Sugar industry faces new complaint over Thai firm’s violations in Cambodia

Over 700 Cambodian families allegedly displaced in 2008 and 2009 to make way for sugar plantations have recently filed a complaint in the UK against Bonsucro, the global industry’s certification body

The families accuse Bonsucro of failing to hold a member company, Thai sugar giant Mitr Phol, accountable for reportedly seizing their land.

According to the US-based Inclusive Development International (IDI), the families were left “homeless and destitute” and have endured “more than a decade of impoverishment and related hardships” as a result of Mitr Phol’s actions. IDI and two other organisations, Equitable Cambodia and the Cambodian League for the Promotion and Defense of Human Rights (LICADHO), filed the complaint on behalf of the families.

The complaint, based on allegations of breaches of the OECD Guidelines for Multinational Enterprises, was filed with the UK National Contact Point, a government body that handles human rights grievances against British multinational enterprises. Bonsucro is headquartered in the UK.

IDI, which has supported the affected families for several years, claims that Bonsucro has “spectacularly” failed in its obligation to provide grievance mechanisms for people harmed by its members’ activities and has instead rewarded Mitr Phol with public recognitions of the company’s “continuous improvement” in sustainability and human rights.

Mitr Phol is the world’s fifth largest sugar producer and, until recently, one of the top three suppliers to Coca Cola. Its customers, past and present, also include PepsiCo, Mars, Nestlé and Corbion.

Mitr Phol’s record in Cambodia

In January 2008 Mitr Phol obtained three concessions totalling 19,700 hectares for sugarcane production in the Samrong and Chongkal districts of Oddar Meanchey province. Only one of the concessions was controlled by a company directly owned by Mitr Phol, but IDI has demonstrated that the other two companies were largely dependent on the Thai giant.

Affected households reportedly lost rice fields, orchard and grazing land, as well as the associated crops of fruits and vegetables that sustained their livelihoods. The O’Bat Moan village, where over 250 homes were either demolished or burned to the ground, was particularly badly affected. Residents who opposed their loss of land and livelihood suffered repression. At least four people were arrested, two of whom were sentenced to two years in prison. Reports of illegal logging of old growth forest at one of the concessions have also surfaced.

According to IDI, “the facts indicate that Mitr Phol colluded with Cambodian authorities to breach a host of Cambodian laws and regulations.”

In 2015, two years after a complaint filed by local NGOs, the Thai National Human Rights Commission issued a report that found Mitr Phol to have been in serious breaches of its responsibility to respect human rights under the United Nations Guiding Principles on Business and Human Rights. The Commission determined that the company had an ongoing responsibility to compensate the affected families and provide remedies for the losses and human rights abuses suffered by local people as a result of its activities.

In April 2018, in yet another attempt to hold Mitr Phol accountable, the families filed a class-action lawsuit at a Thai court. A mediation process ordered by the court has ostensibly failed due to the company’s refusal to engage with the communities. The case is now set to enter formal litigation.

Mitr Phol’s presence in Cambodia did not last long. In 2015 the company pulled out of the country. The International Sugar Journal has linked this decision to a 2014 Coca Cola audit of the concessions as part of its human rights commitments (in 2013 Coca Cola pledged “zero tolerance for land grabbing” and announced its intention to axe suppliers guilty of land seizures). In 2018 Coca Cola told IDI that it had stopped sourcing sugar from Mitr Phol.

The case against Bonsucro

Mitr Phol was admitted as a Bonsucro member months after the evictions took place. In 2012, a year after the families filed the first complaint with the industry body, the company reportedly withdrew from Bonsucro, which paralysed the grievance process. It was reinstated in 2015 but, according to IDI, this did not restart the process. In late 2018, after another complaint had been filed with the body, Bonsucro dismissed the case.

While Bonsucro has noted “the findings of the Thai Human Rights Commission that human rights violations took place in 2008 and 2009”, it has not considered it “appropriate to place any conditions on Mitr Phol’s continued membership of Bonsucro.” The body has further stated that the complaint did not present “cogent evidence that […] Mitr Phol breached the terms of Bonsucro’s Code of Conduct in place at the time.”

Bonsucro has also said that Mitr Phol has requested the government of Cambodia to return the land to its original owners after ceasing all operations in the country and commissioned an independent report to understand the land concession process that took place.

In a guest blog for the Business and Human Rights Resources Center, IDI co-founders Natalie Bugalski and David Pred have denounced the fact that Bonsucro ignored the families’ complaint for nearly eight years, despite “reams of evidence […] of illegal land seizures, destruction of private property, forced evictions and deforestation.”

IDI argues that one of Bonsucro’s responsibilities under the OECD Guidelines is to “use its leverage with its members to address human rights concerns, especially serious ones that are brought to its attention.”

Bugalski and Pred claim that “Mitr Phol never showed any sign that it was willing to acknowledge the adverse impacts it caused and right its wrongs.” Mitr Phol has reportedly refused to provide compensation to the affected families.

“It’s high time for voluntary industry standards organizations like Bonsucro to be held accountable to their own human rights responsibilities,” say Bugalski and Pred, who believe that while the ethical seal of approval provided by Bonsucro benefits its members’ business interests, it should also live up to the trust that consumers put on the label.

The Thai company has strongly denied committing any human rights violations in Cambodia.

Bonsucro has defended its certification scheme as independent and credible, and argued that membership is based on “continuous improvement” rather than expecting members to be “perfect.”