Rubber fallout extends to IFC

Villagers from Lbaing II commune inspect an allegedly illegal logging site
 in a forest in Ratanakkiri’s Lumphat district earlier this month.
PHOTO SUPPLIED

Amelia Woodside and Phak Seangly
The Phnom Penh Post, 11 February 2014

Representatives of 17 indigenous communities announced yesterday they were filing a complaint against the International Financial Corporation (IFC) for investing in a Vietnamese rubber firm accused of illegal logging and land-grabbing in the villagers’ home province of Ratanakkiri.

The complaint, announced at a press conference in Phnom Penh that featured a female representative singing of the communities’ losses, details a litany of alleged abuses and legal violations by Hoang Anh Gia Lai (HAGL), which operates rubber plantations on economic land concessions in the Kingdom’s northeast.

Villagers from Andong Meas and O’Chum districts lodged the complaint with the Compliance Advisor Ombudsman (CAO), the internal watchdog of the IFC, which itself is the private lending arm of the World Bank.

“This complaint provides hard evidence that IFC’s investment has ultimately been used to grab land and destroy critical natural resources,” said Natalie Bugalski, legal director at Inclusive Development International (IDI), one of several NGOs working with the affected families.

The IFC is accused of supporting HAGL’s actions by investing millions of dollars through an intermediary fund called Dragon Capital Group since 2002.

Dragon Capital – whose representatives could not be reached yesterday – holds a 5.5 per cent stake in HAGL.

Last year, HAGL came under fire when Global Witness, an NGO based in London, published a report titled Rubber Barons accusing it of illegally logging outside concession areas and being in possession of at least 47,000 hectares of economic land concessions – almost five times the legal limit.

Global Witness singled out IFC, Deutsche Bank and later Credit Suisse for their investments in HAGL, resulting in Deutsche Bank divesting.

Communities are requesting land seized by HAGL be returned, saying they “do not want cash compensation, because it cannot be inherited by the next generation”.

HAGL, which has previously said it is in possession of about 30,000 hectares of ELCs, did not comment yesterday.

Following the submission of the complaint, the CAO has 15 days to respond, IDI managing director David Pred said.

“Why is nearly half of IFC’s financial portfolio going into this black hole of financial markets when they really have no idea what their impacts are on the ground?” he asked.

Eang Vuthy, executive director of Equitable Cambodia, is hopeful the negotiation process will be fruitful.

“We hope that the CAO can help bring the company and its investors around the table to find a resolution that fully respects the rights of the affected indigenous communities and Cambodian law,” he said.

The IFC did not respond to requests for comment by press time.