30 years ago this month, the ex-Khmer Rouge commander Hun Sen was appointed Prime Minister of Cambodia, a position he has held ever since.  Over the last three decades, private sector investment in Cambodia has burgeoned in apparel, agriculture, construction and services.  This investment has contributed to welcome economic expansion, with GDP growth at 7.7% for two decades, and expected to continue in 2015.  But the benefits of that growth are unfairly skewed: absolute poverty in Cambodia has fallen sharply but, according to the World Bank, “the vast majority who escaped poverty were only able to do so by a small margin”.  In 2012 there were almost 3 million in poverty, and 8.1 million who were near-poor and highly vulnerable to any economic shock, with 40% of under-fives malnourished and stunted in height.

Cambodia is a destination-of-choice for foreign investment because of low-cost labour and personal security of foreign managers, but there are also concerns around both endemic corruption and weak governance, especially around natural resources, and especially land.  Hun Sen’s rule has been characterised by a poor human rights record, where business-related abuses are often traced back to the state.  A recent report by Human Rights Watch links Hun Sen to a wide range of serious human rights abuses, including bans on assembly and association, and the repression of activists and trade union leaders.  The report also provides an overview of “widespread land-grabbing affecting the urban and rural poor that has adversely affected hundreds of thousands of Cambodians and helped enrich Hun Sen, other officials, and his cronies.”

In October last year, Cambodians filed a historic claim before the International Criminal Court alleging that widespread and systematic land seizures by government and government-linked businesses amount to a crime against humanity.  The human rights group, Licadho, reported that violent land grabs have affected around half a million people since 2000, and 2,246 families just last year.

The unfortunate absence of effective, functioning legal remedies inside Cambodia has pushed communities affected by land grabs to seek remedies outside of Cambodia.  For instance, in 2006 in Koh Kong Province, two land concessions were granted to Taiwanese and Thai companies and a Cambodia Senator for sugar plantations, with crops later on contracted to Tate & Lyle Sugars.  Over 2,000 villagers claimed they were violently displaced by what rights groups consider an illegal land seizure.  The local case they filed in 2006 still remains unresolved.  So villagers, with support from civil society, have brought their case before to international fora, including to:

• a UK Court against Tate & Lyle Sugars
• the US National Contact Point under the OECD Guidelines against American Sugar Refining, which owns Tate & Lyle Sugars; Bonsucro trade association against Tate & Lyle Sugars
• The EU in line with its Everything But Arms Initiative;
• the Thai National Human Rights Commission against Khon Kaen Sugar, the Thai company that owns majority of the shares of the Koh Kong plantations. 

But the organisational links and resources necessary for these international actions are not available for the majority of communities whose lands have been taken illegally. 

In 2012, Hun Sen issued a moratorium on economic land concessions and ordered a review into existing concessions.  (The land concession scheme, supposedly meant to boost agricultural exports, is largely blamed by rights groups for the land crisis.) Only six months since this moratorium was announced, it was reported that government approved at least 32 economic land concessions, the majority for rubber plantations. 

Another major area of private sector investment is the apparel industry, where poverty wages and systematic denial of workers’ rights are endemic.  The ILO reports that Cambodia is amongst the top 20 apparel manufacturers, and yet has one of the lowest minimum wages in the industry.  In November 2014, amidst major labour unrest, and police crackdowns on demonstrators, the government agreed a wage rise from $100 to $128 (compared to around $660 in Taiwan).  While this wage rise is welcome, analysis shows it only re-establishes wages at pre-2008 levels after years of real wage decline.  Workers’ organisations denounced the wage rise as ‘inadequate’ and below the margins of poverty. 

Wages have been held low in Cambodia for many years, in part, through violent repression.  In January 2014, a crackdown on garment workers protesting for higher wages left four dead and dozens injured.  This also led to the arbitrary detention of 23 protesters.  The 23 were convicted and later on released.  The trial was closely monitored by human rights groups as well as garment brands.  A rights group found serious violations of fair trial rights of the 23.

While certain conditions may be attractive, especially to profit margins of companies investing in and sourcing from Cambodia, these companies will have to take extra care not to be complicit in or benefit from rights abuses; nor abet the unfair distribution of benefits from business that drives further poverty.  Some companies are certainly learning their lesson, and are taking the necessary steps.  In September 2014, after negotiations with trade unions, global fashion brands such as Primark, Inditex (‘Zara’), H&M, C&A, and Next took an unprecedented step and agreed they would pay a minimum wage of $177 per month in their Cambodia supply chains.   

Cambodia is now facing greater political uncertainty.  International investors and those with supply chains there, could face increasing instability, especially if the benefits of growth continue to be so unfairly shared in society.  It is to be hoped that the new precedent of paying a living wage will expand rapidly to other fashion brands that source in Cambodia; and that companies exploiting weak governance to seize communities’ land or that benefit from unjustly seized land will put a brake on their abuse.  On the precedent of the last 30 years, there appears little chance that Prime Minister Hun Sen will lead these changes to uphold human rights and ensure justice.  Companies will have to decide whether they will simply ride along his flawed leadership, or bind themselves to higher standards that will ensure respect for rights and shared prosperity.

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Phil Bloomer, Executive Director, and Bobbie Sta. Maria, Southeast Asia Regional Researcher, Business & Human Rights Resource Centre, Twitter: @pbloomer; @bobbiestamaria