Alternative Land Conflict Transformation: Lessons from Cambodia

1. Improve Vietnamese
responsible
investment in Lao and
Cambodia

2. Page 2
BACKGROUND
• Outward investment on agriculture and other land
related sectors of Vietnamese business increased
rapidly over last decades, especially in the countries of
sub-Mekong region such as Cambodia and Lao
• Concerns noted in destination countries from
communities and civil society groups affected by cross-
border agricultural investment.
• Understand the current situation in the field and
exploring opportunities in Vietnam to engage with
companies and government and promote more
responsible investment

3. Stakeholders to join the project
Research
Guideline
Advocacy

4. Page 4
Research on Vietnamese
agriculture investment in
Cambodia and Lao
1. Objectives of the research
2. Key research findings, by stage of the investment
process:
 Preparation and approval
 Land acquisition and compensation
 Project implementation
 Closure and phasing out
 General findings throughout the investment process
3. Recommendations

5. Long term objective
Vietnamese companies investing in agriculture in Laos and
Cambodia apply standard practices that harmonize benefits
of all related stakeholders (businesses, local government and
communities).
Concrete objectives
1. To identify current situation, advantages, challenges of
Vietnamese investments in agriculture in Cambodia and Las.
2.To put forward recommendations and a framework of best
practices to enhance socio-environmental responsibilities of
Vietnamese companies.

6. OVERVIEW OF VIETNAMESE
OUTBOUND INVESTMENT

7. Page 7
Context of Vietnamese outbound
investment
• Outwards investment of Vietnam has been increasing both
number of project and capital, during period 2989-2015:
• Total of 1,049 outward investment projects;
• Total registered capital nearly 21 billions USD;
• Mekong sub-region, especially Lao and Cambodia are most
popular destination of Vietnamese outward investment;
• Agriculture – forestry – fishery is the second largest of
Vietnamese outward investment, after mining;
• In coming time, Vietnam will revise the Prime-minister Decision
236/QĐ-TTg dated 20/02/2009 on promotion of outward
investment
Outbound investment is strategic and promoted

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Overview of Vietnamese outbound
investment
Source: GSO, 2016

9. Page 9
Top 10 economic sectors of
Vietnamese outbound investment*
*: Cumulative until 31/12/2015 Source: GSO, 2016

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Top 10 destinations of Vietnamese
outbound investment*
*: Cumulative until 31/12/2015
Source: GSO, 2016

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Vietnam investment to Cambodia
and Lao PDR
Cambodia Lao
Ranking of investor TOP 5 TOP 3
Number of projects (1/2016) 183 258
% of total number of outward
projects
18% 27%
Total registered capital (billion
USD)
2.8 4.9
% of total investment capital 22% 26%
Source: MPI, 2016

12. Page 12
Investment in Lao PDR
Source: Vietnam Ministry of Planning and Investment, June 2016
No. Sector No. of
Projects
Investment
capital (USD)
1 Electricity, gas, steam, and air conditioning supply 6 1,297,029,850
2 Agriculture, forestry and fisheries 47 1,048,753,284
3 Arts, entertainment and recreation 2 1,004,500,000
4 Mining and quarrying 66 954,161,275
5 Financial, banking and insurance activities 9 208,628,000
6 Manufacturing 56 107,449,057
7 Construction 15 63,343,881
8 Real estate activities 5 50,700,999
9 Accommodation and food service activities 4 48,210,289
10 Information and communication 5 42,040,000
11 Wholesale and retail trade; repair of motor vehicles and motorcycles 22 40,656,845
12 Water supply, sewerage, waste management and remediation activities 3 9,371,204
13 Professional, scientific and technical activities 5 3,975,000
14 Human health and social work activities 3 1,630,000
15 Education and training 2 1,346,700
16 Transportation and storage 3 1,071,050
17 Administrative and support service activities 1 300,000
18 Other activities 4 50,375,000
Total 258 4,933,542,434

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Investment in Cambodia
No Sector No. of
Projects
Investment
capital (USD)
1 Agriculture, forestry and fisheries 77 2,069,364,871
2 Financial, banking and insurance activities 10 273,800,000
3 Information and communication 17 215,605,422
4 Mining and quarrying 15 123,581,708
5 Manufacturing 18 58,527,315
6 Transportation and storage 8 35,560,000
7 Human health and social work activities 6 29,095,528
8 Wholesale and retail trade; repair of motor vehicles and motorcycles 33 18,492,435
9 Construction 16 15,230,133
10 Electricity, gas, steam, and air conditioning supply 4 13,812,234
11 Accommodation and food service activities 3 2,630,000
12 Real estate activities 1 900,000
13 Administration and support service activities 4 850,000
14 Professional, scientific and technical activities 6 603,000
15 Other activities 8 1,680,000
Total 226 2,859,732,646
Source: Vietnam Ministry of Planning and Investment, June 2016

14. FIELD RESEARCH
FINDINGS

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Research visit
Cambodia:
1.NGO Forum on Cambodia
2.Local governments and communities in Kratie and Ratanakiri provinces
3.Companies: Dau Tieng, SBK in Kratie, 30/4 company in Ratanakiri
(transferred to Company 74).
Laos:
1.Ministry of Agriculture and Forestry; Local governments and
communities of Attapeu, Champasak, Savannakhet provinces
2.Global Association of People and Environment (GAPE), Japan
International Volunteer Center, AVIL, IDP
3.Companies: Hoang Anh Gia Lai, Tin Nghia, Viet – Lao Rubber company,
Vietnam Rubber Group
Vietnam: Headquarters of companies under VRG, Tin Nghia, HAGL

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Limitations
• Some inconsistency in official investment data
• Difficult to contact some companies; research team
pragmatically visited companies that could be contacted
• Additional visits made to company HQ in Vietnam
• In Cambodia, also difficult to contact some provincial
authorities
• Limited time and length of visits
• Research not complete or comprehensive but identifies issues
that apply across sectors and companies visited

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Benefit of Vietnamese
Investment
According to Vietnamese state sources:
Investment in Cambodia and Laos helps Vietnam’s economy to
integrate deeper in the global economy;
Vietnam can gain more resources for the country’s development;
By investing in the two neighboring countries, Vietnam can
enhance its role and status in international and regional relations;
Vietnamese businesses can gain more experience in overseas
direct investment so that they can explore investment opportunities
in other countries.
Vietnamese businesses can leverage investment advantages in
Cambodia and Laos so that they can manage risks when domestic
business opportunities become less attractive.

18. Page 18
Benefits to host countries?
 Contribute to GDP growth; add tax resources for
governments to use for public services
 Employment for local people
 Contributions to socio-economic development through
the construction of schools, clinics, hospitals, roads and
low-income housing
 Indicator of strong political ties with Vietnam

19. FIELD RESEARCH RESULTS:
PREPARATION & APPROVAL
Findings
• Investors are aware of main
procedures for investment
• Procedures not always clear and
are subject to change
• In Cambodia investors often
bypass provincial / local level to
work with national authorities,
while in Lao, some land deals
made with provincial and district
levels, with little coordination to
national authorities
• Local authorities not well informed
• Unclear how/whether EIA
requirements are followed
Challenges
• Information provision:
communities often unaware of
investments affecting them
• Investment plans and
feasibility studies lacking
• Little public consultation on EIA
(let alone FPIC)
• Limited monitoring and
compliance by authorities
(National Assembly, local
authorities) or NGOs
Page 19

20. LAND ACQUISITION AND
COMPENSATION
Findings
• Disputes over land boundaries
are common; maps old or unclear
• Companies often begin clearing
land immediately after licensing
• Law requires compensation but
rates are ad-hoc
• In Lao, Land disputes increasingly
recognized, leading to moratoria
in land concessions, but many
disputes remain unresolved
• In Cambodia, CSOs support to
villagers increasing results in
some conflict resolved (Decision
01/2012: 300,000 ha re-allocated)
Challenges
• Villagers lack information about
rights and contracts
• Many villagers lack land title; no
compensation for untitled land
(such as forest)
• Villagers may have divided
opinions (eg migrants and old
residents); companies and
officials take advantage, exert
pressure on people to accept low
compensation
• In Cambodia, indigenous people
face complex process to register
communal land.
Page 20

21. PROJECT IMPLEMENTATION
• Evidence of infrastructure
improvements
• In Lao, law requires that 90% of
workers are Lao, but many
companies say they are unable
to recruit local workers
• In Cambodia, few local workers
recruited (or workers unwilling to
work for companies) – only 3%
of population employed in
agriculture investment
• Company CSR contributions
more common in Laos than
Cambodia
• Little contract enforcement;
some companies change
business plan after approval
• Living conditions for workers
cited as poor
• Extensive use of pesticides and
herbicides
• Impacts on food security and
livelihoods are greater than
benefits from project
implementation
• In Lao, many local workers lack
contracts and social security
• In Lao, reports of supervisors
withholding salary (up to 2-3
months)
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22. CLOSURE AND PHASING OUT
• Legislation and procedures
for project termination and/or
transfer to other companies
are unclear
• No known monitoring system
for project close-out
• In Lao, companies are
uprooting rubber trees to
plant other crops, which
changes terms of original
license
• In Cambodia, sometimes
unclear who the owner is
(Vietnamese or
Cambodian…?)
• Transfer of ownership may lead
to confusion among
communities and local
authorities
• In Cambodia, evidence that
some companies use ELCs to
access land for logging, then
leave it fallow
• In Cambodia, others lease land
then transfer to new companies,
avoiding accountability
• In Lao, evidence that some
companies violated to protected
forest
Page 22

23. Page 23
CROSS-CUTTING ISSUES
 Information provision and transparency: Land deals and
concessions seen as ‘secret agreements’, despite their
public interest. A new inventory is underway that responds to
the Lao government’s concern for quality of investments
 Lack of consultation: not only to affected communities, but
also between levels and sectors of government
 Companies are reluctant to engage directly with
communities: they do not see it as their responsibility and
prefer to leave it to authorities
 Compliance with national laws and international treaties
is an issue both for companies and government: ex. land
concessions granted in national parks; companies
implementing projects in different areas than authorized

24. SUMMARY OF CHALLENGES
IN PROCESS OF INVESTMENT
Preparation
and
approval
Land
acquisition &
compensation
Project
imple-
mentation
Closure &
phase out
Cross-
cutting
issues
Development
of investment
plans
Mapping and
identification of
boundaries and
ownership
Employment
and labor
conditions
Procedure
s and
contract
agreement
s
Information
provision and
transparency
Environmenta
l impact
assessment
Compensation
for land loss
Local and
regional
development Transfer
to other
companie
s
Compliance
with national /
international
law & treaties
Granting of
licenses for
land
concessions
Conflict
resolution
Follow up on
contracts
Page 24

25. Page  25
Ideas for guidelines development
People and Nature Reconciliation
Guideline Development Team

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Pioneers Group
People and Nature Reconciliation

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Responsibilities of Pioneers Members
People and Nature Reconciliation

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Pioneers Group meetings
People and Nature Reconciliation
Regional Consultative WS
Advocate for implementation and integration into
relevant policies
Open for public comment in 30 days both in Vietnamese and English version.

29. Page  29
Guideline Development Process
People and Nature Reconciliation

30. Page  30
Guideline Framework
People and Nature Reconciliation
Risk Identification
Recommendations
References and Examples
How-to-do

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PREPARATION
People and Nature Reconciliation

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IMPLEMENTATION

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IMPLEMENTATION

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IMPLEMENTATION

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IMPLEMENTATION

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IMPLEMENTATION

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IMPLEMENTATION: Operation
1. Labor issues
2. Environment issues
3. Security issues
4. Reporting issues
People and Nature Reconciliation

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OPERATION: Labor issues
1. Local employment plan
2. Foreigner employment plan
3. Transparent and publicly recruitment process
4. Working environment
5. Developing company’s culture (See Eg. 13)
6. Developing company’s good reputation (See
Eg.14 & Eg. 17)
7. Cooperation between company and communities
People and Nature Reconciliation

39. Page  39
OPERATION: Environment issues
1. Environmental management plan (See Eg. 18);
2. Compliance with pesticide and chemical use to
minimize adverse impacts (See Eg. 19);
3. Cooperation with local communities for
environmental protection
People and Nature Reconciliation

40. Page  40
OPERATION
Security issues: Closely incorporate with local
authorities and communities
Reporting issues
1.Tax report,
2.Reporting to local authorities: labor, environment
protection;
3.Reporting to investment authorities in Vietnam

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Project
TERMINATION OR
TRANSFER

42. Page  42
 Project termination
– Not recorded project termination due to ELC expired
– Some projects were terminated by choice
 Project transfer
– Some projects were transferred to Vietnamese or other investors
• Note: regulation on project transfer

43. Page  43
Relation with local people
 Inform the local people about project transfer or termination as soon as
posible
 Fulfill commitments to the local people or negotiate alternatives
 In case of project transfer: must have a term on tranfering obligation to the
buyer and inform the local people about the term (may have a three-sided
meeting)

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Relation with employees
 In case of project termination:
– Inform early to the employees in order to help them find appropriate jobs
– Fulfill financial obligations such as wage or employee insuarance
 In case of project transfer:
– Negotiate with the buyer regarding prioritization of using current employees

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Apply the Guideline
 National workshop
– Public consultation on the guideline
– Invite companies to apply the guideline
 Pilot companies
– Vietnam Rubber Group:
• Krong Buk – Rattanakiri Rubber Joint Stock Company
• Quasa-Geruco Rubber Joint Stock Company
– Daklak Rubber Company in Champasak and Salavan
 Adjust the guideline
 Advocacy:
– Endose the guideline under VCCI
– Advocate the Vietnamese Government to endose the guideline

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PILOT
 Step 1: Developing the Workplan
 Step 2: Review company policies
 Step 3: First field trip
 Step 4: Initial Assessment
 Step 5: Identifying the risks and
agreeing on the action plan
 Step 6: Capacity building for
companies
 Step 7: Implementing the
recommendations
 Step 8: Mid-term review
 Step 9: Final field assessment
 Step 10: Final Assessment