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Thursday, August 18, 2011

Thaksin 'has no plan' to go to Cambodia

Deposed prime minister Thaksin Shinawatra has no plan to visit Cambodia at this time, says his close aide and legal adviser Noppadon Pattama.

Mr Noppadon said Thaksin told him over the phone around 3pm yesterday he would not travel to Cambodia from Friday to Sunday or after his trip to Japan, as reported in the media.

Thaksin is scheduled to visit Japan from Monday to Friday.

Mr Noppadon also denied reports that Thaksin planned to discuss a business deal on petroleum resource development in the overlapping maritime area between Thailand and Cambodia.

"He is fully aware of the situation in Thailand and does not want to be a target of opposition attacks," Mr Noppadon said.

The former prime minister did not want to cause the government, led by his younger sister Yingluck Shinawatra, to worry about him.

Thaksin wanted to see the government direct all its efforts to helping the public, he said.

When asked which country Thaksin would go to after visiting Japan, Mr Noppadon said he did not know.

On Thaksin's plan to return to Thailand, the former prime minister would return to the kingdom "when the time was right", Mr Noppadon said. He insisted his boss would not do anything to obstruct the government's efforts to solve the country's problems.
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Defense Spending Expected to Rise Into 2012

Hun Sen's military thick skin and National Defense packes are ready to battle interlopers around Preah Vihea, sharp fangs for fierce fights

Cambodia expects to bump up its military and defense budget next year, an increase that comes amid an ongoing standoff with Thailand over the border near Preah Vihear, officials said Wednesday.

Defense remains a priority sector for spending, garnering $304 million in 2011, when it also saw an increase. Officials say they expect to prioritize health and education spending for 2012.

However, national defense remains a primary concern, with an ongoing border dispute that began in July 2008 and has led to a number of deadly skirmishes over the last three years.

As a result, the government has begun a recruitment drive for 5,000 more soldiers—many of them to replace retiring troops—who will train for three months before they are sent to the northern border.

The 2011 budget totaled $2.4 billion, with the Ministry of Defense—a portion only of defense and security spending—receiving $190 million, the Ministry of Education $223 million, and the Ministry of Health $169 million.

The $304-million defense and security budget for 2011 was less than Cambodia’s neighbors last year. US officials estimate Thailand’s defense spending at $2.41 billion, Vietnam’s at $5.2 billion. Laos spent less, with $212 million.

Finance Minister Keat Chhon declined to comment on the spending increase, saying only it has been “decided.”

“Everything is already prepared,” said Defense Minister Tea Banh. “We divide [the budget] depending on the reality of each year.”

By comparison, last year’s budget for education was $915,000.

Ly Sethik, director of finance for the Ministry of Education, said the budget increase for next year would go toward salaries.

Teachers have long complained of low government salaries, which they say forces them to take other jobs and ask for daily payments from students, marginalizing the poorest of them.

“With economic growth, it’s no problem that the budget is increased,” Ly Sethik said.

Health Ministry officials declined to comment in detail on next year’s budget.

Ly Horn, finance director for the ministry, said he was “not sure” how much an increase would be.
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Cambodian Anti-Corruption Drive Creates Headache for Western Firms

"It is a major issue for business because theoretically if any business pays them, they are liable to face criminal charges and the person paying them is liable to five years jail or more."

A man working at a money exchange (R) passes 100 Cambodian riel notes to a client in central Phnom Penh, March 12, 2011 (file photo).

Earlier this month the Cambodian government announced that as part of its anti-corruption drive, it had outlawed the payment of fees to civil servants. But the move has opened a new set of problems that worry Western businesses that operate in the country.

To the government, this was expected to be a minor announcement. As of August 1, all corruption offenses contained in two separate laws were now in force.

For Phnom Penh, this was another step on the road to combating corruption.

The problem is that the move has effectively outlawed "facilitation fees," payments that are critical for doing business in Cambodia. Anyone who pays them can be jailed for 10 years, while the person receiving them can get 15 years.

But what exactly is a facilitation fee?
"Facilitation fees are what are paid basically to low-ranking government officials to assist in doing their job," said Matthew Rendall, the managing partner at Sciaroni & Associates, a law firm in Phnom Penh. "No advantage and nothing illegal is being obtained. And you are basically having to pay these in order to do legitimate business."

He says these fees are not exorbitant and most businesses routinely pay them.

"It is day-to-day nickel-and-dime payments made to supplement the salaries of government workers who otherwise you know would not have enough," Rendall added. "You know it could be $2 for a form, $5 to submit it, $20 to put your monthly tax filing in."

In other words, these are payments made to process paperwork. They are not bribes. They are the sorts of fees that in other countries are paid to get a passport renewed or a license issued.

The difference is that other countries list those fees on a schedule and issue a receipt. In Cambodia, a customer pays the civil servant, who pockets the fee.

Cambodia's civil servants have long relied on facilitation fees, because their salaries are typically around $50 a month, far below what they consider a livable wage.

Stephen Higgins is the chief executive officer of ANZ Royal Bank, a part-owned subsidiary of Australian banking giant ANZ. He explains why outlawing the payment of facilitation fees is a problem.

"It is a major issue for business because theoretically if any business pays them, they are liable to face criminal charges and the person paying them is liable to five years jail or more," said Higgins. "And for a business such as ours, if we were to pay them then theoretically I would be liable to go to jail here in Cambodia, in Australia, in the U.K. and in the U.S. And I certainly don't wish that upon myself."

While it is unlikely that the Cambodian government would prosecute investors for paying facilitation fees, outlawing them has effectively triggered other anti-corruption regulations in Western nations.

U.S. and Australian law allowed companies to pay such fees provided they were not illegal in the country where the payment was made.

Now that they are illegal in Cambodia, any U.S. or Australian firm paying facilitation fees here is opening itself up to prosecution at home.

Rendall says the result is that Western businesses simply cannot risk paying them. He adds that investors have long asked the Cambodian government to formalize this system by drafting a schedule of fees and issuing receipts. There is now a pressing urgency to do so.

"I mean we are scrambling to get the government to implement practices so that those payments are receipted or scheduled at least," Rendall explained.

Once those fees are legal, Western businesses will be able again to pay them. But finding out what action the government will take is tricky. No government official responded to numerous requests for clarification of the policy.

Such ambiguity gives investors from Western nations pause and is already having an impact.

Last month, courier company FedEx said it would not deliver any items worth more than $300 until the government instituted a schedule for payments for more valuable goods.

Matthew Rendall says the situation could eventually skew the business climate to favor investors from Asia.

"Those countries that have foreign corrupt practices laws - the United States, the Western countries, etcetera - are at a massive disadvantage now," said Rendall. "So the one impact it has had: Does it basically result in a situation where Cambodia finds itself almost exclusively with Chinese, Vietnamese-type investors who are not susceptible back home to being prosecuted, and excluded from OECD-type countries? Absolutely. It is a concern, it has been raised."

Although that result does not appear to be the intention of the law, Rendall says it could be an unforeseen consequence unless the government finds a way to resolve the problem.
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Cambodia Villagers Stage 'Avatar' Themed Protest About Land Loss

Cambodian villagers affected by the loss of land in Prey Lang forest in the north of the country pray at a Buddhist shrine in central Phnom Penh, August 18, 2011. Later, most were briefly detained after they distributed leaflets in the capital, but they were all later released.

.More than 100 villagers from rural Cambodia were detained briefly by the authorities in Phnom Penh after handing out leaflets detailing how government land concessions are affecting their lives.

Early Thursday, about 120 villagers gathered to pray at a Buddhist shrine on the riverfront in Phnom Penh.

Many were dressed in outfits designed to evoke a Cambodian version of the hit film "Avatar," which depicts the struggle of an alien race battling to save their forest from commercial exploitation. Protesters had green painted faces, green shirts and wore a green leaf as a hat.

Raising awareness of deforestation
They said they had come to the capital to let the public know of the troubles they face in rural areas where huge tracts of forest have been leased to domestic and foreign businesses.

Villager Kao Chart, who traveled from the northeastern province Kratie, said the forests are being cleared and people like him are losing their livelihoods. He said 20 people came from his area, and are praying to the Buddha for help. He also said taking care of the environment is a priority.

A community group said similar gatherings took place in 145 other locations across Cambodia. The claim could not be confirmed, but a nationwide effort would mark an unusual degree of cooperation on a social issue in Cambodia, where activism tends to be local and small-scale.

Land issues, however, are a significant problem affecting many communities.

Pervasive issue
Earlier this week, the Cambodian Center for Human Rights, a local non-profit organization, released a report showing that ownership of at least five percent of land, nationwide, had been disputed in the past four years.

CCHR estimates that 47,000 families are either at risk of land conflict or had been affected by it.

One threatened area in the news recently was Prey Lang, the largest lowland evergreen forest in the region. Large tracts of this unprotected forest recently have been leased to rubber plantations.

Villager Kao Chart, who relies on Prey Lang for a living, said he is optimistic that coming to Phnom Penh would raise awareness of the problems. He said he hopes the demonstration will attract more support, and that the government must control deforestation.

After the prayer session concluded, the villagers dispersed around the capital and started handing out leaflets that highlight the importance of preserving the forest.

Government detentions
But within an hour or so, the authorities had detained more than 100 members of the group. All were released shortly after promising they would not hand out leaflets again without permission.

Despite repeated calls, a ministry of interior spokesman was not available to comment on the detentions or the government’s reasons for preventing the leaflets from being distributed.

Three prominent rights groups spoke out against the detentions and the ban on distributing fliers. They said authorities had claimed the act of distribution could disrupt social order.

Ou Virak, who heads the Cambodian Center for Human Rights, said the real reason for the detentions was that such the protests threaten the ability of the elite to exploit Cambodia’s natural resources.
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