Cambodia: Challenging Mitr Phol land grab

Overview

Hundreds of Cambodian families who were violently displaced by Thai sugar giant Mitr Phol—a supplier to global brands such as Nestlé, Mars and Coca-Cola—have been struggling for justice for over a decade. Now, with the support of Inclusive Development International, our Cambodian partner organizations, and a team of Thai lawyers, they’re taking their case to the Thai courts in a groundbreaking class action suit. This is the first transboundary human rights litigation of its kind in Southeast Asia and will set a precedent for whether transnational corporations can be held legally accountable in their home countries for abuses they commit abroad.

 

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 Nestlé, 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 Thai sugar giant Mitr Phol—supplier to global brands such as Nestlé, Mars and Coca-Cola—secured a legally dubious large-scale land concession from the Cambodian government in 2008, the communities and smallholder farmers living on and working the land were forced out to make way for an industrial sugarcane plantation.

More than 2,000 families in 26 villages were displaced. Affected households lost extensive rice fields, orchards, grazing land, crops and access to forests that sustained their livelihoods. In some instances, police and private security forces violently evicted residents, bulldozed houses, torched rice fields, and beat and arrested villagers. Families were left homeless and landless, with many forced to migrate to Thailand to find work.

One brave community leader, Hoy Mai, traveled 300 miles while pregnant to the capital Phnom Penh to petition the Prime Minister for help. Instead, she was arrested and gave birth in prison. More than ten years later, she is still fighting for justice as the lead plaintiff representing more than 700 affected families in a groundbreaking class action suit against Mitr Phol that is now underway in Thailand. The class action Hoy Mai & Others vs. Mitr Phol Co. Ltd. is the first of its kind in Southeast Asia.

Inclusive Development International worked with Cambodian partners and a team of Thai lawyers to file the lawsuit against Mitr Phol in 2018, after exhausting many other avenues for advocacy. Since then, we have overcome numerous procedural barriers—challenging Mitr Phol’s attempts to get the case dismissed and securing reams of evidence from the company’s buyers in the United States—to ensure the case moves forward and we have the best chances of success.

The stakes in this suit are high, not only for the communities seeking redress, but for corporate accountability globally. If the plaintiffs prevail, it will prove that multinational corporations can be held legally accountable in their home countries for abuses they commit abroad, signaling to parent companies everywhere that they cannot hide behind the lax legal systems of host countries.

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

Inclusive Development International’s founders began working with the affected communities in 2010 to seek redress and hold Mitr Phol accountable. In collaboration with Cambodian human rights groups, we have supported the communities to pursue a range of advocacy strategies, including engaging with Mitr Phol’s buyers and filing complaints to Bonsucro—an industry dominated “sustainable” sugarcane multi-stakeholder initiative to which Mitr Phol belonged—and to the Thai Human Rights Commission, before filing a class action suit against the company in its home country of Thailand.

Engaging with Multi-Stakeholder Initiative Bonsucro

In 2011, after identifying Mitr Phol as the hidden owner of the Cambodian shell companies behind the land grabs in Oddar Meanchey, Inclusive Development International’s founders worked with representatives of the evicted families to submit a complaint to the grievance mechanism of Bonsucro, an industry dominated “sustainable” sugarcane multi-stakeholder initiative to which Mitr Phol belonged. The complaint was accepted, but rather than addressing the allegations, Mitr Phol withdrew from the initiative. Three years later, however, the company was quietly reinstated as a Bonsucro member even though it had failed to re-engage in the complaint resolution process. This was despite an express written commitment in 2012 by the then-chair of Bonsucro’s Complaints and Grievances Committee that engagement in the resolution process would be a condition of readmission should the company choose to rejoin.

In 2016, Inclusive Development International, together with local partners Equitable Cambodia and the Cambodian League for the Promotion and Defense of Human Rights (LICADHO)  submitted a new complaint to Bonsucro on behalf of 712 families. The complaint requested 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 could not be reached, to expel Mitr Phol from the organization for breaching its Code of Conduct. 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 injustice by lodging a precedent-setting complaint against Bonsucro with the UK National Contact Point for Responsible Business Conduct, arguing that the multi-stakeholder initiative 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 alleged that 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 admitted the complaint.  After a lengthy examination, in January 2022 it determined that Bonsucro had breached OECD standards and violated its human rights responsibilities. Specifically, it found that Bonsucro “did not undertake an appropriate level of due diligence” when it readmitted Mitr Phol as a member in 2015. It also found that Bonsucro failed to use its leverage with Mitr Phol to remediate the harms suffered by Cambodian communities devastated by the company’s land grab. 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.”

Engaging the Thai National Human Rights Commission

In May 2013, Inclusive Development International’s Cambodian partners 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 on 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 directly responsible for the forced evictions and associated human rights violations and in serious breach of its responsibilities 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.

At a press conference, the Thai human rights commissioner Niran Phitakwatchara said that the land grabs led to the “collapse of the community.” Rarely, if ever, has a national human rights commission issued such a strong condemnation of a private company. Yet, Mitr Phol has since refused to provide any form of compensation to the Cambodian families whose lives it destroyed.

Bringing a Landmark Human Rights Case against Mitr Phol in Thailand

Frustrated by the failure of Bonsucro’s grievance mechanism and Mitr Phol’s refusal to compensate the families even in the face of clear recommendations to do so by the Thai Human Rights Commission, Inclusive Development International worked with our Cambodian partners and a team of Thai lawyers to bring a landmark class-action lawsuit against the company in the Thai courts. Hoy Mai & Others vs. Mitr Phol Co. Ltd., filed in April 2018 and representing a class of approximately 3,000 people, is 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, Inclusive Development International and our partners 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. In May 2022, the court denied Mitr Phol’s motion to dismiss the case, allowing it to proceed to trial, likely in 2023.

Engaging with Mitr Phol’s Buyers

In parallel with other advocacy strategies, Inclusive Development International has been engaging with Mitr Phol’s buyers on an ongoing basis to urge that they use their leverage to hold the company accountable to its human rights responsibilities.

Inclusive Development International and other members of the Clean Sugar Campaign, a coalition working to address human rights abuses by sugar producers in Cambodia, wrote to Coca-Cola in November 2013 to urge it to implement its pledge of “zero tolerance for land grabbing” in its supply chain.  In response to Oxfam’s Behind the Brands campaign, the Coca-Cola Company had acknowledged its responsibility to take action and use its influence to help protect the land rights of local communities affected by its sugar suppliers and pledged to take 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.”

 

In our letter to Coca-Cola, Inclusive Development and partners asked the company to make good on these promises in its relationship  with Mitr Phol by:

  • 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 never made its findings public and failed to use its leverage to compel the company to provide redress to the victims in Cambodia. The company 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.

In 2021, Inclusive Development International filed a petition with the U.S. federal court in the Northern District of Georgia, on behalf of plaintiffs in the class action lawsuit underway in Thailand, requesting assistance in obtaining evidence from Coca-Cola from its investigations into Mitr Phol. The U.S. Foreign Legal Assistance Statute (FLA) permits U.S. courts to assist foreign litigants in obtaining evidence from companies found in the United States. The court has since ordered Coca-Cola to turn over the information requested, which it determined to be “essential to the full and fair adjudication of the Thai proceedings.”

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

Inclusive Development International continues to call on 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 Nestlé – 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.

Mitr Phol’s concessions breached 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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