Gov’t Has Oil Account at Nat’l Bank, UN Says

The government has created an account at the central bank for payments from oil and gas companies, the UN Development Program said this week.

The government has “said that they have created a special account in the National Bank of Cambodia to invest special payments made by companies that are negotiated under petroleum agreements,” the UNDP said in a statement sent by e-mail Monday.

The UN agency said that it did not know when the account had been created, saying only that it had been informed about the account in November, when the Ministry of Economy and Finance briefed lawmakers on the matter.

“We anticipate that the government will be able to put in place increasingly sophisticated mechanisms to manage and report on revenues from the sector,” the UNDP said.

The government has in recent weeks been called on to come clean on details of payments made to it by had set up an account for petroleum companies, only saying that private investors do make deposits at the national bank.

“I cannot provide you all those details. It is customer information,” she said.

Chea Pheng Chheang, secretary of state at the Ministry of Finance, said he was unaware of the government’s NBC account and Finance Ministry Secretary-General Hang Chuon Naron did not respond to written questions on the matter.

Last week, the opposition party called on the government to explain its dealings with Australian miner BHP Billiton and French oil firm Total over payments both firms made to do business in Cambodia.

Prime Minister Hun Sen on Friday assigned Cabinet Minister Sok An, who is chairman of the national petroleum authority, as well as Finance Minister Keat Chhon, to answer those questions.

The SRP’s questions were in­spired after investigations were launched in Britain and the US into government payments BHP reportedly made in Cambodia in 2006. Aid and environmental groups have also called on the government to release information on Total’s own multimillion dollar payments, announced for the first time by Prime Minister Hun Sen last month.

Mr Hun Sen said that $20 million of Total’s money was a signature bonus for doing business in Cambodia and the remaining $8 million was to contribute to a government-controlled “social fund.”

Total has since declined to reveal what specific projects the social fund will support, but did say the money was sent to the national petroleum authority, which is under the jurisdiction of Mr Sok An. CNPA officials have declined to comment on the Total payment.

For years the potential revenue flows from Cambodia’s extractive industries have been cited by politicians and development agencies alike as a source of hope for the economy. However, criticism has been voiced at the lack of transparency by the government in its management of the sector.

In October 2006, the Indonesian company MedcoEnergi announced it had paid $4.5m into a government social fund as part of it acquiring exploration rights in the 5,600-square km offshore Block E.

That money has never shown up on the government’s books, according to environmental campaigner Global Witness. The same is true for a $2.5 million payment to a social fund by BHP and most recently the $8 million paid by Total.

“At the risk of sounding like a broken record, why aren’t these showing up in the budget lines produced by the [Ministry of Finance]?” Eleanor Nichol, a campaigner for Global Witness wrote in an email message last week.

The government’s Public Finan­cial Management Reform Pro­gram—previously supported by donors including Australia, Japan, the UN, the Asian Development Bank, the International Monetary Fund and the World Bank—is often accredited with improving financial accountability. However, the budget lines for what is potentially the biggest form of income to the country are missing, Ms Nichol’s added. “Why aren’t more questions being asked about this?” she added.

Richard Thompson, an independent consultant on Cambodia’s mining sector, said that despite the problems and inadequacies, the development of the oil, gas and mining sectors are still in their very early stages.

“Mining is an international business and however small the country and its mining sector, there are theoretically no reasons to prevent it from adopting the well documented best practice governance and principles applied by the ‘best’ mining jurisdictions,” Mr Thompson said.

“It is likely that Cambodia will need external assistance together with further development of its own human capacity in order to build a modern, regulated mining sector,” he said.

“Cambodia should actively seek this assistance and be prepared to embrace the terms and positive spirit with which it will be provided.”

 

 

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