CAO investigation: IFC-linked rubber firm project paused

20 June 2014

In May, an International Finance Corporation (IFC, the World Bank’s private sector arm) linked Vietnamese rubber plantation company operating in Ratanakiri province, Cambodia, agreed to stop some of its activities temporarily. A February complaint to the IFC’s accountability mechanism, the Compliance Advisor Ombudsman (CAO), accused the rubber company of harm to communities and land grabbing (see Observer Spring 2014, Update 86). The IFC has invested in private equity fund Dragon Capital Group which invests in Hoang Anh Gia Lai (HAGL), the company that owns the Cambodian rubber plantations.

The February complaint by affected communities accused HAGL of land grabbing, negatively impacting water resources and using child labour. The director of HAGL stated that operations in several projects will be suspended from May until November, and that “the subsidiaries are only allowed to tidy up and to collect the branches of trees in the already reclaimed areas.” Eang Vuthy at NGO Equitable Cambodia, one of the complainants, welcomed the decision, but asked “the company to continue ceasing activities completely in all 25 of the communities.” Meanwhile, the CAO confirmed that the dispute resolution process continues and that they “will engage with the complainants, their larger communities and NGO advisors, and with the company, on establishing ground rules to guide the process.”