Logo of Phnom Penh Post newspaper Phnom Penh Post - IFC criticised for abusive investments




IFC criticised for abusive investments

An excavator works in a section of deforested land on an economic land concession belonging to the privately owned Hoang Anh Gia Lai company in Ratanakkiri province in 2013
An excavator works in a section of deforested land on an economic land concession belonging to the privately owned Hoang Anh Gia Lai company in Ratanakkiri province in 2013. GLOBAL WITNESS

IFC criticised for abusive investments

Rights groups yesterday took aim at the private-sector arm of the World Bank for investing money into companies that are responsible for human rights abuses around the world, highlighting a Vietnamese rubber firm accused of illegal logging and land grabbing in Ratanakkiri province as a prime example.

In a report titled The Suffering of Others, Oxfam, along with other NGOs including Global Witness and Equitable Cambodia, say the International Finance Corporation (IFC) has “little accountability” for billions of dollars of investments into banks, hedge funds and other financial intermediaries that are awarded to projects responsible for such abuses.

“The IFC’s flawed system of measuring development impacts of financial intermediary (FI) lending means that it has little proof of positive development outcomes,” the report explains.

“The crux of the issue is whether, by channelling funds through third parties, the IFC loses control over how the money is eventually spent,” it says.

“If, as the Bank’s own watchdog claims, the IFC often does not know where its money ends up, and cannot therefore guarantee that it does no harm … what does this mean for the people on the ground”?

The report uses Hoang Anh Gia Lai (HAGL), which operates rubber plantations on economic land concessions in the northeast, as an example of such issues.

In Ratanakkiri, “at least 18 villages, home to some 15,000 people, have been adversely affected or threatened by HAGL’s plantation development,” the report notes.

The confiscation of land and destruction of forests, it explains, has led to a drop in living standards and created food insecurity in some areas.

One affected villager, 57-year-old Dan Leam, said that in Chey Odam commune, while villagers have held onto the majority of their community forest, the loss of more than 200 hectares to HAGL would have long-lasting effects. “We can only live on it now, but not use it for farming,” he said.

Since filing complaints with the IFC last year, villagers said yesterday that the situation with HAGL has improved, with efforts currently being made to reach a resolution by the end of the year.

But Eang Vuthy, executive director of Equitable Cambodia, said more needs to be done by the IFC. “We see clearly the impacts on this case. [Villagers] filed complaints to the IFC, now they are in dialogue with the company … [but] what about many other projects we don’t know about?

“There must be more transparency. [The IFC should] disclose all projects they’ve been financing, including sub-projects.”

In a statement, the IFC said it was taking the findings of the report “very seriously”.

“These cases show we must continually improve our approach to supervision,” it said, adding that it remained “committed to working through financial intermediaries to reach more entrepreneurs and small businesses than we can on our own”.

HAGL did not respond to requests for comment.

ADDITIONAL REPORTING BY PHAK SEANGLY

MOST VIEWED

  • Hungarian exposes 90 to Covid in Siem Reap

    The Ministry of Health has discovered 90 people who have been exposed directly or indirectly to a Hungarian man infected with Covid-19. They all are required to quarantine at home and the hospital. The ministry is searching for other affected people. Among the 90, one is the

  • PM warns of ‘new Cold War’

    Prime Minister Hun Sen said the possibility of a so-called new Cold War has become a significant concern and that all countries have to reject outright, any attempt to allow history to tragically repeat itself. He made the remarks in a speech during 75th Session

  • PM: West unfair to Cambodia

    Prime Minister Hun Sen released a message celebrating the International Day of Peace on Monday, saying that some major powers and western countries had been systemically cooperating to put political pressure on Cambodia as they did in the 1970s and 1980s. Hun Sen said pressuring

  • ‘Bad news is an investor’s best friend’ – unlocking investment potential in Cambodia

    It is time to shop. Economic woes provide good pickings for investors if they know where to look The poem If, written by English Nobel laureate poet and novelist Rudyard Kipling for his son circa 1895, is widely perceived as fatherly advice for John who would

  • PM requests Russia’s Covid vaccine

    Prime Minister Hun Sen has requested that Russia provide Cambodia with its Covid-19 vaccine after the former announced it planned on mass vaccinating its population next month. The request came on Thursday through the prime minister’s Facebook page as he met with Anatoly Borovik,

  • Cambodia, CRF win rice battle in EU Court

    The European General Court has rejected the European Commission’s (EC) request to reject a complaint submitted by Cambodia and the Cambodian Rice Federation (CRF) regarding the EU’s reintroduction of tariffs on Indica rice exports from Cambodia. A court order uploaded to the European