for example, another five or ten dollars to file it.
Cambodian civil servants earn paltry salaries - typically between 50 and 80 dollars a month - and they survive by taking cash from the people who need their services, part of the petty corruption that cloaks the country.
Paying those fees is now illegal under Cambodian law. Anyone offering such a payment can be jailed for up to 10 years; anyone accepting one can get 15 years.
Stephen Higgins is the CEO of ANZ Royal Bank, a part-owned subsidiary of ANZ. He explains the concerns.
HIGGINS:
It's a major issue for business because theoretically if any business pays them, they are liable to face criminal charges and the person paying them is liable to 5 years jail or more. And for a business such as ours, if we were to pay them theoretically I would be liable to go to jail here in Cambodia, in Australia, in the UK or in the US. And I certainly don't wish that upon myself.
CARMICHAEL: And that's the bigger point: Nobody expects Phnom Penh will pursue investors for paying such small sums. After all, the government doesn't pay its civil servants enough, and this is how they have topped up their salaries for years.
The problem is that since such fees are now illegal here, some Western companies could face prosecution back home.
Matthew Rendall is a partner at law firm Sciaroni & Associates.
RENDALL:
Whereas the assumption is you wouldn't be prosecuted locally for paying 20 dollars to do your monthly tax filing, for example, the fear now is that you could be prosecuted in your home countries under the Foreign Corrupt Practices Act, and the penalties are severe, the repercussions are severe.
CARMICHAEL: The toll has started. Last month the courier FedEx said it would not deliver any items worth more than $300 dollars until the government put scheduled fees in place.
Western firms simply cannot afford the risk of paying facilitation fees. Even if they convinced a judge back home that they had done nothing untoward, says Rendall, they would still suffer reputational damage.
RENDALL: So the fear for investors in Cambodia at the moment is the impact it has on them in their home countries.
CARMICHAEL: So, back to Article 605: That article makes it a criminal offence to provide any benefit to a public official - but the Criminal Code doesn't define the term "benefit".
However the anti-corruption law does: It says a benefit is giving someone money to do their job, which is why facilitation fees are now illegal.
And because paying civil servants to do what they have always done is now an offence under Cambodian law, that makes it an offence under US and Australian law too, something the government didn't consider.
RENDALL:
What they didn't see, and it turns out it was this one-line article from some other law that was written another time - coming into play and having this impact. So I suppose now that they are probably aware of this they will be now meeting among themselves of how to resolve it.
CARMICHAEL: It is not yet clear what the government will do. Two spokesmen passed the parcel on the issue, another senior official refused an interview, and two others at the finance ministry stopped answering their phones. It seems the government is still working out its approach.
But whatever action it takes, this won't be a quick fix.
Business associations say the government should publish a schedule detailing what each service costs, and then ensure receipts are issued. That will make the fees official, which removes the risk of prosecution back home.
It sounds simple enough, but setting that up will likely require agreement between ministries and the treasury on how to divide the takings. And that could take time.
14 comments:
There's a land broker going by the name of Thon in Sihanoukville. To all expatriates , Be very careful in dealing with him. As a matter of fact it would be better NOT to deal with him. He says that all expatriates are like " porc meat".
I had the misfortune of trusting him and paying "commission" fees for a service he never completed. I could give you more information but that is going directly to the competent authorities.
Where is the problem? No one will follow the law as always. And what means does the government have to enforce the law when those who wrote the law are themselves taking bribes.
Hi Everyone,
One of KI-Media member who has his name in Facebook as Khmer Sovannaphumi but his real name is Pang Sokhoeun, former political asylum and now living in Sweden. He always copies news from here to post in his facebook profile to promote himself, but right now, he tries to remove and blocked anyone who dares to reveal his con activity particular he tries to hide what he has cheated his wife (Sreypov Chea) by having a girlfriend (Sokunthear Sam) behind his wife back. Now, his girlfriend had run way from him after she knew his cheating.
A con man Pang Sokhoeun as well as KI-Media like to insult to the government officers who have affairs, but himself does even worse than other people. What a shame!
When one person had posted in KI-Media and accused that a con man Pang Sokhoeun is a brother of Som Ek (former Chief of Tiger's head sign guerilla, who was arrested and put in prison by Cambodian government) during that time, a cheater Pang Sokhoeun came to deny in his blogs immediately and had pointed the blame to Mr. Sourn Serey Rotha, but this time, he has bury his head in the sand because he cannot deny the truth that he has cheated his wife. Right now, all he can do is removed and blocked anyone who dared to reveal his cheating.
Can KI-MEDIA clarify whether a Khmer born overseas would has to pay for a visa to visit Cambodia? I'm aware that Cambodian visa is permanent for Khmers overseas once you have been issued.
ស្តាយមិនគួមានមនុស្សជម្ងឺខួរក្បាលហើយមិនទៅព្រែកត្នោត ! បែជាមក comment តែអារឿងត្រឹមចង្កេះចុះក្រោម អត់មើលអត្ថបទគេសរសេរពីអី ! អូភ្លេចអាចំគួតមួយហ្នឹងត្រូវបានមីស្រីអារ៉ាត់អារាយបំរ៉ុងយកទៅស្រុកខ្មែរឆាប់ៗហើយ ! ព្រោះវាត្រូវទៅដេកមើលខួរក្បាលឆ្គួតៗ របស់វា ហិ ហិ អាប្រុសចេះត្រឹមធ្វើរឿងត្រឹមចង្កេះចុះក្រោម !!!! ពិជាពូជន៏អាអត់កំណើតមែន !!
Experiencing insomnia. As a poor lower middle level of civil offical. Before the law, I some days on the job hope to get pay for morning tea/coffee commissions but now the things are going to be extra careful or at least make your eyes upside down. your monthly salary can't sustain the cost of living. The top level can get away with whatever they do. This is unfair treatment.
I am aware of my practice can be equvalent to the meaning of corruption. The corruption is an addiction once a person starts, it is very extreme hard to stop even the person have more than enough money. It is a painful and unpleasant thought in my mine when I accept the money but...What can I do. It is a greedy and self- empoweredego from inside out. But Anyone out there can tell me of what other way to support my family with three childran in school and a wife with chronic heart problem. My family is the core of my pride and hope. A lot of gloomy thoughts and looking to seethe ligth at the end of the tunnel.
To 8:42 PM,
The word "poor" has different meaning for different people.
Here are some meaning for others:
For people in the city (Gov. official):
- Having place to live, no village.
- Own one car, no Mercedess.
- Having only one wife,no mistress.
- Having enough food to eat, but can't affort fancy rest. every day.
- No servant at home.
For some other people:
- Not enough food to eat and don't know where the next meal will come from.
- No place to live and no relative to depend on.
- No job or mean to make a living.
It is depend on your expectation in life !!!!
If you are poor then act like one. Don't try to violate the laws to be rich, it is not worth it !!
In 1979 Cambodia:
- you are rich if you have enough food to eat and place to live.
- None of your family are sick and you have a mean to make a living.
In 1980 in the US (new Immigrant):
- You are happy if you have place to live ,having a job and own an old car so you can drive to work.
2011 in the US:
You are happy if you have a place to live and a full time job or own a business.
2011 in Cambodia:
You are happy if you have:
- Servant at home to help with domestic chor.
- Chauffer to drive you around with body guard.
- Own multiple villa.
- More than one wife.
- Having connection with politician.
- Make a lot of money without working on a real job.
- Stay late at night and drink with your friend.
10:05pm! GOOD SOUND LIKE A DREAM OF CORRUPTERS! IN CAMBODIA.
NOW you all live in Cambodia, Khmer, Cambodian, or foreigner will live under good will of ah Kwack!!
Ah Kwack is your god and your god is stupid and blind!
Good luck!
sorry to you corrupted investors out there, but cambodia must clean our own home now. no more bribery is allowed in doing your business in cambodia, ok! i told you, our law will catch up with you sooner or later, it's a matter of time. we have to reform, too, you know! more power to cambodia! god bless cambodia.
from now on, everybody has to do it the right way, the lawful way, that is, ok!
a hint, if you want to bribe and be corrupted in your business practice, go do it in vietnam, etc, ok, you can bribe better over there, not in cambodia anymore, ok!
we have to reform our law!
yes, for bribers out there, even good time can come to an end as well, ok! get used to it! cambodia is reformed, no more ease bribe, ok!
Is that mean if we get service at the restaurant
? we go to jail if we tip the waiters or waitresses
Poor Cambodia! none of big investors from the West can come and invest in Cambodia because of the corruption. To get a business license to operate a business in Cambodia, they will need to pay a big sum of fee up to USD10,000 to the Council for the Development of Cambodia or up to USD1,000 to the Ministry of Commerce, another thousand to the Ministy of Labour etc. These fees have no receipt. Without this payment, the investor will never ever get a license to operate a business in Cambodia. Hence, to invest in Cambodia, they have to commit criminal crime in Cambodia by paying a bribe.
Poor Cambodian people, while number of students graduate from the university keep increasing, the number of jobs created is very limitted.
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