Staff Writer
Columbus CEO

c.2013 New York Times News Service

OMLIANG COMMUNE, Cambodia — Yim Lon nurses bitter memories of how three years ago the local authorities forced her and her family to dismantle their small home and move it to make way for a sugar plantation.

The Phnom Penh Sugar Co. paid her a few hundred dollars, less than a tenth of what Yim, 53, says she believes the family’s small plot of farmland was worth. She dreams of being allowed to move their two-room house, made of wood planks and steel siding, back to the site near a stream where they used to grow rice. She is convinced that the other culprits are the Europeans, who buy sugar from Phnom Penh Sugar. “If Europe continues buying sugar from the company, then we will continue suffering,” she said.

Phnom Penh Sugar says that it has behaved fairly and obeyed local laws. Newly created sugar plantations across Cambodia have created thousands of cash-paying jobs for destitute migrant workers and subsistence farmers, and hundreds of jobs for skilled factory workers.

But the corporate practice in Cambodia of obtaining tens of thousands of acres from the government as economic development concessions for large sugar plantations, while paying modest compensation to farmers pushed off the land, places a harsh light on international trade pacts that are meant to help the world’s poorest countries.

To many activists who have heard the tales of people like Yim, the trade pacts that foster exports can have the unintended effect of encouraging land grabs by wealthy, politically connected families.

Nearly all of Cambodia’s sugar exports go to the European Union under the Everything But Arms program, which eliminates import duties for the sugar. The European Union also sets high minimum prices for imported sugar, well above world levels. Western activists have tried in recent months to organize consumer boycotts against companies that have bought Cambodian sugar, notably Tate & Lyle Sugars, which is owned by American Sugar Refining of West Palm Beach, Fla.

The European Union has held high-level talks with Cambodian officials about the sugar issue. But it has refrained so far from opening a formal investigation into whether Cambodian sugar should lose duty-free access to the European Union.

In a written response to questions, Ambassador Jean-François Cautain, the head of the European Union’s delegation to Cambodia, pointed to statistical measures. Rising exports helped Cambodia triple average annual income per person in the last decade, to $980, while reducing poverty to a fifth of the country’s population, he wrote. “We also need to consider the benefits the overall Cambodian economy gets from the ‘Everything But Arms’ scheme and the harm the country would suffer if we remove it,” he said.

Cambodian and Western activists have called for the exclusion of Cambodian sugar from duty-free treatment in Europe, saying that it triggers corporate land grabs.

“The land is deeply connected to the spiritual life of the people,” said Chum Narin, the land and natural resources program head at the Community Legal Education Center, a nonprofit group in Phnom Penh.

American Sugar Refining said that its Tate & Lyle unit had bought only two “small shipments” over the years from Cambodia. The first was in May 2011 and the second in June 2012, the company said. It also said that it “has not received Cambodian sugar for over a year and has no plans for further purchases.”

Both of American Sugar’s purchases were from the KSL Group, another company producing sugar in Cambodia. Phnom Penh Sugar said that it sold sugar to businesses in Spain and Italy, but it declined to identify the buyers.

Sugar represented only $25.2 million of the $1.34 billion in Cambodian products that the European Union bought in the first six months of this year. Most of the European imports from Cambodia are garments.

But the developing sugar industry has created jobs chopping sugar cane for previously destitute migrant workers from hill villages even poorer than Omliang Commune. Sugar refineries have also brought multimillion-dollar investments, roads and other amenities to remote areas where investors have long feared to venture in an oftentimes chaotic country like Cambodia.

Phnom Penh Sugar says that it has spent $220 million on its refinery, brought power lines into the valley, constructed a water-treatment plant and a school, erected dormitories for skilled factory workers and built roads and bridges to replace muddy tracks.

Local residents, including Yim, complain that the school is small. The displaced say they do not have access to the treated water, but must rely on newly dug wells at the edge of the valley where they moved their houses. Well water is often less clean than the stream that used to flow near their homes and leaves what they say is a mysterious white residue when boiled.

The influx of new residents to cut the cane has infuriated longer-term residents like Yim, who regard the migrants as interlopers in their communities. “It’s not good for the village because the outsiders make money,” she said.

The root of the problem, not surprisingly, goes back to the horrors of the Khmer Rouge years. The Khmer Rouge, the Maoist movement that ran Cambodia from 1975 to 1979, are most notorious for causing the death of as many as a quarter of Cambodia’s people, many of them murdered in the country’s “killing fields” and prisons. Others died from large-scale starvation.

But a less-known aspect of their rule was the systematic destruction of nearly all land records in Cambodia. Land ownership is now ambiguous. The country gradually regained stability since 1998 when government forces overran the last of the Khmer Rouge’s jungle redoubts in western Cambodia, including the land in and around Omliang Commune. (Rural administrative areas in Cambodia are still known as communes even though considerable free enterprise is now allowed.)


Western nations then paid for the removal of the huge number of land mines planted by the Khmer Rouge. By 2001, people poured into the sparsely inhabited jungles to chop down trees to make small farms.

Then a second land rush began in 2006 as Cambodians realized the profits to be earned chopping down every tree in the jungle with a trunk of more than a couple inches in diameter and burning it to make charcoal. The air here is smoky from fires burning up in the hills. Residents hike into ever more remote areas to hack down every tree of potential value. They use motorcycles to pull rickety trailers so heavily laden with charcoal that they sometimes must be pushed by hand up the steeper hills.

Villagers here described tensions between those who came in 2001 and those who came in 2006 or later. Cambodian law authorizes a land title of sorts for people who have been certified by local authorities as having occupied the land for at least five years.

But those who lived here more than five years before the plantation was set up and whose houses were removed in 2010 received no more compensation than later arrivals, residents said. They say that obtaining the necessary certification from local authorities had been nearly impossible before Phnom Penh Sugar, in which a powerful Cambodian politician, Ly Yong Phat, who owns a controlling stake, was granted land in the valley by the national government. Asked about the assertion of Yim and other local residents that they had been threatened with arrest if they did not move off land granted to Phnom Penh Sugar by the central government, Seng Nhak, managing director of Phnom Penh Sugar, did not give a direct reply. “They have the right to continue staying on their land, provided that they have proper documentations and proofs of the ownership to the related authorities and to the land dispute committee,” he said in an email.

He declined to comment on whether local residents had been unable to obtain documents showing land ownership. That was a matter for local authorities, he said.