World Bank ends Cambodian lending freeze while Boeung Kak evictees remain landless
World Bank ends Cambodian lending freeze while Boeung Kak evictees remain landless
In a statement published on its website last Thursday, the World Bank will resume lending to Cambodia, marking the first loans since the World Bank froze all new loans in 2011 surrounding controversy over the Boeung Kak Lake dispute.
When the Bank announced the freeze in 2011, Country Director Annette Dixon stated: “Until an agreement is reached with the residents of Boeung Kak Lake, we do not expect to provide any new lending to Cambodia.”
The bank’s board of directors have agreed to restart lending for four Cambodian infrastructural projects as of last Thursday’s release, “aimed to bring tangible benefits for Cambodians,” said Ulrich Zachau, Country Director of the World Bank for Southeast Asia.
In statements this week to realestate.com.kh, the World Bank Cambodia stated that “The World Bank Group prepared the Country Engagement Note (CEN) in partnership with Cambodia, and in close dialogue with Cambodia’s development partners…The CEN envisages financing for seven investment projects, totaling about $250 million, from the International Development Association, or IDA, the Bank’s fund for the poorest.”
“Over the next year,” said the Bank, “our focus will be to engage closely with all relevant stakeholders to ensure adequate completion of the preparation of planned projects.”
As a build up to recent announcements of restarting loans, the World Bank Group (WBG) had conducted a series of consultations across Cambodia last year, from June 29 to July 13, inviting a range of stakeholders to exchange their opinions with the Bank regarding Cambodia’s development opportunities and potential issues in coming years.
While the consultation process included 17 face-to-face meetings with 635 stakeholders, including national and sub-national government officials and representatives, parliamentarians, private sector and civil society representatives, development partners and UN agencies, according to a summary of the Bank’s website, the remaining evictees and community leaders of Boeung Kak were not involved in the process at any point.
According to a host of NGO representatives, community leaders and past and present evictees of Boeung Kak Lake, such a new loan would undermine the World Bank director’s statements, the Inspection Panel Report 2011, and the 2014 Consolidated Appropriations Act – US regulation that calls for remedial action from the Bank regarding the Boeung Kak case, supported by the US Treasury, one of the Bank’s largest funding sources.
Eang Vuthy, executive director for Equitable Cambodia, who has met with the Bank’s Washington office on several occasions, the latest in early 2015 with World Bank management staff, says the Bank has consistently cited the same excuse for inaction over the Boeung Kak issue: “Nothing can be done without Government cooperation.”
In statements this week to realestate.com.kh, the World Bank Cambodia has said that, “Land issues remain an important development agenda for Cambodia. Fair and peaceful resolution of land conflict is critical to Cambodia’s sustained economic and social development. We welcome the substantial progress made to date in the provision of land titles in the Boeung Kak Lake area, where only a few remaining families remain in negotiations with the Municipality of Phnom Penh over size of land titles now.”
Beoung Kak Lake, Phnom Penh
As the filled tract of Boeung Kak Lake land is beginning to be sold to secondary developers who are beginning to build on the land, ex-residents now resettled at the north and west of the lake still face waist high flooding and tenure insecurity.
Graticity Real Estate Development company (GRED), a Beijing based company, began construction in November 2015 after purchasing 20 hectares of Boeung Kak from Shukaku Inc. for $2,500 per square meter, according to company representatives’ statements in local media coverage.
Meanwhile, Phnom Penh City Center (PPCC), the title given to Shukaku’s own development project is well under way.
Michelle Lau, Executive Director of Shukaku Inc., said to realestate.com.kh this week that, “”We are making good progress with our master-plan and are busy working on finalizing a number of investments for Phnom Penh City Center (PPCC). Our first project was built for the community in mind and today, the PPCC Sports Complex is open to them. The community can also look forward to our Central Park project.”
“We are in the midst of developing Residence 90,” said Lau, “our first residential villa property tailored for the modern urban lifestyle, which has already received interest from Cambodian customers. We are about to launch a mixed-use establishment which we expect will be open to the market in mid-2016. In addition to this, One Park, co-developed with our partner, GRED, is an integrated lifestyle, residential and commercial hub already well under way. We are also in the midst of developing the PPCC’s site features, including a comprehensive drainage system, underground cabling system and permanent roads, which is slated for completion in 2019.”
Lau continued to say, “We value and respect the opportunity we have been given to support the development of Phnom Penh’s future – it’s up-and-coming CBD – and we do not take this responsibility lightly. We are also close to finalizing agreements with local organizations that will conduct initiatives solely for the purpose of giving back to our community.”
PPCC’s envisioned “Central Park” at Boeung Kak.
In regards to a question regarding new developers investing in land on Boeung Kak in 2016, Lau stated that, “We are in discussions with a diverse group of established international developers and corporations who have confirmed interest in investing on the Phnom Penh City Center, especially in the sectors of F&B, mixed-use real estate and recreational spaces. To respect confidentiality agreements, we are unable to comment further on this matter but we believe the Phnom Penh community and the growing number of tourists visiting the Capital will have a lot to look forward to.”
Some developers have pulled out of the area seemingly as the ramifications of the eviction legacy became apparent. HLH, the Singapore-listed developer, which entered into a $14.9 million agreement with Shukaku to purchase 1.3 hectares of land at Boeung Kak lake on June 19, 2014, with the intention to develop the land into a business and shopping complex, announced a cancellation of the deal on December 17 of the same year.
The firm cited, “commercial reasons,” without detailing their rationale further. This withdrawal was celebrated by rights activists, who commended HLH for the decision.
Yet, amongst the families on the borders of Boeung Kak awaiting redress, there lies a commonly held belief that lobbying the World Bank will still bring long-awaited results, albeit sporadically.
Ownership over 133 hectares of the lake was passed to CPP Senator Lao Meng’s Shukaku Inc. company on a $79 million, 99-year lease in 2007, whose company then cooperated with the Phnom Penh Municipality to evict over 3000 families in order to fill the lake, the majority not receiving land titles or adequate compensation at that time.
In 2011, the Bank’s internal watchdog found that a $24 million Bank funded land-titling project denied the Boeung Kak families due access to their land rights, and failed to follow the Bank’s own safeguard policies regarding eviction protocols. A remedial action plan was issued with no promises of supportive funding from the Bank. Since, the action plan has never been implemented.
The US Consolidated Appropriations Act 2014 likewise called for “appropriate redress” which should include “the provision of legal security of tenure to the 61 families remaining in the Boeung Kak area who have been excluded from receiving land titles; clear demarcation of the developer’s concession and the area reserved for the community; and the establishment of livelihood programs for those forcibly evicted from the Boeung Kak area, in accordance with the World Bank Policy on Involuntary Resettlement.”
So far, the Government, Municipality of Phnom Penh (MPP) and the Shukaku company have offered various resolutions to most evictees.
In 2011, Prime Minister Hun Sen signed Sub-Decree No. 183, awarding 12.44 hectares of the Boeung Kak Lake area to the community, allowing new plots of land for around 700 remaining families situated to the North of the lake site.
As reported by local media in February 2012, district authorities then issued land titles to another 46 families within the concession plot.
These were major victories for those protesting since 2007, facing beatings, arrests and what numerous international rights groups called “unlawful detainment” by police and military forces.
Today, after a unpredictable trickle of continued title issuing from the MPP since the original, major concessions, around 37 families are still waiting for titles, and around 200 families (from former Boeung Kak Lake) have continued to advocate for more accurate compensation, according to various rights groups.
As reported by the Phnom Penh Post in July 2012, viable solutions for the remaining families settlement are well documented.
Sahmakum Teang Tnaut (STT), a Cambodian NGO that has lobbied relentlessly for the evictees since 2007, issued a widely supported proposal to move the remaining families to the free plots that remain at the 12.44 hectare tract granted by Hun Sen in 2011.
“While informal promises were made by representatives of MPP to fulfill the plan, no official decision has ever been announced,” says Sarom Ee, executive director of STT.
When realestate.com.kh reporters visited the area to meet community leaders in early December 2015, MPP representatives were present, and looked to be surveying the 12.44 hectare site. Tourist Pol, Project Coordinator for Equitable Cambodia, said at the time, “they might be mapping out the new titles… but they could also be planning a new access road.”
Phnom Penh City Hall spokesman, Long Dimanche, over the phone in December 2015, said, “The City Hall is working on measuring the land and the titles for the people who have already filed a lawsuit to the city hall.”
When asked whether those still living to the west of the lake would be moved to the 12.44 hectares to the north of the lake, Dimanche only commented that, “there are too many people around this area.”
When the World Bank is lobbied, the MPP sometimes restarts dialogue with the communities, leading some evictees to remain hopeful that the issues will be resolved through Bank mediation.
Phan Chhunreth, one such community leader who has lived in her family home on the 12.44 hectare concession since 1993, is still seeking a lawful title for her property from the MPP.
According to Phan, a representative of the World Bank called her early in 2015 asking what she was seeking from the MPP, following complaints lodged by her to the Bank’s office in Phnom Penh. Phan informed World Bank staff that she sought a title adequate for her home in the 12.44 hectare allotment. Phan claims the Bank promised her that they would meet with the MPP and try to move her case forward. This report was corroborated by other community leaders.
In December 2015, Khan Daun Penh issued a notification to Phan requiring her family to move from her home within 15 days. This notification stated that her residence is on land owned by the MPP. Phan refused to leave and staged many protests in early 2016, with the support of members of the Boeung Kak community and members of other urban poor communities. As a result, in March 2016, MPP promised to invite Phan to a meeting for further negotiation, although this has yet to eventuate.
Phan suggests that, “the MPP is not proactive; only reactive to the World Bank’s requests as a means to save face and secure future loans for the Government.”
Chan Puthisak is one evictee currently residing informally on the north-west side of the lake, alongside the railway track, who says he is waiting to be moved into the 12.44 hectare concession. Puthisak claims the MPP promised his community land titles in April 2015, but there was no follow after this statement.
On April 9, 2016, MPP took a lucky draw with the 16 remaining families in Village 1, a community located on the north-west of the lake along the railway where Puthisak lives, in order to allocate land in the Boeung Kak redevelopment site. As a result, each of these families received a plot of land 4 meters by 16 meters. However the land has still not been officially measured by the MPP, which is essential for land titling. This was supposed to have taken place after Khmer New Year according to officials statements to village members, but to date has not been completed.
“Protests, bribes, or good luck have been the keys to receiving titles,” Chan suggests.
According to Nget Khun, an activist in her seventies who was previously detained in Prey Sar prison for protesting the evictions, finally received her title in 2015 through a seemingly random process of selection by the MPP, and a payment of $3000.
For Puthisak, however, unwilling and unable to pay the MPP for his title, has spent over five years protesting outside the MPP and World Bank offices still with no success.
Dimanche said, “The World Bank is not involved in this issue. When people file a lawsuit to the World Bank seeking redress, the World Bank passes the lawsuit to the City Hall, because it is not their business.”
According to various commentators, reissuing loans to Cambodia without involvement in the Boeung Kak resolution will damage the World Bank’s public image.
“World Bank re-engagement in Cambodia without resolving the outstanding safeguards issues surrounding the LMAP loan would betray the public commitments the Bank made to the Boeung Kak families and represent a flagrant disregard for its binding operational policies, the findings of its accountability mechanism and its anti-poverty mandate,” said David Pred, Managing Director of Inclusive Development International (IDI).
“At minimum, the Bank must ensure that the 3000-plus families who were forcibly evicted from Boeung Kak without adequate compensation are fully rehabilitated. Such an effort could easily proceed in tandem with the Bank’s broader re-engagement,” concludes Pred.
In a 144-page report released in 2015, “At Your Own Risk: Reprisals against Critics of World Bank Group Projects,” Human Rights Watch have said that the World Bank’s weak response to reprisals by borrowers around the world, specifically identifying the Boeung Kak evictions and arrests, is embarrassing the institution’s ideals.
“The World Bank has long said that public participation and accountability are key to the success of the development efforts it funds. But the World Bank’s repeated failure to confront intimidation or harassment of people who criticize its projects risks making a mockery out of these principles,” said Jessica Evans, International Financial Institutions Advocate at Human Rights Watch, in the report.
In a statement released by the Bank’s Washington office in March 2015, World Bank Group President, Jim Yong Kim, also recognised that some issues have occurred: “We took a hard look at ourselves on resettlement … [and] found several major problems. One is that we haven’t done a good enough job in overseeing projects involving resettlement; two, we haven’t implemented those plans well enough; and three, we haven’t put in place strong tracking systems to make sure that our policies were being followed.”
“The US Treasury is watching Cambodia if the World Bank reissues loans without resolutions, according to the 2014 Act. But so are international NGO’s around the world,” says Vuthy, who has made this opinion clear to the Bank’s Washington office during his numerous visits.
Steven Higgins, Managing Partner at Mekong Strategic Partners, contends “there has been too much focus on the tangential role of the World Bank in the Boeung Kak lake project. By focusing on the World Bank’s role, attention is being deflected from how the project was approved in the first place, how such valuable property was transferred to private interests for such low consideration, and how it was done without adequate transparency.”
And now, as the lake is prepared for secondary development, commentators and community members review the project’s success in its entirety.
“This project is a disaster.” says Vuthy. “In short, 3,000 families have been evicted, impoverished and removed from their heritage land. It’s also become an environmental disaster; just as independent engineers said it would when the project was first being considered. The flooding to the north of the lake, where most families were resettled, has required huge amounts of public funds to only partially fix the problems.”
“It was an exercise of using public funding to fuel private gain. People have not been considered in this ‘development’ at any point of the process,” he says.
“On what basis did the World Bank originally trust the Government of Cambodia? They were fully aware of their track record but still issued loans without safeguards in place,” comments Vuthy.
And for those evictees still awaiting redress, this point is largely lost.
“Their loan only paid for our eviction” says Phan, “and gave the government more power to follow their own interests, and for the police and military to physically control the people here. There has been no benefit to the community, no ‘development’ as the World Bank promised.”
Nget, who protested outside the GRED construction site as they broke ground for their high rise condo, retail and flathouse complex, is saddened by the lake’s future as a real estate investor’s paradise: “The World Bank is responsible, but the government is to blame. This is an abuse of power.”
“We are only citizens, therefore we live under the power of our government,” says Puthisak. “If the World Bank wants to help the people in Cambodia, they must take measures to monitor and control our government’s exercise of power. They gave money to the government with no land title insurance plan in place – and so now we wait.”
But Vuthy is “not surprised the Bank is reissuing loans, but disappointed.”
Ee similarly believes the “World Bank has long wanted to re-engage with the Cambodian Government.”
“There is money to be made as the Cambodian economy leaps forward,” says Vuthy, “and the World Bank is currently missing out.”
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Source: News – Real Estate Cambodia