Thursday, May 6, 2010

What’s Wrong With That?

I am talking about the payments Total and BHP Billiton made to the Cambodian government for offshore exploration rights and mineral excavation rights, respectively. Similarly it appears some NGOs and Global Witness are up in arms about research to extract oil from the Tonle Sap. What rankles them most, judging from their statements, is the fact that both Total and BHP paid money to the government in connection for these rights. Ok, BHP is investigated by the SEC in the U.S. whether these payments constituted a bribe or whether it was a legitimate concession fee. Obviously, the deal with Cambodia did not come to fruition as the company withdrew its operations from the country. The Japanese company hasn’t paid anything yet but most likely will at a later date.

But the payments Total made should not raise any eyebrows. This is customary and quite within a country’s rights to sell exploration rights, which will usually lead to a partnership once oil has been found. The oil company will surely recover this comparatively paltry amount in no time.

Sorry, I can’t see anything wrong with BHP either. But then, admittedly, I don’t know all the facts, but neither do the people who go on barricades clamoring for transparency. It now has come to the point that whenever a payment is made to the government people raise their heads and cry foul, assuming that most of those funds will disappear in some government official’s pocket. Granted, Cambodia doesn’t have the best of reputations when it comes to corruption, but can’t we just wait for all the facts to come out first?

Then this Global Witness spokesman gave a telephone interview, speaking from London, where I am sure he is completely in the know, fearing that oil extraction in the Tonle Sap region will have negative environmental consequences or will not be of benefit to the people. He doesn’t even know exactly where this is going to happen. The Japanese responded that the area is not in the protected zone and an environmental impact study will be made. Shouldn’t that be enough?

I am not knocking Global Witness in general, but sometimes it seems they just seem to jump the gun a bit. Additionally, we don’t know either where the monies go that governments of other countries reap in for mineral rights. Sometimes governments auction off rights to the highest bidder; even telecom frequencies were sold this way. Now all of a sudden, it is not all right because this is Cambodia? Of course, the companies’ reticence doesn’t help either. They surely don’t win any PR awards this way.

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