A Chinese company sanctioned this week by the U.S. Treasury Department for land grabs, rights abuses, and corruption in Cambodia has been targeted unfairly and is operating in line with the country’s laws, Cambodia’s defense minister said on Friday.
The Union Development Group (UDG)—which is building the U.S. $3.8 billion dollar Dara Sakor project including a seaport, resorts, and casinos in Cambodia’s Koh Kong province —was sanctioned by the Treasury Department on Tuesday under the Global Magnitsky Human Rights Accountability Act.
The Department also raised concerns that Beijing may be using the project to secretly build a naval base and airstrip for military use as part of a bid to secure its territorial claims in the disputed waters of the South China Sea.
Speaking to RFA’s Khmer Service in an interview on Friday, Cambodian Defense Minister Tea Banh challenged the charges made against UDG, saying the Chinese state-owned developer has “invested properly” in the Southeast Asian country and is operating within Cambodia’s laws.
“It is not true at all to say that this company is involved in corruption and human rights violations,” the defense minister said. “The company has properly invested in Cambodia according to Cambodian laws, and has always complied with guidelines issued by the government, just the same as other companies investing [in Cambodia].”
Though UDG’s investments in Cambodia have had “impacts” on residents of the areas near projects, the company and the Cambodian government have properly compensated villagers displaced by the company’s work and are “finding solutions for the problems that remain,” Tea Banh said.
The Dara Sakor project has been mired in controversy ever since UDG’s parent company, Tianjin Wanlong Group, was granted a 99-year lease to 90,000 acres along 20 percent of Cambodia’s coastline in May 2008. The lease was handed to Tianjin Wanlong without an open bidding process, and provided the company with more than triple the size of any concession allowed under Cambodia’s land law.
UDG soon began clearing large swathes of forest from the Botum Sakor National Park, which was included as part of the land lease, and forced hundreds of families to relocate. Many have yet to receive the compensation they were promised as part of the deal 12 years ago.
The Treasury Department confirmed on Sept. 15 that UDG’s seizure and destruction of villagers’ land was carried out in part by Cambodian military forces, which controlled villagers’ movements, prevented them from planting rice paddies on disputed land, and burned down the houses of villagers with whom UDG had conflicts.
Meanwhile, much of the Dara Sakor project, touted by Beijing as one of its signature Belt and Road Initiative projects, remains unfinished, and completed structures like casinos and a hotel have been left largely to rot.
Work has continued though on Dara Sakor’s international airport, which will be the largest in Cambodia when finished, heightening U.S. concerns that the facility and a deep-sea port under construction nearby will be used someday to base and support Chinese military forces.
Reports that Cambodia will allow a Chinese military presence on its territory are unfounded, Tea Banh told RFA.
“Frankly, these accusations based on so-called credible reports only serve the geopolitical interests of the United States within the region,” the defense minister said, adding, “Cambodia has no real concerns about this.”
“The U.S. itself has several military bases around the world, but no one questions them about that. I find this really hard to explain,” he said.
‘China has been an enabler’
Observers meanwhile welcomed the U.S. moves against UDG, with Sophal Ear—an associate professor of diplomacy and world affairs at Occidental College in California—saying that the U.S. has now shown there will be consequences for China’s economic, political, and military encroachments in Cambodia.
“The U.S. is like a wedding crasher. China and the Hun Sen regime were getting married, and the U.S. showed up to ruin their perfect ceremony!” Sophal Ear said.
“The regime isn’t going to like their money or power relationships being touched. But then again, there ought to be consequences for human rights abuses, the destruction of democracy, and the curtailing of freedom.”
“China has been an enabler of the Hun Sen regime—and it needs to be told in no uncertain terms to cut it out,” he said.
Cambodia-based political science professor Em Sovannara said that by sanctioning UDG, the United States has signaled its continuing willingness to enforce international law and help smaller countries be more cautious in their dealings with China, whose companies “always violate legal principles.”
“But I think that Cambodia won’t benefit much from these latest measures because of the strong and close relations it has built with China in recent years,” he said.
Alex Gonzalez-Davidson—an environmental activist and founder of Mother Nature, a group working to protect the environment in Koh Kong—called the U.S. sanctions against the Chinese development firm a warning to Hun Sen to roll back Beijing’s influence in the country.
“This is a clear signal to Hun Sen that if he doesn’t limit China’s influence, and doesn’t restore human rights and democracy [in Cambodia], he can expect even more entities to be placed on a U.S. black list,” Gonzalez-Davidson said, adding that even Hun Sen’s family members and Hun Sen himself may find themselves sanctioned someday.
China has stepped in to wield significant influence in Cambodia in recent years as relations between Phnom Penh and Western governments have cooled amid concerns over the country’s human rights situation and political environment following a broad crackdown on the political opposition in 2017.
Chinese investment has meanwhile flowed into Cambodia, but Cambodians regularly chafe at what they call unscrupulous business practices and unbecoming behavior by Chinese businessmen and residents.
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