Can REDD stop the land grabbing crisis in Laos and Cambodia?

This week, Global Witness released a new report investigating a land grabbing crisis in Laos and Cambodia. The report looks at two Vietnamese “rubber baron” companies, Hoang Anh Gia Lai (HAGL) and the Vietnam Rubber Group (VRG). Global Witness found that these companies “have leased vast tracts of land for plantations in Laos and Cambodia, with disastrous consequences for local communities and the environment”.

The report, titled, “Rubber Barons: How Vietnamese companies and international financiers are driving a land grabbing crisis in Cambodia and Laos”, can be downloaded from the Global Witness website.

Vietnam, Laos and Cambodia are all involved in REDD-readiness processes, both through the World Bank’s Forest Carbon Partnership Facility and the UN-REDD programme. In addition, several REDD projects are underway in all three countries. REDD, it seems, takes place in a parallel universe to the destruction documented in the Global Witness report.

Global Witness uncovered close ties to political and business elites that provide the two companies with impunity. The companies are bankrolled by international finance, including Deutsche Bank and the International Finance Corporation – the World Bank’s private sector lending arm. Deutsche Bank owns US$4.5 million-worth of shares in HAGL and owns shares worth more than US$3 million in a subsidiary of VRG. Meanwhile IFC invested US$14.95 million in Vietnam Enterprise Investments Ltd (VEIL), a fund owned by Dragon Capital Group Ltd, a Vietnamese fund. VEIL holds about 5% equity in HAGL and a subsidiary company. IFC currently holds an 8.8% share in Dragon Capital and has been an institutional shareholder in the group since 2002. Dragon Capital, through its Vietnam Growth Fund Ltd, owns US$3.18 million-worth of shares in Dong Phu, a subsidiary of VRC.

While part of the World Bank is supposed to be addressing deforestation through the FCPF, another part of the same Bank is funding forest destruction.

The two Vietnamese companies are only part of the land grab that is taking place in Laos and Cambodia. In Laos, the government has handed out at least 1.1 million hectares in land concessions. In Cambodia, the government has handed out 2.6 million hectares of land. Global Witness has been documenting and campaigning against the destruction of Cambodia’s forests since 1995, and describes the latest land grab as,

simply the latest example of how the country’s valuable natural resources have been captured by an elite growing spectacularly rich while one third of the population lives on less than US$0.61 a day.

The driver for this land grab is high prices for rubber and international demand, particularly from China.

“The negative impact of VRG and HAGL’s activities is hard to overstate,” write Global Witness.

Often the first people know about either company being given their land is when the bulldozers arrive. Families affected are impoverished, face food and water shortages and get little or no compensation. Indigenous minority peoples’ spirit forests and burial grounds have been destroyed. When they resist, communities face violence, arrest and detention, often at the hands of armed security forces who are on the investors’ payroll.

Global Witness has produced a video to accompany the report, focussing on the impacts of the rubber plantations on local communities and their forests:

Global Witness presented its evidence to HAGL and VRG in August 2012, but the companies have failed to take any action:

Global Witness is not aware of any positive changes made by either HAGL or VRG to their operations in Laos or Cambodia since August 2012. Disputes with local residents continue and satellite analysis reveals significant additional illegal clearing of forest has taken place since then.

In 2012, the governments of both Laos and Cambodia put in place a moratorium on new land concessions. In June 2012, the Vientiane Times reported that, “The government won’t consider any new investment proposals in mining or land concessions for rubber and eucalyptus plantations until December 31, 2015.” But as Global Witness points out, the lack of transparency in concession allocation in Laos means that the current policy is unclear. And the moratorium fails to address the problems faced by communities that have already lost their lands and forest to industrial plantations.

In May 2012, Cambodia’s Prime Minister Hun Sen announced a moratorium on new land concessions and a review of existing ones. But a loophole allowed land concessions that were “already in the pipeline” to be issued after the ban. In the seven months following the moratorium announcement, a total of 208,805 hectares of land was handed over to concessionaires.

REDD is not the cause of the land grab in Cambodia and Laos. However, the REDD activities that are taking place in the two countries (and in Vietnam) have so far failed to address the problems highlighted in the Global Witness report. That may seem a little unfair, since the Global Witness report was only published this week. But the land grabs in Cambodia and Laos have been going on for many years and are hardly a secret.

For example, in a 2002 report about human rights in Cambodia, Peter Leuprecht, the Special Representative of the Secretary-General for Human Rights in Cambodia, stated his concern about land concessions in the country:

The Royal Government has pursued a policy of granting large-scale land, forestry and other types of concessions to private companies. The experience thus far has shown that this represents a serious threat to the well-being of those living on such territory and has also contributed to the problem of access to land for the general population.

More than ten years later, the names of the companies have changed, but the land grabs and the social and environmental problems continue. It is perhaps revealing that the Global Witness report makes no mention of REDD.