Logo of Phnom Penh Post newspaper Phnom Penh Post - Rubber projects on hold

Rubber projects on hold

Rubber projects on hold

Controversial Vietnamese rubber giant Hoang Anh Gia Lai (HAGL) has suspended part of its operations in Ratanakkiri province amid an investigation by the World Bank’s investment arm into claims of land grabbing, a company memorandum reveals.

The April 28 announcement states that three projects in Ratanakkiri province – Heng Brother Project, CRD Project and Hoang Anh Oyadav Project – will be suspended from May 1 to November 30. The statement does not cite a cause for the suspension, but notes the decision follows an April 2 meeting with the Compliance Advisor Ombudsman at the World Bank’s International Finance Corporation (IFC).

“During the reclamation suspending period, the subsidiaries are only allowed to tidy up and to collect the branches of trees in the already reclaimed areas prior to 28 April 2014,” the company memo says.

In February, 17 indigenous communities who accused HAGL of land grabbing in their home villages in Ratanakkiri province filed a complaint with the IFC – which invests in the rubber producer via an intermediary fund called Dragon Capital Group.

The Post reported last month that the IFC’s compliance ombudsman had launched an investigation into the agricultural giant’s rubber plantations after meeting with villagers in early April.

Eang Vuthy, executive director of NGO Equitable Cambodia, which is working with affected families, welcomed the company’s suspension as a positive step towards a resolution, but said the stoppage did not cover all the areas that need to be addressed.

“We would like to see the company halt all clearance at all affected communities, not just 13 as indicated in the announcement,” he said in an email yesterday.

“Also, we would like to see the company put a stop on planting rubber trees on the disputed land, lands that have already been cleared, until the disputes are appropriately addressed.”

Last year, UK-based NGO Global Witness published a report accusing HAGL of illegally logging outside concession areas and being in possession of at least 47,000 hectares of economic land concessions – almost five times the legal limit.

The IFC, Deutsche Bank and, later, Credit Suisse were all singled out for investing in HAGL. Deutsche Bank subsequently divested, while Credit Suisse claimed that its holdings predated the Global Witness report.

A spokesperson for the IFC’s Cambodian office labelled the intervention as a mediation process, rather than an investigation, before referring specific questions on the action to the Washington-based watchdog carrying it out.

The compliance ombudsman did not immediately respond to questions from the Post yesterday.

HAGL could also declined to comment on the matter.

Despite the recent progress towards a resolution, affected villagers contacted yesterday were cautious of a process that has been a long time coming.

“They just suspend it, but we still are not allowed to do anything on our land,” said Sol Sophat, a farmer from Malik village in Ratanakkiri province, who was forced from his home in 2012 to make way for one of HAGL’s rubber projects.

HAGL’s partial suspension of production comes just weeks after Bloomberg reported that the agricultural giant was planning an expansion of its business in Cambodia.

The April 21 report quoted HAGL chief executive officer Nguyen Van Su as saying that the company would harvest corn in Cambodia this year, with further investment planned in food commodities to support increasing demand across the region.

ADDITIONAL REPORTING MAY KUNMAKARA

MOST VIEWED

  • Capital-Poipet express rail project making headway

    The preliminary results of a feasibility study to upgrade the Phnom Penh-Poipet railway into Cambodia’s first express railway indicate that the project would cost more than $4 billion and would take around four years to complete. The study was carried out by China Road and

  • Thai boxers to join SEA Games’ Kun Khmer event

    The Cambodian SEA Games Organising Committee (CAMSOC) – together with the Kun Khmer International Federation (KKIF) and Khmer Boxing Federation – have achieved a “great success” by including Kun Khmer in the upcoming biennial multi-sports event on its home soil for the first time, said a senior

  • Bullets to bracelets: Siem Reap man makes waste from war wearable

    Jewellery is often made from valuable gemstones like emeralds or diamonds and precious metals like gold or silver, or valueless things like animal horns. But a man in Siem Reap has approached the manufacture of delicate pieces from a different angle. His unique form of

  • Second Hungary business forum set for H2

    Cambodia has asked Hungary to provide GSP- (Generalised System of Preferences) Plus facilities for when the Kingdom sheds its least-developed country (LDC) label, as the two countries prepare to hold a second business forum in the second half (H2) of this year to expand trade

  • 61% of 2022 imports came from just 3 markets

    The three largest exporters to Cambodia – mainland China, Vietnam and Thailand – accounted for 60.94 per cent of the Kingdom’s total merchandise imports last year, at $18.245 billion, which was up 11.99 per cent over 2021, according to the General Department of Customs and Excise. Cambodia’s total imports

  • CPP sets out five primary strategic goals for 2023-28

    The Cambodian People’s Party (CPP) on January 29 concluded its two-day extraordinary congress, setting the party’s priority goals for 2023-2028. The ruling party’s congress was attended by more than 3,000 members from across the Kingdom, including the members of the permanent and central committees,