The case study compares the experience and impact of two contrasting examples of independent monitoring in the forest sector of Cambodia. Cambodia is one of the poorest countries in South-East Asia, having long suffered from a history of conflict. With both a weak state and civil society, the country's multi-party democracy relies upon networks of personal allegiance in the post-conflict era.
Forestry has been an important sector in the recent development of Cambodia. Between 1991 and 1998 Cambodia exported an estimated US$2.5 billion worth of timber. However, all of this trade is regional, where there is at present no demand for legally-verified timber.
In the 1980s and 1990s timber exploitation was marked by widespread mismanagement and corruption, leading to disorder and violence. The donor response was to recommend, and subsequently fund, a Forest Crimes Monitoring and Reporting Project (FCMRP). This included the appointment of an independent observer (IM) to monitor the performance of the two ministries involved: the Ministry of Agriculture, Forestry and Fisheries (MAFF) for production forest and the Ministry of the Environment for protected areas. The IM became a conditionality requirement of a World Bank US$30 million Structural Adjustment Credit programme, in a country heavily dependent on foreign aid.
In 1999 the IM contract was awarded to Global Witness, a UK-based environmental NGO, which had been actively campaigning against forest law abuses in Cambodia. The terms of reference for the IM were set very generally. The relationship between the IM and government deteriorated as controversial cases came to light and little was done about them. The contract was withdrawn by government in 2003. A contract was then awarded to a private sector company, SGS. SGS adopted a more restrictive interpretation of the IM brief, limiting itself to the auditing of the government case tracking system rather than acting as an investigator of forest crimes. In February 2006 SGS' operations were suspended due to lack of funding. This time the donor community did not insist upon its immediate renewal and the IM function has been in abeyance since that time.
Neither period of IM operation can be considered a success. Global Witness failed to come to an understanding with government over the very broad way in which it interpreted its brief, giving the impression to some stakeholders that it felt free to act as it pleased. On the other hand, SGS failed to address the deep-seated problems of governance in the forest sector by adopting a narrow auditing approach.
General lessons to be learnt from this case study include the importance of system design, with precision over the roles and responsibilities of the independent observer, a management mechanism that integrates the IM with the remainder of the control system and clarity over the legality standards to be verified. More fundamentally, issues associated with the design of verification systems in contexts of low political will, and under-developed local civil society, remain unresolved.