Corrupt elite threaten Cambodia's development

Mr. Gavin Hayman

ABC Radio,

Australia

February 6, 2009

The anti-corruption ngo Global Witness says "a corrupt elite" in Cambodia is taking over the nation's emerging oil and mineral sectors, while international donors turn a blind eye.

In a report titled 'Country for Sale', Global Witness says Cambodia's future is being jeopardised by high-level corruption, nepotism and patronage in the management of public assets. This, it says, threatens Cambodia's potential to wean itself of foreign development aid.

Presenter: Sen Lam
Speaker: Gavin Hayman, director of Global Witness

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HAYMAN: We've been working in Cambodia for the last 15 years looking at how illegal logging was being operating in the country and were able to show that it directly benefitted the ruling military and political elite. And our new report has showed that the self same people whose names are in our previous report as being involved in illegal logging have now effectively taken over the mining and also have oversight over the emerging oil industry in the country. And that's disastrous news for Cambodia because the money from oil and mining, which could actually really help Cambodia's development and lift Cambodia's citizens out of poverty, appears to instead be in severe danger of being wasted.

LAM: But you also say that international donors are turning a blind eye. What would you like donor countries to do?

HAYMAN: Well donor countries need to really get the Cambodian government to behave itself. They need to effectively declare a moratorium until there's basic governance and transparency framework in place to actually have oversight over what's going on. At the moment we've discovered that effectively the government doesn't have any way of giving out concessions, apart from patronage. So a particular kind of senators for example in the ruling party appear to have a beneficial possession of the mines, and they also needs to do a proper audit as to exactly how all those concessions be given out and whether they're equal and whether in fact the money is in the national budget. And there's about 60 or 70 different companies operating now, and we've written to all of them, also to ask about their behaviour, and we haven't had many responses back. What we did get was from BHP Billiton, the huge Australian mining company, and they actually told us they paid about a million dollar signature bonus to the government to explore for bauxite near the Vietnamese border. Now we congratulate BHP on being transparent about that. We're worried about the 79 companies that haven't been transparent, but also disturbingly we can't find information about that million dollars in the Cambodian budget. And that's very worrying, so where is this money in Cambodia's financial system? That's very concerning.

LAM: Indeed, it must be quite hard though, to extricate the ruling elite from these lucrative contracts. So what do you think can be done to change this culture, this culture of corruption?

HAYMAN: Well I think at the moment Cambodia's depends on foreign aid for about half its budget, and the donors have a very limited window of opportunity to use that influence on the Cambodian government to get a moratorium in place and a proper audit and future management provisions in place. To actually assure transparency, and that the money actually flows into the national budget and is properly spent. So they've got to use their leverage now and effectively really they shouldn't be lending into corruption and actually compensating a corrupt government that's stealing money that should be spent on development by actually putting taxpayer's money into development projects. So effectively they've got to play hard ball with the Cambodian government and get it to actually be fully transparent.

LAM: And just very briefly, can the Cambodian government itself do more or is the government itself the problem?

HAYMAN: The government itself as currently constituted by the ruling elite is the problem. So, as I said the military and political figures in Cambodia are direct beneficiaries and owners of some of these mines. And they may not actually own it on paper but if you turn up at the gate, which is one of the things we've done, the people guarding the mine they all know who's in power and they'll tell you who's actually in charge and who's the owner. Effectively, the donors have been very soft, some might even say spineless about addressing corruption in Cambodia for the last sort of 14 or 15 years. And to give you an example, Cambodia still hasn't passed an anti-corruption law despite the donors pushing for that for the last 14, 15 years.