CAMBODIA Country Profile

Environment, Natural Resources and Extractive Industry

Business Corruption

In Cambodia, the allotment of oil and gas concessions to companies is conducted in a highly irregular and non-transparent way. Companies have to pay huge sums of money as signature bonus to the Cambodian National Petroleum Authority (CNPA), as well as large annual fees. According to Global Witness 2009, this money does not appear in any ministerial revenue reports. Companies that are contemplating entering into extractive industries in Cambodia are advised to develop and strengthen integrity systems.

Global Witness 2007 revealed that due to illegal logging, Cambodia has lost 29% of its forest area within the last 5 years. Illegal logging is carried out under the guise of plantation establishments and harvesting permits.

Rubber is an important export article for Cambodia, but export performance is hampered by smuggling. It is estimated that one-third of the rubber produced is smuggled out of the country.

Political Corruption

Forestry and mining concessions are often signed behind closed doors in Cambodia, making it impossible to ensure good governance in this area.

Illegal logging, stripping the country of valuable forest areas, is common. High level politicians and military officers have been exposed as being involved in the lucrative, but very destructive illegal logging trade.

The corruption and collusion within illegal logging involves Cambodia's political and economic elite. According to Global Witness 2007, the most powerful logging syndicate is run by relatives and allies of Prime Minister Hun Sen. They are Hun Chouch (cousin to the Prime Minister), Seng Keang (his ex-wife who is friends with the Prime Minister's wife), Seng Kok Heang (her brother who is a military officer in Brigade 70), and Khun Tong (brother-in-law to the Minister of Agriculture, Forestry and Fisheries).

According to Global Witness 2007, the transport of the illegally logged timber is carried out by Brigade 70 - an elite military unit that also serves as the reserves for the Prime Minister's body guard unit.

The buying and selling of civil service jobs is a common practice. Global Witness 2007 states that it is believed that the Minister of Agriculture, Forestry, and Fisheries, Chan Sarun, and the head of Forest Administration, Ty Sokhun, have sold more than 500 jobs in the Forest Administration, earning them an estimated USD 2.5 million in bribes.

According to Global Witness 2009, concessions in the extractive industries - oil, gas and minerals - are being sold in a non-transparent and secretive way to companies that have strong affiliations with the Cambodian political elite. Furthermore, the organisation established to be in charge of the oil and gas industry, the Cambodian National Petroleum Authority (CNPA), is set up by royal decree only, and so far it has not been included in any legislation. It is under the direct control of Hun Sen and his deputy Sok An. According to Global Witness the millions of dollars have been paid in bonuses in exchange for the concessions. None of these sums figure in revenue reports from the Ministry of Economy and Finance, suggesting that the money is being pocketed.

Frequency

Global Witness: Cambodia Family Trees 2007:
- Cambodia's forest area was diminished by 29% between 2002 and 2007.