n agreement to set up a joint venture oil storage and distribution company
between the French oil company TOTAL and the state-owned Companie Kampuchea des
Carburants (CKC) may be on track again after the intervention of First Prime
Minister HRH Prince Norodom Ranariddh.
Doubts about the future of the
agreement arose when the Ministry of Commerce issued an unsigned declaration on
Feb. 11 stating that "the agreement signed by HE Mr. Sam Rainsy and TOTAL
company on 19 January 1994 is not legal and is considered cancelled."
The ministry's declaration went on to say that "TOTAL was banned from
contacting CKC and that CKC officials had been informed not to work with
The issue entered the public domain when a copy of the Protocol
Agreement between TOTAL and the Ministry of Economics and Finance was leaked to
the press and reprinted in full in the Khmer Independent on Jan. 29.
Sources contacted by the Post who requested anonymity speculated that
individuals within the CKC and the Ministry of Commerce, as well as others
involved in lucrative oil distribution contracts, may have been trying to
sabotage the agreement over fears that the new joint venture company would
disrupt a flow of financial benefits outside of official government
Concern was also raised about a potential personnel shake-up at
the CKC which might result in the loss of jobs.
When contacted by the
Post on Feb. 21, the CKC refused comment and said the Ministry of Commerce was
the appropriate agency to deal with. Commerce officials were unavailable at
The Ministry of Commerce has been the oversight agency for
the CKC, although Ranariddh in a Feb. 16 letter to Second Prime Minister Hun Sen
suggested that responsibility be shifted to the Ministry of Industry, Mines and
Energy, and that the agreement be resubmitted for ratification.
came to the attention of His Majesty King Norodom Sihanouk who in a Feb. 11
letter to TOTAL's Managing Director Andre Camp said "I am of the opinion that HE
Mr. Sam Rainsy is very competent and serious and I have confidence in him in
His Majesty the King added that "TOTAL was known and
respected throughout the entire world for its seriousness."
agreement moves forward, the new joint venture company will be responsible for
the rehabilitation of petroleum products storage facilities in Phnom Penh and
for their systematic control and distribution.
Once an audit has been
completed of CKC's existing fixed assets a shareholder agreement will be
produced defining the percentage of shares owned by each partner.
for its part, would provide the cash to upgrade the storage facilities to
international standards, contribute firefighting equipment to insure safety
standards, oversee the quality of imported petroleum products, and insure
payment of import duties and relevant taxes to the Royal Government.
TOTAL is also committed to overseeing technical training for Khmer staff
and to give its full support to the transfer of technology where appropriate.
Minister of Economics and Finance Sam Rainsy, commenting on the TOTAL
agreement and the need to regularize the flow of revenues from state enterprises
through proper, accountable channels said: "Only a company like TOTAL can put
things right in this sector."