The CSR challenge for Chinese ELCs in Cambodia

Rhoda Guetta, People's Coalition on Food Sovereignty (PCFS)

The economic land concessions (ELC) the government of Cambodia granted to the subsidiaries of Chinese private enterprise (POE) Guangdong Hengfu Group Sugar Industry Co., Ltd. in 2012 has become one of the major land disputes in the country. The governments of China and Cambodia are expected to take necessary steps in protecting the rights of and providing remedy to the communities in order to address such land disputes.

The economic land concessions (ELC) the government of Cambodia granted to the subsidiaries of Chinese private enterprise (POE) Guangdong Hengfu Group Sugar Industry Co., Ltd. in 2012 has become one of the major land disputes in the country. Hengfu is a Chinese agribusiness enterprise mainly producing diversified sugar products for export, and it was granted around 36,000 hectares of land in the province of Preah Vihear to convert into sugarcane fields. As of 2016, 13,000 hectares or 36 per cent of the land granted are now being used for sugarcane farming.

Hengfu was established in 2000 with more than 10,000 employees and a total asset of 8.5 billion CNY. It was assessed one of top five sugar companies in China. In the group company’s website, it highlights that the company has obtained the certification of ISO 9001-2000 international quality management system and ISO 14001:2004 environmental management system, and attach importance to measure of corporate social responsibilities.

ELCs are public agricultural lands leased to private enterprises for decades. They are among Cambodia’s main mechanisms to draw in foreign direct investments to agro-industry that could supposedly drive development in the country. According to data collated by Open Development Cambodia, these ELCs now cover around two million hectares overall, with 380,000 hectares awarded to thirty Chinese companies – the largest among foreign concessionaires from one country. 

However, ELCs in Cambodia have always been criticized for furthering landlessness in the country, which has caused countless human rights and indigenous people’s rights abuses, as well as environmental, economic, and sociocultural destruction as reported by affected communities. Abusive corporate investors are rarely held accountable both by their home and host countries.

The Khmer and Indigenous Kuy peoples have condemned Hengfu and its operations due to the suffering it had inflicted to their lives and livelihoods. Villagers were forcefully evicted from their farms and ancestral lands, which they greatly depend on for food and livelihood. They lost access to non-timber forest products and important rice growing areas that would have a significant effect on the rice production of the entire province. The soil and waterways were harmed and poisoned due to the pesticides used by Hengfu in farming sugarcane, which resulted in the degradation of the local ecosystem and impairment of the villagers’ food security. Villagers borrow money from local moneylenders and microfinance institutions to compensate for the decrease in income, but the high interest (up to 50 per cent) make it impossible for them to pay these loans.

Given the political situation in Cambodia, where there is overwhelming economic patronage from China in the form of aid, loans, grants, and investments, government regulation of Chinese investments is a conflict of interest. Hengfu, in particular, has persisted despite protests by the villagers of Preah Vihear through various legal and meta-legal means in the past five years, which has drawn in support at the national and international levels.

The governments of China and Cambodia are expected to take necessary steps in protecting the rights of and providing remedy to the communities in order to address such land disputes. However, Hengfu as an investing enterprise should practice the state-sponsored Corporate Social Responsibility and comply with the guidelines set for them by many Chinese state regulations. These include the Implementation Opinions on Encouraging and Guiding Private Enterprises to Actively Conduct Overseas Investment (2012) and the Regulations on Outbound Investment and Business Activities of Private Enterprises (2017).

In addition, the Guidelines for Environmental Protection in Foreign Investment and Cooperation urges Hengfu and Chinese companies alike “to further regularize their environmental protection behaviours in foreign investment and cooperation, guide them to actively perform their social responsibilities of environmental protection, and promote the sustainable development of foreign investment and cooperation.” [1]

The Chinese government and its investing enterprises in Cambodia should also take the necessary steps in protecting the rights of and providing remedy to the communities as they violate their responsibilities to respect human rights as per the United Nations Guiding Principles on Business and Human Rights. Included in this CSR mandate is “resource conservation and environment protection.”

As long as Hengfu fails to comply with its responsibility to respect human rights following international and national legal frameworks that uphold and protect the rights to land, territories, economy, culture, tradition, and natural resources, the communities in Preah Vihear will carry on with their militant struggle in defence of their lands and resources.

 

Find more information at www.foodsov.org

References

Community Network in Action (CNA), Ponlok Khmer, GRAIN, Cambodia Indigenous Youth Association (CIYA), and Asia Indigenous Peoples Pact (AIPP). (2017, June 8). Cambodia: Communities in Protracted Struggle Against Chinese Sugar Companies’ Land Grab. Retrieved from IPHRD Net: http://iphrdefenders.net/cambodia-communities-in-protracted-struggle-aga...

Leuprecht, P. (2004). Land concessions for economic purposes in Cambodia: A human rights perspective. Special Representative of the Secretary-General for Human Rights in Cambodia. Phnom Penh: United Nations Cambodia Office of the High Commissioner for Human Rights. Retrieved from http://www.ticambodia.org/library/wp-content/files_mf/14363288502004_Lan...

Open Development Cambodia. (2017, November). Economic land concessions (ELCs). Retrieved from Dataset | Open Development Cambodia: https://opendevelopmentcambodia.net/dataset/?id=economiclandconcessions


[1] China's Guidelines for Environmental Protection in Foreign Investment and Cooperation. (n.d.). Retrieved from http://www.mekongwatch.org/english/policy/ch_env_guide.html