'Blood sugar' land grab by Phnom Penh Sugar Company, Kampong Speu, Cambodia

Economic Land Concessions, militarization, dirty finance and the ironic European agreement “Everything but Arms”; the recipe for forced evictions in Cambodia


Description
Encouraged by Cambodia’s policy to establish large-scale agriculture under the Economic Land Concessions (ELC) scheme, and incentivized by the European agreement “Everything but Arms” (EBA) with least developed countries, Cambodia attracted large amounts of investment into sugar production, allowing the country to export their products at a fixed minimum price and without tariffs to the European Union. Investments attracted in this context, caused some of the most depressing land grab conflicts in Cambodia. Among them are the evictions surrounding Phnom Penh Sugar Co. Ltd.’s sugarcane plantations for the production of what some called “blood sugar” (1;5;7). In February 2010, Phnom Penh Sugar Company (PPSC), owned by ruling party senator and business tycoon Ly Yong Phat, was granted an ELC covering 8,343ha in Thpong district, Kamping Speu district. Another ELC amounting to 9,052ha, located in Omlaing commune, Oral district, was granted to the sister company Kampong Speu Sugar Company (KSSC), owned by his wife Kim Hean. On March 21, Prime Minister Hun Sen further signed a sub-decree to classify 4,700ha in the Oral Wildlife Protected Area as an extension of the concession land granted to KSSC. Both companies, which are closely associated and further belong to the same family, control now more than 23,000ha of ELC land, while the legal limit per ELC is set to 10,000ha (2). The procedure and impacts of establishing the sugarcane plantation have been devastating for the local population. Concessions were granted without prior consultation or environmental or social impact assessments. Formally recognized community forests, orchards, farming and residential of around 1500 families from 21 villages located in Thpong and Aoral district was seized and bulldozed backed up by military presence. Villagers were evicted and resettled in areas with lack of adequate infrastructure and productive land and without proper compensation (see project details). Facing food insecurity and a drastic loss of livelihood, villagers were forced to start working on the sugarcane plantation. Low salary required to take children out of school to send also them to work on the plantation as child labour. Working conditions have been dramatically harsh and dangerous; several workers have been killed so far by cane-cutting machines (2). Also the environmental impacts are devastating, including dumping of waste into community streams, which has provoked fish dying, and sickness of villagers and their livestock (2). The evictions were resisted by all kinds of mechanisms, ranging from protests, over small-scale arson and throwing stones on company equipment, to highway barricades (1). Several villagers who protested have been facing lawsuits and trials or have been arbitrarily arrested. Uprising was further largely repressed since the beginning, through police and military presence. In fact, KSSC employed the former Khmer Rouge Batallion 313 as private army to intimidate villagers, to force them to accept completely inappropriate compensations and to protect the concessions land. (2). In January 2014, social and environmental impact assessments leaked to Inclusive Development International (IDI) and Equitable Cambodia, two national NGOs supporting the case, revealing that the supposed ethical banking group ANZ has financed the project with several “tens of millions of dollar” (3), in spite of completely dismissed social and environmental recommendations of the assessment report, which some moreover described as a “whitewash report”, as it did not mention the forced evictions associated to the plantations (2). On behalf of 681 families that were forcibly displaced and dispossessed, IDI and Equitable Cambodia filed on October 6, 2014 a formal OECD complaint against ANZ for financing this devastating land grab (2). Impacts mentioned in the report include the military-backed up forced evictions, violation of human rights, arbitrary arrests and widespread use of child labor (4). Finally, also the EU started to revise its EBA policy and to assess its adverse effects (5).
Basic Data
Name'Blood sugar' land grab by Phnom Penh Sugar Company, Kampong Speu, Cambodia
CountryCambodia
ProvinceKampong Speu province
SiteOmlaing commune (Oral district) and
Accuracy of LocationLOW country/state level
Source of Conflict
Type of Conflict (1st level)Biomass and Land Conflicts (Forests, Agriculture and Livestock Management)
Type of Conflict (2nd level)Land acquisition conflicts
Plantation conflicts (incl. Pulp
Intensive food production (monoculture and livestock)
Specific CommoditiesLand
Sugar
Project Details and Actors
Project Details
The concession land has been granted under the Economic Land Concession (ELC) scheme of Cambodia, which provides concessions for the development of large-scale agriculture under a lease agreement of up to maximum 99 years. Lease agreements are commonly set for 70 years (see legal ELC framework, below).
See more...
Project Area (in hectares)22,095
Level of Investment (in USD)more than 200,000,000
Type of PopulationRural
Potential Affected Population7000 (estimate)
Start Date01/02/2010
Company Names or State EnterprisesPhnom Penh Sugar Company Ltd. from Cambodia - sugarcane, agro-industry, sugar, real estate
Kampong Speu Sugar Company Ltd. from Cambodia - sugar, sugarcane, agro-industry
Relevant government actorsLy Yong Phat, ruling party (CPP) senator, is owner of the Phnom Penh Sugar Comapny Ltd.
International and Financial InstitutionsEuropean Union (EU) - Through the program "Everything but Arms" - http://trade.ec.europa.eu/doclib/docs/2013/april/tradoc_150983.pdf
Australia and New Zealand Banking Group Limited (ANZ) from Australia - banking, finance
Environmental justice organisations and other supportersEquitable Cambodia

Inclusive Development International

Hands off Land Alliance

Sugar Justice Network
The Conflict and the Mobilization
Intensity of Conflict (at highest level)HIGH (widespread, mass mobilization, violence, arrests, etc...)
When did the mobilization beginIn REACTION to the implementation (during construction or operation)
Groups MobilizingFarmers
Industrial workers
Informal workers
International ejos
Local ejos
Neighbours/citizens/communities
Forms of MobilizationBlockades
Involvement of national and international NGOs
Land occupation
Lawsuits, court cases, judicial activism
Official complaint letters and petitions
Public campaigns
Street protest/marches
Property damage/arson
Boycotts of companies-products
Refusal of compensation
Impacts
Environmental ImpactsVisible: Biodiversity loss (wildlife, agro-diversity), Food insecurity (crop damage), Loss of landscape/aesthetic degradation, Soil contamination, Waste overflow, Deforestation and loss of vegetation cover, Surface water pollution / Decreasing water (physico-chemical, biological) quality, Reduced ecological / hydrological connectivity
Potential: Air pollution, Soil erosion, Groundwater pollution or depletion, Noise pollution
Health ImpactsVisible: Accidents, Malnutrition, Mental problems including stress, depression and suicide, Violence related health impacts (homicides, rape, etc..) , Occupational disease and accidents, Other environmental related diseases, Other Health impacts
Otherexposure to contaminated water streams
Socio-economic ImpactsVisible: Displacement, Increase in violence and crime, Lack of work security, labour absenteeism, firings, unemployment, Loss of livelihood, Militarization and increased police presence, Violations of human rights, Land dispossession, Other socio-economic impacts
Potential: Increase in Corruption/Co-optation of different actors, Loss of traditional knowledge/practices/cultures, Social problems (alcoholism, prostitution, etc..)
OtherChild labour
Outcome
Project StatusIn operation
Pathways for conflict outcome / responseCompensation
Corruption
Court decision (failure for environmental justice)
Criminalization of activists
Repression
Deaths
Strengthening of participation
Violent targeting of activists
Land demarcation
Migration/displacement
Accidents due to lack of work security even led to the death of several persons, killed by cane-cutting machines (2)
Development of AlternativesVillagers faced already large damages. Inclusive Development International (ID) and Equitable Cambodia (EC) estimated that the damages produced to villagers due to loss of farm land and other issues amounts to 11 million dollar of uncompensated losses (3). The NGOs claim that the villagers need to be compensated by the companies as well as ANZ which supported the project. Villager further require help to establish again their livelihoods.

According to a report (7) by EC and IDI, their recommendations include:

To the EU: that EU should investigate impacts; temporarily suspend EBA trade; verify that producers are not involved in Human rights abuses or environmental destruction; ban import of agricultural goods produced on illegally acquired land.

To the Cambodian Government: Enforce the moratorium on new ELC; assure that the required social and environmental impact assessments are conducted; cancel concessions that violate human rights; support dispossessed families in returning to their land; return illegally granted concession land; and stop state military-backed up evictions, among others.

To the involved companies: Stop forced evictions; stop destruction of community natural resources; stop using violence against people; return illegally appropriated land; stop using child labor.
Do you consider this as a success?No
Why? Explain briefly.The project goes on, in spite of devastating impacts on people and the environment. Accidents due to lack of work security even led to the death of several persons, killed by cane-cutting machines (2).
Sources and Materials
Legislations

Cambodia's land law and related regulatory frameworks
[click to view]

2005 Subdecree on Economic Land Concessions (ELC) in Cambodia
[click to view]

References

(1) Borras and Franco (2011). Political Dynamics of Land-grabbing in Southeast Asia: Understanding Europe's Role. Transnational Institute.
[click to view]

(7) EC & IDI 2013. Bittersweet Harvest: A human rights impact assessment of the European Union's Everything but Arms Initiative in Cambodia. Equitable Cambodia and Inclusive Development International (accessed 16/02/2015)
[click to view]

Links

(2) Inclusive Development International on the conflict (accessed 13/02/2015)
[click to view]

(4) Specific Instance against ANZ (OECD complaint) (accessed 13/02/2015)
[click to view]

(5) Inclusive Development International on the EU's decision to revise the "Everything but Arms" (EBA) agreement and its impacts (accessed 13/02/2015)
[click to view]

(6) Formal response by Phnom Penh Sugar Company Ltd. regarding complaints over the social and environmental conditions of their plantations (accessed 13/02/2015)
[click to view]

(3) Inclusive Development International on the formal complaint to the OECD about the involvement of ANZ in financing the land grab (accessed 13/02/2015)
[click to view]

Media Links

Al Jazeera news report on the case
[click to view]

Short documentary by Equitable Cambodia/Inclusive Development International on Cambodia's sugar industry
[click to view]

Other Documents

Child labor in the sugarcane plantations Source: http://www.phnompenhpost.com/national/sugar-company-axes-child-labour (accessed 13/02/2015)
[click to view]

Protesters in front of ANZ bank Source: http://www.phnompenhpost.com/national/rage-bank-flares-again (accessed 13/02/2015)
[click to view]

Meta Information
ContributorA. Scheidel (ICTA-UAB) / arnim.scheidel "at" gmail.com
Last update07/06/2016
Comments