Not all economic land concessions listed [-Shenanigans at the Chan Sarun's ministry?]

Villagers affected by an economic land concession granted to CPP Senator Ly Yong Phat’s Phnom Penh Sugar Company protest outside the Kampong Speu provincial court in March, 2010. Photograph: Will Baxter/Phnom Penh Post

Chan Sarun, the fishy minister of Agriculture, Forestry and Fisheries

Thursday, 05 July 2012
David Boyle and May Titthara
The Phnom Penh Post

“The ministry’s silence is a reflection of a systematic lack of transparency surrounding ELCs and the recent order to review these concessions.”

The Ministry of Agriculture, Forestry and Fisheries’ latest list of economic land concessions reveals some peculiar discrepancies with known records of ELCs. Some that have recently been granted are missing, while others known to have been cancelled remain.

The June 8 MAFF list makes no mention of ELCs granted by Prime Minister Hun Sen on May 18 to SK Plantation (Cambodia) Pte Ltd for 8,000 hectares in Ratanakkiri province and 7,710 hectares for Le Ye Rubber in Siem Reap province.

The premier fiercely rejected claims late last month that he had breached his own May 7 moratorium on ELCs by granting these concessions, pointing to a loophole in the sub-decree that exempted those that had already been agreed to in principle.

But an ELC that was cancelled in Kampot’s Chhouk district for First Bio-tech Agricultural (Cambodia) Co, Ltd’s 10,000-hectare corn plantation and processing factory also remained on the list.

Chevron report completed

A tuk tuk driver parks outside a Caltex petrol station in Phnom Penh yesterday. Photograph: Pha Lina

Tuesday, 26 June 2012
Don Weinland
The Phnom Penh Post

Chevron has completed an environmental assessment for oil production in Cambodia’s Block A offshore oil field, a step insiders called important for the proposed extraction that appeared to stall early this year.

The Environmental Impact Assessment (EIA), completed in March and obtained yesterday by the Post, was the first to be seen publicly after Chevron’s 10 years in the Kingdom.

Documenting a rough three-phase plan, the EIA shows Chevron building up to 10 platforms during a nine-year period.

Risks associated with Chevron’s potential production were listed as “low” or “insignificant”.

ASEAN's Secret Human Rights Declaration

June 26, 2012
By Che Carpio
Vox Bikol

Unfortunately, the AICHR has kept the AHRD to itself like a closely guarded secret. Deliberations are held in strict confidentiality. No draft is even circulated to the public.

Unknown to most peoples of ASEAN (Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar/Burma, Philippines, Singapore, Thailand, Viet Nam) there is now an on-going regional effort to come up with an "ASEAN Human Rights Declaration" or AHRD. Tasked with this initiative is the ASEAN Intergovernmental Commission on Human Rights (AICHR).

The AICHR first convened for the AHRD early this year on Jan. 8-9, in Siem Reap, Cambodia. There it resolved to finish the new document before the year ends.

The AICHR met again on the declaration on Feb. 17-19, in Jakarta, Indonesia. The meeting set the framework and structure of the proposed regional instrument and also completed deliberations on the "preamble" and the "general principles."

On March 9-13, the AICHR held its third meeting on the AHRD. It then set out the provisions for "civil and political rights."

Viet gloats about another border post that lacks transparency

Binh Dinh launched new Vietnam-Cambodia border marker

Wednesday, 09/06/2010
VNN (Hanoi)

The launch ceremony for the Vietnam-Cambodia border marker No. 241 was jointly held on June 9 by the An Giang Provincial People’s Committee and Cambodian authorities from Kandal province.

The border marker, located at the Tien River International Border Gate in the southern province of An Giang, is the starting point of the border line between An Giang and Kandal.

After one year of construction, border marker No. 241 has been completed, covering an area of 3,600m2. It was made from an entire granite stone to a design approved by both governments.

Both the Tien River and Kaomsamno International Border Gates are the most dynamic and developed among the two countries’ border gates. Their export revenue accounts for 65 percent of the total Vietnamese export earnings from all of the two countries’ border gates.

SRP lawmaker seeks info on resource deals

Thursday, 06 May 2010
Vong Sokheng
The Phnom Penh Post

OPPOSITION lawmaker Son Chhay wrote a letter to National Assembly President Heng Samrin on Wednesday asking for government officials to explain their dealings with mining giant BHP Billiton and energy firm Total.

BHP secured a mining concession in Mondulkiri province in 2006 before abandoning it last year, saying that a feasability study conducted at the site had shown that large-scale production there would not be cost-effective. The firm has been thrust into the media spotlight in recent weeks after disclosing last month that it was conducting an internal inquiry based on evidence of possible corruption violations by employees working on one of its overseas projects.

Though BHP has declined to disclose the project at the centre of its inquiry, speculation has been focused on Cambodia and the Mondulkiri project in part because of comments made by Minister of Water Resources Lim Kean Hor in 2007. Speaking before the National Assembly, Lim Kean Hor said BHP had paid US$2.5 million in “tea money”, or off-the-books fees, to secure its concession.

Son Chhay inquired into this issue. “As a member of the National Assembly, I have the right to write a letter to invite government officials to explain to the National Assembly about what we did not know,” he said Wednesday. “Within my letter, there was a question related to the deals that the government made with BHP Billiton and Total over the oil and gas business.”

Council of Ministers spokesman Phay Siphan said Wednesday that he had not seen the letter and therefore could not comment. Son Chhay said he had given government officials a deadline of next week to respond to his request.

Hang Chuon Naron, secretary general at the Ministry of Economy and Finance, revealed in January that Total had paid the government $26 million in January to secure conditional rights to drill for oil in the Gulf of Thailand. In a speech last week, Prime Minister Hun Sen put the payment at $28 million, a figure confirmed by Total.

BHP has said that the $2.5 million payment to which Lim Kean Hor referred was devoted to social development projects, and Total said last week that $8 million of its payment to the government would be earmarked for similar projects.

On Tuesday, the government inked an oil exploration deal with the Japanese Oil, Gas and Metals National Corporation for an area covering the Northern Tonle Sap basin. Officials and company representatives have thus far declined to make the terms of this deal public.

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.

The Dark Side of China Aid

March 24, 2010
By CHRISTOPHER WALKER and SARAH COOK
The New York Times

The government in Phnom Penh, which has received substantial aid from the United States and other democracies, now receives comparable amounts from China. The Cambodian authorities have used this “assistance competition” to their advantage. Rather than combating corruption and implementing sorely needed reforms to the judiciary and media sector, Prime Minister Hun Sen’s government has shrunk space for alternative voices and independent institutions. Western donors, fearful of losing influence, have been increasingly hesitant to penalize the regime for its failures.

A growing number of developing countries receive billions of dollars a year in assistance, loans, and investments from China. Already in 2010, Beijing has committed $25 billion to Asean nations. In March, Zambia’s president returned from a trip to China with a $1 billion loan in hand.

As Beijing’s levels of foreign assistance swell and its relationship deepens with countries across Africa, Asia and Latin America, a key question emerges: What impact will investments by an opaque and repressive superpower have on governance standards in the developing world?

Findings from a Freedom House analysis, “Countries at the Crossroads,” point to the challenges that many of these recipient countries confront as they struggle to build more transparent and accountable systems. Fighting corruption and safeguarding freedom of expression and assembly are proving especially difficult. The dark side of Beijing’s engagement, with its nontransparent aid and implicit conditions, risks tipping the balance in the wrong direction.

To appreciate the “China effect” on developing countries, it is essential to understand the methods Beijing is using to exert influence and warp incentives for accountable governance.

First, as international financial institutions and donor organizations seek to encourage stronger governance norms, aid from China has become an alternate source of funds. Recipient governments use these as a bargaining chip to defer measures that strengthen transparency and rule of law, especially those that could challenge elite power.

Cambodia is a telling example. The government in Phnom Penh, which has received substantial aid from the United States and other democracies, now receives comparable amounts from China. The Cambodian authorities have used this “assistance competition” to their advantage. Rather than combating corruption and implementing sorely needed reforms to the judiciary and media sector, Prime Minister Hun Sen’s government has shrunk space for alternative voices and independent institutions. Western donors, fearful of losing influence, have been increasingly hesitant to penalize the regime for its failures.

In October, the Guinean government announced a $7 billion deal with the China International Fund just as the international community was considering sanctions following a massacre of opposition supporters. The case underscores how even investments by a private entity, this one with ties to Beijing, can be manipulated to undermine efforts to support human rights standards.

Second, while “no strings attached” is commonly used to describe China’s approach in the developing world, the reality is not quite so benign. A combination of subtle and not-so-subtle conditions typically accompanies this largesse. Included among these is pressure to muzzle voices critical of the Chinese government, often undermining basic freedoms of expression and assembly in these countries. The authorities in Nepal, which have recently received a 50 percent boost in aid from Beijing, have violently suppressed Tibetan demonstrations, including the arrest of thousands of exiles in 2008. In December of last year, Cambodia’s government forcibly repatriated 20 Uighurs to China, where they face almost certain imprisonment and torture. Three days later, Beijing announced a package of deals with Cambodia estimated at $1 billion.

Even more democratically developed countries are not immune to such pressures. In March 2009, the South African government barred the Dalai Lama’s attendance at a pre-World Cup peace conference.

Third, Chinese aid funds are frequently conditioned on being used to purchase goods from firms selected by Chinese officials without an open bidding process. In Namibia, anti-corruption agencies are investigating suspected kickbacks in a deal involving security scanners purchased by the government from a company until recently headed by President Hu Jintao’s son. Beijing’s response has been to stonewall investigations and activate its robust Internet censorship apparatus, sanitizing online references to the case Chinese citizens might stumble across.

Observers such as the scholar Larry Diamond have identified countries that are semi-democratic, rather than autocracies, as the most promising ground for expanding the ranks of consolidated democracies globally. The patently negative aspects of the Chinese Communist Party’s developing world influence could deal a real blow to this aspiration.

Findings from Freedom House’s global analysis of political rights and civil liberties put this phenomenon in perspective. Over the past five years countries with only some features of institutionalized democratic systems have slipped significantly — 57 countries within the “partly free” category have experienced declines, while only 38 improved.

Beijing’s deepening involvement in these cases may generate a number of effects, some perhaps positive for short-term economic development. But the dark underbelly of the Chinese regime’s involvement — the opacity of its aid and the illiberal conditions that underpin it — means that over the long haul, incentives for strengthening accountable governance and basic human rights are being warped, or even reversed.

Christopher Walker is director of studies and Sarah Cook is an Asia researcher at Freedom House.

After Long Wait, Cambodia Opens to Mining

By Ros Sothea, VOA Khmer
Original report from Phnom Penh
18 March 2010

A handful of companies are on the verge of beginning mining parts of Cambodia’s northeast, a development that could bring much development to those areas, but could also increase poverty in an already marginalized area, experts say.

“Some companies with enough capital and high technologies have shown us positive signs that they could begin their extraction activities,” Energy Minister Suy Sem said earlier this month. “So in no more than six years, [we] will be able to get revenue from mineral resources.”

About a third of 20 licensed companies are expected to begin mineral extraction in around 2015, following exploration in the northeast provinces of Ratanakkiri, Mondulkiri and Kratie, Sok Leng, director of the ministry’s mineral department, told VOA Khmer.

He declined to name the companies, but since 2006, Cambodia has issued 104 licenses to 20 local and international mining companies, including Australian-owned Oxiana Cambodia, Liberty Mining, and Southern Gold; China’s Hang Seng Coal Mine; and Vietnam’s Vinacomin, along with other companies from Korea.

These companies are in the exploration stage in northeastern Cambodia, according to a 2009 report by the Ministry of Energy. Interest in mining has seen a swift increase, from $4 million in fixed investment in 2008 to $11 million in 2009.

Australia’s Southern Gold said on its Web site last week its tests indicate significant gold and silver in Kratie province, after seven drillings. It expects to do more in March and April.

Cambodia’s mineral potential has been well known since at least the 1960s, when geological mapping found 25 types of minerals at 145 sites.

The country has bauxite, copper, zinc, gold, iron ore, nickel, granite, gemstones and tungsten, mostly discovered in Pailin and the provinces of Kampong Thom, Kampot, Battambang, Pursat, Preah Vihear, Oddar Meanchey, Mondulkiri, Ratanakkiri and Kratie.

Small and traditional mineral extraction in gold and gemstones has taken place among Cambodian people for many years, as well as with non-metal materials like sand and stone used as construction material.

Were industrial mining to take off, it could follow lucrative revenue from oil and gas, which is expected to come in 2013 with an estimated revenue stream of $1.7 billion by 2021.

There are no such estimates for minerals, Suy Sem said. However, he said money from mining can help strengthen agriculture, education, health and infrastructure development.

Civic groups caution that weaknesses in the laws, management and transparency could dampen any gains mining might bring.

There are few controls to ensure companies are properly mining, said Mom Sambath, a member of the Extractive Industry Social and Environmental Impact Network.

If a company violates the law, “it will impact both the environment and revenue,” he said.

Already, some are warning of the impacts of mining. A 2009 study by the Cooperation Committee for Cambodia in Mondolkiri’s Keo Seima and Pechreada districts found that people are facing the loss of income and damaged forests, as well as internal disputes among indigenous people.

“I think mining extraction will be negative rather than positive if the problems remain,” said Chen Sochoeun, the researcher who conducted the study.

Beyond environmental concerns, revenue management is another problem.

“If the revenue isn’t effectively used, it will benefit to only a group of rich and powerful people,” said Chhet Sam Ath, Executive Director of NGO Forum. “As a result, social disorder will occur. The poor become poorer, and our society can’t develop.”

Civic groups have urged the government to discuss strategies related to mining to ensure revenue is used effectively.

To help manage the resources, the Cambodian government issued a law on mineral resource management and exploitation in 2001. But critics say the law is still weak and aims to protect the interest of private companies.

In 2009, the government established Public Financial Reform Committee to prepare an action plan to manage revenue from oil, gas and other mineral resources. But experts say transparency and human resources remain challenges.

Phan Phalla, deputy secretary-general of the Supreme National Economic Council, said human resource shortfalls remain, but the government has been transparent with mining.

“We continue to publish every piece of information we have on the Web site, and we have never hidden anything,” he said. “Moreover, we have been trying from day to day to effectively manage revenue from mineral resources. Our aim is to make everything transparent.”

Rights groups condemn Asean [countries for appointing gov't offiicials to the ASEAN Inter-Gov'tal Commission on Human Rights]

20/10/2009
Bangkok Post

CHA-AM : Civil society organisations covering Southeast Asia have criticised many Asean members for their lack of transparency in nominating national representatives to the Asean Inter-Governmental Commission on Human Rights.

Instead of nominating delegates who work in the field of human rights, several Asean governments had appointed, or influenced the selection of, diplomats or officials as their choices, they said in a meeting of the Asean People's Forum in Cha-am.

Some of the known commission representatives include legal expert Om Yentieng from Cambodia, Rafendi Djamin from Indonesia's Coalition for International Human Rights Advocacy, Deputy Foreign Minister Boungerd Sangsomsak from Laos, former senator and academic Wigberto Tanada from the Philippines, Richard Magnus from Singapore and Sriprapha Petcharamesree from Thailand.

The civil society organisations also expressed concern about the Burmese government's meddling with non-governmental organisations in the nomination of delegates to a meeting with Asean leaders on Friday.

Burmese junta-sponsored NGOs, including the Union Solidarity and Development Association, the Anti-Narcotics Association and the Federation of Womens Affairs, were present at the NGO nomination meeting yesterday.

Although they were outnumbered by exiled Burmese activists, the groups presented a powerful front, demanding that only a representative of the Burmese NGOs be selected and that they be a Burmese national and speak the Burmese language.

Some NGOs based outside Burma suggested that Ashin Sopaka from the International Burmese Monks Organisation represent the Burmese NGOs at the meeting with the Asean leaders. But the Burmese NGOs based in Burma objected strongly saying they had already proposed Shwe Shwe Sein Latt to the Burmese and Thai foreign ministries.

The Burmese exile groups said they would still choose their own representative, Khin Omar, to attend the meeting.

The Asean civil society organisations made up of 18 core groups also called for the launch of the fourth pillar, the environment, in building up the Asean Community by 2015. The other three pillars are the socio-cultural, economic, and political and security aspects.

The Towards Ecological Recovery and the regional Alliance and the Alternative Agriculture Network-Thailand are spearheading the proposal which calls for all 10 Asean members to embrace internationally recognised standards in deciding on megaprojects or action on climate change and biodiversity.

The NGOs asked for a review of the Asean Plan of Action for Energy Cooperation 2010-2015 to pay more attention to energy efficiency, demand side management and renewable energy technologies in order not to harm the environment.

Cambodia debates merits of land sales [shrouded in secrecy by Hun Sen's regime]

A farmer ploughs a paddy field at Somrong Tong district, Kampong Speu province, about 60km west of Phnom Penh. Chor Sokunthea / Reuters

May 31. 2009
Jared Ferrie, Foreign Correspondent
The National (United Arab Emirates)

PHNOM PENH -- At first glance, one could hardly ask for better circumstances for bilateral trade agreements: Cambodia is economically poor, but rich in farmland; Gulf states lack land to grow food, but have money to pay for it. So Cambodia has been signing deals with Kuwait and Qatar to help develop its agricultural sector.

Cambodian officials, however, refuse to disclose details of the agreements, which are worth hundreds of millions of dollars. Such secrecy has triggered warnings that foreign investors could find themselves embroiled in violent land disputes, which have plagued Cambodia in recent years.

Those concerns were raised recently by the UN’s committee on economic, social and cultural rights. Committee experts asked Cambodia’s representative, Sun Suon, “whether everything, including companies, land rights, could be bought; whether a rice concession made to Kuwait could have negative effects”, according to a May 12 release.

Mr Suon said Cambodia “wished to develop its rice exports and therefore welcomed not just Kuwait, but all countries who wished to invest in agriculture”.

Although he said Cambodia’s justice system “had room to improve”, he said the country operated within a legal framework to protect its citizens.

The UN was not overly reassured. Its conclusions, released on May 22, noted: “The committee was gravely concerned that since the year 2000, over 100,000 people were evicted in Phnom Penh alone.”

Opposition politicians and non-governmental organisations are concerned that agricultural agreements could follow the same pattern of evictions as deals involving such sectors as property development, forestry and mining.

“Nobody has much information on this deal or many other similar deals that the Cambodian government makes with foreign investors,” said David Pred, Cambodia director of Bridges Across Borders, which is involved in land rights issues. “Very often, affected communities are not made aware that their land has been granted as a concession until the bulldozers turn up.”

Son Chhay, an opposition MP, predicted that the implementation of the agricultural agreements would lead to violence.

“When the time comes, no doubt we will see that the armed forces will be sent to break down houses and shoot people, as they have in the past, to force them off the land,” said Mr Chhay, of the Sam Rainsy Party.

Until September, Mr Chhay chaired the parliamentary commission on foreign affairs and international co-operation, which he said was involved in negotiating deals with Kuwait and Qatar. But even so, he could not obtain copies of documents outlining the agreements. He claimed his deputy chairman, a member of the ruling Cambodian People’s Party (CPP), went over his head, attending meetings from which he was excluded.

Un Ning, the former deputy chairman, denied he had any information about agreements made between Cambodia and Gulf states. “I haven’t dealt with this affair. I was not involved in talking about this.”

Cheang Vun, who replaced Mr Chhay as head of the commission, said: “I cannot help you with that.”

Long Visalo, a secretary of state for the ministry of foreign affairs and international co-operation, also refused to discuss the agreements. “I have no duty to talk to you,” he said when contacted by phone.

Mr Chhang said a culture of silence has infected Cambodian politics since a 1997 coup led by Hun Sen, the prime minister, which consolidated CPP power and marginalised opposition parties.

This lack of transparency allows ruling elites to enrich themselves by selling off the country’s natural resources, he said.

The government has made some information regarding the dollar value of deals with Gulf states public: Qatar intends to invest US$200 million (Dh734m) “in rice farmland” as well as provide a loan for irrigation systems, according to a speech given last year by Mr Sen.

After returning from an official visit to Kuwait on Jan 16, Cambodia’s minister of foreign affairs, Hor Namhong, told reporters the countries signed a memorandum of understanding, with Kuwait agreeing to finance a $350,000 irrigation project that would cover 130,000 hectares of rice fields.

But the government has not divulged what Kuwait or Qatar will receive in return. Critics say the devil is in the details.

Mr Chhay and others suspect Qatari and Kuwaiti companies will receive land concessions of 99 years (it is illegal foreigners to own land), as other companies have.

Many agree that Cambodia’s agricultural sector needs an overhaul; its rice farmers produce lower yields than their counterparts in neighbouring Vietnam and Thailand. But Mr Chhay said it was up to the government to invest in infrastructure and aggressively seek export markets.

“You don’t need Middle-Eastern countries who have no expertise in rice farming to come here and take land from farmers. It’s ridiculous,” he said.

“There’s potential for this to be a win-win situation,” he added. “Farmers should sell rice to the government and the government should sell rice to Kuwait.”

An April report by the Washington-based International Food Policy Research Institute advised developing countries to find investors willing to work with small farmers. In return for such investments as credit and technical assistance, farmers would be contracted to sell their crops to the investor. According to the institute, land agreements similar to those in Cambodia have proliferated globally since the food crises of 2007-2008.

“Details about the status of the deals, the size of land purchased or leased, and the amount invested are still murky,” said the report entitled Land Grabbing by Foreign Investors in Developing Countries.

The institute urged developing countries to encourage foreign investment in agriculture, but to ensure that deals are made transparently and include measures to protect local residents.

The Kuwait Embassy in Bangkok, which covers Cambodia, did not respond to requests for comment.

jferrie@thenational.ae

Aid Packet Comes With Some Expectations

By Chun Sakada, VOA Khmer
Original report from Phnom Penh
05 December 2008

Click here to listen to the Khmer audio program

Donor agencies and governments said Friday they had confidence in Cambodia’s commitment to pass an anti-corruption law and continue reforms in public finance and transparency, justifying a decision to hand the government a giant aid package.

The nearly $1 billion in aid pledged Friday was to support the government’s development plan, help the country grow, and help reduce the number of poor, said Qimiao Fan, the World Bank’s Cambodia manager and facilitator for the 17 donors.

“In our support, we encouraged the government to improve the transparency and the management of these resources for the benefit for the people,” he said. “The government needs to further integrate the planning with budgeting and aid management, so that these resources raised from external donors they use efficiently and effectively for the benefit of the Cambodian people, particularly the poor and vulnerable.”

“Priority areas” discussed in the two days of meetings included education, health, agriculture, infrastructure and social protection, he said.

The British government, which increased it aid from about $20.5 million last year to $26.4 million this year, would support “a number of areas of development, particularly supporting good governance, the health sector, and rural development,” the country’s ambassador, Andrew Mace, said Thursday.

“The prime minister set out some very clear challenges facing the country,” he said. “He set out a very clear agenda for action by his own government, and a willingness to work in close partnership with the donors, and we welcome that very much.”

“We recognize very well the need of the Cambodian people for assistance…in addressing issues such as health, education, road developments, [and] many challenges facing them,” he said. “We’re working closely with the government to know those areas. We welcome their commitments in those areas. I welcome their commitments for good governance and combating corruption [and] we look forward to those commitments to been turned into practice.”

Murdered reporter's family: police probe not transparent [-Police: Blame delays on Hok Lundy's death -sic!-]

Khim Sambo and his son's funeral (Photo: RFA)

Tuesday, 02 December 2008
Written by Cheang Sokha
The Phnom Penh Post

A lack of information into the investigation of Khim Sambo's death has raised fears about its progress, family members, monitors say

FAMILY members of slain opposition journalist Khim Sambo and his 18-year-old son have expressed anger at the lack of transparency in the investigation of their deaths.

"It is really unjust for the victim. The relatives of the victims never receive any information on how [the investigation] is going," Khim Laurent, Khim Sambo's brother, told the Post Monday. He added that he had never received information from police on the state of the investigation.

Chan Soveth, a monitor for rights group Adhoc, said that despite repeated requests for information, he had also been shunned, with police declining to reveal any details of the case.

"We do not know how it has developed so far," he said. "We have asked for information, but police have tried to hide it from us."

Khim Sambo, who wrote for Moneaksekar Khmer, a daily paper affiliated with the opposition Sam Rainsy Party, was gunned down while on a motorbike with his 21-year-old son Khat Sarinpheata outside the Olympic Stadium.

Phnom Penh deputy police commissioner Hy Prou, who is in charge of the investigation, said that the probe was progressing but had been slow because of delays caused by the Water Festival and the death of the National Police Chief Hok Lundy.

"We have not completed our work yet," he told the Post Sunday.

John Johnson, a spokesman for the US embassy, said that the FBI, which joined the investigation in August, was making progress. "The investigation is ongoing," he said via email Monday.

Good Governance Should Be All-inclusive: Sam Rainsy

Sam Rainsy's letter to the Editor
The Cambodia Daily, November 11, 2008

GOOD GOVERNANCE SHOULD BE ALL-INCLUSIVE

Reports such as "Protests Continue Over ADB's Rice Distributions" (Nov 7, page 29) and "200 Protest as ADB Completes Rice Donations (Nov 6, page 27) reflect three interrelated problems that need to be seriously addressed through a comprehensive approach:

1- The increasing wealth and revenue gap between a political and financial oligarchy and the mass of rural poor, who survive near the starvation line, increasingly relying on handouts, in a country that boasts a relatively high "macroeconomic growth rate."

2- The need to check government corruption and official disdain for transparency and the rule of law that prevails at all levels of the state apparatus, from the Council of Ministers to village chiefs.

3- The absence of decentralization, meaning the failure to put in place procedures that would involve villagers at the grassroots level in decisions that affect their daily lives.

I would like to make a few remarks on the third issue, which few experts, analysts and observers have concentrated their attention on.

The current legislation on decentralization, meaning the devolution of power from the central government to elected local authorities, has existed only on paper since the first commune council elections in 2002.

The opposition SRP collected 25 percent of the popular votes at the last commune council elections in 2007. It has secured commune councillors in 85 percent of Cambodia's 1,621 communes. It has won commune chief positions in 28 communes, first deputy chief positions in 403 communes and second deputy chief positions in 963 communes.

According to the law, the first deputy chief is in charge of finance and budget, and the second deputy chief of public services and security.

However, except for a few SRP-affiliated commune chiefs, elected local officials from the opposition actually have no power whatsoever. The CPP authorities at the national, provincial, district, commune and village levels just ignore them or bypass them, thus stalling any system of checks and balances and making a mockery of decentralisation.

Therefore, in 98 percent of Cambodia's 1,621 commune councils that are headed by a CPP commune chief, the ruling party adamantly refuses to share power with the opposition.

Since the commune councils in turn elect village chiefs, virtually all the country's more than 15,000 village chiefs are also controlled by the CPP.

Village chiefs are like little kings in their respective villages. They are integral parts of both the state apparatus and the CPP machinery. They actually control the population through using and abusing their power in countless activity fields that directly affect the daily lives of villagers.

Political bias is often associated with corruption. Village chiefs select villagers who are entitled to assistance from national and international organizations, including the Red Cross, based on criteria that may have nothing to do with humanitarian considerations.

Regarding the ongoing protests over ADB's rice distributions, it was reported in one of the articles mentioned above that most of the complaints accused village chiefs of "bias and nepotism" in those chosen to receive rice and for excluding others from the beneficiary lists.

By violating the law on decentralization the CPP authorities block democracy at the grassroots level, which allows more and more irregularities and abuses to occur.

If, in each commune, all elected representatives of the people were properly informed, consulted and allowed to play their respective roles according to the law on decentralization and the spirit of democracy, the above problem of food distribution could be avoided. Many other and more serious problems could also be avoided.

The lesson is clear: The Cambodian government and the international donor community alike should abandon their ineffective piecemeal approach and start to solve problems from a comprehensive perspective by meeting conditions that are prerequisites of good governance: effective law enactment, effective decentralization and effective democracy at the grassroots levels.

Sam Rainsy,
SRP President

City Official Defends Lake Development

By Sok Khemara, VOA Khmer
Washington
05 September 2008

Click here to listen to the Khmer audio program

Responding to concerns that a lake development project could damage the environment of Phnom Penh, a senior municipal official said Thursday a 10-year study had taken place before the plan was approved.

The company developing the lake, Shukaku, Inc., began filling Boeung Kak lake last week, angering residents who say a government buy-out effort is too low and raising environmental concerns.

But a 10-year study has shown the lake is no longer a reservoir and is not an important part of the city's infrastructure, said Pa Socheartavong, deputy governor of Phnom Penh, as a guest on "Hello VOA."

The lake is not being used for agriculture and cannot produce clean water, he added.

"This lake is just like a polluted bomb in town," where residents drain their waste daily, he said. "It's a dead lake. That means no activity."

The city decided to privatize the lake, offering a 99-year lease to Shukaku, which will develop the area into a long-term recreational area and reservoir, as well as a site for residential and commercial property.

The development will force more than 4,000 families to move, and many of them have proven reluctant to do so. The city has offered $8,000 per household to help people move, but residents say they want to be paid current market prices.

Around 1,000 families are still protesting the move.

But not all residents there are legal, Pa Socheartavong said. Following the 1993 election, many people moved from border areas and settled around the lake on public land.

The city has offered three options to residents, he said. They can either take the buyout, be moved to housing in another area, or wait for housing in the same place they now occupy.

The lake issue became politicized ahead of July's general election, he added.

New $4b dams in planning

Friday, 05 September 2008
Written by Thet Sambath
The Phnom Penh Post

Proposed 10 dams will boost irrigation, generate electricity

THE Ministry of Water Resources and Meteorology has begun preliminary studies for the building of a series of dams across four provinces.

"We are planning to build more than 10 dams and related irrigation systems in four northwestern provinces to ensure rice production during both the rainy and dry seasons," Veng Sakhon, secretary of state for the ministry, told the Post this week.

The proposed dams would provide the country with a more modern irrigation system as well as generate electricity for rural communities, he said.

However, other dam projects have come under fire for their impact on the environment and lack of transparency.

The ministry aims to build four dams in Pursat province that would supply irrigation to more than 35,000 hectares of land and generate as much as 300 megawatts of power for local communities. Other proposed dam sites include locations in Battambang, Kampong Chhnang and Banteay Meanchey provinces, and the ministry is consulting with engineers from China and South Korea, Veng Sakhon said.

He added that the government must look outside the country for the money needed to complete the ambitious project.

"We will need more than US$4 billion," he said, adding that the ministry is still in the preliminary stages of planning the massive projects.

Chan Tong Yves, secretary of state for the Ministry of Agriculture, Forestry and Fisheries, said Cambodia must improve its irrigation systems to meet greater agricultural and export demands. "We have suffered drought in some areas, but nothing serious yet," he said.

Meas Sotheavy, head of the statistics office at the ministry's Planning and Statistics Department, said only a relatively small portion of Cambodia's rice fields is irrigated.

"Now, only about 30 percent of rice paddies are connected to irrigation systems. We'd like to get that number to 40 percent by the end of this year," she said.

Can Cambodia become an Asian tiger?

Wed, Jul 30 2008
Money Matters

Neither very democratic nor well-run, the country has nevertheless seen economic growth of more than 10% a year since 2000

Cambodia’s ruling party won re-election in an imperfectly democratic ballot on 27 July. Corrupt, impoverished, with high population growth and poor infrastructure, the country might seem a basket case.

Yet, with Vietnamese backing and nearly 10% annual economic growth since 2000, it may be turning into another Asian Tiger.

Cambodia is neither very democratic nor very well-run. Its leader Hun Sen was backed by Vietnam when it overthrew the Khmer Rouge in 1979, and he has been prime minister since 1985.

Cambodia ranks at No. 162 on Transparency International’s 2007 Corruption Perceptions Index, well below the threshold at which normal business becomes difficult—a sale of land to foreign investors in 2007 seems to have benefited mostly the ruling elite.

Like its neighbour Vietnam, Cambodia is suffering an imported inflation problem because of rising food and fuel costs. The government’s solution has been to cease reporting the country’s consumer price index “to avert the possibility of disorder and turmoil”.

Nevertheless, there are signs of progress. Cambodia has enjoyed economic growth of more than 10% a year since 2000, led by its main export industry, garments.

Its annual population growth has declined from 2.3% in 2000 to 1.8%, facilitating rapid economic growth by reducing the strains that high population growth places on education and infrastructure.

Cambodia’s public sector absorbs only 12% of its gross domestic product (GDP), its budget and payments are close to balance, and it expects to open a stock exchange in 2009.

Foreign investment is the key, as it has been in Vietnam, where it totalled 65% of GDP in the first half of 2008. Cambodia permits 100% foreign ownership in most sectors, and foreign investment is expected to double in 2008 from $2.7 billion (Rs11,475 crore today) in 2007 (30% of GDP), with China and South Korea the leading investors.

Corruption and a lack of public sector transparency stand in the way.

But with rapid growth in Vietnam, greater prosperity in Thailand, its other neighbour, and the US market open to its exports, Cambodia could be set to become an Asian Tiger in its own right.

Cambodia to Open Bourse in 2009; Urges Corporate Transparency

By Netty Ismail and Yoolim Lee

July 24 (Bloomberg) -- Cambodia plans to open its first stock exchange and start a corporate bond market in the fourth quarter of 2009 in a bid to attract foreign funds to Southeast Asia's second-poorest nation, a government official said.

Six to 10 companies, with a combined market value of $200 million to $400 million, including Sokimex Group, the country's biggest petroleum company, and Acleda Bank Plc, its largest bank, will likely be listed on the exchange within a year of it being set up, Kao Thach, head of the Ministry of Economy and Finance's financial market division, said late yesterday.

Cambodia, which abolished money under the Khmer Rouge three decades ago, is seeking to lure foreign funds as economic growth slows after peaking at 13.5 percent in 2005. The government will need to improve the legal system and urge Cambodian companies to open their accounting records to investor scrutiny, said Agost Benard, who covers the country for Standard & Poor's.

``Given all the uncertainties and lack of transparency, at least initially, it will probably be the local people who are willing to take the punt,'' said Benard, associate director at the rating company in Singapore. ``International investors who expect higher standards of disclosure and transparency will take a wait-and-see attitude.''

The government last year asked more than 400 companies, most of which are family businesses, to get their financial statements audited to improve transparency, Thach, 34, said in an interview in Phnom Penh.

Local Rules

``Cambodia has been effectively cut off from the rest of the developed world for the past three decades, so a lot of business has been done based on unwritten local rules,'' said Marvin Yeo, co-founder of Frontier Investment & Development Partners in Phnom Penh.

Frontier Investment, a private-equity fund, is raising $250 million to put in the second-poorest of 10 Southeast Asian nations, and will cash out of some of its planned investments through listings on the exchange, Yeo said.

The listing requirements in Cambodia will likely be modeled on the Kosdaq, South Korea's second stock market that was set up 12 years ago for small- and medium-sized firms as well as venture start-ups, Thach said.

Companies seeking a Kosdaq listing need to be in business for at least three years with minimum paid-in capital of 500 million won ($495,417) and debt-to-equity ratio of less than 150 percent of the industry mean. Venture capital firms have less stringent requirements under the South Korean government's program to prop up smaller technology companies.

Raising Capital

South Korea's exchange is helping Cambodia set up its bourse. The Cambodian government, which will likely own at least 51 percent of the planned venture, and the operator of the Seoul-based bourse, Korea Exchange Inc., will begin discussions next month to decide on their shareholdings, Thach said.

The Cambodia Securities and Exchange Commission will likely be set up as early as September, Thach said.

``They're nowhere near getting the rules together, the criteria for listing, transparency, proper accounting,'' said John Brinsden, vice chairman of Acleda Bank, the largest Cambodian bank with 209 branches in 24 provinces.

Acleda Bank will ``need a lot of capital over the next few years'' as it opens more offices in Cambodia and neighboring countries including Laos, Brinsden said in Phnom Penh.

Sokimex, which has monopoly rights to ticket sales at the Angkor Wat ancient temple ruins in Siem Reap, plans to expand its hotel and resorts business, Chief Executive Officer Sok Kong said on the company's Web site.

Transparency Concerns

Other Cambodian companies considering initial public offerings include Canadia Bank Plc, Union Commercial Bank Plc and Mong Rithy Group, which has palm oil plantations in Sihanoukville, Thach said.

Royal Group, which owns the country's biggest mobile-phone operator and has a partnership with Australia & New Zealand Banking Group Ltd. in Cambodia, will consider a listing ``in the future,'' Chairman Kith Meng said in an interview in Phnom Penh.

Companies can sell shares or bonds in Cambodia's currency, the riel, or the dollar, which will mitigate any foreign exchange risk for international investors, Thach said.

Still, ``the biggest concern would be the credibility of the companies or their reporting standards,'' said Frontier Investment's Yeo. Transparency International, a private monitoring agency based in Berlin, ranked Cambodia 162nd of 179 countries in its annual report on perceptions of corruption last year.

To contact the reporter on this story: Netty Ismail in Singapore
nismail3@bloomberg.net.

ECONOMY-CAMBODIA: Resource Curse or Blessing?

By Andrew Nette

PHNOM PENH, May 28 (IPS) - Cambodia is facing a natural resource boom, prompting donors and non-government organisations (NGOs) to warn that without measures to improve financial transparency, promote better governance and curb corruption, the potential windfall could be squandered.

In addition to significant oil reserves off Cambodia’s coast, there are major deposits of natural gas, as well as minerals such as gold, copper and bauxite, mainly in the northeast of the country.

"The risk of a resource curse is there," said Jo Scheuer, country director for the United Nations Development Programme (UNDP) in an IPS interview. "Included in this is the issue of corruption and funds disappearing."

At the same time Scheuer is keen to stress that Cambodia "has a great opportunity to avoid mistakes that have been made in other countries,’’ and translate the benefits to all Cambodians to ‘’create a resource blessing’’.

"The government says it is a little early to start to talk about revenue because the resources are still underground," said Chhith Sam Ath, executive director of NGO Forum in Phnom Penh. "We think it is important for us to be prepared for the new situation and challenges."

NGO Forum is one of a number of local organisations behind a new coalition, yet to be formally launched, that wants to ensure the potential financial benefits from the country’s resource windfall are managed in a socially responsible manner.

The Berlin-based Transparency International’s 2007 Corruption Perception Index ranked Cambodia 162 out of 179 countries, making it the most corrupt country in Asia after Burma and among the worst globally.

"I think the concern is the past experience," continued Sam Ath. "A lot of natural resources have been extracted often under concessions, but the revenue that has gone into the budget has been less than expected."

"It is generally accepted that poor governance, lack of transparency and corruption are serious problems for Cambodia," said Sek Barisoth, director of the Mainstreaming Anti-Corruption for Equity Programme with PACT Cambodia, another supporter of the emerging coalition.

While observers say the Cambodian Government is verbally committed to the fight against corruption, there has been little action. A proposed anti-corruption law, developed in early 2005 with technical assistance from PACT, remains in draft form. It would establish an independent anti-corruption commission and provide a better legal definition of corruption.

Oil is the current focus of the resource boom, with exploration well underway in the waters off Cambodia’s cost to determine the extent of the country’s reserves.

How much oil is there? "We do not know," said UNDP’s Scheuer. "The standard answer is that no one has done any work on exactly how much oil and gas there is."

Two years ago, U.S. oil giant Chevron, the lead partner in Block A, where exploration has gone the furthest, announced "significant" oil and gas reserves. Scheuer said the company is expected to announce the results of its exploration sometime after Cambodia’s July national election.

With the price of a barrel of crude currently hovering around 130 US dollars and some analysts expecting it to reach 200 dollars by the end of the year, the financial gains for Cambodia are significant.

"It is a potentially huge windfall for a country if invested wisely in the long-term development objectives such as health, education and expanding the labour market," said Scheuer. His organisation has been one of the key donors working to help the Cambodian government deal with the threats and opportunities presented by the oil boom.

It is collaborating with the Cambodian National Petroleum Authority to build its capacity, and earlier this year cooperated with the government to organise a major international conference on oil and gas.

"It is not necessarily a blessing for a country to be endowed with petroleum resources," Arne Walther, a Norwegian diplomat said at the conference. Norway, one of the poorest countries in Europe until the discovery of oil and gas off their coast in the mid-sixties, is cited by many as a success story in terms of how to handle the issues raised by an influx of petro dollars.

"It is how governments arrange for their resources to be extracted and how revenues earned are used that determine the success or failure of being a petroleum endowed state," Walther said. "I believe Cambodia faces a challenging task in planning and developing its petroleum sector and developing policy and instruments for channelling the future oil and gas revenues in a best possible way for the benefit of Cambodians. It is actually a momentous task."

"We realise the opportunities that petroleum revenues may afford us to improve the livelihoods of the Cambodian people," Deputy Prime Minister Sok An told the gathering. "The translation of the capital value of oil reserves into the stored capital value of our people through improved health and social conditions and education is very important for the long term prosperity of Cambodia."

"While some technical people in the government are concerned that the Nigerian experience is not copied in Cambodia it is unclear how high up this goes," said Barisoth.

"The concerns are valid," agreed Scheuer. "It is still too early to make a judgement and we are cautiously optimistic that they will get it right," he says of the government’s efforts.

The threat of corruption is not the only factor bearing on Cambodia’s efforts. "It is extremely difficult for a country like Cambodia, with its capacity, to develop a petro industry because everything is so complicated," said Scheuer.

The appropriate contractual arrangements and tax regimes are just two of the complex issues the country faces. Other countries, including developed countries, have encountered unexpected economic difficulties in developing their resource wealth, often dubbed ‘Dutch Disease’.

This refers to the problems associated with dumping large amounts of resource revenue into an economy and the distorting impact this has on other sectors such as agriculture. It originated in the Netherlands after the rapid flow of funds from the discovery of North Sea gas led to significant structural changes, including price increases and the de-industrialisation of many sectors of the economy.

The key message from the conference earlier this year was that Cambodia should take time to develop the industry and get the policy fundamentals right.

"In Norway it was ten years from the first drilling to first revenue coming on stream. Their advice is not to rush it," said Scheuer. "The main point now is to get the governance and policy frameworks right. If they get it right with Block A it will flow onto the other blocks."

The other idea being suggested by donors and experts with experience in the sector is for Cambodia to set up a fund to store revenue from oil and invested appropriately. Similar funds already exist in Norway and East Timor.

"We need to learn more about this fund but in general we would support a transparent process for the resource revenue," said Sam Ath from NGO Forum. He is one of two Cambodian NGO people who are closely studying East Timor to look at how the fledgling state is handling its revenue from natural gas.

Timor was selected from among several countries because of its similarities to Cambodia. "It is very important to build capacity and learn from them how civil society can engage with the government over the distribution of natural resources," said Sam Ath. "NGOs are open and happy to work with the government. We are not working to oppose them but to help them make the most effective use of the revenue from oil and gas."

NGOs and donors are also keen that Phnom Penh sign up to the Extractive Industry Transparency Initiative supported by a coalition of governments, companies and civil society organisations aimed at ensuring companies disclose what they pay and governments what they receive.

Oil Official Predicts 2011 Production [-Experts: No guarantee that the production of oil would lead to prosperity for all]

By Chun Sakada, VOA Khmer
Original report from Phnom Penh
26 March 2008

Cambodia expects to start production of its off-shore oil in 2011, a senior national oil official said Wednesday.

Production could begin "if there is no delay," said Te Duong Dara, director-general of the Cambodian National Petroleum Authority, on the sideline of a conference between officials and international oil experts. "We will produce the first oil products for Cambodia in 2011 to reduce the import of oil."

The government's ministries were "working all together" to create proper laws and attract investment, he said.

"If we have the right laws and transparency, foreign investors will come to make their business with us," he said.

Estimates for six blocks of offshore development are in the hundreds of millions of barrels of crude and three times as much natural gas.

Experts warned Wednesday there was no guarantee that the production of oil would lead to prosperity for all.

"Economic growth in resource-rich developing countries has been on average two to three times lower than resource-poor countries," said Jo Scheuer, Cambodia director for UNDP, which sponsored the conference. "Many assume that the discovery of oil and gas reserves automatically translates into greater prosperity. Unfortunately, this is not the case."

Council Minister Sok An, who is also chairman of the national petroleum authority, said Wednesday Cambodia viewed the production of oil as a "vital step in contributing to the country's sustained economic development."

The government is responsible for transparency, he said, and managing the oil revenue to reduce poverty.

Chinese dams threaten Cambodia's forests, farmers

Tue Mar 25, 2008
By Ek Madra

CHAY ARENG RIVER, Cambodia (Reuters) - Along the Chay Areng valley in Cambodia's remote Cardamom mountains, children still scamper barefoot through one of mainland southeast Asia's last remaining tracts of virgin jungle.

If they take the same paths in a few years, they will probably have to be swimming.

Faced with a rapidly growing but power-starved economy, Prime Minister Hun Sen has decided the rivers flowing from one of the few elevated spots in a relentlessly flat country should become its battery pack.

With this in mind, in the last two years he has agreed to at least four Chinese-funded hydropower projects as part of a $3 billion scheme to boost output from a measly 300 MW today to 1,000 MW in a decade, enough to power a small city.

The indigenous communities who have lived off the forests in the Cardamoms since the dawn of time appear to be the ones who will be paying the biggest price.

"We have been living here without a dam for many generations. We don't want to see our ancestral lands stolen," said 78-year-old Sok Nuon, lighting a fire inside her wooden hut nestled in among the trees near the Chay Areng river.

"I do not want to move as it takes years for fruit trees to produce crops. By then, I'll be dead," she said.

WAR ON BLACKOUTS

Few people argue that Cambodia's 14 million people need more power.

After decades of war and upheaval, including the Khmer Rouge "Killing Fields" of the 1970s, the economy has finally taken off, growing at nearly 10 percent a year.

But its antiquated, mainly diesel-fuelled power plants can meet only 75 percent of demand, meaning frequent blackouts and unit prices around twice those of neighboring Thailand and Vietnam -- both factors inhibiting faster expansion.

With the closer ties Hun Sen has cultivated with Beijing in the last five years, Chinese cash and dam-building expertise has become a logical solution to what is one of the inevitable pains of breakneck growth.

"Chinese investment in hydropower is so important for Cambodia's development," Foreign Minister Hor Namhong said in January after meeting with his Chinese counterpart Yang Jiechi.

But critics maintain that much of the planning is taking place with scant regard for the long-term impact on the environment in a country where (80) percent of people still rely on agriculture for their livelihoods.

"Poorly conceived and developed hydro-power projects could needlessly and irreparably damage Cambodia's river system with serious consequences," said Carl Middleton of the U.S.-based International Rivers Network.

MUDDY WATERS

The Chinese embassy in Phnom Penh denied Beijing was taking any short-cuts in dam construction in Cambodia -- part of a massive aid package designed to ensure a compliant friend in the region.

"They comply with environmental standards and are approved by the Cambodian government," said a Chinese diplomat who did not wish to be named. "We just want to help Cambodia as much as we can."

But the Chay Areng project hardly appears to be a model of transparency.

The deal was signed in late 2006 with China Southern Power Grid Co (CSG), one of China's two grid operators, to build a 260 MW plant at an estimated cost of $200 million and with a completion date of 2015.

With no prior consultation, the first villagers knew of the project was when Chinese engineers turned up this year to start working on feasibility studies -- details of which CSG and the government are reluctant to discuss.

Environmentalists who have conducted their own studies say the dam's lake will cover 110 sq km (42 sq miles) and displace thousands of indigenous people in nine villages.

More than 200 animal species, including elephants, sun bears, leopards and the endangered Siamese crocodile, would be affected upstream, said Sam Chanthy, head of the NGO Forum, a foreign-funded non-governmental organization in Phnom Penh.

Downstream, the delicate ecosystem of the flooded forest, home to some of the world's rarest turtle species as well as hundreds of types of migratory fish, would also be hit by disruptions to water flow, he said.

"It won't take long for these invaluable assets to disappear when the dam is built," said Eng Polo, of wildlife group Conservation International.

(Editing by Ed Cropley)