 Proveang (Preah Vihear, Cambodia). 05/06/2008: Illegal gold extraction in an open-pit mine
©John Vink/ Magnum
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.
Nearly half the Kingdom in private hands
“Over the past 15 years, 45% of the country's land has been purchased by private interests. […] The social and environmental consequences have already been devastating.” This stark observation opens the last report, published on February 5th, of the former independent monitor of the forest sector in Cambodia – which mandate was ended in April 2003. Global Witness (GW) adds that the granting of these concessions often comes with land-grabbing, as thousands of people are displaced every year in the country. But, the NGO warns: once these natural resources are gone, they will be gone forever.
On the basis of the information disclosed in the 70-page “Country for Sale”, which was collected in 2008, GW accuses part of the ruling elite – who the organisation readily calls “kleptocratic” – of having “sold off potentially valuable concessions to companies in a manner that is non-transparent and highly dubious.” Also, these extractive industries must pay financial bonuses (payments made by a company to the government in exchange for the rights to exploit oil resources, a common practice throughout the world) and other fees. These are estimated by GW to amount to several million dollars, but, as far as the NGO could see, they do not appear in the 2006 or 2007 annual revenue reports from the Ministry of Economy and Finance.
The case of mining licenses
Every single mine site investigated by GW in 2008 was either owned or controlled by members of Cambodia's political or military elite, according to the organisation. The NGO points out “obvious and extensive involvement of the Royal Cambodian Armed Forces” (RCAF) in this sector, especially in the provinces of Stung Treng, Preah Vihear and Pursat.
GW is particularly concerned with the capture of areas protected for their environmental value. “At least six of Cambodia's 23 protected areas now have some form of mining activity within their boundaries.” The NGO reminds the history of this classification: in 1993, a royal decree had recognised 23 “protected” areas in Cambodia over a combined coverage of 32,289km2; however, the 1994 Prakas on protected areas – which prohibited mining activity within their perimeter – was “quietly annulled” in August 2006. As these activities were no longer explicitly banned under the 2001 Law on the management and exploitation of mineral resources, “this left Cambodia's protected areas in a legal vacuum,” which was “rapidly exploited”... For instance, it is reported that the situation is particularly acute in the heavily forested province of Mondulkiri, where GW stresses that some 21% of the total protected areas have been turned into mining concessions.
While in the mid-1990s, no major mining project existed in Cambodia, the Council for Development of Cambodia – the government body in charge of encouraging foreign investment – approved, for 2006 alone, 403 million dollars of investment in the mining sector, GW notes. According to their research, more than 100 mining licences were allocated for mineral exploration purposes, but almost no information about these was made public by the relevant ministries or concerned companies. The organisation adds that similarly to what happened in the forest sector, these companies are in the hands of the country's ruling elite.
Oil and gas: from opportunity to curse?
Oil and gas resources have attracted lots of financial speculation and media interest because their exploitation could serve as an engine of economic growth. The International Monetary Fund (IMF) has predicted that annual oil revenues could gradually increase from 174 million dollars in 2011 (announced date for the start of oil extraction in Block A, which U.S. company Chevron holds the rights to) to a maximum of 1.7 billion dollars in 2021, before dropping rapidly thereafter. The industry is in its infancy, but many already have their eyes on it. The curse of the black gold, which has caused ravages in countries like Nigeria, comes to mind.
In “Country for Sale”, the NGO thus expresses serious concerns over the viability of the institution established to manage oil and gas resources, the Cambodian National Petroleum Authority (CNPA), a “constitutionally dubious body under the direct control of Prime Minister Hun Sen and his deputy, Sok An.” The CNPA was created in January 1998 by royal decree “only”, GW deplores, thereby circumventing public and parliamentary debate at the National Assembly. Moreover, the organisation highlights that the authority is “highly politicised” and in the hands of Hun Sen supporters. Meanwhile, parliament has no oversight of the body, which also appears not to coordinate with other ministries, not even the finance ministry. GW argues that the royal decree transferred responsibility for the oil and gas sector away from the Ministry of Industry, Mines and Energy to this new institution, without “any official explanation” being given. Shortly afterwards, two amendments to the 1991 Petroleum Regulations removed any safeguards for the transparent and equitable allocation of Cambodia's petroleum concessions, while a new petroleum law remains to be developed, the organisation adds.
In short, GW explains that these concessions have been allocated under “a blanket of secrecy”, secrets that the CNPA is said to be guarding closely. “It is known however,” GW specifies, “that the CNPA has allocated all of Cambodia's undisputed offshore blocks to private companies.” Meanwhile, there are reports of continuing allocation of blocks onshore this time around the Tonle Sap Basin and re-licensing of offshore blocks in the Overlapping Claims Areas – maritime areas contested between Cambodia and Thailand. Moreover, GW recalls that “the Cambodian government has announced that it will not endorse” the Extractive Industries Transparency Initiative aimed to improve governance for better transparency on company payments and revenues from extractive industries, by making such information available to the general public and supporting the sustainable use of such wealth.
The conclusion reached by GW is that the end result is “zero transparency” in the process behind concession allocation in the oil industry. The organisation draws attention to the fact that some of the companies that have been allocated concessions “have little experience in the oil and gas sector, and unproven financial means to exploit the resource. In some cases, it is not publicly known who controls the company or benefits from its activities.” The consequence is that the Cambodian people, who “collectively own this resource”, have no say or control, the NGO laments.
Donor countries' guilty silence
Global Witness does not blame only the Cambodian government but also donor countries, who provide “aid equivalent to approximately half Cambodia's national budget each year,” the organisation reminds. International donors are criticised for not using “the influence that their development aid gives them to improve governance.” GW denounces a disconnect between the commitments made at the international level and the action of donors at a national level in Cambodia.
To justify the fact they are not putting more pressure on the Phnom Penh government to implement significant reforms which would benefit the Cambodian people, donors have argued that taking a stronger stance would “push Cambodia further into the pockets of its biggest donor – China.” GW considers this an excuse, which “overlooks the fact that China, despite its generosity, cannot offer the Cambodian government the international respectability it seeks.”
GW considers that the experience of the Cambodian forest sector hardly offers an encouraging precedent. However, the organisation believes that “all is not lost” and the revenues generated by these sectors can contribute to Cambodia's development rather than increase poverty. Thus, the NGO recommends a moratorium on any new concessions, a review of existing concessions, and full transparency on the allocation and management of these public assets. Also, international donors are called to redefine their terms of engagement with Cambodia.
Reaction of Cambodian authorities: GW is “naïve”
Unsurprisingly, the Cambodian government has not appreciated this last report from GW, whose staff were declared “undesirable” on Cambodian soil since 2005. The first to start blasting their latest work was the Cambodian Ambassador to the United Kingdom, who accused GW – whose headquarters are in London – of “pursuing a malicious campaign to try and discredit the country and its leaders.” Nambora Hor called the various international bodies funding GW to demand an urgent review of its politics 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 conducts its affairs and its commitment to demonstrating the highest possible standards.” The diplomat added that his government “is working hard to establish a sound and comprehensive framework governing the extractive industries.” He also claimed that the revenues generated by the exploitation of these natural resources will be used to improve “health, education and social conditions for [the Cambodian] people which is very important for the long-term prosperity of Cambodia.”
Same reaction from Khieu Kanharith, the government's spokesman. According to him, GW is taking Cambodia's partners for “idiots” by deeming them incapable of assessing the situation “although every project carried out in Cambodia is controlled and implemented with the assistance of experts.”
An organisation that has become “too politicised”
“Global Witness has become too politicised. Their goal is not to campaign for good governance, but to attack prime Minister Hun Sen personally. This NGO, which we have already banned from Cambodia, is just craving for attention. They are acting like an opposition party,” Khieu Kanharith opines.
The spokesman accuses GW of seeking to “cause confusion among the public by mistaking exploration license and exploitation license.” He adds, “When you do exploration, it is often at your own risks, because for now, the quantity of available resources there is unknown. So, to this day, we have not distributed any exploitation licences.”
Will the Cambodian government take measures against the report and its authors? The official's answer is no. “What can we say in response? There isn't a lot of precise information in their report and they haven't even looked at the budget law in detail! We prefer not to join the controversy.”
“Country for sale: a unique opportunity – what are you waiting for”
On the back of its report “Country for Sale”, GW offers a candid summary of the conclusions of its investigations on the management of natural resources in Cambodia... in the ironic form of an advertisement. Under the title “For Sale”, a text says: “Have you got some cash to invest? Want a quick return? No questions asked? Exclusive investment opportunity, beautiful location with lush countryside and scenic views, […] discretion guaranteed […]. Contact us now! A unique opportunity – what are you waiting for?” Next to it, three pictures of a forest, land and sand, all stamped with the word “Sold”... The bottom of the page features the address of a website, www.countryforsale.net … where the organisation's last report can be downloaded.
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By Doris
By John Vink
By Doris