Calls grow to repurpose land squandered in Cambodia’s concession policy

PHNOM PENH — “Make the bosses rich in Cambodia,” then-prime minister Hun Sen said at the 2012 inauguration of a sugar refinery in Kampong Speu province. “If a country has no millionaires, where can the poor get their money from?”

This underscored the ideology at the heart of the policy of economic land concessions, or ELCs, which promised benefits for all by handing vast swaths of the country to a handful of elites to develop, mostly for agroindustry.

The sugar refinery where Hun Sen gave this speech belonged to one his closest advisers, Ly Yong Phat — a ruling party senator with a sprawling business empire and a well-documented history of environmental vandalism.

The senator’s sugar refineries and the ELCs he was granted for the development of plantations now sit dormant and fallow. The irreplaceable ecosystems that once occupied Ly Yong Phat’s ELCs are long gone.

So are the thousands of families who were evicted to make way for the plantations. While many of the evictees temporarily found day-laborer work on the plantations, there was no compensation for the family farms that were lost. Then, when Cambodia’s sugar business became embroiled in the so-called Blood Sugar scandal — an advocacy campaign that targeted European buyers and Australian financiers of Cambodian sugar due to rights abuses linked to tycoons like Ly Yong Phat — the refineries unceremoniously fell silent, leaving former residents with no land and no work.

This is just one example of the countless social, environmental and economic failings of Cambodia’s ELC system, which culminated in May 2012, when the government issued an order banning the issuance of new ELCs. However, even today, concessionaires still control some 2.25 million hectares (5.56 million acres) of Cambodia — roughly 14% of the country, or the size of the state of New Jersey — through 313 ELCs, according to data compiled by rights group Licadho.

The range of issues brought about by the ELC system has prompted a range of actors from the private sector and civil society to advocate for reforms that would bring about more shared benefits, although it remains unclear how many ELCs are still operational.

A history of failure bleeding into the present

By almost every metric, the ELC system failed to bring about the promised prosperity, instead leading to widespread ecological destruction as Cambodia’s forests were cleared at record rates to make way for agricultural plantations, many of which never came to fruition. Since 1998, an average of 105,000 hectares (259,500 acres) of land was added to the ELC system each year, contributing directly to an estimated 40% of Cambodia’s deforestation.

“I think we need to stress the destruction caused by the ELCs, it needs to be highlighted to the public that these are huge failures of government policy,” said Eang Vuthy, director of land rights group Equitable Cambodia.

“They’ve led to massive destruction of state forests as well as evictions and human rights violations across communities while private individuals benefit from logging across state land,” he said.

Analysis by Global Forest Watch shows that more than 773,000 hectares (1.91 million acres) of forest have been lost across the 2.25 million hectares of ELCs between 2001 and 2022. Using Licadho’s ELC data, Mongabay found that 104 ELCs either overlap with or were issued in the heart of some 23 protected areas across Cambodia. This has enabled rampant timber laundering as concessionaires felled protected forests while claiming it was natural forest from within their ELC. Perhaps more telling is how this year’s redrawing of the borders of protected areas across Cambodia has excluded ELCs from previously protected land.

The social impact of the ELC policy has been equally disastrous for Cambodians. Between 2003 and 2012, rights groups estimated some 400,000 Cambodians had been affected by land grabs, most of which were linked to ELCs.

These losses were felt acutely among Cambodia’s Indigenous communities, who not only saw their homes and farms swallowed up in the name of trickle-down economics, but their culture and traditions too.

“They destroyed holy sites of worship where we had Bunong ceremonies,” said Pleuk Phearom, a grassroots Indigenous rights activist in Mondulkiri province. “They came here for our resources. Both the companies and the government target us because they just want to control us. Before, when we all farmed, nobody owned land — we shared.”

Cambodia’s northeastern provinces are largely populated by Indigenous minority groups, but the land is also rich in gold, precious gems and luxury timber, rendering it an ideal area for concessionaires to strip the country of its natural assets.

“We never got any benefits from the companies,” added Phearom, who is herself Bunong. “We lost our farms. We lost our forests and the companies threaten us when we protest.”

All of this destruction, loss and suffering hasn’t even paid off, if the limited amount of publicly available data is accurate. In August 2022, then-agriculture minister Veng Sakhon said that ELCs generated little more than $2 million for the year, although this was apparently generated by 72 ELC companies that controlled some 1.16 million hectares (2.87 million acres).

According to Sakhon, only 402,760 hectares (995,240 acres) of this was actually cultivated, while the rest was being cleared. When contrasted against Licadho’s data set, which lists nearly 2.25 million hectares as ELC land, the ministry’s figure of 1.16 million hectares doesn’t add up, but the discrepancy could be accounted for by the unknown number of inactive ELCs.

Many concessionaires treated their ELCs as logging concessions, the predecessors to the ELC system, and simply abandoned the land after stripping it of forest. Others, bogged down in decades-long disputes with communities, opted to wash their hands of their investment, while a mismanagement of crop planting during the 2010-2011 frenzy of new ELCS left many concessionaires struggling to compete in a flooded market.

Neither the current agriculture minister, Dith Tina, nor his spokesperson, Im Rachna, responded to detailed questions sent by Mongabay. Likewise, the U.N. Food and Agriculture Organization’s Cambodia office, which is nestled inside the ministry’s compound, didn’t respond to requests for data on inactive ELCs.

Sources who did speak with Mongabay agreed that reforms have been floated for the past 10 years, but that little has been done to undo the damage wrought upon the communities and ecosystems affected — although there’s no shortage of ideas as to how things could be improved.

Replanting the forests and returning the land

As one source familiar with Cambodia’s forestry sector suggested, this begs the question of what can be done with the untold hectares of dead land that comprise the many failed ELCs that litter Cambodia’s countryside.

The forestry expert, who asked not to be named due to their ongoing work with the government, suggested that reforestation or rewilding projects could be initiated in tandem with allowing communities to farm now-defunct ELCs. As part of its December 2021 pledge to become carbon neutral, the government has stated it will reduce deforestation by 50% by 2030, stopping it completely by 2045, and will extend forest cover to 60% of the country’s landmass by 2050. That means reforestation will need to happen somewhere. This, combined with other initiatives such as REDD+ projects, aims to create a 50 megatons of carbon dioxide equivalent carbon sink in Cambodia, according to the government’s long-term strategy.

Indeed, the idea of reforestation has garnered support from Cambodian King Norodom Sihamoni, former prime minister Hun Sen — who oversaw and reportedly profited from much of the destruction of Cambodia’s forests at the hands of concessionaires — as well as Cambodia’s new environment minister, Eang Sophalleth, who, in September this year, pledged to plant 1 million saplings each year.

It’s unclear where these new trees will go, although the pro-government Khmer Times reported Sophalleth as focusing forest cover expansion efforts on areas such as the Cardamoms, Prey Lang Wildlife Sanctuary and Veun-Sai Siem Pang National Park.

All of these protected landscapes are under assault from illegal loggers — some of whom appear to work for the government, and many of whom have laundered illegally logged timber from protected forests via ELCs.

Phay Buncheon, spokesperson for the Ministry of Environment, didn’t respond to repeated requests for comment.

One industry insider, who requested to remain anonymous due to their work with the government, noted that acacia and eucalyptus could easily be grown on a lot of the land currently going to waste in inoperative ELCs and that, as a result, Cambodia is “missing out big time on becoming a major player in the wood and furniture game.”

But while illegal logging networks continue to flourish, the source added, there’s little hope for a cleaner, sustainable and profitable timber industry blossoming in Cambodia.

Tree nurseries, sources suggested, could provide jobs, while unused ELC land could allow former residents displaced by concessionaires to return to farming. Greenhouses could be constructed, they said, to allow communities to grow a variety of crops in soils where ELCs have depleted the nutrient base.

“They can still do many different types of crops [on dormant ELCs] and the farmers who lived there know exactly what they can grow on their land,” said Vuthy of Equitable Cambodia. “This would be very beneficial to the country and to the people, for livelihood security, for income generation and to stop young people migrating to Thailand to find another job.”

But in October, when some 470 Indigenous families tried to reclaim land lost to Hengfu Sugar Group, whose five ELCs span 42,422 hectares (104,827 acres) across Preah Vihear province, authorities prevented the communities from farming the land.

The Chinese sugar giant has been inactive in Cambodia for at least three years, but still the government refuses to allow displaced residents to return.

“So many ELCs are inactive, we’re trying to ask the government to return the land to the former owners, which is the communities affected by land grabbing,” Vuthy said. “This is very difficult, but it should be very simple. The progress we’ve seen is so slow that it’s almost no progress at all.”

The potential for community-led cooperatives

But if land is to be returned to displaced farmers as part of broader ELC reforms, then approaches to agriculture should be reformed in tandem, said Eugene Kraamwinkel, chair of the agriculture committee at the European Chamber of Commerce and CEO of LN Agri, which operates an ELC along with other private farms in Kratie province.

Kraamwinkel said the failings of ELCs have been repeatedly discussed, whereas more focus needs to be placed on productive solutions for the land and the communities who were evicted from it.

“Currently, traders go from house to house, buying 50 kilograms of rice from this guy, 100 kilograms from that guy, until they’ve brought all the rice in town and then the sellers have to move it all to a central point,” he said. “A truck stands there while they load the rice. Who’s making the money? The guy with the truck, because traders have the negotiating power on volume.”

This, Kraamwinkel said, is why smallholder farmers in Cambodia stay poor, despite knowing how to farm their land.

He proposed handing land currently owned by nonperforming ELCs to agricultural cooperatives managed by communities, placing more negotiating power in the hands of Cambodian farmers rather than concessionaires.

Rather than competing, neighbors could become collaborators and cooperatively farm the land — or, at least, that’s the vision, Kraamwinkel said.

This, he said, would grant farmers greater purchasing power, enabling bulk buying of commonly shared supplies like fertilizers, pesticides and machinery, while preventing the duplication of these costs that would be incurred by each farmer operating independently.

Whether the legislation is there to support it or whether the Cambodian political economy would block the development of cooperatives springing up on inactive ELC land is hard to say, Kraamwinkel added, but he noted that, “In Cambodia, there’s already this culture of sharing; cooperative farming would just be another form of sharing.”

Avoiding ‘just another failure’

Any solution would need to start with top-down action from the government to dislodge concessionaires from ELCs they aren’t using. However, the role of local communities would be central to the success of any reformation of the ELC system and would need to be carefully considered to avoid the pitfalls of the old system, said Jean-Christophe Diepart, a geo-agronomist with more than 20 years of experience in Cambodia.

“Whether the ELCs have really delivered on their promises, to bring about economic development, for me that’s an absolutely a no,” Diepart said. “The displacement of people has been massive, not well quantified, but this has been very, very important and this has created multiple waves of migration that saw people being moved on into the forest.”

Diepart, who has authored papers on land insecurity in Cambodia, pointed to the lack of uniform grievance mechanisms, of free, prior and informed consent, and of land dispute resolution policies across the ELC system.

Each concessionaire, Diepart said, is free to deal with communities as they see fit. This has often resulted in heavy-handed tactics and created conflicts that turn violent when communities feel their land is being stolen.

This has also contributed to the ultimate failure of the ELCs as they stand, he said, as more concessionaires have either refused to pay taxes when they feel the government hadn’t supported them in dealing with aggrieved communities, or have been pushed out of business by the cost of dealing with land disputes.

“Out of a budget of $2.2 billion or so, [the revenue generated for the state] is really peanuts, especially when you consider the impact that ELCs have. It’s definitely not balanced with the negative impacts,” he said, adding that the ELC system is fading into irrelevance economically. “There’s a recognition that the whole thing is not going properly, but also the investors are increasingly reluctant to invest in land because they know that it’s a very, very touchy and very, very problematic area.”

These problems would still be present in any reform to the ELC system that alters the level of accessible farmland for communities, Diepart said, adding that the rights and land security of Cambodians would need to be at the heart of any potential policy regarding inactive ELCs.

“Any attempt to reforest, rewild, or whatever you call it in these dormant ELCs needs to take into account — and do so very seriously — the problem of migration,” he said. “This is the problem of the redistribution of the farming population in the country. If people don’t take this into account seriously, I mean, it’s just another failure.”

Banner image: In February 2023, a politically connected company, Sal Sophea Peanich, was seen clearing out the remnants of natural forest within its concession in Stung Treng province. Image by Andy Ball / Mongabay.

See more from this reporter here, like this recent investigation:

License to Log: Cambodian military facilitates logging on Koh Kong Krao and across the Cardamoms