New owners, old story

In 2013, NGO Global Witness’s report Rubber Barons found that two of Vietnam’s largest rubber companies had bought up vast tracts of land in Cambodia to the detriment of local communities and the environment.

“The Cambodian government’s decision to promote investment into the rubber sector at this time highlights the level of impunity with which they operate,”

Villagers walk through deforested land inside a HAGL rubber plantation in Ratanakkiri province. PHOTO SUPPLIED

New owners, old story

Phnom Penh Post | 6 March 2014

 

An existing moratorium on economic land concessions should be no impediment to pouring more cash into the Kingdom’s booming, and highly criticised, rubber trade, industry executives in the capital heard yesterday, as many current ELCs can simply be recycled to a new crop of investors.

Ly Phalla, director general of the Agriculture Ministry’s General Directorate of Rubber, said at the fourth Rubber PLANT Summit at Phnom Penh’s Intercontinental Hotel yesterday that 70 per cent of land designated for economic land concessions (ELCs) under the previous government was up for “review” and could be sold on to foreign investors.

“The last government placed a moratorium, that [it would allocate] no more ELCs, because [it] already provided 1.2 million hectares [to companies]. But recently, the new minister ordered all the documents for the ELCs [to be sent to] us to monitor and discuss with the companies of the projects,” he said.

“Eighty per cent [was allocated] for the rubber plantations.… So, we think that some in [the] industry did not comply [with their contractual obligations].

“Through strengthening the mechanism for monitoring the activity of ELCs, [we will] ensure … [that we] rectify the shortcomings in the land sector.”

Before the conference began, the tone of proceedings was set during an informal discussion between a European “independent consultant” set to speak at the conference and several Sri Lankan plantation firm owners.

“All the guys in government are on side, despite what they may claim in public,” the consultant said.

Dr Regis Lacote, an agronomist with French agricultural development institute CIRAD, said that “rubber continues to attract foreign investment … there’s a scarcity of land … [but this] opens an opportunity for what we call ‘unused land’”.

The conference, which was sponsored by three Southeast Asian rubber lobby groups – the Vietnam Rubber Association, the Association for Rubber Development of Cambodia and the Dawei Rubber Planters and Producers Association – is the second of its kind to be held in Phnom Penh.

Phalla added that the current holders of the ELCs would be given the opportunity to sell off their holdings.

“Maybe the old company signed a contract but [did] not invest. So they want to sell or join or to find a new investor. Yesterday, [they have the ELC]. Tomorrow, we sign over … to [new] private investors.”

As well as the scheme to reallocate ELCs to foreign rubber companies, Phalla said that, within existing ELCs, there were areas of forest that had not been logged, which could be cut and turned into plantations.

“Some areas have the strong forest … and some remaining in the ELCs [will] go for the rubber plantation[s],” he said.

Forestry Administration country director Chheng Kimsun could not immediately be reached for comment.

Opposition lawmaker Son Chhay suggested a possible second motive behind the announcement that ELC holders could lose their land if they are found to have not complied with their contracts: corruption.

“I believe that 95 per cent of those [companies] have violated the contracts. They do not respect the conditions of the contract where they have to respect the local communities,” he said. “I have no doubt that this is a threat to the ELC companies, so they have to come and bribe officials to keep the land. If the government’s serious, they should take the land back and let the forests grow back.”

Prime Minister Hun Sen imposed a moratorium on new ELCs in May 2012 in response to growing social unrest and pressure from foreign powers.

In 2013, NGO Global Witness’s report Rubber Barons found that two of Vietnam’s largest rubber companies had bought up vast tracts of land in Cambodia to the detriment of local communities and the environment.

“The Cambodian government’s decision to promote investment into the rubber sector at this time highlights the level of impunity with which they operate,” Josie Cohen, a land campaigner at Global Witness, said in an emailed statement to the Post yesterday. 

“Whether it’s the supposed moratorium on new land concessions or the law against allocating state forests to investors, Cambodia’s political elites continue to blatantly ignore their own national laws, choosing instead to pursue their own private interests.

“Considering yesterday’s statements from the authorities promoting illegal logging at a public summit, it is sadly no surprise that Cambodia has lost more of its forests than any other country in the world bar Malaysia in the last ten years.”

In the latest round of conflict over ELCs granted to rubber firms, police in Kratie province’s Snuol district on February 26 tore down about 100 homes of people allegedly illegally occupying an ELC belonging to Vietnamese rubber firm Thanhlar.

A report released last month by the Ministry of Agriculture, Forestry and Fisheries showed that since 1993 less than one-quarter of the land leased to foreign companies for plantations, including rubber, has been used for its intended purpose.

“[Officials] do not care about the forest, they don’t really care about the people living on the land, [they just] take money, take bribes. One hectare can cost as little as $50, and there’s not any money coming to the country’s budget,” Chhay said. 

“I found a few years ago a document in which one of the firms got a concession in Stung Treng [for] land, about 270,000 hectares, and there was no money coming into the government budget. But they sold the land for $135 million, and no money went into the budget,” he said.

A key component of the government’s plan for the rubber industry is to “normalise” the use of cloned rubber trees in plantations and smallholdings in Cambodia, a scheme bankrolled by the French Development Agency, according to Phalla.

The French Development Agency did not immediately respond to an emailed request for comment.

So-called “budtree nurseries” around the country, owned by private investors and overseen by researchers from the Cambodia Rubber Research Institute, will provide seedlings for smallholders, ELCs and rubber estates.

The government estimates that by 2050, the $3 million scheme will mean the country produces nearly one million tonnes more rubber for export than using current rubber tree strains, netting the government an additional $3.5 billion in revenue, a figure questioned by some conference delegates.

Even if the figure was accurate, Chhay doubts the money would find its way into state coffers.

“They should do a study and ensure that the land is suitable for plantations. The land must not continue to change hands, it violates the constitution,” he said. “The whole thing is corruption and the prime minister is absolutely involved, and he must stop. He must stop.”