Cambodian Journalists Alliance Association

Communities lack knowledge of available mineral funds that can help their development

A big boat transporting sand onto the Bassac river in Phnom Penh. Photo taken on July 21, 2021. CamboJA/ Pring Samrang
A big boat transporting sand onto the Bassac river in Phnom Penh. Photo taken on July 21, 2021. CamboJA/ Pring Samrang

The Mineral Funds for Local Community Development has been established for more than seven years by the Ministry of Mines and Energy to help finance education, health, and infrastructure services in local communities affected by mining activities. However, very few local communities are informed about the funds, and not many have availed themselves of them.

At the multi-stakeholder dialogue on “Mechanisms for Ensuring Transparency and Accountability of the Use of Mineral Funds for Local Community Development” on June 18, Ung Dipola, the director general of the General Department of Mineral Resources at the Ministry of Mines and Energy, said that the funds were set up in 2015 through proceeds generated from royalties, fines, and taxes imposed on mining companies to serve public development of communities directly and indirectly affected by them.

Tes Srey Nich, a community representative of Putreng village, Dak Dam commune, in the O’Raing district of Mondulkiri province, said that her community had been ignorant of the mineral funds until she attended the dialogue event.

She told CamboJA that her village has been experiencing problems such as damaged infrastructure, due to the small development budget her commune has. She said they may apply for mineral funds to request the construction of roads and school fences.

The bauxite mining pit of a private company that has not yet been filled, in Dak Dam commune, O’Raing district, Mondulkiri province. The photo was taken on June 24, 2022. Supplied by Tes Srey Nich, community representative of Putreng village.

She also suggested that mining activities and investments should be done with the agreement and cooperation of local authorities and communities. The relevant companies should provide communities – especially those in remote areas – with comprehensive information so that they can avoid the detrimental consequences of development.

Klan Dean, a 33-year-old representative of the Community Collective Land Registration in Nhang commune, Andoung Meas district in Ratanakiri province, said that he only knew about the presence of mining companies – there was a Canadian gold mining company in his commune – but had never heard of the existence of the mineral funds.

Now that he knew about the funds, he would like to ask the authorities to build more roads and schools. “The community wants to strengthen the capacity of youth, eradicate illiteracy, and develop roads,” he said.

Dean also asked for a small budget that the community could control independently. He said that depositing the budget with commune authorities made it difficult for the community to find solutions to the smaller problems they face.

A man preparing to search a gemstone mine at Ratanakiri province. Photo taken in 2020. CamboJA/ Panha Chhorpoan

Chan Na, the chief of Dak Dam commune, told CamboJA that he had never heard of the mineral funds either. “They only inform us when they are digging mines in each village, but we never know about the mining fund,” he said.

Dipola said that there are currently no mineral funds for the O’Raing district in Mondulkiri province, despite the presence of a mining business called Aluminium Development.

“They have just received a business license but have not yet started operating because they are studying a full environmental impact assessment. Don’t have any funds yet,” he said.

He added that he did not know when the assessment would be done, but after the assessment, the project would also need inter-ministerial approval. Then the ministry would disseminate the relevant information to the affected community.

Similarly, in the Andoung Meas district, Ratanakkiri province, Dipola confirmed that the Angkor Gold company currently holds a metal exploration license but has not started operations.

From 2015 to the present, the mineral funds have accumulated to a total of nearly $10 million. Mondulkiri province has a fund of nearly $300,000, while Ratanakiri province has more than $50,000. Since 2015, 44 community development projects have been implemented at a cost of more than $1 million. In 2022, 17 more projects are being implemented at a cost of nearly $1 million.

Dipola said no local authorities or communities have yet submitted a request on the remaining $8.5 million in mineral funds.

San Mala, a senior advocacy officer at the Cambodian Youth Network, said that previously, in the case of sand dredging in Koh Sdech, Koh Kong province, the authorities had not informed the people about the mineral funds.

He said it was only after the news broke on the corruption and irregularities in the smuggling of sand from Cambodia to Singapore and other countries that the Minister of Mines and Energy visited the community in Koh Sralao, Koh Kong, to hold a public forum and announce the budget to be given to the community to build roads and bridges.

“I think that the concealment of information from the community is normal, happens almost everywhere, and is a bad example for Cambodian society,” Mala said. “When the Community Development Fund package is not open to the public, we are worried that the authorities or fund managers will have bad intentions by using the mineral funds for personal gain.”

San Chey, the executive director of the Affiliated Network for Social Accountability Cambodia (ANSA), said that the mineral funds are something new for the local people and authorities, who were unaware of it before, especially in areas where mining and sand dredging took place.

He said that access to comprehensive information is a necessary step to the application procedure, and communities should know how the funds are used by the local authorities. He added that civil society organizations such as ANSA, funded by Oxfam Cambodia, have been working to broaden the level of access to the mineral funds for affected communities – both in terms of its dispersal from the ministry to the local level, as well as increased transparency and accountability at the local level.

According to an announcement by the Ministry of Economy and Finance, a delegation from the General Department of Taxation visited Renaissance Mineral Cambodia Limited to explore its mining operations in the O’kvav area to examine the potential for tax collection on June 21.

Kong Vibol, the director general of the General Department of Taxation, appreciated the company’s investments and encouraged companies to implement socially and environmentally responsible development. He said that it is important for them to comply with applicable laws and regulations, and to be transparent in their performance of fiscal obligations and compliance, which benefits the national budget, both in terms of tax revenue and non-tax revenue.

He said that in the past, the General Department of Taxation had encountered serious obstacles in the mineral resources sector, as some investment companies did not fully cooperate in fulfilling their tax obligations – failing to provide financial statements, and paying only low taxes that do not reflect their activities.