Chevron Silent on Bribery Allegations in Cambodia

By MARWAAN MACAN-MARKAR / IPS WRITER

BANGKOK — US energy giant Chevron is under fire for failing to disclose the amount of money it allegedly paid to secure rights to drill for offshore oil in corruption-ridden Cambodia.

"It is yet to respond to our detailed questions in a letter written to the company in October 2008," says Gavin Hayman, campaigns director for Global Witness (GW), a London-based anti-corruption watchdog. "It is not in favour of supplying information about what it pays foreign governments to secure rights for oil exploration."

Chevron’s attitude towards disclosure "will be telling," he explained in an interview, since such revelations will help measure the scale of "under the table payments" involved in a country where a small and powerful elite has "captured the country's emerging oil and mineral sectors" for personal gain.

But disclosure about money paid to access the resource is only one part of the transparency and accountability equation. GW activist insists that the oil companies should also disclose what they would pay Cambodia once the revenue starts flowing.

Hayman made the comments following a launch here this week of a report by GW which warns of a corruption disaster as the Southeast Asian country "appears to be on the verge of an oil, gas and minerals windfall."

"Cambodia today is a country for sale," reveals the 68-page report. "Having made their fortune from logging much of the country’s forests resources, Cambodia’s elite have diversified their commercial interests to encompass other forms of state assets."

"Financial bonuses paid to secure concessions [for oil and mining]—totaling millions of dollars—do not show up, as far as GW can see, in the 2006 and 2007 revenue reports from the ministry of economy and finance," notes the report, 'Country for Sale'. "Oil company contracts and information on concession allocations are a closely guarded secret within the CNPA [Cambodian National Petroleum Authority]."

Yet what is better known is the presence of Chevron among the companies from Australia, China, Indonesia, South Korea and the United States that have been competing to secure rights to explore oil in the six blocks off Cambodia’s western coast.

"With the exception of Chevron, the government of Cambodia has not publicly announced the names of those companies to whom it has awarded oil and gas exploration rights," states the report. "Block A was awarded to US oil company Chevron in 2002. Chevron’s activities in Block A are the most advanced of all oil companies currently operating in Cambodia."

GW estimates that oil will start flowing in 2011 and peak in 2021. Proceeds range from 174 million US dollars in the first year to 1.7 billion dollars when extraction peaks.

But GW doubts that such income from Cambodia’s natural resources will flow to those who need it most—the country’s millions still mired in poverty following nearly two decades of a bloody conflict and a brutal rule by the genocidal Khmer Rouge regime.

Currently, over 35 percent of Cambodia’s 13.3 million people live in dire conditions, on less than one dollar a day. And UN reports have revealed that life expectancy is 58 years, while nearly a third of children under five years are malnourished.

Yet for a small cabal of political, military and economic elite, the period since the 1991 peace accords has been a journey on the road to immense—and ill-gotten—wealth. In 2007, for instance, GW revealed in a report that illegal logging in Cambodia by the elite raked in over 13 million dollars.

Such greed by the elite has not only raised the alarm that Cambodia is on the verge of becoming a kleptocracy, but it has been rated as among the most corrupt countries. In 2007, the global anti-graft watchdog Transparency International ranked Cambodia 162nd among 179 countries surveyed for corruption, making it the most corrupt country in Asia after Burma.

The ease with which the powerful few have filled their personal coffers stems from a lack of independent bodies backed by strong laws and resources to curb corruption. "Any state that has weak anti-corruption institutions is not going to have proper level of oversight," says Donald Bowser, head of the Cambodia office of the Mainstreaming Anti-corruption for Equity Project, funded by the development arm of the US government.

"There are local concerns about the misuse of the country’s extractive industry for personal gain," Bowser said during a telephone interview from Phnom Penh. "A civil society coalition has been formed to campaign against this form of corruption."

But such campaigns face a daunting challenge. The Cambodian government under the grip of an increasingly authoritarian Prime Minster Hun Sen has yet to implement strong anti-corruption measures that have been called for by the country’s foreign donors, who fund nearly half the national budget.

Activists like Hayman of GW also point fingers at international financial institutions like the World Bank for being complicit in the corrupt culture of Cambodia’s rising kleptocrats. "The World Bank is particularly bad," he charges. "They have a bad track record of forgetting civil society to monitor all steps of programs in Cambodia to ensure accountability."

However, the Bank thinks otherwise. "The World Bank shares many of the concerns NGOs have raised about the government’s management of extractive industry in Cambodia," it said in a statement released to IPS from its Phnom Penh office.

"Although the Bank has not been directly involved in extractive industries in Cambodia, our dialogue with the government includes discussion of policy reforms that will help to ensure that any revenue generated through extractive industries benefit the people of Cambodia," it added.