VZCZCXRO0200
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHPF #0146/01 0640713
ZNR UUUUU ZZH
R 050713Z MAR 09
FM AMEMBASSY PHNOM PENH
TO RUEHC/SECSTATE WASHDC 0470
INFO RUCNASE/ASEAN MEMBER COLLECTIVE

UNCLAS SECTION 01 OF 05 PHNOM PENH 000146 
 
SENSITIVE 
SIPDIS 
 
STATE FOR D, P, EAP/MLS, EAP/RSP, DRL, S/WCI, AND DRL/ILCSR FOR 
MITTELHAUSER, EEB/IFD/OMA FOR FREUDENWALD, EEP/TPP/BTA, 
EEB/TPP/MTAA, EEB/ESC/IEC/ENR FOR KOPP 
STATE PLEASE PASS TO USTR FOR BISBEE AND WEISEL 
STATE ALSO PASS TO USAID FOR ASIA BUREAU 
BANGKOK FOR USAID, FCS FOR GRIFFITH GREENE 
HO CHI MINH CITY FOR FAS FOR RIEDEL 
COMMERCE FOR ITA/OTEXA AND ITA/MAC 
LABOR FOR ILAB FOR RIGBY 
 
E.O. 12958: N/A 
TAGS: PREL EAID PGOV KJUS PHUM PTER KWMN BM CB
SUBJECT: SECOND ANNUAL U.S.-CAMBODIA BILATERAL DIALOGUE 
 
REF: 08 PHNOM PENH 95 
 
SENSITIVE BUT UNCLASSIFIED 
 
¶1. (SBU) SUMMARY.  EAP Deputy Assistant Secretary (DAS) and U.S. 
Ambassador for ASEAN Affairs Scot Marciel participated in a 
senior-level U.S.-Cambodia bilateral dialogue hosted by the Royal 
Government of Cambodia (RGC) Ministry of Foreign Affairs (MFA) March 
¶3.  The second annual bilateral dialogue highlights the progress 
made in normalizing U.S.-Cambodian relations over the past few years 
and demonstrates a commitment to further broaden and strengthen 
bilateral cooperation in the years to come.  The Cambodian 
delegation highlighted its concern about the global financial crisis 
and the worsening Cambodian economy, and expressed its hopes for 
continued and increased U.S. assistance. 
 
¶2. (SBU) The wide-ranging discussion highlighted the increasing 
depth and breadth of the U.S.-Cambodia relationship, including: 
increasing bilateral assistance; law-enforcement cooperation; rule 
of law and judicial reform; administrative reform; anti-trafficking 
in persons efforts; mil-mil relations; counter-terrorism 
cooperation; maritime security; U.S.-ASEAN relations; the ASEAN 
Human Rights Body; engagement on Burma; bilateral trade and economic 
issues; debt negotiations; and oil and gas development. 
 
¶3. (SBU) MFA Secretary of State Ouch Borith headed the Cambodian 
delegation, which included representatives of the Ministries of 
Foreign Affairs, Interior, Defense, Economy and Finance, Commerce, 
and Justice, as well as representatives of the Cambodian National 
Petroleum Authority, Council for Administration Reform and Council 
for Legal and Judicial Reform.  The Ambassador, Acting Deputy Chief 
of Mission, USAID Mission Director, Defense Attache, Legal Attache, 
and Regional Agriculture Attache also represented the U.S. side in 
the dialogue.  END SUMMARY. 
 
BILATERAL ASSISTANCE: MCC, THE FINANCIAL CRISIS, AND OIL 
--------------------------------------------- --------- 
 
¶4. (SBU) USAID Mission Director provided an overview of U.S. 
assistance, highlighting programs in education, governance and rule 
of law, health, the environment and biodiversity, and economic 
growth.  MFA Secretary of State Ouch Borith thanked the U.S. for its 
generous assistance to Cambodia and expressed the hope that it would 
be increased in the next few years.  He inquired about the MCC's 
country scorecard for Cambodia and what the RGC might do to improve 
their performance further.  He stated that in 2008, Cambodia had met 
four of the seventeen requirements, and in 2009, they had met five 
of the seventeen.  USAID Mission Director explained that in 2009, 
Cambodia failed to meet any of the indicators in the Ruling Justly 
category, including controlling corruption.  She stated that the 
controlling corruption indicator in particular is key to improving 
Cambodia's country scorecard.  Ambassador Marciel added that the 
U.S. would facilitate a meeting in Washington for a Cambodian 
delegation if they would like to learn more about the MCC scorecard 
and steps necessary to meet the requirements. 
 
¶5. (SBU) The Cambodian delegation expressed concerns about the 
possible impact of the global financial crisis on U.S. assistance, 
and inquired whether further assistance might be forthcoming for 
their nascent petroleum sector.  Ambassador Rodley explained that 
while the U.S. budget picture was still unclear, the new 
administration had expressed its strong commitment to foreign 
assistance and that she expected the level of assistance to Cambodia 
to be similar to its current level and focused in the same sectors 
(health, governance, economic development and productivity, and 
education.) 
 
¶6. (SBU) Secretary General of the Cambodian National Petroleum 
Authority Te Duong Tara expressed his appreciation for recent USTDA 
capacity building assistance for RGC officials involved in the oil 
and gas sector.  He referred to ongoing negotiations with Chevron 
over oil/gas exploitation in the Gulf of Thailand.  He requested 
additional assistance to help build capacity in this sector, 
possibly including some legal assistance in implementing regulations 
for the draft Petroleum Law.  He noted that U.S. private sector 
involvement far exceeded U.S. public sector assistance to the oil 
and gas sector. Ambassador Marciel responded that the USG did not 
insert itself in negotiations between U.S. companies and third 
parties and stated that the Petroleum Law should benefit Cambodia 
and treat all oil companies equally.  He stated that the USG would 
explore the possibility of providing additional assistance to the 
sector. 
 
PHNOM PENH 00000146  002 OF 005 
 
 
 
RULE OF LAW, JUDICIAL REFORM: DIRECT ENGAGEMENT 
--------------------------------------------- -- 
 
¶7. (SBU) Ministry of Justice Secretary of State Sam Sophal explained 
that the RGC was in the second phase of its Strategic Action Plan 
for judicial reform and emphasized the importance of training 
Cambodia's next generation of judges and prosecutors.  Sam Sophal 
thanked USAID for its indirect support for judicial reform through 
the NGO community and requested direct U.S. engagement with the 
Ministry of Justice and the Cambodian Bar Association.  USAID 
Mission Director explained that the mission was currently 
negotiating agreements to support the Ministry and the Bar 
Association and pledged to continue working with the Royal 
University of Law and Economics.  Ambassador Marciel commended the 
Strategic Action Plan, noting that rule of law and judicial reform 
were important for Cambodia's success. 
 
ADMINISTRATIVE REFORM EFFORTS 
----------------------------- 
 
¶8. (SBU) Chhoun Chham, Deputy Secretary General of the Council for 
Administrative Reform, said that the RGC was currently focused on 
improving the delivery of public services and boosting public 
confidence in the civil service.  He explained that the current 
phase of the RGC's administrative reform program included efforts 
to:  1) improve the transparency of public services; 2) improve the 
accountability and efficiency of public services; 3) develop the 
civil service's human and institutional capacity; and 4) improve 
civil service human resources management.  He emphasized that 
administrative reform was a significant component of the RGC's 
"rectangular strategy", which included anti-corruption efforts, 
legal and judicial reform, administrative reform, and armed forces 
reform.  He requested that the USG consider administrative reform 
support in its development assistance package.  Ambassador Marciel 
applauded the RGC for undertaking an ambitious administrative reform 
agenda and stressed the importance of anti-corruption efforts. 
 
TRAFFICKING IN PERSONS (TIP) PROGRESS REPORT 
-------------------------------------------- 
 
¶9. (SBU) Chhou Kim Eng, Secretary of State for the Ministry of 
Interior, described the RGC's national mechanism to combat 
trafficking in persons, which involves all levels of government, 
communities, civil society, and international stakeholders such as 
the UN and development partners.  She said the Ministry had drafted 
a new five-year Anti-TIP Action Plan, which she expected the Council 
of Ministers to adopt soon.  She called for closer coordination on 
trafficking cases, stressing that partners should share information 
on cases with Cambodian law enforcement as soon as it is known in 
order to ensure effective operations.  She also expressed her thanks 
for U.S. assistance in the area of law enforcement cooperation, 
particularly in investigating terrorist acts and trafficking of both 
persons and drugs.  Ambassador Marciel welcomed the progress on 
anti-TIP initiatives and expressed hope that the RGC would continue 
to intensify efforts to prosecute offenders and those who aid them. 
Ambassador Rodley commended the Ministry of Interior and law 
enforcement for working with civil society on TIP programs, noting 
that Cambodia could serve as a model of effective cooperation in the 
region. 
 
EXPANSION OF PEACEKEEPING ACTIVITIES IN AFRICA 
--------------------------------------------- - 
 
¶10. (SBU) Ambassador Marciel began the discussion of security 
cooperation by expressing appreciation for Cambodian peacekeeping 
efforts in the Sudan, adding that Cambodia's willingness to host the 
2010 CAPSTONE exercise was a significant step toward a greater 
Cambodian role in the ASEAN region.  Defense Attache said that 
military-military relations with Cambodia were very positive, and 
that while there may be some shifts in the type or focus of military 
aid, he had every hope that assistance for training and grants of 
new and used equipment would increase.  Ambassador Rodley asked the 
Ministry of Defense to consider whether it would welcome additional 
technical assistance in the area of force management.  Under 
Secretary of State for the Ministry of Defense, Lt. General Chum 
Sambath requested further military-military assistance, particularly 
in the area of training, explaining that much of the success of 
Cambodian peacekeeping efforts was the result of U.S. assistance. 
He stated that U.S.-sponsored training was an important part of the 
Cambodian government's armed forces reform program.  He also 
mentioned that the government of Sudan had recently approached 
 
PHNOM PENH 00000146  003 OF 005 
 
 
Cambodia concerning expanding its demining activities into central 
and western Africa.  He said that additional U.S. training of its 
demining teams would enable Cambodia to take on additional 
peacekeeping responsibilities. 
 
MARITIME SECURITY 
----------------- 
 
¶11. (SBU) Under Secretary of State Chum Sambath, RCAF BG Lay Chenda, 
and Defense Attache also discussed enhancing U.S.-Cambodia maritime 
security cooperation.  Defense Attache expressed U.S. interest in 
assisting Cambodia to finalize a legal framework necessary to 
support a maritime security program, followed by technical and 
tactical assistance of up to $377,000 in FMF funds.  The Under 
Secretary of State and BG Chenda responded by saying that Cambodia 
is currently working with both Australia and the U.S. on maritime 
security, and that it would review its programs with both countries 
to enhance cooperation. 
 
RGC WELCOMES INCREASED USG ENGAGEMENT WITH ASEAN 
--------------------------------------------- --- 
 
¶12. (SBU) Ambassador Marciel opened discussions on regional issues 
by emphasizing U.S. support for a strong, prosperous Southeast Asia 
and the ASEAN agenda.  He outlined USG assistance to ASEAN, 
including the Technical Assistance and Training Facility at the 
ASEAN Secretariat in Jakarta.  He said that Secretary Clinton's 
early visit to the Secretariat sent a signal that the U.S. 
considered ASEAN important, and he confirmed that she would attend 
the ASEAN Post-Ministerial Meeting in July and would begin the 
process for U.S. accession to the ASEAN Treaty of Amity and 
Cooperation. 
 
¶13. (SBU) MFA Secretary of State Kao Kim Hourn concurred that 
Secretary Clinton's visit was significant and welcomed increased 
U.S. engagement with ASEAN.  He expressed hope that there could be a 
U.S.-ASEAN Summit next year.  He outlined the organization's recent 
progress, including the ratification of the ASEAN Charter, the plan 
to assign country representatives to a permanent ASEAN committee in 
Jakarta by next year, and an increase in the ASEAN Secretariat's 
resources through a larger budget of $14 million and four Deputy 
Secretary Generals instead of two.  He highlighted that the Charter 
marked a departure from past ASEAN documents, in that all of the 
ASEAN members, not just the original six members, had produced it. 
He added that the RGC was finalizing a sub-decree to establish a 
Cambodian ASEAN National Secretariat to ensure RGC compliance with 
the Charter. 
 
HUMAN RIGHTS AT THE REGIONAL AND BILATERAL LEVELS 
--------------------------------------------- ---- 
 
¶14. (SBU) Kao Kim Hourn praised the first draft of the terms of 
reference for the ASEAN Human Rights Body (HRB) and said that the 
second draft was on schedule for the July Ministerial Meeting. 
Ambassador Marciel noted that although the strength and enforcement 
of the Charter and the HRB was up to ASEAN, the world would be 
watching and would judge ASEAN's will to make difficult political 
decisions.  He said he hoped that given its unique experience and 
record for working with civil society, Cambodia would push for a 
more ambitious ASEAN agenda on human rights.  Kao Kim Hourn felt 
that there was genuine political will behind the HRB, noting that 
the fact that it had been formed in the first place marked a step 
forward for the organization. 
 
¶15. (SBU) When asked about the reports that Prime Minister Hun Sen 
had barred a Cambodian civil society representative from 
participating in the recent ASEAN Summit talks, Kao Kim Hourn blamed 
the incident on the Summit organizers and called it a case of "bad 
press".  He said that the process for selecting and including civil 
society representatives in the Summit had not been transparent and 
claimed that the member countries were only informed at the last 
minute that NGOs would participate.  He said that the proposed 
Cambodian NGO was not registered in the ASEAN Charter and that it 
was unfair for the NGO to try to skip the registration process, 
adding that leaders should know with whom they would be meeting. 
(NOTE: The Cambodian representative and his NGO are not known to 
anyone at this Embassy, and his selection is something of a mystery. 
END NOTE.)  Kao Kim Hourn suggested that the ASEAN members would 
take steps to ensure that civil society representation would be open 
and transparent in the future and that the RGC would try to more 
effectively highlight its strong relationship with civil society. 
 
 
PHNOM PENH 00000146  004 OF 005 
 
 
CREATIVE SOLUTIONS NEEDED TO ADDRESS THE BURMA ISSUE 
--------------------------------------------- ------- 
 
¶16. (SBU) Ambassador Marciel repeated Secretary Clinton's remarks 
that U.S. sanctions against Burma had not worked and said that both 
the U.S. and ASEAN had to be open to new ideas for engaging the 
Burmese government.  He stressed that the U.S. was not against 
Burma's success.  Rather, the U.S. wanted Burma to be strong, open 
and unified, which would begin with the Burmese government releasing 
and engaging in a dialogue with opposition leaders.  Kao Kim Hourn 
said that the Burma issue was a subject of conversation in ASEAN 
meetings at all levels and that all the ASEAN members pushed Burma 
to make more positive contributions to the organization.  He said 
that ASEAN would continue to support UN Special Envoy Ibrahim 
Gambari's mission and push for the Tripartite Core Group to 
facilitate cooperation between the Burmese government and 
international community. 
 
ECONOMIC ISSUES 
--------------- 
 
¶17. (SBU) Vongsey Vissoth, Deputy Secretary General for the Ministry 
of Economy and Finance, affirmed the RGC's recognition of its 
responsibilities regarding Cambodia's debt owed to the U.S. and 
expressed the RGC's desire to seek a "fair and mutually beneficial" 
resolution to this outstanding issue.  Ambassador Marciel explained 
that while the Department of State would work enthusiastically to 
implement any kind of debt for assistance program, only Congress, 
not the Administration, had the legal authority to offer such a 
recycling program.  He encouraged the RGC to sign a bilateral debt 
repayment agreement and begin making payments, explaining that a 
proposal for a debt recycling program might not be rejected once 
Cambodia is making repayments.  Additionally, Ambassador Marciel 
emphasized that given the uncertainty surrounding the likelihood 
that Congress will pass such legislation anytime soon, the longer 
the RGC delays, the larger the amount owed.  Vissoth explained that 
the RGC was "quite encouraged" by previous interactions with the 
Hill on this issue and announced that following a lull due to the 
Cambodian and U.S. elections, the RGC planned to reengage Congress 
on this issue "very soon." (NOTE: Vongsey later averred the RGC was 
busy and not likely to go to Washington in the next few months. END 
NOTE.) 
 
¶18. (SBU) Ministry of Commerce Secretary of State Pan Sorasak sought 
U.S. assistance in encouraging U.S. buyers to source more from 
Cambodia, explaining that following years of steady growth, 
Cambodian garment exports to the U.S. fell by 1.5 percent in 2008. 
In response, Ambassador Marciel suggested that Cambodia increase 
efforts to market Cambodia as an attractive source of exports, given 
the garment industry's favorable reputation for upholding 
international labor standards.  He also highlighted the importance 
of reform in maintaining Cambodia's competitiveness and to make 
Cambodia a more attractive destination for foreign investment. 
Ambassador Marciel warned that proposed changes to the Labor Law, in 
particular an amendment which would allow for an unlimited number of 
fixed-duration contracts, could, if not properly explained to U.S. 
buyers, undermine Cambodia's competitive edge in the industry. 
 
¶19. (SBU) Sorasak highlighted the progress achieved in implementing 
Cambodia's WTO commitments, explaining that as of February, 34 of 
the 111 WTO-related tasks have been completed.  Additionally, he 
stated that the Trade and Investment Framework Agreement (TIFA) 
dialogue is a useful mechanism in assisting Cambodia to comply with 
its WTO obligations and inquired as to when the next TIFA meeting 
might take place.  Recognizing the enormous undertaking required, 
Ambassador Marciel expressed his appreciation of the RGC's efforts 
to fully integrate Cambodia into the world economy and applauded the 
positive approach taken by the RGC to the TIFA. 
 
¶20. (SBU) Sorasak welcomed Agriculture Attache's request for greater 
cooperation to promote agriculture and food trade between the two 
countries, and stated that Cambodia is particularly interested in 
increasing its rice exports to the U.S.  Sorasak also applauded 
USAID's new economic growth program and stated that the RGC looks 
forward to cooperating with USAID to promote greater economic 
growth. 
 
COMMENT 
------- 
 
¶21. (SBU) The breadth of topics under discussion illustrates the 
expanding U.S.-Cambodia relations.  As our bilateral relationship 
 
PHNOM PENH 00000146  005 OF 005 
 
 
continues to mature, the annual bilateral dialogue provides a unique 
opportunity for both sides to highlight areas of cooperation, 
identify potential areas for enhanced engagement, and to affirm our 
commitment to supporting Cambodia's political and economic 
development. 
 
RODLEY