Corruption remains a significant issue in Cambodia for investors. An increase in foreign investment from investors willing to engage in corrupt practices, combined with sometimes opaque official and unofficial investment processes, has served to facilitate an overall rise in corruption, which is reported to already be at high levels. In its Global Competitiveness Report 2018, the World Economic Forum ranked Cambodia 134th out of 140 countries for incidence of corruption. Transparency International’s 2018 Corruption Perception index ranked Cambodia 161 of 180 countries globally, the lowest ranking of all ten ASEAN member states.
Those engaged in business have identified corruption, particularly within the judiciary, customs services, and tax authorities, as one of the greatest deterrents to investment in Cambodia. Foreign investors from countries that overlook or encourage bribery have significant advantages over foreign investors from countries that criminalize such activity.
Cambodia adopted an Anti-Corruption Law in 2010 to combat corruption by criminalizing bribery, abuse of office, extortion, facilitation payments, and accepting bribes in the form of donations or promises. Under the law, all civil servants must also declare their financial assets to the government every two years. Cambodia’s Anti-Corruption Unit (ACU), established the same year, has investigative powers and a mandate to provide education and training to government institutions and the public on anti-corruption compliance. Since its formation, the ACU has launched a few high-profile prosecutions against public officials, including members of the police and judiciary. The ACU has also tackled the issue of ghost workers in the government, in which non-existent employees collect salaries.
The ACU, in collaboration with the private sector, has also established guidelines encouraging companies to create internal codes of conduct prohibiting bribery and corrupt practices. Companies can sign a Memorandum of Understanding (MOU) with the ACU pledging to operate corruption-free and to cooperate on anti-corruption efforts. Since the program started in 2015, more than 80 private companies have signed a MOU with the ACU. In 2018, the ACU completed a first draft of a code of conduct for public officials, which has not yet been finalized.
Despite the passage of the Anti-Corruption Law and the creation of the ACU, enforcement remains weak. Local and foreign businesses report that they must often make informal payments to expedite business transactions. Since 2013, Cambodia has published the official fees for public services, but the practice of paying additional fees remains common. Despite a pay raise in 2016, the minimum salary for administrative civil servants remain below the level required to maintain a suitable quality of life in Cambodia, so public employees remain susceptible to bribes. Furthermore, the process for awarding government contracts is not transparent and is susceptible to corruption.
UN Anticorruption Convention, OECD Convention on Combatting Bribery
Cambodia ratified the UN Convention against Corruption in 2007 and endorsed the Action Plan of the Asian Development Bank / OECD Anti-Corruption Initiative for Asia and the Pacific in 2003. Cambodia is not a party to the OECD Convention on Combating Bribery.
Resources to Report Corruption
President, Anti-Corruption Unit
No. 54, Preah Norodom Blvd, Sangkat Phsar Thmey 3, Khan Daun Penh, Phnom Penh
Executive Director, Transparency International Cambodia
#13 Street 554, Phnom Penh