German ambassador urges Cambodia to join oil ethics group

Jun 7, 2007, 11:55 GMT

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.