CDC - STATEMENT OF THE CHAIR OF THE DONORS’ GOVERNANCE WORKING

STATEMENT OF THE CHAIR OF THE DONORS’ GOVERNANCE WORKING GROUP. Phnom Penh CG Meeting on Cambodia June 19-21, 2002

Royal Highness Excellencies, Ladies and Gentlemen, On behalf of the Donors’ Working Group on Governance, I have been requested to make the following contribution to the current CG proceedings. In our deliberations yesterday, there was a clear consensus that the pace of legal and judicial reform, a key aspect of governance, and the advancement of the governance agenda overall have been disappointing. It was suggested that there is an urgent need to establish clear priorities with a timetable for the realization of the actions defined. It was also underlined that legal and judicial reform is of the highest importance: it can promote foreign direct investment and stimulate growth, all of which can contribute to poverty reduction. Special mention was made of the need to protect women and children whose rights are abused by gender-based violence and trafficking. The overall consensus was therefore that good governance, of which legal and judicial reform is an integral part, is fundamental to poverty reduction and should include: (i) focusing resources on poverty reduction efforts and creating accountability in the use of public funds; (ii) building national capacities for pro-poor policy formulation and implementation; (iii) improving administration and private sector participation for better service delivery to the poor; (iv) shifting decision making nearer to the poor and helping the poor to organize themselves; (v) preventing corruption as it affects the poor the most; (vi) strengthening the rule of law with clearly pro-poor enforcement procedures; and (vii) involving, in a participatory way, a diversified range of stakeholders including NGOs representing the poor. It was recognized that since we last met in Tokyo a year ago, a number of key initiatives have been undertaken by the Royal Government of Cambodia in the Governance area as presented earlier by H.E. Sok An and H.E. Dith Monthy: the National Audit Authority has now become a reality and started an audit of the Ministry of Economy and Finance, the lawyers’ training school and the Royal School of Judicial Training (Ecole Royale de la Magistrate) have been established and the draft Legal and Judicial Strategy has been reviewed and is more elaborate and comprehensive. Finally, the establishment of the Legal and Judicial Reform Council broadly along the lines discussed with external partners and civil society is also an important development. It is critical that this body establish clear mechanisms for consultations with external partners and civil society as needed to ensure that they make a valuable contribution to its important work. The overall thrust should be to move from policy formulation to its actual implementation and the achievement of concrete results. Let me know turn to specific priority cases where we would like to obtain clarifications from the Government on when and how it plans to act: Internal consultations on the draft legal and judicial reform strategy. Consultations with external partners and civil society on this draft strategy. Discussion and adoption by the Cabinet of the draft strategy reflecting the results of consultations. Consultations on and adoption by the Cabinet of the draft law on the statute of the magistrates. Restructuring of the Supreme Council of Magistracy. Updating of the action plan. Adoption of a separate budget for the judiciary. Two more areas deserve to be addressed here: procurement management and anti-corruption legislation. Procurement is at the heart of social development and poverty reduction simply because it commands the effectiveness and efficiency with which public resources are being used to address the needs of the most vulnerable and poor in our society. More generally, poor management of public assets, goods and services, whether this concerns their acquisition, their sale or their lease in the form of concessions or otherwise, contributes to aggravate poverty because it makes the state loose resources: it makes the state pay more than it should and therefore reduces resources that can be applied to attack poverty. Likewise, assets that are not properly sold or concessions that are not well structured deprive the state of much needed revenues. In either case, the poor are the losers, not the rich who in fact gain in the process through illegal payment mechanisms. We understand the constraints that the Government has repeatedly explained to us concerning procurement matters, which explain the decision to start application of the procurement sub-decree to all key economic and social ministries starting on January 1^st, 2003. We have also been made to understand that the complexities and constraints of the situation explain the decision by the Prime Minister to have the anti-corruption law adopted by June 30, 2003, although an earlier date would have been preferable. I would conclude by mentioning that since the dissemination conference on the Governance Action Plan last December, we have not been informed on any new development in this area and would be interested to know what are going to be the next steps. Thank You.