Shady partners abound on UNDP investment platform
samlot chit
Shady partners abound on UNDP investment platform
Illegal deforestation Jan. 4, 2014 near Saen Monourom, Mondulkiri Province, Cambodia.
(Christian Pirkl via Wikipedia)A UN-agency platform intended to guide investors to “opportunities that advance humankind” lists a number of Cambodian businesses with poor human rights records.
The United Nations Development Programme is now investigating whether its platform has helped elevate Cambodian companies allegedly involved in forced eviction, deforestation, trafficking and other rights abuses.
The agency’s SDG Investor Platform bills itself as a resource for businesses and others looking for opportunities to invest in sustainable development. It purports to offer “market intelligence” for 40 countries, though stresses it “does not present investment-ready deals or projects.”
But its tool for Cambodia includes several companies with controversial human rights records according to local rights group Licadho, which in March filed a confidential complaint with the UNDP saying the agency had “failed to conduct due diligence and adhere to its environmental and social policies.”
In May, the UNDP’s social and environmental compliance unit, or SECU, determined the complaint was eligible for investigation. According to SECU’s memo, the Licadho complaint “alleged a number of specific harms that pertain to particular communities and companies.” After reviewing the allegations, the unit found “them credible to warrant additional investigation.”
Though the announcement does not detail which companies faced accusations, an RFA review of the investment platform revealed several corporate partners with troubled backgrounds.
In the section on “private forest management,” the UNDP lists Phea Pimex Asia Forestry Investment Group Co. Ltd. as a partner.
More commonly known as Pheapimex, the group is one of Cambodia’s most well-connected companies. It is owned by Lau Meng Khin, a senator, and his wife, tycoon Choeung Sopheap, a close confidante of former Prime Minister Hun Sen and his wife, Bun Rany. A 2007 U.S. Embassy cable termed its owners “one of the most politically and economically connected couples in the country.”
The sprawling conglomerate, which owns a number of large scale land concessions, has long drawn the ire of conservationists and rights groups. In a 2000 Global Witness report, the watchdog warned that “Pheapimex continue[s to] log illegally and with apparent impunity; they cannot be trusted to manage the forest while the industry is restructured.” Decades later, a 2018 case study on Pheapimex’s activities in Kampong Chhnang and Pursat province published by thinktank Focus on the Global South detailed land grabs, destroyed communities and abusive labor conditions. And earlier this year, CamboJA reported on illegal deforestation in a protected area from a Pheapimex-linked Economic Land Concession.
Pheapimex has not publicly responded to any of these findings and could not be reached for comment.
Cambodian tycoon Lau Meng Khin, right, walks with his wife, Choeung Sopheap, left, as they prepare to see off then-Prime Minister Hun Sen, as he departs for Shanghai, China, at Phnom Penh International Airport in Phnom Penh, Cambodia, Sunday, May 18, 2014. (Heng Sinith/AP)In an agro-industry section of the platform, the UNDP listed Santana Agro Product, an agricultural development and processing company, as a partner. Last year, indigenous minorities accused Santana of illegally grabbing and clearing their protected forest land in Preah Vihear for a cashew plantation, RFA Khmer reported. A Mongabay investigation noted owner Ouk Kimsan had a “a long, well-documented history in the illicit timber trade” predating his involvement in Santana. According to the Mongabay report, USAID closed out a grant to Santana over concerns regarding Kimsan’s connections to Try Pheap, a timber tycoon sanctioned by the U.S. treasury department in 2019.
The UNDP platform also encourages users to invest in microfinance institutions, or MFIs, saying that they contribute to a number of sustainable development goals, including “no poverty” and “decent work and economic growth.” However, microfinance — which involves banks giving small, high-interest loans to poor borrowers— has come under sharp criticism in Cambodia. The debt burden is among the highest in the world, with the average borrower holding over $4,000 in debt — more than double the country’s per capita income. Numerous reports by Licadho and other rights groups, international media, and academics have long painted a picture of predatory lending practices that drive borrowers deeper into debt, and contribute to child labor, deforestation, land loss and other social ills.
Santana and the Cambodia Microfinance Association, a professional organization for MFIs, did not respond to requests for comment by press time.
In a statement issued May 24, Licadho noted they had raised concerns with UNDP in late 2022 “but the UN agency failed to resolve these problems sufficiently for more than a year prior to the filing of the complaint.”
A UNDP spokesperson told RFA that “the list of entities included in the report are stakeholders in those key sectors, and UNDP does not necessarily engage with any of them.”
The author of the SECU memo noted the UNDP team stressed “no due diligence was required” and that they are not actively promoting these companies “as a pipeline of potential investment.”
But Licadho outreach director Naly Pilorge said there could be little doubt that by listing them as “partners” on a UN-backed investment website, they had promoted “sectors and companies that are perpetrating or contributing to human rights abuses in Cambodia.”
“We would like to see UNDP conduct proper due diligence and screening in order to properly assess every single investment area and company they have selected as part of this platform, to ensure that abusive companies and investment areas are not supported by UNDP,” she added.