Senator’s Sugar Firm Parts Ways With ANZ

A controversial sugar plantation owned by Senator Ly Yong Phat has paid off the last of its debt to ANZ Royal Bank amid pressure from the bank to help hundreds of families in Kompong Speu province who accuse the plantation of stealing their land.

Local rights groups say the end of commercial relations did not absolve the bank of responsibility and that ANZ should compensate the families if the plantation still refuses to do so.

“I can confirm that PPS [Phnom Penh Sugar] has paid out its loan and is no longer a customer of ANZ,” said Stephen Ries, head of media relations for Australia’s ANZ Bank, the majority owner of ANZ Royal. “We understand they were able to get…finance cheaper when all the compliance costs required by ANZ were factored in.”

Phnom Penh Sugar director Seng Nhak confirmed that the plantation had paid off its loan to ANZ Royal but declined to say whether the move was prompted by the costs of meeting the bank’s social and environmental compliance standards.

“Phnom Penh Sugar is continuing to engage directly with the local community and will continue to do so. Even last week one of Phnom Penh Sugar’s representatives was meeting with the local community,” he said in an email, declining to elaborate.

The bank’s ties to the plantation were first made public in January, when human rights groups released project impact assessments from 2010 and 2013 revealing that ANZ Royal was helping to finance operations. Neither the bank nor the plantation will say how much financing ANZ has provided, but the figure is believed to run into the millions of dollars.

At the time, ANZ Royal CEO Grant Knuckey said the bank was urging the plantation to meet with the affected families.

“When impacts are identified that are not consistent with ANZ’s policies, our aim is to be a positive force for engagement and for change,” he said at the time. “Where we have found that a client does not meet our environmental and social standards and they are not willing to adapt their practices, ANZ has declined funding or exited the relationship. We will continue to engage with this particular case.”

Mr. Knuckey declined to comment Sunday on the plantation’s payout.

Rights groups said the end of the loan should not end the bank’s efforts to help the 400 to 500 families still waiting for fair compensation for the land they lost to the plantation.

“The [bank’s] policy requires them to do the right thing. They have to address this issue,” said Eang Vuthy, executive director of Equitable Cambodia. “If you have done something wrong, you have to fix it…. They cannot run away from the problem.”

Mr. Vuthy said if the plantation fails to compensate the families, ANZ should do so itself.

“This was the easy route for ANZ to try to make this story go away, but the fact is this story is not going away for the hundreds of families who have been impoverished by the project ANZ made possible,” added David Pred, managing director of Inclusive Development International.

“As a major financier of the sugar project, which has no doubt profited handsomely from it, ANZ has a duty of care to the people whose land was grabbed and that duty does not go away when it recalls its loan.”

Chan Sokhoeun, who is still waiting for compensation for the 4-hectare farm he says he lost to the plantation, said ANZ Royal’s departure leaves only Phnom Penh Sugar’s customers to put pressure on the company to compensate evicted families.

“Only the bank and the buyers are able to put pressure on the company to find a solution for the villagers,” he said.

Cambodia exports much of its sugar duty-free to the European Union—$13 million dollars’ worth last year—thanks to an E.U. trade scheme for developing countries.

The E.U. has thus far rejected calls from families, rights groups, and even members of the European Parliament to end the trade benefits or at least launch an investigation of the plantations.

While the E.U. has been in negotiations with the government for several months on a deal that would secure more compensation for all families that have lost land to sugar plantations nationwide, the government and E.U. have not yet managed to agree on how many families deserve to be included.

Of the more than 1,500 families that have lost land since 2010 to Phnom Penh Sugar and an adjacent plantation owned by Mr. Yong Phat’s wife, hundreds have yet to receive any compensation at all. Those who have been compensated received a maximum of $500, or were given replacement land significantly smaller and less fertile than what they lost, families say.

At least two employees have died on the plantation since December after being run over by harvesting machines, apparently while asleep in the fields. A rights group says a third may have died in February after falling off a company truck.

(Additional reporting by Aun Pheap)

[email protected], [email protected]

© 2014, The Cambodia Daily. All rights reserved. No part of this article may be reproduced in print, electronically, broadcast, rewritten or redistributed without written permission.