Pay day politics

Where pro-Chea Sim Vice President of the CNPA, Ho Vichett, is given more political duties, such as the drafting of legislation, pro-Hun Sen Director General of the CNPA, Te Duong Tara (pictured), is in charge of the contracts and the more commercial side of the business

Excerpt from "Country for Sale"
Global Witness

The CNPA fails to pay its workers a living wage

Common to the vast majority of civil service jobs in Cambodia, the effectiveness of the [Cambodian National Petroleum Authority] CNPA is undermined by the low salary level for employees. Most CNPA employees do not earn a salary sufficient to cover their families’ costs of living. The typical salary for a CNPA employee is US$45 each month: only 20-25 per cent of what is needed to cover the costs of living.

For many trained staff within the CNPA, a combination of the politicisation of work responsibilities and these low level salaries mean that they hold second jobs. One observer claimed that some staff only show up in the office on pay day. The Bridge Group’s independent Training Needs Assessment again offers a more diplomatic explanation:

“On a typical day, some 30 employees come in the morning and only some 10-12 return after lunch… Many employed have received further training… However, they have not had the opportunity to apply the knowledge gained in their daily work, and it has not been developed but instead been continuously eroded. The training has therefore to a large extent been wasted, and this is the source of much frustration among the employees.”

The lack of adequate funding of salaries for CNPA employees appears out of step with the funding for staff development which, according to the CNPA’s model petroleum agreement, is due to the CNPA each year. This contract states that each oil signatory is required to pay US$150,000 each year for staff training and development. Given this, the CNPA should currently be the direct recipient of at least US$900,000 each year for staff training and development.

It is doubtful whether money paid by investing companies for staff training could be used for salary payments. However, when compared, the disparity between staff salaries and income to the CNPA does raise questions as to the wisdom or rationale of keeping staff wages so low, or what any payments are being used for.

Global Witness wrote to the Director General of the CNPA, Te Duong Tara, to ask what the staff training and development fund is used for. At the time of publication, Global Witness had not received a response.

CNPA's Te Duong Dara: Cambodian oil production to start in 2011 [-Information on companies involved in the exploration still in the dark]

Cambodian oil production to start in 2011: energy official

PHNOM PENH (AFP) — Cambodia expects to begin oil production in 2011, a senior energy official said Wednesday amid warnings that new-found petroleum reserves did not guarantee instant prosperity for the impoverished country.

"If there is no delay, we are planning the first oil production for around 2011," said Te Duong Dara, director-general of the Cambodian National Petroleum Authority (CNPA), speaking at a conference of global industry experts and energy company officials in Phnom Penh.

He declined to say how many companies were currently exploring for oil in six vast blocks off Cambodia's shores.

Following the discovery of oil in 2005 by the US energy giant Chevron, Cambodia was quickly feted as the region's next potential petro-state, sitting on an estimated hundreds of millions of barrels of crude, and three times as much natural gas in six blocks located off of the coast.

Chevron, the most active of several firms exploring the fields, remains mum, saying only that its test wells have found that the oil and gas is "dispersed rather than located in one core field," according an earlier statement.

Government optimism has also been blunted, with Prime Minister Hun Sen warning late last year that it was "highly premature" to estimate how much oil Cambodia might hold in undersea reserves after other officials projected that the country could begin production in 2009.

Concerns have also been raised over how Cambodia -- one of the world's most corrupt countries -- would use its new-found oil and gas wealth.

"Many assume the discovery of oil and gas reserves automatically translates into greater prosperity. Unfortunately, this is not the case," Jo Scheuer, Cambodian country director of the UN Development Agency, said Wednesday.

"Economic growth in resource-rich developing countries has been on average two to three times lower than resource-poor countries," he added.

"Cambodia's non-renewable resources are important assets that must be used wisely."

While GDP growth estimates remain some of the highest in the region, averaging 11 percent over the past three years, nearly a third of Cambodia's 14 million people survive on only 50 US cents a day or less.

Despite their uncertainty over how much oil can be pumped from Cambodia's reserves, government officials are adamant that petroleum profits would not be squandered, saying the sector is essential to the country's continued growth.

"The discovery of oil and gas ... is a vital step in contributing to the country's sustained economic development," said Deputy Prime Minister Sok An, who also chairs the CNPA.

Al Jazeera gives a glimpse into Hun Sen's secret oil contracts and confidential documents on actual oil reserve

Oil may fuel Cambodian corruption

MONDAY, AUGUST 06, 2007
By Hamish Macdonald in Sihanoukville, Cambodia
Al Jazeera

Cambodia could lose millions of dollars worth of international aid if it fails to tackle rampant corruption. That's according to Robert Zoellick, the World Bank president, who visited the region over the weekend.

There now are fears that the recent discovery of off-shore oil could add to the problem. Al Jazeera follows the trail of Cambodia's latest secret.

Cambodia is one of the most corrupt countries in the world, ranked 151 out of 163 in a global corruption list.

Anti-corruption laws have remained in the "drafting" stage since 1994, but have never been implemented.

The World Bank has issued a stern warning to the Cambodian government, saying that anti-corruption laws were a key element.

"And it's not only passing the law, but its implementing it," said Zoellick.

'Curse or blessing?'

A third of Cambodians live on less than 50 cents a day

Meanwhile, the oil and gas reserves discovered off the country's south coast have already been divided up for exploration and production.

So although the fossil fuel find is estimated to be worth $80bn, it could be more of a curse than a blessing for the average Cambodian.

In the villages of southern Cambodia, people are living in poverty. But not far away from there lies a potential fortune.

Cambodia, where one-third of its population live on less than 50 cents a day, has discovered oil but the government is keeping the find under wraps.

Strangely though, the government is keeping much of the detail secret.

Theary C Seng, of the Centre for Social Development, said the government should have "clearer and more transparent procedures and information" about the oil discovery.

"Ultimately this is our money and we want a say in it," he said. "This is why the government needs to be transparent and engage the public. It's not their money. It’s the public's money."

Secret contracts

The sleepy coastal town of Sihanoukville is likely to see the first signs of major development, and poised to become the heart of the local oil industry.

Al Jazeera has learned that the Cambodian government has now completed contractual negotiations with 13 foreign companies for 100 per cent of the country's off-shore oil and gas reserves.

This it has managed to do without informing either the parliament or the public, and there are no guarantees as to how the profits will be spent.

Te Duong Dara, from the Cambodian National Petroleum Authority, has led negotiations on behalf of government and is optimistic about the future despite the absence of anti-corruption and freedom of information laws.

"I know people talk about the anti-corruption laws or something, but for me what is important is the spirit of the people," he said.

Money from oil could boost Cambodians' weekly shopping budget of less than $10

According to him, there is no indication of how long the oil reserves will last, or how much they will be worth.

But confidential documents prepared for the oil industry and obtained by Al Jazeera reveal clearer details.

It says oil reserves should last 20 years, and projects that government revenue would hit between $3-$4 bn annually at current values. On last year’s figures, that is 50 per cent of Cambodia's GDP.

But even some of the politicians are being prevented from getting that information.

Keo Remy, an opposition legislator, said: "Right now we know nothing about the oil".

At the markets in the capital, Phnom Penh, Cambodians shop with a weekly budget of less than $10. This is where oil revenues could make a real difference.

But Cambodians are all too aware that oil could turn out to be a curse. For now, though, there's a belief they will share in the spoils at the end of the rainbow.