Costello joins Cambodia land race
By Robert Carmichael
PHNOM PENH - When villagers in Kandal province near the Cambodian capital
blocked National Road 2 in early April, it was just the latest protest by rural
villagers angered by yet another alleged land grab, a seemingly unending string
of which have engulfed the country in recent years.
Ten villagers were arrested after they and others blocked the road over the
loss of hundreds of hectares of their land to a private developer, whose
bulldozers started clearing the land in late March.
The problem is likely to get even worse, critics say, because the government's
moves to allocate vast tracts of land to foreign and
local companies are often carried out without consulting locals.
Another huge deal was touted earlier this year when Australia's former finance
minister, Peter Costello - now a paid adviser to the World Bank on transparency
and good governance - announced a US$600 million investment in agriculture in
This deal would be four times larger by value than any single agricultural
investment in Cambodia. The size of the land in question is substantial too:
Costello, managing director of BKK Partners Ltd, a corporate advisory firm
based in Sydney, spoke of more than 100,000 hectares.
The reason for the proposed investment by Costello's client and others is
simple: rising food prices in 2008 alerted investors to the returns they can
make from buying or leasing tracts of land in poor countries that have plenty
of water and fertile land.
Cambodia certainly needs foreign investment and it needs the 150,000 jobs that
Costello reportedly told Deputy Prime Minister Sok An would be created in the
"We have seen a spike in food prices in 2008, so I think agriculture is going
to come back into its own as an investment in the decades that lie ahead and of
course that's a great opportunity for Cambodia," Costello told the Phnom Penh
In recent years, Cambodia has done land deals with several countries. China,
Vietnam, South Korea, Kuwait and Qatar have signed up to invest in agriculture
- be that to grow food for export or crops such as rubber.
But critics say transparency is absent from the process. What has been agreed
commercially in dozens of deals in every investment sector is regarded by Phnom
Penh as confidential, despite the fact that the government is often selling or
leasing public assets.
Son Chhay, an outspoken opposition MP and former head of Parliament's foreign
affairs committee, said that that in Parliament he was regularly prevented by
his deputy, who was from the ruling Cambodian People's Party, from getting
information on deals signed by the government with foreign nations.
Secrecy, said Son Chhay, has long been part of the often-murky process of
"It's still the case that we are not able to get our hands [on investment
documents] and that's a cause for great concern," he said. "A lot of
concessions have caused problems to our farmers and indigenous people who have
no knowledge of what is in the contracts."
He said Costello stressed the importance of transparency and the negative
effects of corruption during his visit. "He should act upon his word. We would
hope that this kind of investment from a society like Australia would be done
in a proper manner," Son Chhay said. "I would very much like that this BKK
company provides the contract to the public so I can have a copy of that."
Land in Cambodia is a complicated topic, not least because of the Khmer Rouge
rule in the 1970s, when private property was abolished and land documents
destroyed. In recent years around 1.1 million land title documents have been
awarded, but that is less than 10% of the total land parcels, says the World
Bank, which was involved in the scheme.
Combine a lack of title with the fact that around 80% of the 14 million
Cambodians live in rural areas, and around 40% of them live under the poverty
line, and the rising landlessness problem has many worried about social
In 2007, the Cambodian office of the UN human rights body released a report on
economic land concessions (ELCs). It noted that 59 concessions for nearly
950,000 hectares of rural land had been granted to private companies to develop
The true figure, it pointed out, is certainly higher since the statistics
excluded smaller ELCs. The UN body said that the concessions had "adversely
affected the human rights and livelihoods of Cambodia's rural communities".
Since that report's release, the government's investment approval arm, the
Council for the Development of Cambodia, has signed off a further 33 projects
worth $837 million in the agro-industry sector - and that excludes the proposed
Costello deal. Many of these are plantations.
The government recently passed controversial legislation that allows it to
expropriate land for projects deemed to be in the public interest. Agricultural
investments certainly fall into that category, as Prime Minister Hun Sen made
clear earlier this year.
Speaking at the January unveiling of a $100 million Thai sugar mill part-owned
by a leading light in the ruling party, Hun Sen said that the extra workers and
land needed to expand its sugar production would be found for Thailand's Khon
Kaen Sugar Industry company, which already has a 90-year concession for 20,000
hectares, since its operations were in the national interest.