US seeks reports on resource acquisition

Monday, 19 July 2010
Sebastian Strangio
The Phnom Penh Post

A SWEEPING financial reform bill passed by the United States Senate last week will force US-listed oil, gas and mining companies to publicly divulge payments made to secure access to resources in foreign countries including Cambodia.

The provisions, passed on Thursday as part of the 2,300-page Dodd-Frank Wall Street Reform and Consumer Protection Act, will require the companies to disclose the payments to the US securities and exchange commission by 2012.

Companies will be obliged to report to the SEC the “type and total amount of such payments made for each project”, as well as “the type and total amount of such payments made to each government”.

These include “taxes, royalties, fees (including licence fees), production entitlements, bonuses, and other material benefits” relating to extractive industry revenues.

Cambodia is home to some publicly traded resource companies – including Chevron, Total, Petronas, Conoco-Phillips and Mitsui & Company Ltd – that would be required to publicise further payments made to secure oil-exploration rights or offshore oil concessions in the Kingdom under the newly passed legislation.

In April, Prime Minister Hun Sen revealed that French oil giant Total had paid US$28 million to secure offshore oil exploration rights in the Gulf of Thailand, prompting requests for further disclosures.

In a statement on Friday, Oxfam America applauded the new regulations, saying they would improve the transparency of public revenues in Cambodia.

“Public disclosure of revenues and how they flow from industry to government is fundamental to improving governance, helping any government’s efforts to prevent and curb corruption, and improve revenue management,” Mona Laczo, Oxfam America’s deputy regional director for East Asia, said in the statement.

Ou Virak, president of the Cambodian Centre for Human Rights, also welcomed the new bill, saying the issue of under-the-table payments had long been a concern in the extractive resources industry.

“It is a good thing for the US to pass a bill that forces companies to disclose all unofficial fees,” he said. “I think it will be far-reaching.”

Council of Ministers spokesman Phay Siphan said he was not familiar with the new regulations, but reaffirmed the government would pursue resource revenue transparency “in the same spirit” as in its fight against corruption.

New US law seeks disclosure of foreign payments

Washington, July 17 (IANS) Publicly traded oil, gas and mining companies, including those from India and other emerging economies, will be required to disclose their payments to foreign governments under the landmark financial reform legislation.

The new law awaiting President Barack Obama’s signature will require companies to report on their filings with the Securities and Exchange Commission (SEC) such payments on a country-by-country and project-by-project basis, according to the Washington Times.

‘We now have the tools to help people in resource-rich countries hold their leaders accountable for the money made from their oil, gas and minerals,’ Benjamin L. Cardin, Maryland Democrat who co-introduced the measure in the senate was quoted as saying.

‘Too often, oil money intended for a nation’s poor ends up lining the pockets of the rich or is squandered on showcase projects instead of productive investments,’ Richard G. Lugar, top Republican on the Senate Foreign Relations Committee said in support.

The legislation should go a long way to ending the secrecy surrounding companies’ payments to foreign countries, its supporters contend.

The legislation applies to oil, gas and mining companies registered with the SEC and covers more than 90 percent of internationally operating oil companies and many of the top international mining companies, according to Oxfam America, an international nonprofit relief and development group that has been pushing for the law.

‘This not only includes American companies but also many foreign companies, such as Shell and BP, as well as companies from emerging markets such as China, India, Brazil, and Russia,’ the Times cited Oxfam officials as saying.

The measure would not apply to a number of large nationally owned oil companies, most of which operate only in their own countries and not internationally.

Oxfam and others praised Congress for passing the legislation.

‘Secrecy of oil, gas and mining company payments to governments fosters government corruption and violent conflict in resource-rich countries that are home to more than half of the world’s poorest people,’ Oxfam America President Raymond C. Offenheiser Jr. was quoted as saying.

‘Instability in these regions poses a long-term threat to national security, foreign policy, and economic interests in the United States.’

Watchdog Renews Call for Oil Transparency

Men Kimseng, VOA Khmer
Washington, D.C Wednesday, 02 June 2010

“We want to see this revenue being managed transparently and accountably so that Cambodian people and their future generations benefit equally.”

The US oil giant Chevron and the Cambodian government need to improve transparency in the management of oil revenue, a Cambodian watchdog said Monday.

“What we want to know is how this revenue from natural resources is being managed, because it is a new sector,” Mam Sambath, chairman of Cambodians for Resource Revenue Transparency, told “Hello VOA.” “We want to see this revenue being managed transparently and accountably so that Cambodian people and their future generations benefit equally.”

Mam Sambath, who attended Chevron’s annual meeting last week in Houston, Texas, to advocate for a payment disclosure policy, said greater transparency will work in the company’s interest.

“The disclosure will instead promote a good image of Chevron in a country it operates,” he said. “And it will also attract other highly responsible companies to follow suit and invest in that particular country.”

Cambodia insists it has been transparent in managing state revenue.

“We don’t have a problem [if a company makes their payment public],” Hang Chuon Naron, secretary-general of the Ministry of Economy and Finance, told VOA Khmer. “The prime minister has authorized us to do that, and we have been doing that all along.”

However, a caller from Banteay Meanchey province expressed skepticism in the government’s transparency efforts. Villagers are seldom fully informed of gold mining operations in the province, the caller, who gave his name as Ny, said.

Transparency advocates say Cambodia would do well to become a member of the Extractive Industries Transparency Initiative, or EITI.

“On natural resources, the international community must push the government to be a member of EITI to ensure effectiveness in management of revenues and expenditure from mineral resources,” said Yim Sovann, spokesman for the opposition Sam Rainsy Party. “Sooner or later we will extract oil and gold, and revenue from this sector is gigantic. If we manage it properly we will be rich.”

Yim Sovann called for openness for input from the public, lawmakers and the international community for the drafting of a management law for natural resources currently underway.

Mam Sambath agrees.

“I strongly urge the government to consider becoming a member of EITI, so that we can better manage revenue from natural resources and help better manage our economy,” Mam Sambath said.

Foreign donors concerned about accountability in Cambodia

Wed, 02 Jun 2010
DPA

Phnom Penh - Cambodia's donor conference opened Wednesday with warnings that access to land, improved transparency, and accountability for use of natural resources will be essential for the country's development goals.

World Bank country head Annette Dixon noted that 4 million Cambodians - about 30 per cent of the population - live in poverty while many more "live precariously near poverty."

"Life continues to be extremely challenging for the majority of Cambodian rural families, who remain vulnerable to shocks," she said.

Dixon applauded reforms in managing public finances, and said the government had strengthened social protections for the poor.

She said donors remained "strongly committed" to development efforts help the poor, despite global financial woes, "which in turn heightens the need to improve aid effectiveness and accountability for results."

Cambodian officials, non-governmental groups and foreign donors are meeting for two days to discuss the country's most pressing issues. On Thursday, donors will announce how much money they will give to help the government for it development goals.

In 2009, donors provided 951 million dollars, around half the government's budget. The finance ministry said it expected pledges of more than 1 billion dollars this year.

Prime Minister Hun Sen told the conference that good governance was "the most important prerequisite for a sustainable and equitable economic development and social justice."

"In the context of this vision, the Royal Government considers the fight against corruption as a top priority," he said, citing a new anti-corruption law, and an ongoing crackdown on illegal logging and fisheries, as evidence of the government's commitment.

Hun Sen said agriculture was the top development priority for the predominantly rural population, saying it could bolster economic growth and ensure food security.

He also pledged to pay more attention to granting land concessions to the poor. Land concessions are a highly contentious subject, with large investors in possession of more than a million hectares.

Non-governmental organizations said improvements in some health indicators showed similar gains could be made in governance, land use and natural resources. They called for reform of the judiciary, which is seen as corrupt and inefficient.

On Tuesday, the Britain-based organization Global Witness, called on donors to pressure the government to deliver meaningful reforms in the face of "gross mismanagement" of its natural resources.

Global Witness is not participating in the conference.

British NGO calls on Cambodia to honour reforms

Wednesday, June 02, 2010
ABC Radio Australia

A British N-G-O is calling on donors to Cambodia to ensure the government makes good on long-delayed reforms in exchange for donations expected to form around half the country's budget.

The call by Global Witness comes ahead of this week's key donor conference in Phnom Penh, where nations are expected to pledge around one billion U-S dollars.

UK-based Global Witness said donors must insist the government makes good on regularly repeated promises of reform in exchange for foreign taxpayers' cash.

It says donors must stop turning a blind eye to the problems, and warns that continued bad practices mean foreign taxpayers are propping up a corrupt elite.

A government spokesman declined to comment.

But Cambodian Prime Minister Hun Sen last week hit back, calling Global Witness "a gang of thieves" and accusing it of colluding with unnamed foreign organisations to undermine the Cambodian people.

Tackle Cambodia mismanagement, donors urged

1st June 2010
Source: Global Witness

International donors must act on entrenched natural resource-related corruption in Cambodia, says Global Witness

Cambodia’s international donors must tackle head on the gross mismanagement of the country’s natural resources at tomorrow’s government-donor meeting, campaign group Global Witness said today. Donors gave Cambodia $1bn in aid last year, despite evidence of widespread corruption and mismanagement of public funds and repeated failures to implement promised reform.

Ambassadors from donor countries will meet in Phnom Penh from June 2-3 for the regular review of the government’s progress towards meeting reform targets. They are expected to agree to continue to provide aid to the tune of $1bn a year - a figure almost equal to Cambodia’s entire domestic revenue through the national treasury in 2008 - even though the government has failed to meet agreed benchmarks.

“The Cambodian government has been promising to reform for years, but nothing had changed,” said Global Witness Campaigns Director Gavin Hayman. “Our latest report shows that the political elite has no intention of loosening its stranglehold over the country’s natural resource wealth. Donors simply cannot continue to turn a blind eye.”

Tomorrow’s meeting follows a series of revelations of high level corruption and governance failures over the last 18 months, including:

• The mysterious circumstances surrounding a multi-million dollar payment in signature bonuses and “social funds” made by French oil giant Total to the government. No information about the whereabouts of these payments has been made public by the authorities.
• A total lack of transparency in the latest bidding round for oil and gas exploration rights, held in late 2009. No information about the result has been made public by the government;
• An investigation by the US Securities and Exchange Commission into possible violations of anti-graft legislation by multinational mining company BHP Billiton during operations in a country widely reported to be Cambodia;
• The bankrolling of Cambodia’s military by private businesses, formalised by Prime Minister Hun Sen in February 2010. The following month a CPP Senator used the Battalion he sponsors to guard a plantation owned by his company against community protests;
• An escalation of land grabs resulting in urban and rural forced evictions;
• Condemnation by civil society of a new Anti-Corruption Law passed in March 2010 which fails to protect whistleblowers, and of the lack of independence of the new Anti-Corruption Unit.

Earlier this month Global Witness published Shifting Sand which outlined how a largely unregulated sand trade between Cambodia and Singapore was threatening coastal ecosystems and local livelihoods. It named two of Cambodia’s senator-tycoons as benefitting directly from the trade, and estimated that more than $10m in royalty fees could be missing from national accounts.

Global Witness is calling on Cambodia’s donors to make aid dependent on basic governance reforms which will enable Cambodia to harness its own resources for development. “Donors must take a coordinated stand against the horribly subverted dynamic of aid in Cambodia in which their country’s money props up the basic functions of the state, leaving an elite free to exploit the state’s assets for personal profit and gain further power,” said Gavin Hayman. “Taxpayers rightly expect development aid to be spent on genuine poverty reduction rather than underwriting corruption and state failure.”

/ENDS

Notes

1) In April 2010, Prime Minister Hun Sen announced that the French company Total had made a payment of US$28 million to the government. US$8 million of this was for a social development fund as part of its agreement to explore for oil offshore, and an additional US$20 million signature bonus went to the government. Information can be found at http://www.globalwitness.org/media_library_detail.php/961/en/multi_million_dollar_payments_to_cambodia_by_french_oil_giant_total_should_be_scrutinized_by_countrys_donors

2) In April 2010, it was announced that the company BHP Billiton is under investigation for potential anti-graft violations by the U.S. Securities Exchange Commission (SEC). Information can be found at http://www.globalwitness.org/media_library_detail.php/958/en/global_witness_statement_on_bhp_billiton_engagemen

3) Information about the private sponsorship of the Cambodian military, can be found at http://www.globalwitness.org/media_library_detail.php/935/en/global_witness_urges_cambodias_donors_to_condemn_s

4) Information about land grabs and forced evictions in 2010 can be found at www.ngoforum.org.kh

5) Information about the anti-corruption law can be found at http://www.licadho-cambodia.org/press/files/221Jointstatementondraftanti-corruptionlaw11march2010-Eng.pdf

Global Witness investigates and campaigns to end natural resource-related conflict and corruption and associated environmental and human rights abuses.

NGO says Cambodia's donors must demand reform for cash

Tue, 01 Jun 2010
DPA

Phnom Penh - The British non-governmental organization Global Witness said Tuesday that foreign donors must pressure the Cambodian government to deliver meaningful reform in the face of "gross mismanagement" of the country's natural resources.

"The Cambodian government has been promising to reform for years, but nothing had changed," said Gavin Hayman, the group's campaigns director.

Donor nations were scheduled to meet in Phnom Penh Wednesday and Thursday to discuss pledges. Last year, they provided almost 1 billion dollars in assistance, around half Cambodia's annual budget.

Finance Minister Keat Chhon said in April that he expected donor pledges to match or exceed last year's sum.

In a statement released to coincide with this week's meeting, Global Witness, which monitors natural resource exploitation, claimed evidence of widespread corruption and mismanagement of public funds.

Donor nations' "money props up the basic functions of the state, leaving an elite free to exploit the state's assets for personal profit and gain further power," Hayman said.

"Taxpayers rightly expect development aid to be spent on genuine poverty reduction rather than underwriting corruption and state failure," he said.

Cambodia is ranked as one of the most corrupt countries by the anti-graft monitor Transparency International, which last year placed the country near the bottom of its annual Corruption Perceptions Index.

Government spokesman Prak Sokhonn declined to comment on the statement by Global Witness, but last week, Prime Minister Hun Sen lashed out at the group, a regular critic of his government, describing the organization as "a group of thieves."

The opposition Sam Rainsy Party acknowledged some progress had been made in health, education and child protection since the last donor meeting in December 2008 but highlighted problems with land disputes and evictions.

"Titling of land must be increased, and a moratorium on evictions and arrests should be implemented until all land is formally adjudicated according to the law," the party said.

Cambodia's gold, mineral find

May 24, 2010
AFP

London-based Global Witness has alleged that Cambodian earnings from natural resources, including minerals, are being 'jeopardised by high-level corruption, nepotism and patronage.' The environmental watchdog said Cambodia had enough natural wealth to wean itself off foreign aid but that international donors must do more to ensure the assets are properly managed.

PHNOM PENH - CAMBODIA said on Monday that Australian firm OZ Minerals had discovered around 8.1 million tonnes of gold on its territory, ahead of a conference intended to draw in mining investment.

Some 60 local and foreign firms including companies from Australia, China, South Korea and Vietnam have been conducting mineral research and exploration across Cambodia, an official said ahead of the international mining conference starting in Phnom Penh on Wednesday.

'We have been conducting research and we have obtained remarkable results,' said Sok Leng, head of the General Department of Mineral Resources at Cambodia's Ministry of Industry, Mines and Energy, at a news conference.

OZ Minerals Limited had recently discovered about 8.1 million tonnes of gold in an area in the north-eastern province of Mondulkiri, said Mr Sok Leng. Other minerals including gold, iron ore, and copper had been found elsewhere in the country, he said.

Douglas Broderick, representative of the United Nations Development Programme, which is co-organising the conference with the Ministry of Industry, Mines and Energy, said Cambodia's mining sector would continue to develop. 'Obviously, we would like to see (the) mining conference encourage investment,' Mr Broderick said during the briefing.

London-based Global Witness has alleged that Cambodian earnings from natural resources, including minerals, are being 'jeopardised by high-level corruption, nepotism and patronage.' The environmental watchdog said Cambodia had enough natural wealth to wean itself off foreign aid but that international donors must do more to ensure the assets are properly managed.

Locals Want More Say in Resource Development

By Im Sothearith, VOA Khmer
Original report from Washington
23 December 2009

[Editor’s note: VOA Khmer recently spoke with specialists in the field of natural resource management in developing countries and learned that Cambodiais not alone in struggling to use natural resources to benefit its citizens. The resource curse, where natural riches fail to help the poor, is a worldwide scourge, the global experts told VOA Khmer in numerous interviews. Below is Part 16 of the original VOA Khmer weekly series, airing Sundays in Cambodia.]

Local communities, civic groups, media and even law enforcement often have the least opportunities, if any at all, to get involved in the management of timber, oil, minerals and other resources, experts warn.

That means policies that are often set by international experts and the government are little understood by the people most affected.

Petter Stigset is a senior advisor for oil and development at the Norwegian Agency for Development Cooperation, which works with Cambodian National Petroleum Authority.

Involvement by many groups can help shed light on how resources are developed, he said.

“To get the civil society, to get the media involved, to get NGOs involved, to try to find out what is actually happening, and to have a good and constructive dialogue with the authority, with the government, it’s really the most important,” he said. “Also, to be able to ask the right question and make sure that no damage is being done to Cambodians and the Cambodian economy.”

More local groups are becoming aware of their role.

“However, we see that participation of civil society and the public is limited in the drafts of bill, policies and decrees, in particular the policies and laws related to the management of natural resources,” said Mam Sambath, Chairman of Board of Directors of Cambodians for Cambodians for Resource Revenue Transparency. “I think the government should be encouraged to see the important role of the community and the public so that it provides the community with adequate opportunity to share its inputs to make the policies and laws accurate and to effectively protect the benefits of the country and the local community.”

Nguon Nhel, vice president of the National Assembly, said the government understands the importance of stakeholders, especially local communities. The government has encouraged the formation of groups to care for fisheries and forests, he said.

Even so, some groups say they have not had the influence they would like.

Ly Lim, chief of the Romeas Pon Mchul Forest Community, in Kratie province, has been trying to build local networks of forestry communities that might be able to lobby at the provincial level. So far, he said, communities have not had a chance to participate in decision-making “at all.”

Sroeun Mach is a representative of a minority Pnong ethnic community in Keo Seima district, Mondolkiri province, and a member of the National Network for Social and Environmental Impacts by Extractive Industry. In his area, the Cambodian Highlight Mineral Company, Ltd., has been licensed for gold exploration.

“I have never had an opportunity to voice my concerns,” he said. “When they came, they did not inform our local community. They came with their teams and security guards. We saw them digging near our [tropical] trees, from which we take wood oil for living.”

A representative of the company said it had twice discussed its operations with the community in an attempt to solve unforeseen impacts. It also allows villagers to collect from trees on sites where the company is licenses, the official said.

Even so, Sroeun Mach would like to see more engagement from his community in the entire process.

“I would like to request the government that before granting concessions to private companies to invest for the country’s development, the government should come down and study, so that our community can give inputs and be informed,” he said. “If the government does not come down to study and [continues to] allow private companies to do business, it will impact most of the ethnic identity in my Mondolkiri province.”

Cambodia Lacks Clear Spending of Resource Money

By Im Sothearith, VOA Khmer
Original report from Washington
14 December 2009

[Editor’s note: VOA Khmer recently spoke with specialists in the field of natural resource management in developing countries and learned that Cambodiais not alone in struggling to use natural resources to benefit its citizens. The resource curse, where natural riches fail to help the poor, is a worldwide scourge, the global experts told VOA Khmer in numerous interviews. Below is Part 15 of the original VOA Khmer weekly series, airing Sundays in Cambodia.]

Cambodia lacks a clear mechanism for spending revenue from natural resources that could benefit citizens and socio-economic development, experts say.

In his book, “The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It,” Paul Collier, an Oxford University economist, says development is about giving ordinary people hope that their children will live in a society that has caught up with the rest of the world.

Natural resources can create a huge opportunity for a country, he told VOA Khmer in an interview, but they must be used for ordinary citizens and not elites. A major benefit can come in education, building what economists call “human capital.”

This doesn’t always happen to resource-rich countries.

“There are many reasons why things go wrong,” Collier said. “Often the revenue’s sometimes not captured by the government through taxation. But the more usual problem is the revenue gets badly spent; so, instead of revenue being well spent on good investment, they use it for public consumption, and they become a battleground between politicians.”

It is hard to tell now whether Cambodia is on a path for responsible spending, Antoine Heuty, deputy director of Revenue Watch Institute, based in New York, told VOA Khmer by phone recently.

Revenue from resources like oil and timber can be volatile, so its expenditure must be stabilized in budgets. In practical terms, that means saving resources to ensure consistency and to avoid the disruption of policy and spending.

“Harnessing the revenues to the development requires a sustainable investment path, and that means investing resources domestically and not saving it abroad altogether, because that’s not going to work in the long run,” Heuty said. “So, there is a way to spend the money properly if it is discussed in consultation with citizens, civil society, with parliament in a systematic framework to explain how the money will be used, and to give accounts as how it has been used and to what impact.”

“Having the strategy, making sure that you have proper consultations, and linking that back to the budget are three fundamental features to make sure that expenditures are delivering for Cambodia,” he added.

Such mechanisms are not in place in Cambodia. Even the government’s so-called “rectangular strategy”—which also focuses on reform in fisheries, forests and land—fails to mention management of natural resources.

Cheam Yiep, a lawmaker for the Cambodian People’s Party and head of the National Assembly’s finance committee, acknowledged the lack of regulations, but he said the government and parliament are working on a resources law.

For now, revenue from natural resources is simply put into the national budget for general public spending.

But there is no substitute for transparency in bringing resource benefits to the public, “with the emphasis upon good public investment,” Collier said.

Oil revenue must be handled well, because it has such tremendous potential to transform a country like Cambodia, said Petter Stigset, a senior advisor of Oil for Development, Norwegian Agency for Development Cooperation, which has been working with the Cambodian National Petroleum Authority on a new petroleum law.

“It’s an absolute prerequisite that all the money that flows or will flow from the oil and gas business is controlled,” Stigset said, “that it goes to the state, not to individuals or to anything else.”

Resource Revenue Collection Remains Weak

By Im Sothearith, VOA Khmer
Original report from Washington
08 December 2009

[Editor’s note: VOA Khmer recently spoke with specialists in the field of natural resource management in developing countries and learned that Cambodia is not alone in struggling to use natural resources to benefit its citizens. The resource curse, where natural riches fail to help the poor, is a worldwide scourge, the global experts told VOA Khmer in numerous interviews. Below is Part 14 of the original VOA Khmer weekly series, airing Sundays in Cambodia.]

Regardless of its bountiful resources, Cambodia cannot effectively collect revenue due to a lack of adequate state agencies, leaving revenue out of the hands of ordinary citizens but lining the pockets of a handful of elites, experts warn.

“Natural resources are big opportunities for any countries that have them, and they could transform the economy from poverty into prosperity,” said Paul Collier, an Oxford University economist and author of “The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It.”

It is important that the government have adequate laws, effective law implementation, and transparency to manage the revenues, which are important to a country’s socio-economic development, Collier told VOA Khmer in a recent interview.

In “The Bottom Billion,” an award-winning book, Collier points out that natural resource revenue to world’s billion-most poor is greater than international aid, but it is poorly utilized. Managed as effectively and efficiently as aid presently is, resources would have an enormous impact for development.

Collier proposes five steps to effectively recover resource revenue.

Step one is to carefully award contracts to get the resources out of the ground. This step can be disastrous when companies try to bribe their way into contracts beneficial to them and political elites, but not the nation.

Step two is to ensure the proper wording in contracts, where price risk is typically borne by governments, not companies.

Step three is to create transparency in all payments of natural resource revenues. If the average citizen does not know what money is coming in, he will have no hope of scrutinizing how it is used.

Step four is to build transparency in public expenditure, a vital route to development.

And step five is to make a set of rules for smoothing public spending.

“It’s important to focus on just the critical steps, which really means getting the revenues in, [through] transparent arrangement with the private sector,” Collier said. “And we’re particularly keen on processes like auction, which is more likely to ensure good revenue for the government. With the auction, the government does not really need to know a lot because the values of the resources are revealed by the bidding process of companies bidding against each other.”

William Ascher, a professor of government and economics at Claremont Mckenna College, in California, is the author of “Why Governments Waste Natural Resources: Policy Failures in Developing Countries” and “Bringing in the Future: Strategies for Farsightedness and Sustainability in Developing Countries.”

Ascher told VOA Khmer by phone that it is imperative for the government to make sure that both private and state enterprises in natural resource exploitation are required to hand over the intrinsic value of the resources to the government from the very beginning. And that often has to do with the contracting procedures.

“The most important aspect of that is making sure that they pay for their access to the resources from the very beginning, so that they are not left in the situation where everything that they get, in terms of revenues, is at their disposal to spend later on,” Ascher said.

“If the government is the agent acting on behalf of the people of the country, the government should collect what is called a natural-resource rent, which means the basic value of the natural resources as they’re being extracted, and that should go into the central budget,” he said. “And the central budget authorities in the Finance Ministry and planning agency and so on should be in the position to decide how that money should be spent best on behalf of people.”

However, Ascher added, the government should also not get greedy about revenue. Too much revenue coming into the country can create macroeconomic problems, particularly in inflation.

“So the government has to be far sighted in thinking about the rate of natural resource exploitation and to ensure that they don’t look aside if the private or state enterprise is engaging in too much exploitation to bring in revenues,” he said. “There’s no aspect of natural resources that has not been challenged by some inappropriate policies in an appropriate action. So I would imagine that for Cambodia, there are a lot of issues ranging from fishery to timber to oil to minerals.”

Ascher concern rings true for Cambodia, where natural resources have been almost exhaustively exploited in the absence of proper rules of law and inadequacy of state apparatuses, experts said.

Cheam Yiep, a lawmaker for the ruling Cambodian People’s Party and chairman of the National Assembly’s finance committee, told VOA Khmer the government follows the law on taxation, adopted in 1994. He acknowledged, however, the 1994 law does not provide for taxation of natural resource revenue.

“Oil and other minerals, such as bauxite, gold, and others, have not been illustrated in that law,” he said.

Without specific and proper guidelines, laws, and mechanisms, natural resource revenues cannot be brought effectively into national coffers, said Antoine Heuty, deputy director of the New York-based Revenue Watch Institute.

“The law is going to have to be developed to address specific challenges and develop saving and spending mechanisms that will address all activities, which is the major challenge for the country,” Heuty said.

Cheam Yiep said the National Assembly is receiving resources and assistance to enact a law for effective collection of resource revenue.

“As for natural mines in Cambodia, the government is preparing a separate law so that private extractive companies take responsibility to pay based on what is listed in tariffs of fiscal law on natural resources in Cambodia,” he said.

According to government figures, revenue from fisheries, forests and mining concessions rose from about $5.8 million, in 2008, to $6.85 million, in 2009.

Cambodia’s governance remains fragile, Heuty said, making it difficult to get resource revenue to the people. An accountable structure must be put in place to avoid problems of management, he said.

Specific guidelines are needed. These revenues are different from typical tax revenues, because they are finite. Cambodia will one day run out of resource revenue.

“If there is absolutely no structure to ensure that the money will be spent and collected and will benefit the citizens, then it may be better to leave the resources in the ground,” he said. “That’s a very extreme proposal, but some are advocating for.”

Another problem, he said, is corruption within the tax collection administration. If tax and customs departments are underpaid, they will not effectively bring revenue into national coffers.

“If you have civil servants that are paid almost nothing, and they are supposed to collect millions from a company, it’s not going to work,” he said. “I mean, it’s difficult to have a system that is functional if you have this type of situation, where the state is not looking forward to fulfilling its role. I think that is another challenge for the country; how to develop a capable state that’s ready to collect the money and then deploy it effectively.”

In Resource Management, Media Can Play a Role

By Im Sothearith, VOA Khmer
Original report from Washington
30 November 2009

“Local media rarely broadcast about natural resource management. They broadcast mostly about improvement or development. But they have some short radio and TV spots to educate us not to kill wildlife and promote the government’s tree planting day, but other sensitive issues have never been broadcast.” Sarom, Phnom Penh resident

[Editor’s note: VOA Khmer recently spoke with specialists in the field of natural resource management in developing countries and learned that Cambodia is not alone in struggling to use natural resources to benefit its citizens. The resource curse, where natural riches fail to help the poor, is a worldwide scourge, the global experts told VOA Khmer in numerous interviews. Below is Part 13 of the original VOA Khmer weekly series, airing Sundays in Cambodia.]

Media outlets can play a critical role in natural resource management, but that has not been the case so far in Cambodia, where experts say exploitation of the country’s timber, minerals and other resources is often undertaken by political elites or businesses heavily involved in politics.

In order to build an informed society, according to Paul Collier, an Oxford University economist and author of “the Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It,” good media are needed, to inform citizens on issues of public interest.

Collier refers to these informed citizens as an important “critical mass,” which can help hold a government accountable on issues like natural resource management. However, he said, it is hard to build critical mass where good media are not in place.

“It doesn’t require everybody in the society to be well informed,” he said. “We need what’s called a critical mass, which is several thousand people who understand the issue and hold government to account.”

In the case of Cambodia, the local media have not been capable of informing people about the natural resource issue, said Chea Vannath, and independent analyst and former director of the Center for Social Development.

“Local media rarely broadcast about natural resource management,” one Phnom Penh resident, who gave only his given name, Sarom, said. “They broadcast mostly about improvement or development. But they have some short radio and TV spots to educate us not to kill wildlife and promote the government’s tree planting day, but other sensitive issues have never been broadcast.”

Puy Kea, Kyodo news correspondent and member of the Club of Cambodian Journalists, acknowledged that local media have limited coverage on the natural resource issue, while international media do better on sensitive issues.

Natural resources are not a priority for local media, he said. And there is a safety issue, as well.

“The real concern is when [journalists] go out to report on regions or institutions involving sensitive issues, such as corruption or irregularities,” he said. Meanwhile, he said, “in Cambodia nowadays, media have the tendency of leaning to the government and ruling party.”

Lao Monghay, a researcher for the Hong Kong-based Asian Human Rights Commission, said Cambodia has a number of media outlets; however, “people are scared.”

“We must have information to make judgments, and we must have freedom of expression too,” he said. “It’s also the responsibility of the media, newspapers and radio to report and publish or broadcast to the people.”

Eleanor Nichol, a campaigner for the watchdog Global Witness, which has had two of its reports on natural resources banned in Cambodia, said full freedom to cover the issue would bring an element of transparency to the process.

“If they allow the publication of information about who has access to what resources so that people on the ground and civil society in Cambodia are able to see what and who has control of their resources, [they can] begin to call the government to account on that,” Nichol said.

Assembly Must Play Stronger Role in Resources: Experts

By Im Sothearith, VOA Khmer
Original report from Washington
24 November 2009

[Editor’s note: VOA Khmer recently spoke with specialists in the field of natural resource management in developing countries and learned that Cambodia is not alone in struggling to use natural resources to benefit its citizens. The resource curse, where natural riches fail to help the poor, is a worldwide scourge, the global experts told VOA Khmer in numerous interviews. Below is Part 12 of the original VOA Khmer weekly series, airing Sundays in Cambodia.]

The chaotic management of the country’s natural resources is due in part to a legislature that is ill-equipped to hold government and law enforcement officials accountable, experts say.

The National Assembly has the mechanisms in place, but the body is not an effective watchdog of government policies and practices, said Lao Monghay, a researcher at the Hong Kong-based Asian Human Rights Commission.

“The question is, how effectively does the National Assembly and every member of parliament serve the country and the people,” he said.

The legislative branch, such as the National Assembly, is an important part of a democratic country, overseeing the executive body, government activity and the application of laws.

Paul Collier, an Oxford University economist and author of “The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It,” said the poorest countries need “very strong checks and balances.” Collier said.

“They haven’t got them,” he said. “They got instant democracy in the 1990s, elections without check and balances.”

In “The Bottom Billion,” Collier ranks Cambodia as one of the world’s fifty-eight poorest countries that are natural resource-rich. In his view, Cambodia is one of the lowest-income countries and has only a façade of democracy.

Eleanor Nichol, a campaigner for the environmental watchdog Global Witness, said Cambodia’s National Assembly must strengthen the government’s checks and balances, and should be strong enough to oversee and investigate cases involved natural resources on behalf of the citizens it represents.

“It’s a key oversight body in terms of checks and balances of a functioning democratic state,” Nichol said. “So, one would hope to see it being proactively acting on behalf of citizens who elect them.”

Improper resource management undermines poverty alleviation and human rights, she said, so parliamentarians must investigate cases, ask questions, and challenge policies and actions where appropriate.

“That is what we hope to see in any functioning democratic state,” she said.

Nguon Nhel, vice president of the National Assembly, told VOA Khmer in a phone interview that parliamentarians are aware of their role, in lawmaking, oversight and handling complaints from the public.

The National Assembly makes laws, but in the absence of proper legislation, resource abuses take place, he said. Meanwhile, the National Assembly can question ministers over improper implementation of existing laws.

“We have done this so many times to strengthen the state of law,” he said.

Members also “go to the field” to meet people over their concerns in their lives “or pressure from any circle,” he said.

The National Assembly has passed four important laws to deal with natural resources: the Environmental Protection and Natural Resource Management Law, in 1996, the Law on Management and Exploitation of Mineral Resources, in 2001, the Law on Forestry, in 2002, and the Law on Fisheries, in 2006.

Still, many in the public lack confidence in the National Assembly.

Sarom, a truck driver in Phnom Penh, said he was disappointed in the inability of parliamentarians to address the concerns of the people.

“I don’t believe in parliamentarians at all because they are parties’ representatives,” Sarom said. “Parties can give orders to parliamentarians. Party represents the government. Therefore, parliamentarians have no will. Sending requests to parliamentarians is like sending requests to a cow.”

“They cannot criticize the government because criticizing the government is criticizing the party, which undermines the party’s popularity,” he said. “Then, they can be fired because our law says once parliamentarians are fired from a party, their parliamentary positions are no longer valid.”

The opposition is a minority and also ineffective, he said.

“It’s even worse sending our requests to parliamentarians from opposition parties, as they may be jailed or their immunity may be stripped,” he said. “We can’t do anything about it because the ruling party is a majority in the National Assembly.”

Son Chhay, a National Assembly representative for the opposition Sam Rainsy Party, acknowledged such concerns.

“I am very disappointed,” he said. “I’ve been a parliamentarian for so long, and I would be satisfied if the democracy is more or less progressing. But we are in a situation where people have lost confidence in us. It is true that people cannot depend on parliamentarians from the ruling party, because most of the abusers are officials from the ruling party or associated with the party. In addition, it’s unfortunate that our country’s leader publicly warns people not to file complaints to opposition parties. If they do, the problems won’t be solved.”

It is difficult for the National Assembly to oversee the government’s management of natural resources, because ruling party has full control over both legislative and executive bodies, he said.

“The lack of division of power within national institutions to oversee each other allows officials in the government to abuse whatever they want,” Son Chhay said. “Therefore, I think Cambodia is facing serious hardship. We haven’t seen any mechanism in place to effectively prevent these resources from being destroyed.”

Public Has Little Say in Resource Management

By Im Sothearith, VOA Khmer
Original report from Washington
24 November 2009

[Editor’s note: VOA Khmer recently spoke with specialists in the field of natural resource management in developing countries and learned that Cambodia is not alone in struggling to use natural resources to benefit its citizens. The resource curse, where natural riches fail to help the poor, is a worldwide scourge, the global experts told VOA Khmer in numerous interviews. Below is Part 11 of the original VOA Khmer weekly series, airing Sundays in Cambodia.]

Cambodian citizens are rarely given a chance to be meaningfully involved in managing the country’s natural resources, even though they own them in principal, and they are unlikely to have a chance to do so in the near future, experts say.

The government’s working culture and the existing mechanisms for resource management are impediments to participation by citizens, who nevertheless find themselves wooed during elections.

“The government should listen to citizens’ opinions about the management of natural resources in Cambodia and other challenges, such as the degradation of the environment,” said Lao Monghay, a researcher at the Asian Rights Commission in Hong Kong. “The government must take these under consideration, respond and take effective measures.”

Paul Collier, an Oxford University economist and author of “The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It,” told VOA Khmer by phone that public input is important, but the public must be informed.

“The government won’t get it right unless the critical mass of citizens understands the issue,” Collier said. “The citizens have to get up and speak, especially [because] managing natural resources involves the future. These resources are going to run out. So extracting these resources needs to lead to a legacy of good investment for the future.”

Chea Vannath, an independent analyst and founder of the Center for Social Development, told VOA Khmer by phone that Cambodians’ knowledge about natural resources is limited, allowing policymakers to ignore them.

“Even though they see natural resource transactions, they do not know whether they are legal or illegal,” she said. “They don’t know whether they should stage a demonstration. They are not clear. If they raise their concerns about what impacts their lives, the concerns are usually stuck at local authority levels. There is no mechanism to pass the concerns from local authorities to provincial authorities to ministerial levels in the capital. There is no bridge to pass on such concerns.”

Despite such criticism, National Assembly Vice President Nguon Nhel told VOA Khmer by phone that the government encourages the public’s role in resource management.

“Now the government encourages people to form communities so that they can be owners of nature,” Nguon Nhel said. “We have forest protection communities, fish protection communities. So, they fish in their fishing areas and protect them at the same time. work with local authorities to arrest abusers. So creating communities is beneficial, so that people are able to exercise their rights of ownership.”

Sarom, a truck driver in Phnom Penh who asked he not be fully identified, told VOA Khmer by phone that he understands ordinary citizens have responsibilities, but political pressure and starvation hamper them from thinking about anything else.

“It happens only in developed countries,” Sarom said. “The development in our country is very little. About 30 to 40 percent of Cambodian people are poor. They are not simply poor, but the poorest, with nothing to eat daily. Therefore, how can people have a chance to think about natural resource management? When they are starving, they don’t have a brain to think about anything else.”

According to New Zealand’s International Aid and Development Agency, while 40 percent of the Cambodian population has expenditure levels well below the poverty line, with 15 to 20 percent in extreme poverty. And while their livelihoods depend heavily on natural resources, the country’s natural resources have been dramatically degraded.

Saroeun, a 45 year-old resident of Kampong Speu province, told VOA Khmer by phone that he knows that, as a citizen in a democratic country, he has a responsibility to safeguard natural resources, but can’t do anything.

He sees mountains near his home destroyed and carried off as rocks in trucks.

“First we lost natural resources that existed over generations,” Saroeun said. “When they destroy them, we lose them and their beauty. Transporting those [rocks] destroys the road. In the past, I didn’t know what they used the rock for, but since I was born I used to see more mountains than now.”

NGOs Lack Resource For Protection Capacity

By Im Sothearith, VOA Khmer
Original report from Washington
09 November 2009

[Editor’s note: VOA Khmer recently spoke with specialists in the field of natural resource management in developing countries and learned that Cambodia is not alone in struggling to use natural resources to benefit its citizens. The resource curse, where natural riches fail to help the poor, is a worldwide scourge, the global experts told VOA Khmer in numerous interviews. Below is Part 10 of the original VOA Khmer weekly series, airing Sundays in Cambodia.]

While many civic groups have proven active in the realm of human rights, their involvement in protecting natural resources remains marginal, experts say.

“Not many non-governmental organizations act as watchdogs and write reports to inform either the public or the government” on resources, said Chea Vannath, the former head of the Center for Social Development, who is now an independent analyst.

People knowledgeable in the issues are limited, as is access to government information, while resource exploitation takes place in remote areas such as jungles or dangerous areas, she said.

“Most of the information is from international NGOs, who have been conducting research and writing about natural resource management in Cambodia,” she said.

The best known of these is Global Witness, she said, an environmental group that has written reports critical of the government’s exploitation of timber, oil and minerals.

Global Witness reports, which implicate senior officials and tycoons close family and friends of Prime Minister Hun Sen in the abuse of resources, are banned in the country.

Cambodia has 622 non-governmental organizations listed at the Cooperation Committee for Cambodia. Of these 418 are local, and 64 work on natural resources issues.

Cambodia’s civic groups “don’t have adequate skills” in resource protection, said Lao Monghay, a researcher for the Asian Human Rights Commission, which is based in Hong Kong. “In every sector we learn together. The government also learns, civil society also learns and the average citizen also learns.”

Paul Collier, an Oxford University economist and author of “The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It,” told VOA Khmer by phone that there’s no substitute for an informed society to watch the government’s natural resource management.

An informed society comprises a “critical mass” that understands the issue well, and civil society is one part of this, he said.

Seeing the absence of transparent management and weak role of civil society, a group of organizations joined to form Cambodian Resource Revenue Transparency, or CRRT, to report on resource management.

“Giving the public an opportunity to participate in public debate is an opportunity for them to participate in decision-making and monitor natural resource management,” Mam Sambath, the group’s director, said. “CRRT will try to seek important information for the people. They will receive information they deserve through all public forums. If there’s a public forum at the national level on natural resource management or the impact of the extractive industry, we plan to invite civil society representatives, government representatives or community members to participate.”

Chhit Sam Ath, executive director of the NGO Forum, which has projects dealing with natural resources, stressed the important role played by civil society in promoting the people’s awareness of resource management.

“First we help publicize laws or decrees concerning natural resource management to the community so that they are aware of their rights in managing natural resources,” he said. “The second is, some NGOs who are working in the community to help build capacity in the community, especially helping create natural resource communities, such as forestry communities and fishery communities, so that community members can work together to preserve and protect their natural resources.”

Kong Kimsreng, senior program officer for the International Union for the Conservation of Nature, or IUCN, said his group has two main conservation projects: the Peam Krasaop site in Koh Kong province and the Ramsar site in Stung Treng province.

“We work with rural communities on natural resource conservation from the grass-root level to find out their concerns about participating in utilizing the natural resources,” he said. “When we know their concerns, we pass on the concerns to policymakers so that they can take the concerns into consideration and give some rights to people to use the natural resources in their areas.”

Cambodia Mulls Resource Transparency Initiative

By Im Sothearith, VOA Khmer
Original report from Washington
02 November 2009

Global Witness, which has issued two reports critical of the government that are banned in the country, is a member of the transparency initiative’s board

[Editor’s note: VOA Khmer recently spoke with specialists in the field of natural resource management in developing countries and learned that Cambodia is not alone in struggling to use natural resources to benefit its citizens. The resource curse, where natural riches fail to help the poor, is a worldwide scourge, the global experts told VOA Khmer in numerous interviews. Below is Part Nine of the original VOA Khmer weekly series, airing Sundays in Cambodia.]

Cambodia is considering application to the Extractive Industry Transparency Initiative, despite heavy criticism of its handling of natural resources so far, an official says.

Cambodian People’s Party Lawmaker Cheam Yeap said the initiative could help provide expertise in the field, “with adequate experiences in managing oil and gas.”

The Oslo-based Extractive Industry Transparency Initiative is a non-profit organization that helps country’s manage their natural resources.. In 2002, Britain’s then-premier Tony Blair announced the concept of the initiative at the World Summit for Sustainable Development in Johannesburg, South Africa.

The initiative focuses on transparency and accountability in managing oil and gas and requires companies to publish payments to host governments. So far, 30 countries, including five in Asia, have implemented the program.

“If the government officials and parliamentarians are interested in applying for EITI, we welcome that,” Sam Bartlett, Asia director for the group, told VOA Khmer. “We are ready to support those stakeholders in any way so that they can adapt the EITI to the challenges in Cambodia.”

Bartlett noted, however, that Global Witness, which has issued two reports critical of the government that are banned in the country, is a member of the transparency initiative’s board.

Cheam Yeap said, were Cambodia to decide on the initiative, it were defer decisions to the board.

“If Global Witness is still angry, or wants revenge on the Cambodian government, or Cambodia, it’s not a surprise, because we’ve had some sorts of conflict in the past,” he said. “If Global Witness is on the board and is still angry with Cambodia, let the EITI board of directors decide.”

Global Witness has been campaigning against illegal logging in Cambodia since 1995. Over the last three years, Global Witness has issued two reports, “Cambodia’s Family Trees” and “Country for Sale,” severely criticizing the government for mismanaging natural resources, claiming Cambodia’s elites are able to diversify their commercial interests to reap all forms of the country’s assets. (The government denies these reports.)

Eleanor Nichol, a Global Witness campaigner, told VOA Khmer in an interview in Washington that the group’s goal was not to publish anti-government material, but the truth inevitably affected a few officials.

“It’s not anti-government information,” Nichol said. “But what happens is, actually, that it tends to point back to members of the Cambodian government, because they tend to be using their positions of power to exploit their country’s natural resources. So, inevitably over the period of time, it has brought us into a conflictual relationship with the Cambodian government.”

Cambodia needs to consider not only EITI, but also overall governance of natural resources, she said.

“They also need to look at the way in which concessions have been allocated and who the concessions have been allocated to in order to ensure that the best deal has been obtained for Cambodia and its citizens,” she said.

Mam Sambath, chairman of the newly established Cambodians for Resource Revenue Transparency, supported transparency attempts, saying the initiative would provide information to the public, informing the decision-making process.

The transparency initiative also comes with financial support to build government and civic capacity, perform outreach work to companies, and coordinate work through different organizations and agencies, Bartlett said.

Both Indonesia and East Timor have committed to the initiative, while the Philippines and Vietnam are both considering how it could fit into their regulations.

Patronage Hurts Resource Revenue: Experts

The family of the top patronage chain in Cambodia, aka the Hun Inc. family

By Im Sothearith, VOA Khmer
Original report from Washington
27 October 2009

[Editor’s note: VOA Khmer recently spoke with specialists in the field of natural resource management in developing countries and learned that Cambodia is not alone in struggling to use natural resources to benefit its citizens. The resource curse, where natural riches fail to help the poor, is a worldwide scourge, the global experts told VOA Khmer in numerous interviews. Below is Part Eight of the original VOA Khmer weekly series, airing Sundays in Cambodia.]

In Cambodia, natural resource transactions and revenues remain hidden from the public, a product of nepotism and patronage systems that have been practiced for generations, experts told VOA Khmer in recent interviews. The public should be the benefactors of national resources like oil and timber, experts said.

Cambodia practices only a façade of democracy, but transparent management, an important part of true democracy, does not exist, Lao Monghay, a researcher at the Hong Kong-based Asian Human Rights Commission, said.

The government has a habit of keeping its work obscured to the public, with questionable deals serving the personal interests of officials, their associates and the ruling Cambodian People’s Party, he said.

“It’s a tradition,” he said. “It’s a heritage of the communist regime. The deals benefit their group, their party, and they don’t want the opposition party to know about them. Actually, through the National Assembly, members of parliament must know a lot, except on national security issues.”

Local rights groups acknowledge that the government has made some efforts at improvement.

The government has made efforts to involve people in the management of national resources, through the creation of commune councils and other decentralization programs, said Chea Vannath, a political analyst and founder of the Center for Social Development.

However, it is difficult for the government to learn about something new, she said, so an absence of transparent management for resources continues.

“For centuries, since prior to colonialism, during colonialism, and later, there has never been people participation in leadership,” she said. “It is not about hiding, but it is our working culture. It’s our culture.”

Such criticisms are rejected by government officials and ruling party lawmakers.

Nguon Nhel, a CPP parliamentarian and vice president of the National Assembly, told VOA Khmer the legislative body invites responsible officials for questioning whenever a parliamentarian makes the request.

“The National Assembly questions the government at a session to pass the annual budget every year, about everything, including taxes or duties at the borders, even tax from casinos, all sources of income, how much comes to the national budget, the reasons for losing some of it, and what the government’s measures are to collect taxes,” he said.

The Assembly also questions officials on forestry concessions, he said.

“The government openly answers those questions, and it is broadcast publically throughout the country,” he said. “Nothing to hide.”

Cheam Yiep, CPP chairman of the National Assembly’s finance committee, said the Assembly and the administration are aware of the essence of transparency and have made laws related to resource management.

The National Assembly has also requested assistance from experienced international institutions, such as the World Bank, International Monetary Fund, UNDP and the Extractive Industry Transparency Initiative, he said.

“We have requested the Extractive Industry Transparency Initiative to help us,” he said. “They have helped us a few times to host seminars in Phnom Penh. The purpose of the seminars is to enable our citizens, government officials, and experts to clearly understand the aim of laws on oil and gas and their transactions in Cambodia.”

Despite such assurances, some of Cambodia’s traditions have made it into law.

The 2001 Law on Mineral Resource Management and Exploitation provides confidentiality “of all documents and information,” such as application forms, reports, plans, notices and related documents, unless the license is terminated or the license holder approves public disclosure.

Such secrecy in public transactions is not an element of democracy, experts say.

And while some officials have indeed been questioned before the National Assembly, they do not come frequently enough to ensure checks and balances, said Son Chhay, a parliamentarian for the opposition Sam Rainsy Party. The National Assembly lacks the power to invite officials as often, or as high-ranking, as necessary, he said.

“Our prime minister never shows up at the National Assembly to be questioned, not even once since 1993,” Son Chhay said. “I am the only person who was able to invite a few ministers to be questioned over the last 15 or 16 years. The forestry issue was one of the subjects for questions, but questioning once in a while is not effective."

“This irresponsibility allows the destruction of natural resources,” he said. “Even the idea of restoring what has been degraded doesn’t exist, because everyone wants more benefits to pay for the protection of their positions.”

Ordinary citizens have voiced concerns over government measures, saying confidential management of natural resources leads to the suspicion of corruption.

Bun Nguon, who asked to be indentified only as a resident in Preah Sdech district, Prey Veng province, said while the country’s natural resources are exhausted, revenues from natural resources are unknown to the public.

“I am aware that the government has revenues from natural resources,” Bun Nguon said. “But we never know how the government gets the revenues, what contracts are like in what procedures, what percentage goes to investors and what percentage the government gets. It has never been broadcast through existing TV or radio stations, or promulgated through existing local authorities.”

“For me, I want the government to manage the country’s natural resources transparently,” said Chhet Sarom, a resident of Phnom Penh. “It is to be known to all people because it belongs to everyone, not to any individuals. Don’t hide this work because it doesn’t belong to only you. By hiding all the transactions, it means you own the country alone; all the people are your slaves. By hiding the deals, it means they look down on people. So, the management should be transparent because you cannot live alone in the country without people, like Pol Pot, who tried to kill all the people.”

Som Sen, a resident of Siem Reap province, said many fish species and fine wood have gone extinct and other natural resources are exploited, but where the revenues go is unknown.

“I want to know that where the revenues of the natural resources, which belong to people, go,” Som Sen said. “Every year, I hear that the government seeks loans from the international community, asks for international assistance. And public infrastructure and public buildings are gifts or donated by the prime minister or by other government officials, but nothing comes from the national budget, the budget from the natural resource business. For instance, roads are either financed by international loans or aids. The government is always asking for aid.”

Government figures show that $3.6 million went into the national budget in 2008 for sales of forestry and mining concessions, with income from these expected to increase to $4.6 million in 2009.

A Finance Ministry official said this was due to sale of concessions only. The resource revenues have not been reserved for future investment, but go to the national budget for general public spending.

The key factor contributing to effective management is transparency. The arrangement with the private sector, contracting process, and how the revenues are spent have to be transparent, experts say.

People need to be involved in making decision or at lease know decision making process.

Experts are concerned that as Cambodia is exhibiting a pattern similar to extreme cases in other countries around the world, and they are concerned that, if the government doesn’t learn from its past and fails to reform resource management, the country will fall deeper into poverty, see the gap between rich and poor widen and fall into a resource curse.

More Capacity Needed for Resource Management

By Im Sothearith, VOA Khmer
Original report from Washington
20 October 2009

Laws, regulations, and capacity building comprise important steps in natural resource development, which can fill government coffers, Cambodia’s ambassador to the US said at a recent discussion in Washington.

“The revenue from both the petroleum and mining sectors will contribute substantially to the nation’s development of infrastructure, to form the basis for the future economic growth,” Ambassador Hem Heng said at the Oct. 15 discussion, organized by Oxfam America.

The International Monetary Fund estimated in 2007 that revenue from Cambodia’s untapped oil reserves could reach $174 million in 2011, climbing to $1.7 billion by 2021.

Since then, Cambodian oil has attracted major international corporations, spurring concerns from local and international organizations and donor countries that the government’s management capabilities may not be adequate.

Critics point to a record of poor management in other resources, such as timber.

Oxfam America is working with Cambodian government on natural resource management.

Lim Solin, the group’s East Asia program officer, said Oxfam America wants to see the government use resource revenue with transparency and accountability, and for future investment.

The strategy is to work with the government, civil society, the private sector and donors.

“We all have common goal to develop natural resources successfully so that average Cambodian people benefit from the developemnt” Lim Solin said.

Michael Zwirn, director of US operations for Wildlife Alliance, which has project in Cambodia’s Cardamom Mountains, said discussion of resource management can help improve the government’s opportunities when oil and gas begin to flow.

Government officials have proven very cooperative with Wildlife Alliance, he said, but some still lack political will and dedication to develop natural resources.

“There’re some individual members of the Cambodian government who are tremendously supportive,” he said. “The other members have not yet been convinced, but we’re helping to develop political will within the Cambodian government at a very high level, as well as the rural government in the provinces.”

Laws, But No Teeth, in Resource Protection

By Im sothearith, VOA Khmer
Original report from Washington
19 October 2009

“No one helps protect the forest from being illegally logged ... Chainsaws and hundreds of ox carts keep coming. Roads have been destroyed. Forest is destroyed everyday” - Villager from Snuol district, Kratie province

[Editor’s note: VOA Khmer recently spoke with specialists in the field of natural resource management in developing countries and learned that Cambodia is not alone in struggling to use natural resources to benefit its citizens. The resource curse, where natural riches fail to help the poor, is a worldwide scourge, the global experts told VOA Khmer in numerous interviews. Below is Part Seven of the original VOA Khmer weekly series, airing Sundays in Cambodia.]

Cambodia may have laws on the books to protect its natural resources, but experts say enforcement of these laws is wanting. Cambodia was once rich in timber resources, but much of that was logged out, and some continues to be, despite laws against it. Now, mineral and oil wealth are threatened by the same problems.

Management laws are ill-implemented if they are implemented at all, said Robert Mather, a regional representative for the International Union for the Conservation of Nature, which has projects with the Ministry of Environment in Stung Treng and Koh Kong provinces.

“If you look at the actual implementation, I mean, clearly the allocation of human resources and the allocation of budget is nowhere near sufficient for the jobs that need to be done,” Mather said. “They have little manpower, they have very little budget, or even no budget at all, for the implementation of the activity, for patrolling, for enforcement. There’s no overall long-term strategy for the management of the area, and there’s no clear management plan and management objective.”

Jacob Jepson, deputy head of mission for the Royal Danish Embassy and the Danish International Development Agency, which has a wide range of projects assisting the government in natural resource management, agreed.

There has been some improvement in national agencies, and despite plenty of people in government workable systems and strategic planning are lacking, he said.

The National Assembly promulgated the Environmental Protection and Natural Resource Management Law in 1996; the Law on Management and Exploitation of Mineral Resources in 2001; the Law on Forestry in 2002; and the Law on Fisheries in 2006.

Mather acknowledged that Cambodia has the most up-to-date laws on natural resource management, some of the best among neighboring countries. However, he said, its law enforcement ranks near the bottom.

However, some international organizations working in Cambodia say the government has made some progress on the bumpy road to effective law enforcement. It has shown some willingness to work with partner organizations.

Mark Gately, the Wildlife Conservation Society’s Cambodia director, said he felt positive about the country’s future law enforcement.

“I come back to the whole question of society, which is basically the 30 years within the situation of almost permanent civil unrest,” Gately said. “So after that kind of thing, it takes a while for the system to develop, for those rules and regulations to be implemented. Our experience has been very positive in working with the government in the protected areas we are focusing on. You know we have very, very capable government staff working with us for many years.”

Those years of turmoil ended with Cambodia transitioning to democracy, but lacking in the checks and balances between the executive, legislative and judicial branches.

Paul Collier, an Oxford University economist and author of “The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It,” told VOA Khmer by phone that check and balances, which are non-existent in the poorest nations of the world, play an important role in natural resource management.

“The electoral competition determines how you acquire power, and check and balances determine how you use power,” Collier said. “It turns out the electoral competition is the thing that’s doing the damage with democracy, whereas strong checks and balances make a resource boom good. And so, what the countries of the bottom billion need is very strong checks and balances. They haven’t got them. They got instant democracy in the 1990s; election without check and balances.”

In Cambodia, that has meant questionable law enforcement, said Lao Monghay, a researcher for the Asian Human Rights Commission.

“The government must report to the National Assembly about law implementation,” he said. “For example, the implementation of specific laws, such as laws on forestry or mines, or petroleum or gas, has to be reported to the National Assembly, who has the responsibility to oversee law enforcement. The mechanism is in place, but there is no implementation. The deal has mostly been done through the ruling party.”

Chhit Sam Ath, executive director of the NGO Forum, an umbrella group of non-governmental agencies, acknowledged that the government has adopted some resource management laws, but law enforcement has yet to reach an acceptable standard.

“Actual law enforcement is still limited,” he said. “We still have land problems and forest problems, such as anarchical logging and land grabbing. These problems still exist, which impacts our natural resources.”

However, Nguon Nhel, a CPP lawmaker and vice president of the National Assembly, told VOA Khmer by phone that the Assembly always urges the government to enforce laws effectively—and Cambodia has adequate laws on natural resources.

“We have proper laws to protect the natural resources of the country and people,” he said. “We punish those who violate the laws.”

Ty Sokun, director of the Agricultural Ministry’s forestry administration, which is one of the state agencies that enforces laws to protect resources, told VOA Khmer that his agency has made efforts to enforce laws by stopping timber export and by replanting trees instead.

“We have strengthened law enforcement, sharpened technical skills and carried out international forestry management strategies for ASEAN,” he said.

But Hom Sakunth, director of Cambodian Community Development, who is working on natural resources in Kratie province, said he was disappointed with the ineffectiveness of law enforcement by those responsible for it.

“When we look at their activities, they seem to be considerably active, but I wonder why illegal logging and timber transport still takes place,” he said. “Talking about forest rangers, they are positioned everywhere. There are checkpoints on every road, but trucks carrying timber still safely cross checkpoints and reach their destinations.”

A villager in the province’s Snuol district raised similar concerns.

“No one helps protect the forest from being illegally logged,” the villager said. “Chainsaws and hundreds of ox carts keep coming. Roads have been destroyed. Forest is destroyed everyday.”

Two Decades of Resource Development Questioned

By Im Sothearith and Men Kimseng, VOA Khmer
Original report from Washington
12 October 2009

[Editor’s note: VOA Khmer recently spoke with specialists in the field of natural resource management in developing countries and learned that Cambodia is not alone in struggling to use natural resources to benefit its citizens. The resource curse, where natural riches fail to help the poor, is a worldwide scourge, the global experts told VOA Khmer in numerous interviews. Below is Part Six of the original VOA Khmer weekly series, airing Sundays in Cambodia.]

Cambodia’s natural resources were not heavily developed during years of internal conflict, but significant exploitation in the last two decades has been questionable in bringing revenue to everyday Cambodians, and the nation’s gemstones, forests, oil, natural gas, even fish, are more likely to benefit the elite.

Over the last three years, London-based Global Witness has issued reports severely criticizing the government for mismanaging natural resources, claiming Cambodia’s elites are able to diversify their commercial interests to reap all forms of the country’s assets. The government denies these reports, which are also banned in the country.

Eleanor Nichol, a Global Witness campaigner, told VOA Khmer in an interview in Washington that the group’s goal was not to publish anti-government material, but the truth inevitably affected a few officials.

“We’ve become increasingly outspoken at the very high-level, institutionalized corruption, which we’ve come across in Cambodia’s natural resource sectors,” Nichol said. “And what we do is publish information on that high-level, institutionalized corruption. It’s not anti-government information. But what happens is, actually, that it tends to point back to members of the Cambodian government, because they tend to be using their positions of power to exploit their country’s natural resources. So, inevitably over the period of time, it has brought us into a conflictual relationship with the Cambodian government.”

Nichol said despite the angry response by the government to the reports, Global Witness is still willing to work with its leaders and officials.

“We would still like to work with the government, and we’d like to see them comment in a serious manner and respond in a serious and considered manner to some of the failures in government which we’ve unveiled in Cambodia’s oil and mining industries,” she said, “mainly because it is so crucial to the economic future of the Cambodian people.”

In the “Cambodia’s Family Trees”, published in 2007, and “Country for Sale,” published in 2009, Global Witness severely criticized the government for mismanaging its natural resources.

The rich and powerful have diversified their commercial interests, so that natural resources like beaches, forests, islands, land and mining are controlled by a handful of government-affiliated tycoons, high-ranking police, military commanders and family members, Global Witness reported.

Om Yentieng, a senior adviser to Prime Minister Hun Sen and head of the government’s human rights body, is named in “Country for Sale,” reportedly benefiting from the work of a mining company active in Cambodia, Float Asia Friendly Mation.

Global Witness reported Float Asia as extracting marble from the protected areas of Phnom Aural Wildlife Sanctuary and the Central Cardamom Mountains’ protected forest.

Om Yentieng dismissed the report as “stupid” and “nothing new,” saying Global Witness had accused Cambodia of wrongdoing “for years.”

“If their report is true,” he said, “then Cambodia is a hell, with no development, no double-digit development for five years, like this.”

Global Witness has also indicted high-ranking members of the military in its reports. In a visit to Washington and the Pentagon in September, Defense Minister Tea Banh told VOA Khmer the organization tended to “exaggerate the truth,” discrediting itself.

“One day the truth will be revealed, and their credit will be undermined,” he said.

Nguon Nhel, a prominent National Assembly lawmaker and stalwart of the Cambodian People’s Party, said the 123 representatives of the body are tasked with providing credible criticism of the government.

“We accept criticism and investigate whether the criticism is true, but some criticism is unacceptable,” he said.

Son Chhay, and opposition lawmaker for the Sam Rainsy Party, said the government should pay attention to detailed cases written in the Global Witness reports and respond with productive follow-ups.

Instead, the government has drawn criticism by silencing critics with lawsuits and jail terms, he said. They have filed no lawsuits against Global Witness, he noted, indicating to him the veracity of its reporting.

“The National Assembly seldom uses information from such organizations as Global Witness,” he said. “In principle, when we see such a report, we must go to the field accounted in the report, such as extraction mines in Kampong Thom and Ratanakkiri provinces.

“Of course it hurts that the report names those individuals,” he said, “but it’s an opportunity for the government to use the report as a benchmark to improve these irregular situations.”

Yim Sovann, spokesman for the Sam Rainsy Party and a lawmaker, told VOA Khmer by phone that so far concessions were not issued transparently.

“Every concession of natural resources, especially mines, must be publically handed out, so that people know where the government has allowed private companies to exploit, where mines are located,” he said. “They must have inventory and announce publically so that all companies have equal opportunity to auction. If we hand out concessions to a company secretly, without transparency, we lose a lot of national income.”

Government figures show that $3.6 million went into the national budget in 2008 for sales of forestry and mining concessions, with income from these expected to increase to $4.6 million in 2009. A Finance Ministry official said this was due to sale of concessions only.

Cheam Yeap, a member of the Cambodian People’s Party and chairman of the National Assembly’s finance committee, said incomes from natural resources are put back into the national budget for public spending.

“We have separate incomes generated from the investment of natural resources and other income, and a set percentage for investment and for other public spending,” he said.

Another official said the government had managed the country’s forests by ceasing timber export and replanting 49,000 hectares of trees.

Ty Sokun, director of Ministry of Agriculture’s forestry administration, told VOA Khmer that forests were still abused by local poor, private individuals and the armed forces, but on a small scale the government is cracking down on.

“We have strengthened law enforcement, sharpened technical skills and carried out international forestry management strategies for ASEAN,” he said. “We are leading and actively participating in carbon forest credit, so that it contributes to reduction of climate change and green house gas. In addition, it is noticed that while abuses decrease, wildlife increases. We have collected weapons to be destroyed.”

Cambodia was to be a model for post-conflict nation-building, following the introduction of peace and democracy in 1992 by UNTAC. However, Global Witness said, it turned into Southeast Asia’s newest kleptocracy, its reputation marred by corruption, human rights abuses, impunity, repression and undemocratic government.

Instead of using millions of dollars from natural resources to alleviate poverty, the reports said, the government could follow the example of Burma, where a handful of elite use money from the country’s natural resources to accumulate wealth and consolidate political power.

International experts working in Cambodia told VOA Khmer that they acknowledge the challenges Cambodia has faced over the past decades, but they are looking to the government to make more efforts to improve the management of natural resources.

This could benefit Cambodia in the long term, they say, especially with strong laws related to the environment, forestry, fisheries and mining, and as a younger generation rises in the government.