Australia's ANZ agrees payout to Cambodians locked in land dispute

PHNOM PENH (Thomson Reuters Foundation) - The Australia and New Zealand Banking Group has reached a compensation deal with more than 1,000 Cambodian families involved in a land dispute with a sugar company it funded, officials at the bank and human rights groups said on Thursday.

Australia’s fourth-largest lender provided a loan about nine years ago to Phnom Penh Sugar Company, a subsidiary of Cambodia’s diversified L.Y.P. Group that is run by a Ly Yong Phat, a Cambodian senator and advisor to Prime Minister Hun Sen.

At the time the company was involved in a land dispute with 1,200 mainly farming families in southern Kampong Speu Province, who said they were offered little compensation for land they had worked for years that was awarded to the firm for a plantation and refinery.

“ANZ recognized the continuing hardships faced by the affected communities, and has agreed to pay the profit it earned from the loan to the affected communities,” said a statement by the Australian Treasury, which led the compensation talks.

The amount agreed was confidential, said ANZ spokesman Nick Higginbottom, declining further comment.

Phone calls made to Phnom Penh Sugar and the L.Y.P Group went unanswered and there was no immediate reply to a Thomson Reuters Foundation email request for comment.

Since the early 2000s, Cambodia has awarded large swathes of land to foreign companies for mines, power plants and farms to spur economic growth and alleviate poverty.

But human rights lawyers have voiced concerns that such deals - which covered more than a tenth of the country’s surface area by 2012 - have forced more than 770,000 people from their homes.

The payout reached with ANZ should serve as an example to other land disputes that remain unresolved, said Eang Vuthy, head of Equitable Cambodia, a land rights charity advocating for the families.

“After many years of demanding that ANZ divest and return the profits to the affected families, that is exactly what they have agreed to do,” Vuthy told the Thomson Reuters Foundation.

“It is a very important step in regards to land rights in Cambodia and we would like to see others follow.”

The initial complaint - filed with the Australian National Contact Point here, which monitors corporate behavior overseas and sits within the Australian Treasury - said the families were forcibly removed from their land and intimidated.

While the financial settlement addressed ANZ’s failure in due diligence, it did not absolve the sugar company from blame, Vuthy said.

Reaction among the compensated families was mixed.

Kep Im, who lost a five-hectare (12-acre) plot of land, said after almost a decade of protests and broken promises, she would not celebrate until the deal was finalised and would reject it if the payout was not enough to buy an equal plot of farmland.

“We want our land back,” she said, explaining how corn, bean and rice crops had once sustained her family.

Reporting by Matt Blomberg @BlombergMD; Editing by Michael Taylor. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit