Fraud? International Cooperation for Transparency – Sunday, 25.4.2010

Posted on 26 April 2010. Filed under: *Editorial*, Week 661 | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , |

The Mirror, Vol. 14, No. 661

Cambodia entered into many different international relations since the new Constitution of the Kingdom of Cambodia was promulgated in 1993 and a new phase of history for the country began. International integration was one of the main policy goals of the government – regaining the seat for Cambodia in the United Nations, which had been held by a representative of the Khmer Rouge until 1991, long after the Khmer Rouge had lost their grip on the country, establishing new diplomatic relations, gaining membership in ASEAN, in the World Trade Organization [WTO], etc., and entering into many bilateral agreements – with other governments, with international organizations like the Asia Development Bank, and with Non-Government Organizations through the Ministry of Ministry of Foreign Affairs and International Cooperation.

Some of these agreements have consequences in detail, which were not all foreseen or discussed with those who are affected – for example: the membership in the WTO will require that copyrights of international companies for computer software will have to be enforced from 2013 onward, and the import of goods and services from other countries has to be liberalized. Though this may have difficult consequences for some sections of the Cambodian economy, other sectors welcome it.

During the past week, a five-year Accountability in Governance and Politics program, financed by the USA, was inaugurated by Deputy Prime Minister Sok An and the US Ambassador Carol A. Rodley, according to which the Cambodian government will cooperate, implementing specific projects, with the International Republican Institute, the National Democratic Institute, and the International Foundation for Electoral Systems. According to the nature of this program, international transparency will be necessarily be enhanced, even when this may relate to difficult challenges to be faced internationally.

What this can mean can be deducted from a difficult processes developing at present in the USA. Goldman Sachs – a full-service global investment banking and securities firm – one of the top financial institutions of the USA, is facing at present charges by the US Securities and Exchange Commission [“The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation”] of fraudulently having contributed to the wide breakdown of financial systems, by systematically entering into contract with people and companies who were supposed not to be able to pay back what they borrowed. To give a small-scale example: one internal e-mail, now leaked, says “I’ve managed to sell bonds to widows and orphans” making “some serious money” for the bank; one section manager made a profit of $1 billion for the bank – but then the whole system collapsed and needed much higher government assistance. The future will show how this will be handled.

Once international government agencies get involved, the chance of achieving real transparency is higher. Repeated corruption allegations raised, for example, by the non-government agency Global Witness in the UK were easily dismissed here as not coming from a government agency, without dealing with their specific documentations. They had also raised questions related to the role of the – then – head of the Forestry Department, Mr. Ty Sokun, which were quickly and strongly rejected as “nonsense” and “lies” at that time, but recently he was removed from his position. The situation will be different in a case which is receiving ever more prominence recently.

The Australian Company BHP Billiton – “the world’s largest diversified natural resources company” – entered into a mineral exploration agreement with the Cambodian government in 2006 to explore for bauxite in Mondolkiri – unprocessed aluminum ore; parts of the exploration site, a 996-hectare mining concession, were in protected natural forest areas. It had also been announced that this was just for exploration, a decision could be found only later, as the transport of bauxite, or the production of aluminum which requires huge amounts of electricity, need further studies. But this plan was abandoned in 2009 because the studies had shown that bauxite mining in Mondolkiri would not be cost-effective.

But recently, during this month of April 2010, BHP Billiton announced that United States Securities and Exchange Commission is investigating corruption allegations which may relate to Cambodia, though this is not yet sure.

According to the Foreign Corrupt Practices Act of the USA, a company which has made illegal payments, can be fined to pay “up to twice the benefit that it sought to obtain by making a corrupt payment,” and staff involved may have to serve five years in prison.

Neither the US Securities and Exchange Commission nor BHP Billiton has stated that there were actually illegal payments. But the present investigations are based on some reports dating back to 2007.

According to various sources on the Internet, the Minister of Water Resources Lim Kean Hor had reported in the National Assembly at that time that the Prime Minister had informed him from Australia that BHP had paid US$2.5 million as “tea money” for the concession. BHP said, however, that this money was designated for a “social development fund” for health and education projects in Mondolkiri. According to other sources, BHP confirmed to have paid US$1 million to the government in 2006 to secure the concession agreement.

Later inquiries produced various incongruous pieces of information: that the money was not used, as designated, for health and education in Mondolkiri, but for irrigation in Pursat, and the records of the the Ministry of Economy and Finance show for 2006 only US$443,866 as income from mining concessions.

By Saturday, not only the US Securities and Exchange Commission was dealing with the BHP case, but also the UK Serious Fraud Office [“an independent Government department that investigates and prosecutes serious or complex fraud, and corruption. We are part of the UK criminal justice system”].

A “social development fund” of the Cambodian government had also been mentioned before, in relation to substantial payments from Caltex, having obtained the right for off-shore oil exploration. While one government argument, why an NGO law is urgently needed, was the request to gain more transparency about social and development funds (which are, for NGOs, regularly audited by public auditing companies anyway), we have not seen any similar reporting so far about the government’s social development fund – its purpose, its administrative arrangements and it’s oversight bodies, and its assets and disbursements.

The Cambodia Daily carried on 24/25.4.2010 an article, “Precise Meaning of ‘Tea Money’ Up for Debate.” And Mr. Phay Siphan, the spokesperson of the Council of Ministers, is quoted to have pointed to the new anti-corruption legislation which shows that the government is committed to “highlight transparency.” – He will surely be able to shed more light onto this affair.

Please recommend The Mirror also to your colleagues and friends.

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Challenging Times – What Kind of Change to Come? – Sunday, 25.1.2009

Posted on 26 January 2009. Filed under: *Editorial*, Week 596 | Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , |

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The Mirror, Vol. 13, No. 596

On 20 January 2009, when Barack Obama was inaugurated as the 44th president of the United States of America, change started to come. Never before had so many people around the world be able, through TV and the Internet, to participate form afar – never before was also so much interest expressed, in the new presidency of this country by a crowd of more than a million people in Washington, and many more around the globe.

To refer here to these events may be an occasion to remember the years of Administrative Reform and Judicial Reforms in Cambodia, and the efforts to see spokespersons authorized in the different sections of the Cambodian administration, so that the Cambodian public will not have to read, time and again, that one official refers an inquiry to the next, and the next does not have time to speak to a journalist. And the public, the people – “The Cambodian people are the masters of their own country” according to Article 51 of the Constitution – are not informed what is being done and why – even in such important situations that they trusted the commander-in-chief of the Royal Cambodian Armed Forces for many years, and now he is no more there, and the population – civilian and in uniform – does not know why they should withdraw the confidence they had held for many years.

During the long and difficult election campaign, there had been different slogans leading to the inauguration, becoming more and more specific: “Hope and change” – “Hope is not enough” – “Change you can believe in” – not only believe in, but real “Change we need.” And change started to happen. First of all there is an openness for communication, through the media, to the people. It was reported that the new president visited the White House media quarters and press office – places that the former president is said to have avoided – because there, people ask questions and expect clear answers.

When the new president signed some executive orders in front of TV cameras, before he signed them, he read parts of them and explaining what is meant, for the public to understand. And it was announced that e-mail alerts and Internet blogs would be used for “timely and in-depth content” about the administration’s policies:

“The President’s executive orders and proclamations will be published for everyone to review, and that’s just the beginning of our efforts to provide a window for all Americans into the business of the government. We will publish all non-emergency legislation to the Web site for five days, and allow the public to review and comment before the President signs it.”

And in terms not only of changed style, but also of content, the president made some fundamental policy declarations in his inaugural address:

“Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with the sturdy alliances and enduring convictions.

They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use. Our security emanates from the justness of our cause; the force of our example; the tempering qualities of humility and restraint.”

One cannot but remember that Prime Minister Hun Sen had made similar declarations in relation to the ongoing violence by the rich or on behalf of the powerful, when he had said already in 2002:

“We are conscious that corruption in the public machinery, be it judiciary or administrative or any other, increases transaction costs for everyone and reduces predictability in law enforcement and implementation of government’s policies… The government believes that enactment of adequate laws and regulations to prevent and punish corruption is crucial for addressing this problem. In this spirit, the Royal Government is committed to finalize the draft of the Anti-Corruption Law before the end of June 2003.”

In December 2005, the Prime Minister had warned that if illegal land seizures were not brought under control, they could lead to a farmers’ revolution.

And – interestingly enough – it was the Chinese People’s Daily Online which reported on 13 February 2007 the concerns of the Cambodian Prime Minister (we missed to see this reported in the local press):

“The land grabbers dare to get a lot of land illegally while we have always appealed again and again to stop. The land grabbers are not simple people, and they must be powerful people in the government. I asked the question, do they dare to conduct a coup d’etat in the future?” And he is quoted to have replied himself that they really dare to do so. “So before they conduct a coup d’etat, we need to take action against them.”

We do not have an explanation for what is happening now – in spite of these words.

When the international human rights organization Human Rights Watch had raise critical question about many countries, including Cambodia, the leader of the Cambodian government’s Human Rights Commission is quoted to have quickly dismissed their statement, elaborated with 20 detailed documents, as “defaming the country with lies. – I refuse all of the accusations, they are just trying to make up things.”

Human Rights Watch had also criticized then USA. The new president’s executive orders to bring change to the detainees at Guantánamo Bay and to the harsh interrogation methods, some of which the new attorney general – the US minister of justice – called torture, remove some of these accusations.

In the meantime, when people from 234 families, to be evicted from land, assured to them by a court order, were protesting, they where shot at – not by illegal private thugs hired by a company, but by members of a Military Police unit.

The Dey Krahom Community on 24.1.2009

The Dey Krahom Community on 24.1.2009


Yesterday, on Saturday, the protracted negotiations – with residents of the Dey Krahom area in Phnom Penh, who claimed that the compensation offered to them for being removed 20 km away, with no school for their children, and no possibility to continue to earn a living like now, where they used to live since many years, are different from the original promise for new arrangements in place – came to an end. They were replaced by destruction and forced eviction.
The police and the people

The police and the people.


Teargas was used, and electric batons – their existence in Cambodia had frequently been denied by the authorities.
Teargas

Teargas


Electric baton

Electric baton


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This action was taken in support of the 7NG Group, the parent company of 7NG construction. The pictures of their website shows big villas on wide green lawns – housing for the few very rich. There website has even a section Code of Conduct. But when one clicks on it, it responds: “We are sorry… – This webpage is under construction.” Is it an irony, or is it just the truth that it shows two big construction machines at work?

dk-kb-grader
According to public discussion, neither the transfer of this public land – originally “3.60 hectares of social land concession granted by the Royal Government of Cambodia to the seven Dey Krahom communities” – into private business use is procedurally and legally very transparent. Nor does the 7NG Group presented detailed plans for the commercial use of the land – except that it is for high class housing and maybe a shopping center – rumors in the absence of transparency. The Mirror has regularly reported information that the construction sector of the Cambodian economy is facing severe problems. The construction boom in Phnom Penh during the last years resulted in many high rise and high price buildings being constructed or being under construction, which now have to be scaled down or abandoned. But the 7NG company can go ahead?

Phnom Penh has not seen anything similar to what what President Obama could say to a new senator, who has dedicated herself to public, not high priced, housing:

“During her career, Kirsten Gillibrand has been a strong voice for transparency and reform in government and shares the belief that government should be open, accessible and work for all of our citizens. In Congress and as special counsel for the Department of Housing and Urban Development, she worked to strengthen public and private partnerships to invest in infrastructure and New York’s economy.”

Where are the 7NG plans to be located in view of the warning, quoted by the Chinese international media? Are they among the group about which Prime Minister Hun Sen has “always appealed again and again to stop” – or is the Cambodian government maintaining the position nationally, which President Obama has denounced as wrong internationally: “that power alone cannot protect us, nor does it entitle us to do as we please… Our security emanates from the justness of our cause; the force of our example; the tempering qualities of humility and restraint.”

The experience of many people to be marginalized and to be pushed further out, for the benefit of powerful and rich interests, will not help to build a human, peaceful, an just society. This is not how the hearts and minds of people can be won.
dk-kb-distressed
People close by were watching: Will they be next?
dk-np-whonext
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[Pictures: courtesy of Karl Bille, LICADHO, Monika Nowaczyk, Nestle Poell G. Lagaya, Makenzi Travis]

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