Cambodia: Challenging Mitr Phol land grab and Bonsucro greenwashing

Overview

A decade-long struggle by displaced Cambodian farmers against Asia’s largest sugar company has led to a landmark court victory in the company’s home country of Thailand. This transboundary human rights litigation against Mitr Phol - which has supplied Nestle, Mars, PepsiCo and Coca-Cola - is the first of its kind in Southeast Asia. Meanwhile, a legal challenge by Inclusive Development International and our Cambodian partners to the so-called ‘sustainability initiative’ Bonsucro is holding the sugar industry accountable for its shameful greenwashing of Mitr Phol’s human rights abuses.

 

CASE FILE

Location: Cambodia – Oddar Meanchey province
Project Sugarcane plantation
Companies: Mitr Phol Sugar Corporation and Bonsucro
Key concerns:

 

·      Land grabbing and forced evictions

·      Destruction of homes, crops and property

·      Homelessness and impoverishment

·      Corporate impunity and failure to provide redress

·      Multi-Stakeholder Initiative greenwashing

Community goals: Return of land and compensation for losses
Key investors and buyers: Mitr Phol Sugar Corp is a privately owned group of companies, mainly owned by the Vongkusolkit family. Its current and former sugar buyers include Nestle, Mars-Wrigley, Coca-Cola, PepsiCo, Corbion and Total.
Our partners: Equitable Cambodia, the Cambodian League for the Promotion and Defense of Human Rights (LICADHO), Community Resource Center, Legal Rights and Environmental Protection Advocacy

 

After securing a legally dubious large-scale land concession from the Cambodian government, Thai sugar giant Mitr Phol colluded with local authorities to grab 9,400 hectares of land from smallholder farmers for an industrial sugarcane plantation in northwestern Cambodia.

Between 2008 and 2009, more than 2,000 families in 26 villages were forced to give up their land for Mitr Phol’s concessions. Affected households lost extensive rice fields, orchards, grazing land, crops and access to non-timber forest products that sustained their livelihoods.

One residential village, O’Bat Moan, was completely destroyed. Police and private security forces descended on the village, forcibly evicting residents, bulldozing houses, torching rice fields, and beating and arresting villagers. The families were left homeless and landless, with many forced to migrate to Thailand to find work.

One brave community leader, Hoy Mai, was arrested after travelling to the capital to deliver a petition to the Prime Minister. She was pregnant at the time and gave birth during her imprisonment.

An investigation by the Thai National Human Rights Commission found Mitr Phol directly responsible for the forced evictions and associated human rights violations. The land grabs led to the “collapse of the community,” commissioner Niran Phitakwatchara said at a press conference. Rarely, if ever, has a national human rights commission issued such a strong condemnation of a private company. In its final report, the Commission called upon Mitr Phol to “correct and remedy the impacts.” Yet, Mitr Phol has steadfastly refused to provide any form of compensation to the Cambodian families whose lives it destroyed.

In 2011, representatives of the evicted families submitted a complaint against Mitr Phol to the grievance mechanism of Bonsucro – an industry dominated “sustainable” sugarcane multi-stakeholder initiative, to which Mitr Phol belonged. Mitr Phol withdrew its membership in Bonsucro rather than address the complaint. Three years later, the company was quietly reinstated even though it failed to re-engage in the complaint resolution process.

Inclusive Development International, together with local partners Equitable Cambodia and LICADHO, filed another complaint with Bonsucro’s grievance mechanism on behalf of the families in 2016. Two years later, the complaint was dismissed by Bonsucro’s board on the grounds that it had not received “cogent evidence that…Mitr Phol breached the terms of Bonsucro’s Code of Conduct in place at the time.”

Frustrated by Bonsucro’s inaction, with Inclusive Development International’s assistance, the families filed a landmark class-action lawsuit against Mitr Phol in the Thai courts. The transboundary class action Hoy Mai & Others vs. Mitr Phol Co. Ltd. is the first of its kind in Southeast Asia.

Inclusive Development International, Equitable Cambodia and LICADHO also filed a precedent-setting complaint against Bonsucro with the UK National Contact Point for Responsible Business Conduct for failing to hold its member company accountable for gross human rights abuses. The U.K. National Contact Point admitted the complaint, finding that multi-stakeholder initiatives like Bonsucro are in fact bound by the international human rights norms codified in the Organisation for Economic Co-operation and Development (OECD) Guidelines on Multinational Enterprises.

It has been a long road to justice for the Oddar Meanchey communities, and there’s still a way to go, but there is now real hope that Mitr Phol and its industry enablers will finally be held to account.

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Our Actions

On January 31, 2011, a complaint was submitted on behalf of affected communities to Bonsucro, a multi-stakeholder ‘sustainability initiative’ for sugarcane that Mitr Phol had joined. The complaint details widespread violations of Cambodian law, human rights and the core principles of Bonsucro’s Code of Conduct.

The complaint was accepted as within the remit of Bonsucro’s Complaints and Grievances Committee (CGC) and the organization attempted to establish a Complaints Resolution Mechanism to “resolve the complaint in a manner that is mutually agreeable to all parties involved.” However, rather than engaging in the complaint resolution process, Mitr Phol withdrew from its membership in Bonsucro in June 2011.

In May 2013, local NGOs filed a complaint with the Thai National Human Rights Commission on behalf of the affected communities alleging that Mitr Phol’s Cambodian subsidiaries are implicated in serious human rights violations in relation to its land concessions in Oddar Meanchey. The complainants called upon the Commission to recommend appropriate remedies, including return of forcibly seized lands and payment of damages to victims for abuses they suffered due to the company’s actions or negligence.

In October 2015, the Thai National Human Rights Commission issued its investigation report, finding Mitr Phol Group in serious breach of its responsibility to respect human rights under the United Nations Guiding Principles on Business and Human Rights. Importantly, the Commission found that, although Mitr Phol has since ceased its operations in Cambodia and relinquished its economic land concessions there, the company has an ongoing responsibility to provide compensation and other appropriate remedies for the losses and human rights impacts suffered by people in Bos, O’Bat Moan, Taman, Trapaing Veng and Ktum villages as a direct result of its previous business activities.

In June 2015, Mitr Phol quietly rejoined Bonsucro but was not required to reengage in the complaint resolution process, despite an express written commitment in 2012 by the then-chair of the Complaints and Grievances Committee that engagement in the resolution process would be a condition of readmission should the company choose to join Bonsucro again.

In light of this development, in February 2016, Inclusive Development International, LICADHO and Equitable Cambodia submitted a new complaint to Bonsucro on behalf of the 712 families. The complaint requests that Bonsucro appoint a competent and impartial mediator to attempt to bring about a resolution of the case through the provision of adequate compensation to affected households, and if such a resolution cannot be reached, to expel Mitr Phol from the organization for breaching its Code of Conduct.

Some two years later, Bonsucro’s board dismissed the complaint without taking any action, while at the same time accepting Mitr Phol’s paid sponsorship of its Bonsucro Global Week conference in Thailand in 2019. The week’s events showcased Mitr Phol as a “leading member” and culminated with a visit to one of its sugar mills.

In March 2019, Inclusive Development International, LICADHO and Equitable Cambodia responded to this outrageous injustice by lodging a complaint against Bonsucro with the U.K. National Contact Point for Responsible Business Conduct, arguing that the multi-stakeholder initiative has breached its human rights responsibilities under the OECD guidelines and U.N. Guiding Principles on Business and Human Rights.

Industry sustainability bodies such as Bonsucro have become increasingly important in recent years, as the public demands ethical sourcing of commodities found in consumer products. Bonsucro claims its mission is “to ensure that responsible sugarcane production creates lasting value for the people, communities, businesses, economies and eco-systems in all cane-growing regions.” The complaint alleges the opposite: rather than hold Mitr Phol to these standards, Bonsucro whitewashed the company’s human rights abuses with its stamp of approval, helping to facilitate access to the global sustainable sugar market.

On September 25, 2019, the U.K. National Contact Point ruled the complaint admissible. The decision establishes that London-based Bonsucro is bound by OECD standards on responsible business conduct and does not operate in a human rights vacuum. The U.K. National Contact Point is currently conducting an examination of the merits of the complaint to determine whether Bonsucro’s actions have been inconsistent with the OECD Guidelines. For more about the importance of this case, read our blog “Why Multi-Stakeholder Initiatives Need to be Held Accountable for their Rights Abusing Members.”

Given Mitr Phol’s steadfast refusal to engage with the communities and provide appropriate remedies through the non-judicial grievance mechanisms they have attempted to use, in April 2018, plaintiffs representing the five most affected villages filed a landmark class-action lawsuit against Mitr Phol in the Thai courts. Filed by Thai lawyers with Inclusive Development International’s assistance, and representing a class of approximately 3,000 people, the complaint was the first ever class-action lawsuit filed in the Thai courts by plaintiffs from another country for abuses committed by a Thai company outside of Thailand. More details about the case are available here.

When the court of first instance wrongly denied class action status to the plaintiffs, we appealed the decision and won. On July 31, 2020, the Bangkok South Civil Court overturned the lower court’s decision and recognized class status for the complaint, allowing the roughly 700 families to bring the lawsuit as a group. For Thailand and the region, the decision changes the legal landscape, providing that class action legislation can be used in transboundary cases and to protect the victims of transnational corporate abuse in Southeast Asia and beyond.

Mitr Phol Buyers

In November 2013, the Coca-Cola Company issued a statement in response to Oxfam’s Behind the Brands Campaign, acknowledging its responsibility to take action and use its influence to help protect the land rights of local communities affected by its sugar suppliers. The soft drink giant committed to zero tolerance for land grabbing in its supply chain.

Specifically, Coke committed to the following steps:

  • Conduct third-party social, environmental and human rights assessments of its suppliers, beginning in Brazil, Colombia, Guatemala, India, the Philippines, Thailand and South Africa.
  • Disclose within three years all sourcing countries for cane sugar and the names of all its direct cane sugar suppliers (Mitr Phol was disclosed at the time as one of its top three cane suppliers globally).
  • Adhering to the principle of Free, Prior and Informed Consent across its operations and requiring its suppliers to adhere to this principle.
  • Requiring respect for and prohibition of the violation of the land rights of communities and traditional peoples in its Sustainable Agriculture Guiding Principles (SAGP).
  • If a supplier fails to uphold any aspect of the SAGP requirements, the Coca-Cola Company will “work with the supplier on corrective action. If such action is not taken, the supplier relationship will be terminated.”

 

Inclusive Development International and other members of the Clean Sugar Campaign coalition wrote to Coca-Cola to urge it to implement the pledge with respect to Mitr Phol by taking the following steps:

  • Conducting a credible and transparent third-party social, environmental and human rights impact assessment of Mitr Phol’s operations in Cambodia.
  • Working with Mitr Phol to develop a time-bound remedial action plan, based on the findings of this assessment, meaningful consultation with the affected people and in accordance with IFC Performance Standard 5.
  • Notifying Mitr Phol that if it does not cooperate in this process, the supply relationship will be terminated.

 

While Coca-Cola took some initial steps to investigate the allegations and engaged with Mitr Phol on the concerns, it failed to use its leverage to compel the company to provide redress to the victims in Cambodia and has since attempted to distance itself from the problem rather than fulfilling its promise to have zero tolerance for land-grabbing in its supply chain.

Other Mitr Phol buyers include Nestle, Mars Wrigley, and Corbion.  Pepsi has confirmed that Mitr Phol is no longer a supplier.

Inclusive Development International calls upon all of Mitr Phol’s industrial buyers to use their leverage to ensure that Mitr Phol repairs the grave harms it caused to hundreds of families in Cambodia. In November 2020, ahead of the Ninth UN Forum on Business and Human Rights, where we delivered this joint statement, we wrote to Mitr Phol’s buyers to urge them to act without further delay.  Read the correspondence:

Letter to Coca Cola – Company Response

Letter to Mars Wrigley – Company Response

Letter to Nestle – No written response received to date

Letter to Corbion – Company Response

Letter to Pepsi – Company Response

 

Background

In January 2008, the Ministry of Agriculture, Forestry and Fisheries (MAFF) granted three 70-year economic land concessions (ELCs) for industrial sugarcane production in the Samrong and Chongkal districts of Oddar Meanchey province.

The three concessions together totaled more than 19,700 hectares and were all clearly connected. Conscious of the illegality of owning concessions larger than 10,000 hectares, the company issued a statement in 2012, explaining that “Mitr Phol owns one company and is partnering with two other companies not owned by Mitr Phol.”  Nevertheless, all three companies applied for the concessions on the same day, received approval from the Council of Ministers on the same day (and in the same letter), and signed the concession contract on the same day. The directors of each of the three companies are or were all senior figures in Mitr Phol: Buntoeng Vongkusolkit (Managing Director), Krisda Monthienvichienchai (President), and Tat Wanakornkul (Vice President).

According to a letter issued in 2007 by provincial authorities, 31 villages occupying an area of 4,500 hectares in three communes were located within the boundaries of the proposed concessions. Community representatives report that in May 2007, the land concessions were demarcated and villagers were warned to stop using the land that overlapped with the concessions. In April 2008, the company started clearing the land.

Throughout 2008-2009, more than 2,000 smallholder families in Kon Kriel commune were forced to give up their land for the Angkor Sugar concession. Affected households lost extensive rice fields, plantation/orchard land, and grazing land as well as the associated crops that sustained their livelihoods. Crops including rice, watermelon, maize, cassava, sweet potatoes, and soybeans were lost. Sampled households interviewed by Equitable Cambodia lost five hectares of rice fields on average. Annual market-related losses from rice crops averaged $1,570 per family. Compensation provided for these losses was generally a plot of inferior land that was much smaller than what they lost and often already owned by others.

Common property resources, including community-managed forests, were also lost or degraded as a result of Mitr Phol’s plantation development. The Angkor Sugar concession effectively reduced the size of the pending Ratanak Rukha / Rattanak Sambak Community Forest from 28,772 to 12,872 hectares, affecting the livelihoods of thousands of people in 16 villages. Extensive illegal logging of old growth, high-value timber was also documented within the concession.

Villagers watch their farmhouse burn during forced evictions in O’Bat Moan village, Kon Kriel commune, October 2009.

The most grave human rights violations occurred in O’Bat Moan village in Kon Kriel commune, which was entirely destroyed to make way for Mitr Phol’s plantations. In April 2008, 154 homes in the village were forcibly demolished by Angkor Sugar Company staff under the guidance of local authorities. Further evictions occurred in October 2009, when around 100 homes were burned to the ground by approximately 150 police, military police and hired demolition workers. Most affected families lost all of their possessions during the evictions and were left landless and homeless. Even their rice crops, which they were about to harvest, were reportedly looted by company staff and security forces, leaving them without essential food and income in the immediate aftermath of the evictions. These forced evictions were preceded by arrests and an assault on the former village chief. Two community leaders were sentenced to two years in jail on charges of ‘clearing State forest,’while two others were released after serving over six months in pre-trial detention. One was pregnant at the time and gave birth during her eight months of imprisonment.

Only 14 families from O’Bat Moan village received compensation in the form of a one hectare plot of forested land in a remote area. The shelters that these families have rebuilt there are rudimentary and do not provide sufficient protection against the elements. They lack access to sanitation and drinking water. Transportation is difficult to arrange, time consuming, and costly due to the remote location and poor conditions of the access road. Thus, access to health care, education and the outside community is severely limited. The closest school, for example, is 10 kilometers away.

Many affected people resorted to illegal migration to Thailand after they lost their land to the sugar concessions.

The facts indicate that Mitr Phol colluded with Cambodian authorities to breach a host of Cambodian laws and regulations, including the Constitution, Land Law, Forestry Law, Sub-Decree on Economic Land Concessions, Labor Law, Penal Code and Civil Code, as well as Cambodia’s international human rights treaty obligations.

The company’s acts and omissions also violate the UN Guiding Principles on Business and Human Rights, which hold that businesses must respect the Universal Declaration on Human Rights, ensure they are not involved in violations of human rights, and provide an effective remedy to people whose rights have been violated as a result of their business activities. These responsibilities apply to business activities no matter where they occur, and include a responsibility to conduct human rights due diligence, particularly in situations where there is a significant risk of human rights violations, such as involvement in economic land concessions in Cambodia. And they extend to other businesses that are directly linked to the abuses through their business relationships, as is the case with Bonsucro and Mitr Phol’s major buyers.

Following an investigation by the Thailand Human Rights Commission between 2013 and 2015, Mitr Phol submitted a request to the Cambodian government to cancel its economic concessions in Cambodia. All three concession agreements were cancelled on August 9, 2015. Despite the recommendation of the Thai Human Rights Commission that Mitr Phol compensates the affected families for their losses, the company has consistently refused community requests to engage in a dialogue about remediation.

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