Cambodia’s Mineral Exploration Licensing Process: Governance Risk Assessment

Cambodia’s Mineral Exploration Licensing Process: Governance Risk Assessment aims to identify and analyse governance risks associated with the process for granting mineral exploration license in Cambodia.

This assessment is conducted by Emerging Markets Consulting (EMC) with support from Transparency International Cambodia (TI-Cambodia). The assessment adapted the Corruption Risk Assessment (MACRA) tool provided by Transparency International to reflect the local circumstances. To minimize the scoring subjectivity between “Likelihood” and “Impact”, we introduced sub-indicators and weightage system for a more balanced assessment.

The literature review served as the baseline. This research is primarily based on semi-structured interviews with 21 representatives from key stakeholders from government ministries, local authorities, civil society organizations, mining industry association, and mining companies. This assessment also went through 3 rounds of consultation and validation with stakeholders from the mining sector in Cambodia. Validation was conducted to ensure that the assessment fits within the local context and reflects the actual situation in Cambodia’s mining sector.

The risk assessment identified that the new MME process for granting mineral exploration license eliminated 14 pre-existing risks from the previous process. However, 14 governance risks remain covering 1 contextual (CF) risk, 8 process-design (PD) risks, 3 process-practice (PP) risks, and 2 response-accountability (RA) risks. These risks relate to the understanding of surface rights, sharing of information, timeline of process, application evaluation process, public consultation, beneficial ownership, and approval from other line ministries.

The risks identified are primarily process related. This reflects the early stage of the MME’s implementation of the reform agenda and provides a great opportunity for stakeholders to contribute to the governance of mineral exploration license process. The formation of EIGF provides an excellent working platform to progress this development, which will require support and commitment from all relevant stakeholders.

To mitigate these risks, this research recommends the development of a more robust regulatory framework with support for more stringent enforcement of the intent of Sub-Decree No.72. The research also recommends the setting- up of standard operating procedure (SOP) or guideline for application evaluation, public consultation, and improved access to public information through formal websites (MME and EIGF).

The risks and recommendations were presented to key stakeholders in the validation workshop on 9th June 2017 and accepted by Ministry of Mines and Energy. Summary of the remaining risks and recommendations are as follow: