Transparency increases, but there is still a long way to go

PhnomphenPost

May 14,2010 at 8:14 pm

Recent scandals over oil, gas and mining payments suggest a degree of transparency by a government firmly under suspicion

Photo by: Pha Lina Sok An signs an exploration agreement with Japan’s JOGMEC on May 4 in Phnom Penh. Stakeholders in Cambodia have different views as to whether the EITI is the right model."

DURING an otherwise routine presentation on the Cambodian economy on March 17, Ministry of Economy and Finance Director General Hang Chuon Naron chose the very last slide to offer a rare, detailed glimpse of Cambodia’s expanding oil and gas revenues.

The decision has since proven to be both a milestone in Cambodian transparency, and a millstone around the government’s neck.

On one hand, Hang Chuon Naron’s disclosure that the government received US$800,000 in December and $26 million in January for energy “signature bonuses” and a “social fund” represented a new level of state transparency for extractive industry payments in the Kingdom.

Subsequently, however, Prime Minister Hun Sen’s government has faced increasingly difficult questions on where the money came from, how it is being spent and to what degree payments derived from the extractives industry will be opened up for public scrutiny.

The missing $500,000 reportedly paid to the government by the world’s largest iron ore producer BHP Billiton – now the subject of a US securities and exchange commission enquiry – looks to be just the start of a period in which the government has increasingly been asked the question: Where has all this money gone?

For the first time, the Cambodian government has published state revenues publicly that detail payments foreign energy and mining companies have made to operate in the Kingdom. A TOFE (state financial operations notice) partly issued on the Finance Ministry website and fully presented at last month’s Oxfam America extractive industries conference in the capital showed the state received some 9.323 billion riels, or $2.25 million, from the sector in 2009. Of this total, 6.003 billion riels ($1.45 million) came from mining companies, with the remaining $800,000 derived from the oil and gas sector, according to official government figures.

But with Australian mining companies OZ Minerals and Southern Gold looking at imminent gold production in Cambodia, and US energy firm Chevron under pressure from the government to begin oil production as soon as 2012, the political opposition, civil society and the UN – among others – are pushing the government to go further on what they say is still limited disclosure.

“I think [this is] the first step, the first step that the government has [made] … to disclose this information to the public,” said Mam Sambath, chairman and executive director of the NGO Cambodians for Resource Revenue Transparency (CRRT).