Minorities Complain to IFC Over Rubber Farm Funding

More than a dozen ethnic minority communities from Cambodia’s northeast filed a complaint with the International Finance Corporation (IFC) on Monday, accusing it of breaking its own safeguard policies by investing in rubber plantations they say are stealing their land and illegally logging their forests.

The 17 communities say plantations in Ratanakkiri province belonging to Vietnam’s Hoang Anh Gia Lai (HAGL) have been grabbing their farms and clearing their community forests for years, destroying their way of life in the process. They want the IFC, the World Bank Group’s private sector investment arm, to use its stake in HAGL to make the plantations stop and return the land they have taken.

“We want the World Bank to know that its money is being used to destroy our way of life,” said Sal Hneuy, an ethnic Kachac whose village has been locked in a bitter land dispute with four surrounding plantations, two of them belonging to HAGL, for the past four years.

“Nowadays we are surrounded by companies. They have taken our community lands and forests. Soon we fear there will be no more land left for us at all and we will lose our identity. Does the World Bank think this is development?” he asked.

The 35-page complaint, prepared with the help of local NGOs, says the IFC has invested $27 million since 2002 in a Vietnamese fund, Dragon Capital, which in turn owns a 5.5 percent stake in HAGL.

It accuses HAGL’s plantations of breaking a host of national and international laws and the IFC of breaking its policies to do no harm by giving the plantations the money with which to do it.

Under Cambodian law, healthy forest is legally protected from logging, whether inside or outside of a government-approved plantation.                           Mr. Hneuy, at a press conference in Phnom Penh regarding the complaint, said the rules are being applied very selectively.

“When we cut down a tree for our farming or our homes, they [government authorities] accuse us of illegally clearing the forest. But then the company does it they say it’s good,” he said.

The complaint also accuses the plantations of failing to carry out impact assessments or to consult with the communities before starting work, all required under Cambodian law.

“The investment causes the villagers to lose their jobs because their lives depend on their farms and the forest,” said So Sophat, an ethnic Tampuon from Ratanakkiri who also joined the press conference.

“If the forest is completely cleared, they [the communities] will lose their jobs because they always go to the forest to cut bamboo and vines to make baskets and sell at the market,” he said

Sev Boeun, a 78-year-old Kachac who also made the trip from Ratanakkiri, said the plantations have burned their fields, are cutting down the trees they have been tapping for decades for their valuable resin, and are poisoning their animals with the chemicals they use. He said the companies have seized their grazing lands and cut them off from their generations-old spirit forests and burial grounds.

“Now I cannot farm any more because there has been a lot of cutting and clearing,” he said. “The company says it wants to cut down poverty…but actually it is killing the lives of the people.”

The IFC did not reply to a request for comment about the complaint.

Its compliance ombudsman now has 15 days to tell the families that it has officially registered their complaint. After that, the ombudsman must decide whether to launch a compliance review.

Soon after its financing of HAGL was revealed in May by the British environmental watchdog group Global Witness, the IFC defended its use of equity funds like Dragon on the grounds that they made investment risk easier to manage and let the IFC invest in more firms than it could without them.

However, the IFC’s ombudsman has already noted major problems with the financier’s oversight of such funds. After auditing hundreds of IFC investments around the world, including some in Cambodia, the ombudsman last year concluded that the IFC had no reliable way of knowing whether any of them were helping or doing harm.

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