24 November 2021 –
Cambodia has made progress in adopting relevant anti-corruption legislation to implement various provisions of Chapters II (preventive anti-corruption measures) and Chapter V (asset recovery. However, the legal framework leaves significant room for improvement, and enforcement actions are often biased and weak, a new civil society report authored by TI Cambodia finds. The report is intended as a contribution to the UNCAC implementation review process in its second cycle, with technical and financial support from the UNCAC Coalition and the Swedish International Development Cooperation Agency (Sida).
A key challenge identified by the report is insufficient political independence of key anti-corruption actors, which remains a particular topic of concern: the Anti-Corruption Unit, Cambodia’s main anti-corruption body, is described by observers as a politically captured entity that has been misused to target opponents; the judiciary suffers from a lack of integrity and is considered by the public as highly corrupt.
A lack of publicly accessible information and data, ranging from key anti-corruption policy documents to procurement data, data on enforcement of anti-money laundering provisions to asset recovery cases, as well as restrictions on freedom of speech and freedom of the media, hamper independent monitoring of anti-corruption efforts by civil society and the general public.
The official UNCAC review in Cambodia was scheduled to begin in 2018. Cambodia´s UNODC country profile page reveals that the country visit took place in Cambodia with representatives from peer reviewing countries Thailand and Eswatini from 30 October – 1 November 2019, and that other stakeholders were involved in the review.
Read the full civil society report in English here. The translated version of the report in Cambodian will be uploaded here as soon as it is ready.
The following are some of the main findings:
Prevention of corruption
Cambodia has enacted comprehensive anti-corruption legislation (the Anti-Corruption Law), and has developed three National Anti-Corruption Strategic Plans, along with other anti-corruption policies. However, enforcement of the Anti-Corruption Law remains weak, some observers have expressed concerns that the law is enforced in a discriminatory manner. There is no evidence to suggest that a transparent and meaningful formal consultation process in the development of anti-corruption policies and practices has taken place. Key anti-corruption documents are not accessible to the public.
The Anti-Corruption Law established an Anti-Corruption Institution (the ACI), which consists of the Anti-Corruption Unit (ACU), which is tasked with implementing measures of the law, and a National Council against Corruption (NCAC), which serves as an advisory body. In practice, while the ACU has tackled issues including ghost workers – inexistent government employees that were on the payroll – it has rarely investigated a high-level member of the ruling party, despite widespread allegations of corruption at senior levels of the government. Observers describe the ACU as essentially being a public relations unit for the government that has been politically captured, lacking the power and independence to tackle high-level corruption, and being used as a political tool to eliminate rivals including those within the ruling party. The ACI is not accountable to the parliament and the public, its independence is not ensured, as its leadership is appointed by a royal decree at the request of the prime minister.
Public sector employment
Cambodia’s Civil Service Law, passed in 1994, established important provisions regarding the employment of civil servants, including, on standards for recruiting and promoting civil servants. However, reports suggest that corruption continues to be a challenge within the civil service, where appointments to the central bureaucracy are often made on party political lines and are generally immune to the rule of law. In practice, public sector positions are advertised and anyone can apply, however, it is reported that those who actually get jobs often have friendships or familial ties to the senior staff in the affiliated ministry. Bribery is also a common way to gain access to the appointments and promotions.
A first draft of a code of conduct for public officials was developed by the ACU in 2018, but has yet to be finalised.
In law, public funding of political parties is awarded in a fair and transparent manner, detailing how state subsidies for political parties are calculated and awarded. State-controlled entities are prohibited from making financial or in-kind contributions to political parties, political candidates and election campaigns. Foreign donations to political parties are banned. Political parties are required to keep records of all their revenues and expenditures.
However, political donations are inadequately regulated: there is neither a legal definition of what constitutes a donation nor a limit on contributions donors can make to political parties and candidates. There is no explicit ban of anonymous donations to political parties. Also missing are provisions guaranteeing public access to the financial reports of political parties and politically independent oversight of political financing. Furthermore, there is widespread misuse of state resources to support political campaigns.
Asset declarations of public officials
Certain senior public officials are required to declare details regarding their assets and liabilities to the ACU in line with Chapter 4 of the Anti-Corruption Law. However, the law does not address the verification of asset declarations. The ACU claims that the compliance rate for the asset declaration system in Cambodia is almost 99.9% – these compliance numbers cannot, however, be verified by the public because asset declarations are kept highly confidential and remain sealed unless allegations of corruption are filed. Direct family members of public officials are not covered by the declaration requirements, raising concerns that the declarations may not provide a comprehensive picture of the assets held by officials and their families. Furthermore, declaration requirements have large gaps, undermining their use in detecting and prosecuting illicit enrichment. Only very few asset declaration forms have ever been unsealed.
Cambodia lacks a comprehensive whistleblower law. While a limited reporting mechanism and whistleblower protection is stipulated in the Anti-Corruption Law, there is no available evidence to suggest that whistleblowers are adequately protected in practice in Cambodia. Protected disclosures and persons afforded protection are not clearly defined in the Anti-Corruption Law, there are no specified measures in place to include physical protection as well as protection from workplace or other retaliation. A provision in the Anti-Corruption Law that criminalises malicious or false reports on possible corruption cases and threatens up to six months of imprisonment and significant fines deters and endangers whistleblowers. Furthermore, there are no reporting obligations in place for civil servants and public officials who have knowledge of a corruption offense.
Public procurement and public finance transparency
The Law on Public Procurement of 2012 has provided a foundational framework for State contracting. While procurement rules and practices may have improved over the years, the sector is still prone to corruption and malpractice, especially involving large-scale projects, contracts and licenses. While the law does not require the public dissemination of procurement decisions, in practice those are often made public. Concerns remain about the independence of procurement committees and a lack of independent oversight of their work.
Due to the lack of a registry of contracts and procurement data, public monitoring of State contracts and purchases and compliance with the legal framework is not possible. Companies are not required to list their shareholders and beneficial owners when submitting a proposal for a tender.
While Cambodia has made efforts to increase the availability of budget information, public participation and budget oversight by the legislature and the auditing institution remain weak.
Access to Information
Cambodia has no access to information legislation to guarantee public access to information held by Cambodian government bodies and to ensure transparency within the public administration. Furthermore, severe limitations on freedom of expression in Cambodia result in a restrictive environment that is not conducive for public discussions of corruption, the damages it causes and possible ways to tackle it.
The independence of the judiciary is guaranteed by the constitution and statute. Judges and prosecutors are mandated to abide by their respective Code of Ethics and the law establishes disciplinary measures for judges and prosecutors who show “contempt to honour, good morals and dignity.” Both judges and prosecutors are required to declare their assets.
In practice, the judiciary is widely seen as lacking independence, incompetent, and closely connected to the ruling party. The judiciary is regarded as one of the most corrupt public institutions in Cambodia. Accountability of members of the judiciary for violations of the ethics code is almost non-existent; disciplinary measures for judges and prosecutors are rarely enforced in practice.
Company ownership transparency
The existing legal framework provides a relatively favourable environment for the creation and running of businesses. However, no information on the ownership structure of a business or how the business is controlled is required when registering a new business in Cambodia. Similarly, there is no regulation in place that requires companies to report information on their beneficial ownership. It has been reported that the seeking and offering of bribes is commonplace in the business sector.
In 2020, Cambodia improved its anti-money laundering (AML) framework to address the money-laundering risks identified in the country. Although the adoption of the AML laws and the creation of various government bodies responsible for implementing the laws represent a step forward, significant challenges remain.
Cambodia since 2019 has been on the list of jurisdictions under increased monitoring (the “grey list”) of the Financial Action Task Force (FATF). The government in response has made a high-level political commitment to strengthen the effectiveness of its AML/CFT regime. Until 2016, not a single case of money laundering had been prosecuted. A report from October 2020 suggests that Cambodia investigated 140 money laundering cases as of June 2020, 22 cases were sent to court, and five have gone to trial. However, these cases involve only Chinese nationals bringing cash into Cambodia through airports. According to the information that is available to the public, Cambodia has never investigated possible cases of money laundering involving Cambodian nationals although such cases have been widely covered by international media.
The Law on Mutual Legal Assistance in Criminal Sector was promulgated in June 2020, stipulating the requirements and procedures for Cambodian authorities to process legal assistance requests in criminal matters from other nations. There is no publicly available information regarding completed and ongoing asset recovery efforts related to proceeds of corruption in Cambodia that have an international element. The AML Law provides for non-conviction based confiscation of assets and confiscation of assets where the predicate offences are committed abroad. In practice, there is limited freezing and confiscation of criminal proceeds, instrumentalities, and property of equivalent value being undertaken.
The Law on Mutual Legal Assistance also provides the Cambodian courts with the discretion to allow for assistance to be made in the repatriation of confiscated assets to foreign requesting jurisdictions. There is no mechanism in place for the return and disposal of confiscated property, and Cambodia has not yet repatriated confiscated assets to a foreign jurisdiction.
In its report, TI Cambodia makes several key recommendations for priority actions to be taken to ensure the full implementation of the UNCAC in Cambodia, for example:
- Strengthen the independence and accountability of the Anti-Corruption Unit: Ensure that the Chairperson of the ACU presents its annual activity and financial reports to parliament, and that the reports are made publicly available in the following fiscal year; adopt a measure to ensure that the chairperson and vice-chairperson of the ACU are appointed by an open and competitive recruitment process, involving the input of civil society.
- Facilitate inclusive anti-corruption efforts: Establish a transparent formalised public consultation process for the development of national anti-corruption policies and practices, and report to the public about such consultations and any public input considered.
- Promote transparency of anti-corruption efforts:
- Ensure that the National Anti-Corruption Strategic Plan (2020-2025) is made widely accessible to the public via the ACU’s website;
- Increase the collection and publication of relevant data and statistics to provide the public with evidence of how legal provisions regarding anti-corruption, AML and the asset recovery of proceeds of corruption, are being implemented and enforced in practice.
- Strengthen integrity in public hiring: Improve the rules and procedures to address conflicts of interest in the hiring process for public sector jobs e.g., declaration of impartiality and no conflicts of interest by the recruitment committee members, disclosure of specific scoring criteria for the evaluation of the applicants’ qualification; prohibit family members working in the same department.
- Improve transparency and effective oversight of political financing: Disclose the financial reports of political parties to the public; adopt regulation on campaign spending by political parties and close regulatory loopholes that create numerous deficiencies in the political financing laws; establish and impose sanctions for violating political financing laws g., the use of state resources for political interests.
- Improve the asset declaration regime: Publish at least a summary of asset declarations submitted by public officials, especially for those with high discretionary powers, i.e., politicians; develop a process for the verification of asset declarations, which information on this process also being publicly accessible, as well as a set of proportionate and deterrent sanctions to ensure compliance. Address loopholes and regulatory gaps in the asset declaration regime.
- Advance protection of whistleblowers: Expand the whistleblower regime with provisions to provide for adequate protection for whistleblowers, in line with international best practice, and anonymous reporting of corruption through clearly defined channels; revise existing sanctions that may deter whistleblowers.
- Improve company ownership transparency:
- Develop a centralised Beneficial Ownership Register with a requirement that adequate and structured data on the ultimate owners of all legal entities in Cambodia be compiled and publicised on a free, searchable online database.
- Ensure free online public access to the company registry, including information on the directors and direct owners of companies;
- Require private entities to report their shareholders and beneficial owners when submitting a proposal for tender during public procurement processes.
- Advance transparency in public procurement: Publicly disclose the names of all private entities that have been blacklisted for public procurement processes; require that procurement decisions and information on all stages of the procurement process be made public in easily accessible formats, including through web portals; enhance state oversight and public monitoring on the services / products delivered by the contractors.
- Promote public access to information: Adopt and implement legislation, policies and practices to allow members of the public to obtain information on the organisation, functioning and decision-making process of public administration in Cambodia; enact and implement effective access to information legislation that meets international best standards.
- Advance integrity in the judiciary: Ensure that the judiciary is accountable to a completely independent body and that any ethics violations within the judiciary can be reported and are investigated, addressed and sanctioned.
- Strengthen anti-money laundering efforts:
- Continue to strengthen the operational independence and capacity of the Cambodian Financial Intelligence Unit;
- Enhance the AML oversight of non-financial sectors in Cambodia, most notably the gambling and real estate industry.