A Change of Guard

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Friday, 5 August 2016

Crony In the Forest: Try Pheap--Another Beneficiary Of The Cambodian Strongmen's Web

Crony In the Forest: Try Pheap--Another Beneficiary Of The Cambodian Strongmen's Web

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This story appears in the August 2016 issue of Forbes Asia. Subscribe

Try Pheap, an associate of Prime Minister Hun Sen, has become prominent in the past decade. Credit: Heng Chivoan

By Sebastian Strangio

On Google Maps the Boeng Per Wildlife Sanctuary in northern Cambodia is marked by a patch of theoretical green, like each of the country’s 32 national parks and protected areas. On the ground, however, there’s little to distinguish the zone from any old swath of Cambodian countryside.

Along National Road 62, a sealed highway that bisects the sanctuary from north to south, there are square wooden houses alongside rice paddies. There are black market vendors selling gasoline in old Pepsi bottles, and muddy sidings where cars and motorbikes stop for snacks and iced coffee. There are also plenty of trees–but few that would pass for protected forest. “They’ve cut everything down,” said Huon Keano, 38, a member of the Kuy ethnic minority from Ou Pour, a village of some 200 families, which has sat for generations in the center of the sanctuary. “They burned it until only some stumps remained.”

Huon Keano stops his motorbike about a mile off the highway in an expanse of churned-up soil soaked by a recent downpour. All around, charred tree-trunks stick from the mud like blackened matchsticks–an area of forest that was cleared by bulldozers a few months ago to make way for commercial plantations. Further along a dirt track is the dripping silence of a rubber grove. Radiating outwards, invisible on Google’s maps, are hundreds of hectares of cashew, rubber and jackfruit saplings.

These plantations, owned by the Cambodian tycoon Try Pheap, are located near the center of the 242,500-hectare Boeng Per sanctuary, created by royal decree in 1993. The Kuy, who have traditionally made a living by tapping resin from forest trees for use as sealants and varnishes, say that since Try Pheap was granted a 10,000-hectare concession in the area in 2011, in what they say was a violation of Cambodian law, they have been blocked from accessing the land. “Try Pheap came here and killed everyone’s business,” said Huon Keano, back at his village. “The ethnic minorities here don’t have resin, they don’t have trees. The business here is gone.” (Try Pheap’s representatives have said that not only has he created thousands of jobs, but he also will build health centers and schools–which villagers say they haven’t seen.)

Over the past decade Try Pheap, in his early 50s, has become prominent in this nation of 15 million. An associate of Prime Minister Hun Sen, who has run the country in various guises since 1985, his holdings run deep. In addition to agricultural plantations, Try Pheap has vast and growing interests in real estate, including three casinos, two dry-ports for local and international shipping, and two Special Economic Zones in border areas. He recently launched “PAPA,” a petrol retailer, and is building a $300 million port in Kampot province on the country’s southern coast.

Like most other tycoons close to Hun Sen and his ruling Cambodian People’s Party (CPP), Try Pheap holds the singular title of Oknha, an honorific granted to those who have gifted more than $100,000 to the state–which is to say, the CPP.

Fortified by high-level connections, Try Pheap is said to have scored one more business milestone. In a 2015 report the London-based transparency group Global Witness accused him of controlling “an all-encompassing illegal logging network that relies on the collusion of state officials and supposed enforcement agencies.”

The report accused Try Pheap of getting around official logging bans by obtaining permits for industrial agricultural developments known as Economic Land Concessions (ELCs) and using them to “launder” luxury-grade timber from protected areas both within and outside the concession boundaries. “This large-scale industrial takeover is helping drive tree and animal species to extinction,” the report claimed, “while stripping indigenous and forest-dependent communities of resources on which their livelihoods depend.” Try Pheap’s suspected bounty is Siamese rosewood, a richly hued hardwood that can fetch tens of thousands of dollars per log for buyers in Vietnam and China. At the time, the Forestry Administration maintained that the collection of luxury timber was restricted to ELCs and the reservoirs of hydropower dams, and that anyone permitted to sell it paid taxes to the government. No charges were ever brought.

Marcus Hardtke, a forest campaigner who has worked in Cambodia for 17 years, says that in his quest for rosewood Try Pheap has used his political connections to “corrupt all relevant government agencies”–even those, like the Ministry of Environment and the Forestry Administration, tasked with eliminating forest crimes.

“These guys are just laundering timber through these plantations. It’s basically turned the idea of foreign management upside-down,” he says. Hardtke describes Try Pheap’s involvement in the rosewood trade as “an environmental crime of monstrous proportions.” Between 2001 and 2014 forest loss in Cambodia accelerated at a faster rate than in any other country in the world, according to figures in a World Resources Institute report.

Inside the Boeng Per Wildlife Sanctuary: “They’ve cut everything down. They burned it until only some stumps remained.” Credit: Sebastian Strangio

Try Pheap’s office declined a written request for an interview with FORBES ASIA, but in an interview last year in the Phnom Penh Post he acknowledged involvement in the timber trade while denying that he had “annihilated” forests. He professed to buying timber legitimately from ELC owners and exporting it to China. “We use capital to buy timber from people clearing concessions, paying from $700 to $1,000 per cubic metre, and we sell it for $2,500 to $3,000 in China. But we have to pay export tax, harvesting and transportation costs, so we only make $300 on a cubic metre,” he said.

On the Try Pheap Group website the tycoon pays tribute to Hun Sen’s leadership and claims that his businesses have been “actively contributing to the development activities of the government.” Boeng Per has certainly seen a growth spurt since Try Pheap’s arrival. His firm has built a market, administration buildings and a way station for tourists. There is also a gas station, named after Try Pheap, and a villa owned, it is said, by the magnate. All of this is dominated by a huge arch announcing the “Try Pheap Boeng Tonle Merech Rubber Plantation.”

The developments have attracted hundreds of new residents to the area, including Buth Chan Chesda, 29, who runs a shop at Try Pheap’s market serving noodles to plantation workers. He says he is happy for any developments that alleviate the need to seek jobs abroad–a common problem in Cambodia. “Before it was all forest. When my wife came four years ago, she slept in a hammock,” he says. “He has a good heart,” he adds of Try Pheap.

But environmentalists and local residents say that Try Pheap’s concession in Boeng Per, as elsewhere, has served as cover for the large-scale removal of rosewood and other luxury wood species. Toby Eastoe, an Australian ecologist who worked in forest protection in Cambodia from 2008 to 2015, says he has seen Try Pheap’s logging networks quickly spread “like a big spider web across the whole of Cambodia.” When asked what position the tycoon occupied in Cambodia’s logging economy, Eastoe responds, “He is the logging economy.”

In a shabby hut on the highway, Vong Tola, 52, a former forest ranger, confirms this version of events. “In 2012 the forest was like a person who wore very nice clothes,” he says, “but in 2016 it’s like a person who’s wearing nothing.”

Try Pheap’s timber-fueled rise encapsulates the opaque and pervasive form of crony capitalism that has characterized Hun Sen’s 31 years in power. For years off-the-books wealth has been crucial to the Cambodian strongman’s hold on power, providing a wellspring of patronage that trickles downward, ensuring the loyalty of powerful tycoons, provincial power brokers, and key members of the military and police. So says Global Witness in its most recent study, released on July 7, which focuses on the extensive business interests of Hun Sen and his family. Try Pheap offers a textbook example of the “symbiotic relationship” that exists between Hun Sen and his country’s elite, the organization argues.

(To the Left) Tep Phat, 70, a Kuy resident of Ou Pour village, says his community has been hit hard. (Right) Chhiev Yae, 39, a Kuy woman clearing company land in Boeng Per Wildlife Sanctuary. Credit: Sebastian Strangio

Try Pheap appears to have six companies officially listed in Ministry of Commerce records, but it is nearly impossible to ascertain the full extent of his holdings. Few Cambodian firms release annual reports, and lucrative state contracts are often granted behind closed doors. “The real cash is not transferred by bank,” says Ouch Leng, an award-winning environmentalist who has studied his country’s logging operations in depth. Asked to assess the baron’s net worth, Cambodian sources put forth figures ranging from a few hundred million dollars to several times that.

Equally obscure is Try Pheap’s background. The businessman told the Phnom Penh Post he was born into a humble rural family in Kandal province, outside Phnom Penh, before beginning his rise.

According to one story repeated by several sources, he started out as a taxi driver before getting into timber by marrying a midlevel trader. Another story, also hard to verify, is that Try Pheap is connected by marriage to Pheapimex, one of Cambodia’s largest conglomerates. This firm, profiled by FORBES ASIA in 2014, is led by the businesswoman Choeung Sopheap and her husband, Lao Meng Khin, a CPP senator and, according to a 2013 report, director of a mining firm along with Try Pheap. The couple, who enjoy close ties to Hun Sen and his wife, Bun Rany, continue not to respond to our questions.

Whatever the reason, Try Pheap’s rise over the past decade has been fast and frictionless. By the last national election in 2013 he was wealthy enough to make his big contribution to the CPP and its associated charity organizations.

In February 2013, five months before the election, the agricultural ministry gave Try Pheap permission to purchase all wood felled inside ELCs in Ratanakkiri province. Then, in June that year, he was granted the right to collect up to 4,871 cubic meters of luxury wood seized from illegal loggers by forestry officials throughout the country, reportedly strengthening his grip on the trade. The profits from the murky trade are allegedly enormous. In October 2014 the Phnom Penh Post reported that Try Pheap had made an estimated $227 million profit on rosewood logged in the Stung Atay hydropower dam reservoir and the Phnom Samkos Wildlife Sanctuary in the three years to 2012.

Try Pheap’s case hints at the challenges Hun Sen may have in extending his rule beyond the next national election, due in mid-2018. While the country has experienced strong economic growth and was recently promoted by the World Bank to lower-middle-income status, the CPP is facing rising opposition. At the 2013 national election the party suffered a sharp loss of support, in large part because of rising public anger about issues like illegal logging and landgrabs, as well as a lack of job opportunities.

Since then, Hun Sen has promised reform. In a marathon six-hour speech in September 2013, he told officials to “scrub your body” and “heal our disease.” So far the government has boosted salaries for soldiers and garment factory workers, and reshuffled the cabinet (twice). Earlier this year he reorganized the ministries that deal with ELCs and protected areas, vowing to eradicate illegal logging.

At the same time, Hun Sen has ruthlessly acted to quash any challenge to the resource networks that sustain him. Since mid-2015 the government has jailed more than 20 people, including parliamentarians from the opposition, human rights activists and land rights campaigners. In July a prominent activist was shot dead at a gas station in Phnom Penh in an attack many saw as politically motivated. (Hun Sen has since promised a “vigorous” investigation into the shooting.)

An entryway to Try Pheap’s Compound. Credit: Sebastian Strangio

The dilemma for Hun Sen, critics say, is that any true reform would undermine the economic base of his power. Forest activist Hardtke says the prime minister was taking money from timber barons like Try Pheap at the same time that he was claiming to be clamping down on the trade–”trying to catch fish with both hands.” As if to illustrate the contradiction, when Try Pheap opened his rubber plantation in Boeng Per in July 2015, Say Sam Al, Hun Sen’s new “reformist” minister of environment, appointed in a reshuffle after the last election, was there to help.

Government officials remain curiously tight-lipped about the secretive mogul. Phay Siphan, a spokesman for the Council of Ministers, as Cambodia’s cabinet is known, says he has requested information from Try Pheap’s company about its business operations to answer reporters’ questions but has received no reply. “I have no idea, my friend,” he says. “He’s a big shot.” Suos Yara, a CPP parliamentarian and party spokesman, says he has “no information about him at all.”

People nearby confirm that logging operations have indeed slowed in Boeng Per, largely, they say, because the most valuable trees have already been cut. But Ouch Leng, the environmentalist, has no doubt that Try Pheap’s operations are still active in more remote parts of the country. “Try Pheap hasn’t stopped the timber business–he’s waiting to see the political situation. It’s not true. It’s never true. It’s just political propaganda,” he says.

Either way, old ties continue to bind. In mid-May Try Pheap appeared at the National Institute of Education in Phnom Penh to accept an honorary doctorate in economics from the IIC University of Technology in Cambodia. As the school’s rector praised his contributions to Cambodia’s development, the tycoon stepped onto the stage, wearing a black-and-blue academic gown and mortarboard, as senior government officials looked on.

And who presented him with the framed diploma? Prime Minister Hun Sen


Anonymous said...

The face of a devil monster: Try Pheap

Anonymous said...

What happens to Dr. Kem Ley's killers??

It looks like it goes to the same old road: no killers found.

Yuon and Ah Kouk Hun Sen can kill Khmer nationalists at will without suffering any consequence.

Justice will not drop from the sky to help Khmer people. They have to fight to get justice.