ELCs: THE GOOD, THE BAD AND THE UGLY

Cam­bo­dia works for eco­nomic and so­cial gains

Cambodian Business Review - - Front Page -

Many coun­tries l ease out pub­lic land to com­pa­nies to de­velop – for in­dus­try, min­ing, oil wells and other eco­nomic ac­tiv­i­ties. Govern­ment and in­dus­try ar­gue it is vi­tal for na­tional economies and eco­nomic de­vel­op­ment.

And it can of­ten be con­tro­ver­sial, rais­ing protests from en­vi­ron­men­tal groups or lo­cals who may be ad­versely af­fected.

Few is­sues are as con­tro­ver­sial or stir emo­tions in Cam­bo­dia as much as the Eco­nomic Land Con­ces­sions (ELCs) leased to com­pa­nies to clear the land to de­velop in­dus­trial-scale agri­cul­ture and build lo­cal in­fra­struc­ture for sur­round­ing com­mu­ni­ties.

ELCs are meant to de­velop pro­cess­ing plants for lo­cal agri­cul­tural pro­duc­tion or plant plan­ta­tions for ev­ery­thing from cas­sava to oil palm to rubber.

But Prime Min­is­ter Hun Sen, with an eye on the 2018 elec­tion, on Fe­bru­ary 25 an­nounced the govern­ment would claw back al­most half the land for ELCs, to hand out to poor fam­i­lies. He gave no de­tails of how the land would be re­al­lo­cated.

“(A re­view) … is com­pletely fin­ished,” he said. “Now, only 1,090,000 hectares of land are al­lowed to re­main for in­vest­ment and al­most a mil­lion hectares was taken back.”

Sup­port­ers say ELCs boost the econ­omy and govern­ment rev­enue, cre­ate jobs and sus­tain­able in­comes in ru­ral ar­eas and de­velop in­fra­struc­ture such as hous­ing, roads, schools – tasks the govern­ment doesn’t have the money or the re­sources to do – and com­bat poverty.

“We make full use of the land,” Ith Nop, gen­eral man­ager of the Mong Reththy Group, the largest agro- in­dus­trial con­glom­er­ate in Cam­bo­dia and the fifth- largest in South­east Asia, told Cam­bo­dia Busi­ness Re­view.

“We em­ploy a huge num­ber of lo­cal com­mu­ni­ties. We build roads etcetera, in­fra­struc­ture. That’s part of the terms of our con­ces­sion. But we need the help and co­op­er­a­tion of the lo­cal peo­ple. We need to get along with them, so we do our best. You can­not op­er­ate with­out them.”

Crit­ics say many ELCs dis­place im­pov­er­ished lo­cals, in­clud­ing tribes­peo­ple, has­ten de­for­esta­tion and de­stroy the en­vi­ron­ment. They say some con­ces­sion-hold­ers grab ex­tra land, strip the con­ces­sion of tim­ber in­stead of de­vel­op­ing it, or just sit on it spec­u­lat­ing to sell­ing out to an­other in­vestor.

Rights group LI­CADHO es­ti­mates well over half a mil­lion peo­ple have been af­fected by land dis­putes in­volv­ing ELCs since 2000, with thou­sands still un­re­solved.

“Each num­ber rep­re­sents a po­ten­tially ru­ined life, an in­di­vid­ual who faces se­vere and long-term hard­ship,” says the group’s Naly Pilorge.

“With­out land, they no longer have the means to pro­vide them­selves with the ba­sic re­quire­ments for a de­cent life. The govern­ment must act now to end this epi­demic of land­grab­bing.”

Un­til re­cently, ELCs cov­ered about two mil­lion hectares across the coun­try.

The World Bank es­ti­mates about 80 per­cent of Cam­bo­di­ans live in ru­ral ar­eas, de­spite in­creas­ing ur­ban­iza­tion fu­elled by the coun­try’s strong eco­nomic growth.

ELC’s are a key plank of the govern­ment’s eco­nomic de­vel­op­ment pol­icy, us­ing the pri­vate sec­tor to help de­velop the econ­omy and boost so­cial de­vel­op­ment.

We make full use of the land. We need the help and co­op­er­a­tion of the lo­cal peo­ple. We need to get along with them. - Ith Nop

But stung by ac­cu­sa­tions of abuse by some con­ces­sion-hold­ers of the sys­tem, the govern­ment – which is­sues ELCs through the Agri­cul­ture Depart­ment – is now cut­ting back lease terms to 50 years from up to 70, or even 90, years, chang­ing the terms of the lease.

Oth­ers are be­ing down­sized or hav­ing their leases re­voked al­to­gether.

In the same an­nounce­ment in which he cut back the land for ELCs, Hun Sen stream­lined the con­ces­sion is­su­ing process by hand­ing sole re­spon­si­bil­ity to the Agri­cul­ture Depart­ment. Pre­vi­ously, the En­vi­ron­ment Depart­ment had also is­sued and con­trolled ELCs.

Hold­ers of con­ces­sions such as rubber plan­ta­tions com­plain ar­bi­trar­ily cut­ting terms ig­nores the pro­duc­tion cy­cle of their trees, which take years to ma­ture and pro­duce.

“Yes. There are some bad (con­ces­sion-hold­ers),” says Ith Nop. “Some com­pa­nies do not fol­low the rules. That’s no good. There are a lot of com­plaints. They make it hard for the rest of us. We are very re­spon­si­ble. We help the com­mu­ni­ties.

“Maybe only 20 per­cent (of ELCs) are good. The prob­lem is en­force­ment.”

And some crit­ics say the govern­ment is crack­ing down as a gim­mick ahead of the 2018 na­tional elec­tion and lis­ten­ing to the “noisy mi­nor­ity”.

Many con­ces­sion-hold­ers say the re­spon­si­ble oper­a­tors are be­ing pe­nal­ized for the, ad­mit­tedly sig­nif­i­cant num­ber, of bad ones.

Many con­ces­sion- hold­ers com­plain of cor­rup­tion and black­mail and co­er­cion ham­per­ing their op­er­a­tions and driv­ing up costs.

“We suf­fer the in­dig­nity of hav­ing to face off with vil­lagers who were not even in ex­is­tence when the con­ces­sion was granted – be­fore in­fra­struc­ture was de­vel­oped and be­fore the con­ces­sion started work,” said.

ELCs come with a re­quire­ment to set aside some of the con­ces­sion for fam­i­lies al­ready liv­ing in within the bound­aries.

Costs are driven up fur­ther by in­flated “fees” and cor­rup­tion, in­clud­ing in the ten­der­ing process, they say.

In Jan­uary, cor­rup­tion watch­dog Trans­parency In­ter­na­tional rated Cam­bo­dia the most cor­rupt coun­try in South­east Asia. Lo­cal au­thor­i­ties are of­ten ac­cused of goug­ing money from the ELCs.

Hun Sen in 2012 or­dered a mora­to­rium on new con­ces­sions and or­dered the seizure of those not liv­ing up to the con­di­tions of their lease.

Rights groups and other NGOs say the mora­to­rium has dra­mat­i­cally re­duced the num­ber of dis­putes, but com­plain lit­tle is be­ing done to re­solve ex­ist­ing ones. They also say the govern­ment has no power to pun­ish those com­pa­nies who breach their con­di­tions.

Con­ces­sion-hold­ers and crit­ics agree on al­most noth­ing. ELC oper­a­tors say the courts do not en­force their le­gal rights; NGOs say the courts throw vil­lagers into jail for try­ing to get their land back.

Pos­si­bly the one thing they do agree on is tougher en­force­ment of the law, in­clud­ing a crack­down on con­ces­sion hold­ers who breach the terms of their lease and proper en­force­ment of “claim-jumpers”.

Even rights groups such as LI­CADHO of­ten ad­mit some pro­test­ers de­mand­ing com­pen­sa­tion or land have no right to be in the demon­stra­tion.

“But it’s hard to weed them out,” said a worker from an­other NGO, who did not want to be iden­ti­fied for fear of ret­ri­bu­tion.

Cam­bo­dia is not alone in leas­ing con­ces­sions on state land – in­clud­ing forests – to com­pa­nies. And other coun­tries, too, work hard to find a bal­ance be­tween all groups in­volved.

In the United States, about 24 per­cent of govern­ment land is ac­ces­si­ble un­der stan­dard in­dus­try lease terms, says the Amer­i­can Pe­tro­leum In­sti­tute.

“It is im­por­tant to note that we are talk­ing about mul­ti­ple use pub­lic lands, where de­vel­op­ment of en­ergy re­sources is al­lowed, along with graz­ing, recre­ation, hunt­ing, fish­ing, and other uses,” the In­sti­tute says in a pol­icy is­sues pa­per.

“Th­ese are govern­ment lands des­ig­nated for use for eco­nomic, recre­ational and sci­en­tific pur­poses. Around one-third of the land in the United States is con­trolled by the govern­ment.” We stress “the im­por­tance of col­lab­o­ra­tion by all stake­hold­ers to as­sure en­vi­ron­men­tally sound and eco­nom­i­cally fea­si­ble de­vel­op­ment of th­ese im­por­tant … re­sources”

Photo: Flickr

Ex­tracts la­tex oil from rubber trees.

Photo: Flickr

Insepceting a young cas­sava crop.

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