Wednesday, September 7, 2011

Controversial Chinese projects in Cambodia bow to public pressure

Controversial Chinese projects in Cambodia bow to public pressure
Company pulls out of dam projects after protests, and a real estate
project is forced to make concessions

Toh Han Shih in Cambodia
South China Morning Post, Sep 03, 2011

Two Chinese state-owned companies held back from their investment
projects in Cambodia under public pressure, a sign China is paying more
heed to international opinion.

China Southern Power Grid (CSG) has pulled out of controversial dam
projects in the country after local villagers protested that the dams
would ruin their fisheries.

And a luxury real estate project by the other Chinese state-owned firm,
Inner Mongolia Erdos Hongjun Investment, has only resumed after
Cambodian Prime Minister Hun Sen agreed to set aside land to relocate
residents evicted to make way for the project.

"There has been a growing sensitivity [by Chinese state-owned firms] to
the way China is perceived across the world," said Professor Shaun
Breslin, associate fellow of the Asia Programme at British NGO Chatham
House. "There is an understanding that to be in it for the long term and
to make access [to overseas projects] sustainable, sometimes short term
gains might have to be foregone."

CSG, a state-owned company established in 2002 to transmit and
distribute electrical power in China's southern provinces, has quit all
its potential power projects in Cambodia, said the company's spokesman
Rambo Niu Feng.

The power utility had conducted feasibility studies for at least six
proposed dams in Cambodia with a total power output of more than 3,300
megawatts, according to 3S Rivers Protection Network (3SPN), a Cambodian
civil society organisation that works to support hydropower-dam-affected
communities living along the Sesan, Srepok and Sekong rivers in
northeastern Cambodia.

China has become the biggest builder of dams and roads in Cambodia and,
according to 3SPN Co-ordinator Meach Mean, the projected output of the
CSG schemes is far above Cambodia's power consumption of 500MW.

The company's involvement in several dams in Cambodia, Myanmar and Laos
threaten local populations and ecosystems, said International Rivers, an
international NGO. In a letter to CSG chief executive Zhao Jianguo on 22
June 2009, International Rivers expressed its concerns with some of the
Chinese firm's projects in Southeast Asia, including the Sambor and
Stung Cheay Areng hydropower projects in Cambodia.

The Sambor project would have "unacceptable impact on fisheries", while
the Stung Cheay Areng project would flood nine villages, the letter from
International Rivers said.

CSG's Niu defended the company. "CSG is a responsible company," he said.
"We understand the concerns of local residents, just as we understand
the concerns of consumers for adequate power supply and the concern of
the government for economic progress."

But CSG's feasibility studies for a dam along the Srepok River in the
northern Cambodian province of Ratanakiri aroused opposition from
residents of Thmey Village, located 500 metres from the dam site. "If
the river is blocked by the dam, it will be difficult for us to catch
fish," said a member of the village.

A young man in Thmey Village, Cham Sam Ol, added angrily: "Even if we
get compensation, we will have to use the money to feed our families and
pay for their electricity. "It is better to use our own money than other
people's money."

Niu said: "On every project, CSG always strictly follows the laws in the
host country, carefully carrying out feasibility studies, including the
influence on local residents and environment. If proven unsustainable,
the government will not approve the project. Therefore we believe that
whether the project is approved will be subject to the balance of all
parties' interests."

The other Chinese state-owned firm, Inner Mongolia Erdos Hongjun
Investment, is involved in the US$98 million Boeung Kak Lake property
project in Phnom Penh, which has aroused opposition from local residents
and the World Bank.

Erdos Hongjun and a Cambodian firm, Shukaku, have formed a 50-50 joint
venture to develop the luxury property project, which is expected to be
completed next year, according to government documents from Ordos, a
city in Inner Mongolia, where Erdos is headquartered.

In February, the Cambodian Housing Rights Task Force, a coalition of 12
NGOs, sent a letter to Erdos Hongjun chief executive Wang Linxiang,
saying 4,000 families in the Boeung Kak Lake area were being "forcibly
evicted" and having their land "illegally appropriated".

Development plans were only announced to Boeung Kak residents after the
municipal government of Phnom Penh signed a 99-year lease agreement with
Shukaku in January 2007 without consulting the residents, the letter said.

"There have been adverse social and environmental impacts since Shukaku
commenced filling the lake in August 2008," the Housing Rights Task
Force letter said. "These impacts include the intimidation of residents
by company officials, the deliberate flooding of homes with
sewage-contaminated water, destruction of private property and the
denial of fair compensation.

"More than half the residents have been evicted and many have been
driven into impoverishment as a result. Since September 2010, Shukaku
has pointed its sand-pumping machine directly at the homes of residents
of one Boeung Kak village, deluging villagers' homes with mud and
forcing families to evacuate the area," the letter alleged.

On August 9, World Bank Cambodia director Annette Dixon warned that
until an agreement was reached with the residents of Boeung Kak Lake,
the bank - which has lent Cambodia up to US$70 million annually over the
past few years, "did not expect to provide any new lending to Cambodia".

World Bank president Robert Zoellick said: "We are deeply troubled and
frustrated about the people who are being forced from their homes. We
have repeatedly called on the Cambodian government to end the evictions."

Days after the World Bank halted its loans, Cambodian Prime Minister Hun
Sen said he had signed an order for 12.4 hectares of land to be reserved
for the evicted families, Reuters reported.

An executive of Erdos Hongjun, Liu Xueming, said: "The problem has been
resolved by Hun Sen. Our company has no further comment."

Erdos Hongjun is involved in nearly US$2 billion of other projects in
Cambodia, according to Ordos government documents.

Erdos Hongjun is part of another joint venture, with Cambodian
International Investment Development Group, to build two 135MW electric
power plants in Sihanoukville, Cambodia, with a total investment of 2.46
billion yuan (HK3 billion).

Shukaku's director is Lao Meng Khin, a senator of the ruling Cambodian
People's Party, whose wife Yeay Phu is a close friend of Bun Rany, the
wife of Hun Sen, according to a report by Global Witness, a London-based
NGO that "campaigns against natural-resource-related conflict and
corruption and associated environmental and human rights abuses".

Lao's companies have been granted concessions by Cambodia to explore for
iron ore with Chinese firms, and he is a shareholder of a Sino-Cambodian
joint venture, Wuzhishan LS Group, which has been granted concessions of
at least 10,000 hectares by the Cambodian government, the report said.
Lao has financed construction of Cambodian army bases, it added.

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