Richard Baker and Nick McKenzie
A BHP Billiton mining deal being investigated for alleged corruption
was personally overseen by Cambodian strong man Hun Sen, diplomatic
cables reveal.
The mining giant's aborted attempt to establish a bauxite
mine in Cambodia and its hospitality program for Chinese officials at
the 2008 Beijing Olympics are at the centre of a foreign bribery probe
involving the Australian Federal Police and the US Justice Department.
Diplomatic cables, several marked ''sensitive'' and
''protected'', show for the first time Cambodian Prime Minister Hun
Sen's close involvement in 2006 negotiations with BHP executives.
The cables show Hun Sen told a private audience in Cambodia
that he would give ''BHP 1 million hectares of land'' weeks before the
2006 agreement was signed. He also promised the company ''a possible tax
holiday'' and chaired a committee examining legal issues associated
with the BHP proposal.
The cables reveal how BHP decided to stop all mineral exploration in
Cambodia in 2009 just months after a British-based non-government
organisation exposed its ''tea money'' payments of $US 3.5 million to
Cambodian government departments and raised concerns some of the money
had gone missing.
There is no evidence suggesting any of the money went to Hun
Sen, who has dismissed reports suggesting BHP was involved in bribery in
Cambodia.
The cables, released under FOI by the Department of Foreign
Affairs and Trade, show BHP in 2006 took what Australian officials
regarded as an unusual step of asking them to directly approach Hun Sen
for a meeting to ''go to the next level and close the deal''.
Although Australian officials rejected the request to
approach the Cambodian leader on BHP's behalf in order to ''preserve our
political capital'', embassy staff in Phnom Penh contacted Hun Sen's
office to get a contact name and number to pass to BHP.
In September 2006, Hun Sen and BHP executives signed an
agreement granting the firm and joint venture partner Mitsubishi rights
to explore a huge area of land for bauxite deposits. The deal was
ratified by Hun Sen and then prime minister John Howard weeks later.
The cables make clear that although BHP's exploration process
was progressing slowly during 2007 and 2008, the company's
Cambodia-based executives were optimistic about the project's success.
However, the diplomatic cables show a change in BHP's stance on Cambodia
shortly after the February 2009 release of the Global Witness report.
In April 2009, Australian diplomats sent a ''confidential''
cable to Canberra raising doubts about BHP's long-term commitment to
Cambodia, blaming the global financial crisis and the country's ''own
poor financial management''.
The cable stated that any withdrawal by BHP would ''not only
breach BHPB's MOU with the Cambodian government (signed in the presence
of prime ministers Hun Sen and Howard in Canberra in 2006)'', but would
also ''diminish Australia's influence in this major sector''.
Australian diplomats in Phnom Penh also sent a cable to
Canberra in response to the claims by Global Witness stating that ''the
specific references [to] Australian companies are very concerning''.
However, they remained confident BHP had done nothing wrong.
BHP told the Australian government in June 2009 that it would
pull out of Cambodia because the bauxite deposit was not worth mining
due to global financial conditions.
The firm asked for the information to be kept secret from Hun
Sen's administration, which was not told of the decision until August
2009.
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