This report examines the practices of Environmental, Social, and Governance (ESG) principles and other related compliance within Cambodia’s gold industry. The findings, discussions, conclusions, and recommendations presented in this report are based on extensive research, including in-depth interviews conducted with investment personnel, provincial department representatives, and international NGOs, as well as semi-structured interviews with gold mining employees. Field observations were also carried out during data collection in Preah Vihear, Mondulkiri, and Ratanakiri provinces in September 2022. The report provides an overview of the state of labor rights during a specific period. It primarily focuses on issues such as working conditions, labor laws, health and safety regulations, environmental management, and any community-related concerns that may arise from gold mining operations. Methodologically, a qualitative approach was employed to gather data and information, enabling the formulation and analysis of findings from six gold mining companies across the three provinces. The study was conducted in a participatory manner, ensuring the active involvement and participation of key stakeholders throughout the various stages of the study.
Cambodia has established legal requirements pertaining to various aspects of ESG practices. These requirements encompass areas such as labor rights, health and safety, environmental protection, impact assessment, human rights, child rights, gender equality, and private corporate governance. While ESG may not be explicitly referred to, its concepts and practices have been widely adopted and implemented. Various policies and sub-decrees, such as the Law on Environmental Protection and Natural Resource Management, the Law on Mineral Resource Management and Exploitation, and the Law on Forestry, among others, have been effectively put into practice. The Ministry of Mines and Energy (MME) has reported many signs of progress and growth in mineral management and revenue collection while risks and impacts are mitigated and compensated.
ASEAN acknowledges the positive mineral potential and market indicators within the region. However, recent efforts to attract investment, particularly in exploration and industrial mining, have been deemed unsatisfactory (ASEAN Secretariat, 2022). Investors in the mineral sector have been favoring other regions over ASEAN. To fully tap into the potential of the minerals industry and enhance its contribution to the economic growth of ASEAN member countries, this trend needs to be reversed.
In Cambodia, the mineral industry holds significant appeal due to the presence of reported substantial mineral deposits, including gold, copper, aluminum, uranium, and various construction resources. Currently, there are 478 construction mineral licenses, 21 industrial licenses, and 34 exploration licenses in Cambodia by the first semester of 2022 (Dipola, 2022). The mineral production by 2021 is 19,000 tons of coal, 10.5 million tons of limestone, and 8.8 million tons of cement (ibid.). For gold alone, the total production reached 4,825kg by November 2022 (Fresh News, 2022).
The objective of this study is to contribute to a better understanding of the existing ESG-related policies, regulations, and practices among gold mining investments in Cambodia. It further aims to provide practical recommendations for “appropriate follow-up action” to address any challenges of ESG performance in the mining sector, including concerns on human rights, gender, health and safety, and indigenous people, and to find out the financial institutions (FIs) that finance the investment on the extractive industry (EI) in Cambodia.
Disclaimer: The content of this publication is the sole responsibility of Fair Finance Cambodia and can in no way be taken to reflect the views of the Fair Finance Asia/Fair Finance International network. The opinion and views expressed in this work do not represent the position and value of FFC. They are expressed in support of the consultant’s opinions and recommendations.
About Fair Finance Cambodia
The Fair Finance Cambodia (FFC) coalition aims to reduce the negative impacts of cross-border investments on human rights, the environment and climate change, particularly those made by multinational financial institutions, banks and insurers while increasing inclusive economic development. FFC is operational in Cambodia – wherein the Fair Finance Cambodia Civil Society Organization (CSO) coalition leads research and engagement with key stakeholders, including financial regulatory and policymaking institutions, banking and investment associations, multilateral development banks and academia. FFC is a member of Fair Finance Asia, a regional network of CSOs committed to ensuring that financial institutions’ funding decisions in the region respect local communities’ social and environmental well-being.