A task force established a month ago to address problems stemming from an influx of Chinese investment to Sihanoukville has not received a single report of illegal businesses or taken any enforcement action, with one official maintaining it was impossible to take “serious” action for fear of discouraging more investment.

Despite officials in the coastal enclave having complained for months about increased money laundering, illegal gambling and human trafficking associated with the recent flood of Chinese money and workers, Long Kemvichet, spokesman at the Commerce Ministry in Phnom Penh, which is heading up the task force, said his ministry had not received any reports of irregular foreign businesses since the task force was announced.

“We are still studying the operation of businesses and looking for new mechanisms based on our laws,” Kemvichet said yesterday. “As for what we are going to do to take action, we cannot comment on that right now.”

The task force was created late last month on the same day that Preah Sihanouk Provincial Governor Yun Min wrote a letter to Interior Minister Sar Kheng highlighting problems with Chinese investment in his province.

That letter followed months of rising tensions between Cambodian business owners and the large number of new Chinese investors entering Sihanoukville, whom locals accused of driving up land prices and creating a closed economic loop that shut out Cambodian businesses and workers.

“Because of the influx of foreign investment in the province, the small-scale businesses by foreigners have also increased and now compete with our domestic business operators,” Min said yesterday. “Now the working group is researching how to take action for protecting the [local businesses] in the future.”

The heads of the province’s labour, tourism and commerce departments are involved in the task force, but officials from those departments said they had not yet attended a meeting with all the involved ministries focusing on the topic of Chinese investment.

Prom Socheavanda, director of the province’s Commerce Department, said his department was enforcing existing laws but could not take immediate action due to the risk of imperilling future foreign investment.

“Right now, we could not take any serious action or crack down on foreign businesses while we are trying to attract more investors to the country,” Socheavanda said. “If we take any action, it would impact everyone’s benefit, so we only encourage them to comply with the laws and tax payments.”

Socheavanda also said that while the task force had not yet met as a unified group, they planned to meet at an unspecified date in the future.

Yow Khemara, the head of the Labour Department in Preah Sihanouk, said he had joined a meeting with the Commerce Department and had agreed to focus on checking work permits and ensuring the Labour Law was being followed.

However, his department has not made any arrests regarding unpermitted foreign workers since the task force was announced, he added.

At an Immigration Department meeting in Phnom Penh on Tuesday, officials said the government had lost out on $23 million in revenue last year due to foreign workers – the majority of them Chinese – not paying taxes or fees.

At the meeting, Preah Sihanouk Deputy Provincial Police Chief Hun Sorithy said authorities “cannot control” Chinese workers because some of their employers “do not cooperate, and they say that they know two-star or three-star generals, while we are only one-stars”.

Khemara also said that the Commerce Ministry was considering a plan to regulate the ability of foreigners to operate some small-scale businesses, but ministry spokesman Kemvichet declined to comment directly on that claim.

Taing Socheat Kroesna, head of the province’s Tourism Department, said the task force was still preparing in order to take action in the future.

“We are now just sharing information with each other in order to prepare for the strategic plan for next time,” he said.