Bittersweet harvest [-Ly Yong Phat's BLOOD Sugar]

Sacks of freshly produced raw sugar are lined up at the Cambodian plant in which SET-listed Khon Kaen Sugar Industry Plc (KSL) is a joint venture partner. The plant last year became the first new sugar mill to begin operating in the country in more than 40 years.

CPP Land-thief Ly Yong Phat (Photo: The Phnom Penh Post)

Major Thai producer among businesses facing land-grab allegations in Cambodia's lucrative sugar industry.

5/09/2011

James O'Toole

Bangkok Post

PHNOM PENH : Cambodia's burgeoning sugar industry has appeared a sweet deal to both local and international investors of late. Allegations of land-grabbing and human rights abuses now dogging producers, however, have left many people souring on the sector.

With neighbouring Thailand, the world's second-biggest sugar exporter, aiming to export 7 million tonnes this year, sugar would appear a natural choice for Cambodia as it attempts to diversify its agro-industrial production. Adding further attraction has been the duty-free access to European markets which, along with guaranteed minimum prices, came into effect in 2009 for Cambodian sugar as part of the European Union's Everything But Arms (EBA) trade initiative.

In one of the industry's most prominent projects thus far, Thailand's SET-listed Khon Kaen Sugar Industry Plc (KSL) partnered in 2006 with the Taiwanese company Vewong and Cambodian businessman and senator Ly Yong Phat in a joint venture to harvest sugarcane on roughly 20,000 hectares in southwestern Cambodia. In June of last year, the group made its first shipment to Europe, exporting 10,000 tonnes of sugar to the United Kingdom under the EBA agreement.

But as the project has been developed, thousands of Cambodian villagers claim they have been pushed off their farmland, in some cases left homeless and denied their livelihoods, according to local rights groups. Community leaders have been intimidated with lawsuits and attacked by police seeking to clear their land on behalf of the project.

Ly Yong Phat has developed sugar plantations in three provinces, in all of which he has been accused of illegal land-grabbing by NGOs and villagers. The senator brushed off the allegations in an interview with the Phnom Penh Post earlier this year, saying that his concessions had been granted lawfully and that the frequent protests against his operations had been orchestrated by "political parties".

Cambodian villagers evicted for sugar plantations

Villagers in Kampong Speu protesting against land-grabbing and forced eviction by Ly Yong Phat's company (Photo: Heng Reaksmey, VOA)

August 16, 2010
ABC Radio Australia

Cambodia's sugar industry is undergoing a revival but there is a bitter undercurrent to what would otherwise be a great success story. Hundreds of farmers have been forced off their land to make way for sugarcane plantations, which are controlled by foreign firms and take advantage of Cambodia's tax exemptions in Europe. An investigation by Radio Australia has found the EU trade initiatives designed to help least-developed-countries are instead fuelling evictions at gunpoint in rural Cambodia. Rights groups worry the abuses will only continue as the sugar industry- and foreign incentives - grow.

Presenter: Liam Cochrane
Speakers: Dr Peter Baron, Executive Director of the International Sugar Organisation; Khan Samban is the head of the Directorate of Agri-Business at Cambodia's Ministry of Agriculture; Chuon Chhuon, farmer in Amleang commune, Kampong Speu province; David Pred, country director of Bridges Across Borders; Rafael Dochao Moreno, Charge d'Affairs of the EU Delegation to Cambodia

COCHRANE: Cambodia's sugar industry came to an abrupt halt in 1970 when first General Lon Nol and then the Khmer Rouge took over the country.

Now, with the help of foreign money and EU trade incentives, the sugar industry is making a comeback.

In January, Prime Minister Hun Sen proudly opened a new refinery in the country's south-west and in June, the first shipment of Cambodian sugar in four decades was exported to Britain.

But there's a dark side to this economic success story.

[SFX - BURNING / SHOUTING]

That's the sound of farmers wailing as their homes are burned down by police and soldiers to make way for a sugar plantation in the country's north west.

This kind of State-backed dispossession has accompanied the resurgence of Cambodia's sugar industry - a sector driven largely by two foreign factors, says Dr Peter Baron, Executive Director of the International Sugar Organisation.

BARON: Laos and Cambodia, both least developed countries, which have seen a recent revamp of their sugar industry driven exclusively by foreign direct investment aiming at new export opportunities to Asia and the European Union under the so-called Everything But Arms initiative.

COCHRANE: Everything But Arms is an EU scheme which allows Least Developed Countries to send goods to Europe tax free - to encourage trade with poor nations, such as Cambodia.

Khan Samban is the head of the Directorate of Agri-Business at Cambodia's Ministry of Agriculture. He says the EU trade incentives are important for Cambodia's emerging sugar industry.

SANBAN: [translated] I think the EU policy is very beneficial for Cambodia. If the EU doesn't charge any taxes for imports, it opens up new opportunities for foreign investors.

COCHRANE: The Cambodian government has added a further sweetener to the deal, allocating tens of thousands of hectares as economic land concessions for sugarcane plantations.

The details of how these land deals are done remain murky, but laws covering economic land concessions clearly state the need for social impact assessments, public consultations and for any resettlement issues to be resolved.

In reality, that doesn't happen, says farmer Chuon Chhuon.

CHUON: [translated] I am begging to keep only 200 square meters of land next to the highway. But the company doesn't listen and keeps clearing the land I asked for. Sometimes, in the morning, the company brings in bulldozers with military police carrying stun batons.

COCHRANE:Chuon Chhuon says he's lived on his land in Kampong Speu province for 10 years, and has developed orchards of mango and banana trees.

That should be enough to secure his property. That's because Cambodia's land title system was wiped out by the Khmer Rouge, and new laws give ownership to anyone who lives on the land for more than five years.

But laws mean little when powerful interests are involved.

And when it comes to Cambodia's sugar industry, the key powerful player is Ly Yong Phat, a senator and businessman who owns one sugar plantation outright, is involved in several others and is a 20 per cent stakeholder in Cambodia's new sugar refinery.

Ly Yong Phat's main business partners are Thai sugar giants Khon Kaen Sugar and Mitr Phol Sugar, as well as Taiwanese investor Vewong Corporation.

The sugar company they own together was named earlier this year as an official sponsor of army Battalion 313 - members of which have turned up, with their weapons, to the scene of forced evictions.

The organisation Bridges Across Borders has been investigating the impacts of Cambodia's sugar industry, and its country director is David Pred.

PRED: A number of these concessions have been accompanied by militarisation and serious human rights abuses. I'm refering here to forced evictions that leave families landless and homeless, destruction of property, violence including several shootings in the last year, and arbitrary arrest and detention of affected farmers.

COCHRANE: The sugarcane that supplied Cambodia's first shipment in four decades came from land in Koh Kong province, in Cambodia's south-west, where police and military police stood alongside the company bulldozers.

When farmers resisted in 2006, they were threatened and then police opened fire. One woman was shot in the foot, a man was shot in the arm and five others were injured.

Later, a deal was reached with some communities, others are still waiting for a resolution.

The next evictions were in the former Khmer Rouge stronghold of Oddar Meanchey, in the north-west, where more than 100 homes were torched.

The latest battleground for land is in Kampong Speu province, about three hours drive from the capital.

SFX - Amleang

There, residents are resisting resettlement because the small plots of land offered by the company would leave them nowehere to grow rice or cash crops, according to Ouch Leng, from the land program at rights group ADHOC.

LENG: The company and the government did not care about the living conditions for the people, about the living standard... they care only about the investment, they get the money with their private company.

COCHRANE: David Pred from Bridges Across Borders says, as well as the companies and government, the EU should take at least some responsibility for the human rights abuses.

PRED: We are extremely concerned that instiling this tariff-free status on Cambodia without recquiring any environmental and social safeguards is encouraging the expansion of a model of industrial agriculture that is in fact very harmful to Cambodian farmers and rural communitites, and has been directly tied to violence and the abuse of human rights.

COCHRANE: The Charge d'Affairs of the EU Delegation to Cambodia, Rafael Dochao Moreno, says it's unfair to blame rights abuses on the EU.

MORENO: It's like accusing for instance, where there's a drunk driver killing a pedestrian, you accuse the manufacturers of cars of this killing. There is a relation because the car has killed a person but it is not a direct responsibility of someone that is manufacturing cars.

COCHRANE: Mr Moreno went on to say the EU is concerned about forced evictions and human rights abuses in Cambodia, and will be raising these issues with the Government in talks in October.

The company that purchased the first shipment of sugar, British food giant Tate & Lyle declined to be interviewed, but sent this written statement:

TATE & LYLE: All our sugar suppliers are audited by an independent and internationally recognised auditing body to evaluate their social, ethical and environmental performance. This is the first year our EU sugar refining business will have received sugar from Cambodia and therefore an independent audit will be undertaken within the next few months.

COCHRANE: Ly Yong Phat and his Thai business partners did not respond to requests for comment.

Meanwhile, Ly Yong Phat's company bulldozers continue to clear land in Kampong Speu province, preparing for another sugar plantation.

Conflicts Simmer Over Land Concessions

Violent scene like this one showing a cop shooting at villagers will become more frequent with Hun Xen's illegal and secret land concessions to foreign companies, including Viet and Thai companies (Photo: RFA)

By Robert Carmichael

PHNOM PENH, Apr 14 , 2010 (IPS) - When villagers in Kandal province near the Cambodian capital blocked National Road 2 in early April, it was just the latest protest by rural villagers angered by yet another alleged land grab.

They had blocked the road in a bid to raise awareness about the loss of hundreds of hectares of their land to a private developer, whose bulldozers had started clearing the land in late March.

Ten of the villagers were arrested, the latest in a seemingly unending string of land evictions that have engulfed this South-east Asian country in recent years.

The problem is likely to get even worse, critics say, because the government’s moves to allocate vast tracts of land to foreign and local companies are often done without consulting locals.

Another huge deal was touted earlier this year when Australia’s former finance minister, Peter Costello – also a paid adviser to the World Bank on transparency and good governance – announced a 600 million U.S. dollar investment in agriculture here.

This deal would be four times larger by value than any single agricultural investment in Cambodia.

The size of the land in question is substantial too: Costello, managing director of BKK Partners Ltd, a corporate advisory firm based in Sydney, spoke of more than 100,000 hectares.

The reason for the proposed investment by Costello’s client and others is simple enough: Rising food prices in 2008 alerted investors to the returns they can make from buying or leasing tracts of land in poor countries that have plenty of water and fertile land.

Cambodia certainly needs foreign investment and it needs the 150,000 jobs that Costello reportedly told Deputy Prime Minister Sok An would be created in the agriculture project.

"We have seen a spike in food prices in 2008, so I think agriculture is going to come back into its own as an investment in the decades that lie ahead and of course that's a great opportunity for Cambodia," Costello told the ‘Phnom Penh Post’ newspaper in an interview.

In recent years, Cambodia has done land deals with several countries. China, Vietnam, South Korea, Kuwait and Qatar have signed up to invest in agriculture – be that to grow food for export or crops such as rubber.

But critics say transparency is absent from the process. What has been agreed commercially in dozens of deals in every investment sector is regarded by Phnom Penh as confidential, despite the fact that the government is often selling or leasing public assets.

Son Chhay, an outspoken opposition MP and former head of Parliament’s foreign affairs committee, said that in Parliament he was regularly prevented by his deputy, who was from the ruling Cambodian People's Party, from getting information on deals signed by the government with foreign nations.

Secrecy, said Son Chhay, has long been part of the often-murky process of investment here.

"It’s still the case that we are not able to get our hands (on investment documents) and that’s a cause for great concern," he said. "A lot of concessions have caused problems to our farmers and indigenous people who have no knowledge of what is in the contracts."

But he said Costello stressed the importance of transparency and the negative effects of corruption during his visit. "He should act upon his word. We would hope that this kind of investment from a society like Australia would be done in a proper manner," Son Chhay said. "I would very much like that this BKK company provides the contract to the public so I can have a copy of that."

Land in Cambodia is a complicated topic, not least because of the Khmer Rouge rule in the 1970s, when private property was abolished and land documents destroyed. In recent years around 1.1 million land title documents have been awarded, but that is less than 10 percent of the total land parcels, says the World Bank, which was involved in the scheme.

Combine a lack of title with the fact that around 80 percent of the 14 million Cambodians live in rural areas, and around 40 percent of them live under the poverty line, and the rising landlessness problem has many worried about social instability.

In 2007, the Cambodian office of the U.N. human rights body released a report on economic land concessions (ELCs). It noted that 59 concessions for nearly 950,000 hectares of rural land had been granted to private companies to develop agro-industrial plantations.

The true figure, it pointed out, is certainly higher since the statistics excluded smaller ELCs. The U.N. body said that the concessions had "adversely affected the human rights and livelihoods of Cambodia’s rural communities".

Since that report’s release, the government’s investment approval arm, the Council for the Development of Cambodia, has signed off a further 33 projects worth 837 million dollars in the agro-industry sector – and that excludes the proposed Costello deal. Many of these are plantations.

The government recently passed controversial legislation that allows it to expropriate land for projects deemed to be in the public interest. Agricultural investments certainly fall into that category, as Prime Minister Hun Sen made clear earlier this year.

Speaking at the January unveiling of a new 100 million-dollar Thai sugar mill part-owned by a leading light in the ruling party, Hun Sen said that the extra workers and land needed to expand its sugar production would be found for Thailand’s Khon Kaen Sugar Industry company, which already has a 90-year concession for 20,000 hectares, since its operations were in the national interest. (END)

[Thailand] Mitr Phol [Sugar Group] shelves Cambodia investment

December 12, 2008
By Chalida Ekvitthayavechnukul
The Nation

Mitr Phol Sugar Group, Thailand's largest sugar producer, has postponed its planned Bt4billion investment in establishing a factory in Cambodia, due mainly to the global economic slowdown.

The company planned to use the facility as its production base to serve demand in Cambodia and export to Europe.

Cambodia has a special quota to export raw sugar to the European Union in 2009 under an "Everything But Arms" scheme, at prices higher than those on the world market.

Chairman Issara Vongkusolkij said it would at the appropriate time establish the sugar plant as a joint venture with its European partner.

"We are waiting for the proper period to continue our investment plan," he said.

"The global crisis could lead to lower sugar consumption in Europe, while we also face difficulty in raising funds amid the global credit crunch."

Meanwhile, the Office of the Cane and Sugar Board announced the primary price for cane in the 2008/09 harvesting season at Bt850 per tonne, up from Bt670 in the previous season.

"It is good that cane growers can sell at a high price because they will have more spending power to stimฌulate the overall economy," Issara said.

Mitr Phol has an overall production capacity of 2.5 million tonnes of sugar a year, which accounts for 5 per cent of regional capacity. Of that total, 1.5 million tonnes is produced in Thailand and the rest from its plant in China.

It owns five sugar mills in China with a daily production capacity of 716,000 tonnes of cane, an annual crushing capacity of 8.8 million tonnes, and an annual sugar output of 1.1 million tonnes.

The group is also constructing a plant in Laos, which will have a proฌduction capacity of 5,000 tonnes of sugar cane per day.