Financial Crime World

Here is the article in Markdown format:

Cambodia’s Banking Sector Falls Short on Environmental and Social Protections

Phnom Penh - A recent study conducted by the NGO Forum on Cambodia has revealed that Cambodia’s banking and financial institutions are failing to adequately consider the environmental and social impacts of their lending practices.

Lack of Consideration for Environmental and Social Issues

The study found that despite recognition of concerns about environmental-social issues and long-term sustainable development, banks have not been diligent in assessing the potential risks and consequences of their projects. This lack of consideration has led to significant social and environmental risks, including depletion of resources, disruption of livelihoods, and pollution.

Inadequate Implementation of Environmental and Social Impact Assessments

The study highlighted that international and regional banks require Environmental and Social Impact Assessments (ESIAs) as conditions for loan approval. However, Cambodian banking and financial institutions have not implemented this practice. The absence of a legal basis or provision institutionalizing environmental and social protection from Cambodia’s financial and banking operations has exacerbated the issue.

Recommendations

To address this shortcoming, the study recommended:

  • The Ministry of Environment (MoE) and the National Bank of Cambodia (NBC) initiate discussions to promote the implementation of environmental and social requirements for funding development projects.
  • The MoE develop additional guidelines on required procedures and operational standards for ESIAs that Cambodian banks can implement.
  • The NBC introduce a guiding policy requiring financial and banking institutions to apply or consider ESIA policies and regulations before loan or credit approvals.
  • Lenders establish an Environmental and Social Management System (ESMS) to ensure the reduction of ecological or social damages and adequate compensation when such damage occurs.

Call for Action

The NGO Forum on Cambodia is calling for increased awareness and recognition of the importance of environmental and social protections in Cambodia’s banking sector. The organization urges policy-makers and stakeholders to work together to address this critical issue and promote sustainable development in the country.

Contact Information

For more information, please contact:

  • THE NGO FORUM ON CAMBODIA
    • House # 9-11,
    • Street 476,
    • Toul Tompong 1,
    • Phnom Penh,
    • Cambodia
    • Telephone: +855 (0) 23 214 429/ (0) 23 994 063
    • Website: www.ngoforum.org.kh
    • Supported by [list of supporters]