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Smuggling Saps Rubber Industry

Smuggling Saps Rubber Industry

The flow of black market rubber into Vietnam has grown into a flood in recent months

as unpaid workers pilfer latex in lieu of wages and smuggling flourishes in the wake

of an administrative shakeup.

Early this year, Som Sarith was removed from his position as Minister of the General

Department of Rubber Plantations and the department was placed under central authority

of the Ministry of Agriculture. State-run plantations collapsed under the instability

of leadership, with workers reverting to illicit trading across the Vietnamese border.

Chea Song, head of operations at the Department of Rubber Plantations, estimated

that illegal exports account for 10 to 20 percent of rubber production in central

areas of Kompong Cham and Kratie, the country's leading source of latex. In the border

districts of Memot and Snoul, the loss of latex from the state-run plantations was

estimated to be as high as 70 to 90 percent. By the end of June, Memot and Snoul-based

operations had collected only nine per cent of targetted yields.

Company officials in the two districts complained that the local authorities were

doing little to halt the rampant smuggling operations which are run by guerrilla

groups and armed gangs. Latex ,which sells for 150 to 300 riels per kg in the local

market, can fetch up to 300 to 700 riels at the border, depending on the quality.

Lean Try, deputy director of the Memot company said his area has become uncontrollable.

"Unless the local authorities can protect the border crossings we can do nothing,"

he said.

Provincial police and military officials have seized an average of more than 1,000

tons of smuggled rubber a year in recent times but rubber companies then have to

pay police 30% of the value of the latex as a fee for its return.

Try, denouncing the lack of security provided by the provincial authorities, said

five of his workers were killed in August fighting the illicit trade.

Kompong Cham provincial authorities, however, refused to take responsibility for

the smuggling explosion and blamed the plantations and the poor wages paid to the


Falling world prices and lack of state subsidies contributed to financial difficulties

resulting in layoffs and unpaid workers.

Redundant plantation workers were transferred to the fields and their wages were

lowered to 8,000 from 15,000 riels a month. The companies, however, have still not

been able to meet the payroll.

Kim Thorn, a member of one of the 354 families that live and work at the Memot plantations

said they had not been paid since May. She said the workers were angry and defended

their right to take rubber, plantation equipment and spare parts as compensation.

"It's the only way we can survive," she said. "How could we live for

months without any pay? If there was enough pay, we would not have to steal our latex

sheets by passing through dangerous places.

"If the company is so smart, why do they only blame the workers, who do this

on a small scale using bicycles, but they don't look at the large trucks that are

going by full of latex," she added.

The Kompong Cham provincial officer charged that the Memot and Snoul companies owed

the workers a total of 1,300 million riels in back pay.

In 1990 the government gave the companies more autonomy over their financial affairs

and management although they are still obliged to sell rubber to the government rubber


Company officials have plans to raise plant and factory worders' pay-which varies

depending upon volume and quality-from 10,000-100,000 to 20-200,000 riels, the both

plant and factory workers.

In addition, officials say they have tried to provide a welfare package for their

workers, based on the previous French system, that includes an annual food ration

of 24 kg of rice and 10 kg for the workers' children, accommodation, education and

medical care and 200 riels in hardship compensation. They have been hindered by lack

of finances and medical treatment.

For the most part, the plantation hospitals stand empty because of a shortage of

medical supplies and can do little to treat the 10 to 30 percent of workers who come

down with malaria every year.

One woman, a 34-year-old mother of six, who works at the Memot factory said the conditions

for employees were atrocious.

"I was pregnant but still had to work over a tank full of acid [used to make

the latex congeal]. My lungs ached and if I hadn't seen the doctor I could have caught

tuberculosis. And I was never allowed to rest. I was supposed to work until I gave

birth," she said.

The worker said attempts to free the plantations of state control, which were begun

in 1990, had done little to improve the lot of workers

"Everything was upside down.We got only 8,000 to 15,000 riels. The rice and

other supplies didn't turn up sometimes."

Companies demand an output of 35 liters of latex per worker per day, but more than

50 percent of workers could not meet this goal.

In addition to the problems of smuggling and labor unrest, the rubber industry is

also struggling because of the poor condition of the trees. Yields from nearly 70

percent of the rubber trees in Kompong Cham are poor due to disease, improper care

and old age. Rubber trees in good health can produce up to 1,000 to 1,500 kg of latex

per year but most of the trees in Kompong Cham yield between 400 and 700 kg per hectare


Prior to 1970, most of the country's 60,000 hectares of rubber plantations were controlled

by French interests.

During the Khmer Rouge (KR) regime, plantations were abandoned and hundreds of hectares

were cut for firewood.

After the KR were toppled from power in 1979 the State of Cambodia assumed control

of the rubber plantations and reorganized the running of the industry. The 56,709

ha of rubber fields were placed under the control of six state-owned companies, which

employed 28,364 workers. Since 1986, 9,549 ha of rubber sapplings were planted to

replace the more than 10,000 destroyed during the war years.

In 1980, the first year of exports after the Khmer Rouge reign, the state rubber

company exported 1,454 tons of rubber. By 1992, this had risen to 11,227 but exports

are expected to slump to 9,807 tons by the end of this year. The rubber is divided

into different categories depending on quality which ranges from $480 to $610 per


The State of Cambodia government signed contracts of cooperation with the former

Soviet Union, Bulgaria and East Germany to exchange 30,368 ha of rubber production

for much-needed industrial equipment and other raw materials. But following the collapse

of the eastern bloc in 1991, the only official export market Cambodian rubber has

been able to find has been in Singapore.

"We greatly need to improve the quality of our products so that they can meet

international standards" said Chea Song.

In 1992, the French government provided more than 12 million francs to help restore

the rubber plantations and upgrade the technology being used.

An officer of General Department of Rubber Plantations, said the industry needed

foreign investment to help it become internationally competitive but noted that so

far there had been little real interest because of the security situation.


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