Showing posts with label Bribery. Show all posts
Showing posts with label Bribery. Show all posts

Friday, April 29, 2011

Victorian school teacher deported after night in Khmer cells

April 29, 2011
Herald Sun (Australia)

A VICTORIAN school teacher cleared of molesting children in Cambodia was quietly deported home to freedom after paying Khmer officials. 

The man is still permitted to work as a teacher in Victoria.

Education Minister Martin Dixon had nothing to say about the case.

The man told the Herald Sun he had paid police in Cambodia's Sihanoukville province about $100 before they released him from his cell last June.

He had been detained overnight accused of inappropriately touching local children as he played with them on the beach.

He denied the allegations and insisted the cash was not a bribe, but a fee for the food he consumed.

Saturday, August 14, 2010

Cambodian jailed four months for attempting to bribe policeman

Friday, August 13th, 2010
Bernama

SEREMBAN: A Cambodian was today sentenced to four months' jail and RM10,000 fine or two months' jail by the sessions court here for attempting to bribe a policeman.

Sles Man, 30, from Phnom Penh was charged with attempting to give a RM150 bribe to a policeman who arrested him at a roadblock at Jalan Bahau-Mahsan at 6.30pm on Aug 9.

Malaysian Anti-Corruption Commission (MACC) deputy public prosecutor Fiza Fazlin Fandi said the bribe was to stop the policeman from arresting him for possessing an expired passport.

The charge under Section 17 (b) of MACC Act 2009 carries a jail sentence of not more 20 years' and fine not less five times the value of bribe whichever is higher.

Judge Sabariah Atan ordered that jail sentence on Sles start from Aug 9 and that the rubber tapper be deported to Cambodia after completion of his sentence.

Friday, August 13, 2010

Cambodian court jails Swedish paedophile

13 Aug 10
The Local (Sweden)

The 63-year-old Swedish man convicted for sexually assaulting three boys in Cambodia, will serve his 6.5 year sentence after a Cambodian court confirmed his conviction.

The Swede was convicted and sentenced by the court in Phnomh Penh for having abused the three boys, including his own adopted son.

The man claimed in an interview with the Svenska Dagbladet daily this week that he expected to be freed by the court after having paid out $11,000 in bribes.

The newspaper reported that its article was presented in the court hearing at which the man retracted his claims.

"The judge wondered about the circumstances and statements from the accused, but he denied it today. But it was something which the court paid attention to," said Annethe Ahlenius, the Swedish police officer following the proceedings, to the newspaper.

The Swede has been in custody since he was arrested in May last year after police and social services had been tracking him for three years.

During his time in custody the man has had daily contact with his son, who had previously testified against his father regarding sustained abuse, but changed his story at Friday's hearing.

But the court found the boy's amended stable to be unreliable and confirmed the conviction and sentence served in January against his adoptive father.

The 63-year-old retains the right to appeal the judgement, which ends Swedish police involvement in the issue.

"If the man has been convicted in Cambodia then we can not do anything. You can't try someone for the same offence in two different countries," said Lisbeth Tolfes, detective inspector at National Criminal Investigation Department (Rikskriminalen) to news agency TT.

The 63-year-old has been previously convicted for sexual offences against children in Sweden.

Monday, May 31, 2010

Job for sale, position not guaranteed: Hun Xen's Corruptbodia?

30,000-dollar "gift" and no job? I'm suing, says job-seeker

May 31, 2010

DPA

Phnom Penh - A Cambodian official who said he paid 30,000 dollars to secure a government post has sued after the job failed to materialize, national media reported Monday.

Municipal court prosecutor Hing Bunchea said Tea Kimhong was charged with fraud for offering the position to Heng Heam, who works at the military court.

'Heng Heam was apparently offering money for any job as a civil official,' Hing Bunchea told the Cambodia Daily newspaper.

The accused told the court he had received only 27,000 dollars, the prosecutor said.

Local media reported that the job sought was a deputy provincial governorship.

Although bribery is an offence, the prosecutor said Heng Heam would not be prosecuted since the court accepted he was innocent and believed the money would be used as a 'contribution' to an unspecified ministry construction project.

A spokesman for the Ministry of Interior said Tea Kimhong had worked as an assistant to the minister, adding that he was fired for misconduct before the alleged offence took place in 2008.

Cambodia is regarded as one of the most corrupt countries in the world.

It recently passed legislation to tackle the scourge. The law, which was 15 years in the making, received mixed reviews when it went through parliament earlier this year.

Sunday, May 16, 2010

Chamkarmon Governor to Retain City Position

Chamkarmon District Governor Lo Yuy. (Photo: by Heng Reaksmey)

Manilene Ek, VOA Khmer
Friday, 14 May 2010

"I did not accuse Lo Yuy of taking bribes from karaoke clubs,” the governor said Friday.
Phnom Penh’s governor says he will not investigate a district official who was nearly implicated in two illegal karaoke clubs earlier this month.

Phnom Penh Governor Kep Chuktema told VOA Khmer on Friday there was “no need” to investigate Chamkarmon District Governor Lo Yuy because of the structure of city government.

If he were removed, Kep Chuktema said, it would not be publicly. Kep Chuktema said he had not found bribery among any of the city’s eight district governors.

Kep Chuktema was quoted by the English-language Phnom Penh Post as saying in a meeting last week he wanted to fire Lo Yuy, after police raided two illegal karaoke clubs in his district.

“I did not accuse Lo Yuy of taking bribes from karaoke clubs,” the governor said Friday. “I only said, ‘The drug problem and sex abuse was happening in your area. So what does that mean that it still happens in your area? You don’t know, or you pretend not to know?’”

Kep Chuktema said he had phrased his words this way because residents in the area had complained of illicit drugs, prostitution and child sex crimes in the district, which could lead them to assume bribery by the district’s leader.

Instead, Lo Yuy will remain at his post. He declined to comment Friday.

Friday, May 07, 2010

SRP lawmaker seeks info on resource deals

Thursday, 06 May 2010
Vong Sokheng
The Phnom Penh Post


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

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

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

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

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

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

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

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

Monday, May 03, 2010

Envoy to UK aims criticism at watchdog

Monday, 03 May 2010
Vong Sokheng and Will Baxter
The Phnom Penh Post


THE ambassador to the United Kingdom has accused Global Witness of pursuing “a ferocious politically motivated campaign against the government of Cambodia” after the international watchdog said a US$28 million payment made by a French oil company lacked transparency.

Hor Nambora issued a statement on Friday condemning the group, one day after it said the issue of extractive industries payments must be addressed when donors meet with the government in June.

The people of Cambodia and governments who give development assistance have a legitimate right to know what happened to that money,” Global Witness said in a statement.

Eleanor Nichol, a campaigner for Global Witness, said Sunday that the group stood by the statement, and added: “The easiest way to clarify this issue would be for the Cambodian government to publicly issue details on this payment and others made by companies.”

Penelope Semavoine, a spokeswoman for Total, confirmed last Thursday that the company had paid a $20 million signature bonus in January to the Cambodia National Petroleum Authority and had earmarked an additional $8 million for a social development fund in order to secure exploration rights to the 2,430-square-kilometre offshore block designated Area III.

Prime Minister Hun Sen referred to the Total deal in a speech last week, comparing it to a payment he said had been made by mining giant BHP Billiton, which has recently launched an internal inquiry that some have speculated concerns its work in Cambodia.

Global Witness has been a frequent target of Hor Nambora, who routinely goes after groups and media outlets he accuses of being unfairly critical of the Cambodian government.

In his most recent statement, the ambassador said, “It’s time Global Witness was stopped in its tracks and forced to explain and justify its campaign of smear and hatred against the Cambodian government and Cambodian people.”

Baby Hor embarks on a barking mission on behalf of Papa Hor's boss ... yet again

Ambassador Condemns Pressure Group: Smear Campaign

April 30, 2010
Source: Hor 5 Bora, Cambodian embassy in the UK

The Ambassador of Cambodia to the United Kingdom, Nambora Hor, says the pressure group Global Witness is in danger of losing all credibility as it continues to pursue a ferocious politically-motivated campaign against the Cambodian government.

“Global Witness is now a loose cannon spouting ever more irresponsible statements which shouldn’t be tolerated by the international community,” he said.

The Ambassador’s comments follow Global Witness questioning a US$28 million payment made to the Cambodian government by the French oil company, Total; Global Witness is demanding that the issue should be top of the agenda when the group of countries providing international aid to Cambodia meet in June.

Ambassador Hor said: “It’s time Global Witness was stopped in its tracks and forced to explain and justify its campaign of smear and hatred against the Cambodian Government and the Cambodian People.”

The Ambassador challenged the pressure group to a debate in London or elsewhere. “Global Witness should not be allowed to continue peddling persistent lies and misleading information about the lawfully-elected government of Prime Minister Hun Sen. The unsavoury tactics of this organisation need to be exposed for all to see.”

The Ambassador said he was confident all donor countries to Cambodia as well as other international partners would continue to support the political, economic, social and judicial reforms which had been positively implemented by the Government of Prime Minister Hun Sen.

He said it was those countries providing financial backing to Global Witness which should cut their funding to the organisation with immediate effect. He also urged nations in the developing world to ban representatives of Global Witness from entering their countries.

Cambodia rejects BHP bribe allegations [-No surprise there!!!]

May 3, 2010
ABC Radio Australia

The Cambodian government has rejected suggestions that money it's been paid by the mining giant BHP was effectively a bribe. BHP has acknowledged it gave two point five million US dollars to a community living near a bauxite exploration project in north-east Cambodia. That payment's being investigated by the Securities and Exchange Commission in the United States. A minister in the Cambodian government reportedly referred to the money from the BHP as "tea money", a slang term for a bribe. But Prime Minister Hun Sen says the money's being used on development projects, including a hydro-electric dam, schools and hospitals.

Presenter: Kate McPherson
Speakers: George Boden, Global Witness; Phay Siphan, spokesperson for the Council of Ministers in Cambodia


Saturday, May 01, 2010

Scrutiny of exploration rights payments in Cambodia urged

Saturday, May 01, 2010
ABC Radio Australia

An environmental watchdog is urging Cambodia's donors to scrutinize multi-million-dollar payments by French oil company Total to secure the rights to explore an offshore area.

The call by the London-based Global Witness comes after Cambodia's premier Hun Sen announced a 28-million-dollar contract with Total on Tuesday.

Hun Sen says eight million dollars of that money would go towards a "social fund".

Earlier this week Hun Sen denied that Anglo-Australian mining giant BHP Billiton had paid a large bribe for an exploration contract, saying that money had also gone into a "social fund".

Total has won the right to search for oil and natural gas in Cambodia's offshore "Block 3" in the Gulf of Thailand.

Global Witness says questions regarding oil and mining payments made to the Cambodian government should top the bill at a meeting of aid donors in June.

Friday, April 30, 2010

Total confirms $8m social fund [-More tea money?]

Friday, 30 April 2010
James O'Toole
The Phnom Penh Post


FRENCH energy company Total confirmed Thursday that it paid the government US$28 million, including $8 million for a “social development programme”, to secure rights to drill for oil offshore in an area claimed by both Thailand and Cambodia.

Penelope Semavoine, a Total spokeswoman in Paris, said Thursday the company had signed the agreement in October with the Cambodia National Petroleum Authority (CNPA) to explore the 2,430-square-kilometre offshore block designated Area III. The company, she added, paid a $20 million signature bonus to the CNPA in January and is planning an $8 million social development fund.

Prime Minister Hun Sen referred to the Total deal in a speech at the Government-Private Sector Forum in Phnom Penh on Tuesday. Rebutting media reports that mining giant BHP Billiton paid bribes to the Cambodian government, the premier said the firm had merely contributed to a social development fund. Total, he noted, “also paid this kind of money”.

Speculation has seized on Cambodia as the origin of an ongoing graft inquiry at BHP in part because of a $2.5 million payment to the government that the company said was for a social fund but that Minister of Water Resources Lim Kean Hor described in 2007 as “tea money”, or an unofficial fee.

Semavoine said Total’s $8 million social fund payment will be “administrated by committees that will include representatives from the CNPA and Total”.

“That will be a social development programme aimed at improving general health, education, culture, and welfare for the people of Cambodia,” she said. Exploration of Area III, she added, will not be undertaken until Cambodia and Thailand reach an agreement on their maritime boundaries.

A deal for the onshore Block 26, which covers an area of 22,050 square kilometres from Phnom Penh to the Vietnamese border, is still under discussion, Semavoine said.

Wednesday, April 28, 2010

Cambodian Minister denies illegal payments from BHP

(Photo: Reuters)

April 29, 2010
AU.IBTimes.com
The term "tea money" is coined by government officials for unofficial payments.
The Prime Minister of Cambodia denied allegations that Broken Hill Proprietary (BHP) Billiton bribed the government with a huge amount of money for mining explorations in his country.

In a recent discovery by the US Securities and Exchange last week, BHP paid a hefty amount of $A2.7 million or $US2.5 million as payment related to a mining exploration in Cambodia.

However, Cambodian Minister Hun Sen refuted the accusations, stating that the money was used to build hydroelectric dam, schools, and hospitals. The money received was a "social fund," which was established in a contract between Australia and Cambodia.

''Let's see the contract - it was a social fund. It is written in the contract. It is not secret," Minister Hun Sen said.

Last week, BHP Billiton was probed by the US SEC concerning the "tea money" graft scandal in Cambodia.

The term "tea money" is coined by government officials for unofficial payments.

BHP denied these claims and insisted that the money was used as a development fund for local social welfare programs. It also paid $US1 million to the Cambodian government for bauxite exploration rights in September 2006.

The mining giant said it has discovered evidences of possible violations of anti-corruption laws linking local government officials in several of its abandoned projects. However, the firm did not specify a country.

A spokeswoman for BHP dismissed other claims and said that the US SEC's investigation does not relate to any activity in China nor its marketing activities or sales relating to the company's products. She said that the inquiry is related to past exploration projects some as recent as a year ago.

BHP said it paid $US2.5 million to a community in Cambodia while another $US1 million was disbursed to the government as payment for bauxite explorations rights.

According to the U.S. Foreign Corrupt Practices Act, BHP may be facing a $US2 million penalty while individual employees may be fined up to $US100, 000 and jail sentence up to five years.

Sacrava's Political Cartoon: Social Funds Club

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

Tuesday, April 27, 2010

Cambodian PM denies BHP paid bribe [-It was not bribe, just "tea money"]

April 27, 2010
AFP

The Cambodian prime minister has denied that mining giant BHP Billiton paid a large bribe for an exploration contract in his country.

Australian media last week reported that authorities in the United States were probing BHP over a $US2.5 million ($A2.7 million) payment related to a project in Cambodia.

But Cambodian leader Hun Sen said the money was for a so-called "social fund" established in an agreement between Australia and Cambodia, and was used to build a hydroelectric dam, schools and hospitals.

"These days, they have been saying BHP paid illegal money to Cambodia. Let's see the contract - it was a social fund," Hun Sen said in a speech.

"This issue is written in the contract. It is not the under-the-table money," Hun Sen told a meeting between the government and private sector which Australia's ambassador to Cambodia also attended.

"It is written in the contract. It is not secret," he said.

The Anglo-Australian miner on Wednesday said it had evidence of possible corruption involving "interaction" with government officials, related to a minerals exploration project that was terminated about a year ago.

It declined to reveal the location of the project, but said it was not in China, where four staff of rival miner Rio Tinto were jailed for bribery and commercial espionage last month.

BHP has said it paid $US2.5 million to a community in Cambodia's east and $US1 million to the government for bauxite exploration rights, according to The Australian newspaper.

BHP declined to comment on the reports. On Wednesday, it said it had handed evidence to the US Securities and Exchange Commission and was also conducting an internal investigation.

Anti-corruption watchdog Global Witness said in a statement last week that Cambodian government accounts do not appear to reflect large amounts of money paid by BHP and other companies for mining concessions.

Friday, April 23, 2010

BHP chief plays down Cambodia fallout

April 24, 2010
BARRY FITZGERALD
The Sydney Morning Herald


BHP Billiton chief executive Marius Kloppers has effectively pre-empted the findings of two investigations into its Cambodian bribery scandal by saying he expects only modest fallout for the company.

Rather than wait for the findings of an investigation by the US Securities and Exchange Commission and an internal report being conducted with the help of a US law company, Mr Kloppers jumped the gun in an interview this week with the Financial Times, said by BHP to have been planned months ago.

"We think the potential issue we've got in the total scale of the company is very modest," Mr Kloppers is reported to have said.

The report quoted the chief executive as saying the potential wrongdoing needed to be put in context, which he said was why BHP limited its disclosure of the SEC probe and its own investigations to the bottom of its March-quarter exploration report, released on Wednesday.

"If there was any view that this was something that would have had a material impact on the company - and I'm not talking about financial-only terms, I am talking about overall reputational damage, all of the things that we weigh when we look at a disclosable event - you can clearly see we thought of this in one way," he said.

But Mr Kloppers also seemed to want an each-way bet.

"I don't want to detract from the seriousness of these issues at all because there is absolutely nothing more important in life than our reputation, as events at Toyota and Citibank show. So even if there was 50¢ that had changed hands to a government official, it would have been an unbelievably big deal."

BHP has so far refused to disclose where the bribery scandal took place, but nor has it bothered to deny widespread reports that it involved a $US1 million payment by the company to the Cambodian government in 2006 to secure bauxite leases.

There has also been speculation that there could be lingering issues for BHP from an aborted nickel project in the Philippines, with a Catholic Church aid agency saying in 2008 that the company needed to be more careful in picking its local joint-venture partners.

The Catholic Agency for Overseas Development alleged that BHP's Filipino partner in a nickel joint venture had offered bribes to community leaders to buy support for the project and silence opposition to the mining.

CAFOD said that while there was no evidence that BHP was involved, the company had a responsibility to ensure that partners and contractors it had chosen to work with did not partake in bribery or corruption.

ASIC's eyes on BHP

April 23, 2010
Rachel Hewitt, with AAP
Herald Sun (Australia)


AUSTRALIAN regulators are likely to do their own investigations into corruption claims involving mining giant BHP Billiton, according to a leading corporate law expert.

The Australian Securities and Investments Commission yesterday would not confirm whether it was investigating already, but Melbourne University's Professor Ian Ramsay said local regulators would be "almost forced" to make inquiries.

Prof Ramsay noted that ASIC chief Tony D'Aloisio had confirmed the regulator was making routine inquiries into Rio Tinto in the wash-up of the Stern Hu affair, and expected it would have to respond the same way to the BHP situation.

US regulator, the Securities and Exchange Commission, and Britain's Serious Fraud Office are probing the claims, apparently related to a bauxite exploration project in Cambodia.

BHP revealed on Wednesday it had uncovered evidence of possible violations of anti-corruption laws involving dealings with government officials, but it has refused to say whether it is connected to allegations of an unofficial $US2.5 million payment to secure exploration rights in the Mondulkiri province.

Foreign Minister Stephen Smith said yesterday he could not see grounds for an inquiry into the conduct of Australian mining executives overseas.

"I don't think that is a sensible or appropriate response for the Government to take," Mr Smith told Sky News.

In a message to BHP staff yesterday, company chief executive Marius Kloppers said: "While matters of this kind are of great concern, they remind us that we must work in a way that is consistent with our code of business conduct and our charter values. Along with safety, nothing is more critical to our success than working with integrity.

"That means working in a way that upholds our values, which underpins everything we do."

Prof Ramsay said the type of wrongdoing alleged was more common than the conduct in Rio Tinto's bribery scandal. "So that's why I would have thought that regulators in Australia would be making inquiries. In fact, they're almost forced to make inquiries now," he said.

Prof Ramsay noted the increased focus of governments and regulators on bribery matters in recent years, including the much higher penalties for bribery under Australian law which came into effect this year.

He said it was inevitable BHP would be pressured to disclose more.

"It's just better to put it all out there initially -- and that assists in terms of preventing speculation," he said.

Thursday, April 22, 2010

BHP declines comment on 'tea money'

22 Apr 2010
AAP

BHP Billiton Ltd is refusing to confirm corruption claims relating the company are connected to so-called "tea money" paid to officials in Cambodia.

Non-government group Global Witness last year highlighted allegations originally aired in a local Cambodian newspaper in 2007 that the company had paid the "tea money" a customary term for unofficial payments.

A BHP Billiton spokeswoman on Thursday said she was unable to add to comments already made by the company.

In its quarterly production report on Wednesday, BHP Billiton revealed it had uncovered potential corruption in company dealings with government officials.

The company did not disclose which country or countries the allegations related to, or whether any workers had been stood down or sacked in relation to the claims.

But Global Witness has said: "According to an article published in The Cambodia Daily on 24 May 2007, Cambodia's Minister for Water Resources, Lim Kean Hor, told the National Assembly that BHP Billiton had paid $US2.5 million to the government to secure a bauxite mining concession.

"In the same article, Lim Kean Hor is reported to have described this payment as tea money, a customary term for an unofficial payment in Cambodia," Global Witness said in its Country for Sale report.

The report went on to say that in accordance with the terms of a minerals exploration agreement BHP Billiton paid $US1 million to the Cambodian government in September 2006.

It said the money did not appear to be accounted for in government financial documents, raising questions about where the $US1 million had gone.

Global Witness wrote to BHP Billiton in 2008 about the allegations and the miner replied that it had paid $US2.5 million for a social development fund in Cambodia.

"We reject any assertion that the payment under the minerals exploration agreement is, or the amounts contributed to the social development projects fund are, tea money," the miner told Global Witness.

BHP Billiton on Wednesday said it was cooperating with relevant authorities and had disclosed evidence it uncovered regarding "possible violations of applicable anti-corruption laws".

The corruption investigation comes at a crucial time for BHP Billiton, as it is trying to convince regulators in Australia, Europe and Asia to sign-off on a controversial joint venture with Rio Tinto.

While refusing to name which country the corruption allegations relate to, BHP Billiton has volunteered that it does not relate to China.

Four Rio Tinto workers based in Shanghai were recently convicted of receiving bribes and jailed in China.

BHP shares were 1.47 per cent weaker at $42.10 at 1242 AEST, against a 1.17 per cent slide in the benchmark index.

Doing business in Cambodia, BHP-style

22 April 2010
By former Phnom Penh Post journalist Georgia Wilkins
crikey.com.au


Today’s broadsheets reported that mining giant BHP Billiton could be guilty of paying $US2.5 million in bribes to the Cambodian government to secure a bauxite mining concession in the country’s north-west.

Further investigations have revealed that BHP discretely shelved its mining plans at the same time as a probe into the deal by the US Securities and Exchange Commission began. It seems Japan’s Mitsubishi were also part of the deal.

Is this a repeat of the Rio Tinto saga, or are we seeing a pattern emerge?

It seems that even the world’s largest mining company and one of the world’s largest diversified trading and investment companies believe that they can get away with corrupt behaviour; at least in vulnerable corners of the world in which few in London or New York pay attention too.

The Sydney Morning Herald claims that the latest graft scandal to hit a mining company has been under investigation by SEC since August. This coincides exactly with the company’s sudden pull-out from the bauxite mine in Mondulkiri province, Cambodia.

BHP at the time attributed the pull-out to their failure to find bauxite in sufficient quantities, with a spokesman for BHP in Australia quoted in the Phnom Penh Post as saying: “We completed our exploration field work in the Mondulkiri province and are in the process of sharing our evaluation with the Royal Government of Cambodia. As such, we have reduced our presence in Phnom Penh.”

The spokesman, who was not named, refused to give further details, saying that “…we do not comment publicly about the results of our exploration activities”.

Another source confirmed this alibi, telling the Post a feasibility study, which reportedly cost $US10 million and covered 400 hectares of the company’s 996-hectare concession, failed to find bauxite in sufficient quantities to make extraction profitable and justify the construction of the aluminium refinery.

But it seems that the news of poor profits was so devastating to BHP that it not only exited the deal, but exited the country, quickly vacating their large French-colonial building on the city’s main boulevard and no longer returning the Post’s calls.

The question needs to be asked: Why is this coming to light now?

The Global Witness report has been on the record for over a year, claiming BHP is involved with gross wrongdoing. But only now is it reaching papers in the developed world — surely in part because of the blow-up of the Stern Hu case.

Tireless watchdogs like Global Witness have long been a thorn in the side of Cambodia’s political and military elite. But officials know that without a large international audience, the group’s naming and blaming usually falls on deaf ears. It is this isolation from the world community that, as Global Witness itself points out, makes Cambodia such a natural fit with extreme corruption and kleptocracy.

So why were these commercial titans with huge reputations on the line dipping into the forbidden fruit on offer in small, backwater countries?

Global Witness says the fact that Cambodia has been resting on the cusp of a “petroleum and minerals windfall” is at least partly to blame.

“High demand worldwide for these commodities has, until recently, led to high prices. As a result companies are beginning to search for economically viable reserves in previously untapped countries once thought to be too politically unstable to operate in,” it says in its report, Country for Sale.

So, was it only a matter of time?

Cambodia and Vietnam, with fractured economies and greedy politicians, both have a reputation in south-east Asia for being the lowest hanging fruit on the dirty-money tree. Cambodia also has the seductive advantage of a huge bureaucracy in which standard accounting practices can disappear without a trace; not to mention a system of bullying predicated on fear which guards corrupt deals against squealers.

Indeed, the Cambodian government has been labeled the biggest in size in the world per capita; and they may likely be the richest. A nomenklatura of inter-wed and blood-related elites manage the country’s wealth through a sophisticated pyramid-shaped network of handshaking and intimidation. It is almost impossible to defy this natural hierarchy of power and its coercive logic of bribery: Global Witness claim every mine they investigated for their report was indeed run by a member of the government or military, or their relative.

So protected is the government from opposition that it can be genuinely humoured by attempts to threaten its power – especially when they come from outside the country. Following the release of Global Witness’s report, the Cambodian ambassador to the UK and son of the Minister for Commerce, Hor Nambora, responded by whipping up his own “report” with a poorly drawn image of the initial report going into a waste-paper basket.

But as the government squanders so much of the country’s wealth on big cars and expensive watches, teachers and low-level government workers are starved and forced to perpetuate the cycle of bribery.

‘Tea money’ may sound like a sinister misnomer, but to most Cambodians, a kickback is simply the cost of an every-day service. A legitimate monetary system can be easily reversed once one person’s salary is not paid. Because teachers receive barely any income, children learn from an early age that if they want to pass subjects, they must take a few hundred riel along with their lunches to school every day.

With this culture in place, it is difficult to believe that any company, large or small, international or local, can avoid paying this ‘tea’ tax on top of bloated concession fees. With SEC’s investigation underway, we are no doubt likely to see that the Stern Hu case is the rule, rather than the exception, when it comes to second and third-world business deals.

Tuesday, December 29, 2009

Leader Of The Pack

Source: Strategy Page

December 28, 2009: China aspires to be a world power. It's understood that China cannot do this alone. Even the mighty United States has allies it depends on. Who can China depend on? Not a lot. In fact, China has a rather disturbing roster of friends. There's Pakistan, a corrupt nation, always on the verge of falling apart and one of the few remaining sanctuaries for Islamic terrorists. China is also cozy with North Korea, Iran and Myanmar, pariah nations all. So China has been forced to improvise. This has resulted in uniting the search for allies, with business opportunities, China embraces countries willing to do business (especially if they have needed raw materials), no matter what their international reputation. As a result, China has made friends with some of the most unsavory states of Africa. China is nonplussed by Western disdain at this behavior. It's business, and the outcast states have few nations they can do business with. That cuts down on the competition. Operating conditions are less than ideal, but the Chinese are accustomed to dealing with corruption and criminal gangs. It's really a good fit.

China played on these friendships recently to get Cambodia to expel twenty Chinese citizens (ethnic Turks, or Uighurs) suspected of participating in recent ethnic violence, and sending them back to China. China does not want the separatist minded Uighurs setting up operations outside China, and is using all its diplomatic clout to extradite wanted Chinese citizens from foreign sanctuaries.

Chinese courts are being kept busy persecuting Internet pests. The expense and stress of going to trial, then the large fines, or even jail term, that usually result, causes outspoken Chinese to think twice before they say something, the government might not like, on the Internet. Writer Liu Xiaobo was recently sentenced to 11 years in prison, because he wrote a book that called for more freedom. China has been a communist police state for the last 60 years, and the people in charge want to keep it that way.

December 27, 2009: China announced that it had rescued the Chinese coal ship, the De Xin Hai, and its 25 Chinese sailors, off the coast of Somalia. What was not immediately mentioned was the payment of a $3.5 million ransom, and the pirates then leaving the ship. The seizure of the ship, two months ago, despite the presence of Chinese warships and commandos in the area, was embarrassing for the Chinese government. Little was said, in the government controlled press, about the De Xin Hai. But the chatter on the Internet was less than flattering for the government. That apparently led to the attempt to spin the ransom payment as a military rescue mission.

December 24, 2009: A court in western China condemned five more Uighur men to death, for participating in ethnic violence earlier in the year. Five other death sentences were commuted, meaning the accused would spend life in prison. Nearly a thousand people, mostly Uighurs, have been arrested and are being prosecuted. The government is still seeking several hundred others, many who have fled the country.

December 17, 2009: China has a growing reputation for taking every opportunity to do a little espionage on the side, especially an overseas business operation is close to a military base. For example, the U.S. government is threatening to block a Chinese firm from developing a mine in Nevada, because the operation would be too close (80 kilometers) to Fallon Naval Air Station, where experimental work is done. Earlier in the year, Australia also blocked Chinese investment in a mining operation that was near Woomera (where missiles are tested.) In Taiwan, Chinese government officials are not allowed to own real estate. While there are some national security concerns at play here, Taiwan is mainly concerned with preventing corrupt Chinese officials from hiding their loot in the form of Taiwanese commercial and residential property.