Role for civil society in transparent oil resource management

Roundtable discussion on 

PHNOM PENH, 26 October 2012 (Cambodia Herald) - Civil society has an important role in helping the government ensure transparent management of oil resources, Konrad Adenauer Foundation representative Denis Schrey said Friday

"To date, much of the attention on the oil and (gas) sectors has focused on what will become of the money once these revenues begin to be generated," he told a roundtable discussion organized by the Club of Cambodian Journalists.

"Relatively little has been said about who the concessions have already been given to and the process by which they have been allocated."

According to Schrey, "corruption and illegal acts can be found at all stages of the natural resource extraction process in resource-rich countries around the world.

"Corruption has always started at the point of entry in the natural resource chain -- with the allocation of concessions for the resource itself."

In Cambodia, he noted that all phases of petroleum activities are now coordinated by the Cambodian National Petroleum Authority, a new institution reporting directly to the prime minister rather than the Ministry of Industry, Mines and Energy.

"As far as my own research is concerned there is no parliamentary oversight of the CNPA," he said. "Therefore the role of (civil society organizations) is important to engage in a dialogue with the government on transparent management during various stages of the resource extraction value chain."

In the first stage, he said, government negotiation capacities in relation to large companies have to be strengthened. Once they are extracting resources, "better monitoring may ensure extraction and corresponding payments are in line with what had previously been negotiated, while local environmental and social impact laws are adhered to."

Schrey said the implementation of an "extractive industries transparency initiative" could then ensure transparency of the revenue flows. "Finally, sound investment decisions ensure that the income from resource extraction maximizes the developmental prospects for the country," he added.

With the IMF predicting annual oil revenues of up to $1.7 billion in 2021, Schrey said the industry was regarded as an "emerging major element" in Cambodia's economic future.

He also noted that all offshore blocks and at least one onshore block had already been allocated to domestic or foreign companies from Australia, China, Indonesia, Japan, Korea and the United.