Australia defends involvement in Cambodian railway project

ABC Radio Australia

Updated November 7, 2011

The Australian embassy has defended its involvement in a rail development project in Cambodia, which critics say is increasing poverty among those displaced from the side of the tracks.

The Rail Rehabilitation Project will spend more than $US140 million fixing Cambodia's two decrepit rail lines, which link Phnom Penh with a southern port and the Thai border to the west.

It's billed as a poverty reduction scheme, and an Australian company Toll Holdings has teamed up with Cambodian conglomerate The Royal Group to run the rail service.

Presenter: Liam Cochrane
Speaker: Penny Richards, Australia's Ambassador to Cambodia

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RICHARDS: Well this fits very strongly with the Cambodian government's own economic planning and objectives and fits in with the ASEAN masterplan of connectivity. Economic theorists will tell you the best way to develop economies and therefore bring people out of poverty is to link up trade routes and trade networks. So the railway will link up Cambodia's garment producers, manufacturers, farmers, agricultural producers with prospective markets in Thailand and ultimately other parts of the wealthy ASEAN market. So through infrastructure connectivity, economic development that will increase the growth rates in Cambodia, help reduce poverty rates and give opportunities for individual Cambodians.

COCHRANE: In the course of this project, Australia has made commitments to making sure the resettlement process is carried out appropriately and has said that assisting displaced people and replacing their housing, land, livelihood and access to services has helped offset any negative impacts. However, at the moment, residents relocated 25 kilometres out of the city are sleeping under tarpaulins and the promised income support initiatives, that were pledged and that Australia has put a million dollars towards has not yet started, even though they've already been relocated. Is this an acceptable situation for those people who have been moved?

RICHARDS: As you mentioned, the project is mainly funded by the Asian Development Bank with Australia as a co-funder. Under the terms of the loan agreement, the Cambodian government is responsible for the resettlement project and has agreed to do resettlement in accordance with the ADB safeguards policy. The fundamental principle of that policy is that those who are moved off land where they've been illegally squatting should be no worse off than they were before. There's various elements to that no worse off policy. People will be compensated for their assets which they've left behind, the areas to which they're moved will have electricity and running water, which, of course, is you can't take for granted anywhere in the Cambodian countryside, which only has 20 per cent electrification, a mentioned, income restoration projects, that's part of it, because one reason why people like to live in these dangerous areas so close to transport corridors is that there's a means of small commerce with passing trade, so income restoration is important.

As you point out, the project has not been trouble free, but I think everyone recognises it's a complex and heavy burden that the Cambodian government's undertaking and our objective has been to shore up its capacity, assist with resources for extra monitoring and giving a hand where we can, so that not only this project with resettlement works well, but that there's some residual capacity in the Cambodian government which we hope it might apply in other projects which we're not necessarily funding. So there will be hiccups along the way and, for example, one of the issues which has been discussed is grievances, is the amount of compensation adjusted correctly and so on and that's another area where we've been concentrating, helping to get the grievance resolution process working better and I'm informed that as at the current time about 60-70 per cent of grievances have been addressed.

COCHRANE: You mentioned the focus on monitoring for this project and I understand at least half-a-million dollars has been put into monitoring, independently evaluating the success, the socio-economic impact of this rail development project. Another key part of that monitoring is something that AusAID has recognised is the contribution of non-government organisations which brings us to one of the organisations STT, one of the two main groups involved in the rail project. It was recently suspended by the Cambodian government shortly after they called for a halt to the resettlements. Will Australia consider pulling out of this project if NGOs like STT are not allowed to monitor the resettlement process?

RICHARDS: Well, a couple of things to say on that. First of all as a general principle Australia values very much the role of civil society, both in our own country and in other countries where we work and we always make the general point that civil society has an important contribution which it can make in relation to this particular project. The issues which some of the NGOs have raised are serious and have merited attention and indeed we have redoubled our efforts to address some of these problems which have cropped up. In terms of the project, we talked before about the overall aims of poverty reduction and we believe that in partnership with the ADB and the Cambodian government we should forge ahead with this project whilst addressing in a careful and thorough way the problems which arise along the way.

COCHRANE: One of the key methods of finding out the problems that are arising along the way though has been through this group STT. Will Australia consider pulling out of the project if the group is not allowed to continue monitoring?

RICHARDS: The Australian government remains committed to the project for the important policy objectives which I've mentioned.