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A refined approach?

Labourers harvest sugar cane at a plantation in an economic land concession owned by Phnom Penh Sugar Company in Kampong Speu’s Thpong district
Labourers harvest sugar cane at a plantation in an economic land concession owned by Phnom Penh Sugar Company in Kampong Speu’s Thpong district last week.

A refined approach?

Hundreds of trucks hauling sugarcane queue up along the dusty roads that cut a path through a plantation in Kampong Speu province. Their destination: Cambodia’s most advanced sugar refinery.

Its owners say the landmark project, run by the Phnom Penh Sugar Company and its president, ruling party senator Ly Yong Phat, is a boon for Cambodia’s poor and a pathway to greater prosperity. Rights groups, however, say the outfit produces “blood sugar”, a commodity whose profits serve Cambodia’s elite at the expense of locals and their land.

As this dispute and the industry that it’s part of face increased global scrutiny, the firm’s opening of its doors to the media last week offered a rare glimpse inside one of its most well-known but least understood ventures.

“It is harvesting season, so about 3,000 people are working in the plantation. In the factory, there are about 1,000 workers turning the cane into refined sugar and raw sugar,” said Seng Nhak, Phnom Penh Sugar Company’s managing director, looking out over the firm’s 8,343 hectares in Thpong district.

The trucks along the road are loaded with stalks freshly chopped down by workers. Once at the factory, which sits surrounded by cane fields, the vehicles back into hydraulic lifts that tilt them skywards, sending the cane falling into a holding area. From there, it is scraped into a pit and sent on a conveyor belt to a processor, which crushes the stalks into liquid that is then crystallised using high temperatures.

A centrifuge – much like a giant washing machine – spins and dries it into raw sugar, some of which is further processed into the refined sugar used for coffee and tea. The next step is bagging the sugar and stacking it for distribution.

Up to 14,000 tons of cane is fed in each day, and up to 1,400 tons of sugar comes out. The company says 80 per cent is for domestic supply, and 20 per cent for export.

“I think a project like this is very helpful, because this land, before the company came, did not create any economic value at all,” Nhak said, referring to the $220 million development.

Cambodia is traditionally a net importer of sugar. In 2012, more than $8.5 million was spent on importing nearly 20,000 tons, down from 31,000 tons in 2011, thanks to an increase in domestic supply.

Increased domestic production has also meant increased exports. Under the EU’s Everything But Arms trade scheme, least-developed countries like Cambodia enjoy duty-free access to EU markets.

Sugar exports to the EU more then quadrupled last year, from 15,500 tons in 2012 to close to 65,000 in 2013. Rights groups have called on sugar to be revoked from the trade benefit scheme, saying the preferences enable rights abuses, which normally take the form of land grabs and forced evictions.

Pressure has also been applied from within the EU, with calls for an investigation into who really benefits from trade preferences that are supposed to help the poor.

Though the EU is currently working with the government and sugar producers to find solutions for outstanding land disputes, the legal conditions for an EU investigation into withdrawing EBA preferences is not warranted, the EU’s ambassador to Cambodia, Jean-Francois Cautain, said in an email on February 19.

“Trade preferences in themselves are not the cause of human rights abuses in Cambodia,” Cautain said.

Other foreign interests have raised concerns. One of the world’s largest sugar buyers, Coca-Cola, has been conducting audits of Cambodian sugar producers.

“As part of our land rights commitment, we are undertaking a series of third-party social, environmental and human rights assessments, in which we will be reviewing land rights issues that may be impacting the industry and its workers in the Coca-Cola system’s cane sugar supply chain,” Sharolyn Choy, group communications director at Coca-Cola Pacifc, said in an email last week. Coca-Cola doesn’t buy directly from Cambodian producers, Choy added.

Before giving a tour of the factory last week, Phnom Penh Sugar officials held a seminar at their nearby offices in coordination with Labour Ministry officials and a sustainable schools NGO. They addressed an audience of about 100 subcontractors, whose job it is to find many of the 3,000 workers to cut sugarcane on the plantation.

A Phnom Penh Sugar representative speaks to labour sub-contractors at a child labour forum in Kampong Speu province last week
A Phnom Penh Sugar representative speaks to labour sub-contractors at a child labour forum in Kampong Speu province last week.

Many of the workers travel from afar to stay in accommodation clusters on the plantation. Others once lived within the boundaries of the land concession, and now reside on relocated plots bordering it.

In this same concession last year, Post reporters witnessed children as young as seven working in the fields. The story caused the company to crack down on the practice, as evidenced by a “No To Child Labour” banner at the seminar.

But miscommunications remain. When people in the crowd raised concerns about what to do with children while working, a ministry official cited the Labour Law, which says that kids as young as 12 can perform light duties under conditions that aren’t hazardous and don’t deprive them of school.

Nhak, the managing director, said immediately afterwards that regardless of local law, no children are allowed to work.

Afterwards, Nhak said the company is working on initiatives like a nursery and a school to overcome what he called the “cultural issues” of workers, many of whom travel from other provinces, bringing their children to the fields.

Since its beginnings in 2010, the concession has been at the centre of land disputes. Hundreds of families were forced off their land and relocated. Arrests were made, which fueled more protests. Rights groups say more than 1,000 people have been affected by the concession and a neighbouring concession in the name of Ly Yong Phat’s wife.

“People said their lives were totally worse off,” said Eang Vuthy, executive director at Equitable Cambodia, which has followed developments in Kampong Speu.

From 2010 to 2013, Phnom Penh Sugar ignored 60 per cent of an audit’s recommendations on a variety of issues, from monitoring those relocated to worker safety. The company’s response to many of the allegations is that it is providing jobs, addressing relocation problems, giving those displaced priority job opportunities.

“The sugar industry is a really new industry in Cambodia, and the country is trying to work very hard to address the issue, it is like the baby is just born, so it takes time for the baby to grow up, you cannot expect the baby who is just born to speak politely or speak nicely, it has to be a step by step basis,” Nhak said.

Some, though, don’t have to the luxury of time. Tat Sivang, 65, was relocated from his farm his 2010 with assurances of a better life. Now, a road gives him better access to a market where he can sell goods, but his land isn’t as large or as fertile as it once was: “I hope that the promises will come in the future,” he said.

“But I cannot wait.”



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