Families to File Complaint With IFC Over Rubber Plantations

Some of the hundreds of families losing land and community forest to Vietnamese-owned rubber plantations in Cambodia’s northeast will this week file a complaint with the International Finance Corporation (IFC) over the investment it has made in the plantations’ parent company.

Eang Vuthy, executive director of Equitable Cambodia, one of several NGOs working with the affected families, said the complaint would be filed with the IFC’s compliance adviser ombudsman today or tomorrow.

The IFC’s interests in Hoang Anh Gia Lai (HAGL) was first revealed by the U.K. environmental watchdog group Global Witness in May, at the end of a months-long investigation concluding that investments by both the IFC and Deutsche Bank were helping to finance illegal logging and land grabbing by the firm’s many rubber plantations here. According the Global Witness, the IFC at the time had $15 million invested in a Vietnamese fund holding nearly 5 percent equity in HAGL.

By November, Deutsche Bank had dumped most of its stake in HAGL. The IFC has not.

Mr. Vuthy said the complaint accuses the IFC, the private sector lending arm of the World Bank Group, of breaking its own policies meant to guarantee that its investments are used ethically.

“Based on IFC policy, they have to monitor their policies, and the company [HAGL] has to comply with these policies,” he said.

But rather than seeing the IFC simply divest as Deutsche Bank did, the families want it to use its financial stake in HAGL to pressure the plantations into returning their farms and to stop forest clearing and land grabbing.

“We want them to help stop the clearing and to try to facilitate dialogue between the communities, the company and the IFC,” Mr. Vuthy said. “Some of the communities are in the middle of the [plantations], so it’s a really bad situation.”

Immediately after the Global Witness report, the IFC in its defense said that it preferred investing in funds, like the one invested in HAGL, rather than individual firms in part because the risk that came with funds was easier to manage. The IFC also said it would study the report as part of its ongoing monitoring of the fund.

HAGL has denied any wrongdoing on the part of its plantations in Cambodia.

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