Phnom Penh Post, Issue 15 / 19, September 21 - October 5, 2006
Skyrocketing world rubber prices have seen the Tai Seng Import Export company fighting on two fronts to protect its turf - a 70-year government concession that it says gives it exclusive rights to exploit state rubber plantations in Ratanakkiri.
On one front, entrepreneurs who have gained control of 33 communist-era rubber-worker syndicates are trying to muscle in on 1,300 hectares of rubber plantation that Tai Seng says is part of its concession.
On another front, Tai Seng plans to lodge complaints with the government against Deputy Provincial Governor Bou Lam, who Tai Seng says has permitted another firm to invest in the province's rubber industry.
Tai Seng lawyer Puth Theavy said he will write a letter to Prime Minister Hun Sen seeking intervention, and to the Ministry of Agriculture, Forestry and Fisheries (MAFF) urging it to halt the firm TTY Crumb Rubber Processing Lower Grade Imex Ltd from buying rubber resin in Ratanakkiri.
"The signature of Bou Lam contradicts the agreement between the government and the Tai Seng Company," Theavy said.
On May 19, a TTY Company official wrote a letter to Ratanakkiri's governor proposing to open an office for buying resin from local families. On August 28, deputy governor Lam signed an agreement acceding to the firm's request.
"It is a big challenge to our company," said Tai Seng company owner Ly Hong Sin. "Our company pays taxes to the government that total more than $200,000 every year."
Ouk Sokhon, MAFF Undersecretary of State in charge of rubber plantations, said provincial authorities do not have the right to allow private companies to open offices.
"If the Tai Seng firm files a complaint, the ministry will report to Prime Minister Hun Sen to ask for his recommendation," Sokhon said. "He [Bou Lam] may misunderstand the law, but he is deputy governor and he should know about that."
In 1997 the government gave the Tai Seng Import Export Company a 70-year license to collect resin on 2,300 hectares of a state-owned rubber plantation in Ratanakkiri and to plant on an additional 2,000 hectares of land in the province. The license grants the firm the exclusive right to buy resin from the 33 samaki, so-called solidarity organizations or syndicates set up in 1985 to control rubber harvesters.
Lam told a Cambodian newspaper on September 14 that he did not violate the law and the TTY company agreement was made with the governor according to a prakas from the MAFF issued on December 15, 2003, a notification from the MAFF minister issued on February 22, 2004, and from Hun Sen himself on April 29, 2004.
"Allowing the TTY company to buy resin is not going to affect the Tai Seng firm because Ratanakkiri has more than 5,000 hectares of rubber plantation," Lam said. "According to the agreement in 1997, the government has allowed Tai Seng to buy only on the 2,300 hectares."
Free market
He said people who plant rubber privately can sell their products to any firm and Tai Seng firm cannot limit the price, as it is a free market.
Ratanakkiri Governor Muong Poy said he received the proposal from TTY but did not permit the firm to open an office. He said he advised the firm to ask permission from MAFF because rubber plantations in the province are under the ministry's control.
"I was not aware that Bou Lam signed an agreement permitting the firm to open an office here," Poy said.
Chan Hith, deputy director general of the rubber plantation department, also said he was not aware that the TTY firm had opened an office in Ratanakkiri.
Future growth
He said the Tai Seng firm has the right to control only state rubber, not private - but there were only eight hectares of mature private rubber trees in the province.
"Other private companies cannot buy the rubber resin in Ratanakkiri at the moment because the private rubber group has only eight hectares in which to get resin," Hith said. "But it will be possible in the future when private rubber [plantations] grow up."
Hith said most rubber plantations are in the provinces of Kampong Cham, Kratie, Ratanakkiri and Kampong Thom. There are about 50,000 hectares of rubber plantation in Cambodia, including state and private holdings. More than 80 percent of the plantations are in Kampong Cham.
Tai Seng lawyer Theavy said that in 2004, the 33 samaki in Ratanakkiri, syndicates representing 1,700 rubber workers, asked the government for permission to occupy as private land 1,300 hectares of state rubber plantation not being exploited by the Tai Seng company. But the 1,300 hectares was already part of the Tai Seng concession and the request was rejected by the Council of Ministers and MAFF on August 23, 2006. Theavy said Hun Sen also issued a notification urging Tai Seng to cooperate with provincial authorities to curb illicit resin trading in the province.
Soy Sona, deputy chief of Ratanakkiri's agriculture office, explained that the reason the samaki want to occupy land separately from the Tai Seng firm, was because of skyrocketing resin prices. Most people in the province had switched from farming to harvesting rubber to earn more income.
"The living standard of people planting rubber is much better than farming," Sona said. "But they spend more money [to take care of the rubber trees] until they can harvest them for resin."
Hong Sin said most of the chiefs of the samaki are not longstanding community members, but businessmen from outside the area. He said many rubber trees have been cut down secretly and the resin sold to other firms.
Hem Sophal, a member of a governmental rubber-measuring committee, said many samaki chiefs have recently been replaced and some are managing without recognition from local authorities.
Hong Sin said that in the past, rubber workers took home 70 percent of the money they made selling resin and gave the other 30 percent to the samaki chiefs, who he claims also serve as resin dealers and middlemen. According to Sin, the workers now get only 50 percent, and that the reduction has prompted many to sell to other companies from outside the province.
Sona recognized that a brisk trade in illegal rubber resin has been prevalent in Ratanakkiri to Kampong Cham since late 2005 and early 2006, but claimed the activities decreased when the Tai Seng Company began cooperating with provincial authorities to stop the smuggling.
'The problem occurred from both sides - the workers and company, but we always solved it for them," Hith said,
Sophal said nearly 300 hectares of private rubber plantation had been planted, but only 10 hectares was mature and producing resin. Its owners had the right to sell to companies other than Tai Seng.
"About 80 percent of land in Ratanakkiri is good for rubber plantations," Sophal said, "The resin can be exported to China and Malaysia through Vietnam."
On one front, entrepreneurs who have gained control of 33 communist-era rubber-worker syndicates are trying to muscle in on 1,300 hectares of rubber plantation that Tai Seng says is part of its concession.
On another front, Tai Seng plans to lodge complaints with the government against Deputy Provincial Governor Bou Lam, who Tai Seng says has permitted another firm to invest in the province's rubber industry.
Tai Seng lawyer Puth Theavy said he will write a letter to Prime Minister Hun Sen seeking intervention, and to the Ministry of Agriculture, Forestry and Fisheries (MAFF) urging it to halt the firm TTY Crumb Rubber Processing Lower Grade Imex Ltd from buying rubber resin in Ratanakkiri.
"The signature of Bou Lam contradicts the agreement between the government and the Tai Seng Company," Theavy said.
On May 19, a TTY Company official wrote a letter to Ratanakkiri's governor proposing to open an office for buying resin from local families. On August 28, deputy governor Lam signed an agreement acceding to the firm's request.
"It is a big challenge to our company," said Tai Seng company owner Ly Hong Sin. "Our company pays taxes to the government that total more than $200,000 every year."
Ouk Sokhon, MAFF Undersecretary of State in charge of rubber plantations, said provincial authorities do not have the right to allow private companies to open offices.
"If the Tai Seng firm files a complaint, the ministry will report to Prime Minister Hun Sen to ask for his recommendation," Sokhon said. "He [Bou Lam] may misunderstand the law, but he is deputy governor and he should know about that."
In 1997 the government gave the Tai Seng Import Export Company a 70-year license to collect resin on 2,300 hectares of a state-owned rubber plantation in Ratanakkiri and to plant on an additional 2,000 hectares of land in the province. The license grants the firm the exclusive right to buy resin from the 33 samaki, so-called solidarity organizations or syndicates set up in 1985 to control rubber harvesters.
Lam told a Cambodian newspaper on September 14 that he did not violate the law and the TTY company agreement was made with the governor according to a prakas from the MAFF issued on December 15, 2003, a notification from the MAFF minister issued on February 22, 2004, and from Hun Sen himself on April 29, 2004.
"Allowing the TTY company to buy resin is not going to affect the Tai Seng firm because Ratanakkiri has more than 5,000 hectares of rubber plantation," Lam said. "According to the agreement in 1997, the government has allowed Tai Seng to buy only on the 2,300 hectares."
Free market
He said people who plant rubber privately can sell their products to any firm and Tai Seng firm cannot limit the price, as it is a free market.
Ratanakkiri Governor Muong Poy said he received the proposal from TTY but did not permit the firm to open an office. He said he advised the firm to ask permission from MAFF because rubber plantations in the province are under the ministry's control.
"I was not aware that Bou Lam signed an agreement permitting the firm to open an office here," Poy said.
Chan Hith, deputy director general of the rubber plantation department, also said he was not aware that the TTY firm had opened an office in Ratanakkiri.
Future growth
He said the Tai Seng firm has the right to control only state rubber, not private - but there were only eight hectares of mature private rubber trees in the province.
"Other private companies cannot buy the rubber resin in Ratanakkiri at the moment because the private rubber group has only eight hectares in which to get resin," Hith said. "But it will be possible in the future when private rubber [plantations] grow up."
Hith said most rubber plantations are in the provinces of Kampong Cham, Kratie, Ratanakkiri and Kampong Thom. There are about 50,000 hectares of rubber plantation in Cambodia, including state and private holdings. More than 80 percent of the plantations are in Kampong Cham.
Tai Seng lawyer Theavy said that in 2004, the 33 samaki in Ratanakkiri, syndicates representing 1,700 rubber workers, asked the government for permission to occupy as private land 1,300 hectares of state rubber plantation not being exploited by the Tai Seng company. But the 1,300 hectares was already part of the Tai Seng concession and the request was rejected by the Council of Ministers and MAFF on August 23, 2006. Theavy said Hun Sen also issued a notification urging Tai Seng to cooperate with provincial authorities to curb illicit resin trading in the province.
Soy Sona, deputy chief of Ratanakkiri's agriculture office, explained that the reason the samaki want to occupy land separately from the Tai Seng firm, was because of skyrocketing resin prices. Most people in the province had switched from farming to harvesting rubber to earn more income.
"The living standard of people planting rubber is much better than farming," Sona said. "But they spend more money [to take care of the rubber trees] until they can harvest them for resin."
Hong Sin said most of the chiefs of the samaki are not longstanding community members, but businessmen from outside the area. He said many rubber trees have been cut down secretly and the resin sold to other firms.
Hem Sophal, a member of a governmental rubber-measuring committee, said many samaki chiefs have recently been replaced and some are managing without recognition from local authorities.
Hong Sin said that in the past, rubber workers took home 70 percent of the money they made selling resin and gave the other 30 percent to the samaki chiefs, who he claims also serve as resin dealers and middlemen. According to Sin, the workers now get only 50 percent, and that the reduction has prompted many to sell to other companies from outside the province.
Sona recognized that a brisk trade in illegal rubber resin has been prevalent in Ratanakkiri to Kampong Cham since late 2005 and early 2006, but claimed the activities decreased when the Tai Seng Company began cooperating with provincial authorities to stop the smuggling.
'The problem occurred from both sides - the workers and company, but we always solved it for them," Hith said,
Sophal said nearly 300 hectares of private rubber plantation had been planted, but only 10 hectares was mature and producing resin. Its owners had the right to sell to companies other than Tai Seng.
"About 80 percent of land in Ratanakkiri is good for rubber plantations," Sophal said, "The resin can be exported to China and Malaysia through Vietnam."
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