The Kandal Provincial Court on Tuesday tried two opposition CNRP officials and their lawyer—two of them in absentia—over a case dating back to 2011 that was abruptly scheduled a week ago.
The Australian Federal Police (AFP) has closed an investigation into suspicious payments to officials in Cambodia by the world’s largest mining company BHP Billiton, according to a report released by the Organization for Economic Cooperation and Development (OECD).
Although the report, released last month, does not directly name the firm involved, the description of the case in the study closely resembles an announcement made by Australia’s BHP in 2010 that it was the target of a U.S. investigation reportedly concerning payments made to the Cambodian government.
The OECD report states that instead of conducting a domestic investigation, the firm simply referred the matter to another agency despite identifying evidence that could have led to convictions of its staff under Australian foreign bribery laws. The firm is referred to in the report as “company Z.”
“In 2010, the company announced that it had disclosed to U.S. authorities evidence that it had uncovered possible foreign bribery…. Based on material received from the U.S., the [AFP] identified suspicious transactions that had been recorded as legitimate business payments,” the OECD report states.
But after consulting with U.S. authorities and the Australian Securities and Investment Commission (ASIC), Australian police decided against an investigation because the ASIC said the company had already “documented the suspicious payments and disclosed them to the market,” the report says.
The OECD expressed concern in the report that the level of foreign bribery enforcement is extremely low in Australia and recommended that police “take sufficient steps to ensure that foreign bribery allegations are not prematurely closed.”
The OECD report also appears to make reference to another case involving payments to government officials in Cambodia.
The second case bears striking similarities to OZ Minerals, another listed Australian mining company, which bought out its Cambodian partner in 2009 for $4.6 million, though nearly $1 million of that payment went to the relatives of senior officials inside the Ministry of Industry, Mines and Energy, according to a company memorandum.
In that case, according to the OECD report, “the AFP declined to open an investigation because it received information from the AFP’s overseas network that the transaction had been undertaken with due diligence and that all payments were made at the joint venture partner’s request.”
A spokeswoman for BHP in Melbourne declined to say whether Australian police had made initial inquiries regarding the payments made to Cambodian officials.
“Following requests for information in August 2009 from the U.S. Securities and Exchange Commission, the Group commenced an internal investigation and disclosed to relevant authorities evidence that it has uncovered regarding possible violations of applicable anti-corruption laws involving interactions with government officials,” Fiona Hadley said in an email, adding that the investigation is still under way in the U.S.
The AFP declined to comment on its investigation in Cambodia.
“Australian authorities continue to closely liaise with overseas counterparts to investigate and prosecute foreign bribery cases. Any investigations mentioned within the [OECD] report are subject to confidentiality,” an AFP spokesperson said in an email.
The Australian Attorney-General’s Department, however, said that any decision to halt an investigation would have been carried out by the AFP.
“The AFP is responsible for the investigation of foreign bribery and makes decisions about individual investigations independently of government,” a spokesperson from the Attorney-General’s Department said.
Suspicion fell on BHP’s operation in Cambodia in 2007 when Minister of Water Resources Lim Kim Hor told the National Assembly that Prime Minister Hun Sen had telephoned him from Australia in 2006 to inform him of having received a “signing bonus” in a BHP contract to explore for bauxite in Mondolkiri province.
Mr. Kim Hor referred to the payment as “tea money,” a term which normally describes an unofficial commission. The minister said the commission amounted to $2.5 million.
In 2010, after Mr. Kim Hor’s “tea money” comment, BHP announced that U.S. authorities were investigating the company. Soon after, Australian newspapers reported that BHP had given the Securities and Exchange Commission a batch of emails between company executives and Cambodian government officials which appeared to show that the payments made to the government risked breaking anti-corruption laws in the U.S. The government has denied any wrongdoing in the matter.
William Loo, a senior legal analyst at the OECD for the Asia-Pacific region, said that the OECD “is of the view that Australia should at least consider conducting its own investigations systematically, especially when foreign bribery allegations involve a company with significant connections to Australia.”
“There have not been convictions for foreign bribery in Australia, and one case is currently before the courts. These figures are substantially lower than several other parties to the Anti-Bribery Convention,” Mr. Loo said.
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