One of the biggest social problems in Cambodia today is the relentless issue of land concessions to foreign (and some local,) owned companies who present the Government with grand plans of turning subsistence farm holdings into consolidated wealth-producing fields of rubber, palm-oil production or similar. It will create jobs, they promise. It will be sustainable. There will be minimal social cost. In fact local villagers will be better off!
Yeah right. A recent study by international watchdog organisation Rights & Resources Initiative found that practically all concessions end up in social failure, with villagers displaced, often with no compensation. Nearly three-quarters of a million Cambodians have been affected in this manner.
For more on the R&RI report, see this piece in the Phnom Penh Post, dated December 8th, 2014.The report says the Cambodia experience matches the global pattern of land grabbing by corporates.
The majority of the disputes evolved at the initial stages when companies set project proposals into action without input from locals.
“Second, risks can be reduced by maintaining strong environmental standards,” the report says, as environmental regulations were the most common source of noncompliance related fines and lawsuits.
Additionally, without strong relations with the community, even well-intentioned relocations or compensation fail.
However, evictees from the Borei Keila community – who had been promised relocation housing in 2003, but found themselves abandoned – said the problem is lack of accountability.
“If the company and the government officials especially had respected and implemented the contracted agreement, our people would have gotten more benefits from this project,” said Chhay Kim Horn, a representative. “It is the authorities and the company together that left us disappointed.
In 2011 the World Bank imposed a freeze on all new lending to Cambodia, reported Cambodia Daily, in protest at the government’s forced eviction of some 3,000 families from Phnom Penh’s Boeng Kak neighborhood. Now three years later those residents are still urging the World Bank to keep the freeze in place because they still seek adequate compensation.
Increasingly, investor activists are joining the dots between where their investment dollars are going, and what these dollars are being used for. In Australia the ANZ Bank came under fire this year, back in April, when they were publicly shamed for pouring investor dollars into locally owned Phnom Penh Sugar – without ensuring that displaced villagers would be compensated (they accepted a paper promise but did not undertake further due-diligence) nor that adequate health and safety standards would be implemented. The Oxfam report which uncovered these failed promises was scathing of the ANZ for its hands-off approach on ethical issues – despite glowing mission statements advertised by the bank.
Australia’s ABC report is well worth viewing. Click here.
A year earlier, following intense scrutiny by Oxfam and watchdog Global Witness, Deutsche Bank of Germany divested of itself holdings in Vietnamese owned Hoang Anh Gia Lai Group a huge corporate in the rubber industry.
Here’s a quote from the German broadcaster DW’s report 03.12.2013:
In the report titled “Rubber Barons,” HAGL was accused of numerous rights abuses in relation to tens of thousands of hectares of land the Cambodian and Laotian governments have granted it.
Global Witness’ report assessed the environmental and social effects of HAGL’s rubber plantations in Cambodia and Laos. It stated that the company was flouting the law when it came to protecting the land rights of indigenous people, was illegally clearing forest, and held tracts of Cambodian land nearly five times greater than the 10,000 hectare legal limit.
“Families affected are impoverished, face food and water shortages, and get little or no compensation,” Global Witness said at the time. “Indigenous minority peoples’ spirit forests and burial grounds have been destroyed. When they resist, communities face violence, arrest and detention, often at the hands of armed security forces that are on the investors’ payroll.”
There are several failures here. On the frontline, the big corporates are acting as rapaciously as untethered giants did, I’m thinking of the United Fruit Company, a century earlier. They are in it for the quick dollar.
Second is the blind-eye being turned by authorities. The Hun Sen government wants growth at any price, and appears unwilling to enforce its own laws. There is a 10,000 ha land limit enshrined in law – but numerous corporates exceed this; even locally owned corporates. Then there are the issues of social justice to which the Government appears oblivious. In fact, as dispossessed people protest their situation, the police have been called in to jail these protestors.
But third – and just as culpable – are the investors, the big banks or managed funds, and the mom and pop investors, who bankroll these operations.
Deutsche Bank never gave reasons for its divestment in HAGL, but it is pretty obvious they had been shamed by the difference between their ethical promise and their actual actions. First world investors need to connect these dots more often.