Donor Scrutiny of Extractive Industries Should Increase, SRP Lawmaker Says

Donor countries must hold the government more accountable in its pledge to release information publicly regarding revenues generated from the country’s extractive industries, an SRP lawmaker said Friday.

SRP lawmaker Son Chhay said that countries need to place tougher conditions on aid to government to ensure that revenues from the country’s largely unexploited resources are not wasted.

“The more corrupt your country is, the more aid you want,” Mr Chhay said on the sidelines of a press conference on transparency in the extractive industries.

He said that foreign donors had so far continued to “feed [the government] with a carrot” rather than hold it accountable.

Last week 26 SRP lawmakers wrote letters to 22 US Congressmen expressing concerns that oil, gas and mining revenues could end up in the pockets of senior government officials.

However, the government said the opposition should have confidence in the government’s reform programs for better revenue transparency.

“They [foreign donors] play a very good game and the diplomats here they like to feel comfortable too,” Mr Chhay said. “They like to have a good rapport and cover up all the dirty things and then they walk away when they finish up their mandate here happily.”

“To be sure that the tax payers money that is being given to Cambodia is being used accordingly they should encourage more for the opposition to be active in this country,” he added.

Mr Chhay said the SRP was also considering sending similar letters to the government’s of the United Kingdom, France, Singapore and Japan asking them to adopt similar laws to that of the US, which in July passed legislation requiring extractive industry companies to disclose all payments made to foreign governments by 2012.

Phay Siphan, spokesman for the Council of Ministers, said that scrutiny over the government’s revenues was already at the discretion of all foreign donors.

“All the country donors, they have their ambassadors to monitor the situation,” he said. “If the system is corrupted I don’t think the donor countries would be giving as much money.”

In June foreign donors pledged $1.1 billion in assistance to the government – $110 million more than the amount proposed in 2008 – despite concerns from rights workers that the government’s development record on land issues, indigenous people’s rights and revenue transparency, among other aspects, are not being sufficiently monitored.

Rights workers say that the more oversight that donor countries have over countries the better.

“We think, for the extractive sector, it’s equally effective for donor countries and third-party governments to develop strong legal framework at home rather than just attaching conditions with aid on host countries,” said Brian Lund, regional director for Oxfam America’s East Asia Regional Office. “Transparency is everyone’s responsibility, not only the government, but also the private sector and donor communities themselves.”

Asked about whether stronger conditions on the government in return for better revenue transparency should be implemented, a US embassy spokesman wrote in an email: “We welcome the passage by Cambodia’s National Assembly of the Anti-Corruption Law and look forward to its promulgation.”

“We trust that the implementing regulations will clarify and enhance the law’s aim to detect and punish corruption according to international standards, and thereby deter acts of corruption which discourage foreign investment,” the spokesman wrote Friday.

Still, in a report approved last month, the US Senate Committee on Appropriations issued draft instructions that would require the US Agency for International Development to produce more effective procedures that ensure transparency in the allocation and ownership of extractive concessions.

The government has instructed American oil giant Chevron to start extracting oil by 2012 from its offshore location in the Gulf of Thailand.

Dominique Mas, first secretary at the French embassy in Phnom Penh said the way in which revenues are monitored was a strictly domestic and sovereign affair for Cambodia.

“In a sovereign country, it is up to the national institutions and the democratic representation to monitor the budget incomes and the corruption,” he wrote in an email.

Mr Mas added that the level of corruption in a country “is a criteria for the majority of the donor countries before budgeting their public aid.”


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