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Global lenders 'linked to Vietnam land grabs'

Global Witness accuses companies bankrolled by World Bank and Deutsche Bank of driving land-grabbing crisis in region.

Last Modified: 13 May 2013 12:26
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More than 1.2 million hectares of land in Cambodia alone have been leased for rubber plantations [EPA]

Global Witness, a group that campaigns on resource issues, has accused Vietnamese rubber firms bankrolled by an arm of the World Bank and Germany's Deutsche Bank of driving a land-grabbing crisis in Southeast Asia.

Indigenous ethnic minorities are bearing the brunt of the seizures, which have affected tens of thousands of villagers and led to the clearance of swathes of protected forests, according to the group.

Vietnam, the world's third-largest rubber producer, is keen to tap surging demand for the commodity in particular from China, which is hungry for car tyres and other rubber goods as its economy booms.

Global Witness accused two firms, Hoang Anh Gia Lai (HAGL) and Vietnam Rubber Group (VRG), of driving forced evictions via subsidiaries linked to government cronies in impoverished Cambodia and Laos.

According to the report, Deutsche Bank has multi-million dollar holdings in both companies, while the International Finance Corp (IFC) - the World Bank's private lending arm - invests in HAGL through financial intermediaries.

HAGL dismissed the accusations saying it strictly conformed with laws in the countries in which it operated.

"I am completely surprised by this," the chairman of the HAGL Group, Doan Nguyen Duc, told the Reuters news agency.

"I can affirm that these accusations are all fabrication and vilification ... I am unpleased when they issue the accusations
without meeting us and working with us."

VRG cold not be reached for comment.

'Ignoring laws'

More than 1.2 million hectares of land in Cambodia alone have been leased for rubber plantations, Global Witness said, with about 400,000 people affected by land grabs for rubber and other uses since 2003.

"The governments in Cambodia and Laos are allocating large areas of land and ignoring laws designed to protect human rights and the environment," according to the report.

"Often the first people know about either company being given their land is when the bulldozers arrive."

Global Witness urged Cambodia and Laos to suspend all dealings with the two firms and their subsidiaries.

It called on Deutsche Bank and the IFC to withdraw their funding if the two companies fail to take steps to comply with human rights and environmental standards within the next six months.

In response, Deutsche Bank said an "intensive due diligence process" was conducted before the shares were bought on behalf of its investors.

The IFC declined to comment ahead of the report's release, saying Global Witness had not shared its full findings in advance.

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