Khon Kaen Sugar Industry Public Company Limited or KSL was founded in 1976 to manage and operate sugar factories and related businesses. It issued the first IPO (Initial Public Offering) in 2005, consequently, the group was listed on the Stock Exchange of Thailand (SET) using symbol KSL. Consequently, the company has expanded to other related business e.g. renewable energy (biomass power generation) and has also extended its production base to neighboring countries i.e. Laos and Cambodia.

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CAPTION 1: The sugar factory. Image from the company’s website.

On 21 April 2006, Chamroon Chinthammit, Chief Executive Officer and President of KSL, submitted a notice to the President of the Stock Exchange of Thailand (SET) on the company’s investment project in sugarcane plantation and establishment of sugar factories in Cambodia — that KSL and subsidiaries will establish a joint-venture in Cambodia in order to secure concessions for sugarcane plantation and permits for sugar factories. The project was planned to cover 20,000 hectares (125,000 Rai) of land in Koh Kong province of Cambodia. Estimated investment capital 2,000 million Thai Baht, KSL will hold at least 50% of the joint venture’s registered capital stocks. Additionally, the sugar products would be exported to the European Union between 2004 – 2009 through EBA (Everything But Arms), a trade preference scheme which allows duty-free and quota-free import of certain goods from Least Developed Countries to the EU.

On 2 August 2006, KSL with its foreign joint ventures signed an MOU with Cambodia’s Ministry of Agriculture, Forestry and Fishery to make lease agreement for 20,000 hectares of land with a 90-year concession period and to establish a sugar mill. Subsequently, two new companies were founded for the purpose of this project: Koh Kong Plantation Company Limited (KPT) to run sugarcane plantation and Koh Kong Sugar Industry Company Limited (KSI) to run sugarcane plantation and to build a 6,000 tons-per-day sugar mill.[1]  As for registered capital stocks of the two companies: KSL held 50% of the share, another 30% were held by a Taiwanese joint venture while 20% or the rest were held by a Cambodian joint venture who was also a Senator from the Cambodian People’s Party[2]. Later, KSL had increased its shareholding to 80% in both companies[3] having their representatives in both companies’ management. In the end, KSI was granted 9,567.2 hectares of land concession[4] and KPT was grated 9,174.5 hectares; therefore both companies were granted concessions of approximately 19,100 hectares of land in total.

Key activities during the first phase of the project:

– 20 March 2006: the Cambodian cabinet granted 10,000 hectares concessions each to “Duty Free Shop” and “Koh Kong International Resort Club”.

– 19 May 2006: security personnels were sent to the area to clear the land.

– 29 May 2006: KPT and KSI began company registration process.

– 20 June 2006: “Duty Free Shop” and “Koh Kong International Resort Club” filed documents to the government requesting to change the name of the concessions holders.

– 18 July 2006: the Cambodian cabinet agreed on the transfer of concessions ownership from “Duty Free Shop” to KPT and from “Koh Kong International Resort Club” to KSI.

– 2 August 2006: MOUs between the Ministry of Agriculture, Forestry and Fishery versus KPT and KSI[5] were signed acknowledging the concessions period of 90 years.

On the other hand, according to Cambodian law, to grant economic land concession to any individual or legal entity, the land in question shall be categorised as “Free” or “Non-use” under the 2005 Sub-Decree on Economic Land Concessions. However, the concession area which covers three villages, i.e. Chhouk village, Chikhor village, and Trapaing Kandal village in Srae Ambel District of Koh Kong Province, hosts agricultural communities who have been settling there for at least 70 years. Livelihoods of these communities heavily depend on use of natural resources since the land is so abundant thus suitable for cultivation of agricultural produces such as corn/maze, cassava, watermelon, and mango; Additionally some lowland area are used for rice paddy while some area are used for livestock grazing. The land was actually apportioned under Cambodian’s “Participatory Land Use Planning” or PLUP policy. There are nearby community forests where communities have been foraging for domestic consumption and for sell in markets in town. Legally, villagers have been living on their land for more than 5 years without objection; the possession of their land have been open, peaceful, and evident to the public. Consequently the land which was granted concessions to the companies are not “Free” or unoccupied according to Cambodia Land Act (2001,  Paragraph 30, 31, 38); Therefore villagers have the right to ownership of the land, qualified for land title deed, and qualified for market-value compensations in case of expropriation [6].

Moreover, the Land Law also stipulates that an economic land concession is limited to 10,000 hectares (62,500 Rai) that can be granted to an individual or legal entity, or collectively to multiple legal entities controlled by the same individual — (a legal entity) cannot receive more than 10,000 hectares of land concessions combined. Hence KSL’s establishing two companies to invest in the sugar project in Cambodia is considered violation of the law.  Additionally, according to related regulations, granting economic land concession requires environmental and social impact assessment. In this case, no prior consultation, public hearing nor public announcement was documented as well as no environmental impact assessment was conducted.

In 2006, villagers reported a group of police officers visited the villages and forced-evict the communities. The incidence left 5 villagers injured reportedly by gun shot wounds and beating-up wounds by guns. Demolition of farm land and confiscation of livestocks and valuable possessions were also reported. More than 456 families from the 3 villages had lost over 5,000 hectares in the incidence. One local villager had recorded a moment when the police force used bulldozers to demolish houses in the village. Tragically, the villager was assassinated the next year; Additionally, lawyers and activists associated with the case have reported being followed and threatened by security personnels during their field visits[7].

The company claimed this incidence of forced-eviction and demolition of farmland and villages as an activity to clear unused, undeveloped, and deteriorated land; On contrary, villagers denounced the claim on grounds that they have been living and farming on the land and the land is fertile as explained above.

As a result of this project, communities are disconnected from natural resources, their possessions and livestocks confiscated. In addition, they can no longer make a living as they are barred from going into the (community) forest to forage. Bamboo (from the forest) which is the main material for building houses/cottages have also become inaccessible. Extremely high fees are imposed on those who want to enter the forest so that villagers are unable to pay (thus cannot access).[8]

Apart from forced eviction and assault, the loss of land have forced some villagers to get labour jobs for the company because they can no longer maintain their livelihood. According to a survey, 66% of all households in the 3 villages work as employees in the sugarcane plantations; Most work as day labourer (hired and paid by the day) with no income security because the seasonal jobs require labour only during the sugarcane harvesting season. While the wages are low but works very demanding for the labour jobs, villagers’ income dropped; consequently their children have to give up education because they need to help their parents work in order to compensate for the lost income. Additionally, the relocated land are not suitable for living; the land are infertile degraded forest land, lacking of nutrient, very far from civilisation, and inaccessible by car; Even if they can farm on the land, selling produces is not feasible with the inconvenient transportation.

Disputes

In September 2006, several protest marches were held by villagers who were severely affected by the incidence of violent eviction and assault. On the other hand, local government officials had obstructed NGOs and the Cambodian Human Rights Action Committee (CHRAC) from entering the area to follow up and monitor the case.

12 November 2006, a meeting between the company’s representative and community leaders was organised. They agreed to delay any decision and that the company would temporarily withhold eviction activities. However, it was reported that the company had violated the agreement and eviction activities continued.

In 2007, villagers from 220 families filed a complaint in Koh Kong Provincial Court on illegality of the concession contract between the sugar companies and the government of Cambodia thus called for cancellation of the concession contract. The villagers claim that they were never informed, consulted nor given opportunity participate in the concession process. The companies then negotiated with villagers and offered some payment; Eventually, only 203 families remained in the lawsuit.

Later in 2013, Koh Kong Provincial Court ended the litigation process and transferred the case for review by the Cadastral Commission. This agency has a mechanism for managing certain types of land dispute, as part of the state mechanism for land management. According to the Court, the case is beyond its jurisdiction because villagers (therefore it does not have the power to hear the case). The Cambodia Legal Education Center (CLEC) has since submitted a letter to the Commission, requesting that the lawsuit be returned to Koh Kong Provincial Court for consideration and, if the case were to be transferred, the responsible authority should preferably be the National Authority of Land Dispute Resolution.

5 March 2007, over 120 people traveled to Phnom Penh to submit petitions to various government agencies. Officials from the Ministry of Interior only ensured by words that they will resolve the problem.

 

May 2007, the Secretary of State for Ministry of Interior organised a meeting between the companies’ representatives, community representatives and the Community Legal Education Center (CLEC). Results of the meeting included recommendations that the companies cease land clearing and eviction of residents and that the companies should work with civil society to resolve the situation and redress. However, the recommendations were ignored by local government officials over the year following this meeting. Consequently, some villagers decided to accept compensation from the companies at a rate of almost 1,000 US dollars per hectare; although the compensation rate is reportedly lower than the actual cost of damage due to the fact that company measurements of the land area were less than the actual land area lost by villagers.

 

Image may contain: 1 person, text
“When I arrived at the capital city (Phnom Penh), I realised the government had already given concessions of people’s land to the companies. They claimed this will bring development and wealth to the communities; But what I have seen are only calamity.”
Teng Kwaw
Villager affected by sugar industry in Koh Kong province of Cambodia

 

26 August 2008, KSL sent a letter to the Community Legal Education Center (CLEC) to request additional information regarding claims that the companies have violated land concession laws and human rights. CLEC provided information to the company but there has so far been no further correspondence from KSL.

6 January 2010, Toward Ecological Recovery and Regional Alliance (TERRA) together with Community Legal Education Center (CLEC) filed a complaint before the National Human Rights Commission of Thailand (NHRCT) under Complaint No. 58/2553.  The complainants alleged that a Thai company, Khon Kaen Sugar Industry Plc. (KSL), received, through Cambodian subsidiary companies, economic land concessions in Sre Ambel District of Koh Kong province, Cambodia; This action has led to violation of Cambodia’s Land Law on economic land concessions and violations of human rights laws and standards, resulting in illegal possession of local people’s land, loss of their livelihood and work opportunities, loss of food security, lack of educational opportunities, worsening poverty and even threats of violence; The complainants requested for an investigation by the NHRCT on the case in which the Thai company’s practices have caused human rights violations against Cambodian citizens.

Accordingly, on 10 March 2015, the NHRCT had resolved that: Despite the company KSL’s claim that it did not personally commit the act of human rights violation against residents of the 3 villages, the NHRCT concluded that KSL is the direct beneficiary of the act of human rights violation. That is to say: the company KSL, through its two subsidiaries, obtained concessions of the land from two other Cambodian companies. KSL claimed that the violent eviction and assault incidence (in May 2006) had occurred before concessions on the land were legally transferred to KSL (in August 2006). On the other hand, in April 2006 KSL submitted a notice to the Stock Exchange of Thailand (SET) regarding its intent to set up joint-ventures in order to secure concessions and establish sugarcane plantation and sugar factories in Koh Kong province of Cambodia. — The notice to SET was sent (April 2006) before the violent incidence occurred (May 2006) therefore KSL should be aware of the incidence[10]. Finally, NHRCT resolved to submit policy recommendations to the company KSL including recommendation to consider land return in areas of dispute to the villagers, to compensate for various types of loss and remediation to the communities, and to rehabilitate the local environment to ensure that communities can return to rely on and benefit from natural resources and the land.

 

………………………………….

References

[1] Verbal statement made to the NHRCT Subcommittee on Civil and Political Rights on 20 July 2010. In “Finding Reports No. 115/2558” National Human Rights Commission of Thailand. URL http://www.terraper.org/web/sites/default/files/key-issues-content/th_kohkong.pdf. Unofficial translation to English: https://earthrights.org/wp-content/uploads/unofficial_english_translation_-_tnhrc_report_on_findings_-_koh_kong_land_concession_cambodia.pdf

[2] “Finding Reports No. 115/2558” National Human Rights Commission of Thailand. 20 July 2010.

[3] Comapnies’ website http://www.kohkongsugar.com/en/about-us

[4] 1 hectare = 6.25 rai

[5] Verbal statement made to the NHRCT Subcommittee on Civil and Political Rights on 20 July 2010. In “Finding Reports No. 115/2558” National Human Rights Commission of Thailand.

[6] Land Law Cambodia 2001, Article 31

[7] Statement of the complainants. In “Finding Reports No. 115/2558” National Human Rights Commission of Thailand. 20 July 2010.

[8] Statement of the complainants. In “Finding Reports No. 115/2558” National Human Rights Commission of Thailand. 20 July 2010.

[9] Statement of the complainants. In “Finding Reports No. 115/2558” National Human Rights Commission of Thailand. 20 July 2010.

[10] Verbal statement made to the NHRCT Subcommittee on Civil and Political Rights on 20 July 2010. In “Finding Reports No. 115/2558” National Human Rights Commission of Thailand

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