Chinese Investments in Cambodia Ignore Environment Queries

By Marwaan Macan Markar 29 March 2013

BANGKOK — China’s expanding investment portfolio in Cambodia has brought into sharper focus the darker side of the Asian giant’s “development projects” in the impoverished Southeast Asian nation.

And it is in the southwestern corner of Cambodia—known for its rich biodiversity, forest covered hills and bubbling rivers—where this Chinese economic footprint is leaving a defining mark. A plan to build a 400 km-long railway line through this rugged green terrain is the most recent Chinese addition to growing list that has alarmed Cambodian environmentalists.

The new rail line will serve as a transportation corridor to link two other planned Chinese investments: a steel plant near iron ore deposits in the northern province of Preah Vihear and new seaport in the southern coastal province of Koh Kong.

The steel plant will be a first in the country, where the only industry in a largely agrarian setting is the economically successful garments sector, which accounts for 75 percent of Cambodia’s exports, valued at US $4 billion annually.

Two Chinese companies are spearheading these three ventures, valued at $11.2 billion — the largest foreign investment ventures in Cambodia’s history. This deal, signed at the dawn of the New Year, exceeded the total foreign investment the Chinese have poured into Cambodia over the past two decades, which had reached $8.8 billion by the end of 2012, according to the Council for the Development of Cambodia, the government’s investment agency.

“At the present time there is still no publicly available information on whether or not any environmental and social impact assessments has been conducted,” says Eang Vuthy, director of Equitable Cambodia, a Phnom Penh-based grassroots campaigner. “All domestic and international regulations must be implemented to avoid the social and environmental impacts associated with the project.”

This means little has changed since the beginning of this year, shortly after the Chinese companies signed the deals.

Environment Minister Mok Mareth reportedly told the Cambodia Daily newspaper in an interview at the time that the paperwork had not included an environment impact assessment (EIA).

The same publication had also got Transport Minister Tram Iv Tek to affirm in an interview that he was in the dark about the details of this massive investment.

It confirms a pattern that is disturbingly familiar to environmentalists who have been monitoring much longer “development” projects: the way Chinese companies are building large hydropower projects in the same southwestern corner targeted for the new railway line.

For it is here that the largest Chinese-built dam, the $280 million Kamchay Dam, was completed in late 2011. And the much bigger 338 megawatt Russei Chrum Kkrom dam, costing $500 million, is coming up.

“None of the dams currently under construction in Cambodia had environment impact assessments approved before starting construction,” says Amy Trandem, Southeast Asia programme director for International Rivers, a United States-based global environment campaigner. “This violates Cambodia’s laws and international best practice.

“Chinese dam builders have set a dangerous precedent for dam building in Cambodia,” she told The Irrawaddy. “Some Chinese dams that are under construction in the southwest are having a devastating effect on some of Cambodia’s most pristine and bio-diverse forests.”

China’s role as Cambodia’s principle dam builder has given it a monopoly in the country’s hydropower sector without parallel in Southeast Asia. Currently seven mega-dams have either been built or are under construction, while five other dam projects have also attracted Chinese interest.

China’s hydropower projects, now estimated to be over $1.6 billion in investments, are aiming to generate 915 megawatts of power in a country that suffers from an energy deficit. Only a quarter of the country’s 14.5 million population has access to power from the national grid.

The power shortage explains why Cambodian Prime Minister Hun Sen has rolled out the welcome mat for Chinese investors to build new dams—now looming as the most potent symbol of bilateral ties between the two countries.

Such strengthening bonds have not been lost on Phnom Penh-based diplomats, including an envoy from an Asian country, who said: “China wants to have a dependable ally in Asean and it has sought Cambodia for this role.”

Yet Phnom Penh’s pro-Beijing tilt is coming at a price, not only diplomatically, but with environmental and social costs, since Cambodia’s climate of impunity and lawlessness have made the country a fertile ground for Chinese investors to ignore development accountability mechanisms such as EIAs.

“Chinese investments are helping to strengthen the climate of lawlessness and corruption,” Mu Sochua, an opposition lawmaker, said in an interview. “These development projects violate human rights and are also raping our natural resources.”

But the Hun Sen administration counters that view by arguing that investments from China are more welcome since they do not have “any conditions” attached. And once, after a ceremony near a Chinese-backed dam site, the region’s longest-serving leader, rhetorically asked: “Is there any development that happens without an impact on the environment and natural resources? Please give us a proper answer.”

It is a view that has gathered pace only after China shifted gears, becoming a new arrival in Cambodia’s development sector that had, since the 1991 Paris Peace Accords, which brought an end to decades of bloody conflict, been dominated by a pro-Western alliance of donor countries and multilateral financiers.

In 2003, for instance, China’s investment portfolio in Cambodia stood at $45 million.

China’s efforts to re-engage with Cambodia were also under scrutiny given its role in the country’s civil war. After all, Beijing propped up the genocidal Khmer Rouge regime, which was responsible for the deaths of 1.7 million people, nearly one-fifth of the population, from execution, forced labor and starvation during its reign of terror, from April 1975 to January 1979.

“Western countries and the Western development model had a free run in Cambodia before the Chinese stepped in. Yet what did they achieve?” asks a humanitarian worker based in Phnom Penh. “There is a lot of NGO propaganda that overlooks Western development models that added to Cambodia’s problems.”

“This is why you don’t see public protests against Chinese development projects like the way you see in Myanmar,” she added. “It is very unlikely that Chinese dam projects or the railway project will be stopped.”