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Thursday, June 07, 2007

German ambassador urges Cambodia to join oil ethics group

Phnom Penh - Cambodia has been repeatedly urged to join the Extractive Industries Transparency Initiative (EITI) to help it properly manage expected lucrative oil revenues, outgoing German ambassador to Cambodia Pius Fischer said Thursday.

Speaking at a Club of Cambodian Journalists roundtable discussion attended by dozens of local reporters, the ambassador again voiced Germany's concern that the country's economic boom was not trickling down to the rural poor and said it was vital that oil revenues were used to their best advantage to help society.

The Extractive Industries Transparency Initiative (EITI), founded in 2002, supports improved governance in resource-rich countries through the verification and full publication of company payments and government revenues from oil, gas, and mining, according to its website.

It works to build multi-stakeholder partnerships in developing countries in order to increase the accountability of governments.

'There is definitely a need to invest in Cambodia's human capital so Cambodia has the capacity to remain competitive in the globalized world,' Fischer said.

'More attention should be given on social equities because as the disparities between the urban rich and rural poor are growing this could lead to social conflict.

'With the beginning of the exploitation of Cambodia's oil and natural gas resources expected to begin probably by 2008 or 2009, it would be important also to develop concepts of how the revenue from these natural resources would be harnessed and used for the benefit of the Cambodian population

'In this context Cambodia's development partners have repeatedly suggested that Cambodia adopt the principals of the EITI. These principals, if they were observed by Cambodia, would be very beneficial for Cambodia's economy,' he said.

On Wednesday, Prime Minister Hun Sen branded people who claimed endemic corruption could hijack potential oil revenues 'stupid' and said countries critical of how resources might be plundered would be better served making positive input and ensuring their oil companies negotiated fairly with Cambodia.

It was unclear if EITI is going to be included in the draft law on oil currently being written by the government and government sources close to the oil industry have declined to comment until the law is unveiled later this year.

Critics have voiced fears that corruption and a lack of transparency, if unchecked, could send Cambodia the way of Nigeria and fail to benefit more than an elite few, instead of making it the success story of other oil-rich nations in the region like Brunei.

EITI is a global initiative strongly supported by oil producing countries including Britain and Norway with around 20 members worldwide including Chad, Ghana, Kazakhstan, Timor Leste, Mongolia, Bolivia and Peru. Neither Nigeria nor Venezuela are members.

Fischer ends his mission in Cambodia in mid-July and will then become German ambassador to Mongolia.
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Cambodia's bourse plans reflect changing fortunes

PHNOM PENH, June 7 (Reuters) - Cambodia plans to launch a stock market in 2009, Prime Minister Hun Sen said on Thursday, another sign of the southeast Asian nation's accelerating recovery from the devastation of Pol Pot's "Killing Fields".

Hun Sen, a former Khmer Rouge officer who lost an eye in the final assault on Phnom Penh in 1975 by the ultra-Maoist guerrillas, said his government was already drawing up the laws needed to establish a bourse.

"With the start of a stock market, Cambodian people will be able to collect their savings, which can then be used for long-term investment," he told a symposium hosted by the Asian Development Bank (ADB).

Central bank governor Chea Chanto said the laws would be approved "soon".

Per capita income rose to $500 in 2006, Hun Sen said, double 1994 levels when the country was regarded as one of Asia's most desperate basket cases, beset by lingering civil war, a growing AIDS epidemic and defunct economy.

However, growth has taken off in the last few years due to relative political stability under Hun Sen, who has brushed aside accusations of authoritarianism during his two decades in charge.

The garment and tourism industries have mushroomed, with much of the expansion financed by foreign investors, and the new office buildings springing up across the once-sleepy French colonial capital are testament to a roaring construction sector.

The last two rice harvests have also broken records.

The economy grew 10.4 percent last year, according to the International Monetary Fund (IMF), which expects growth of 9 percent in 2007 and 7.5-8 percent in 2008, making it one of the world's fastest-growing economies, albeit worth only $7 billion.

In a big push to banish the legacy of Pol Pot's "Year Zero" revolution and its estimated 1.7 million victims, Phnom Penh has obtained B+ and B2 credit ratings from S&P and Moodys respectively this year.

The ratings should help pull in more foreign direct investment (FDI), as well as encourage commercial lending by the blossoming banking sector, which now boasts 20 institutions, IMF Asia and Pacific adviser Jeremy Carter said this week.

"You have new banks, small banks which have just started to grow rapidly. They are taking in a lot of deposits and they are issuing a lot of new loans," Carter told news conference.

FDI in 2006 was $4 billion -- another record -- and last month a South Korean consortium announced plans to build a $2 billion residential, commercial and cultural complex on the northern outskirts of the capital.

Hun Sen, whose government still relies on foreign aid for 60 percent of its revenues, said on Thursday foreign reserves rose to over $1 billion last year from just $100 million in 1994.
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Humanitarian work fulfilling says Jolie

NEW YORK: Angelina Jolie, who won an Oscar for 1999's Girl, Interrupted, says she wants to be remembered for her humanitarian work.

"I have no animosity towards Hollywood or the demands of the red carpet, " Jolie, 32, tells Esquire magazine in its upcoming July issue.

"That's my job, and I'm happy to have it. But when I die, do I want to be remembered as an actress? No. I recently had an op-ed (column) published in a newspaper," she continues. "And at the end, it didn't say I was an actress. It said that I was a UN goodwill ambassador - that's all. And I was really proud."

Jolie, an activist for issues ranging from global poverty to wildlife conservation, says she has found meaning as a citizen of the world.

"I entered this business before I had focus and purpose in my life," she says. "I was very unhappy, very unhealthy, and when I sat down for an interview, I didn't know why. I felt like I didn't have anything to share. It was a very empty time."

Today, her life is far from empty. Jolie and her partner, Brad Pitt, 43, have four children: five-year-old Maddox, who was adopted from Cambodia; three-year-old Pax Thien, who was adopted from Vietnam; two-year-old Zahara, who was adopted from Ethiopia; and daughter, Shiloh, who was born to the couple a year ago.

"I try to make sure that each of my children has enough of my attention to feel equal. I try to make sure that my relationship with the man in my life is solid and complete and we're very connected and having a great life together and enjoying our children and being part of the world. So that's my life," she says.

"We don't go to parties. We hardly ever leave the house. We try to schedule time when we're alone," says Jolie.
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CAMBODIA:Denuded by Corruption, Plunder, Impunity

by Marwaan Macan-Markar , Inter Press Service News Agency
June 6th, 2007

'If (they) come to Cambodia, I will hit them until their heads are broken,'' says a government official from the South-east Asian country in a local newspaper report on Tuesday.

The speaker happens to be Hun Neng, brother of Cambodia Prime Minister Hun Sen and, currently, governor of Kompong Cham province. The targets he has in mind for such violence are the researchers of Global Witness, a London-based environmental lobby.

A few days before, Phnom Penh turned its ire on Global Witness by banning the object of such anger -- a 95-page report by the non-governmental organisation (NGO) released Jun.1 about illegal logging in the country. The title, ‘Cambodia's Family Tree,' offers a tongue-in-cheek image of a study that exposes the lengths to which members of the most politically influential families have gone to strip the country's natural assets with ‘'complete impunity.''

The dominant illegal logging syndicate, which goes under the name of the Seng Keang Company, is ‘'controlled by individuals related to Prime Minister Hun Sen, Minister for Agriculture, Forestry and Fisheries Chan Sarun and Director General of the Forest Administration Ty Sokhun,'' states Global Witness.

The annual timber haul from illegal logging is estimated to be over 13 million US dollars, reveals the report. ‘'Illegal logging in Cambodia not only fills the pockets of the political elite; it also funds the activities of a 6,000-strong private army controlled by Hun Sen. The Brigade 70 unite runs a nationwide timber trafficking and smuggling service, catering to prominent tycoons, that generates profits of two million dollars to 2.75 million dollars per year.''

The cost of such plunder on this country, where close to 40 percent of the population live in poverty and where nearly 30 percent of forest cover has been wiped off over a five year period, cannot be ignored, says Global Witness director Simon Taylor. ‘'The political culture of corruption and impunity means that Cambodians are still among the world's poorest people.''

‘'I don't view the government of Cambodia as the government of Cambodia. It has been captured by a kleptocratic elite,'' he said in an IPS interview. ‘'Lawlessness is an issue that starts at the top.''

But this showdown has broader implications. It comes days ahead of a major meeting of international donors in Phnom Penh, where rampant corruption, human rights violations and the culture of impunity due to flaws in the criminal justice system are expected to come under some scrutiny.

The meeting of the Cambodia Development Cooperation Forum, which runs from Jun. 19-20, will include representatives from the World Bank and officials from developed nations. Pledges made at this meeting, which previously met as the Consultative Group (CG) to aid Cambodia, often account for close to half of the country's national budget.

In March 2006, the CG pledged to give 600 million U.S. dollars in aid to Cambodia. Yet at the same time, it turned the heat on the Hun Sen administration, urging the government to crackdown on corruption through a comprehensive anti-corruption law, to implement broad judicial reform and to demonstrate genuine efforts to stem the destruction of the country's natural resources.

This push for cleaner government came in the wake of a law approved in early March last year by the 123-member National Assembly. It gave the power for a political party to form a government if it had secured a simple majority, rather than a two-thirds majority, as was the case before. The immediate winner was Hun Sen's Cambodia People's Party (CPP), which had 73 seats in the legislature.

That Phnom Penh has dragged its feet on the goals set out by the CG -- despite the CPP enjoying the right to govern alone for the first time and pass new laws -- is not only the view of Global Witness.

Even local, independent think tanks based in the country's capital are hardly impressed. ‘'There is hardly any sign of major change. There has been slow progress on legal reform and corruption is still a big concern,'' Im Sophea, a ranking member of the Centre for Social Development, told IPS by phone from Phnom Penh.

And rather than threaten critics, the government should ‘'conduct a proper investigation to find out if the revelations in recent reports are true,'' he says. ‘'The international donors must take note of this.''

‘'The donors have to hold the government accountable to deal with the lawlessness,'' adds Taylor. ‘'What is happening is that Hun Sen says no and they (the donors) stick their heads in the sand like an ostrich.''

In fact, Hun Sen has also been as caustic as his brother -- although less threatening in his words. His target is also another international voice that has levelled criticism at the country's human rights record. On Monday, the premier used a speech broadcast on national radio to attack Yash Ghai, a Kenyan lawyer who is currently serving as the U.N. human rights envoy to Cambodia.

‘'Even if you live for another 1,000 years and I am still alive, I will not meet you,'' Hun Sen was quoted as having said over the radio, according to the AFP news agency.

Cambodian government officials have continued to snub the U.N. envoy since he arrived in the country on May 29. This visit came after his recent report provided a critical account of the widespread impunity enjoyed by human rights violators, consequently undermining the rule of law.

‘'It is imperative that the Cambodian government embrace the rule of law to honour its international human rights obligations,'' the Hong Kong-based Asia Legal Resource Centre said in a statement soon after Ghai arrived in the country. ‘'The core element of the rule of law is an independent judiciary. In Cambodia, the judiciary is under the executive control as judges are mostly affiliated to the ruling CPP party.''
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Cambodia PM says offshore oil potential unsure

Prime Minister Hun Sen said Wednesday that there is still uncertainty about the commercial viability of Cambodian offshore oil deposits, qualifying his earlier optimism over their potential.

In February, Hun Sen raised hopes of a brighter future for his impoverished nation when he said Cambodia expects to begin tapping oil revenues in 2010.

"Whether it will be a curse or blessing, in fact it is still under the seabed, and it is still unknown how much there is," he said Wednesday.

"What if one day companies say, 'Oh, no, after exploration, it has no commercial viability?' Oil under the sea is still a dream," he said.

Hun Sen spoke during a ceremony to begin construction of a Chinese-funded bridge at a village about 20 kilometers (12 miles) north of the capital Phnom Penh.

China is among several countries that have lined up for opportunities to explore oil off the coast of Sihanoukville, in Cambodia's southwest.

U.S. energy giant Chevron Corp. discovered oil in 2005 off the Cambodian coast, 145 kilometers (90 miles) southwest of Sihanoukville. The company found oil in four wells in an area called Block A, and plans to drill 10 more wells by the end of 2007.

Critics and observers have expressed concerns that increased income from oil could exacerbate Cambodia's already widespread corruption if the government fails to develop proper legal environment to manage the expected revenues.

Hun Sen said Wednesday he is fed up with that point of view, and that "it is better to think about how to maintain growth of the current economy."

In a statement issued Tuesday at the end of a mission to Cambodia Tuesday, an International Monetary Fund delegation warned that there is still much uncertainty about whether Cambodia will become a significant oil producer.
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