News / Economy

Deutsche Bank Sells Fund's Stake in Controversial Vietnamese Company

FILE - Workers work at the Vietnam Hoang Anh Gia Lai (HAGL) construction site in Rangoon, Sept. 20, 2013.
FILE - Workers work at the Vietnam Hoang Anh Gia Lai (HAGL) construction site in Rangoon, Sept. 20, 2013.
Robert Carmichael
Germany’s largest bank - Deutsche Bank – announced that one of its funds has sold its stake in a controversial Vietnamese company whose land investments in Cambodia and Laos have been sharply criticized by activists.
 
In a brief email, Deutsche Bank spokesman Michael West said the stake in Vietnam’s Hoang Anh Gia Lai Group, or HAGL, had been sold, adding that the shareholding had been in a fund managed by a third party on behalf of external investors.  
 
An earlier filing indicated Deutsche Bank's investment amounted to about four million shares worth just over $4 million.
 
HAGL is one of Vietnam’s largest rubber producers, and in recent years has expanded into Cambodia and Laos.
 
It was one of two companies - the other was state-owned Vietnam Rubber Group - that appeared in a highly critical May report from Britain-based monitor Global Witness. The report alleged the two firms had been awarded 200,000 hectares of concessions in Cambodia and Laos that saw some families forced off their land and others threatened and even imprisoned. 
 
Megan MacInnes, the campaign manager for Global Witness’ land program, said the organization had hoped its report would put greater pressure on HAGL.
 
“In our report, Rubber Barons, we presented these problems to the company and made a series of recommendations for what HAGL needs to do to bring its operations in line with the law, provide compensation to households who, for example, who have lost their fields, and to also provide greater disclosure about its operations in general. And we asked HAGL’s investors like Deutsche Bank to use their leverage, their financial leverage, to also put pressure on the company to undertake these changes,” explained MacInnes.
 
Global Witness said a six-month window for improvements had expired without any change on the ground. At that point, Global Witness called on Deutsche Bank to sell its stake.
 
In an email, HAGL Group’s chief of finance, Vo Truong Son, said Deutsche Bank had not informed his company of the sale, and added HAGL had complied with local laws.
 
HAGL has previously denied Global Witness’ allegations.
 
Cambodian opposition MP Son Chhay welcomed the news that Deutsche Bank’s fund had sold its stake, and said he hoped more companies would follow its example.
 
“It’s quite encouraging because we know what’s happening in our forests - and which directly affects the indigenous people as well as our environment - has been the concern of the world, not just the Cambodian people,” said Chhay.
 
Land-grabbing has become a chronic problem in Cambodia and Laos, with politically well-connected companies like HAGL and others receiving vast land concessions. Global Witness reported that since 2000, more than 3.7 million hectares in the two countries has been handed over to firms. Around 40 percent of that land is earmarked for rubber plantations.
 
In recent years, hundreds of Cambodian families have also lost their land to sugarcane companies.
 
Non-profit organizations, such as Britain-based Oxfam, have raised the profile of such abuses and put pressure on buyers like Coca-Cola and Pepsico.
 
In November, Coca-Cola, the world’s largest beverage company, said it would work to ensure that its entire supply chain was transparent and accountable, and pledged “zero tolerance” for land grabs.
 
Global Witness’ Megan MacInnes said the actions of Coca-Cola and Deutsche Bank indicate times are starting to change.
 
She also said that such actions should put extra pressure on the Cambodian government to enforce its own laws regarding land rights abuses.

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