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Discrepancies in Cambodian Sand Exports Spark Fraud Allegations

FILE - A Vietnamese vessel hauling sand plies the Tatai River in southwestern Cambodia, Aug. 2, 2011. Cambodia once exported vast amounts of sand for land reclamation and construction projects in Singapore. The government has since banned exports of most types of sand, but exempted silica sand from the ban.

An environmental group is highlighting discrepancies in Cambodian government data on exports of silica sand to Taiwan, in what the group's founder suggests may be a case of tax avoidance and economic fraud.

Exports of another type of sand to Singapore were investigated after the same group exposed similar discrepancies in trade figures with that country last year.

In a posting on its Facebook page late Monday, the group Mother Nature cited data from Taiwan's Customs Administration showing imports of 1.5 million tons of silica and quartz sand from Cambodia valued at more than $32 million between 2012 and 2016.

PDF: Silica and Quartz Sands Imports, 2010-2016

But, the group says, Cambodia's Customs and Excise Department and the Ministry of Commerce records show sales to Taiwan of only 28,900 tons valued at $275,606 during that period. The sand is used in making components for electronic devices and other products.

PDF: Sand Exports, 2016

​Yos Monirath, director general of the Department of Mineral Resources and a spokesman for the Ministry of Mines and Energy, refused to confirm or deny any of the statistics, referring a reporter to documents the government has released.

"If you take the statistics from me today, it will be different tomorrow. The formal data is what we sent to the National Assembly" in response to an opposition lawmaker's request, he said. Mother Nature's data request "just bothers the government's work," he said.

'Systematic fraud'

VOA was able to examine the Cambodian export records for all but six months of the period cited by Mother Nature and has verified its figures. It has also verified the Taiwan import data, which is publicly available.

Mother Nature's co-founder Alejandro Gonzalez-Davidson told VOA the figures are evidence of "systematic fraud" and pledged to pursue the case with anti-corruption authorities in Taiwan. Cambodian government officials confirmed that any undisclosed exports of sand would normally have been subject to taxes, including royalties on resource extraction and a 20 percent tax on profits.

Gonzalez-Davidson went further in an interview published Wednesday in the Phnom Penh Post, saying the sand sales could not have been hidden without government complicity.

"This is beyond an environmental and ecological issue; this is about fraud and tax evasion. This is an economic crime," the newspaper quoted him as saying.

Mother Nature was instrumental last year in exposing a $700 million reporting gap in sales of construction sand to Singapore between 2007 and 2015, setting off a government investigation that ended with a conclusion that there was no discrepancy. The government subsequently banned exports of most types of sand, citing the threat of environmental damage, but exempted silica sand from the ban.

The environmental group further disclosed Tuesday that two of its members, Hun Vannak, 36, and Douem Kundy, 22, had been arrested that morning while investigating a silica sand operation in Koh Kong province, the main source of silica sand. The Post confirmed the arrests with police in Koh Kong but was unable to get an explanation for the arrests.

In this 2010 photo, a private boat dredges sand in the Mekong river near Phnom Penh, Cambodia.
In this 2010 photo, a private boat dredges sand in the Mekong river near Phnom Penh, Cambodia.

Two companies named

The Cambodian government says it has granted licenses to export silica sand to two companies: the Mong Reththy Group — owned by Senator Mong Reththy, who is close to Prime Minister Hun Sen — and Sibelco Cambodia Company Limited.

Senator Mong Reththy told VOA his company is not currently exporting sand, but he did not directly address the accusations made by Mother Nature.

"Don't write to make people have arguments. I know this issue is sensitive," he said.

Sibelco is not listed on a publicly available Ministry of Commerce companies database. But a version of the same database made public by Global Witness in 2016 suggests the firm is registered to a Belgium person or persons named Bruno Luc Annie Wauters, with a company address in Singapore.

A person answering the listed phone number said the number was incorrect.

In Taiwan, Chou Kuo-tung, deputy director of Taiwan's Bureau of Mines, told VOA he had no information on the companies involved in the sand imports.

"Our data on these companies is incomplete. We've always wanted to look into it but have no way," he said, adding that only the Taiwan Bureau of Foreign Trade had the information — a claim the trade bureau denied to VOA.

Preap Kol, executive director of Transparency International Cambodia, said the Ministry of Economy and Finance and the Ministry of Mines and Energy need to investigate the trade figures to see if taxes were evaded.

"It is not business as usual when it comes to such huge amounts of discrepancy and it happens to be not one time," he said. "It is important that government, relevant authorities take these issues seriously and citizens have the right to know what's going on."

Officials at the General Department of Taxation, Ministry of Economy and Finance, and Ministry of Commerce either did not answer calls and emails or directed questions elsewhere.

Ralph Jennings in Taipei and Sun Narin in Phnom Penh contributed reporting to this story.