Ratanakiri’s once abundant forests have been decimated over recent years as a staggering number of large-scale land concessions have been granted to companies, primarily for rubber plantations. One of the companies that has benefited from the concessions is Vietnamese Hoang Anh Gia Lai (HAGL), whose landholdings cover an estimated 5 percent of the province and overlap with significant tracts of indigenous land. Among HAGL’s investors is Dragon Capital, a Vietnamese equity fund, which is owned in part by the IFC.
The complaint, which was submitted to IFC’s internal watchdog, the Compliance Advisor Ombudsman (CAO), describes how the Bank failed to conduct an appropriate level of due diligence commensurate to the high-risk nature of its investment and has thereafter consistently failed to monitor and supervise its end use.
In addition to the illegal land seizures in Cambodia, the complaint also describes rights abuses committed against communities in Laos as a result of HAGL’s operations through three rubber concessions. While IDI has been unable to work with affected communities in Laos due to the repressive human rights situation there and the serious risks that such engagement could pose to the communities, the complaint urges the CAO to consider initiating a compliance audit of IFC’s sub-projects there.
The complaint sets out a litany of harms experienced by the communities, including loss of forest, grazing land, reserved land for shifting cultivation and future generations, spirit forests, burial grounds, access to resin trees and other non-timber forest products that they rely upon. While some households have received inadequate compensation for seized rice fields and farming land, there has been no compensation at all for communal losses. The complaint describes how “the concept of collective ownership over their territory and resources is central to the communities’ identity.” The seizure of their land and destruction of their forests is “particularly devastating” for the communities, because of their reliance on natural sources of food, housing materials, medicines and other needs, and their limited integration into the cash economy.
The complaint sites more than ten flagrant violations of Cambodian law, including laws that enshrine the land rights of indigenous communities, protect Cambodia’s forests, including rare tree species, and regulate economic land concessions.
The IFC’s investment was channeled through an intermediary, Dragon Capital Group, which holds an equity stake in HAGL. In 2012, the CAO released a damning audit report on IFC’s “financial intermediary” investments, which represents nearly half its entire portfolio, finding that the IFC is oblivious to the environmental and social impacts of the end use of its funds. The IFC is notoriously non-transparent about its investments, allowing the World Bank Group to contribute significant capital to the private sector, while publicly disclosing only scant information.
The complaint says that due to their deep connection to their lands and forests, the communities want their lands, wrongly seized by HAGL, to be returned to them. Complainants say they “do not want cash compensation [for their land] because it cannot be inherited by the next generation”. They say, that while land can continue to feed them and their children forever, if they receive money “soon it will be gone.”
Since 2014, the communities have been engaged in mediations with HAGL to redress the adverse impacts that they have suffered as a result of HAGL’s activities. IDI has been assisting the communities to engage in this process, alongside local partners Equitable Cambodia and Highlanders Association.
In a major breakthrough in 2015, the company agreed to refrain form any further development of its plantations and to return remaining land, reducing their total concession area to under 14,000ha. It also agreed to a joint-mapping exercise with the company and government to determine which areas of additional land it should return or compensate for. IDI and local partners have assisted the community in preparing for and participating in the joint mapping exercise, and pushing for recognition of their claims in the mediations. This included training and workshops on tenure options, customary land registration, GIS mapping exercises, and a valuation of losses, among other activities. As a result, the company has now agreed to return further significant tracts of land, including 20 spirit mountains and over two dozen other areas with spiritual and traditional value to affected villagers. The mediations are ongoing.
Additional information is available here.
A human rights impact assessment conducted by IDI and Equitable Cambodia is available here.
The full complaint is available here.