State must be become transparent

Tuesday, 21 September 2010
Eleanor Nichols
Global Witness
Letter to The Phnom Penh Post

Dear Editor,

Steve Finch is right: The Cambodian government must do more to disclose payments made by companies operating within the country’s extractive-industries sector (“Go further with disclosure and embrace EITI, September 10).

The Ministry of Economy and Finance’s recent publication of revenues from the extractive industry for the first half of 2010 is a welcome first step towards improving transparency within a notoriously opaque sector.

However, it remains unclear whether the 112.21 billion-riel payment received in March 2010 corresponds to the US$28 million payment made by French oil company Total in January for rights to offshore Block 3.

The continued uncertainty reiterates the need for the kind of transparency offered by the Extractives Industries Transparency Initiative, which if implemented would give public access to such detailed information.

But regardless of how long the Cambodian government takes to endorse the EITI, many of the international petroleum companies currently allocated exploration rights in Cambodia will soon be required to disclose information on all payments they make to the government.

The recently passed United States Financial Reform Bill requires companies registered with the US Securities and Exchange Commission to disclose all payments made to foreign governments on a country-by-country basis, as a condition of their stock exchange listing.

Eleanor Nichols
Global Witness

SRP MPs Press Conference on 20 August 2010

Cambodia's PM says lessons on fiscal matters unnecessary

Cambodia Prime Minister Hun Sen liken lessons on managing unearned revenues to lessons on cooking a fish that was still in the water.

Wednesday, May 26, 2010
Robert Carmichael, Phnom Penh
ABC Radio Australia

Cambodian Prime Minister Hun Sen has told a conference on good mining practices the country does not need any more lessons on how to manage expected revenues from mining industries.

That comes ahead of a donor meeting next week where foreign nations will gather to decide how much to give the country for its budget.

Cambodian Prime Minister Hun Sen was in combative form when he said foreign organisations must stop giving lessons on fiscal transparency in the extractive industries sector.

That comes after criticisms that millions of dollars paid in signing fees by French oil major Total and Australian mining house BHP Billiton failed to appear in the budget.

Hun Sen told the two-day mining conference that advising Cambodia how to manage unearned revenues was like telling someone how to cook a fish that was still in the water.

The prime minister also rounded on Global Witness, a long-time critic of the government's track record on management of state assets.

He described the British-based NGO as a group of thieves that was in league with foreign organisations, and was trying to bring hard times to the Cambodian people.

In recent years foreign firms have signed dozens of exploration deals covering oil, gas, gold and bauxite.

Critics say revenues fail to reach the budget.

The government says the signing fees went to a social fund. It is that budget which donors will talk about next week, when they gather for the annual donor conference.

Last year donor nations provided almost half of Cambodia's two billion dollar budget.

Global Witness said last month that ordinary Cambodians and donor nation taxpayers have the right to know what happens to revenues paid to Phnom Penh.

Keeping the Kingdom honest

The AngloGold Ashanti Mine pit is shown in Ghana. Communities across the West African nation have been relocated to make room for mining projects and have endured unemployment, environmental damage and the loss of agricultural land. (PHOTO SUPPLIED)

Monday, 05 April 2010
Solinn Lim
The Phnom Penh Post

Cambodia needs transparent legal mechanisms to govern the development of its natural resources, preventing damage to society and the environment.

Over the past weeks, news on oil, gas and mineral mining rose to the attention of the media and the public with significant discoveries of silver, gold and bauxite, with Chevron also announcing oil operations to start in the Kingdom in 2012. While Cambodia has good reason to be pleased with these prospects, there are a number of important aspects that need to be considered in order to meet realistic public expectations and ensure good governance.

The task ahead of the Cambodian government is a large one. Cambodia will need transparent and accountable legal mechanisms and investment strategies in order to ensure that the valuable but finite extractive revenues will be reinvested into advancing important economic sectors, so that they provide opportunities for our country to grow. Provision of better social services such as healthcare and education will give everyone the chance to improve their standard of living, while investment in economic diversification will help ensure the competitiveness of other critical sectors such as garments, agriculture and tourism, which then can provide large and sustainable employment to Cambodia’s unskilled labour force. This is indeed a challenging task, and many civil society actors including Oxfam are prepared to support this preparation.

Recently, we’ve seen the Cambodian government establish specialised institutions to oversee oil, gas and mining development and start to take necessary steps towards responsible and accountable revenue management, including the recent disclosure of $26 million in signature bonus payments and social funds by PetroVietnam and Total. This is a good example that shows commitment to transparency.

Let me tell you about a large-scale gold mine I saw in Ghana, Africa. It was way beyond the small diggings we know from our small gem miners in Ratanikkiri and Pailin. One mining site seemed 100 times bigger than our Olympic Stadium, and all around were rumbling digging machines that had wheels the size of houses. Its depth was twice the distance from Wat Phnom to the Independence Monument. As Cambodia is preparing to reap the benefits of oil, gas and hard minerals, it has to reflect on the importance of balancing not only the potential benefits of these resources but also the social and environmental impacts.

From Oxfam’s experiences in extractive industries around the world, too often people’s livelihoods are interrupted and their communities are polluted by these projects. Operations at modern mines and oil projects can begin and end in fewer than 10 years. Communities must be prepared for sites to close. If reclamation funding or bonding for the cleanup is not properly negotiated, the community can be left with contaminated land and water, and no jobs. However, there is a way to ensure that this does not happen.

To ensure equitable benefit sharing, community participation in decision making is vital. Oxfam has developed a position paper on Free Prior and Informed Consent that gives the details on what we believe constitutes appropriate consultation. This includes adequate time for decisions to be made; disclosure of adequate and independently verified information about the potential costs and benefits of a project, and the absence of any coercion or intimidation within the decision-making processes. We know that what we are asking is realistic, as there are precedents for good consultation processes in countries around the world including Canada, Australia and the Philippines.

By having taken the first steps to meet realistic public expectations and ensure good governance, Cambodia can increase its opportunity for sustainable development as set out in the government’s rectangular strategy. There is also clear opportunity for Cambodia to stand out as a leader and influence policies regionally and beyond.
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Solinn Lim is regional coordinator for the extractive industries programme of Oxfam America’s East Asia regional office .

Cambodia Looks for Oil Talks With Thailand

Cheab Mony, VOA Khmer
Original report from Phnom Penh
24 July 2007

Cambodian officials are preparing for eventual discussions with their Thai counterparts to ensure mutual benefits for both countries from the marine resources they share—especially offshore oil reserves.

Cambodia signed a memorandum with Thailand in 2001 to find a solution to disputes in overlapping areas in the Gulf of Thailand, Deputy Prime Minister Sok An said at a workshop in Phnom Penh Tuesday. Now was the time to implement those agreements, he said.

"Sooner or later when the Kingdom of Thailand will have an elected government," he said. "We will continue talks, because we think both Thailand and we will benefit from oil and gas for use, because the value is billions of dollars. The oil and gas will not be left lying under the sea for nothing."

Opposition lawmaker Son Chhay said decisions over oil, gas and other resources should not be made covertly.

Heav Veasna, executive director of the Coalition for Transparency, said oil on Cambodia's soil should be for Cambodia, and that the disputed areas should be divided in two.

"Then we will be able to analyze data involving the revenue from the oil," he said.