Government too slow to respond: SRP

SRP MPs Yim Sovann, Son Chhay and Mu Sochua (Photo: Ly Meng Huor, RFI)

Monday, 23 August 2010
Meas Sokchea
The Phnom Penh Post

THE opposition Sam Rainsy Party says the government has systematically failed to respond to its letters seeking information from Prime Minister Hun Sen and the National Assembly, and suggests that senior officials have “looked down” on Assembly President Heng Samrin.

In a report released on Friday, the party stated that 16 letters had been sent to Hun Sen this year, only four of which drew responses. In 2009, the SRP says it sent 24 letters, of which 13 elicited a response.

The report says 132 similar letters were sent to various arms of the government in 2009, but that only 39 of those letters drew official responses. In 2010, the report says, 47 letters have been sent to the government, prompting just 15 responses so far.

SRP lawmaker Son Chhay said the lack of response was evidence that government officials were “looking down” on National Assembly President Heng Samrin, through whom all the letters were addressed.

“With no responses like this, they have looked down on the Assembly president,” he said. Son Chhay said that between 1993 and 2010, only six government officials had appeared in parliament to clarify irregularities highlighted by opposition parties.

“We do not want to keep provoking, but we want people to know how much money government officials have to build their villas,” he said.

But Phay Siphan, spokesman for the Council of Ministers, yesterday dismissed the report, saying that all SRP letters had been responded to, and that no minister was so “insolent” as to ignore Heng Samrin.

“When opposition party letters ask questions through Assembly President Heng Samrin, who dares to be obstinate with Samdech Heng Samrin,” he said. “There are no ministers so insolent not to answer questions raised by the Assembly.”

He said that all questions asked to the Prime Minister had been answered, and that the SRP should write new letters if it did not like the responses it received.

“Prime Minister Hun Sen does not dare gesticulate [or oppose] Heng Samrin,” he said.

China not necessarily a good teacher

China and Cambodia grow closer

March 31st, 2010
Source: Deutsche Welle

In the past few years, China has become the largest foreign investor in Cambodia, with more than six billion US dollars (4.5 billion euros) approved since 2006. Beijing is also a generous donor, having granted around two billion dollars in aid over the same period.

China is the kind of friend Cambodia’s Prime Minister Hun Sen openly appreciates, since its money comes with no human rights or governance strings attached – unlike that of other donor countries, which gave hundreds of millions of dollars to the Cambodian government last year.

But as China and much-smaller Cambodia draw closer – at least financially – some are questioning what Phnom Penh might be getting into.

Good governance, transparency and environment at risk

Chea Vannath, an independent political analyst in Phnom Penh, pointed out good governance, transparency and the environment as being especially at risk.

When it comes to transparency and corruption, Cambodia sits near the bottom of Transparency International’s corruption index of 180 countries. China is 79th, around halfway up the ladder.

“Do we need China with that score to be our grade teacher for good governance? Cambodia needs good democratic governance and to have sustainable economic progress,” she said.

However, Cheang Vanarith, who heads a local research body called the Cambodian Institute for Cooperation and Peace, thought that China’s influence was broadly positive.

“We need China in terms of socio-economic development in Cambodia. Chinese financial assistance – grants, loans – to Cambodia is playing a significant role in poverty reduction and building infrastructure.”

China providing cash for roads and dams

Cambodia emerged around 10 years ago from decades of civil strife with its infrastructure shattered. Donor money has helped to rebuild some of that. China is providing plenty of cash for roads and investment projects such as hydropower dams.

Its assistance is welcome, but the small-print of those infrastructure deals has come in for scrutiny – from the opposition, from civil society, even from the International Monetary Fund.

The opposition party says the deals for the dams – which are funded by China, and which will be built and operated by Chinese firms on a 30-year basis – are not transparent, and riddled with corruption.

China not necessarily a good teacher

For its part, the IMF is concerned that Phnom Penh’s blanket guarantee to buy all the power produced by the dams could prove unaffordable, and might even jeopardize the country’s fight against poverty.

Chea Vannath said that apart from its infrastructure needs, Cambodia also needed to continue rebuilding its institutions of democratic governance. She worried that China was not a good teacher when it came to human rights and governance.

“With the money come a lack of transparency and a lack of democratic governance – not just governance, but democratic governance – the participation of people in state affairs. That concerns us. Yes, it concerns me.”

It concerns others too. But those concerns were not voiced publicly by the Chinese or Cambodian officials, so one could perhaps assume they do not share them. Possibly their interests lie elsewhere.

World Bank: Demand-Side Governance Pushes Reform in Cambodia

World Bank

• First large-scale program dedicated to building civil society capacity to tackle governance challenges
• Social accountability school will provide training by leading practitioners
• Project focusing on demand-side of governance will open door for more citizent involvement

Phnom Penh, Cambodia, February 12, 2008—Cambodia comes close to the bottom for most indicators of governance. It is also a country where government and civil society have an uneasy relationship.

So, on the face of it, this is an unlikely venue for the World Bank’s first large-scale program dedicated to building civil society capacity to tackle governance challenges. But that is precisely what has been launched with the support of a $2 million grant from the LICUS Trust Fund.

The Program to Enhance Capacity in Social Accountability (PECSA) is a 2-year initiative that will provide training, mentoring, networking and other support designed to bring to Cambodia some of the world’s most effective civil society practices to combat corruption and promote good governance.

A key plank in the strategy is to link groups in Cambodia with experienced governance reformers in Philippines and India—two countries where civil society activity in the field of social accountability is most advanced and effective.

PECSA will also provide grants to national and local nongovernmental organizations (NGOs), other grassroots organizations, policy and research centers, professional associations, trade unions, and independent media, for piloting social accountability programs so that those who have been trained or mentored can put into practice what they have learned.

An Open House with Pioneers and Reformers

PECSA was unveiled in December 2007 at a public event in Phnom Penh where more than 900 people took part. Half of these attended the day-long program of seminars and workshops —which included presentations from leading international practitioners as well as social accountability pioneers in Cambodia and senior reformers in government. H.E. Ngy Chanphal, Under Secretary of State for the Ministry of the Interior, said the launch of PECSA was a great opportunity to share each other's experiences.

Several hundred people visited the stalls surrounding the conference center showcasing about 40 existing and pioneering ventures of social accountability in the country. Country Manager Nisha Agrawal stressed that, “by building capacity of civil society to have a voice in demanding governance reforms, the Bank is launching a bold new initiative which is right on the button.”

One of the most widely respected NGO leaders in Cambodia, Yeng Virak, founder of the Community Legal Education Center, spoke enthusiastically about the event, in which he participated, and the program it launched. “I like what is happening here!” he said, “Leaders and the people who are led should understand one another and work together. I am happy to be part of this work.”

Essay Competition on Governance

Hundreds of young people also contributed to an essay competition on governance. The winning group’s essay was a rallying call to youth to take on a leadership role in helping the government become more effective and accountable. One suggestion was to launch a Student Parliament to help young people better understand political power and track the activities of their grown-up counterparts.

The next main event, scheduled for March–April 2008, will be an intensive Social Accountability School (modeled on a Summer School format) that will offer training in a range of social accountability practices, given by many of the world’s leading practitioners. Participants staying the full course and following up with practical exercises will receive a Diploma in Social Accountability, with the option to extend studies and earn a Master’s degree.

The Demand Side of Governance

The timing of PECSA is particularly important. At present the government and the Bank are designing a new project to be financed by a $20 million IDA grant to support governance reform by focusing on the demand-side.

The Demand for Good Governance Project (DFGG) will support a number of government institutions that are prepared to pave the way for more open and accountable government, opening doors for new opportunities for citizen involvement. This is the leading component of the Bank’s key objective in Cambodia—to help the government shake off the problems of corruption and lack of accountability that have severely hampered progress to date.

The project will also have a grant component to support a range of civil society initiatives for governance reform in priority sectors. The success of this project depends, in part, on how prepared and resourced civil society organizations are to take up the opportunities it presents them for engaging in governance reform. PECSA is designed to give a big boost to this and to pilot the grant-making approach that will eventually be used on a larger scale by the DFGG Project.

According to Bhuvan Bhatnagar, the task team leader, “Working on the demand-side is a critical, but often neglected, part of governance reform. So this is a valuable opportunity to expand our understanding of building demand for good governance in a challenging environment, bringing together the public and private sector. It will teach us important lessons not only for Cambodia, but also for other high risk countries.”

The PECSA program and its launch are described fully in the January newsletter of the World Bank in Cambodia.

Not enough oil troubles Cambodia's waters

Nov 20, 2007
By Andrew Symon
Asia Times (Hong Kong)

PHNOM PENH - Could Cambodia's much-touted energy potential, which the World Bank and others had earlier estimated in total at 2 billion barrels of oil and 10 trillion cubic feet of natural gas, become a bust before it ever boomed? Expectations of an energy resource bounty have now suddenly dampened as top Cambodian officials strike a more cautionary tone.

A senior Cambodian energy official last December publicly estimated that the 6,278-square-kilometer Block A that US energy giant Chevron is now drilling could contain as much as 700 million barrels of oil, or nearly twice the earlier 400-million-barrel estimate. Government officials had estimated in January that they hoped to ramp up production by as early as 2009, three to seven years earlier than the World Bank projected as possible.

Marking a notable departure from that optimism, this month Prime Minister Hun Sen told a major business conference in Phnom Penh that the "speculation is highly premature". And despite the over 600 mostly foreign business delegates in attendance at the Cambodia Investment, Trade and Infrastructure conference, Chevron declined to take part in panel discussions on Cambodia's natural resources. The company had previously said it would publicly disclose its findings and estimates in April or May.

Hun Sen's comments and Chevron's low profile have led to downward revisions in some concerned quarters of the government's earlier bonanza estimates. Ever since Chevron reported promising energy finds in Cambodian waters in December 2004, there has been widespread hope that energy exports could transform one of Southeast Asia's poorest countries into a major regional oil-and-gas producer.

According to a joint study last year by the United Nations Development Program (UNDP) and Harvard University, depending on the size and accessibility of the proven reserves, energy-export revenues could double Cambodia's current gross domestic product. Although Cambodian officials have at times freely bandied around buoyant potential energy reserve figures, Chevron itself has shied from publicly stating hard numbers.

Yet speculative hopes and rising global prices have spurred ramped up multinational exploration activities in Cambodia. Since Chevron's supposed find, other international energy concerns, led by Thailand's PTT Exploration and Production, Indonesia's Medco and China's China National Offshore Oil Corp, have taken up new exploration positions in Cambodian waters.

The news has also galvanized new interest in the potential of Cambodia's 27,000 square kilometer Overlapping Claims Area with Thailand, which lies untapped due to a long-running dispute between the two governments. The two sides are expected to resume talks next year after Thailand elects a new government in December.

All of this has occurred despite the fact that no petroleum project in Cambodia has yet to reach an advanced development stage - let alone achieve actual production. As far as the much-anticipated discoveries in offshore Block A are concerned, Chevron has said the deposits are subject to difficult geology and that further appraisal is required before it can estimate how much might be extracted.

Indeed, there are even industry rumors that Chevron may instead move to sell its operating interest in the block, as the deposits may not be as large as the company requires to replace its proven reserves. If so, it could dampen broad foreign investor sentiment in the country, which has recently experienced a boom as foreign capital pumps up property prices and brings the moribund service sector to life. It's unclear how much of the upbeat sentiment is contingent on Chevron's oil-and-gas find, but if the company were to come up dry at Block A it would undoubtedly hurt investor interest in the country.

Foreign investor perception is now crucial to Hun Sen's government, which is reaping the political benefits of an unprecedented post-war economic boom. Now some energy industry analysts are starting to wonder whether government officials disingenuously pumped up expectations about Chevron's find to spur investor interest in other less promising exploration blocks.

There was a measure of surprise among energy industry analysts when the Block A estimates were first touted. Earlier exploration in those same offshore Cambodian waters by Britain's Enterprise Oil, Premier Oil and Japan's Idemitsu in the mid-1990s found only moderate indications of oil and gas. All three companies decided that the find was not significant enough to warrant investment in further drilling and development.

Windfall downsides

Meanwhile, there are lingering questions about the governance quality of the administration of Hun Sen, which ranks towards the tail end of international corruption rankings. Watchdog groups have already expressed their concerns that an energy windfall could be squandered by poor management and official corruption.

Warnings have been made by a wide array of international development assistance agencies, including the World Bank, the UNDP, Oxfam and the International Monetary Fund, that if mismanaged the country could actually face economic and social harm from a fossil fuels boom. In a small economy, rapid and large energy exports risk high rates of inflation and a fast-appreciating currency, which in turn would threaten the international competitiveness of the country's other export-oriented manufacturing industries, including garment exports.

There are also fears of potential environmental damage, particularly as the government toys with the idea of awarding onshore petroleum exploration blocks in the Tonle Basin lake region, a crucial area of the greater Mekong eco-system on which millions of Cambodians depend for their nourishment and livelihoods. Judging by the rampant, often government-sanctioned logging industry, environmental and social concerns are often subordinated to economic gain in Cambodian extractive industries.

Government officials say they are well aware of the challenges and pitfalls of natural resource-driven development. Deputy Prime Minister Sok An told the recent gathering of investors, "We have received many questions about what we are going to do with the [oil and gas] revenues as and when they come. My answer is that we have very much to do - rebuilding and developing our economy and enhancing the quality of the lives of our people."

Testing such assertions will be the establishment of a new petroleum law, which is now being deliberated in Parliament and will likely give a firmer legislative and regulatory base for petroleum industry development. The national energy sector currently operates under fairly ad hoc regulations, first adopted in 1991. In 1998, the Cambodian National Petroleum Authority was established to act as the key government agency in managing development and operation of the industry, where upstream companies operated under a production sharing contract regime which is comparable with international standards.

Now, apparently to subdue its critics, the government says it might join the Extractive Industries Transparency Initiative (EITI), a recently established international mechanism with a secretariat in Oslo, Norway, which brings governments and companies together to promote good governance over natural resource-generated revenues.

First proposed in 2002 by British prime minister Tony Blair, the EITI features a coalition of governments, investors, companies and non-governmental organizations supported by multilateral and bilateral agencies such as the World Bank and the International Monetary Fund. Both corporate and government practices are monitored by the EITI and reforms are proposed for their consideration.

More than 20 countries in Africa, South America and Central Asia, all with large petroleum or mining industries, have joined the EITI. However, there are currently no Asian members, apart from natural gas-rich Timor Leste, formerly known as East Timor. The EITI's member companies, meanwhile, represent some of the world's largest Western energy concerns, including the BG Group, Burren Energy, Chevron, ConocoPhillips, ExxonMobil, Petrobras, Shell, Statoil, Talisman Energy, Total and Woodside.

BG Group, Chevron and ConocoPhillips all have oil-and-gas interests in Cambodia, as do many of the mining companies which have signed onto the initiative. And the government will nonetheless come under EITI principles and guidelines as part of their loan programs with the World Bank and other agencies - whether or not Cambodia's highly anticipated energy bonanza is eventually or ever realized.

Andrew Symon is a Singapore-based journalist and analyst specializing in energy and mining. He may be reached at andrew.symon@yahoo.com.sg.