"The discovery of oil, gas, and minerals and the revenues gained from them could have a potential to lift Cambodians out of poverty," said Mam Sambath, Chairperson of CRRT. "However, for this to happen, important steps need to be taken to ensure that revenue management is done in an accountable way and that the benefits gained are invested into basic social services such as health care and education."
Solinn Lim, a program coordinator for Oxfam America’s East Asia program in Cambodia, spoke at an event held by the CRRT on June 12th in Phnom Penh to launch the new coalition. She said that Cambodia is poised to earn much-needed capital that can be used to drive a new phase of economic growth for the country. "This can only be done with a strong and meaningful engagement between government, companies, and civil society," she said.
Cambodia has recently discovered offshore oil and has mineral deposits in its northern provinces. If effectively exploited, these resources could drastically increase the country's $2 billion national budget. How these additional funds are expended, and the ways the country can safeguard their effective use, is a primary motivating factor for the establishment of the CRRT and its mandate to promote active citizen participation in decisions about use of resource revenues. At the same time, Cambodia’s legal and regulatory framework, both for mining, as well as for oil and gas industries, need to be created. This will help Cambodia to "manage these industries from extraction to revenue collection to spending," said Lim from Oxfam.
Oxfam is making grants to individual members of the CRRT coalition and encouraging other donors to help support the coalition.
The five founding members of the CRRT are Centre for Social Development, Development and partnership in Action, Economic Institute of Cambodia, NGO Forum on Cambodia, and Youth Resource Development Program. The coalition is being funded by Oxfam America, Norwegian People’s Aid, Heinrich Böll Foundation, and Trocaire.
]]>"Cambodia needs a very good new petroleum law and expertise from Oxfam and World Bank would be very interesting," said Than Sina, chair of the National Assembly's planning and investment commission, at the first national public forum on extractive industries in April.
Oxfam America organized the event in Phnom Penh, which was attended by more than 130 members of the public, media, government, the private sector, and diplomatic missions.
"It would be a big opportunity for the government to draft a good law. We can't do it by ourselves, but with the help of Oxfam and other groups we have a good chance of making it work – other wise, Cambodia will be like Chad," Sina added. In Chad, a much vaunted plan to direct oil revenues towards poverty reduction, backed by the World Bank, has unraveled and the population has seen few concrete benefits from the oil boom there.
Chevron and other companies are currently exploring oil fields in Cambodian territorial waters. It is possible that oil production could begin in 2010, although the probability of finding significant oil reserves is not known. Sina said that oil and gas exploration represents a great opportunity for Cambodia because other natural resources such as timber and fish are quickly depleting.
Oxfam welcomes and supports the government's intention to work with other organizations to make development that supports poor communities part of the agenda. Our work centers around helping civil society and the wider population engage with the government before the new law is created. The current Cambodian Petroleum Act regulations were adopted by the Council of Ministers in 1991.
Oxfam's extensive extractive industries program in South America, Central America, United States, West Africa, and East Asia seeks to ensure that oil, gas and mining projects are designed in ways that respect the rights of the poor, and contribute to the long-term reduction of poverty.
In several countries, Oxfam has supported local groups to influence the development of new petroleum and mining laws. In Bolivia, for example, the new government's hydrocarbons law increased the rights of local communities to be consulted before oil and gas projects moved forward, and gave the National Assembly the ability to approve individual projects.
"The promise of oil wealth for Cambodia presents an opportunity to reduce poverty. But, experiences from other countries show that, on a variety of economic indicators, those that become dependent on oil as their leading export have often performed worse than countries without oil," said Ian Gary, extractive industries policy advisor for Oxfam America.
"While no country is perfect, there are positive elements of particular country experiences that Cambodia could draw upon. Nigeria, for example, has completed three audits under the "Extractive Industries Transparency Initiative," Gary said.
Oxfam also highlighted the experience of the joint government and civil society Petroleum Revenue Oversight and Control Committee in Chad. While the Chad experiment with oil revenue management has largely unravelled, this Committee formed in 2002 and tasked with approving social spending projects using oil revenues, made some strides to provide checks and balances in government spending. "In many countries, local civil society organizations have played a crucial monitoring role to try to ensure that oil, gas and mining revenues are used for beneficial purposes," Gary said.
Cambodian civil society could draw upon the experiences of other national level coalitions involved in the global Publish What You Pay campaign, which is a coalition over 300 NGOs worldwide who calls for the mandatory disclosure of the payments made by oil, gas and mining companies' to all governments for the extraction of natural resources. Publish What You Pay also calls on resource-rich developing country governments to publish full details on revenues.
After a preliminary meeting in August, Oxfam brought together a number of key organizations in January, including World Wide Fund for Nature (WWF), Wildlife Conservation Society (WCS), and PACT Cambodia. The groups reviewed proposed oil and mining projects and discussed ways to ensure that future revenues contribute to sustainable development in the region.
In recent months, companies from the US, China, and Australia have scrambled to obtain mining rights in Cambodia, a country rich in untapped resources. BHP Billiton, Southern Gold, Oxiana, Chevron, and other companies have signed deals with the government to explore indigenous lands, including protected forests, for minerals such as bauxite, gold and copper and offshore areas for oil and gas.
"The rapid pace of the development means that we might not have a say about if it happens, but more how it happens," said Warwick Browne, a program officer in Oxfam America's East Asia office.
The future revenues from the extraction of resources could add up to several billions of dollars a year in the near future, according to estimates by local organizations. That amount is expected to dwarf Cambodia's current economy, which is currently based on foreign aid, agriculture, and garment manufacturing.
With that sort of cash influencing the government's actions, Oxfam and other non-governmental organizations say they will have to act as watchdogs over the burgeoning extractive industries, making sure that the affected indigenous people get a say in the whole development process—and if and when oil and mining projects should even move forward on their ancestral lands.
"Now they're just exploring, but it's important to get people involved early on. By participating, we want to avoid environmental, social, and cultural impacts," said Chhith Sam Ath, executive director of The NGO Forum on Cambodia, an Oxfam partner. "We also want to empower communities to have some decision-making power."
NGOs have long played an important role in advocating for Cambodian people and their rights over natural resources. Back in the early 1980s, when the country began rebuilding after the devastating reign of the Khmer Rouge, groups like WWF and WCS began their campaign to conserve the forests of the northeast highlands, those threatened then by a sudden influx of illegal logging, and now by the extraction of minerals.
The organizations made the issue a zero-sum game, said Joe Walston, country program director for WCS. There was little conversation about how logging revenue could help Cambodia, only about how it would hurt the affected ethnic communities and biodiversity. With mining, the groups need to think more broadly and consider how mining could actually fuel the economy, Walston said.
The biggest challenge for Cambodia will be avoiding the "resource curse." when countries rich in resources are essentially cursed by their bounty instead of blessed by it. Unable to translate their resources into a strong economy, some countries actually become poorer when large-scale mineral, gas, and oil companies generate export revenues that are either squandered or misused.
"Oxfam and its partners need to engage with the government and corporations to make sure that affected communities are not left worse off," Browne said. "At the same time, Cambodia needs to follow best practices and international standards so that oil, gas, and mining can be managed in a just and equitable way."
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