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Residents in Lao's Savan-Seno special economic zone remain in conflicts with developers and government over compensation

Author: Ms Pakhem, China Dialogue, Published on: 30 October 2019

“Who is Laos’ first special economic zone benefitting?”, 25 October 2019

When Savan-Seno special economic zone (SEZ) was set up by the Laos government in 2003 it was expected to boost the economy and become a model for future schemes. But years later, the country’s first SEZ is still incomplete, and people who have long lived in the area are in conflict with developers and the government over compensation…

Around 70 enterprises, including from China, Thailand, Japan, Canada, the Netherlands and France, have registered in the Saven-Seno SEZ according to a Chinese government document. Construction plans there include an amusement park, offices, a duty free shop, a car assembly plant and a textile factory.

In the past two decades, the government of Laos has authorised foreign investors to establish 14 special economic zones (SEZs) in the country. So far, as part of the Belt and Road Initiative, 160 Chinese enterprises have invested US$1.5 billion in them, constituting 23% of total SEZ investment…

… Though the SEZ was established 16 years ago, compensation issues for land and property remain unresolved…

“I haven’t received any compensation yet,” she [Ms Vanh (not her real name), a retired government official] said. “Company and state officials have paid several visits but have made no specific offers. If we are not offered land or money equal to the value of what we have now, we’ll refuse to move.”

Vanh is one of ten households determined to stay until they receive suitable compensation…

The community had made their living here for generations, farming and collecting non-timber forest products such as mushrooms, medicinal herbs and bamboo shoots. Before construction started in 2003, the land in Zone D was classified as conservation forest.

In 2015, Khanty Lokapone, an official from the Laos National Committee for the SEZ was quoted by the Vientiane Times: “Land located inside Zone D will not be compensated for, as the land within Zone D is a conservation forest area. The villagers are encroaching on a reservation forest area.”

Community members were aggrieved. They believed the land reclassification was a way for the state and project developers to evict them at low cost.

The government of Laos does not allow people meaningful access to information or consult them on development projects. Publicly available information is limited to the positive aspects of projects, with negative environmental and social impacts usually left out.

Worse, many development projects begin without the prior knowledge of the people affected. Projects are developed by the state and people have little choice but to accept them.

… Since 2006, the government has made explicit reference to the idea of “turning land into capital”…

But the expansion of large-scale land concessions has brought heavy social and environmental costs, including loss of land and livelihoods…

Landholding in Laos is insecure as a result of ambiguously worded laws and policies and because people still lack documents confirming their ownership and rights. At the same time, people lack access to information about the law…

On top of land loss and compensation problems, the Savan-Seno SEZ presents local residents with a number of social problems, including disputes over low wages and a flourishing of drugs and prostitution…

Development projects such as SEZs are under the exclusive control of private sector actors and the government… Laws that could protect local people are like tigers without teeth. They look impressive but are not implemented transparently or enforced properly.

A Lao public interest lawyer who wished to remain anonymous said: “There are big loopholes in laws related to SEZ development in Laos, especially in their implementation… Laws to protect citizens’ rights are very weak, both in principle and enforcement…”

Moreover, SEZ developments lack comprehensive environmental and social impact assessments. No such assessment is even available for the Savan-Seno SEZ…

Without meaningful public participation and proper laws and enforcement to protect the rights of citizens, SEZs may deepen inequality in Laos rather than create opportunities for local people.

[Also referred to Macau Legend Development]

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