TitleThe Khmer Extractive Industry: neoliberalism and unsustainable development

Abstract

In this paper I argue that the Khmer Extractive Industry is a site in which the elite is embracing neoliberalism and transforming alliances as a function of entrenching power. I frame the argument within the neoliberal paradigm in Cambodia. The architecture for neoliberalism was the mandate of the United Nations, initially through its 22,000-strong military and civilian peacekeeping force operational between 1992 and 1993, and subsequently by Western donors which bankroll the Royal Government of Cambodia to the tune of over 50% of its annual budget. A shift in alliances is taking place. Finance capital and investors are staking a claim to Cambodia’s gold and silver, coal and iron ore, lead and copper, nickel and perhaps rare earths, petroleum and natural gas. The oxygen for neoliberalism in Cambodia is patronage politics. There is pushback against neoliberalism which comes at a high price for environmental and human rights activists.

Keywords

Cambodia, neoliberalism, Ecstasy, patronage politics, land grabbing, economic land concessions (ELCs), western and Chinese aid, ASEAN.

BiographyJean Chapman is a feminist research. She was awarded a doctoratefrom the Department of Peace Studies, University of Bradford and is currently a Research Associate at the Simone de Beauvoir Institute, Concordia University, Montreal, Qc, Canada. She was Co-Chair Conference Organizing Committee for the Society for Socialist Studies in 2013 and 2015, and Chair for Conference 2016. She can be reached at chapman@wilkinson.ca

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Abridged versions of this paper were presented at the Conference of the Society for Socialist Studies held from 27-30 June 2013 at Brock University, Ontario, and published in Social Scientist, Vol.41, Nos.5-6, May-June 2013, pp.41-51.

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The Khmer extractive industry: neoliberalism and unsustainable development?

1. Introduction

Sustainable development is taken to mean meeting the needs of today without compromising the ability of future generations to meet their needs. Unsustainable development is its opposite. Sustainable and unsustainable development are concepts in currentusage by mainstream Western donors, their non-government agencies(NGOs), partners in Government, and the critics of that alliance.A warning that the Khmer Extractive Industry (KEI) could be the cause of unsustainable development was sounded as early as 2007(Global Witness 2007).

Some of the issues around unsustainable development have been taken up by the academy. For example, in the context of sassafras oil production and transnational security (Ear 2010), land rights (So 2010), land reform (Donovan 2012), the geographicspecificity of the Khmer neoliberal project (Springer 2011), belligerents’ access to resource revenues to replace external political sponsorship (Le Billon 2012), the boost of confidence that aid from China has given the elite (Strangio 2012), and the link between peace building and natural resources (Lujala and Rustad 2012).

Journalists, working in a professional environment of dwindling freedoms, cover KEI with reports on the environmental and economic impacts of the high-grade sassafras oil produced in Cambodia as a precursor for Ecstasy, the global, recreational drug (Wikileaks 2006, Chaiwat 2010), the consequences of China gambling on Cambodia shrinking forests (Marshall and Thul 2012), the anti-corruption law passed on 11 March 2010 (Carmichael 2010), the mass eviction of the poor from their homes in Phnom Penh as a result of which the “World Bank is suspending all new loans to Cambodia until those made homeless receive proper housing” (Becker 2011), and the foreign policy shift from

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development aid from the West to development aid and soft loans from China (McCartan 2011, Sok 2012, Thul 2012b).

The United Nations Special Rapporteur felt emboldened to speak about human rights violations, and the escalating violence against the Khmer who protect their land and livelihoods from KEIcorporations (Subedi 2012). The UNDP has published a report on artisanal and small-scale mining (Spiegel and Hoeung 2011), even as the Royal Government of Cambodia (RGC) has issued a statement that all small-scale mining is illegal until further notice (Suy 2010).

NGOs are monitoring conflicts over forest products (ARD. Inc./USAID 2006, Yurdi, Kelley et al. 2010, Wallace and Conca 2012), analyzing concessions granted by the RGC for exploring foroil, natural gas and minerals (Thul 2012), the culture of impunity and State-sponsored killings (Sharabi 1988); proposing recommendations for formalizing the artisanal and small-scale gold mining sector (Barreto 2011), identifying the physical and social hazards associated with small-scale gold mining (Sieng 2004), and introducing retorts to recycle mercury at an artisanalgold mine in Ratanakiri (Murphy, Guo et al. 2006).

Local and foreign, publicly listed companies and other investors have arrived from Australia, China, France, the Republic of Korea, Japan, Malaysia, Singapore, Thailand, USA, andViet Nam to explore for Cambodia’s gold, bauxite, silver, lead, copper, zinc, iron ore, granite, coal, nickel, gemstones, zirconium, graphite, tungsten and manganese (Fong-Sam 2009, Fong-Sam 2010), and perhaps rare earths, and to drill for petroleum and natural gas. Twenty-one Special Economic Zones around the country with investment capital in excess of U$1 billion has alsoentered the country (Invest in Cambodia 2012). In a paragraph, those are the riches of contemporary Cambodia.

The non-rich narrative reflects the growing number of Khmer who reap no reward from the riches. Two out of every five persons still live on less than U$1.25/day (CIDA 2012). The country’s Human Development Index (HDI) is 0.523, which gives the

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country a rank of 139 out of 187 (UNDP HDR 2011). Despite the increase since 1995, Cambodia’s 2011 HDI (of 0.523) is below the average of 0.630 for countries in the medium human development group and below the average of 0.671 for countries in East Asia and the Pacific (UNDP 2011).

The transition in contemporary Cambodia is from a classic case of conflict timber during the civil war, to post-war social conflict rooted in forest exploitation and commodification. An argument is that elite control of Cambodia’s most valuable resources contributes to corruption, political factionalization and unsustainable economic growth (Philippe Le Billon quoted in Wallace and Conca 2012:505). An environmental organization maintains that the same elite which squandered Cambodia’s timber resources can be seen as responsible for selling off its mineral,petroleum and natural gas wealth (Global Witness 2007, Global Witness 2009, Global Witness 2012).

According to the Transparency International 2011 Corruption Perceptions Index Cambodia ranks 164th and is the 19th most corrupt country in the world (Transparency International 2012). Corruption thrives on the streets, in high places of society, in the public and service sectors (Sok 2012). It is deeply embeddedin the very structures of society evidence of which is the proliferation of false documents, bribery, illegal evictions, land-grabbing, embezzlement, nepotism, and interference in the judicial process. An anti-corruption law was in the making for many years and was finally passed on 11 March 2010 by the ruling party of the RGC (the opposition staged a walk-out). The Anti-Corruption Law has a fatal flaw: the bodies established under thelaw will be staffed by appointees of the ruling party and will report directly to the Prime Minister (Carmichael 2010).

Questions raised in this paper are: is a feminist perspective positioned to track the transformative power of the KEI? Are the policy frameworks helping or hindering transparencyin revenue flows? What are the links between Khmer patronage, kleptocracy and violence? How can a country be resource-rich, an aid recipient from the West and the People’s Republic of China,

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and yet her people be impoverished? Does the shift from Western to Chinese aid make a difference as to how power is claimed and wielded by the elite? Are green NGOs tied for last place in the environmental protection stakes? Is transparency a panacea for dirty money? Answers to those questions will weave their way into the text.

The organization of this paper is as follows. The first section positions me as a feminist researcher and identifies the sources that I use, which include feminist and gender on-line, open source networks. The next section looks at the policy framework and revenue flows for KEI and the licencing system. Section four analyses the Khmer patronage system. Section five examines the paradox that Cambodia is impoverished, resource-rich, and aid-dependent. The paper concludes on a feminist, optimistic note by stepping lightly around the barriers that havebeen erected around KEI.

The argument that I make in the paper is KEI is a site in which the elite is embracing neoliberalism and transforming alliances as a function of entrenching power. I use the term ‘the elite’ for those who have a sense of entitlement in the military, military police, police, forest administration; the monks; relatives of senior politicians; and financial investors who are local and foreign. The relevance of this research is neoliberalism entails increasing inequalities and processes of de-democratisation making for a more difficult environment for the operation of feminism, which attempts to reduce inequalities and to deepen democratic governance (Walby 2011:11).

2. Methodology

I introduce this section with a brief explanation of the road travelled to KEI. I then position myself as a feminist researcher, and examine the alliances formed by the RGC with the private and public sectors, donors and their agencies.

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I was invited to participate in an e-discussion that took place in August and September, 2012. The e-discussion was initiated by the UNDP Asia/Pacific Region and the subject matter was sustainable development: the case of Extractive Industries. The e-discussion was looking for sustainable development strategies that work. It soon became evident from submissions tothe e-discussion that contemporary Cambodia is the crucible for every possible policy to re-build a post-conflict State to accommodate global markets.

Beyond the context of the e-discussion, however, it became evident that, firstly, Cambodia is the hot bed of every strategy to maintain single party, autocratic rule with its “four-way relationship between neoliberalism, violence, kleptocracy, and patronage” (Springer 2011), and secondly, “power has been generated through development projects and other material inducements whose source of funding were patronage politics backed by corruption that involved party and government officials, businesses people, and rural voters (Kheang 2005: 224).

I draw on diverse secondary sources. I have tapped into local and global literary, university library, and on-line resources which has led me to peer-reviewed literature in academic journals; openDemocracy; blogs; books that are in print and those no longer in print but accessible on-line; grey literature generated by international and national civil society organizations; articles and op-ed pieces in the press and on-linemedia which deal with the KEI; feminist and gender networks, and on LinkedIn.

I am informed by feminist literature in the post-conflict environment, and in the development sector (Goldstein 2001, Pillay 2001, Jackson and Pearson 2002a, Afshar and Eade 2004, Cockburn 2005, Mazurana, Raven-Roberts et al. 2005, Anderlini 2007, Cockburn 2007, Pankhurst 2007, Farr, Myrttinen et al. 2009,Jacobson 2013 ); the literature on dangerous fieldwork (Peritore 1990, Lee 1995, Baylies, Bujra et al. 2000); questionable research (Salamone 2008); and gender and fieldwork (Warren 1988).

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There is an expectation that feminist researchers will practice reflexivity which is the class, caste and racial power that is exercised over literary and material choices brought to the research by the researcher (Harding 1993, Ramazanoglu and Holland2003, Gupta 2010). The gender-sensitive method that I employ builds on El Bushra’s schema of gender relations (El-Bushra 2004)which I expand from changes brought about by conflict, to a heuristic tool for ‘doing’ gender (Chapman 2010c).

Two significant lessons have been learned from my scholarship on gender and landmine management. First, the RGC institutionalizes legality and illegality. In the case of landmine clearance, legal operations are undertaken by entrepreneurs who attach to themselves the moniker ‘humanitarian’who are tasked to clear those types of land that will help the RGC to achieve its macro-economic and development objectives. Demining undertaken by residents is: (a) land for agriculture; (b) forest land used for food, wood for house construction, firewood, and wild plants and animal food; and (c) house land. That is defined as illegal (Moyes 2004:115) and undertaken by amateurs. With competition out of the way the formal sector has built a multi-billion dollar industry on the existence and perceived existence of landmines (Fleisher 2005:8, Chapman 2010b).

The second lesson is international treaties are used as

leverage by some donors. In the case of the Ottawa Convention (1996) millions of dollars have been raised to advocate that States become signatories, or State Parties, to the Convention that bans the production, sale, use, transfer and stockpiling of landmines, and naming and shaming hold outs. With respect to KEI, a treaty is in place, namely the Extractive Industries Transparency Initiative (EITI). There is an on-again-off-again stance assumed by Western donors with respect to its implementation. The rhetoric shifts from EITI being a non-negotiable benchmark of direct budget support packages, to an agreement to consider endorsing (Global Witness 2009:55).

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The value of a gender perspective is it expresses the near-universal privileging of men over women, and “when we speak aboutgender we also speak about hierarchy, power, and inequality”(Kimmel and Holler 2011). A finding by Walby is that under neoliberalism gender inequality has been slightly declining and class inequality has been increasing (Walby 2011:161). Until disaggregated data – which facilitate a gender analysis – is systematically gathered on KEI, this paper is limited to treatingKEI as a contemporary site of hierarchy, power and inequality. In theory, neoliberalism offers women and men unparalleled rightsand freedoms. Yet, each has carried within it new opportunities for violence, subordination and exploitation. Those new opportunities, and the push back against them, are discussed here.

The next section of the paper looks at policies and practices that overtly and covertly subscribe to a model of development that (a) still relies on commodification and growth with the private sector as the key beneficiary, and (b) the global system which is fuelled to a great degree by profit derived from militarism, depletion of natural resources and violation of human rights (Clark and Duran 2012). Beyond the scope of the paper are the revenue flows represented by debt repayments by Cambodia to financial institutions in the North, and the extent to which they exceed aid and humanitarian payments.

3. Policy framework, revenue generation, and licensing

The thesis is that the elite is embracing neoliberalism and transforming alliances around KEI. This section looks at the policy framework that has been put in place by the RGC for the development of its mineral resources, and how licensing is affecting the social and political landscape of KEI.

All permissions for exploration and mining are centered in Phnom Penh. Prior to 2009 policy frameworks were in place to produce industrial minerals such as sand and gravel, crushed stone for the domestic construction industry, and limestone for

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cement production. The exploration of mineral resources has since expanded and policies and programmes are in place authored by the Ministry of Industry, Mines and Energy <www.gdi.mime.gov.kh>. Within that ministry is the Council for the Development of Cambodia, created in 2008, as a one-stop service organization for investment in Cambodia. It grants exploration and mining licences to investors, and will in due course, set industry standards. To date, 160 exploration licenseshave been granted. Three mining licences were granted in 2011 for a total investment of U$31.3 million. The area under exploration is 13.6% of total land mass (Invest in Cambodia 2012).

Contracts are the legal agreements between the government – as legal right holder to subsurface non-renewable natural resources – and private EI companies which are granted the right to explore and produce resources in a given location, for a limited time, in exchange for specified payments in cash or kind.In the petroleum industry there are two main types of contracts, production sharing, and concessions (Cambodians for Resource Revenue Transparency 2009).

Revenues generated from KEI take the form of income tax (30%for mining companies), gross revenue royalties (2.5%), governmentshare of production sharing agreements, bonuses, surface rental, dividends of national oil companies, customs duties, fines, penalties, and other contributions in cash (UNCTAD 2003, Cambodians for Resource Revenue Transparency 2009). Revenues from the EI at the present time are predominantly exploration licences (Cambodians for Resource Revenue Transparency 2009). Itis not clear how the revenue or the resources generated from KEI will be utilized to diversify the economy for sustainable economic growth over and above the National Strategic DevelopmentPlan which puts together a comprehensive reform and development agenda for five years to provide basic services (Royal Governmentof Cambodia 2009) and to create a conducive environment for the private sector which the RGC sees as the main engine of economic growth (Invest in Cambodia 2012).

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The RGC has built institutions to facilitate the explorationand production of KEI out of Phnom Penh. Policies and a tax regime are in place. Standards are being set. Concessions have been awarded for logging, iron ore, to cut trees in State rubber plantations, and to set up tax-free economic zones, and central to the argument are economic land concessions. Contracts have been entered into to build military and civilian infrastructure and to provision the army with rice.

It is not always evident to whom concessions have been granted and the particularities of each. In some instances, a moratorium on issuing concessions is declared, it can get reclassified as ‘temporary’, and the licence is reactivated. In other instances, a moratorium on concessions is declared, which happened on 7 May 2012, because the RGC opposed corporate misuse of economic land concessions (ELCs), or a long-overdue offer to recognize the claims of rural populations to the land on which they live, or, for political expediency given that a negative report by the UN Special Rapporteur on Human Rights in Cambodia was scheduled to be announced on 11 May 2012 (Donovan 2012). Indeed the report was made public (Subedi 2012) and within short delay four new concessions, each located in protected areas, weregranted (Hance 2012). The explanation given by the RGC is that those ELCs were in the pipeline prior to 7 May and were, therefore, exempt from the moratorium. The question of just how many more ELCs were in the pipeline has yet to be answered(Donovan 2012: 2).

The President of Cambodian Association of Mining and Exploration Companies (21 companies are members) believes that a setback to the development of KEI is the tendency for speculatorsto buy and sell ELCs with little intention of actually exploring their tenements (Mullins 2011). Rather, corporations sometimes violently evict people from the land, harvest high-value timber,and leave rather than developing the project for which they have been granted the ELC in the first place (Thul 2012).

Another setback is confrontation over land and forests. Post-1989 RGC began reforming the economy toward neoliberal

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capitalism and reintroduced private property rights (Sar 2010). Privatization of land has been followed by land grabbing and evictions for development and are symptomatic of Khmer patronage in practice (Springer 2011: 2559, 2560). There were 236 conflicts over land in 2009 (Yurdi, Kelley et al. 2010). It is estimated that between 4-12 per cent of the population, or between 500,000 - 1.7 million Khmer are affected by forest conflict the high end being people who derive the majority of their livelihood from forests (ARD. Inc./USAID 2006: v). Not onlydo land disputes and forced evictions continue unabated, the use of force by the authorities and business enterprises has led to violent clashes with communities (Subedi 2012:8,10).

The national media carry regular reports on the types of conflict taking place: the Cambodia Daily has a section on ‘land disputes.’ Land-related clashes between communities and the State in recent years include:

a 14-year old girl was shot to death in the village of Broma during a violent eviction by the military police inMay 2012 (Global Witness 2012:9);

13 women, ranging in age from 25 to 72, received jail sentences for protesting over the expropriation of their land. The protests were over a long standing dispute between tens of thousands of residents who were evicted from their homes in a suburb of Phnom Penh. The women were guilty of disputing authority and trespassing on thedevelopment site (ICNL 2012: 7);

Phnom Penh radio station owner and NGO leader, Mam Sonando, aged 71, was arrested on 15 July 2012 and charged with offences against the State;

Activists Bopha Yorm and Sakmony Tim, prominent in protests against forced evictions of residents, were arrested on dubious charges in September 2012 (ICNL 2012:7);

Chut Wutty was shot dead on 26 April 2012 by members of the Cambodian Military Police while carrying out field research into illegal logging and land seizures. Wutty was one of the last remaining activists willing to speak

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out against the escalation of illegal logging and land grabbing in Cambodia (Global Witness 2012: 8)

Seng Saron was shot dead on 4 July 2007. He was a drivingforce behind mobilizing villagers to establish a community forest (Yurdi, Kelley et al. 2010: 18).

Other policy frameworks in place include:

the programme instituted by the RGC of corporate sponsorship of national army units. Prominent businessmen are permitted to buy sections of the army to defend their business interests (Global Witness 2012:9).

a haphazard financial landscape (Royal Government of Cambodia 2009:103);

an inability to meet the need for well-educated, well-trained, English-speaking workers;

a lacuna is expertise in geology/minerals. To overcome the lacuna the RGC has undertaken to put in place policies to fund short-term training in the country, scholarships for higher education abroad, andreopen the school for geology/minerals which has been closed since 1999 (Suy 2010);

domestic protocols for mineral assay laboratories are yet to be standardized. There are three laboratories,two use the Australian standard, and one uses the Canadian standard.

Journalists and local NGOs who do not share the RGC’s visionof development function in a hostile environment of harassment, intimidation and the threat of a defamation or incitement lawsuit. Threats have taken a turn for the worse (Sharabi 1988) with an increase in the use of live ammunition against people defending their rights and protesting against the RGC policies and practices (Subedi 2012: Section D.37 p.10). The present Khmer regime leaves activists from forest-dependent communities and local NGOs standing up for their basic human rights, the environment, and the rule of law.

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Concessions are the new currency and dominate the policy framework for revenue generation, the social and political landscape of KEI, the State and its elite. ELCs have become a nightmare of abusive, uncompensated evictions. There is push back against neoliberalism. Unlawful evictions are seen to be aberrations. Journalists are doing investigative journalism and placing findings in the public domain. Videos on illegal loggingand land seizures are also in the public domain. The State and its allies remain unmoved, above the law. That will change. There is a campaign to remove Cambodia’s everything-but-arms duty-free access to the European Union. A boycott targets blood sugar, which is sugarcane produced on grabbed land in Cambodia.

The alignment between the public and private sectors, and donors and their agencies are the subject of the next section on the Khmer patronage system and KEI. The oxygen for neoliberalismin Cambodia is patronage politics which, in turn, is based on militarism, the depletion of natural resources, the violation of human rights, and the curtailment of freedom of expression, meeting, and association.

4. The articulation of patronage in Cambodia

Cambodia remains burdened by endemic corruption and an entrenched system of client patronage that leaves many of its population impoverished and subject to exploitation by the country’s rich and powerful (Ear 2010: 64).

Building on the KEI policy framework, making the argument that KEI is the site in which the elite is engaging with neoliberalismand, in the process, transforming alliances and perpetuating violence, this section begins by setting up the patronage system and the shadow State and then examines the impact on artisanal and small-scale gold mining, and sassafras oil production.

Governance is the manner in which power is exercised in the management of a country’s economic and social resources. Power is based on (i) the rule of law, which gives predictability to day-to-day life, and (ii) people’s participation in the institutions of State. Good governance is observable in States

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which exercise their power through State institutions, agencies and organizations, which are accountable and transparent to the general public.

In anticipation of mineral wealth under land and sea, contracts have been awarded and concessions granted to Cambodia’selite (Global Witness 2009), or more specifically, a small group of privileged individuals, creating mutually beneficial patron-client relationships that turn these individuals into key supporters of the ruling party. Revenue from forest resources has found its way to the ruling elite through their close ties with those privileged individuals. The revenue flow has been used to support the ruling party’s political strategy of mass patronage and systematic vote buying (Kheang 2005, Global Witness2007, So 2010:4).

The patronage system is clandestine and hierarchical. Rewards can include an appointment on a Board of charitable organizations, travel abroad in the Prime Minister’s entourage, or “the highest honorific title in the land, Okhna” (Kheang 2005:224). Violence proceeds through particular channels as it keeps judges, top monks, high-ranking military and police officials, journalists, media chiefs, and commune chiefs on an unofficial payroll. The payroll is managed by two rival patronage systems within the Cambodia People’s Party, the key players are firstly, the Prime Minister, and secondly, the personwho acts as the Party Chairman, President of the Senate, and Acting Head of State. The key players are not on equal footing as it appears that the Prime Minister is involved in corruption, has more supporters, and control over both the military and the police. Those connected to the patronage system face pressure tobe an agent or accomplice in the murder of political adversaries,or at least, a participant in an ongoing conspiracy of silence. Violence has transitioned alongside neoliberalism and violence “now focuses its malevolent energies on those who challenge the logic of neoliberalization in the country, as it is neoliberalismthat forms the contemporary backbone of political economic power that Cambodian elites enjoy” (Springer 2011:2562-3). The Prime Minister “has proven to be a highly intelligent and ruthless

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leader, able to keep his domestic opponents and international critics off balance. His main tactic has been the threat and useof force” (Adams 2012), and, of course, linking big money and therural electorate.

This is how the patronage system works.

The elite and locally elected officials comprise the Prime Minister’s entourage. A request will be made on behalf of the residents. The Prime Minister will turn toward his entourage andhe will be given a nod by a contractor. The nod is a commitment to build a road, a well, a pagoda, a school. Local politicians will bring out - sometimes led by the hand - the vote for the Prime Minister’s political party as the local population believesthat the Prime Minister is the benefactor of development projects. His name is chiseled into the gifted infrastructure. Elected officials get re-elected. This is the shadow State whichextorts from businesses and manages an extensive illicit economy.It is administered by managers fluent in the jargon of good governance and sustainable development (Global Witness 2007:10).

The system of patronage predates Khmer neoliberalism. According to Springer, neoliberalism frequently opens opportunities for well-connected government officials to informally control market and material rewards allowing them to line their pockets. What constitutes neoliberalism in Cambodia as distinctly Khmer are ways in which the patronage system has allowed the local elite to co-opt, transform and articulate neoliberal reforms through a framework that has asset stripped public resources (Springer 2011:2555). A pseudo-legal framework was put in place and the Cambodia National Petroleum Authority came into being in 1999 without primary legislation passed by theNational Assembly. This placed direct control in the hands of the Prime Minister and his deputy, without oversight from Parliament or the relevant ministries. During the 2004 rush for mineral resources the Council for the Development of Cambodia (see section 3 above) came into being under a cloak of secrecy where bonuses totaling millions of dollars paid to secure ELCs

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did not show up in the 2006 and 2007 revenue reports from the Ministry of Economy and Finance (ibid. 2566).

What follows are two examples of the shadow State’s relationship with small-scale operators. Artisanal and small-scale mining, generally supplemental to agriculture, have existedfor centuries in the region. In 1975 there were 12 gold deposits. In July 2001 The Law on Management and Exploitation ofMineral Resources was ratified and it defines all gold mining as illegal unless permission is granted by the Ministry in charge ofMining. By 2004 there were 19 gold deposits in Cambodia that employed between 5 000 and 6 000 miners. One of the major differences between the mining industry in Cambodia and those in other countries is the organizational grouping of the miners: thesector was dominated by local, Korean or Chinese-backed small companies.

The number of independent miners is decreasing. In its place is increasing control over mining areas by concessionaires,companies and wealthy miners. New techniques for mining gold usechemical processing that is environmentally destructive and hazardous to human health and fish stocks (Murphy, Guo et al. 2006). The other threat is military personnel who are there to protect the interests of owners. Despite operating under licence, some companies are also known to levy taxes and fees on independent gold mining. The health and safety safeguards that should protect local communities, and are part of agreement are often disregarded (Sieng 2004, Spiegel and Hoeung 2011).

The RGC has put small-scale and artisanal mining on notice. The Minister of Industry, Mines and Energy, puts it this way:

3. Illegal mining operations will generally have to be eliminated through the collaboration of the MIME with all relevant agencies and local authority. In dealing with illegal small scale artisanal mining operations in mining concessions, the Director General has been formulating a study from which the findings will form basis for developingpolicy that will determine how to deal with such illegal

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activities. The solution may include their legalization andlimit their operations to designated areas with low mining potential and as defined by the Director General on Mines and their organization into small scale mining community operations (Suy 2010:2).

There are alternatives to eliminating, ghettoizing, and

making artisanal and small-scale operations illegal. In the formalization of the gold mining sector, for example, the RGC could consider the positive and negative impacts of small-scale mining. On the positive side, it helps to stem rural-urban migration; it maintains a link between people and the land; it makes a major contribution to foreign exchange earnings; it enables the exploitation of what otherwise might be uneconomical resources; it has been a precursor to large-scale mining, and it provides employment. The negative impacts are mercury contamination which is perhaps the most widely known contributionto environmental and social problems affecting miners, surrounding communities, and ecosystems (Barreto 2011).

A second example is the shadow State’s relationship to production where the demand originates in the West and the supplyis from deep within the forests of Cambodia. Sassafras oil is:

a precursor to the manufacture of Ecstasy a global, recreational drug;

used in the fragrance and pesticide industries; a traditional medicine used in the region to treat skin

disease and rashes; used for decorative carvings, housing, furniture and

coffins; as furniture polish in Vietnam.

Sassafras oil made headlines between 2006 and 2008 (see, for example, Wikileaks 2006, Chaiwat 2010). It is found in the root and lower part of the tree. Harvesters cut or burn the tree thendig out the stump and roots, cut it into blocks, place the blockson trays placed above the water level in a vat 5-7 metres high

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and 3 metres in diameter. The surrounding trees are used for a high heat, subterranean slow-burn fire. The steam travels through metal tubing into vats that are submerged in a stream. The cool temperature leads the sassafras vapour to condense in the vat. The production process takes 10-15 hours, uses 0.7 to two tons of wood to produce 20-60 litres of oil. Each camp can produce 90-150 litres per day. “At the height of the illegal operations in 2006, it was estimated that there were at least seventy-five processing factories run by crime syndicates” (Ear 2010: 64). Camps are set up for three months. Total production is/was 300 tons per annum. The price of the oil is U$2.50/litre in the forest; US$5.00 in Pursat, and U$50.00 at the Khmer/Vietnamese border. The biggest producer is Heng Suon Kim who was granted an export licence which was not renewed and the company operates illegally. The illicit stills were run by Vietnamese businessmen “with strong connections to the police andpoliticians in Cambodia” (Wikileaks 2006: Section 2).

The operation was being carried out in the Cardamom protected forest and brought to heel by the Cambodian Army, the Australian Police, and a green consultant, Fauna and Flora International (FFI). At the time the raid was carried out 245 million Ecstasy tablets were found, with a street value of U$7 billion (Ear 2010).

Cambodia did not, on the face of it, gain much from the sassafras oil business. RGC and NGO efforts to battle precursor production typically yield factories with low-level workers, or no people at all (Chaiwat 2010). Cambodia has a lot to lose. The production sites, on protected land, are under threat of deforestation and pollution as the oil finds its way into the waterways during production. “FFI have supported the Rangers for years supplying them with uniforms, equipment and training” (ibid.). As long as there is “international demand and high profitability for drugs, the emergence of new ecstasy manufacturing facilities and the destruction of rare trees and forests will continue in Cambodia (Ear 2010: 66). One is left tosurmise that the traditional uses of the tree and its oil have

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gone underground, and with it the contribution that sassafras oilcould, with ethical management, make to government coffers.

The patronage system and the shadow State pay little heed totraditional knowledge accumulated over centuries; it severs a link between local, resource-rich communities and the RGC; it threatens to ghettoize artisans in non-productive areas; and it creates intermediaries who are creating new ways to wield power and use violence. Which begs the question: what is power lookinglike for the RGC’s old allies, Western donors, who Cambodia inherited with the Paris Peace Agreement in 1991 along with imposed membership into the ‘world club of democratic states’ (So2010:5)?

5. Resource-rich, aid-dependent, and impoverished

The claim being made here is that alliances are being transformedby the elite as it takes ownership of the neoliberal agenda to manage KEI. At the present time, the intermediaries between the elite and ordinary Cambodians are Western donors even as “[T]he government is successfully exploiting international aid as a source of political legitimacy” (Global Witness 2009:8).

The West bankrolls Cambodia to the tune of over 50% of the RGC’s annual budget which peaked in 2008 at one billion US dollars (Global Witness 2009: 54) and reached U$1.1 billion in 2011 (McCartan 2011). Global Witness examines the role that Cambodia’s donors play (Global Witness 2009) in light of the rhetoric that links good governance and fighting corruption with the twin benefits of sustainable development and effective aid. There is disconnect between policy on good governance and its implementation. The reasons are:

Cambodia’s donors have cited multiple justifications for notinsisting that the government implement reforms which would be in the interests of the Cambodian people. Most recently they have argued that taking a stronger stance on governancewill push Cambodia further into the pockets of its biggest donor – China (Global Witness 2009:55).

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Western dollars are controlled by donors and their NGOs. There is an estimated 3,492 registered NGOs and associations in Cambodia of which approximately 1,350 remain active (ICNL 2012). NGOs active on KEI issues are Cambodians for Resource Revenue Transparency, LICADHO, Natural Resource Protection Group, the NGOForum of Cambodia, the Cambodian Human Rights Action Committee, the South East Asia Extractive Industries Watch, Amnesty International, CIDA, Ausaid, USAid, Oxfam USA, among others. NGOs have created baseline data on Cambodia’s natural resources and also on tropical forests making it feasible to have a scientific discourse on forest loss and degradation caused by KEI(Kapos, Ravilious et al. 2010).

There are mixed reviews on NGOs. At issue is the Associations and NGO law. It had a fourth reading in December 2011 and consultation will go on until 2014. The proposed law makes registration for international, national and local ‘Associations’ and ‘NGOs’ mandatory. Applying for registration is complex, and gives authorities unfettered powers to deny or accept applications; the draft law fails to respect fundamental rights of freedom of association, expression and assembly; and key terms, for example, ‘association’ and ‘NGOs’ are undefined(Lun 2011:1, 2). “The normally fractious Cambodian civil [sic] groups have joined together against the new law” for fear of being silenced (Becker 2011:2).

NGOs have a long relationship with the RGC. A posting to Cambodia ranks up there with the best, yet NGO workers are characterized as ’poverty pimps’ and expat do-gooders “who clog the streets with their company-provided SUVs, and by night they fill bars, restaurants, and nightclubs. Collectively, NGO workers represent a privileged caste, isolated and detached from the people who serve as the objects of their benevolence”…..and Action Aid noted that country directors of prominent international charities received compensation packages worth as much as $250,000, and 700 top international consultants in Cambodia were paid an annual average of around $100,000(Silverstein 2011:1, 2).

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Mainstream green NGOs are among the most powerful as RGC ministries and agencies which deal with environmental issues are under-funded and understaffed so NGOs fund and manage those agencies. RGC has sold off land, including protected areas; morethan half of a site designated as an ASEAN Heritage Park; 340 sq.km of land has been carved out of a national park in southwestCambodia for a project of a Chinese real-estate company from northern China. That project is a city-sized gambling resort. A64 km highway has cut through a four-lane swathe of mostly virginforest (Marshall and Thul 2012). Land from which people have been forcibly evicted has been sold or exchanged with oligarchs and foreign investors. The green NGOs have remained silent on theimpacts on the people and the land (Marshall and Thul 2012). Developers need green consultants such as Conservational International, Wildlife Alliance, and Fauna and Flora International. The complicity of the greens is matched by NGOs who want access to Cambodia (Silverstein 2011:2, 3).

There is a shift with respect to the source of aid hence a shift in alliances. The RGC prefers to deal with the Peoples’ Republic of China (PRC) whose investment in Cambodia totalled U$1.9 billion in 2011 more than double the combined investment bythe Association of South East Asian Nations (ASEAN) and ten timesmore than the USA which is trying to extend its influence in the area (Thul 2012b). One questions whether Cambodia needs the Westfor credibility in international circles given the confidence with which Cambodia’s leadership functions. For example, Cambodia chaired the 28-30 May, 2012, ASEAN’s ten-member meeting held in Phnom Penh. For the first time there was no joint statement at the close of the meeting. The Chair had succeeded in keeping off the formal agenda a discussion of the ongoing dispute over the South China Sea in which Vietnam, China, the Philippines, Malaysia, Brunei and Taiwan are embroiled. They have laid claim to all or part of the disputed territories. The islands are potentially resource-rich in petroleum, and are some of the busiest shipping lanes in the world. China pledged more than U$500 million in soft loans and grants, and thanked the RGC for its help in maintaining good relations between it and ASEAN members.

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China is negotiating a free trade agreement with the ASEAN and is its biggest trading partner (Sok 2012, Strangio 2012). China is providing military aid to Cambodia and an agreement was signed on 29 May 2012 for U$17 million for military aid that includes a training facility and medical supplies (Sok 2012). There was a discussion of the dispute over the South China Sea but no joint statement at the end of the ASEAN meeting chaired bythe Khmer Prime Minister in Phnom Penh on 18-20 November 2012.

Cambodia’s mineral wealth is real for Cambodia’s elite and its allies, and illusory, at best, for local communities. Indeed, licences are granted for a fee paid in cash or kind. Even suggesting that revenue flows will translate into ‘the upliftment of the masses’ is based on a false premise. Global Witness puts it this way

[e]xperience of natural resource management in Cambodia and elsewhere paints a different picture. In many resource-richcountries where Global Witness works, resource exploitation has contributed to a deepening, not lessening, of poverty(Global Witness 2012)…

…the solution? Ban Global Witness from working in Cambodia. This goes some way to explaining the paradox that Cambodia bringsin millions of dollars from donors and its mineral wealth yet itspeople are poor. The road out of the ghetto is the subject of the next section.

6. Stepping lightly around the barriers

I examine ways that may not dismantle the clandestine and hierarchical patronage system, but will challenge it. A rock solid case can be made for transparency which has been placed firmly on the global agenda within and beyond extractive industries. Transparency International was founded in May, 1993,by a lapsed regional director of the World Bank. Its mission is to make a world free of corruption in government, business, civilsociety, and in the lives of individuals. Its strategies are to

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compile accurate data; make data available; name and shame offenders; and share topical information on corruption around theworld. The vehicle is the open access, on-line ‘Daily CorruptionNews’ which picks up global media sources on corruption. On 9 November 2012, for example, Quebec’s municipalities, Montreal andLaval, share the headlines on corruption with the Chinese Communist Party which, if left unchecked, will prove fatal for the Party. In India an anti-corruption crusader aims to sweep aside corrupt elites. Britain’s biggest bank, HSBC, is at the centre of an investigation after it opened offshore accounts for serious criminals living in the UK. Note: within the fortnight the Mayors of Montreal and Laval had stepped down.

Another initiative is tailored for the extractive industry. Taking stock at the turn of the century there was a sense of unease about the deep cleavages between the rich and poor. When the UN General Assembly authorized holding the World Summit for Sustainable Development in 2002 it was no secret that sustainabledevelopment was in trouble. Poverty was deepening and environmental degradation worsening. In 2003 a new programme waslaunched, the Extractive Industry Transparency Initiative (EITI).

Since 2002 the World Summit on Sustainable Development has met at two-year intervals; there have been plenary sessions and workshops on EITI; a Board and International Secretariat are in place: the Board is made up of sovereign States, non-government organizations, industry and investors. By 24 February 2011 therewere 101 members (see <www.eiti.org>). The structure of EITI is reminiscent of the ICBL strategy of using an unconventional grouping of Middle Power countries and civil society groups to negotiate its Conventions In Ottawa for landmines in 1997, and inOslo for cluster munitions in 2008. A significant component of ICBL’s operations is advocacy to become a State Party. The difference is membership is restricted to sovereign States in thecase of the Convention banning landmines and cluster munitions, whereas States, corporations and civil society organizations are eligible for membership in EITI. What the ICBL does well is to name and shame countries that are holdouts.

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It is feasible for the RGC to begin the process of stemming corruption and opting for at least a modicum of transparency not only, but also by signing on to EITI. It would not be original, but it would be a bold step. What makes a move toward embracing this initiative attractive is events might otherwise overtake theRGC: the US, through the Securities and Exchange Commission, passed the Dodds-Frank Wall Street Reform and Consumer ProtectionAct on 22 August 2012. Rules for resource extraction companies require disclosure of payments to US and non-US governments. Annual reporting requires a company, a subsidiary or an entity under the control of the company to disclose the type and total amount for each project made to each government (United States Government 2012). The Dodds-Frank Act has its opponents but in the event that it becomes law it and similar legislation by otherdonor countries might leave very little wiggle room for the Khmerelite and its allies old and new.

Should there be foot dragging on EITI, the mining industry might implement the Goodland (2012) Eight Principles. They are: (1) an objective social and environmental assessment for project design; (2) no social and environmental assessment should be keptsecret from potentially impacted stakeholders; (3) if stakeholders don’t want the proposed project, it should not go ahead; (4) mining must not decrease resources in areas of scarce land or water; (5) corporations will uphold international social and environmental agreements and the practices of corporate and social responsibility; (6) all mines to engage in a rigorous independent certification regime; (7) insurance and performance bonds should become standard; and (8) accurately assess all relevant costs and benefits to ascertain whether the proposed mine will earn a significant net benefit.

Goodland identifies five no-go zones. Those relevant to Cambodia are fragile watersheds, biodiversity habitats, and wilderness which includes national, state or provincial parks, UNBiosphere reserves, UN World Heritage Sites, and protected forests (Goodland 2012) to which can be added ASEAN Heritage sites.

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Recommendations that do not require legislation, rely on moral suasion, and could also be the panacea for dirty money are:

Donors and NGO record the names of the dead, count them, and

let the world know where and how they died fighting for their rights;

Donors and NGOs should call for a permanent moratorium on concessions and full transparency on concessions granted, are inthe pipeline, temporary, cancelled, and inactive;

Donors should make funding packages conditional upon applying for EITI membership and rewarding full membership;

Only funds from donors with EITI membership should be accepted by the RGC;

Donors and their agencies should use their own and not RGC criteria to evaluate the impacts and benefits of their aid packages;

A UN expert panel should be struck with the mandate to link high-value natural resources and state-sponsored violence;

Donors should finance an in-depth study of the paradigm shift from Western to Chinese aid;

For effective public participation resource-rich communitiesshould be made aware of their rights and how to access them in the changing, volatile climate. Information asymmetry can be addressed using ICBL’s strategies such as roundtables and workshops, press briefings, use of traditional media, street marches, street theatre, photo exhibits and art installations, fund raising, film screenings, candle light vigils, e-letter writing campaigns, bicycle rallies, and high-value tree planting. Social media and open access publishing can be added to that list.

Mining inherently depletes resources and while efficiencies can postpone depletion, mining can contribute to sustainable development IF the economic benefits outweigh social and environmental costs. Advances in managing and mining minerals can take unforeseen trajectories when social engineering is ignored by (a) corporations whose concern is maximizing the concessions that they hold, and (b) governments which espouse

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sustainable development and, simultaneously, join the elite in careening toward unsustainable development.

7. Conclusions

The feminist gaze notices the absence of disaggregated data in, for example, NGOs which have been institutionalized for women; women in institutions built for development policies and practices; the patronage system; human rights organizations; environmentalists; green consultancies; and corruption. As a consequence, the focus of this study is on the elite. The argument is that KEI is a site in which the elite is embracing neoliberalism and transforming alliances to further entrench its power.

Policy frameworks are in place, and infrastructure is being built around the exploration and future production of KEI. The underpinning of that infrastructure is neoliberalism. The new currency is concessions which are doing a roaring trade. The beneficiaries are entrepreneurs from the global North and South who are there to take a chance on Khmer neoliberalism. With the assistance of the State, this new breed of entrepreneur is creating new opportunities for violence. Land grabs are a new human rights concern. An innovation is sections of the army are sold to entrepreneurs to defend their business interests. A child was shot during a violent eviction by military police; women are jailed for protesting over the expropriation of their land; a male radio station owner is jailed on charges of offencesagainst the State; male activists organizing protests and investigating illegal logging and land seizures are killed. The situation is so dire that even the normally diplomatic UN SpecialRapporteur felt the need to speak out about the violation of human rights and the escalating violence against the Khmer who protect their land and livelihoods. So endemic is repression that a local newspaper has a special section on land grabs, the protests that accompany them, and State-sponsored violence to repress them. There is, however, push back against neoliberalismalbeit with a heavy cost to those brave souls who protest againstillegal logging and land grabs.

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Patronage politics predate Cambodia’s encounter with neoliberal capitalism. When corruption starts at the point of entry in the natural resource chain it distorts the market. Whatis new is the manner in which the elite has learned how to manipulate the intricate web of complicity holding together patronage and the shadow State. The reformed patronage system isthe framework for the elite to co-opt, transform and rearticulateneoliberalism, which has produced a shift in alliances.

Western donors and their NGOs have championed good governance and fighting corruption as the means to sustainable development and effective aid. Their proliferation, high visibility, power and privilege are being challenged by the Statewhich is introducing legislation that will tie them in knots justto remain in the country legally. The hard-earned position of ‘ally’ held by Western donors is shifting. The RGC is developinginfrastructure to provide minimal services to the population, andto create an environment conducive for the exploitation of KEI bythe private sector. Western donors and their NGOs are being sidelined as stakeholders.

It is not only Western donors and their NGOs which are on notice. Of more immediate concern are the small-scale artisanal entrepreneurs. There are alternatives to eliminating age-old institutions which provide employment and control of local resources. Small-scale mining operators have every reason to believe that the State and shadow State will favour tycoon culture. Gold mining and sassafras oil production are shifting toward commodification and growth with the private sector as the key beneficiary. There is evidence that militarism, depletion ofnatural resources and the violation of human rights are the toolsof trade for unsustainable development.

Feminist huff and puff is unlikely to blow down the edifice of Khmer patronage. But there are ways of stepping around the barriers. The State will be on notice if it fails to curb lawlessness within its jurisdiction. KEI is forging a link between lawlessness and concessions and contracts. A tipping

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point will be reached when land grabbing and violence are perceived by investors to be counter-productive. Future research will look at neoliberal processes that de-democratize Cambodia as public services are privatized, violent confrontations accelerate, and civil liberties curtailed. Those are the conditions that restrain political opportunities for the feminist project.

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