Cambodia FLEG Assessment Mission: Preliminary Assessment and Recommendations

1. Cambodia FLEG Assessment Mission: Preliminary Assessment and Recommendations Presentation for meeting organized by the TWG-F&E Phnom Penh, March 23, 2006

2. Mission Objective The objective of this mission is to undertake an assessment of the RGC’s efforts to control illegal logging, land encroachment and other forest crimes.

3. Focus Areas of FLEG Assessment Mission • Timber Theft Prevention and Forest Security: Assess the adequacy of efforts by national forest management authorities (Forestry Administration and Department of Parks and Protected Areas) and territorial managers (e.g. park officials), in providing security and protection to forest resources under their responsibility. • Independent Monitoring: Assess arrangements for Independent Monitoring of forest crime reporting, review the Case Tracking System, assess the Government’s utilization of crime reports and related data to analyze, prioritize and respond to crimes and risks of crimes, and the use of CTS data to manage enforcement efforts and strengthen law enforcement policy. • Case Management and Judicial Follow-Up: Review the procedures and practices for following up reports of forest crimes. Consider investigative techniques, handling and management of evidence, documentation, case filing, charging and results of prosecutions. The mission should consider the scope for using money laundering, corruption, organized crime and asset forfeiture laws to investigate and prosecute timber cases.

4. Crime Monitoring and Reporting System Cambodia set up a unique and innovative FCMR in late 1999. • The CTS is an important component of the system to allow for systematic crime analysis and strategic decision making. • An IFM was also considered an integral part of FCMR as a means of strengthening the integrity and objectivity of the system.

5. Achievements to Date • CTS has input 5,350 cases since 1999, classified by types of offences • Impounded almost 35,000 m3 of sawn timber • Dismantled and burnt 1,470 illegal sawmills and 692 illegal wood-based handicraft factories • Arrested 441 offenders

6. Yet Much More Needs to be done Between 2004 and 2005, incidents of reported forest crimes have gone up from 771 cases to 1153 cases. Need to look into the underlying causes for this increase

7. Changing Context Mission has tried to take a holistic view to the control of forest crimes, by : • Using a forest asset security framework to identify strengths and weaknesses in the current approach. • Considering the efficiency and effectiveness of inter-agency relationships especially the judicial and law enforcement agencies to investigate and prosecute forest crimes. • Assessing the potential of relatively new approaches such as AML laws and the monitoring of suspicious financial transactions to prosecute the ring-leaders involved in forest crimes.

8. Broader relevance of this assessment Using the expanded framework for analysis, the mission feels that its assessment will usefully inform policymakers, donors and other stakeholders in addressing asset security concerns not just in the forest sector but also to similar problems in the broader NRM sector including fisheries and biodiversity.

10. Forest Law Enforcement Review Timber Theft Prevention & Forest Security

11. Preliminary Findings • Case Tracking System • System is sound but is not being used to the best advantage • Not all detected crimes are entered • Information not centrally stored and accessible by all agencies • No strategic analysis of information • Not used as an intelligence or planning tool • Forms not completed correctly in some cases

12. Preliminary Findings • Timber theft prevention • `Crook Catcher Culture`- emphasis on apprehending offenders • No analysis of crime trends to develop prevention strategies • Lack of knowledge of:- • Community policing principles • Crime prevention through environmental design • Crime prevention strategies & techniques • Investigation & tactical policing techniques • No structured crime prevention strategy

13. Preliminary Findings • Suppression methods • Uncoordinated • Ineffective • Allegedly corrupt • Unguided or poorly planned (Adhoc) • `Stove piped’ – poorly integrated between agencies • Limited evidence collection to identify offenders

14. Preliminary Findings • Risk Profile (Security perspective) • High frequency of events • High likelihood of occurrence • Areas of impact – economy, livelihoods, social development (and others) • Consequences - potentially major • High vulnerability • High value • Minimum countermeasures • Multiple & diverse threat sources

15. Preliminary Findings • Risk Profile (offenders perspective) • Low risk • High reward • Minimum effort • Low cost • Too many excuses available to evade prosecution

16. Integrated Security Program

17. The Way Forward • Timber Theft • Conduct a risk assessment of each critical area in the country • Prioritize each location for action • Develop an integrated security management plan unique to each location • Incorporate community policing concepts • Develop & prioritize action plans • Monitor implementation and results

18. The Way Forward • Land Encroachment • Prioritize at risk areas • Complete demarcation as high priority • Settle land ownership as high priority • Develop community based programs • Screen local officials • Develop security program from risk assessment • Monitor implementation & results

19. Strategic Objectives

20. Objectives • Increase the perceived risk • Increase the perceived effort • Decrease the perceived reward • Decrease excuses

21. Areas of Impact

22. Case Tracking System Case Tracking System (CTS) Findings: • Reporting protocols appear to be well understood and followed Suggestions: • Appropriate funding necessary (of course) to continue the work of the FCMRO in FA (and equivalent office in DNCP/MoE) • Greater emphasis on strategic data analysis • Need to ensure timely input of reports into CTS • Training of field-level officers (judicial police, judges and prosecutors), including good knowledge about the new forest law.

23. Independent Monitor Renamed “Forest Practices and Crime Monitor” Mission is of the view that an independent monitor is necessary to strengthen the overall credibility of the FCMR system, as well as to make improvement in the CTS. Mission suggests a name change to, “Forest Practices and Crime Monitor” (FPCM). In order to maximize its effectiveness, the role and responsibilities of the FPCM need to be carefully redefined. In today’s changed context, inter alia, some aspects that the monitor may be tasked to undertake include: • Inspection of land-titling and land encroachment issues and their potential impacts on illegal logging and forest crimes • Establish working relationships with operational and policy level officials among the police, gendarmerie and prosecutors • Provide strategic and operational advice based on its analysis of information obtained from CTS, media reports, NGO intelligence and other information sources related to illegal forest practices and crimes

25. Preliminary Recommendations Regarding Money Laundering and Related Issues

26. What is Money Laundering? • Money Laundering- Process by which the proceeds of crime are disguised in an effort to conceal their illicit origins and legitimize their future use. • Money is laundered through placement, layering and integration.

27. Examples of Placement Related to Forestry Crimes • Cash or checks from illegal logging or corruption are deposited into local bank accounts; • Cash or checks from illegal logging or corruption are used to buy life insurance.

28. Examples of Layering Related to Forestry Crimes • Transfer of payments for illegal logs or bribes to several accounts abroad; • Proceeds from marked up or ‘illegal’ transfer pricing related to legal forestry businesses are transferred to several accounts abroad; • Cash from illegal logging or corruption are used to buy trucks, which are later sold to receive ‘legal’ cash; • Cash from illegal logging or corruption are invested in share portfolios or converted to foreign money; • Selling illegal logs using legal timber transportation documents.

29. Examples of Integration Related to Forestry Crimes • A legal forestry company processes illegal logs to produce wood-based products such as pulp and plywood; • Cash from illegal logging or corruption are invested in resort businesses; • Cash from illegal logging or corruption that is already placed in financial institutions is invested in a transportation business or oil palm plantation.

30. Recommendations 1-3 • Cambodia should enact FATF compliant money laundering legislation, issue the Prakas drafted by the NBC, use existing powers under the Banking (Art. 51) and the Drug Control (Art. 23-28) Krams. • Enact and implement FATF 40 compliant asset forfeiture legislation. • Create an Forest Crime Asset Forfeiture Fund and dedicate a portion of the seized assets for financial resources to fight forest crime.

31. Recommendation 4 & 5 4. Initiate properly predicated criminal investigations and prosecutions targeting significant timber crimes involving corruption involving government officials and companies. 5. Seizure and confiscation of assets/ instrumentalities of crime should be used to the fullest extent possible.

32. Recommendations 6-7 6. Using the draft Money Laundering Law (Art. 26 - Internal Coordination) create an interagency committee which includes the Department of Forestry, the Ministries of Environment and Internal Affairs and the Gendarmerie. 7. Participate in the World Bank Ad-Hoc Experts Group working on identifying red flags involving timber related financial transactions.

33. Recommendation 8 8. Sign, ratify and domesticate into national legislation the Convention on Transnational Organized Crime.

34. Recommendation 9: Enact Legislation to Create Special Procedures for Forfeiture Involving Timber Crime • Presently it is difficult to get timely orders from the court for the forfeiture of illegal timber, transport vehicles and other instrumentalities. • A new law should create presumptions regarding cars and timber seized by police. A “fast track” procedure should be established for handling these cases. • The proceeds from the sale of cars and other forfeited property should go into the Timber Crime Forfeiture fund.

35. Recommendation 10: Establish A Forest Crime Task Force (FCTF) • Establish a small operational interagency “Forest Crime Task Force” to include FA, MOE, police, gendarmerie, prosecutors, NBC “FIU”. • To be successful the Prime Minister should provide political and budget support for the Task Force. • Members should be “vetted” and provided additional salary. • FCTF should be tasked to handle a small number of significant forest crime cases focused on “Ringleaders.”

36. Task Force (cont’d) • FCTF needs independent operational and prosecutorial authority including the authority to use all legal investigative techniques, have access to intelligence, law enforcement information and government databases. • FCTF must have agreed objectives and benchmarks for success.

37. Recommendation 11: Create A Forest Crime Fusion Group • In order for the Forest Crime Task Force to be successful it must be proactive. It will need actionable intelligence so that it can prioritize its targets. • Forest crime intelligence information is collected on a random basis using a stovepipe approach. There does not appear to be a mechanism for sharing information among and between agencies. • Create a Forest Crime Fusion Group (FGFC.)

38. Fusion Group (cont’d) • The FG could be created under the umbrella of the Prime Minister or Council of Ministers. • Access to the information created by the FG should be available only to investigators working on forest crime and corruption prosecutions. Leaking or tipping off should be made a criminal offense. • CTS, investigative, intelligence, NGO and other information should be analysed for the purpose of creating an overall national law enforcement strategy and to develop tactical intelligence for operational use.

39. Examples of Fusion Group Data Collection & Analysis • Collect, analyze and disseminate information on a routine basis to the government FCTF and other agencies based on information from the CTS, informant information, NGO’s, media and other government agencies related, for example to transportation, harvesting and road permits; coups and social and environmental impact statements.

40. Capacity Building For Police, Prosecutors and Judges • Financial investigative skills. • Asset identification. • Asset forfeiture. • Developing strategies for international cooperation. • Develop a list of best practices in the investigation and prosecution of forest crime cases. • Discuss necessity of creating a fast track process for handling forest crime cases. • Authority for government to conduct interlocutory sales to sell perishable and decaying property prior to conviction. • Authority to declare illegally cut logs as contraband, which are per forfeitable.

41. Capacity Building • Conduct familiarization sessions for lawmakers, police, prosecutors, judges, public. • Develop manual of investigation for forest crimes. • Produce a shirt pocket reference guide of forest and related laws.

42. Thank You. Ted Greenberg tgreenberg@worldbank.org ++1-202-458-5108 Nalin Kishor nkishor@worldbank.org ++1-202-473-8672 Mike Dyson mdyson@dysoncorp.com.au ++61-3-62314407