EU may halt trade agreement with Cambodia [-It may spell disaster for Cambodia's economy]

Kampong Speu villagers in a land dispute with Phnom Penh Sugar Company are confronted by police during a protest. Photograph: Will Baxter/Phnom Penh Post

Monday, 29 October 2012
Stuart White
The Phnom Penh Post

“A suspension of trade preferences will send a critical message [to] both the current and would-be land-grabbers that you can’t violate people’s rights and then expect to be able to benefit from the EBA”

The European Parliament, representing one of the country’s largest donors, on Friday called for a moratorium on forced evictions, an overhaul of elections and even went so far as to suggest to the European Union that it suspend tariff-free imports of agricultural goods linked to human rights abuses in Cambodia.

In the body’s motion, seven distinct areas of concern are listed, ranging from a rise in violence against protesters to specific cases such as that of Mam Sonando.

The parliament then calls for a number of recommendations, the strongest of which is that the EU’s decision-making body, the European Commission, temporarily halt its “Everything But Arms” (EBA) trade agreement with the Cambodian government – which allows Cambodian goods free access to European markets – “in cases where human rights abuses are identified”.

David Pred, of the fair development NGO Inclusive Development International, has long sought to convince the EU that its EBA initiatives were fuelling land grabbing by Cambodia’s sugar industry.

Pred said yesterday that suspending the EBA on sugar exports would make companies think twice before disregarding residents’ rights.

“A suspension of trade preferences will send a critical message [to] both the current and would-be land-grabbers that you can’t violate people’s rights and then expect to be able to benefit from the EBA,” he said yesterday, via email.

“When the bottom lines of these companies are affected by sanctions, they will reconsider their approach to compensation of the communities they have affected with their operations.”

According to Pred, the “vast majority” of Cambodian sugar is destined for EU consumers thanks to the agreement, the disruption of which would not go unnoticed.

“A suspension of EBA benefits for sugar would absolutely cause these companies to lose profit,” he said.

Forced evictions to make way for sugarcane plantations are not uncommon in the Kingdom.

In 2006, a sugar company owned in part – at the time – by ruling-party Senator Ly Yong Phat bulldozed nearly 1,500 acres of farmland in Koh Kong province, saying that the occupants – who claimed to have cultivated the land since 1979 – lived there illegally. In 2010, another company owned by Yong Phat acquired 9,000 hectares of land for a sugar plantation in Kampong Speu province, displacing more than 2,000 families.

Eang Vuthy, a representative for rights group Equitable Cambodia, noted that a suspension of the trade agreement would also make the Cambodian government sit up and take notice.

“The company that has an interest in this business, now they have to address this problem, and the government also has to pay more attention,” he said. “It’s up to them to make sure that the laws are respected, and the agreement with the EU also.”

Some, however, were not totally convinced.

Peter Brimble, deputy country director of the Asian Development Bank Cambodia, said that while he didn’t have specific data on the proposed suspension’s economic impact on the sugar industry, just ensuring that improperly produced sugar doesn’t reach European markets would pose serious logistical challenges.

“Sugar is white,” said Brimble. “Do they send a guard out to the factory to stamp it somehow? Sometimes it’s very difficult to even tell that it’s come from Cambodia. Rice, for instance, a lot of Cambodian rice goes to Thailand first, and is exported as Thai rice.”

But, he added, the political implications of a suspension could be more significant than the economic ones.

“I think it would put a bad symbol out for Cambodia, and I don’t think Cambodia needs that at this time,” he said. “But how do you implement it?”

Jean-Francois Cautain, the EU’s ambassador to Cambodia, said via email yesterday that the issues contained in the resolution were “of concern” to the EU, and that the document was “part of the ongoing dialogue between the EU and the Royal Government of Cambodia”, but declined to comment on whether the EU would reduce its aid in the absence of improvements to Cambodia’s rights record.

Cambodian government spokesman Phay Siphan said yesterday that he had not yet read the resolution, and declined to comment on its contents.