TRENDS AND IMPACTS OF FOREIGN INVESTMENT IN DEVELOPING COUNTRY AGRICULTURE

other agricultural purposes, but later filled them
in and made no serious effort to keep its promise.
The commune council has little power over the
company, which is obliged to get permission
from provincial level to implement the project.
Meanwhile, if villagers let their livestock roam
onto the plantation, the animals are detained
and can be retrieved only after paying a fine of
KHR100 000 (approximately US$25).
Environmental impacts: there is no evidence
of competing water use between the company
and Thmor Samleang villagers. Villagers’ crops of
paddy rice, cassava and other crops are rainfed,
and the company has excavated its own reservoir
for watering rubber tree saplings. In addition,
there are no complaints from villagers as to the
overuse of pesticides that could degrade soil
quality and pollute groundwater, or the costs
of harvesting the forest around the village and
particularly the commune. However, this could
be due to the limited knowledge of villagers
regarding the environmental impacts of the
development.
Infrastructural impacts: the company has built
roads connecting its land to the commune centre.
Although it seems these roads have been built
for the sake of the company’s business operations
alone, Thmor Samleang, which is near the
company’s land, benefits from their construction.
There is no other evidence of the company’s
contribution to local infrastructural development,
such as hospitals, schools, irrigation and the like.
Business model: no formal and genuine business
model has been applied, but the company has
cleared forests and expropriated households
plantations; in return it has employed villagers on
the rubber plantation on an irregular basis only.
Corn plantation in Kampong Speu Province
HLH Agriculture
The HLH Group Limited, which is 100 percent
Singapore-owned and was listed on 21
June 2000 on the SGX Mainboard, operates
in agriculture, property and investments,
construction and agriresearch and development.
Part 4: Business models for agricultural
investment: Impacts on local development
In Cambodia, the company received investment
approval in 2007 and started maize plantation
in 2009 on 9 800 hectares in Oral district and
4 500 hectares in Amleang district, Kompong
Speu province, 48 km from Phnom Penh. The
HLH Group produces animal feed on a 70-year
concession with a capital investment of about
US$45 million. It has one processing factory
with production capacity of around 600 tonnes
per day, and four plantation farms, each
covering between 450 and 2 000 hectares. The
company has imported high-tech machinery
from Singapore. All farms are overseen by
farm supervisors from the Philippines, Taiwan,
Singapore, China and Myanmar, who use
different management styles. All the assistant
supervisors are Cambodians, who are supposed
to take over the management jobs in the
future, once they have gained enough skills and
experience. Thirty of the company’s circa 450
full-time staff are office staff, with only two from
Singapore. On the plantations, there are about
200 workers in low season and around 1 000 in
high season; the majority are Cambodian.
Socioeconomic impacts: when the project
began in 2007, a significant number of jobs
were created, providing an average daily
income of between KHR10 000 and 12 000
(around US$2.5–3.0), with villagers having to
spend around KHR1 000 (around US$0.33) on
transport to and from the plantation. Recently,
the number of workers employed has declined
considerably, as the company has replaced
them with imported machines, for example for
sowing and harvesting. This has limited villagers’
opportunity to access this new income source.
The company claims that it has not been able to
apply a business model because farmers cannot
afford to buy seeds and machines and lack
appropriate technology for cultivating maize.
Meanwhile, the project has severely affected local
people’s main and traditional sources of income,
namely, rice growing and charcoal production:
HLH Agriculture has claimed around 40 percent
of villagers’ paddy rice fields and also cleared
forest land. Another large private investment
(Kompong Speu Sugar), belonging to Cambodian
tycoon Ly Yong Phat (of the Koh Kong sugar cane
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CAMBODIA