Cambodia urged to reverse sugar land concessions

By Prak Chan Thul

"We lost farmland, animals, ponds, lakes, fishes, forestry resources, wild animals and roads" - An Haiya, a villager

PHNOM PENH, May 12 (Reuters) - Cambodian rights groups and villagers urged the government on Wednesday to reverse hundreds of land concessions awarded mostly to sugar companies, saying villagers were suffering.

The Cambodian government was believed to have allowed foreign investors involved in joint ventures to do business on land larger than 10,000 hectares (24,710 acres), which is against the law, said Ny Chakrya, chief investigator for rights group Adhoc, at a briefing.

World sugar prices surged to a 29-year high of 30.40 U.S. cents per lb in February, encouraging sugar millers to move into Cambodia, hitherto a net importer of sugar, to produce for export to the European Union.

They can take advantage of a scheme known as "Everything But Arms", which lets developing countries export certain products tariff-free to the EU.

In a bid to attract foreign investment, Cambodia has awarded big concessions to companies, mainly from China, Vietnam and South Korea, to run mines, power plants and lately sugar plantations.

But the rights groups say the land concessions have hurt communities and damaged the environment.

"We lost farmland, animals, ponds, lakes, fishes, forestry resources, wild animals and roads," said villager An Haiya.

At the start of 2010, Cambodia launched its first sugar factory in 40 years in the southern province of Koh Kong, worth $90.6 million. It is a joint venture between Cambodia's Koh Kong Sugar Industry Company Limited, Thailand's Khon Kaen Sugar and Taiwan's Vewong Corp.

Cambodia's Mong Reththy Group is in talks to build the country's second-biggest sugar factory, worth $100 million, as part of a joint venture with a French company that would further help revive an industry that collapsed during the country's lengthy civil war.

The factory was expected to produce around 80,000 tonnes of sugar annually within three years, mostly for export to European markets.

(Editing by Apornrath Phoonphongphiphat and Alan Raybould)