Thursday, 5 February 2009

NGO: Cambodian leaders have squandered rich natural resources

Monsters and Critics

Asia-Pacific News
Feb 5, 2009

Phnom Penh - Cambodia's political elites have put the country's economic future at risk by squandering its rich natural resources, an international environmental and anti-corruption group said Thursday.

A report released by London-based Global Witness said international donors had turned a blind eye to the widespread corruption, mismanagement and nepotism that has positioned political elites as the only beneficiaries of Cambodia's oil, gas and coal reserves.

The report accused Prime Minister Hun Sen and the ruling Cambodian People's Party of allocating contracts 'behind closed doors' to members of the political elite and their families.

'The Cambodian government does not have a process for allocating resources outside of patronage,' Global Witness campaigns director Gavin Hayman said in a statement.

'The same political elite that pillaged the country's timber resources has now gained control of its mineral and petroleum wealth,' Hayman said. 'Unless this is changed, there is a real risk that the opportunity to lift a whole generation out of poverty will be squandered.'

The report called on the government to enforce a moratorium on further mineral and petroleum contracts and launch a review into the environmental, financial and technical credentials of existing contractors.

More than 75 companies, including multinationals Chevron Corp and BHP Billiton PLC, are currently working in Cambodia's resources sector, and according to the report, some have already made undisclosed, upfront payments to the government.

'Companies need to come clean on what they have paid to the government to secure access to these natural resources or risk becoming complicit in a corrupt system,' Hayman said.

The report also called on international donors - which in December last year pledged a combined 1 billion US dollars of aid - to use their funding as leverage to 'demand new governance measures for the industries.'

It argued Cambodia's mineral reserves could be the key to the country's economic future and help end its reliance on foreign aid.

The group said its findings were based on fieldwork and interviews with industry insiders.

Global Witness representatives were expelled from Cambodia in 2005, and in 2007, the government banned the publication of one of its reports that accused a 'kleptocratic elite' of illegal logging and corruption.

Government spokesmen were unavailable for comment Thursday, but Minister of Industry, Mines and Energy Suy Sem was quoted in The Cambodia Daily newspaper as saying that mineral-exploration licenses were subject to competitive bidding and open to all companies.

'There is no principle to charge any companies money before exploitation,' he said. 'The company won't pay before they find minerals.'

Although still in its infancy, Cambodia's resources sector has flourished since 2003 when investors from Australia, Thailand, China, South Korea and the United States were lured by the country's rich mineral, oil and natural gas reserves.

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