What Does the Cambodian Election Mean for the Country’s Fledgling Gold Mining Industry?

In July, Cambodia held its sixth national election since the end of its civil war in 1979. The incumbent Cambodian People’s Party, led by Prime Minister Hun Sen, is set to maintain its hold on power in the southeast Asian nation after an election widely criticized as “neither free nor fair.”

The CPP’s long-term political control raises serious governance concerns due to persistent allegations of corruption, crackdowns and human rights abuse closely tied to control of Cambodia’s land and resources. Management of Cambodia’s natural resources is opaque and growing restrictions on civic space mean that communities and civil society groups have few opportunities to engage with the government or companies on critical issues, such as how the impacts of mining on local people are managed or how revenues are used.

Cambodia ranks 79 out of 89 in the Resource Governance Index’s country-sector assessments: it has one of the least transparent extractive industries in the world.

Cambodia is a new player in mining, awarding its first commercial gold mining licence in 2016. Recent figures suggest that the Ministry of Mines and Energy, responsible for licensing and fees, has since awarded more than 50 exploration licences and 20 mining licences. Licences have been awarded to Indian, U.S. and Australian companies, among others.

No contracts for these licences have been made publically available. The licensing process charts a failing score of 10 out of a maximum 100 in the Resource Governance Index due to a severe lack of publically available information. While blanket identifiers on a successful license applicant are accessible, data on bidding rounds and whether a successful applicant has beneficial owners who hold significant influence and economic interest in a company is not.

These limits in disclosure considerably increase the risk of licensing corruption. Adding to the perceived risk of corruption in the gold mining sector, and general public mistrust in its governance, are rumors in national media that some of those closest to Hun Sen and the Cambodian military have undisclosed links to at least one gold mine.

The lack of transparency has real-life implications far beyond an index rating, with expected safeguards to protect communities in mining areas also lacking. Community consultation is recommended for companies throughout multiple stages of a mining project, but this consultation lacks procedural guidelines. The consultation forms part of the right of indigenous peoples to free, prior, informed consent (FPIC), upheld as a global commitment for indigenous communities to maintain control over natural resources to which they have ancestral and cultural claim.

The result of the lack of guidelines in Cambodia is local consultation conducted by companies lacks clear and transparent targets for who to consult, what information should be shared and how, what is considered consent and how outcomes are reported. This leaves the process open to manipulation by those who have economic interests in the project engineering consent to go ahead.

The need for clearer guidelines and reporting requirements during consultation phases, in addition to effective regulation and monitoring of the mining sector at large, is essential so that communities do not bear mining’s negative burdens. In reality in Cambodia, communities sharing their local resources with poorly regulated mines has toxic consequences. Allegations that at least 14 people died and 300 were made ill due to drinking stream water contaminated with cyanide from gold mining caused widespread concern in a remote area of the country this year. The Cambodian government and the Ministry of Mines and Energy must ensure gold mining is governed in a way that benefits not only the political and business elite, but also protects and empowers local communities.

This challenge is especially acute when considering civil society’s involvement in steering resource governance toward fairer and more effective policy, regulation and implementation. Civil society involvement is regarded as a key driver toward good resource governance.

However, the extent to which civil society can influence resource governance in Cambodia is heavily and increasingly restricted.

Groups engaged in monitoring the local impact of other finite resources, including the logging of hardwoods and sand dredging in coastal mangrove areas, have faced punitive measures. In the last two years alone, human rights organizations have been threatened with closure. Public-facing figureheads of political, human rights and environmental movements have faced increased monitoring, intimidation and jail time, or chosen to flee the country.

In the run-up to July’s election, Cambodia’s civic space has been further eroded, with licenses for independent media revoked—including the largest independent newspaper in the kingdom—and an increasingly restrictive environment for nongovernmental organizations to function freely in.

The re-election of Hun Sen and his party comes with major red flags for the effective governance of the growing gold mining sector, the safeguarding of communities near mining sites and the positive and essential role that civil society can take.

Lisa Morris is a capacity development officer: learning specialist with the Natural Resource Governance Institute (NRGI).