Cambodia's international private sector representatives at the June 19-21 Consultative

Group donors meeting in Phnom Penh will emphasize legal and judicial reform, said

the chairman of the International Business Club Bretton Sciaroni.

Sciaroni, who will represent the Club at the annual donors' meeting, said this month's

gathering was only the second time the private sector would have a seat at the table.

"Legal and judicial reform are the key problems, because without a strong legal

system Cambodia won't get the levels of foreign investment required," Sciaroni

said.

Legal and judicial reform is again shaping up as a key issue for this year's donor

conference along with poverty alleviation and forestry management. The private sector

will reiterate its call for new laws not to be made valid until they have been published

in the government gazette.

Currently only some laws and prakas are gazetted, and no single compendium of Cambodian

law exists. Business people often find they run foul of laws they didn't know existed.

"It was already mentioned in [Senior Minister] Sok An's statement at last year's

CG," he said. "We have the foundation. We just need donor support to get

to the next level."

While judicial reform is a difficult and long-term process Sciaroni said the private

sector would focus on the gazette issue as an easy to achieve reform that would "take

the guesswork out of what's going on in the government".

The "costly, slow and unpredictable" legal environment was a key deterrent

to foreign direct investment (FDI) in Cambodia. Breach of trust laws, for instance,

allowed civil disputes to become criminal matters far too easily, frightening off

potential investors. That was the message given by secretary of state at the Ministry

of Commerce, Sok Siphana, at mid-May's investment and trade conference.

Sciaroni said Cambodia was becoming more dependent on overseas development assistance

(ODA), with blue chip companies such as Standard Chartered Bank and Nestlé

either exiting Cambodia or scaling back their investments.

"ODA is going up and FDI is going down and that's the wrong direction,"

he said.

Last year's conference netted the government $615 million in pledges, well above

the $500 million requested. For this meeting Cambodia has reduced its request to

$1.4 billion over three years as donors take on extra commitments in Afghanistan

and East Timor.

Australia has already pledged to maintain current funding levels at around $22 million

for 2002-2003, but other donors are widely tipped to scale back commitments. Cambodia's

largest donor, Japan, has cut its aid budget by 10 percent globally, a reduction

that might affect Cambodia. The US is expected to cut funding for the country's human

rights sector.