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

  • US names new ambassador to Cambodia

    US President Donald Trump on Friday appointed W Patrick Murphy as the new US Ambassador to Cambodia, replacing incumbent William A Heidt. A press release posted on the White House’s website said nominee W Patrick Murphy is currently acting principal deputy assistant secretary at

  • Kingdom is at a crossroads between East, West after poll

    It was dubbed a success by caretaker prime minister Hun Sen after the electoral victory of his Cambodian People’s Party (CPP), which is poised to take all seats in the National Assembly. But the July 29 national election has not been positively looked at by

  • Final poll results confirm first single-party Assembly

    IN an unprecedented situation in Cambodian politics, the official results of the July 29 national elections have declared that the Cambodian People’s Party (CPP) will take all 125 seats in the National Assembly on the back of it receiving 76 per cent of the votes. The National

  • Chinese influence to sweep Kingdom?

    Growing Cambodia-China ties have seen the latter’s influence sweep across the Kingdom through increased investments and tourism. The Asian giant has become the leading source of foreign funds in Cambodia, fuelling the construction sector with huge casino and hotel projects. Much of the growth