Oxfam Calls on Chevron to Improve Transparency Practices

"Chevron is currently involved in oil and gas exploration in Cambodia" - KI-Media

SOURCE: Oxfam America

WASHINGTON, Dec. 10 /PRNewswire-USNewswire/ -- International aid agency Oxfam America filed a shareholder resolution today with Chevron calling on the California-based oil company to adopt a comprehensive policy of publicly disclosing payments made to governments where the company operates.

The resolution, filed on International Human Rights Day, aims to promote the rights of citizens in oil-rich countries by providing them with vital information about revenues coming into their countries. Co-filers on this resolution include Newground Social Investment, Robert Brooke Zevin Associates, Inc., and likely several other Chevron shareholders.

In 2008, Chevron paid more than $40 billion in taxes to governments around the world. Managed properly, oil revenues can contribute to economic growth and poverty reduction in countries where Chevron and other companies operate. However, history has shown that oil company payments to governments as well as government receipts are often kept secret, leading to embezzlement, corruption, and revenue misappropriation by host governments, which, in many cases, has prevented oil revenues from contributing to economic development in these countries.

"Natural resource revenues are too often squandered through corruption, internal conflict, and weak governance," said Raymond C. Offenheiser, president of Oxfam America. "Citizens of resource-rich developing countries need adequate information to hold their governments accountable for using natural resource revenues for essential services like health and education. Chevron should maintain its position as an industry leader on this issue by practicing the highest degree of disclosure of payments to host governments to help make this possible."

Chevron plays a leading role in the global Extractive Industries Transparency Initiative (EITI), a voluntary program designed to increase transparency of payments by oil, gas, and mining companies to governments where resources are extracted. EITI is recognized as an important step toward improving revenue transparency, but a voluntary initiative has limited effect and does not cover all countries where Chevron invests, including Angola, Chad, and Cambodia.

"While Chevron has endorsed the concept of revenue transparency with programs like EITI, it does not fully disclose payments to governments on a country-by-country basis. A policy for disclosing this information in all of Chevron's countries of operation will help ensure that the company's - and the shareholders' - investments contribute to increased economic development and political stability in developing nations," said Offenheiser. "We hope that other Chevron investors will join us in supporting this proposal."

Oxfam's proposal presents an opportunity for Chevron to take a leadership role as the US Congress contemplates legislation that would legally require all oil, gas, and mining companies registered with the Securities and Exchange Commission (SEC) to disclose payments made to host governments. This includes European companies, such as Shell and BP, as well as many companies in emerging markets such as China, India and Brazil. The Energy Security through Transparency Act of 2009 was introduced with bipartisan Senate support in September and is expected to be considered for a vote in 2010.

"This legislation hopes to address the lack of transparency in the oil, gas, and mining industry that often goes hand-in-hand with government corruption and violent conflict. The resulting instability poses a long-term threat to company investments and higher energy prices for consumers. By recognizing the value of transparency, Chevron can help elevate the industry and foster accountability in nations where secrecy has undermined development, democracy, and human rights," said Offenheiser.

Oxfam America is an international relief and development organization that creates lasting solutions to poverty, hunger, and injustice. Together with individuals and local groups in more than 100 countries, Oxfam saves lives, helps people overcome poverty, and fights for social justice. Oxfam America is an affiliate of Oxfam International.

Cambodia Showing Signs of 'Oil Curse'

19 Mar 2009
Geoffrey Cain
World Politics Review

Up to $1.7 billion a year in oil money is set to flow into impoverished Cambodia, where 35 percent of the population lives under $1 a day and where this year's national budget is only $1.8 billion. Yet in a country ranking a dismal 166 out of 180 on Transparency International's annual corruption rankings, allegations of nepotism and cronyism are already surfacing around the country's nascent oil sector, set to start production in 2012. Critics, like London-based watchdog Global Witness, claim the makings of a "resource curse" are in place, wherein a political elite will siphon profits that should be used to address poverty.

The International Monetary Fund initially estimated the newly found oil reserves, discovered in 2005, at 2 billion barrels, while energy giant Chevron forecast a more modest 400 million barrels. Amendments to a 1991 oil law subsequently placed the fields under the jurisdiction of the Cambodian National Petroleum Authority (CNPA), controlled directly by Prime Minister Hun Sen and his deputy, Sok An, with little parliamentary oversight. Global Witness claims the CNPA is rife with secrecy, its administrators regularly withholding documents and denying telephone usage to employees. That's in addition to millions of dollars, paid by companies to secure oil blocks, that aren't showing up in the government's revenue reports.

The developments follow a pattern that has emerged in other countries that have fallen prey to oil curses, such as Nigeria, Venezuela, and Iraq. Ou Virak, head of the Cambodian Center for Human Rights, argues that Cambodia has much in common with those three countries, in particular the fact that all government bodies and revenues are under the control of a few people. One Asian Development Bank consultant even labeled the CNPA a part of Sok An's "empire" (which also includes the corruption-rankled genocide tribunal).

The diversification into pillaging the oil and mining sectors comes after the country's ruling elites exhausted Cambodia's logging resources to fund their civil war in the 1990s. International donors largely remained silent at the time, said Eleanor Nichols of Global Witness. Now she says they must demand reform to keep Cambodian leaders from plundering oil and mining resources with impunity as well. The government allegedly said in October it would not endorse the Extractive Industries Transparency Initiative (EITI), a global coalition of businesses and governments that require disclosure of revenues, according to a Global Witness report. But Nichols said EITI is back on the table, with donors urging more transparency in Cambodia's oil find.

With foreign aid contributions totaling half of the government's $1.8 billion budget, donors can easily exert far-reaching influence upon Cambodia's ruling elite. But new donors with new agendas are courting Phnom Penh as well, and they don't attach the same conditions of democratic reform that Western governments do. In January, Sen finished his first-ever tour through Kuwait, which offered $546 million in soft loans for agriculture -- destined for Cambodia's vast rice fields -- as a means of securing its own food supplies.

China, facing staggering demand for minerals and timber to support its rapid growth, is also counteracting longstanding Western influence in the mineral-rich country. In exchange for access to resource supplies, China is powering the Cambodian countryside -- which faces some of the highest energy costs in the world -- by building $1 billion worth of hydroelectric dams. All of Beijing's soft loans come with no strings attached.

Whether Middle Eastern countries and China will hold Sen to international transparency standards remains to be seen, but transparency has so far not been high on their list of priorities. With Cambodia now hurtling headlong into an oil disaster, donor pressure will prove crucial to resisting the resource curse pattern plaguing developing countries.

Geoffrey Cain has covered Asia for the Economist, Far Eastern Economic Review, and .net Magazine. His personal Web site can be found here.

Cambodian oil wealth threatens democracy

March 1. 2009
Jared Ferrie, Foreign Correspondent
The National (Arab Emirates)

PHNOM PENH -- When oil was discovered off the Cambodian coast in 2005, the government promised to use the profits to lift the country out of poverty. Now, politicians are reacting angrily to warnings that corruption could turn oil into a curse rather than a blessing.

“If mismanaged through corruption or ineptitude, the money generated runs the risk of widening the gap between rich and poor and weakening democracy still further by entrenching the positions of the ruling elite,” said Eleanor Nichol, of Global Witness, a London-based non-governmental organisation that monitors the exploitation of natural resources and international trade systems.

The group’s recent report, Country for Sale, accuses officials of negotiating deals that would benefit “members of the ruling elite and their family members”.

The government barred Global Witness from operating in the country after a 2005 report documented involvement of officials in illegal logging.

Ms Nichol said copies of Country for Sale have been detained at customs. “It is unclear whether this is the result of an official government ban on the report.”

Chan Sophall, president of the Cambodia Economic Association, said he had not read the report, but he shares similar concerns. “The experience in the developing world is that there could be what is called a ‘resource curse’ – too much money wasted, rather than used for economic development.”

Although Cambodia’s oil reserves are relatively modest, they could be a windfall for this impoverished country of 14 million people. But organisations such as the United Nations, the World Bank and the Asia Development Bank have urged Cambodia to put systems in place to make sure the money is used as it should be, Mr Sophall said.

A Feb 5 World Bank report pointed to expected growth in oil and gas extraction, as well as mining. But it warned: “There needs to be a significant upgrade of the sector’s management which, at the moment, is ineffective and opaque.”

Officials have not taken kindly to such criticism, Mr Sophall said. “Advice on how to use the funds didn’t seem to be appreciated by the government.”

He pointed to a comment made by Cambodia’s deputy prime minister, Sok An, in response to a question about how petroleum revenue would be managed. Sok An was quoted in local media in 2007 as saying: “No question is more stupid than this question.”

After Global Witness published its report on Feb 5, Cambodia’s ambassador to the UK, Nambora Hor, accused the organisation of engaging in “smear campaigns”. He urged funders to review the group’s policies and activities.

On Feb 16, Cambodia’s prime minister, Hun Sen, lashed out at non-governmental organisations that were critical of his government’s management of oil reserves, calling them “crazy”.

“How could we have committed corruption if the oil resources are still in the seabed?” he asked during an economic conference in Siem Reap, Cambodia.

Global Witness and others say the government has failed to build institutions strong enough to monitor the oil industry and make sure the profits are invested in development.

“That’s why we are calling for a moratorium on oil and mining concessions until the basic legal, social and economic frameworks are in place,” Ms Nichol said. “Without this, Cambodia’s extractive industries will be operating in a regulatory vacuum.”

Hun Sen said his government was drafting a new tax revenue law that would include oil, gas and mining. Cambodia’s ambassador to the United Kingdom said the government intends to use oil wealth to fund “improved health, education and social conditions”.

Such assurances have failed to quell the concerns of groups, including the World Bank and Global Witness, that point out that the government has refused to release details about deals signed with oil companies, among them Chevron and BHP Billiton.

Ms Nichol said Cambodia is in danger of following the same path as other developing countries that have discovered oil.

“Newly oil-rich countries with fragile state institutions have repeatedly fallen victim to slow growth despite vast earnings with no ‘trickle down’ effect to benefit the impoverished,” she said. “The risk is that this will exacerbate corruption and authoritarianism.”

In countries from Latin America to Africa and Asia, the discovery of oil has been hailed as the key to moving from poverty to prosperity. But rarely, if ever, has that been the case.

Instead, many developing countries tend to follow the same pattern when oil begins to flow: promises are forgotten as elites pocket the profits; residents of oil-producing areas remain impoverished and often find themselves living in the midst of an environmental catastrophe; social and political unrest follows.

Nigeria, for example, has been forced to cut production by about one-quarter since 2006 because of attacks by insurgent groups in the Niger Delta.

It is Africa’s top oil-producing country, but most Niger Delta residents lack electricity and running water.

And they have lost a valuable source of food as oil has spilt out of pipelines, poisoning soil and polluting waterways where they once fished.

Cambodia’s reserves are nowhere near the size of Nigeria’s, but they could provide enough revenue to help the government wean itself off of international aid, which currently accounts for more than 50 per cent of its annual budget.

In an Aug 2007 report, the International Monetary Fund estimated that Cambodia could gain $174 million (Dh640m) from oil returns when the wells start producing in 2011, rising to $1.7 billion by 2021 before dropping rapidly.

Ms Nichol urged the government to act on the Global Witness report’s concerns. “Cambodia is on the verge of an oil and mining corruption disaster unless governance within the sectors dramatically improves.”

Emerging from decades of conflict, Cambodia’s economy has grown by an average of seven per cent over the past 14 years, the World Bank says. The bank estimated that the number of people living in poverty fell to 30 per cent in 2007 from 50 per cent in 1994. But it predicted that economic growth will slow because of the global economic crisis.

Transparency International ranked Cambodia 166 out of 180 countries on its 2008 annual corruption index.

jferrie@thenational.ae

Cambodia's oil resources: Blessing or curse?

Feb 26th 2009
The Economist
PHNOM PENH

Waiting for the oil (and money) to flow

MANY countries have been afflicted by a “resource curse”. Discoveries of oil or other mineral deposits are hailed as offering a way out of poverty. But hopes are dashed as corrupt officials pocket the money or squander it on grandiose projects. Cambodia, giddy at the prospect of an oil boom, hopes not to go the same way.

A recent report, called “Country for Sale”, by a London-based NGO, Global Witness, points out that amendments to a 1991 law had the effect of placing the Cambodian National Petroleum Authority (CNPA), the body administering oil contracts, under the direct control of Hun Sen, the prime minister, and Sok An, his deputy. It alleges that millions of dollars paid to the government to secure oil concessions do not show up in the official annual revenue reports. Meanwhile, unrestrained mining exploration has seen thousands forcibly evicted from their land in the north, and has damaged six of the country’s 23 protected wildlife areas.

The discovery of oil and other minerals was a godsend to Cambodia. Despite foreign-aid donors’ constant pleas for restraint, logging companies have largely exhausted the country’s once abundant forests. Chevron, a California-based oil giant, at first estimated its 2005 oil discovery in the Gulf of Thailand at 400m barrels, enough to earn about $1.7 billion a year, against the government’s budget last year of $1.2 billion. Chevron was awarded the largest exploration contract in the block thought to be most productive. But it has found that the oil is scattered in pockets and hard to extract. Despite the recent fall in the oil price, the government still hopes production will start in 2012.

It will be very welcome: aid still makes up half of the government’s budget, despite a decade of stalling on anti-corruption legislation that donors want to see. The World Bank consistently ranks Cambodia in the bottom 10% of all countries for controlling corruption. Michael McWalter of the Asian Development Bank, who advises the Cambodian government on oil, argues that the CNPA is underfinanced and ill-equipped to deal with the complexities of the oil business.

In March last year the United Nations Development Programme and the Norwegian government jointly organised a conference to discuss what the government should do. The advice included the creation of an independent, transparent oil fund. This however, was largely based on the experience of Norway, which has an effective system of checks and balances.

Cambodia does not, and Mr Hun Sen and Mr Sok An have still not come up with a coherent plan for managing the oil revenues. According to Global Witness, the government decided at a meeting with donors in October not to join the Extractive Industries Transparency Initiative (EITI), an international coalition that would require full disclosure of oil, gas and mining revenues. Rather, it agreed to endorse only the principles underpinning the EITI, making its rules non-binding.

Government officials have responded to the allegations by lashing out at NGOs. At a conference in February, Mr Hun Sen called NGOs’ criticism of his oil policies “crazy”. And he has already alluded to the prospect that oil revenues may diminish the influence of aid donors—though he denies they have much anyway, since Cambodia can always turn to China, a generous donor, which, he says, despite its might, treats its partners with respect.

CAMBODIA: Cursed by oil and poverty

About 35 percent of the country's more than 14 million inhabitants live below the poverty line (Photo: WFP Cambodia)

PHNOM PENH, 25 February 2009 (IRIN) - Having allegedly exhausted Cambodia's timber resources to fund its 1990s civil war, business and military elites are plundering mining resources while failing to uphold international human rights and transparency standards, a new report warns.

The long-term effects could fuel corruption and contribute to a "resource curse", whereby a tiny elite soaks up the profits instead of using oil and mining revenues to alleviate poverty, London-based Global Witness states in Country for Sale.

Cambodia is Southeast Asia’s second-poorest country after East Timor, with 35 percent of its population living on less than US$1 a day, according to government statistics.

Revenues from the 2005 oil find, which could total more than $1.5 billion annually, according to some estimates, should be directed to achieving its 2015 Millennium Development Goals, say critics.

"I see the rise of Cambodia's mining and oil sectors as just one part of the wholesale diversification of natural resource and state asset exploitation in Cambodia," Eleanor Nichols, a campaigner for Global Witness, told IRIN.

"Historically, the revenue generated by their misappropriation has reinforced the position and impunity of elites, further strengthening their hold on the levers of power," she said.

Global Witness has had a rocky relationship with the government, having closed its office in Phnom Penh in 2005 after threats over a report implicating top officials of illegal logging.

The Nobel-prize nominated group first monitored the country's forestry resources in the 1990s when international donors urged logging reform.

Greater transparency demanded

The group, with several other NGOs, continues to urge international donors to demand more transparency in Cambodia’s young oil and mining sectors as a condition for aid.

Cambodia receives about $600 million aid every year. In 2009, the national budget is $1.77 billion, with donors pledging around $1 billion.

"It is fair to say that the revenue generated would be significant for a country which still relies on donor countries to provide the equivalent of over 50 percent of the annual government budget in development aid," Nichols said.

Secretive mining contracts, mostly in the country's remote northern provinces, allegedly require the forced, mass evictions of rural poor and indigenous people.

"On some sites, land has been taken from local people and cases of intimidation of residents are reported," Global Witness stated. "There has been no free, prior and informed consent by the local population in any of these cases."

The Cambodian embassy in London issued an angry response to the report, denying the accusations.

"The Global Witness report was fairly underhanded and failed to recognise the tireless work and vision of some in government," Michael McWalter, the Asian Development Bank's oil and gas adviser to the government, told IRIN in an e-mail.

Oil worries

The International Monetary Fund estimated the find off the southwest coast at two billion barrels, though energy giant Chevron has been tight-lipped about numbers.

Cambodia could follow the patterns of Nigeria, Venezuela and Iraq, where mismanagement and secrecy surrounding oil contracts plunged the countries into further poverty, said Ou Virak, an economist and head of the Cambodian Center for Human Rights.

"There's every indication Cambodia is heading towards Nigeria. We fit very well of a profile of countries facing a resource curse," he told IRIN. "The fact that all key institutions with money are headed by only a few people indicates there is no intention of having a system in place for transparency and accountability."

Donors last year asked the government to consider joining the Extractive Industries Transparency Initiative (EITI) a global coalition of governments, companies and civil society groups that requires full disclosure of oil, gas and mineral revenues.

The government originally considered signing on to EITI, but reportedly said in October it would not endorse the initiative.

The UN Development Programme (UNDP) hosted a conference last March to address how the government should manage oil and gas revenues to alleviate poverty.

At the conference, delegates from the Cambodian National Petroleum Authority, Supreme National Economic Council, and Norwegian Petroleum Directorate discussed the possibility of establishing an independent fund to manage revenues transparently, a model that has worked in Norway.

Hun Sen calling Global Witness report “crazy”

When everybody around you is "crazy," except yourself, isn't this a symptom of "dementia"?

16 Feb 2009
By Huy Vannak
Radio Free Asia
Translated from Khmer by Heng Soy
Click here to read the article in Khmer

On Monday, Hun Sen publicly reacted for the first time to the Global Witness report titled “Country for Sale,” calling it “crazy.”

From Siem Reap, Hun Sen added that the Global Witness report was published with the intention of attacking the royal government of Cambodia.

Hun Sen said: “Before, I called them (using the derogative “vea” to designate Global Witness) stupid, it was too light, I have to call them (using derogative “Ah Neung”) “crazy,” that would be more befitting. First, I want to reply to them with some rude words, it’s when a group of “crazy” people talked about corruption from oil, when all the oil money is still at the bottom of the sea. Can you all believe that the royal government can be corrupt when there is no money yet? What do you think this is? Is it a political destruction activity or is it an expression of opinion? At the end, they lose their own credibility through this nonsense and crazy report. So I am justified to say that they are “crazy” now.”

In its report, “Country for Sale,” Global Witness, a UK- and Washington-based human rights and environment protection NGO, commented that, currently, Cambodia has been carved up for sale to foreign countries by powerful people in Cambodia so that they can amass a large amount of wealth for themselves, just like what was done in the case of Cambodia’s deforestation and the appropriation of other natural resources, including fish, islands, beaches for tourist resorts, minerals, oil and gas, etc…

Global Witness added that, in the past 15 years, 45% of the total area of Cambodia was carved out for sale to investors with the collusion of Cambodian rulers.

On 12 Feb, opposition leader Sam Rainsy sent a letter to Hun Sen, asking the latter to conduct an investigation into the allegations raised by Global Witness and to report the findings back to the National Assembly as soon as possible.

However, Hun Sen rejected the above Global Witness report saying: “The [Cambodian] ambassador in the UK [Hor Nambora] lives there [in England], and Global Witness is from the UK, it (using derogatory “Ah Neung”) put curses on Cambodia nonstop. So much so that a number of “crazy” politicians in Cambodia are also using this issue to oppose the royal government as well.”

Hun Sen added: “How can there be any corruption when the oil is still under the sea, even the actual amount, we don’t know yet. Who receive corruption money? The bauxite ore is underground, the iron ore is all underground, who can be corrupt on these issues? This is not the time to talk about spending money, it is the time to look for money. I asked both the IMF and the ADB, and foreign experts who expressed their concerns, I asked them to help me find a way to make a lot of money, to help me so that the oil contracts with various foreign companies will bring the maximum revenues to Cambodia, can they help?”

Sacrava's Political Cartoon: Hyena-Om Yen Tieng

Cartoon by Sacrava (on the web at http://sacrava.blogspot.com)

Natural resources “for sale” in Cambodia: Global Witness strikes again

Proveang (Preah Vihear, Cambodia). 05/06/2008: Illegal gold extraction in an open-pit mine (Photo: John Vink/ Magnum)

10-02-2009
By Stéphanie Gée
Ka-set

The environmentalist NGO Global Witness, genuine thorn in the Cambodian government's side, is back with a new report, vitriolic following its custom. The title gives the tone: “Country for Sale: Welcome to Cambodia”! Their previous report “Cambodia's Family Trees”, published on June 1st 2007, had incurred the wrath of the authorities in Phnom Penh, and their latest is no exception. The London-based organisation – who had started to denounce operations of illegal logging since 1995 – had been obliged to close their Phnom Penh office in September 2005, “because of the concerted attempts by the authorities to stop our activities,” Mike Davis of Global Witness had then explained. According to the organisation, the patterns of institutionalised corruption and clan and family patronage of the elite ruling the country – which they had exposed in the forest exploitation – are now observed in the exploitation of mineral and oil resources. The NGO is ringing the alarm.

Click to Read More...

Om Yen Tieng's involvement in the "Float Asia Friendly Mation" marble quarry located in the protected areas of Phnom Aural Wildlife Sanctuary

The chair of the government’s Human Rights Committee, Om Yen Tieng (pictured), and the prime minister’s first cousin, Dy Chouch, are both named as backers of the Float Asia Friendly Mation mine by sources close to the company’s operations

Excerpt from "Country for Sale"
Global Witness

Float Asia Friendly Mation

The Float Asia Friendly Mation Company is extracting marble from the protected areas of Phnom Aural Wildlife Sanctuary and the Central Cardamoms Protected Forest (CCPF).

Company registration documents show the mine to be owned by a man named Ching Kimnguon. Those interviewed by Global Witness however have a different account. They identified two of Cambodia’s elite – Om Yen Tieng and Dy Chouch – as the mine’s backers. Om Yen Tieng is an advisor to Prime Minister Hun Sen and chairman of the government’s Human Rights Committee. Dy Chouch is the prime minister’s first cousin.

Guards drawn from the RCAF ranks are using the threat of armed violence to maintain the company’s position in Phnom Aural and have, so far, fended off attempts by Ministry of Environment rangers to remove them.

“The uplands of Mount Aural sequester one of the most expansive and pristine forests of Indochina. They also sequester a natural ecosystem and ‘biodiversity hotspot’ that is still virtually unknown to science.” - Dr J. Andrew McDonald, Plant Resources Center, University of
Texas at Austin, 2004

“Cambodian sculptures draw the attention of tourists. Finely carved sculptures represent the artistic, cultures and spiritual artefacts of Cambodia.” - Quote taken from the Float Asia Friendly Mation Company Brochure.

The Float Asia Friendly Mation marble mining activities are located in Rokat and Santre Communes, Phnom Kravanh District, Pursat Province. According to documents obtained by Global Witness the company has three sites for marble extraction. Two are situated within Phnom Aural Wildlife Sanctuary. The third is within the Central Cardamom Protected Forest. The company also has a marble processing business depot in Tasai village, Rokat Commune, Pursat Province and a marble depot in Phnom Kravanh town.

When Global Witness investigators visited the area in 2008, it was too dangerous to go to the quarry mining sites due to the poor quality of the road to the site and the risk of flash flooding during the rainy season. A company representative claimed Float Asia had brought in Chinese workers to construct a road to the mine site in 2006. The operation was run by an individual named Mr. Ta Tri, who held the nickname of Ta Venta – or ‘grandpa specs’. These workers had cleared the forest but failed to construct a decent road and it had quickly deteriorated. As a consequence of the lack of road infrastructure, even in the dry season, Float Asia is forced to use local labour and oxcarts rather than trucks. Investigators noted that the depot itself still had considerable stock, mining equipment and a sales staff. Customers were observed buying rock and loading it onto trucks.

Float Asia’s own brochure is very precise about the legal basis of its operations, stating that it was granted a licence by The MIME for an ‘open-pit mining and stone quarry No. 597’ in June 2006.

However, the MoE staff operating in the area disagreed with the legal basis of the company’s operations, claiming it was operating illegally under the 1996 law on Environmental Protection and Natural Resource Management.

Global Witness has obtained a copy of an MoE submission to the prosecutor of the court of Pursat Province concerning Float Asia’s activities which vividly outlines the tensions between these two arms of state. According to the court submission, on 2 March 2008 an MoE ranger mission confiscated one big truck, one tractor and two air compressors from the Float Asia operations. As the team was heading back from the site, the Float Asia company representative Mr. Eang Soknai instructed a group of military personnel to stop the ranger team and threatened to open fire on them. Despite the threats of violence against the MoE staff, sources claim that the Pursat Court did not bring a legal case against Float Asia or pursue the allegations outlined in the MoE submission.

From interviews with company employees, the MoE staff and local residents, it appears that the Float Asia company is controlled and backed by some powerful individuals.

When Global Witness investigators visited the company’s office in Phnom Penh in mid-2008, registration certificates on the wall identified an individual named Ching Kimnguon as the company’s owner. However, when asked, a staff member and another official familiar with the company’s operations, identified one of Hun Sen’s advisors and chairman of the government’s Human Rights Committee, Om Yen Tieng, as the mine’s major backer. Global Witness wrote to Om Yen Tieng in October 2008 to ask what the nature of his relationship was with the company. At the time of publishing he had not responded. Another source close to the company also claimed an individual named Dy Chouch is a controlling force behind the Float Asia mine.

Ong Yentieng on GW's report "Country for Sale": "...broadcast that I said it is a crazy report"

Om Yentieng, Hun Sen’s senior advisor and chairman of the Cambodian government’s Human Rights commission (Photo: John Vink/Magnum)

Watchdog ‘the Worst Liar’: Top Adviser

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

Click here to listen to the audio program in Khmer

[Editor’s note: The environmental watchdog Global Witness released a report this month claiming Cambodia’s potential oil and mineral wealth is set to benefit a small elite, including senior officials in the government and military. Om Yentieng, a senior adviser for Prime Minister Hun Sen, dismissed the report, “Country for Sale,” in a phone interview with VOA Khmer.]

Q. The recent Global Witness report claims some high-ranking government officials, such as Sen. Lao Meng Khin, Gen. Ouk Kosa, Gen. Pol Saroeun, Gen. Meas Sophea, and others, including yourself, were quietly allocated mining licenses. Is this true?

A. I think that if I have a mining license, I don’t know who doesn’t have one in Cambodia. Global Witness really likes to tell so many lies. I think Global Witness is the worst liar. I really want to laugh about that. Doesn’t Global Witness have other things to say, or what?

Q. The report claims that some Royal Cambodian Armed Forces officials protect mining companies, including yours. What do you think about that?

A. They have been speaking very badly about the Cambodian government for years. They have a lot of things to say, a lot of lies about Cambodia.

Q. The report claims that 45 percent of sate property was purchased by private companies. Your response?

A. I have nothing to say further, as I have already said that they have nothing to say but lies. If it is like Global Witness says, Cambodia is already like Hell, and you wouldn’t see that Cambodia has a lot of development like this at all. So that is enough. Don’t try to hurt Cambodia more on that.

You [Global Witness] have a sharp nose and white skin. Are you trying to rule everyone in the world, or what? You always speak about the respect of human rights, and respect of the truth, but you are betraying your own words. You are a liar, and you are the worst, and smell worse than anything else. It is like the doctor who tries to sell itchy medicine, but he can’t even treat his own itchy skin first.

Q. Regarding assets such as petroleum, iron and other minerals, how will the government manage those in the future? And how can this be done with transparency in the revenue?

A. Do you think Cambodian people are not human beings? Are we stupid about everything you say? You think we are too stupid to manage these resources? You know, the Khmers built Angkor Wat, so this is not so difficult. If we talk about petroleum mining, about Chevron, the US oil and gas company doing its research every day in Cambodia, maybe Om Yentieng sold his license to that company. Why doesn’t Global Witness also ask Chevron, how much did this company bribe the government to be able to drill Cambodia’s biggest offshore [block]?

Please don’t be so concerned with this matter. The Cambodian people, including the illiterate farmers, still know how to protect their country. Outsiders, who always have concern, have never helped protect Cambodian land even a meter, only Cambodians in the country have. Please, next time don’t be so interested with this crazy report. And broadcast that I said it is a crazy report.

Elite Now Gain From Mines, Oil: Watchdog

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ANGRY reaction from H.E. Hor 5 Bora ... Is this how they teach DIPLOMACY behind the iron curtain?

ROYAL EMBASSY OF CAMBODIA

2009 Media Releases
February 5, 2009

CAMBODIAN AMBASSADOR HITS BACK AT “NAIVE” PRESSURE GROUP

The Cambodian Ambassador to UK has accused the pressure group, Global Witness, of pursuing a malicious campaign to try and discredit the country and its leaders.

It follows the publication of a new report from Global Witness - Country for Sale – which accuses the Cambodian Government of high-level corruption in its allocation of lucrative rights to mine for minerals, oil and natural gas.

Global Witness also accuses international donors supporting Cambodia with development aid of turning a blind eye to what it claims is poor governance by the Cambodian authorities.

Reacting angrily to the report, the Ambassador of Cambodia in the UK, H.E. Nambora Hor, accused Global Witness of being poorly-managed and indulging in hugely-damaging smear campaigns. He called on the wide variety of international bodies which help fund Global Witness to demand an urgent review of its policies and activities. “It is naïve for Global Witness to imagine that Cambodia’s international donors are not fully aware of the way the Royal Cambodian Government’s conducts its affairs and its commitment to demonstrating the highest possible standards.”

The Ambassador added: “The Royal Government of Cambodia intends to play a leading role in managing the potential revenues from the exploitation of the country’s recently discovered minerals, oil and gas reserves and recognizes the importance of having a good set of laws in place.

“The Government is working hard to establish a sound and comprehensive framework governing the extractive industries. These will reflect best practice and be based on the principles of transparency and accountability.

“Where possible, the Royal Cambodian Government intends to involve local people and businesses as much as possible in using whatever revenue is generated from extracting resources to fund improved health, education and social conditions for our people which is very important for the long-term prosperity of Cambodia.”

Media Inquiries:
Ambassador’s Office - 020 8451 7947.
Unit Media Liaison - 020 8451 7930.

Global Witness website barred in Cambodia: Hun Sen's regime afraid of Global Witness report?

Click here to download the report in Khmer (PDF)
Click here to download the report in English (PDF)

NGO website barred in Cambodia for releasing scathing report

2009-02-09
Xinhua

PHNOM PENH -- The website of UK-based corruption watchdog the Global Witness has been blocked for some local web users following its release of a scathing report on Cambodia's nascent oil and mining industries last week, national media said on Monday.

AngkorNet, one of the kingdom's leading internet service providers (ISP), had blocked the site over the weekend in a manner consistent with a deliberate attempt to prevent access, English- language newspaper the Phnom Penh Post quoted Norbert Klein, editor of the online Cambodia Mirror, as saying.

"This doesn't happen automatically. Somebody somewhere must have done something," he said, adding that the block could either have originated with the ISP itself, or "somewhere further upstream."

AngkorNet representatives confirmed the Global Witness site was barred to its customers, but could not provide further details into the reasons for the restricted access.

The 70-page "Country for Sale" report accused corrupt ruling elites of monopolizing the kingdom's mining and oil industries, aided by a "total lack" of transparency.

The report has drawn fierce criticism from Cambodian government officials since its release on January 5.

Sacrava's Political Cartoon: Kleptocracy

Cartoon by Sacrava (on the web at http://sacrava.blogspot.com)

Cambodia today: From democracy experiment to one-party kleptocracy

Excerpt from "Country for Sale" Global Witness

“Human dignity, equity, meeting the basic needs of the people, participation and the development of people’s capacity and choice are among the principal values and objectives of human rights. Economic and political policies and practices in Cambodia do not accord any particular importance to these values.” - Quote from statement to the UN Human Rights Council by the Special Representative of the Secretary General in Cambodia for Human Rights, Yash Ghai, 12 June 2007.

After decades of war and one of the most horrific episodes in recent human history – the Khmer Rouge regime – Cambodia’s warring factions signed a peace agreement in 1991. This heralded the start of one of the biggest and most costly peacekeeping operations in history, and the beginning of international efforts to bring democracy and development to Cambodia. Expectations that the UN-organised elections in 1993 would bring major political change were not realised, however. The incumbent Cambodian People’s Party, whose leadership is drawn from former Khmer Rouge cadres, refused to accept that they had lost the vote and muscled their way into the government. They completed their reversal of Cambodia’s tentative progress towards democracy in July 1997, when they dislodged their coalition partners in a bloody coup d’état.

It is now 17 years since the signing of the Paris Peace Accords, and the country once regarded as the international model for post-conflict nation-building has become Southeast Asia’s newest kleptocracy; its reputation marred by massive corruption, human rights abuses, impunity, repression and undemocratic governance. Contrary to the spirit of the 1991 Peace Accords, Cambodia’s political influence and wealth is concentrated in the hands of a small ruling elite. The misappropriation of the country’s rich natural resources – its forests, land and fisheries – has been central to this accumulation of wealth and consolidation of political power.

Government officials, senior military figures and their business associates use the police and armed forces as their own private armies, with little balance from a politically-controlled judiciary or a civil society slowly beaten down over the years by killings and threats. State officials and powerful interests around them are able to appropriate natural and economic resources as well as the property of others, harass any opponents and suppress their rights.

Cambodia’s natural resources could have provided the means with which to kick-start the post-conflict economy. Revenue generated from logging, plantations and fisheries should have gone towards poverty alleviation and rebuilding essential infrastructure. Instead, systematic and institutionalised corruption and economic mismanagement have deprived the entire population of the revenue that could have come from these public goods.

Since the suspension of the country’s logging concessionaire system in 2002, focus has shifted to alternative sources of income generation through the exploitation of remaining state assets, including fisheries, land and mineral deposits. The rise of Cambodia’s mining and oil sectors represents just one part of the diversification of natural resource exploitation in Cambodia.

An examination of Cambodia’s business sector reveals that the country’s beaches, casinos, forests, hotels, islands, land, national buildings and ports and are now predominantly controlled by a handful of government-affiliated tycoons, high-ranking police and military brass, or family members of senior political figures. Meanwhile, residents who have lived on the land are simply forced to leave, often with brutal evictions enforced by the police, military police and the armed forces.

Sacrava's Political Cartoon: Dog barks, Human cuts across, Thieves of the Nation

Click on the cartoon to zoom in

Cartoon by Sacrava (on the web at http://sacrava.blogspot.com)

Kleptocratic regime's reply to Global Witness: Deny! Deny! Deny!

An ore pile at the Cambodia Iron and Steel Mining Industry Group site in Preah Vihear province. London-based watchdog Global Witness is pressing for more transparency in the Kingdom's extractive industries. (FILE PHOTO)

Govt denies mismanaging resources

Friday, 06 February 2009
SEBASTIAN STRANGIO and VONG SOKHENG
The Phnom Penh Post

"OIL IS GOING TO MAKE DEVELOPMENT PROBLEMS IN THE COUNTRY MUCH WORSE."

A new report from Hun Sen's bete noire, international NGO Global Witness, says Cambodia's nascent oil, gas and mining industries are being monopolised by a powerful elite.

CORRUPT ruling elites have monopolised Cambodia's emerging oil and mineral sectors, aided by a "total lack" of transparency and a supine foreign donor community, according to a new report from corruption watchdog Global Witness.

The 70-page "Country for Sale" report, released Thursday, takes aim at the "high-level corruption, nepotism and patronage" infusing the Kingdom's extractive resources sector, which it claims is dominated by senior government officials.

On the basis of investigations conducted in 2008, the report's authors say that concessions for mineral and oil exploration are allocated "behind closed doors" and raise fears revenues from these resources will be mismanaged rather than used for infrastructure development or poverty alleviation.

The report goes on to name dozens of high-ranking military and ruling party officials it said have control over the country's resource revenues.

"Cambodia today is a country for sale. The small number of elite powerbrokers who run the state have sold off large concessions in a manner that is non-transparent and highly dubious," the report says.

A "total lack of transparency in the ownership of companies ... serves only one purpose - to protect and entrench the interests of those who benefit from the continued functioning of Cambodia's shadow state".

To date, Global Witness claims the government has granted over 100 mining concessions - including 21 in 2008 - to companies controlled by "elite regime figures", with little environmental oversight.

It raises further concerns about the nature of fees paid by firms to secure mineral exploration agreements, following a 2007 comment by Lim Kean Hor, minister of water resources and meteorology, describing a US$2.5 million BHP Billiton-Mitsubishi social development fund as "tea money".

The report also slams the Cambodian National Petroleum Authority - the institution in charge of the Kingdom's infant oil-and-gas industry - as a "constitutionally dubious body" with "no parliamentary oversight", claiming millions in oil exploration fees have failed to show up in national revenue reports since 2006.

Government denials

RCAF Commander-in-Chief Pol Saroeun, named by Global Witness as the owner of the Rattanak Stone Co, which operates iron ore mines in Preah Vihear province, denied the report's allegations, saying: "I am not involved with the activities in the report."

Om Yentieng, head of the government's Human Rights Committee and reputed co-owner of Float Asia Friendly Mation Co, which the report claims is mining marble from protected areas in eastern Pursat province, also said he had "no time" to dispute the findings.

"I think that the Global Witness report is badly intentioned," he said. "They do not know what is right or wrong."

Minister of Industry, Mines and Energy Suy Sem and officials at the CNPA, including Director General Te Duong Dara and Deputy Director General Men Den, also refused requests for comment Thursday.

But Minister of Information Khieu Kanharith said the government was handling its resource explorations in an open and transparent manner.

"We have always announced in public how many blocks of oil we have, and we have never held bidding because no one knows whether there will be oil there or not," he said, adding that Global Witness was motivated by "personal anger" towards Prime Minister Hun Sen.

However, David Lempert, an international development consultant, agreed with the report that the coming windfall of resource profits would paralyse local development.

"Cambodia's oil is going to make development problems in the country much worse ... by postponing the key problems of sustainability, [of] balancing population with productive, renewable resources," he said.

Spineless donors

Foreign donors - which have pledged nearly $1 billion in aid to Cambodia for 2009 - are also to blame for granting "international legitimacy" to high-level corruption, the report says.

Donors "have refused to acknowledge the fact that the government is thoroughly corrupt and does not act in the best interests of the population", it says.

Independent analyst Chea Vannath said that countries needed a certain amount of tolerance for corruption if they wanted to do business in Cambodia, and that rising levels of Chinese aid - rarely accompanied by conditions - discouraged foreign donors from taking a strong stance on corruption.

"Each country's agenda ... is to have business ventures in Cambodia - not to lecture the Cambodian government about corruption," she said.

Global Witness made headlines in June 2007 when its "Family Trees" report - alleging widespread involvement of senior government officials in illegal logging - was banned in Cambodia, with the prime minister's brother, Hun Neng, saying that he would "hit [Global Witness staff] until their heads are broken". The organisation's staff have been barred from the country since 2005.

Senior CPP lawmaker Cheam Yeap said Global Witness had the right to conduct investigations into corruption issues, but warned they would "face lawsuits" if they published inaccurate information about government officials.

He added that there were clear laws relating to the allocation of mineral and oil concessions, and that the government was trying to root out "individual officials at the local level" engaged in corrupt activities.

"The prime minister has shown a commitment to fight corruption, and he has taken action step by step," he said.

"I think that Global Witness should not take an issue from one dark corner to criticise the government."

Eleanor Nichol, a Global Witness campaigner, said the organisation would welcome an "independent and credible investigation" into the allegations contained in the report, but said that she was "not aware of a government investigation into corruption in the oil and mining sectors".

Nichol also expressed hopes the government would shy away from banning the report, as it did in 2007.

"One of the reasons we put this report together is that there is very little information in the public domain about extractive resources available to the Cambodian public," she said by phone from Bangkok.

"For this reason, we very much hope that the current government does not take the same action."

Kennel barking Embassy communiqué: H.E. Hor 5 Bora sent to the rescue of his kleptocratic bosses once again

H.E. Hor 5 Bora, son of H.E. Hor 5 Hong

Violent government response to Global Witness report

06 Feb 2009
By Maxime Revol
Cambodge Soir Hebdo
Translated from Khmer by Luc Sâr
Click here to read the article in French

"This is quite a surprising initiative promoted by an official government institution, nevertheless, it seems to demonstrate the Phnom Penh regime’s exasperation against Global Witness which is banned from Cambodia since 2007."

To the overwhelming 72-page report issued by Global Witness questioning the management of oil and mineral resources in Cambodia, the government sent a violent reply through its embassy in the UK.

Titled “Country For Sale,” the Global Witness report, which was made available on 05 Feb, indicates among others that “A corrupt elite has captured the country's emerging oil and mineral sectors while Cambodia's international donors turn a blind eye.” The finding was not appreciated by H.E. Hor Nambora, the Cambodian ambassador to London.

In a press communiqué distributed on 06 Feb, Hor Nambora portrayed the Global Witness NGO as a “pressure group leading a defamation campaign to discredit Cambodia and its leader.” According to Hor Nambora, the corruption charge against high-ranking government officials in charge of distributing oil and mineral exploration rights is unjustified, just as criticisms leveled against international donors who are accused of turning a blind eye to all this dubious undertaking.

Hor Nambora also expressed his anger by declaring that Global Witness is “mismanaged” and that it “was hurting itself in these defamation campaigns that are detrimental to everyone.” He also wishes to see an immediate investigation into the NGO’s activities. “Global Witness is very naive to imagine that international donors are not completely aware of the manner in which the royal government of Cambodia conducts the country’s affairs and its engagement to reach the best possible results,” Hor Nambora claimed.

“The government tries to act as an engine in the management of revenues from potential exploration of these recently discovered natural resources. It recognizes the importance of securing a solid law in this domain. The Cambodian government works hard to establish a solid and efficient legal framework for the practice in this sector. This framework is based on transparency and responsibility principles. Wherever possible, the government attempts to involve the population and local entrepreneurs as much as possible for the exploration of these resources. These funds will serve for healthcare, education, improving the living condition of our people, this is essential for the long term prosperity of Cambodia,” Hor Nambora added.

A photo collage concluded the press communiqué. On this collage, Gavin Hayman, Director of Global Witness, is compared to a noxious rat, and a picture depicting Global Witness report bearing its logo is shown in the trash can. Hor Nambora titled his communiqué: “Pressure group and deceptive stratagems encouraging suspicion” and “rubbish.” This is quite a surprising initiative promoted by an official government institution, nevertheless, it seems to demonstrate the Phnom Penh regime’s exasperation against Global Witness which is banned from Cambodia since 2007.

Corrupt elite threaten Cambodia's development

Gavin Hayman, director of Global Witness

February 6, 2009
ABC Radio Australia

The anti-corruption ngo Global Witness says "a corrupt elite" in Cambodia is taking over the nation's emerging oil and mineral sectors, while international donors turn a blind eye.

In a report titled 'Country for Sale', Global Witness says Cambodia's future is being jeopardised by high-level corruption, nepotism and patronage in the management of public assets. This, it says, threatens Cambodia's potential to wean itself of foreign development aid.

Presenter: Sen Lam
Speaker: Gavin Hayman, director of Global Witness

Click here to listen to the audio program in English (Windows Media)

HAYMAN: We've been working in Cambodia for the last 15 years looking at how illegal logging was being operating in the country and were able to show that it directly benefitted the ruling military and political elite. And our new report has showed that the self same people whose names are in our previous report as being involved in illegal logging have now effectively taken over the mining and also have oversight over the emerging oil industry in the country. And that's disastrous news for Cambodia because the money from oil and mining, which could actually really help Cambodia's development and lift Cambodia's citizens out of poverty, appears to instead be in severe danger of being wasted.

LAM: But you also say that international donors are turning a blind eye. What would you like donor countries to do?

HAYMAN: Well donor countries need to really get the Cambodian government to behave itself. They need to effectively declare a moratorium until there's basic governance and transparency framework in place to actually have oversight over what's going on. At the moment we've discovered that effectively the government doesn't have any way of giving out concessions, apart from patronage. So a particular kind of senators for example in the ruling party appear to have a beneficial possession of the mines, and they also needs to do a proper audit as to exactly how all those concessions be given out and whether they're equal and whether in fact the money is in the national budget. And there's about 60 or 70 different companies operating now, and we've written to all of them, also to ask about their behaviour, and we haven't had many responses back. What we did get was from BHP Billiton, the huge Australian mining company, and they actually told us they paid about a million dollar signature bonus to the government to explore for bauxite near the Vietnamese border. Now we congratulate BHP on being transparent about that. We're worried about the 79 companies that haven't been transparent, but also disturbingly we can't find information about that million dollars in the Cambodian budget. And that's very worrying, so where is this money in Cambodia's financial system? That's very concerning.

LAM: Indeed, it must be quite hard though, to extricate the ruling elite from these lucrative contracts. So what do you think can be done to change this culture, this culture of corruption?

HAYMAN: Well I think at the moment Cambodia's depends on foreign aid for about half its budget, and the donors have a very limited window of opportunity to use that influence on the Cambodian government to get a moratorium in place and a proper audit and future management provisions in place. To actually assure transparency, and that the money actually flows into the national budget and is properly spent. So they've got to use their leverage now and effectively really they shouldn't be lending into corruption and actually compensating a corrupt government that's stealing money that should be spent on development by actually putting taxpayer's money into development projects. So effectively they've got to play hard ball with the Cambodian government and get it to actually be fully transparent.

LAM: And just very briefly, can the Cambodian government itself do more or is the government itself the problem?

HAYMAN: The government itself as currently constituted by the ruling elite is the problem. So, as I said the military and political figures in Cambodia are direct beneficiaries and owners of some of these mines. And they may not actually own it on paper but if you turn up at the gate, which is one of the things we've done, the people guarding the mine they all know who's in power and they'll tell you who's actually in charge and who's the owner. Effectively, the donors have been very soft, some might even say spineless about addressing corruption in Cambodia for the last sort of 14 or 15 years. And to give you an example, Cambodia still hasn't passed an anti-corruption law despite the donors pushing for that for the last 14, 15 years.

High Cambodian officials accused of graft

Thursday 5th February, 2009
Malaysia News.Net

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

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

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

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

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