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Cambodia Country Profile

Frontpage » Country Profiles » East Asia & the Pacific » Cambodia » Corruption Levels » Licences, Infrastructure and Public Utilities

Licences, Infrastructure and Public Utilities

Individual Corruption

Results from several surveys reveal that bribes paid to government officials in exchange for getting things done are not uncommon in Cambodia. For example, according to the Transparency International Global Corruption Barometer 2010, a majority of households who have had contact with registry and permit services, utilities services and medical services in 2009, reported to have paid a bribe. In a similar context, the surveyed households by PACT Cambodia's Corruption and Cambodian Households 2010 stated that in 2010, they had been asked for a bribe by employees within the education sector, while a smaller group stated that they had been asked for a bribe by employees within the health care and public electricity service sectors.

Business Corruption

When operating in Cambodia, companies should expect to deal with extensive red tape in order to obtain the proper licences and business permits. According to Global Integrity 2008, despite significant reductions in costs of obtaining a licence and in official fees, illicit payments and unofficial fees are still often required in the process. Furthermore, regulatory requirements for basic health, environmental and safety standards for businesses are meant to be transparent by law and publicly available, but there are nevertheless cases where corruption and other illegal practices have led to enforcement inconsistencies despite of such regulation.

Furthermore, according to the World Bank & IFC Enterprise Surveys 2007, a substantial amount of companies are expected to pay informal payments to public officials in order to 'get things done', and are equally expected to give gifts to get construction permits. This is further corroborated by a finding by the Anti-Corruption Unit, as cited in a December 2011 article by The Phnom Penh Post, which reveals that investors had paid up to USD 50,000 for project approvals.

Political Corruption

High-level officials are suspected of issuing illegal permits to conceal unlawful activities, such as illegal logging operations. Global Witness 2007 reports examples of the illegal issuing of harvesting permits to cover up illegal logging, as well as issuing permits to build roads through forest areas. This has given easy access to all sorts of illegal activities in the forests, such as logging, poaching and expropriation of land.

According to a November 2008 news article by Corruption Monitor, several examples have appeared in the media regarding corruption within the public works and construction with the result that work is both expensive and sub-standard. For instance it was revealed that a public official in a provincial transport department gave a road construction contract to a company which was owned by his relatives. The company not only built low quality roads but was even allowed to utilise state-owned equipment to perform the job.

Frequency

The World Bank & IFC: Doing Business 2012:
- In order to obtain a construction permit, a company must go through 21 procedures and spend 652 days at a cost of approximately 41% of income per capita.

World Economic Forum: The Global Competitiveness Report 2011-2012:
Business executives give government administrative requirements (permits, regulations, reporting in Cambodia a score of 3.7 on a 7-point scale (1 being 'extremely burdensome' and 7 'not burdensome at all').

Transparency International: Global Corruption Barometer 2010:
- 77% of households who had contact with registry and permit services in 2009 report to have paid a bribe.

- 55% of households who had contact with the utilities services in 2009 report to having paid a bribe.

- 63% of households who had contact with medical services in 2009 report to have paid a bribe.

PACT Cambodia: Corruption and Cambodian Households 2010:
- 24% of the surveyed households who had contact with public education departments in 2010 had been solicited for bribes, while 19% had been solicited for bribes when contacting with private education departments in 2009.

- 4% of the surveyed households who had contact with health care departments in 2010 had been solicited for bribes.

- 6% of the surveyed households who had contact with public electricity services in 2010 had been solicited for bribes, while 22% of households had been solicited for bribes when obtaining construction permits.

The World Bank & IFC: Enterprise Surveys 2007:
- 8% of companies surveyed view business licensing and permits as a major constraint for doing business.

- 61% of companies surveyed report that they expect to make informal payments to public officials to 'get things done'.

- 92% of companies surveyed expect to give gifts to get a construction permit.

- 58% of companies surveyed expect to give gifts to obtain an electrical connection and 33% for a water connection.