Cambodia: Hoang Anh Gia Lai rubber plantations

Inclusive Development International has assisted indigenous communities from Cambodia’s Ratanakiri province to file a complaint to the World Bank’s private lending arm, the International Finance Corporation (IFC), and to engage in mediations with a Vietnamese rubber company that grabbed their land and destroyed their resources.  The complaint, submitted on February 10, 2014, details how the IFC has invested in companies that are in flagrant violation of Cambodian and international law and its own social and environmental safeguard policies. Indigenous communities, including the Jarai, Tampoun, Kachok and Kroeung peoples, have lost territory and suffered devastating impacts to their livelihoods, cultural practices and way of life as a result.  The complaint also draws attention to reports of environmental and social harm to communities in Laos as a result of IFC investments in the same company.

Complaint to CAO

Ratanakiri’s once abundant forests have been decimated over recent years as a staggering number of large-scale land concessions have been granted to companies, primarily for rubber plantations. One of the companies that has benefited from the concessions is Vietnamese Hoang Anh Gia Lai (HAGL), whose landholdings cover an estimated 5 percent of the province and overlap with significant tracts of indigenous land.  Among HAGL’s investors is Dragon Capital, a Vietnamese equity fund, which is owned in part by the IFC.

The complaint, which was submitted to IFC’s internal watchdog, the Compliance Advisor Ombudsman (CAO), describes how the Bank failed to conduct an appropriate level of due diligence commensurate to the high-risk nature of its investment and has thereafter consistently failed to monitor and supervise its end use.

In addition to the illegal land seizures in Cambodia, the complaint also describes rights abuses committed against communities in Laos as a result of HAGL’s operations through three rubber concessions.  While IDI has been unable to work with affected communities in Laos due to the repressive human rights situation there and the serious risks that such engagement could pose to the communities, the complaint urges the CAO to consider initiating a compliance audit of IFC’s sub-projects there.

The complaint sets out a litany of harms experienced by the communities, including loss of forest, grazing land, reserved land for shifting cultivation and future generations, spirit forests, burial grounds, access to resin trees and other non-timber forest products that they rely upon. While some households have received inadequate compensation for seized rice fields and farming land, there has been no compensation at all for communal losses. The complaint describes how “the concept of collective ownership over their territory and resources is central to the communities’ identity.” The seizure of their land and destruction of their forests is “particularly devastating” for the communities, because of their reliance on natural sources of food, housing materials, medicines and other needs, and their limited integration into the cash economy.

The complaint sites more than ten flagrant violations of Cambodian law, including laws that enshrine the land rights of indigenous communities, protect Cambodia’s forests, including rare tree species, and regulate economic land concessions.

The IFC’s investment was channeled through an intermediary, Dragon Capital Group, which holds an equity stake in HAGL.  In 2012, the CAO released a damning audit report on IFC’s “financial intermediary” investments, which represents nearly half its entire portfolio, finding that the IFC is oblivious to the environmental and social impacts of the end use of its funds.  The IFC is notoriously non-transparent about its investments, allowing the World Bank Group to contribute significant capital to the private sector, while publicly disclosing only scant information.

The complaint says that due to their deep connection to their lands and forests, the communities want their lands, wrongly seized by HAGL, to be returned to them. Complainants say they “do not want cash compensation [for their land] because it cannot be inherited by the next generation”. They say, that while land can continue to feed them and their children forever, if they receive money “soon it will be gone.”

Since 2014, the communities have been engaged in mediations with HAGL to redress the adverse impacts that they have suffered as a result of HAGL’s activities. IDI has been assisting the communities to engage in this process, alongside local partners Equitable Cambodia and Highlanders Association.

In a major breakthrough in 2015, the company agreed to refrain form any further development of its plantations and to return remaining land, reducing their total concession area to under 14,000ha. It also agreed to a joint-mapping exercise with the company and government to determine which areas of additional land it should return or compensate for.  IDI and local partners have assisted the community in preparing for and participating in the joint mapping exercise, and pushing for recognition of their claims in the mediations. This included training and workshops on tenure options, customary land registration, GIS mapping exercises, and a valuation of losses, among other activities. As a result, the company has now agreed to return further significant tracts of land, including 20 spirit mountains and over two dozen other areas with spiritual and traditional value to affected villagers. The mediations are ongoing.

Additional information is available here.

A human rights impact assessment conducted by IDI and Equitable Cambodia is available here.

The full complaint is available here.

The CAO Assessment Report and Joint Statements issued by the parties are available here.

News and Updates

Vietnam rubber firm reaches accord with Ratanakkiri ethnic villages –Phnom Penh Post, July 27, 2017

Ratanakiri Families reach ‘major breakthrough’ with firm –Cambodia Daily, September 21, 2015 

Major breakthrough in mediation between Hoang Anh Gia Lai company and fourteen indigenous villages – September 20, 2015

Sexual abuse among claims against HAGL –Phnom Penh Post, May 14, 2014

Rubber projects on hold –Phnom Penh Post, May 8, 2014

Rubber company suspends projects as World Bank investigates –Voice of America, May 6, 2014 

IFC accepts complaint over Ratanakkiri rubber plantations –The Cambodia Daily, February 26, 2014

Rubber fallout extends to IFC –Phnom Penh Post, February 14, 2014

Minorities complain to IFC over rubber farm funding –The Cambodia Daily, February 14, 2014

Deutsch Bank and IFC accused of bankrolling Vietnam firms’ land grabs –The Guardian, May 12, 2014