With the fallout from an excoriating Global Witness report on forest crime still

reverberating through the Kingdom and across the world, the issue of how Cambodia's

beleaguered forests are to be managed and monitored remains an ominous and unanswered

question.

It's unclear how civil society, donors, the World Bank and the government hope to

proceed - and whether the politically charged task of independent forest crime monitor

will be kept or discarded.

In the Global Witness report "Cambodia's Family Trees" the UK-based environmental

watchdog accused a "kleptocratic" ruling elite of pillaging Cambodia's

forests. The government categorically denied the allegations and promptly banned

the report.

Despite this, Minister of Information Khieu Kanarith said on June 7 the government

would commission an investigation into the report's findings, with the former independent

forest crime monitor, Swiss-based Societe Generale de Surveillance (SGS), charged

with heading the inquest. Global Witness publicly applauded the government's move

and offered full cooperation. But since the announcement both Global Witness and

SGS have heard nothing further. Thach Suon, the contract manager for SGS's Representative

Office, said SGS's contract as independent monitor expired at the end of 2005 due

to a lack of funding, and they had not been asked to investigate the allegations

made in the Global Witness report.

Chea Samang, the deputy director of the Forest Administration - the government body

charged with enforcing forest law - said neither MAFF nor the FA had conducted an

investigation into the allegations made in the Global Witness report. "We have

already explained many times that the [Global Witness] report is nothing more than

an annoying sound," Samang told the Post. "It's false and has just made

a lot of confusion." With the expiration of SGS's contract in December 2005

progress in the area of forest sector management is now stalled as the World Bank

wrangles with the government over how best to proceed. At the same time donors and

NGOs are reluctant to become mired in the monitoring role that has now become a political

lightning rod.

Independent forest crime monitoring was introduced to Cambodia in 1999, following

mounting international concern at the decimation of the Kingdom's forests. The World

Bank set up a $5 million Forest Concession Management and Control Project (FCMCP)

with three major aims: forest crime prevention, detection and suppression.

According to a 2006 Overseas Development Institute report, a number of options were

considered for the independent monitor (IM), including private sector certifiers

and NGOs, but the report concluded that it was difficult to interest the private

sector "as the reputational risks were felt unlikely to be compensated for by

the expected renumeration."

Ultimately, the World Bank offered UK-based NGO Global Witness to the government

as the IM, in an arrangement endorsed by the government but paid for by donors. According

to the ODI report, the appointment of Global Witness was made at the insistence of

the donors and leveraged through a series of conditions concerning forest management

set out in the World Bank's $30 million loan to the government in early 2000. The

conditions concerning the forest management needed to be met in order for the government

to qualify for the release of the loan's second $15 million tranche.

"Global Witness had been an implacable critic of the government, particularly

Prime Minister Hun Sen and those close to him, and had systematically exposed and

dismembered the political economy of forest enterprise, corruption and bad governance

in the country, often in telling detail," the ODI report stated. "The appointment

must have been a bitter pill for the RGC to swallow."

Struggling forward

In 2003 the bitter pill became too much. Global Witness' first major report was banned

and the organization deemed it unsafe to continue working in the country.

The government's termination of the IM's contract drew widespread criticism while

the World Bank withheld the second tranche of its loan while they worked with the

government to find a new monitor and a new working framework. Of ten organizations

invited to bid, only SGS submitted a completed application.

At the time the company's bid was something of a surprise. When in 1997, pressure

from the IMF had prompted the government to first seek an IM, SGS was rumored to

have begun negotiations, but ultimately withdrew citing security concerns. The uncontested

appointment of SGS was confirmed in December 2003 after several months of negotiations

between the company and the government and some substantial amendments to the terms

of reference for the IM.

Under the deal, SGS was hired by the FA at a cost of $425,000 per year, with the

funds drawn from a World Bank loan. But the revised terms of reference constituted

a far more restrictive mandate than those applied to Global Witness.

Funding for Global Witness was provided directly by international donors, with no

involvement or contribution from government agencies. But with termination of Global

Witness' contract, donors withdrew support and under the new framework SGS was hired

and paid by the FA, whose performance they were also charged with scrutinizing. Global

Witness and other NGOs were vocal in their criticism of the new framework, and called

it a conflict of interest.

"Corruption within the FA runs deep and senior FA officials enjoy close links

with prominent players in Cambodia's logging mafia," Mike Davis, a Global Witness

campaigner told the Post in June 2004. "It is extremely naïve to think

that SGS would not come under pressure from their employers to turn a blind eye to

these underlying causes of forest crime."

The new terms of reference also restricted the ability of the IM to publicly release

information prior to government review, while field inspections had to be facilitated

by the FA and could not be carried out independently.

But SGS was open in its willingness to accept the conditions of the new mandate.

"Global Witness is an advocacy agency and therefore saw monitoring as a means

of fulfilling their aim - saving the forests," Bob Tennent, then SGS Forest

Project Manager told the Post in June 2006. "Thus they embarrassed the government

on a number of occasions which led to their contract being terminated. We see our

role as working with the government."

Having withheld the second $15 million loan payment after the termination of relations

with Global Witness and the failure to meet other forest management related conditions,

the World Bank disbursed the second tranche after the appointment of the new IM.

But in 2005, the independent Inspection Panel of the World Bank received a complaint

from the NGO Forum acting on behalf of local communities affected by forest concessions.

The Inspection Panel investigated the complaints and issued a report on March 30,

2006, which raised several concerns about the Banks engagement in the forest sector

and concluded the FCMCP had drifted from its objectives and was no longer complying

with the World Bank's safeguard policies.

The panel also raised concerns about the amended terms of reference of the IM, which

conflicted with the FCMCP's objective to have "an independent monitor to provide

a check on the accuracy of Government reporting."

In response to the Inspections Panel's report, the World Bank reviewed the situation

of forest management and recommended changes to the terms of reference for the IM

in order to ensure greater independence.

The Bank also recommended new reporting arrangements to ensure increased transparency

and to avoid a conflict of interest.

But in December 2005 funding for the FCMCP expired, and with that the role of SGS

also ended - making the Bank's responses to the inspection report redundant.

Future in doubt

Since then, the World Bank has struggled with the government to find a way forward

in the forest sector. A recent World Bank progress update obtained by the Post, cited

a "lack of political will to fight forest crimes" and stated that "a

consensus has yet to emerge on a clear way forward."

The report also stressed "the importance of the Prime Minister providing leadership

in this politically charged sector."

"The situation in Cambodia remains very challenging, but the Bank is committed

to staying engaged with the Government and other stakeholders," the report stated

- before adding, "It is still too early to propose a full re-engagement in the

forest sector."

Peter Jipp, a senior natural resources management specialist at the World Bank would

not say if the Bank planned to provide funding for a new IM.

Jipp said that the success of a forest monitor hinged not only on the terms of reference

of the role, but on the organization's own objectivity.

"When the agency that performs the monitoring function simultaneously pursues

an advocacy role or has some other competing commercial interest this can lead to

accusations of bias and conflict of interest which tends to undermine trust and effective

coordination among the various actors," he said.

The Cambodian government has long maintained that Global Witness had an agenda and

were "biased" and "political." SGS vice-president George Bottomley,

in a public statement defended SGS's performance in contrast to Global Witness by

emphasizing their neutrality. In response, Global Witness claim their only agenda

is to detect and report forest crime where and when it happens, and if that means

identifying the perpetrators - no matter their position - they will do so. This Global

Witness say was the task given to them as the original independent forest monitor

in 1999.

The ODI report described the conflict as one of two distinct approaches. The report

concluded that while Global Witness may have behaved in a "cavalier fashion,"

SGS's circumscribed role was ineffective.

The ODI report concluded that the most productive way forward would be to appoint

an "SGS-type organization as the independent monitor but to ensure that NGO

watchdogs are available and able to maintain pressure and oversight of the independent

monitor."

Meanwhile, MAFF blame a lack of capacity for the dearth of progress in forest management.

"We have not been looking for a new independent monitor because we do not have

the funding for it," said Lim Sokun, secretary of state at MAFF. "We have

not decided yet what to do. We have restriction measures in place but their implementation

is difficult as our management and resources on the ground are limited. Illegal logging

is a hot issue for the government but the control of illegal logging is not strict

enough and that's why it still happens."

As the government and the World Bank struggle to find a way forward, Cambodia's forests

remain under threat - and for now, no solution is apparent.