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Banks accused of funding Asian land grabbing

May 14, 2013 at 3:57 PM   |   Comments

HANOI, Vietnam, May 14 (UPI) -- A report by U.K. development watchdog Global Witness accuses Deutsche Bank and International Finance Corp., a member of the World Bank Group, of funding land grabs in Cambodia and Laos.

The report, "Rubber Barons," says privately owned Hoang Anh Gia Lai and state-owned Vietnamese Rubber Group acquired more than 494,200 acres of land for rubber plantations through a series of deals with the Lao and Cambodian governments that lacked transparency.

Deutsche Bank has significant holdings in both Vietnamese companies, while the IFC invests in HAGL, says Global Witness.

"We've known for some time that corrupt politicians in Cambodia and Laos are orchestrating the land grabbing crisis that is doing so much damage in the region," said Megan MacInnes, who heads the land team at Global Witness, in a statement Monday.

"This report completes the picture by exposing the pivotal role of Vietnam's rubber barons and their financiers, Deutsche Bank and the IFC," she said.

The Global Witness report cites "the huge pressure" for land to plant rubber, driven by high prices and soaring international demand, especially from China.

The Vietnamese government aims to grow nearly 2 million acres of rubber by 2020 and reap an export value of $2 billion. Just In the first half of 2010, the country's rubber exports were 239,000 tons valued at $656 million, an increase of 83 percent from the corresponding period in 2009, government trade data show.

Based on testimony from locals included in the Global Witness report, communities have experienced increased food and water shortages, loss of livelihood without compensation and poor employment prospects as a result of the rubber plantations.

"Often, the first time people learn of a plantation is when the company bulldozers arrive to clear their farms," the report states.

"When people have attempted to get their land and forests back, they have been threatened, detained and even shot at by security forces on the payroll of concessionaires," the report continues.

Deutsche Bank, in a statement said it "is not providing financing to Hoang Anh Gia Lai Group [HAGL] ... or Vietnam Rubber Group [VRG]," the Guardian reported Monday.

"The DWS fund shares referred to are held on behalf of investors. Deutsche Bank provides only clerical trustee services to HAGL, as it does to thousands of listed companies globally," the statement says.

In its response to Global Witness seen by the Guardian, the IFC confirmed its shares in HAGL, stating: "IFC works with financial intermediaries, such as funds, because they can contribute to sound, inclusive, and sustainable financial markets that are essential to eradicating poverty and job creation."

The statement continued: "We ensured that [the investment fund used to buy shares in HAGL] ... demonstrated a commitment to environmental and socially responsibility."

Global Witness has called for HAGL and VRG to be prosecuted "for their illegal activities" and for their plantation concessions to be canceled.

© 2013 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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