After a steep fall in its share price, Vietnam’s Hoang Anh Gia Lai (HAGL) rubber company has denied allegations made by environmental watchdog Global Witness that it was engaged in deforestation and land grabbing in Cambodia.
The Global Witness report—Rubber Barons: How Vietnamese companies and international financiers are driving a land grabbing crisis in Cambodia and Laos—linked the World Bank’s International Finance Corporation and Deutsche Bank to HAGL and Dong Phu, which is part of the state-owned Vietnam Rubber Group (VRG), and says the firms not only broke forestry laws, but also failed to consult local communities before clearing their land.
Global Witness alleged that the firms—and by proxy their international financiers—have ignored environmental and social safeguards while overseeing the destruction of high-value evergreen and semi-evergreen forest and the seizure of people’s land and livelihoods.
Since news of the allegations spread, HAGL’s shares—which are listed on the Ho Chi Minh Stock Exchange—fell from a closing price on Monday of 22,800 Vietnamese dong, or about $1.09, to as low as 20,700 dong when trading opened Wednesday morning. Shares at the firm rebounded slightly Wednesday to close at 21,400 dong, down 7 percent from its close on Monday when the Global Witness report was released.
Vietnam’s Thanh Nien newspaper reported on Tuesday that HAGL’s chairman, Doan Nguyen Duc, who owns almost half the firm’s shares, had lost more than $20 million with the drop in the share price.
The Thanh Nien report, along with articles on a number of other English-language news websites in Vietnam, quoted Mr. Duc rejecting Global Witness’ claims.
“There is no way HAGL has left local people impoverished since we have paid tax and created stable jobs for more than 10,000 people,” Mr. Duc is quoted in Thanh Nien as saying.
Mr. Duc also insisted that HAGL and its subsidiaries complied with Cambodian laws “including forest protection rules.”
A report on Tuesday by VietnamNet Bridge, a news website, said HAGL had written to the Vietnamese Ministry of Foreign Affairs and media rejecting the claims.
“HAGL did not involve in logging [sic], including economically valuable timber in the concession area of HAGL. The governments of Lao and Cambodia have full control and ownership of the wood volume,” VietnamNet Bridge reported.
The same article quotes an unnamed HAGL representative saying that the company had answered all questions from Global Witness prior to publication of the report and had offered to act if evidence of the organization’s allegations was provided.
“Global Witness accusing Vietnamese groups of bribing the local governments to take land illegally is the insult to officials of the two countries,” the representative is quoted as saying.
The Global Witness report claims that HAGL initially communicated with their office, admitting they did not fully understand local laws in Cambodia. Later, however, “discussions between Global Witness and HAGL stalled, with the company stating that it was not willing to disclose documents to Global Witness or take any further action to remedy the situation,” Global Witness stated in the report.
Megan MacInnes, who heads the land team for Global Witness, said HAGL’s response to the report in the Vietnamese news articles “does not match the evidence we have on the ground.”
Ms. MacInnes said that Global Witness had collected testimony, video and photographs that prove HAGL was both clearing forest itself and contracting local businessmen to clear forest in both Cambodia and Laos.
Further, she said, “just because government officials in Laos and Cambodia are ready to license concessions in disregard of their own laws, this in no way releases either VRG or HAGL from responsibility for making sure their operations are in line with the law.”
In the report, Global Witness labels Mr. Duc, who is one of Vietnam’s richest men, as “the rising rubber baron.”
The report also cites official documents and company disclosures to show six subsidiaries of HAGL hold 47,370 hectares of economic land concessions in Ratanakkiri province—5 percent of the province’s total size—in contravention of the law limiting concessions to just 10,000 hectares per individual.
Four of those concessions total about 28,000 hectares inside the Lumphat Wildlife Sanctuary and Virachey National Park, according to Global Witness.