Ensuring aid transparency in the absence of political will

Wednesday, June 02, 2010
Letter to The Phnom Penh Post

Dear editor

An interesting platform has been set for the Cambodia Development Cooperation Forum by recent revelations of Total’s 8 million dollar contribution to a “social fund” as part of an oil deal with the Royal Government of Cambodia and allegations of corruption against the Australian BHP Billiton and Securency companies. The new Anti-Corruption Law is no ‘magic formula’ to end corruption in Cambodia rather, the manner of its passing as well as its content, serve only to exacerbate suspicions of an absence of the political will needed to tackle corruption.

As the NGOs list suggested govt reform article in last Wednesday’s Phnom Penh Post firmly established, the issue of transparency must be top of the donor’s agenda at this week’s meeting. However, it is not enough that the donors seek undertakings from the Royal Government of Cambodia (RGC) in relation to transparency rather they too must acknowledge their own responsibilities with regard to transparency and apply those same standards to themselves and to their practices.

The Accra Agenda for Action, which was concluded at the 2008 High Level Forum on Aid Effectiveness in Ghana, considers the effect of corruption on aid and places the burden of transparency on donors of aid through a number of duties, as follows:

“publicly disclosing regular, detailed and timely information on volume, allocation and, when available, results of development expenditure to enable more accurate budget, accounting and audit by developing countries”

With this in mind, the donors who attend this week’s meetings must remember that, once the pledges have been made and the cheques have been signed, the real work begins. It is no longer enough for donors to publicise their aid through the provision of figures. As impressive as these figures sound - $951.5 million dollars in 2008 and $689 million dollars in 2007 – they do not provide much information by which to measure progress. Accordingly, the donors must not only secure undertakings from the RGC that they will abide by stringent accounting and reporting procedures but that they, the donors, must also act to ensure the integrity of their aid packages with the publication of information. In this regard, they must publicise their respective aid agreements with the RGC as well as, and to the greatest extent possible, information concerning the priorities, prerogatives, projects and programs that those packages seek to put in place.
By applying stringent transparency procedures, donors can empower four very important watchdogs in the battle against corruption in recipient countries, as follows:

• The intended beneficiaries: The principle of aid transparency reflects the fact that an informed population decreases the vulnerability of aid to corruption. Donors must act to ensure that the Cambodian people are informed of the amount of aid that the RGC receives but also what this aid is expected to achieve;
• The media: The English language press in Cambodia in particular has proved itself to be capable of embarrassing the RGC. The recent publication on 22 February of a leaked document by the Phnom Penh Post which outlined RGC plans for the funding of military units by private companies and individuals provides a good example of the role that the independent media in Cambodia can play. By ensuring transparency and publicizing information as to the aid given to the RGC, the donor community can ensure that if the entire proceeds of aid are not accounted for the media will be in a position to ask some questions and, if aid has indeed been diverted, to name and shame the individuals in question;
• NGOs: The global economic crisis has ensured that there is less aid available internationally. One of the knock-on effects of this is that NGOs are likely to exact a greater degree of scrutiny on the effectiveness of the aid that does remain. With the provision of adequate information, NGOs will be an important ally to donors in the battle to protect their aid from corruption;
• Taxpayers: Just as an informed population in recipient countries is likely to decrease the possibility of corruption, an informed population in donor countries – whose tax payments make up the aid packages – can ensure that “dead aid” to recipient countries can have political consequences at home too.

This letter does not seek to divert attention from the obligations of the RGC in terms of transparency where aid is concerned. However, in a system where corruption has flourished and, as is likely to be the case, will continue to do so, it is time for the donor community to act to ensure that the aid they provide goes to the intended beneficiaries and not towards widening the gap between the haves and the have-nots. By empowering these important watchdogs through the provision of detailed information relating to aid donors can do a great deal to ensure the integrity of aid in the absence of a willing partner in the RGC.

Yours sincerely,

Ou Virak
Cambodian Center for Human Rights

Elite Now Gain From Mines, Oil: Watchdog

By Taing Sarada, VOA Khmer
Original report from Washington
09 February 2009

The report names Gen. Ouk Kosa, head of the Royal Cambodian Armed Forces military development zones; Cham Borey, brother of Commerce Minister Cham Prasidh; Dy Chouch, Hun Sen’s first cousin; Gen. Meas Sophea, commander of RCAF infantry; Sen. Ly Yong Phat, a CPP lawmaker and wealthy tycoon; senior Hun Sen adviser Om Yentieng; Sen. Lao Meng Khin, director of Pheapimex, one of Cambodia’s most powerful companies; Gen. Pol Sareoun, recently appointed commander-in-chief of RCAF; and Try Pheap, a pro-CPP tycoon.

The environmental watchdog Global Witness has issued an indicting report on Cambodia’s potential oil and mineral wealth, angering again many senior officials.

The report, “Country for Sale,” outlines the exploitation of the country’s gas and mineral rights for the benefit of a small elite.

Over the past 15 years, the London-based group says, 45 percent of Cambodia’s land has been purchased by private interests, while the millions of dollars paid by private companies for such concessions have not reached the national treasury.

Exploratory mining licenses have quietly been allocated to members of the ruling elite linked to the Cambodian People’s Party or their relatives, according the report.

Members of the armed forces guard mine sites in the provinces of Stung Treng, Preah Vihear and Pursat, and at some sites, land has been taken from local people through reported intimidation, according to the report.

Neither the National Assembly nor the appropriate ministries have enough say over the National Petroleum Authority, which is under the direct control of Hun Sen and his deputy, Sok An, the report says.

Global Witness in 2007 reported a “kleptocratic elite” had sold the country’s timber away, in a report that was banned from the country. The group says now many of the same officials are managing the country’s mineral and petroleum wealth.

Of mining sites investigated by the group in 2008, all were owned or controlled by members of the political or military elite.

The report names Gen. Ouk Kosa, head of the Royal Cambodian Armed Forces military development zones; Cham Borey, brother of Commerce Minister Cham Prasidh; Dy Chouch, Hun Sen’s first cousin; Gen. Meas Sophea, commander of RCAF infantry; Sen. Ly Yong Phat, a CPP lawmaker and wealthy tycoon; senior Hun Sen adviser Om Yentieng; Sen. Lao Meng Khin, director of Pheapimex, one of Cambodia’s most powerful companies; Gen. Pol Sareoun, recently appointed commander-in-chief of RCAF; and Try Pheap, a pro-CPP tycoon.

Not every official named in the report was available for comment, but all who were dismissed the report as biased, exaggerated, or without evidence.

Om Yentieng, who is the head of Cambodia’s Human Rights Committee, said Global Witness had a track record of defaming the government.

“They have been speaking very badly about the Cambodian government for years,” he said. “They have a lot of things to say, a lot of lies about Cambodia.If it were like Global Witness says, Cambodia would already be like Hell.”

Defense Minister Gen. Tea Banh said he could not accept the report without evidence, calling Global Witness “a very bad group that always destroys the reality of Cambodia.”

“Cambodia has its own laws, and we never violate the law,” he said. “The companies that have licenses are legal.”

Pol Saroeun, who was named in the Global Witness report for having received mining licenses, dismissed the allegation.

“I have never had any company or run any business at all,” he said. “I am a soldier.”

Meanwhile, Ith Praing, secretary of state for the Ministry of Industry, Mines and Industry, said Cambodia was not even 100 percent sure offshore oil would become a reality.

“It is kind of too early to think about this, but I think the government is not stupid in managing revenue from its resources,” he said.

Global Witness Director Gavin Hayman told VOA Khmer that Cambodia should not provide new concessions to private companies too quickly, and should instead review the concessions they have already given. International donors should pressure the government to undertake an audit of the concessions, he said.

The Global Witness report accuses donors of turning a blind eye to potential mismanagement of funds and urges them to use their influence—in hundreds of millions of dollars of aid each year—to ensure the revenues go to the populace.

Millions of dollars are missing from national coffers in oil deals, the report notes.

For instance, each company is required to pay a negotiable signature bonus to the National Petroleum Authority—like the $7.5 million paid by Indonesia’s PT Medco Energi Internasional. Each company will also pay a significant fee annually for production in a concession block, just below $800,000 per concession in the first year.

So far, for the years 2006 and 2007, none of that money has appeared on the books of the Ministry of Economy and Finance.

High Cambodian officials accused of graft

Thursday 5th February, 2009
Malaysia News.Net

A small number of officials and businessmen in Cambodia have been accused of taking millions of dollars from oil and mineral deals.

The Global Witness organization has revealed an elite group was probably able to siphon millions from the impoverished country's fast-growing oil and mining sectors.

Millions of dollars of Cambodian mining, oil, and gas concessions were paid in the form of up-front bonuses to the government by private companies.

Global Witness has accused Prime Minister Hun Sen of being among the group, along with military commanders, businessmen, and the chairman of the human rights commission.

Cambodia's foreign ministry has refused to make any comment on the accusations but the Cambodian Embassy in London, where Global Witness is centered, has posted comments on its website to say the accusations are part of a malicious campaign to damage Cambodia’s economic development.

Cambodia's corruption 'cancer' unlikely to sway voters

Cambodian opposition party leader Sam Rainsy (centre) stands on a truck as he greets supporters during an election rally in Phnom Penh on June 26. Cambodia is rising from the ashes of civil war and the brutal legacy of the Khmer Rouge's "Killing Fields," but it remains hobbled by endemic corruption hindering its efforts to escape poverty. (AFP/File/Tang Chhin Sothy)

PHNOM PENH (AFP) — Cambodia is rising from the ashes of civil war and the brutal legacy of the Khmer Rouge's "Killing Fields," but it remains hobbled by endemic corruption hindering its efforts to escape poverty.

As the country records high economic growth, authorities have been accused of extorting payoffs and officials have been linked to everything from high profile land grabs and skimming off development projects to illegal logging.

"Corruption is the biggest problem for the nation. Corruption is like a cancer right now -- it happens everywhere," said Kek Galabru, head of local human rights group Licadho.

Cambodia remains mired near the bottom of Transparency International's global corruption index, indicating the government is among the most graft-ridden on the planet.

Prime Minister Hun Sen has said that his government is acutely aware that "corruption is a dangerous cancer" that needs to be tackled "without compromise."

But as Cambodia heads into elections Sunday, analysts say there's no sign that rampant corruption will hurt his Cambodian People's Party (CPP) at the polls, which it is widely expected to dominate.

Hun Sen has promised to hand over his personal properties to the new government if the CPP fails to win, apparently in an effort to counter allegations that his government is too corrupt to stay in power.

However, the CPP is the only one of the 11 parties in the campaign that has not promised to pass a long-awaited anti-corruption law.

Main opposition leader Sam Rainsy kicked off his campaign by declaring to cheering supporters: "Down with the corrupt group!"

But he said in an interview that many voters don't have a full understanding of the way corruption affects their lives.

"When people see what corruption is and what bad activities there are, they will support the SRP," Sam Rainsy told AFP, referring to his party.

International donors, who fund half the country's budget, have repeatedly demanded that the government take stronger action against corruption since UN-backed elections in 1993 brought democracy here.

Hun Sen lost that first election to a royalist party, but he bargained his way into a power-sharing deal and then reasserted total control in a 1997 coup.

Hundreds of people were killed in the run-up to elections the following year, and protests against the CPP victory were put down violently.

The last national election in 2003 was far less violent, and this year's campaign has seen even fewer irregularities than in the past, said monitors.

This could be partly because the country is more stable, with double-digit economic growth from garment exports and tourism helping to pull Cambodia from the ruins of civil war.

Up to two million people died of starvation and overwork, or were executed, as the communist Khmer Rouge dismantled modern Cambodia in a bid to forge an agrarian utopia during its 1975-1979 rule.

Despite the recent stability, Cambodia remains one of the world's poorest nations. Some 35 percent of its 14 million people live on less than 50 US cents a day, and economists say corruption is a major drag on the nation's growth.

But persistent poverty does not mean that voters will turn against the government on polling day.

"This (the opposition's anti-corruption) message may sway some voters, but is not decisive to change the leadership," said Lao Mong Hay, a senior researcher at the Hong Kong-based Asian Human Rights Commission.

"The issues do not affect voters' decision as much as personalities."

The CPP has relied on Hun Sen's broad rural appeal and its record of gradual development in its pursuit of victory, and some analysts said this makes voters forget about rampant corruption.

CPP lawmaker Cheam Yeap said only a "small handful" of his party members were corrupt and said it deals with graft "step by step towards development."

"We are not neglectful about fighting graft," Cheam Yeap said. "Fighting corruption is the hot issue that we care about."