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Logo of Phnom Penh Post newspaper Phnom Penh Post - Commerce claims that donations not political

Commerce claims that donations not political

The Ministry of Commerce has defended its solicitation of donations from private organisations as voluntary, legal and a form of corporate social responsibility.

The ministry’s response comes after Post Weekend revealed on Saturday, through leaked documents, that the Garment Manufacturers Association in Cambodia (GMAC) made a cash contribution to the government totalling $5,000 and has been paying membership fees for senior government officials at an exclusive country club.

The donation was made in response to a request from the Ministry of Commerce to oknhas – or wealthy businessmen – to support troops in Preah Vihear. GMAC, too, has defended the payment and says that it regularly receives requests from all ministries to donate to a range of causes.

In an open letter posted on the MoC Facebook page yesterday, Ken Ratha, spokesman for the Ministry of Commerce, said that GMAC’s payment to the government was part of a corporate social responsibility fund, and went exclusively towards assisting troops serving along the Thai border in Preah Vihear.

“It is really a voluntary donation from partner organizations, and not even remotely related to illegal donations or corruption,” the letter reads.

“We would also like to clarify that this type of donation is not detrimental to the public concern. No exchange of money takes place between the private sector and our Ministry other than in a legal manner and we have in cases of informal fee abuse put into place aggressive and bold reform measures at the Ministry.”

Ratha said via email yesterday that GMAC’s $5,000 donation was coupled with donations from MoC staff, other factories and companies, though the spokesman could not provide a full list of the firms who contributed to supporting the troops in Preah Vihear.

The spokesman declined to respond to the revelations that GMAC was paying for senior government officials’ country club memberships.

Pech Pisey, director of programs for Transparency International in Cambodia, said the donations make clear the close financial ties between Cambodia’s public and private sectors.

“It is a very common practice that any individual citizen or business can and have the right to donate to anyone, without problems,” Pisey said. “The MoC is right to claim it is not wrong in the ‘Cambodian context’ – that is, a country with no law to punish anyone who donates to the government, that allows this kind of patronage system, and has clear close networks between government officials and private organisations.”

But continuing to allow such a direct donation system poses serious corruption concerns, Pisey added.

“There is no evidence in the case of GMAC, but such a system can certainly create an environment where the business community can use these donations to influence public officials,” he said.

“The patronage system has to have its day. You cannot have a country claiming to be part of the global community while having this network jeopardising government decision-making.”

The opposition Cambodia National Rescue Party’s chief whip, Son Chhay, said yesterday that the longstanding practice of soliciting donations created an unfair playing field for businesses.

“Of course these sorts of donations are open to corruption. This is happening with a lot of business – big and small – they do not have to pay tax so they pay in donations and as a result, there is no real free market or fair competition in Cambodia,” he said.

Chhay said that if the government wanted to improve on the country’s poor reputation for corruption, it should be focusing its efforts on collecting tax revenues rather than soliciting contributions from businesses.

“It is better for the government to stop this and apply a higher practice. If they want to clean up corruption truly, they need to have other ways to generate revenue that are more sustainable and more effective than just letting companies give donations,” Chhay said.

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