Fair Finance Cambodia Releases a Report Study and Key Recommendations for Sustainable Finance in Cambodia

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Phnom Penh, October 27, 2023_Fair Finance Cambodia (FFC) has published a study focusing on the Asian Development Bank’s (ADB) financing of COVID-19 post-pandemic economic recovery in Cambodia. Specifically, the study assesses the impact of infrastructure project (Road #23/312) which received ADB funding. The report also aims to identify policy gaps in Cambodia’s green and sustainable economies and to evaluate the disparities between policies and practices within relevant institutions.

The study made seven key recommendations for ADB and the government. Three recommend to conduct the Involuntary Resettlement Policy at the early stage of the project; promoting women’s economic empowerment; and enhance women’s access to financial assistance. The other four focus on developing consensus on common legal and technical terms and concepts on green economy and sustainable finance; strengthening institutions by integrating long-term institutional knowledge and skills; developing appropriate tools for environmental and social impact assessment; and addressing policymakers’ and practitioners’ limited knowledge and skills related to green economy and sustainable finance. 

According to the report, “The communities favor the road improvement projects and emphasize the three main points, 1). communities have accepted the impact assessment results; 2). communities have recognized the need for road improvement projects, particularly concerning the current infrastructure conditions in their communities; and 3). communities have identified several benefits that would result from the road improvement projects. These include improved access to schools, markets, hospitals, and farms, crucial for their daily activities and economic endeavors”. However, the communities also have voiced their concerns about the compensation schemes.

Ms. Sophoan Phean, National Director of Oxfam, said “Despite the adherence to legal and policy frameworks in ensuring environmental, social, and economic considerations in road improvement projects, it is imperative that we introduce the resettlement plan early on, providing affected households and communities with an accepted compensation scheme and a clear timeframe. Our policy recommendation calls for the implementation of the ADB's Safeguards Policy Statement on involuntary resettlement, accompanied by tailored procedures and special attention to the needs of women and children. It is crucial that we prioritize the well-being of these vulnerable groups in our development projects.

“The criteria of the emerging twin concepts of ESG, and Sustainable Finance are socially and economically constructed and contributed to equitable, inclusive, and sustainable development in Cambodia. This is what we expect from the impact of the project implementation to share comprehensive knowledge and stronger collaboration among all stakeholders are the suggestions from the findings. The study recommended the findings will be used in various policies and legal frameworks to encourage green growth and sustainable development in Cambodia,” said Ms. Sin Putheary, Executive Director of Cooperation Committee for Cambodia (CCC). 

The study concluded with positive feedback from the affected communities and notes that the ADB’s road improvement project has adhered to legal and policy frameworks to ensure consideration of environmental, social, and economic impacts and outcomes for communities and Cambodia. In addition, the study provides policy recommendations for policy engagement and the pathway to influence the policy agenda on green economy and sustainable finance and to enhance inclusivity and maximize the positive impact for communities.

This research study was co-published by CCC and FFC, the report launch event, “Asian Development Bank’s (ADB) Financing COVID-19 Post-Pandemic Economic Recovery” took place on 27 October 2023 in Phnom Penh, Cambodia, with support from Oxfam in Cambodia. Approximately 50 participants from relevant stakeholders such as banks, microfinance institutions (MFIs), Civil Society Organizations (CSOs), ADB, Ministry of Public Works and Transportation (MoPWT), and youths attended.