Controversial investment

Deutsche Bank's statement confirming the sale was brief. Spokesman Michael West said one of the bank's funds, which he did not name, had sold its “small shareholding” in the controversial Vietnamese firm Hoang Anh Gia Lai Group (HAGL).

West provided no further details of the sale, except to say that the fund in question was managed by Duxton Asset Management. West did not say whether the sale was linked to a campaign by UK-based non-profit organization Global Witness which had called for the bank to divest.

"Deutsche Bank upholds the highest standards in the area of sustainability,” West wrote. “The small shareholding referred to was through funds managed by a third party on behalf of external investors."

On its website, Duxton describes itself as “the delegated manager of Deutsche Asset Management's DWS Vietnam Fund and DWS Global Agricultural Land & Opportunities Fund.”

DW was unable to find information about the holdings of the second fund. However, the June 30, 2013 interim report of the DWS Vietnam Fund reports that it held 4.1 million shares in HAGL worth around 4.05 million US dollars, or around 1.5 percent of the fund's total value. That amount totals around 0.3 percent of HAGL.

Serious allegations

In May 2013, HAGL was the subject - along with the state-owned Vietnam Rubber Group - of a highly critical report by Global Witness. In the report titled “Rubber Barons,” HAGL was accused of numerous rights abuses in relation to tens of thousands of hectares of land the Cambodian and Laotian governments have granted it.

Global Witness' report assessed the environmental and social effects of HAGL's rubber plantations in Cambodia and Laos. It stated that the company was flouting the law when it came to protecting the land rights of indigenous people, was illegally clearing forest, and held tracts of Cambodian land nearly five times greater than the 10,000 hectare legal limit.

“Families affected are impoverished, face food and water shortages, and get little or no compensation,” Global Witness said at the time. “Indigenous minority peoples' spirit forests and burial grounds have been destroyed. When they resist, communities face violence, arrest and detention, often at the hands of armed security forces that are on the investors' payroll.”

For its part, HAGL has long denied the allegations, saying it abides by local laws. On Tuesday, December 3, HAGL's chief of finance, Vo Truong Son, reiterated that, adding too that the company was not “in receipt of any information from Deutsche Bank stating their capital withdrawal.”

“We take the view that we always show consideration and make every effort to assure HAGL stockholders of [the] highest profitability,” he wrote in an email. “We operate our business and investments in compliance with the laws of the home country towards international standards and practices. We confirm our compliance with that principle so far.”

Six months

Megan MacInnes, Global Witness' campaign leader on land issues, told DW on Tuesday, December 3, that when the organization's report was issued in May, it had given HAGL six months to make changes.

“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, for example, who have lost their fields, and to also provide greater disclosure about its operations in general,” MacInnes said.

“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,” she said.

However HAGL's pledges made during its meetings with Global Witness, she said, had amounted to nothing of value.

“Communities have repeatedly told us since May that the problems have continued, and that HAGL is not willing to take their concerns around, for example, land disputes seriously.”

For that reason, Global Witness last month called on Deutsche Bank to sell its shares. Although Deutsche Bank would not say why its fund had sold its stake, “from the timing we do believe there to be a relationship between our call and the bank's action to get rid of its shares in the company,” MacInnes said.

Welcome news

Whatever the motivation, the chief whip of the opposition Cambodia National Rescue Party (CNRP), Son Chhay, welcomed the news. He said it showed that Deutsche Bank, which touts itself as a socially responsible corporation, would no longer continue with “its direct support to this deforestation in Cambodia.”

“It's quite encouraging because we know [that] 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,” Son Chhay said.

News of Deutsche Bank's divestment in HAGL comes shortly after the world's largest beverage company, Coca-Cola, promised “zero tolerance” for land grabbing by its suppliers and bottlers. Its decision follows a high-profile campaign by Oxfam to press the world's largest sugar purchasers - including Coca-Cola, Pepsico and the UK's ABF - to take responsibility for their products' supply chains.

In recent years, for example, hundreds of Cambodian families have lost their land to sugarcane companies. Those companies' exports to the European Union benefit from the Everything But Arms initiative, a trade preferences deal that allows unlimited duty-free imports to the wealthy bloc, and which has been linked directly to significant rights abuses in Cambodia.

Son Chhay, an outspoken critic of the Cambodian government's opaque land sales, says Coca-Cola's stance is commendable. However, he wants such companies to do more.

“They should also support those activists who are working on the issue – not just stopping it,” he said. “If they really care, they should also encourage and support those who work risking their lives to report all these problems in countries like Cambodia.”

Scrutiny driving change?

Global Witness says that since 2000, more than 3.7 million hectares in Cambodia and Laos alone have been handed to companies, with 40 percent of that land set aside to grow rubber. Stories of human rights abuses are commonplace.

But Global Witness is optimistic that large investors such as Deutsche Bank and some companies in the agricultural supply chain are starting to view matters differently, particularly when it comes to their environmental and social responsibility.

“From Global Witness' perspective - and we work on land issues not just in Cambodia but across the world and especially at the international policy level of discussions – we are definitely seeing some major changes,” says MacInnes.

And, she adds, recent decisions - Coca-Cola's in particular with regards to its sugar purchases – contain a timely message for the Cambodian government, which for years has been accused of complicity in land grabs and brutalising its own people.

“The actions … send a very clear message to the Cambodian government that if it wants to be seen as a safe place for investments in land and agri-business, the government really needs to take these kinds of issues seriously,” she said.

MacInnes stresses that the problem is not a lack of laws; they are already in place.

“It's just a case of implementing it on the ground,” she said, “and making sure that companies … are not allowed to get away with the bad practices that they are currently responsible for.”