Cambodia

The disposal of military assets is not at all transparent and no information is made available about the procedure. One interviewee has indicated that many assets are indirectly acquired by friends or relatives of the military officials that are personally involved in the sale. There are no laws which prevent or punish such occurrences. These comments are limited to assets in the defence sector.

Response to Peer Reviewers: Accepted, score lowered to 0.

There is no evidence of a dedicated agency which monitors asset disposals with independent and transparent scrutiny. There is an anti-corruption unit which can monitor public sector officials, including soldiers, throughout the country. No available evidence indicates it has ever done so however.

The percentage of national defence budget (draft) for 2015 is 8.80% (draft law on finance for management 2015). However, there is no detailed breakdown. Moreover, the defence and security expenditure in the budget year which is dedicated to spending on secret items has not been publicly available. Therefore, there is no clear evidence to indicate the fact of the percentage of this expenditure.

Response to Peer Reviewers: While sources close to the government have speculated that secret spending exceeds eight percent, this number could not be confirmed. Given the lack of a detailed budget, the score has been changed to 0.

According to a security sector official interviewed,the national security and military/defence budgets including the secret budget must be shown in an annual report by the Cambodian Bureau of Budget (BB). The budgets then pass up to the cabinet, under the Prime Minister, which ultimately decides on the budget. According to an anonymous foreign journalist, the parliamentary committees in the Upper and Lower Houses only have access to parts of this budgetary information and no access to secret budgets. These committees cannot stop the passage of a military budget. There is not any publicly available legislation governing secret budgets for security forces.

Interview sources have indicated that the defence Ministry Audit Department make annual audit reports on the various parts of Cambodia's security sector. These are shown in a very limited way to the members of the Committee on defence in the Lower House and the Committee on defence in the Upper House of Parliament. Parliamentarians appear to have no way to double-check the accuracy of this information however. In addition, it appears generally difficult for them to access more detailed annual audit information pertaining to the defence sector. The interview sources indicate that no legislation exists which requires audits to be provided for debate in the legislature.

According to an interview with a civil service official, off-budget military expenditures are allowed in Cambodia. The country has a very small military budget which has made it necessary to rely both on other ministries to obtain enough security forces (e.g. Ministry of Interior) but also turn to corporate sponsorship of individual military units. According to an article in the newspaper Cambodia Daily, this latter phenomenon began informally in 2008 and the practice was formally implemented in February 2010. The interviewee continued that there is very little transparency in the use of off-budget expenditures. He furthermore stated that there are no laws which govern off-budget military expenditures.

Off-budget military expenditures do occur in Cambodia. These are typically either &quoute;borrowed&quoute; from the Interior Ministry or derive from corporate sponsorship of certain military units. This is because the salaries for Cambodian military officials tend to be quite low, and thus, the corporations act as substitute financial patrons. The issue of low wages for Cambodian soldiers is explored in a recent article in the Phnom Penh Post. What has happened in Cambodia is that certain military units are sponsored by a particular corporation. In return, that military unit will help guard company interests in specific areas of the country or even work to evict poor people. Though this practice became enshrined into law in 2010, there is substantial evidence that it was going on much earlier and at least since 2008; as such it was indeed illicit. According to NGO Global Witness, there is evidence that some elements of the military derive some of their off-budget income from illegal narcotics trafficking, prostitution and other illegal ventures.

RESPONSE TO PEER REVIEWER 2: Given evidence that the military is reportedly sponsored by illicit economic activity, score changed to 0.

Article 31 of Cambodia's Law on Access to Information (2011) allows the state to classify information based upon national security grounds. There is no method under the law to skirt this regulation in order to achieve any form of transparency. However, according to an anonymous source, the Prime Minister and senior members of the government (and Prime Minister Hun Sen's political party - the Cambodian People's Party) could compel the military to release information to them. Ultimately, as specifically emphasized by the interviewee, the Defence Sector remains highly opaque but influenced by the Cambodian Peoples Party.

Research indicates that, as an institution, the military controls only Military Channel 5 and a small number of radio stations. The extent to which these enterprises are profitable is doubtful. When asked about the transparency of finances of Military Channel 5 and military-controlled radio stations, a government interviewee stated that there is no transparency at all, as the armed forces are able to cite national security to justify failing to provide information.

An anonymous foreign journalist who is extremely knowledgeable about the Cambodian military indicated that those military-owned businesses which exist are at most subject to limited scrutiny such that their operations are generally unaccountable. Military Television 5, which is half-owned by the Royal Cambodian Armed Forces, is only subject to the internal defence Ministry audit department, whose reports are not publicly accessible.

Research found that companies which have been connected to the military are shielded from independent scrutiny either on grounds of protecting national security or because of their close ties to the Cambodian People's Party (see Global Witness, 2009; LICADHO, 2009). NGOs such as LICADHO and Global Witness and media outlets such as The Cambodian Daily have only occasionally exposed the operations of military-connected enterprises.

There has been no legislation which addresses private enterprise activities by military or defence-related officials.

Hunt (2014) offers evidence that military personnel have had ongoing involvement in illegal timbering, protection for prostitution, private security, and helping companies to conduct forced land evictions. According to an anonymous Cambodian security official, most soldiers do not earn enough from their wages to sustain themselves or their families; a key justification for engaging in unauthorized private enterprise, although in other cases military officers have instead acted to enrich themselves.

An anonymous government official stated that individual officers often become involved in business enterprises which are exempt from oversight. This is often enabled by their contacts within the CPP, their ability to use national security as a cover, or their individual influence as senior military officials.

Ultimately, it appears that the government itself profits from the illegal activities conducted by the military and that a percentage of profits will normally go up the well-established hierarchy of patronage with senior CPP officials at the apex.

RESPONSE TO PEER REVIEWER 2: Given evidence that the government benefits from illicit activity, score changed to 0.

Defence Sector officials rarely publicly commit to anti-corruption and integrity measures. According to an interviewee, at a CICP (Cambodian Institute of Cooperation and Peace) security sector reform conference attended by Defence Minister Tea Banh in March 2012, Cambodia's key challenges were identified to be a lack of accountability, professionalism, efficiency and effectiveness. However, in early 2014, when several soldiers accused their superiors of corruption, the Defence Ministry fired the soldiers and announced that Tea Banh himself had investigated the case and found the superiors not guilty back in 2011. There has been widespread doubt over the innocence of the accused officers. This case seems to suggest that there is only a reluctant and superficial commitment to anti-corruption on the part of the Ministry of National defence.

RESPONSE TO PEER REVIEWER 1: While the Ministry of defence has yet to exhibit a robust anti-corruption stance, it has publicaly condemned officials believed to have engaged in corruption. Score changed to 1.

Cambodia has a dedicated anti-corruption unit and laws governing corruption. According to an anonymous interviewee the ACU has only prosecuted a few cases, and has generally been criticized for doing inadequate monitoring. In March 2010 the government passed the Anti-Corruption Law, under which any person found guilty of corruption may face up to 15 years in prison. This law provides no protection to whistleblowers - furthermore, whistleblowers whose reports cannot be verified may be imprisoned for up to 6 months under the law.

In January 2012 the National Assembly passed Cambodia's first law on public procurement. This was an attempt to fight endemic corruption in the public sector, however there has been very little enforcement in practice. One anonymous academic has suggested the Anti-Corruption Unit was created to improve public relations rather than its legitimate purpose, while the laws have had no effect on corruption in the defence sector. Nevertheless, at least with regard to police, the Anti-Corruption Unit has made some arrests of police officers suspected of corruption.

Response to Peer Reviewers: The 2010 Anti-Corruption Law states that any person found guilty of corruption may face up to 15 years in prison. While it is not rigorously applied, its formal existence merits a score change to 2.

There are no witness protection mechanisms in Cambodia, including within the defence services. Although an anti-corruption law was enacted in 2010, it provides no protection to whistleblowers. Additionally, if a whistleblower's reports cannot be verified, they can be imprisoned for up to 6 months. An anonymous interviewee has also indicated whistleblowers are not encouraged by the state to step forward.

There appears to be no written evidence on this topic. According to two interviewees, the only special attention paid to personnel in sensitive positions appears to be to their level of political loyalty to the CPP and Prime Minister Hun Sen. There is no evidence indicating attention is paid to improving monitoring of these positions for efficiency, accountability or anti-corruption purposes. For example, the most senior members of the RCAF also hold some of the most senior positions in the CPP and all have a personal loyalty to Hun Sen outside of the formal chain of command. Meanwhile, Hun Sen's son ascended from being a colonel to a general in the army as well as the Deputy Army Commander, from 2011 to 2014. This highlights that familial trust and loyalty are crucial characteristics for personnel in sensitive positions.

The number of personnel in the Defence Ministry and the size of the Cambodian Royal Army are unclear. Different sources report different numbers. Since the navy and air force are so small, and the number of civilians in the Defence Ministry is miniscule, size is primarily determined from estimates of the army, police, and police constabulary. Some estimates state a figure of 110,000 but only a field strength of 70,000. Another figure states that there are 125,000 actively stationed soldiers, with 200,000 reserves also available. This data is either not publicly available or incomplete within Cambodia. The issue is further complicated by the fact that any published/reported figure may also be inaccurate. In a 16-page complaint to local rights group Adhoc, some soldiers attempted to expose fraud and corruption perpetrated by their seniors. Among other complaints, they also exposed the presence of ghost soldiers in the payroll. This indicates that personnel figures are likely to be inflated.

Salaries for military and civilian personnel in the defence sector are not openly published and research found that the low salaries of soldiers has become a sensitive issue. The country's major opposition party has placed higher wages for soldiers as a major campaign pledge, and anecdotal evidence indeed suggests many soldiers are rumoured to have voted against the government in the 2013 election. The interviewee, who works on political party issues, also confirmed that some soldiers had indeed voted against the ruling party in 2013.

According to the General Status of Military Personnel Act of 1997 military personnel hold the right to a salary determined in accordance with their grade, levels, knowledge, roles, service, and seniority. Military wages are some of the lowest paid to any civil servant in the Kingdom of Cambodia however, with lowest ranking soldiers making approximately US$50 per month. This information was confirmed by an interview source.

According to an interviewee, there is no evidence to indicate whether personnel salary is always paid on time. Information is certainly not published routinely. The Department of Finance in the Ministry of Defence is responsible for ensuring that payments are made accurately and on time. Each service of the military also has a finance department which is similarly responsible.

There have nevertheless been complaints from soldiers of late or incomplete payments as well as unexplained salary cuts. This has been confirmed by the interviewee and in news reports. Sometimes payments are delayed for over 3 months and sometimes personnel are not guaranteed to receive the correct payment, according to the interviewee. According to a news report, in early 2014, soldiers from the Army accused senior military officials of fraud and corruption. In the 16-page complaint to local rights group Adhoc, they listed random, unexplained pay cuts and salary irregularities. In 2008, during the apex of border hostilities with Thailand, Cambodia could not afford to pay all of its troops along the border, prompting it to turn to corporations to sponsor military units. There is strong evidence to suggest units began to serve the corporations however, guarding corporate interests and forcibly evicting Cambodian peasants that the corporation claimed were squatting on lands it desired.

This process is not transparent, independent, or objective. Although a selection system has been established since 1997, it is clear the process prioritizes partisanship far above professionalism. There is no system of appointments in government documents which is publicly accessible. The defence committees in parliament also have no right to monitor appointments. According to interviews, selections of military appointments for military personnel at the middle and top management level are based upon tested loyalty to the current Prime Minister and the Cambodian People's Party.

In one case, selection was evidently based upon blood ties: the Prime Minister's son rapidly advanced from 2011 to 2014 from colonel to general and Deputy Commander of the Armed Forces. There have also been expedited promotions for relatives of politically powerful individuals, including the Armed Forces Commander and Armed Forces Chief of Staff. The process of military promotions is that each service commander will make his or her recommendations for appointments. These decisions will be examined (endorsed or not) by the Supreme Commander of the Armed Forces and subsequently the Minister of Defence. The list then goes to the full cabinet where the Prime Minister makes the final decision before sending the list to the King for the monarch's endorsement. No independent scrutiny occurs at any stage.

According to a source at the US embassy in Phnom Penh, defence sector promotions in Cambodia are not determined by an objective, meritocratic process. A meritocratic process is understood to involve promotion boards outside of the command chain, strong formal appraisal processes, and independent oversight. Yet in Cambodia, it appears all these are disregarded in favour of assessed loyalty to the Prime Minister as leader of the CPP. Cambodia today has approximately 2000 generals; in February 2014 alone, 29 military officers were promoted to the rank of general. This is proportionately one of the highest levels of generals of any country in the world. Some say that these continuing promotions in the top echelons of the armed forces are a way for the Prime Minister to curry favour among loyalists in the military.

Under Cambodian law, every Cambodian man aged 18 to 23 is obliged to serve in the armed forces for 18 months. The law also carries a prison term of up to five years for men who refuse to join the military. This 2006 law is rarely enforced against those who can avoid service, and according to one interviewee, “Those who are more well-off or well-connected would be able to evade conscription”. Commentators also point out the government has not yet sought to enforce this act in earnest despite many announcements, noting that the Defence Ministry does not yet have the budget to pay soldiers adequate salaries. Corruption is highly likely to occur once conscription is strictly enforced, as there are no policies in place to stop avoidance of military service through bribery.

The Anti-Corruption Law penalises bribery and as such would be applicable here as well.

Compulsory conscription has been enshrined into law since 2006. However the government has not yet enforced it because the state lacks enough money to pay drafted soldiers, meaning only an underpaid volunteer army currently exists. There are no current laws against bribery to avoid conscription, nor does there seem to be any policy of refusing bribes to gain preferred postings in the recruitment process. According to one interviewee, evidence suggests a pattern whereby military officers are able to ascend as a result of their ties to high-ranking CPP officials or because of their assistance (including financial) to the ruling party and the prime minister.

The Anti-Corruption Law penalises bribery and as such would be applicable here as well.

In 2006, Cambodia's defence ministry secretary of state publicly admitted that there were at least 7000 ghost soldiers collecting salaries. More recently, allegations have risen in 2012 that the number of ghost soldiers has grown. According to an opposition party lawmaker, the RCAF is &quoute;overloaded&quoute; with ghost soldiers, with troop counts at times reaching 200,000 men, compared to an actual total of 70,000. The interviewee attributed this to the desire by commanders to &quoute;swell a battalion’s payroll so that uncollected pay-cheques could be taken by higher-ranking officers, of whom there are also too many.&quoute; According to an interviewee, there have been concrete steps taken by the Ministry of defence or military against this phenomenon. However, there is no public evidence to verify this and the score has been selected accordingly.

Research found the finance department within the Defence Ministry is responsible for overseeing the chains of payment while the armed forces hierarchy sets the chains of command. There is no evidence that chains of command are separated from chains of payment with the RCAF in practice.

According to an interview with an anonymous Cambodian security sector official, many military officials also tend to have a double source of income: working for the state and working for the Cambodian People's Party. The interviewee continued that low pay is prevalent within the lower and middle rungs of government service while extra pay can come to mid-level to high-level military officials from the CPP. In addition, since 2010, a third source of income has been added following the enactment of a decree to allow corporate sponsorship of military units: getting paid by corporations to do additional work for the corporations. However, according to an interview with a foreign embassy official, meagre pay makes soldiers attach greater value to the payments coming from the CPP and/or corporations (where there is no separation between chains of command and chains of payment).

Response to Peer Reviewer: Evidence of a clear chain of command does not necessarily imply a separation from the lines of payment.

There is little evidence of an applicable Code of Conduct promulgated by the Ministry of Defence or other government institution which is binding on personnel. Indeed there has been no formally adopted Code of Conduct in the Cambodian military. Though the defence Minister has very occasionally highlighted the benefits of security sector reform, according to one interviewee there have only been limited efforts to implement a Code of Conduct regarding bribery, gifts, hospitality, conflicts of interest and post-separation activities. A government report in 2010 suggests there were plans to create a &quoute;code of ethics&quoute; for the RCAF. Research found this has not been done to date.

Cambodia has various laws and Royal Decrees that govern activities of the military. Notably, the 1997 &quoute;Law on the General Statutes for Military Personnel of the Royal Cambodian Armed Forces (RCAF), acts as a doctrine in that it prescribes roles and responsibilities. Article 25 provides a broad set of guidelines which serve the same purpose of &quoute;code of conduct&quoute;. The law also sets out separated decisions for the professional armed forces and contractual-service armed forces. The 2006 Law on Compulsory Military Service (Royal Decree No NS/RKM/1206/030) prohibits RCAF personnel from &quoute;Corruption or exploiting military service for personal interests must be prevented&quoute;. This law has not been fully adopted and it is unclear to what extent it is in use.

CSOs have also made occasional attempts to publish aspirational documents. In 2002, the Cambodian Institute of Human Rights, and in 2006, the Centre for Social Development published Codes of Conduct meant to address egregious corruption practices of the Royal Armed Forces, Military Police and Police. The latter Code emphasized that soldiers must avoid corruption, embezzlement and bribery. It also stated that military officials must report to their superiors, and not abuse their public power for private gain. The code is quite general and vague however, and has not been distributed widely among security sector officials in the country.

Response to Peer Reviewers: Various laws and royal decrees - however incomplete - prescribe roles and responsibilities for the military. Score changed from 0 to 1.

The military does not have a specific code of conduct. Cambodia's Law on the General Statutes for Military Personnel of the Royal Cambodian Armed Forces (RCAF) 1997, acts as an informal military doctrine and lists responsibilities of the RCAF. For example, article 25 broadly describes codes of conduct for military personnel. It is very general and lacks specifics. The law also does not provide any measures for punishing corrupt personnel, undermining its credibility. There is also no publicly accessible information about the extent to which any internal Defence Ministry investigations have resulted in convictions for corruption, graft, bribery, or other related offences. Finally, the Cambodian Peoples Party and certain corporations have been known to bribe military personnel. Ultimately, it appears today that any military Code of Conduct is for public relations purposes only, rather than for any real attempts at professionalizing the defence sector.

Response to Peer Reviewer 2: Agreed. Score lowered to 0.

At present, Cambodia does not have any defence Ministry action plans that call for anti-corruption training of military personnel. Interview sources have indicated that since 2006 approximately three Cambodian military officers each year have participated in International Military Educational Training (IMET) programmes in the United States. US government written sources indicate that the US is interested in using IMET in Cambodia to promote rule of law, &quoute;military justice and human rights to help Cambodian officers better understand democratic concepts&quoute; and make the Cambodian military more professionalized. Despite these objectives, however, there is also no IMET course which specifically addresses anti-corruption.

ACU Joint Monitoring Indicators 2014-2018 has clearly included an output which committed to provide trainings to trainees from a number of institutions including the Royal Military Academy and the Senior Military School, although there is no evidence whether this output has been satisfactorily achieved.

Response to Peer Reviewers: Though irregular, evidence suggests that students in military academies receive anti-corruption training. Score changed to 1.

In Cambodia there is a thorough lack of transparency regarding the prosecution process for military officials, defence officials or service personnel, and it is unclear if any prosecutions are ever carried out. The interviewees stated common opinions that this situation has enabled the ruling party to maintain its popularity among military officials, who are informally permitted to engage in corruption as long as they support the CPP.

Research found that the laws governing facilitation payments, and especially for the military, are currently ineffective.

In 2010, Cambodia passed its first Anti-Corruption Law. Under this law, anyone giving illegal facilitation payments and the government officials receiving them face harsher penalties. According to the Anti-Corruption Unit (as reported in the Business Anti-Corruption Portal), this information had been disseminated to 1,700 communes around Cambodia. Nevertheless, small bribes and facilitation payments are a very common occurance in Cambodia. This point was elaborated upon in a report at a 2014 regional conference on anti-corruption (see RFI news story).

Cambodia has five government units tasked with investigating corruption. These include the Anti Corruption Unit (ACU), the Anti-Corruption Council (ACC), the Ministry of National Assembly Senate Relations and Inspections (MoNASRI), the National Audit Authority (NAA), and the National Assembly's Committee for Protection of Human Rights and Reception of Complaints. According to an interviewee these units all have little power or independence because they are not insulated from the influence of the ruling Cambodian People's Party (CPP).

According to the interviewee, within the Defence Ministry there is an audit department and also inspectors in each military service. However, there is no information available as to whether these units are effectively monitoring facilitation payments in the military since information about any such investigation is unavailable. The non-defence related agencies mentioned above have never appeared to engage themselves in defence matters.

RESPONSE TO PEER REVIEWER 1: Agree with comments. Sources and discussion updated.

According to interviewees, there is a general inspector department in each service of the armed forces. In addition, there is an audit department in the Ministry of defence. Clearly, the military is aware of the need to address corruption as a strategic issue on operations. However, addressing corruption is not part of any strategic plan or military doctrine.

There is no formal Military Doctrine in Cambodia that directly provides a Code of Conduct. According to Cambodia's 2006 Defence Policy, the Law on Compulsory Military Service (Royal Decree No NS/RKM/1206/030) prohibits RCAF personnel from &quoute;Corruption or exploiting military service for personal interests must be prevented&quoute;. However, this law is not fully adopted and to what extent, it is unclear. Cambodia has various laws and Royal Decrees that govern activities of the military, some of them broadly cover corruption as a clause. The military follows different codes of conduct depending on its activities, for example the Election Commission has a &quoute;Code of Conduct for RCAF&quoute; during election times. Similarly, the RCAF would need to adhere to separate codes of conduct in international peacekeeping missions.

Response to Peer Reviewer 2: Score raised to 1 on the basis of the evidence provided.

According to interviewees, there are no corruption training classes being offered by the Cambodian defence Ministry to commanders to address corruption in operations. Interviewees have indicated the only evidence of any training in &quoute;professionalizing the military&quoute; comes from the fact that a few select officers receive training through the United States IMET program, which has been going on annually since 2006. IMET training ostensibly includes courses on rule of law, human rights, democracy, and other related coursework. However, a look at IMET courses specifically offered to Cambodian military students contains none which is actually geared toward any of these subjects, especially anti-corruption. With no training in anti-corruption, corruption clearly exists in the field.

Response to Peer Reviewers: Considering that Cambodian law does not require anti-corruption trainings and considering that US-sponsored IMET training courses do not include an anti-corruption component, score changed to 0.

No evidence exists of any trained professionals being deployed to the field to monitor corruption risks. Interviewees indicated the only professional external entities that have the authority to monitor corruption in the military arena are the ACU and the NAA. However their obligations focus on all public institutions, not just the military, which limits their capacity.

The two parliamentary committees which work on defence issues are also formally responsible for scrutinizing the military, though in practice they never do so. It appears the members of these committees are either not expert enough or not willing enough to monitor corruption in the armed forces.

RESPONSE TO PEER REVIEWER 2: Agree with comments. Score changed from 1 to 0.

According to interviews, there are no specific guidelines on military corruption, and Cambodia generally follows the Law on Anti-Corruption (2010) as a guideline for addressing anti-corruption risks. This guideline is generally meant to also apply to potential deployments or on peacekeeping operations. As Cambodia has only recently been reunited (1993) and built a new security sector (since 1997), laws to diminish corruption in the armed forces have only been developed to a limited stage. Indeed, according to the interviewees, there are no specific laws applying to the military anyway about military corruption. This includes when soldiers are on peace-keeping operations.

Some news reports suggest that private security/military firms are employed in Cambodia. First, in early 2014, the US private military firm DynCorp won an $8.5 million contract to carry support work in Cambodia. Another news report from 2003 reported the presence of an unnamed French PMC providing demining services in Cambodia. Finally, there have been various other private security firms in Cambodia providing security to infrastructure and individuals. An example includes Garuda Securities which is allegedly owned by the Prime Minister's sister.

There is no evidence of regulations for the use of such companies, however or any associated scrutiny.

Response to Peer Reviewer 1: Agreed. Information has been added to the main answer and the score has been lowered to 0.

Cambodia has no legislation which explicitly covers defence and security procurement, and indeed there is no independent scrutiny of procurements. defence and security procurement have in the past been governed by a fragmented legal framework spread out over various sub-decrees and internal guidelines. This allowed for numerous loopholes and room for corruption.

In 2012, Cambodia's first Public Procurement Law passed the Parliament, but it does not apply to the defence sector. Critics have also pointed out the new law is deficient as it effectively ignores procurement planning, implementation monitoring and procurement methods for all acquisitions by state agencies and institutions. It also does not provide for any investigation or complaints procedures. It would therefore be very difficult to successfully apply this law to Cambodia's defence sector.

There is little public disclosure of defence procurements except in general terms, and there is no evidence that the detailed defence procurement cycle is disclosed at all to the public. A 2012 assessment in Jane's Sentinel shows that it is likely that procurement is unplanned and uncontrolled.

In practice, it appears that most procurement has come from China since the late 1990s. Since 1997, China has been the biggest source of military aid to Cambodia, contributing more than 5 million U.S. dollars a year, and Chinese-made armaments can be seen in Cambodian military parades.

RESPONSE TO PEER REVIEWER 1: Source added.

As previously indicated, interviewees have indicated that there are internal inspectors in each military service as well as an audits department for the entire defence ministry. It is unknown to what extent these bodies actually investigate defence procurement issues within the military however since no information is accessible about them.

Beyond the defence sector's internal monitors, the two parliamentary committees in charge of security can request military personnel to explain and disclose specific procurement issues. However this would be very unlikely to happen since the legislators generally lack expertise in military matters. Moreover, according to the interviewees, the military is closely tied to the CPP, which also dominates the parliament.

Finally the National Audit Agency and Anti-Corruption Unit can theoretically investigate corruption in the military. However, these agencies in general only look at corruption in the civilian sector.

Research found no evidence that defence purchases have been made public in any form. Interviewees also confirmed this and indicated that it is not legally required that they must be made public. The only thing publicized is the aggregate total of military spending.

Media evidence indicates that certain military purchases have occasionally been announced. For example, in 2010, reports surfaced that Cambodia had purchased 94 tanks and armed personnel carriers (APCs) from East European countries. It is certainly not possible to assure that all purchases have been announced and reported however. According to the interviewees, any scrutiny by the media is either ignored or rejected by the military.

According to interviewees, when companies are seeking to bid for contract from the Ministry of Defence or armed forces, there is no evidence that the government of Cambodia presses them to avoid corruption or engage in good ethical behavior to be considered as a bidder. As such, according to the interviewees, the threshold for bidder behavior is simply the standards set by each individual company - and some companies may not have any. Interviewees indicate that in practice, a bidder's close connection to the CPP holds much more weight than any compliance standards in ensuring they are appealing to the government.

Procurement information is not made available until the delivery stage, making it nearly impossible to make this required assessment (IHS Jane's, 2013; Defence News, 2010).

Based on reports about most recent major platform acquisitions, it appears that Cambodia may be choosing suppliers based on a government-to-government bilateral agreement; rather than an open tender competition. Supplier nations may also be chosen depending on availability of loans for equipment purchases. Both cases (IHS Jane's, 2014; IHS Jane's, 2013) appear to involve a possible loan. Thus it is likely that bilateral ties and availability of loans are important factors rather than standards of potential suppliers.

RESPONSE TO PEER REVIEWER: Agreed. Sources and discussion updated.

In Cambodia, there is no open, well-audited national defence and security strategy, and it is unlikely any security strategy exists. Interviewees indicate there are few or no identified procurement requirements for the military, meaning there is no connection between any strategy and procurement requirements. Indeed, interviewees emphasized that any procurement comes at the behest of the leader of the Cambodian People's Party who is also the Prime Minister. Since 2008 such procurements have been in response to tensions with Thailand along the Thai-Cambodian border.

Cambodian defence purchases are not formalized and certainly not based upon any quantification of requirements. With no such requirements there is often room for corruption in such purchases. Purchases are made based upon the preferred selections of the Prime Minister and his top advisors.

Interviewees have indicated that defence procurements are sometimes conducted as an open competition but most come through single sourcing. Clear justification of why procurement contracts are single sourced is never provided, nor are there any rules which guide the open competition of procurement contracts.

Interviewees also indicate that competition is allowed where the government wishes to obtain the cheapest bid, however, at times Cambodian state officials are profiting from the use of a particular bidder who may also be favoured. In this way, defence procurement contracts have become a major source of corruption.

Despite information from these interviews, no written sources can be found to support the contention that there is occasionally open competition for bids in defence procurement. Indeed, though the Association of Southeast Asian Nations countries usually announce project tenders via the ASEAN &quoute;opportunities&quoute; page, there is no information available for Cambodia. In fact, there appears to be be no publicly announced project tenders for defence procurement. One must thus conclude that in Cambodia, there is little open competition, with most contracts being single-sourced.

There is no evidence that Cambodia conducts competitive tenders, and in addition, there is no evidence of the existence of any regulations or codes of conduct which would govern Cambodian tender boards. With no competitive tenders occurring, no independent audit of boards also occurs to ensure due process and fairness. This information was confirmed by interviewees.

Cambodia has legislation in place to discourage and punish collusion among bidders. Such laws include the Law on Corruption (2010) and the Law on Public Procurement (2012). At the provincial level, bidders must have a pre-qualification. Public procurement in Cambodia is often financed through external donations; manuals guiding the procurement process for foreign funded projects have been made. One is called the Manual on Standard Operating Procedures (SOP), and another one is the Procurement Manual for Externally Financed Projects/Programs. Both can be found on the Ministry of Economy and Finance website (in Khmer). The manuals state that competitive bidding is preferred and mandatory for all projects exceeding US$100,000. Cambodia is not yet a signatory to the WTO Agreement on Government Procurement.

Despite wider legislation relating to public procurement, the defence sector is exempt from the Public Procurement Law. As such, it is difficult to use such laws to discourage and punish collusion among bidders for defence and security sector contracts.

There is no publicly available information about procurement staff, contract managers or any other posting related to defence procurement. Sources indicate that none of Cambodia's procurement staff receive any specified training in procurement procedures; there is also no training which helps to ensure that defence contractors meet their obligations on reporting and delivery of procurement items. Procurement staff learn their jobs through on-the-job training, and staff are in short supply. Finally, sources indicate there often tends to be a lack of professionalism with regard to procurement, which includes attempts by senior, partisan, bureaucratic figures to influence procurement choices.

According to interviewees, the NAA, ACU, the Ombudsman, and the two parliamentary committees on defence are the only avenues where companies can complain about perceived malpractice in procurement, however these entities are all limited. They either do not handle cases specific to the defence sector, have little expertise about the military, or do not wish to raise concerns. Sources indicate many companies may be reluctant to complain because they do not wish to create enemies within the defence sector and harm their own future opportunities.

There are no reported evidence of defence procurement having been done through a company. Media coverage shows most purchases have been made on a govt-to-govt basis, so although it is possible there is no such mechanism in place to address complaints; it is not likely that there has been a need for one yet.

Under the 2010 Anti-Corruption Law, a corrupt official may face stiff fines and up to 15 years in prison if convicted of a corruption offence. In practice according to an interviewee, very few officials have been been jailed for corruption since it was introduced.

There do not appear to be any specific sanctions existing for improper procurement practice. The 2012 Public Procurement Law establishes no sanctions and no complaints procedures for malpractices in public procurement. Critics note the new law appears to gloss over malpractice in procurement planning, implementation monitoring and procurement methods for all acquisitions by state agencies and institutions alike. It is likely that a corrupt supplier would face few, if any, sanctions. Moreover, the Public Procurement Law is not applicable to the Defence sector. The interviewee stated that no defence supplier has ever been implicated or indicted under anti-corruption laws.

Response to Peer Reviewer 2: The question relates to sanctions for companies, not government officials (which has been covered in other questions). Score maintained.

According to interviewees, there is no evidence to suggest that Cambodia has any offset policy related to defence or other government contracts. Nor is there any evidence that the government has actually engaged in offset contracts.

Defence procurement in Cambodia tends to take place through government-to-government negotiations which are not disclosed to the public in detail. However, reports indicate that they overlap sectors and such contracts cover both imports and exports. Accordingly, it may be the case that offset contracts are used in defence but this information is not made public, which is consistent with the lack of transparency in the sector more broadly. The score has been selected on the basis of this risk.

There is no evidence that Cambodia has any offset policy related to defence contracts or other governmental contract. As such, it is very difficult to evaluate this question in the case of Cambodia.

Defence procurement in Cambodia tends to take place through government-to-government negotiations which are not disclosed to the public in detail. However, reports indicate that they overlap sectors and such contracts cover both imports and exports. Accordingly, it may be the case that offset contracts are used in defence but this information is not made public, which is consistent with the lack of transparency in the sector more broadly. The score has been selected on the basis of this risk.

According to interviewees, there is no evidence to suggest that Cambodia has any offset policy related to defence or other government contracts. Nor is there any evidence that the government has actually engaged in offset contracts. As such, it is very difficult to evaluate this question in the case of Cambodia.
News reports about recent major platform acquisitions do not include any mentions of offset obligations. There is no law, decree or sub-decree covering offsets in defence. There is no information about management of offsets in other sectors either.

Defence procurement in Cambodia tends to take place through government-to-government negotiations which are not disclosed to the public in detail. However, reports indicate that they overlap sectors and such contracts cover both imports and exports. Accordingly, it may be the case that offset contracts are used in defence but this information is not made public, which is consistent with the lack of transparency in the sector more broadly. The score has been selected on the basis of this risk.

According to a foreign embassy interview source, the use of agents and intermediaries in military procurement is extremely common in Cambodia. Indeed, there is no restriction nor any control measures stated in the public procurement law about using agents and intermediaries. Nor does the public procurement law even relate to the Cambodian military. An academic interview source stated that it is very common that intermediaries and agents in Cambodia are involved who have close connections to the ruling Cambodian People's Party. Moreover, the second interviewee continued, there tends not to be any intervention from the ACU, NAA or ombudsman if these entities are used. According to this interviewee, it is generally assumed that these entities are simply part of the procurement process which facilitates it along with very little interference in general public procurement and no interference in defence sector public procurement.

According to two interviewees, it is very uncommon that aspects of the financing package surrounding major arms deals (such as payment timelines, interest rates, commercial loans or export credit agreements) are made publicly available prior to the signing of contracts. This is especially the case if the procurement is for defence items that the government would like to keep secret. Such lack of transparency has been an enabling factor in corruption in defence contracts.

As evidenced by most news reports about imports, details about military procurement are only made public at the final delivery stages, if at all.

According to an interview with a foreign embassy source, there is no evidence that the government formally requires that the main contractor ensures subsidiaries and sub-contractors adopt anti-corruption programmes. Since there are no such programmes, there is necessarily no enforcement of them either. In addition, according to an interview with a foreign journalist, the government does not appear to be encouraging any moves toward having subsidiaries and sub-contractors adopt anti-corruption programmes. These factors, according to an interview with a Cambodian senior police official, are all likely to continue to encourage corruption in the defence sector.

Interview sources indicate political influence by selling nations tends to be a major factor in defence acquisition decisions in Cambodia. There appears to be a competition among China, Vietnam and the United States to curry favor with Prime Minister Hun Sen through deliveries of military supplies that satisfy the Cambodian government's defence acquisition needs. For a specific example, in 2012, as its political influence in Cambodia was growing, China and Cambodia agreed that China would establish a military training base in Cambodia while China also provided Cambodia with US$17 million in military aid. The government hash sometimes justified its defence and security expenditure, and has sometimes justified military procurement by referring to military need. For example, in late 2008, Prime Minister Hun Sen sought a big increase in Cambodia's military budget following Thai military movements along the Thai-Cambodian border. In 2013, Cambodia accepted military procurement from China, in the aftermath of indirect threats of Thai military action along the Thai-Cambodian border, but also as China's political influence was continuing to grow.