A worker carries empty cement bags next to the 193.2 megawatt Kamchay dam the day it came online in 2011 in Kampot province. Pha Lina
Power couple linked to Sinohydro project
Two of the country’s most powerful and politically connected
business owners are on the board of governors of the company thought to
have brokered a controversial deal between the world’s largest
hydropower developer and the Cambodian government, documents obtained by
the Post show.
Cambodian People’s Party senator Lao Meng Khin and his wife, Choeung
Sopheap – owners of Boeung Kak lake developer Shukaku Inc and the
Pheapimex group, respectively – are listed as third-party governors of
Sinohydro (Cambodia) United Ltd. That firm is a local “affiliate” of
Beijing-based Sinohydro Corp, according to the company’s registration
papers, which are dated April 4, 2006, and signed by Koem Sithorn,
then-secretary of state at the Ministry of Commerce.
The Areng Valley at the edge of the Cardamom Mountain range, where
the dam is planned, is one of Cambodia’s few remaining pristine natural
habitats. The area is home to internationally protected Siamese
crocodiles and a large wild elephant population, as well as numerous
other endangered species.
Alex Gonzalez-Davidson, founder of local NGO Mother Nature Cambodia,
said that while it was not clear if Meng Khin or Sopheap had directly
brokered this deal, it was a logical conclusion given that they had
engineered a similar deal for the Kamchay hydropower dam in Kampot
province – where Sopheap was born – in 2006.
“They’re powerful brokers, which opens up all these doors for
military, ministries, any other investors. The key thing is that you’ve
got the largest hydropower company in the world, stock-listed in
Shanghai … [but for] their cooperation, you could not choose a more
[notorious] partner,” he said.
Neither Sinohydro United nor Sinohydro Corporation responded to
emailed requests for comment and phone calls over more than a week. Meng
Khin hung up on a reporter yesterday.
Meng Khin and his wife are arguably the most powerful tycoons in
Cambodia, regularly brokering deals between Chinese investors and the
authorities. Both Meng Khin and Sopheap speak fluent Mandarin and make
regular visits to China.
Meng Khin’s Shukaku Inc was granted the lease for a $79 million
development of the Boeung Kak lake area of Phnom Penh in 2007, after
which more than 1,500 families were forcibly evicted.
As of 2007, Pheapimex controlled 7.4 per cent of Cambodia’s total
land area, according to Cambodia’s Family Trees, published that year by
London-based NGO Global Witness. Two “joint ventures” with Chinese
company Wuzhishan LS and Kong Triv, another tycoon and CPP senator, for
economic land concessions in Pursat and Mondulkiri, have led to serious
human rights abuses, the report noted at the time.
“Whether in terms of taxes paid or jobs created, there is little
evidence that handing over enormously valuable public assets to
Pheapimex has contributed in any way to Cambodia’s development,” the
report said. “What is not in doubt is that the company’s owners and
their political patrons have profited handsomely.”
A
section of land in the Areng Valley in 2012 that will be flooded if the
proposed Stung Cheay Areng dam is completed. RIVERS INTERNATIONAL
Ith Praing, secretary of state at the Ministry of Mines and Energy,
said he did not know about the deal, despite reports that officials from
the ministry had visited the area in recent weeks in preparation for
building an access road into the site and preparing the ground for
construction.
Phay Siphan, spokesman for the Council of Ministers, declined to comment until he had time to review the details of the project.
Last week, officials at the Ministry of Agriculture and Ministry of
Environment confirmed that an environmental impact assessment,
commissioned years ago, was still “under consideration”.
“It’s not surprising, but alarm bells should be ringing,”
conservationist Marcus Hardtke said yesterday. “If you have cronies like
that involved, it’s a guarantee that projects will be approached
without consideration for legal frameworks or social and environmental
standards. If the cronies get their hands on it, everything goes out the
window.”
He added that another concern with the Stung Cheay Areng dam
concession was that two companies had already backed out because they
considered the project economically unviable.
“The danger is that there’s money to be made in constructing this
dam. That might be enough for them. Many of these projects, you find
black groups, cartels. A Chinese loan goes to a company, and these guys
are sitting in the middle,” he said. “Even the power lines are
privatised. It looks like a licence to print money.”
Son Chhay, opposition Cambodia National Rescue Party whip, echoed
conservationists’ concerns over the likely involvement of Meng Khin in
the Areng project.
“Regarding power projects, this couple … they will have a secret deal
with the government, grabbing everything. They have the power to reject
any investigation on any problematic effects,” he said yesterday.
“So many secret deals are made. Lao Meng Khin seems to be a broker
for so many Chinese companies in the country. We should have a warning
about investing in Cambodia. We should be clear about these deals,
especially for the Chinese investors, that these deals are corrupt. It’s
clear destruction of our natural environment,” he said.
Sinohydro Corporation has adopted the World Bank and International
Finance Corporation’s standards for hydropower investment. According to
its Environmental Protection Policy, its projects should “best minimise
the harm to the environment and biodiversity”, provide full disclosure
and consultation on the impact of the project to affected communities,
and will “not occur in a national park, habitat of threatened species or
protected wetlands, which are no-go zones for project development”.
Khnhel Bora, director of local consultancy firm SBK Research and
Development, said yesterday that a contract granted to SBK to assess the
resettlement needs of about 5,000 villagers who will lose their land if
the project goes ahead “was signed with the Sinohydro Corporation in
China”.
According to villagers and a commune chief in the area contacted
earlier this week, the only information they have received from any of
the companies involved in the project was notification that they would
be relocated.
“Sinohydro has its own environmental and social standards. They
should think long and hard [about this investment],” Hardtke said.
“Maybe the companies themselves are not so happy about these deals. It
would be a real tragedy, because people are filling their pockets with
[money from] dams that turn out to be nonsense and a catastrophe for
Cambodia.”
Chhay, who has visited the area on several occasions to investigate
the project in recent years, said that it was “ridiculous” that the
project had been granted to Sinohydro after another firm, China Guodian,
backed out last year.
“The destruction is so, so large, and compared to the benefits from
the power produced by the dam … it’s quite ridiculous to allow these
companies to change hands, because the forest has already been
destroyed. We find no money has come to the country budget whatsoever,”
he said.
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