Logo of Phnom Penh Post newspaper Phnom Penh Post - Rubber fallout extends to IFC

Rubber fallout extends to IFC

Villagers from Lbaing II commune inspect an allegedly illegal logging site in a forest in Ratanakkiri’s Lumphat district
Villagers from Lbaing II commune inspect an allegedly illegal logging site in a forest in Ratanakkiri’s Lumphat district earlier this month. PHOTO SUPPLIED

Rubber fallout extends to IFC

Representatives of 17 indigenous communities announced yesterday they were filing a complaint against the International Financial Corporation (IFC) for investing in a Vietnamese rubber firm accused of illegal logging and land-grabbing in the villagers’ home province of Ratanakkiri.

The complaint, announced at a press conference in Phnom Penh that featured a female representative singing of the communities’ losses, details a litany of alleged abuses and legal violations by Hoang Anh Gia Lai (HAGL), which operates rubber plantations on economic land concessions in the Kingdom’s northeast.

Villagers from Andong Meas and O’Chum districts lodged the complaint with the Compliance Advisor Ombudsman (CAO), the internal watchdog of the IFC, which itself is the private lending arm of the World Bank.

“This complaint provides hard evidence that IFC’s investment has ultimately been used to grab land and destroy critical natural resources,” said Natalie Bugalski, legal director at Inclusive Development International (IDI), one of several NGOs working with the affected families.

The IFC is accused of supporting HAGL’s actions by investing millions of dollars through an intermediary fund called Dragon Capital Group since 2002.

Dragon Capital – whose representatives could not be reached yesterday – holds a 5.5 per cent stake in HAGL.

Last year, HAGL came under fire when Global Witness, an NGO based in London, published a report titled Rubber Barons accusing it 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.

Global Witness singled out IFC, Deutsche Bank and later Credit Suisse for their investments in HAGL, resulting in Deutsche Bank divesting.

Communities are requesting land seized by HAGL be returned, saying they “do not want cash compensation, because it cannot be inherited by the next generation”.

HAGL, which has previously said it is in possession of about 30,000 hectares of ELCs, did not comment yesterday.

Following the submission of the complaint, the CAO has 15 days to respond, IDI managing director David Pred said.

“Why is nearly half of IFC’s financial portfolio going into this black hole of financial markets when they really have no idea what their impacts are on the ground?” he asked.

Eang Vuthy, executive director of Equitable Cambodia, is hopeful the negotiation process will be fruitful.

“We hope that the CAO can help bring the company and its investors around the table to find a resolution that fully respects the rights of the affected indigenous communities and Cambodian law,” he said.

The IFC did not respond to requests for comment by press time.

MOST VIEWED

  • Cambodia unveils new quarantine regulations

    The government has modified Covid-19 quarantine requirements, shortening the duration for, among others, Cambodian officials, foreign diplomats and delegations, investors and inbound travellers in general. According to an official notice signed by Minister of Health Mam Bun Heng late on October 16, quarantine length for Cambodian

  • Cambodia sets new Covid-19 quarantine rules

    The government has modified Covid-19 quarantine requirements, shortening the duration for, among others, Cambodian officials, foreign diplomats and delegations, investors and inbound travellers in general. According to an official notice signed by Minister of Health Mam Bun Heng late on October 16, quarantine length for Cambodian

  • Hun Sen: Cambodia set to fully reopen

    Prime Minister Hun Sen concludes that the October 5-7 Pchum Ben public holiday, during which many people either flocked to their hometowns for family reunion or gathered at tourist attractions across the country, has not caused an outbreak of Covid-19. In a special address to

  • Will Evergrande change the way Chinese developers do business in Cambodia?

    China’s property sector policy has exposed the grim financial condition of real estate developers including those operating in Cambodia, which raises questions over the viability of their projects and business going forward The dark blue netting draping over one of Yuetai Group Co Ltd’

  • Cambodia resumes issuance of tourist visas

    The Ministry of Foreign Affairs and International Cooperation has announced the resumption of its tourist visa and visa exemption programme after a long hiatus due to the Covid-19 pandemic. In a letter dated October 20 and addressed to foreign embassies and consulates, foreign minister Prak Sokhonn

  • Cambodia voted ‘world’s friendliest country’ in Rough Guides reader poll

    Cambodia ranked number one among the “World’s Friendliest Countries”, according to a reader poll conducted by London-based international website “Rough Guides”. Taking submissions through Twitter and Facebook, “Rough Guides”, a well-known travel agency and publisher of guidebooks, said the Kingdom “was by far the