THE Cambodian Mine Action Center has until the end of August to investigate and initiate

prosecution against those accused of defrauding the organization - or face losing

foreign donor funding.

Action on fraud at CMAC is one of 32 demands presented to the organization by foreign

donors who say future donations are dependent on compliance.

The move comes as CMAC faces a looming partial-shutdown of operations due to an ongoing

freeze on donor funds.

The list of demands outlined in a "Draft Donor Framework Towards Normalization

of Relations with CMAC" were presented to CMAC management on August 3.

The demands span matters including "Audit Compliance", "Personnel

Issues", "Financial Management", "Planning and Operational Systems"

and "Organizational Structure Issues" and signal a dramatic departure from

foreign donors' long-standing laissez-faire policy toward CMAC's troubles which have

included mismanagement of funds, misappropriation of demined land, nepotism and outright

fraud.

The 32 demands specify required reforms that must be implemented by CMAC management

within an immediate, short-term (by the end of August) and medium-term (within four

to six months) time frame; failure to comply will result in the termination of funding.

"Consideration of an initial payment sufficient to cover the months of November

and December 1999 would be triggered by the completion of all immediate and the majority

of short-term tasks.

"All short-term tasks and the majority of medium-terms tasks should be completed

before any funds would be considered for 2000," the report says.

The donors stipulate that resumption of "normal funding status" will not

be considered by donors until all "medium-term" demands have been fulfilled.

The removal from their positions on August 10 of then-CMAC Director General Sam Sotha,

CMAC Assistant Director Niem Chouleng and CMAC Director of Finance Eck Boulin were

apparently in direct response to the "Personnel Issues" section of donor

demands detailing that the three be "appropriately sanctioned by CMAC".

Other demands classified by donors as "immediate"

include:

1. An immediate release of requested information by the international accounting

   firm KPMG which is currently conducting a comprehensive audit of donor funding to

   CMAC audit

2. The formation of a "Special Commission" within CMAC to investigate

   allegations of fraud and misappropriation of funds raised by recent audits by the

   Ministry of Finance and KPMG of Royal Government funding to CMAC; the "Special

   Commission" must then refer cases "identified as having criminal elements...to

   appropriate authorities for prosecution" by the end of August

3. An immediate release to donors of "key findings" of a CMAC investigation

   into misappropriation of demined land and "contract demining" by Demining

   Unit 3 (DU3) in Kampot.

CMAC is currently unable to surrender those "key findings" regarding

the issue of alleged wrongdoing by Demining Unit 3 in Kampot - in particular evidence

that CMAC "contract-demined" for former Khmer Rouge commander Chouk Rin

- due to disagreements within the demining organization of the validity of a CMAC

internal investigation of the allegations.

The results of that internal investigation of the allegations against DU3 have been

rumored to have been dismissed by CMAC Quality Assurance Technical Advisor Stefan

Carlsson - who raised the initial alarm about Demining Unit 3 - as a cover-up.

A letter enclosed with the donor demands, signed by 15 ambassadors representing CMAC's

main donors as well as UNDP Acting Resident Representative Jean Claude Rogivue, indicates

that dissatisfaction with the internal investigation of DU3 is widespread.

"The [CMAC investigation] report ... offered by an internal CMAC verification

mission ... has failed to fully reassure the donor community about issues such as

priorities of clearance work, the use of demined land and the overall accountability

of CMAC field activity," the letter reads.

"We note for example that the [CMAC investigation] report confirms that work

was carried out outside of the Integrated Work Plan and that none of the sites were

handed over to concerned authorities."

Carlsson is currently assisting in the establishment of a demining agency in Kosovo.

However, one donor told the Post that the CMAC internal investigation of DU3's activities

lacked credibility because it had been conducted by three CMAC employees who had

been disciplined for corruption in the past.

Ieng Mouly, Chairman of CMAC's Governing Council, conceded that the results of CMAC's

internal investigation have been controversial.

"Our investigation shows there's no problem [in Demining Unit 3] but Quality

Assurance says there is still a problem," Mouly said. "We must consult

donors to get a neutral, third party to investigate because we can't get agreement

[within CMAC]."

In spite of the Demining Unit 3 dispute, Mouly insisted that CMAC's ability to meet

donors' demands "should be no problem".

"We've already formed the "Special Committee", and we'll forward the

results of our investigations to the Ministry of Finance.

Mouly declined to comment on the likelihood that present or former CMAC management

are in imminent danger of facing criminal charges for misappropriation of CMAC funds.