Logo of Phnom Penh Post newspaper Phnom Penh Post - Bank exits rubber firm: NGO



Bank exits rubber firm: NGO

Villagers walk through recently cleared forest inside a HAGL rubber plantation
Villagers walk through recently cleared forest inside a HAGL rubber plantation. PHOTO SUPPLIED

Bank exits rubber firm: NGO

Global Witness, a United Kingdom-based NGO, has alleged that Deutsche Bank has dropped the majority of its holdings in a Vietnamese company that operates rubber plantations in Cambodia, amid accusations the firm is involved in land grabbing and illegal logging.

In a statement released today, Global Witness says the German banking giant has informed the NGO that it has divested from Hoang Anh Gia Lai (HAGL), which operates on economic land concessions in Ratanakkiri province.

“In an email to Global Witness dated 27th November, Deutsche Bank confirmed information that it no longer held any significant stock in HAGL, retaining only ‘minor residual holdings’,” the statement says.

Deutsche Bank spokesman Michael West said the bank does not comment on specific transactions but “the small shareholding referred to was through funds managed by a third party on behalf of external investors”.

“Deutsche Bank upholds the highest standards in the area of sustainability,” he wrote in an email.

Following a Global Witness report in May that was critical of HAGL’s practices and Deutsche Bank’s alleged involvement in the company, the bank told the Post that it did not provide any financing at all to HAGL.

“Deutsche Bank provides clerical trustee services to HAGL as it does to many thousands of listed companies globally,” a spokesman said at the time.

But Global Witness alleges that Deutsche Bank has invested in HAGL “for many years”.

“Its subsidiary (Deutsche Bank Trust Company Americas) acted as HAGL’s depository bank when the company listed on the London Stock Exchange in 2011,” the statement says.

In May’s report, titled Rubber Barons, Global Witness accuses 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.

Despite HAGL claiming it would address these issues, Megan MacInnes, from Global Witness, told the Post last month that little had changed and “logging is still carrying on and the people whose farms were bulldozed are still struggling to feed themselves”.

“In a press statement issued on 14th November 2013”, today’s statement continues: “Global Witness said that HAGL now represented a reputational and financial risk to investors, and that its financial backers should
divest from the company”.

MacInnes said in the statement that the bank had refused to explain why it had dropped its stake in HAGL.

“[But] this move sends a clear message to HAGL and other companies that lack of action to stamp out this kind of abuse is unacceptable and poses a financial and reputational risk to investors,” she said.

Representatives of HAGL told Post reporters last week that it owned only three companies that held ELCs in Cambodia.

Although those companies were in possession of almost 30,000 hectares in total, the representatives, who did not want to be named, said HAGL was doing nothing illegal.

They said the companies were “independent” and the Cambodian government had approved of what they were doing.

Nguyen Van Thu, a company representative, asked for emailed questions last night but did not reply by press time.

Rubber Barons says many villagers affected by HAGL’s activities had lost their livelihoods without compensation and seen sacred forests destroyed.

Eviction protesters had been victims of intimidation and violence, the report adds.

MOST VIEWED

  • Phnom Penh unveils rules for post-lockdown transition

    The Phnom Penh Municipal Administration issued a set of detailed guidelines for the seven days to May 12 after the capital emerges from lockdown at the onset of May 6. In the 14-page document signed by municipal governor Khuong Sreng released on the evening of May 5, the

  • SBI LY HOUR Bank Launches Cross Border Money Transfer Service between Cambodia and Vietnam on RippleNet, utilizing DLT

    SBI LY HOUR Bank Plc and Hanoi-based Tien Phong Commercial Joint Stock Bank (TPBank) on Friday launched the first Cambodia-Vietnam money transfer service in real currency via RippleNet, provided by SBI Ripple Asia Co Ltd to provide safe, fast and convenient services. SBI LY HOUR

  • Gov’t issues guidelines as lockdown nears end

    The government has issued a five-page set of instructions to be enforced when the three-week lockdown of Phnom Penh and adjacent Takmao town in Kandal province ends on May 6. According to an announcement signed by Prime Minister Hun Sen on May 4, the instructions cover a

  • Cambodia ready to exit LDC status

    Cambodia is well-prepared to minimise economic risks when it graduates from its Least Developed Countries status, according to a senior official at the Ministry of Commerce on May 7. Four LDCs – Cambodia, Laos, Bangladesh and Nepal – met at a virtual workshop last week to explore potential

  • Nine US franchises eye Cambodia debut

    Nine famous US franchising companies are looking for business opportunities and expansion into Cambodia to build a footstep for a strong foundation in Southeast Asia. The US embassy in Phnom Penh, in partnership with the US Foreign Commercial Service and with support from the American

  • Lost in translation: ‘Starvation’ in capital’s designated red zones

    “DACH bay” is a Khmer slang meaning a “loss of income”, that could also be literally translated to «deprived of rice”, which alludes to starvation. However, civil society organisation (CSO) officials have independently confirmed the government’s prior assertions that there are no cases of