Numbered and stamped cut timber inside HAGL rubber plantation in Cambodia Global Witness

A new report from campaigning NGO Global Witness has revealed how big-name financial institutions, International Finance Corporation (IFC) and Deutsche Bank are subsidizing Vietnamese land grabs in Cambodia and Laos.

‘Rubber Barons’, published alongside a short film on Monday 13 May, is critical of a culture of secrecy around plantation investments. Two of Vietnam’s largest companies, Hoang Anh Gia Lai (HAGL) and the state-owned Vietnam Rubber Group (VRG) have acquired more than 200,000 hectares of land through deals with the Cambodian and Laos governments. Deutsche Bank has significant holdings in both companies, while the IFC invests in HAGL.

Cambodia and Laos have seen more than 3.7 million hectares of land handed over to companies since 2000, 40 per cent of which is for rubber plantations. The report explains a culture of corporate secrecy and shady connections with élites which mean that companies like HAGL and VRG get away with breaking the rules.

Land grabbing has accelerated in Cambodia over recent years, and so has the violence that surrounds it. By the end of 2012, 2.6 million hectares of land had been leased by the government, 20 per cent of which Global Witness says has been allocated to five of Cambodia’s powerful tycoons.

Laos has experienced a growing economy over the last decade that has attracted attention from foreign agribusiness looking to cash in on the quantity of arable land and cheap labour available. According to Global Witness, almost 20 per cent of all villages in Laos have been affected by at least one land grab. Forests are disappearing, along with journalists and activists who speak out.

Megan MacInnes, who heads the Land Team at Global Witness says that HAGL and VRG are adding to the human rights threat in the region: ‘Often, the first time people learn of a plantation is when the company bulldozers arrive to clear their farms,’ she adds.

Local people have complained of increased food and water shortages, loss of livelihood without compensation and poor employment conditions. Indigenous communities have lost burial grounds and sacred forests. Those who protest say they face violence, intimidation and arrest. ‘Rubber Barons’ outlines non-payment of compensation and routine use of armed security forces to guard plantations in HAGL and VRG’s operations.

The environmental impacts are also significant; the report accuses both companies of involvement in illegal forest clearance, beyond their concession boundaries.

‘Rubber Barons’ says that HAGL and VRG’s financial involvement lies behind an intricate web of shell companies, which allows them to disguise the fact that they have exceeded Cambodia’s legal limit on land holdings. Global Witness is calling for HAGL and VRG to be prosecuted for their illegal activities and for their plantation concessions to be cancelled.

‘Until governments bring in and enforce regulations to end the culture of secrecy and impunity that is driving the global land-grabbing crisis, international banks and financial institutions will continue to turn a blind eye to the human rights abuses and deforestation they are bankrolling,’ says MacInnes.

Read the full ‘Rubber Barons’ report and more about land grabbing in Cambodia and Laos at the Rubber Barons website.

Read more about the global land grab in May’s New Internationalist magazine.