Vietnam rubber tycoon rejects land grabbing accusations

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A Vietnamese rubber tycoon has rejected accusations by Global Witness, a group that campaigns on resource issues, that it was involved in a land grabbing crisis in Southeast Asia.

Doan Nguyen Duc, the chairman of Hoang Anh Gia Lai (HAGL) Group, told Vietnamese media the information provided by London-based Global Witness in its report was total fabrication.

In its report titled "Rubber Barons" released earlier this month, Global Witness accused international investors including Deutsche Bank and the International Finance Corporation (IFC) the private lending arm of the World Bank of financing two of Vietnam's biggest rubber companies, the privately-owned HAGL and the state-owned Vietnam Rubber Group (VRG), to acquire vast amounts of land for rubber plantations in Cambodia and Laos.

According to the report, the two firms have caused widespread evictions, illegal logging and food insecurity in the countries.

After a year-long investigation, the study conducted by Global Witness concluded the Vietnamese firms gained rights to more than 200,000 hectares (nearly 500,000 acres) of concession land through secretive deals with the Lao and Cambodian governments.

Land was often sold without villagers' consent or knowledge and without compensation, the report alleges. Families were forced off their land or expected to work for the rubber plantation, although jobs were few and far between.

"When they resist, communities face violence, arrest and detention, often at the hands of armed Cambodian security forces who are on the investors' payroll," the report claims.

It alleges the IFC invested US$14.95 million in a Vietnamese fund that holds 5 percent equity in HAGL, while Deutsche Bank owns some $4.5-million-worth of HAGL shares. Deutsche Bank is also said to have 1.2-million shares in a subsidiary company of VRG amounting to more than $3 million.

As news of the accusation spread in Vietnam, HAGL shares fall around 6 percent to VND21,400 on Tuesday.

Duc lost VND436.25 billion (US$20.83 million) on over 311 million shares, nearly half the company's shares, he holds.

After the accusations were made public, HAGL released a statement confirming that the company's subsidiaries invested in rubber plantations in each country but the firm "denies seizing land, illegally exploiting wood and other corruption behaviors in Laos and Cambodia."

Duc, the HAGL chairman, said in an interview with Kien Thuc news website that HAGL Group's subsidiaries doing business in Laos and Cambodia comply with the countries' laws, including forest protection rules.

"There is no way HAGL has left local people impoverished since we have paid tax and created stable jobs for more than 10,000 people," he said.

According to Duc, HAGL has thus received high appreciation and support from Laos and Cambodia governments in recent years.

In a statement sent to Radio Australia, Deutsche Bank rejected Global Witness's claims that it was providing financing to the Vietnamese firms.

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

In a written response to Global Witness, the IFC confirmed its shares in HAGL and said: "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."

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

Global Witness is an international NGO established in 1993 that works to break the links between natural resource exploitation, conflict, poverty, corruption, and human rights abuses worldwide.

The organization has offices in London and Washington, D.C.. Global Witness states that it does not have any political affiliation.

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