Foreign Investment in Agriculture in Cambodia CDRI Working Paper ...

Another impact has been the loss of traditional sources of income, particularly resin and
vine collection, as firms have bulldozed the commune’s forest. In addition, several households
have lost the cassava plantations they acquired through illegal clearance of state forest land to
ELCs. Note that this clearance originally occurred with the tacit acceptance of the commune
council, as noted above. As such, the project has been a double blow for households: loss of
income sources but no employment and skills acquisition opportunities.
In compensation for the loss of the land, the firm provided households with USD200
per ha for cleared land with crops and USD100 per ha for newly cleared land without crops/
vegetation. However, one striking characteristic of dispute settlements between the company
and villagers is that though the company representative agreed to follow requests made by the
commune facilitator, in practice the firm broke this promise. For instance, the firm agreed to
not disrupt or divert the streams, both small and big, used for animals drinking water and 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 firm, which gets permission to implement its
activities from provincial level authorities. 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 USD25).
Environmental impacts: There is no evidence of competing water use between the
company and Thmor Samleang villagers. Villagers’ paddy rice, cassava and other crops are
rain-fed, 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 ground water, or the costs of harvesting the forest around
the village and particularly the commune. However, this could relate to villagers’ limited
knowledge regarding the environmental impacts of the rubber plantation.
Infrastructural impacts: The company has built roads connecting its land to the
commune centre. Although these roads have apparently been built to serve the company’s
business operations alone, villagers in Thmor Samleang, which is near the company’s land,
also benefit. Otherwise, there is no evidence of the firm’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 forest and expropriated households’ plantations and in return employed
villagers on the rubber plantation, but on an irregular basis only.
5.1.3. Maize Plantation in Kampong Speu Province
HLH Agriculture
HLH Group Limited, which is 100 percent Singapore-owned and was listed on 21 June
2000 on the SGX Mainboard, is involved in agriculture, property and investments, construction,
agri-research and development. The company’s application to invest in Cambodia was approved
in 2007 and it started maize plantation in 2009 on 9800 ha in Oral district and 4500 ha in
Amleang district, Kompong Speu province, 48 km from Phnom Penh.
The company has a 70-year lease on its concession land. With a capital investment of
about USD45 million it has imported high-tech machinery from Singapore and so far set up one
processing factory with production capacity of around 600 tonnes per day, and four plantations
of between 450 and 2000 ha.
36 Foreign Investment in Agriculture in Cambodia