Sugar’s Sweet Deal With Europe Comes at a Price

The crop enjoys duty-free status, but thousands of poor claim land on which it’s grown

At first glance, it would appear that European importers have every reason to buy sugar from least-developed countries like Cam­bodia, which can export the product duty free at a guaranteed minimum price of $460 a ton.

Europe’s sugar protocol is now the keystone of CPP Senator Ly Yong Phat’s operations in Koh Kong province, which hopes to double its European exports next year and then double them again in 2012.

“Our export of sugar will rise to 20,000 tons of sugar in 2011 and to 40,000 tons in 2012,” said Heng San, an assistant to Mr Yong Phat.

“These duty-free imports will reduce costs…and we can compete with Asian countries and the other sugar-producing countries,” he said. “We would have difficulties if we didn’t have these duty-free imports.”

In June, an initial consignment of 10,000 tons was shipped to the British food industry giant Tate & Lyle, which advertises its use of the European sugar protocol as a means to increase profits.

Under the European trade scheme, known as Everything But Arms, or EBA, which has allowed duty-free imports of sugar since last year, Mr Yong Phat and Tate & Lyle are the clear winners.

But the land disputes and evictions surrounding Mr Yong Phat’s sugar operations in Koh Kong as well as Kompong Speu and Siem Reap provinces have become emblematic of the crisis of land tenure in Cambodia, where as many as 150,000 people are now under the threat of forced eviction, according to Amnesty International.

Human rights activists say this arrangement could effectively be a subsidy for land grabbing.

“Hundreds of families in Koh Kong were dispossessed of their farm and residential land to make way for sugar plantations that have sent sugar to the EU under the EBA scheme. Hundreds more have been dispossessed in Kompong Speu and Oddar Meanchey for plantations whose sugar is most likely bound for Europe,” David Pred, executive director of Bridges Across Borders Cambodia, wrote in an e-mail.

“So far the sugar industry has been anything but sweet for local communities,” he said.

He called on the EU to consider suspending the tariff exemptions in light of the associated land grabbing.

In Sre Ambel district, Mr Yong Phat claimed two sugar concession areas of almost 10,000 hectares each for his sugar plant Koh Kong Sugar Industry and for sugar plantations belonging to another one of his companies, Koh Kong Plantations.

In 2006, around 500 families in Chi Khor Loeu commune accused both companies of illegally taking 5,000 hectares of their farmland. But despite villagers’ complaints with the Koh Kong Provincial Court, the company and authorities went ahead, destroying crops and forcibly evicting villagers to make way for sugar production.

Ouch Leng, a land program officer at the human rights group Adhoc, said the dispute in Sre Ambel district remained unresolved.

“More than 200 families are still waiting for compensation,” he said. Company workers “continue to plant sugarcane in the area and destroy rice fields.”

Mr San, the assistant to Mr Yong Phat, said the Koh Kong sugar operation planned to add another refinery in 2012 and to bring under 20,000 to 30,000 hectares under cultivation.

He said the EU trade benefits would result in thousands of jobs but he would not discuss the disputes over the land the company now uses.

“Our main goal is to be very careful with land disputes,” he said, before hanging up.

Mr Yong Phat on Tuesday also declined to discuss the sugar operations.

Under a joint venture with the Thai company Khon Kaen Sugar, or KSL, Mr Yong Phat in January opened Cambodia’s first refinery. According to the Bangkok Post, KSL is on contract with Tate & Lyle to sell all of its Cambodian produce to Tate & Lyle at $0.19 per pound, or $0.42 per kilogram.

However the future of this arrangement was unclear yesterday.

Tate & Lyle announced last month that it planned to exit the sugar industry altogether and that it had sold its European refineries to American Sugar Refining, a subsidiary of Florida Crystals. The British company is in the process of selling operations in Vietnam as well.

Cambodia’s exports to the US currently do not enjoy reduced trade tariffs.

William Baldwin-Charles, a spokesman for Tate & Lyle, referred questions about the sale of its sugar operations to American Sugar, representatives of which could not be contacted yesterday.

However Mr Baldwin-Charles said the company was “committed to upholding high standards of responsible and ethical behavior.”

“All our sugar suppliers are audited by an independent and internationally recognized auditing body to evaluate their social, ethical and environmental performance,” Mr Baldwin-Charles wrote in an e-mail.

“The content of these audits are private but it has always been our policy that, where necessary, we can better affect change through working collaboratively with our partners and suppliers.”

According to Rafael Dochao-Moreno, EU charge d’affaires in Cambodia, Everything But Arms supports trade, not evictions.

“EBA is a vehicle for promoting trade from Least Developed Countries, like Cambodia and contributes to economic development. It is unjustified to blame a trade preference scheme such as the EBA for domestic violations of issues such as land rights,” he wrote in an e-mail.

“We deplore acts of violence and forced evictions. We believe that these issues need to be dealt with by the Cambodian government,” he said.

 

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