In Cambodia, an official’s cashew factory churns out timber from a protected forest

 

 

By Gerald Flynn & Phoung Vantha

 

Vegetation lurches over a concrete wall that runs alongside a quiet road in the northern Cambodian province of Preah Vihear. Behind the wall, and the rusty gate that serves as the only entrance point, sits one of Cambodia’s three medium-sized cashew nut processing factories. At 2 p.m. on a Thursday in late November last year, the road is silent under the sun. Across the road, baking in the heat, sits a barren stretch of land where a forest once stood.

In 2017, when the United States Agency for International Development (USAID) launched a program giving taxpayer-funded grants to help boost Cambodia’s agricultural productivity, it turned to outfits like this. Cambodia is a major producer of cashews, with some estimates suggesting as much as 700,000 hectares (1.7 million acres) reportedly under cultivation. But roughly 95% of its cashew exports are shipped raw to Vietnam, amounting to 711,513 metric tons in 2022, according to UN data, meaning that most of the profits from the nuts were generated elsewhere.

Among the numerous agricultural suppliers to receive funding was the owner of this facility: Santana Agro Products, a politically connected company primarily focused on cashew cultivation and processing, to which USAID awarded $96,700 between Oct. 15, 2018, and March 31, 2020, and which is listed on the United Nations Development Programme’s Sustainable Development Goals investor platform.

Such investment is much needed if Cambodia is to meet its own target of expanding the cashew sector by 25% by 2027. But here, along the dusty highway that runs through Preah Vihear, there’s little evidence that investment has helped to bolster food security or the local economy.

The sign above the gate to Santana Agro’s factory is sun-faded and weathered. And with the exception of one security guard, there are limited signs of life.

Despite the investments, support and policy shift, Cambodia’s cashew exports in 2023 reportedly dropped by roughly 10% compared to 2022. And Santana Agro is struggling, according to one man who identified himself to reporters as an employee at the company’s cashew processing factory.

The man spoke on the condition of anonymity for fear of losing his job, but said that only as much as 10% of the estimated 300 people working at the factory are involved in cashew production.

“In recent years, since the COVID outbreak, the factory hasn’t been processing cashews, they just export the raw products now,” the man said when interviewed in November 2023. “Maybe in the coming year [2024] they will begin processing again.”

Today, Santana Agro stands accused by an Indigenous community in Preah Vihear of illegally clearing their forest and grabbing their land, which formerly stood directly opposite the cashew processing factory.

From corrupt conservationist to cashew kingpin by way of timber trafficker

That Santana Agro is embroiled in a logging and land-grabbing scandal should come as no shock to anyone who knows the company’s owner. Ouk Kimsan, the sole listed director of Santana Agro, has a long, well-documented history in the illicit timber trade.

Back in 2009, he was a relatively unknown entity, working for the NGO Conservation International and the forestry administration in Pursat province. His job there was to monitor the development of the Stung Atay hydropower dam, where infamous logger Try Pheap made his name as Cambodia’s top rosewood smuggler through his MDS Import Export company.

Try Pheap plundered an estimated 16,000 cubic meters (565,000 cubic feet) of critically endangered Siamese rosewood (Dalbergia cochinchinensis) worth $227 million from Phnom Samkos Wildlife Sanctuary, where the dam was being built. The dam’s 4,179-hectare (10,327-acre) reservoir was estimated to hold just 1,000 m3 (35,300 ft3) of rosewood.

It’s unclear how long Kimsan was working for Try Pheap, but at 2 a.m. on July 25, 2009, Kimsan was arrested while attempting to smuggle the highly coveted timber across the border to Vietnam. Kimsan’s arrest helped uncover what the The Phnom Penh Post dubbed “endemic corruption” within Conservation International’s operations in the Cardamom Mountains at the time.

Kimsan’s career as a conservationist ended here, but his transition to manager of Try Pheap’s logging operations in Preah Vihear province had only just begun. In 2010, a subdecree listed Kimsan as one of many MDS Import Export employees who were awarded a government commendation for philanthropy. And by 2015, Kimsan was serving as a bona fide spokesperson for Try Pheap.

Starting out on the Preah Vihear provincial council for the ruling Cambodian People’s Party (CPP) in 2014, Kimsan’s political career took off in tandem with his work with Try Pheap. He then rose to the rank of deputy provincial governor in 2022, just one year after he was made chairman of the Preah Vihear chapter of the CPP Youth Working Group.

Besides chairing Santana Agro, Kimsan is a tycoon holding the honorific oknha title, which is bestowed upon those who donate $500,000 to the government.

When contacted by Mongabay over the phone in December 2023, Kimsan confirmed that he’s the founder of Santana Agro and said he’s also “an intellectual in agriculture and the environment who loves my country, society, people, and the environment.”

“I’ve never met you and most of the questions you asked me were about things I don’t know, especially with tycoon Try Pheap,” Kimsan said. “I didn’t have any work related to his company and I never used my rights and powers to do anything illegal in the country.”

He didn’t respond to allegations of corruption while working at Conservation International or about whether he still works for Try Pheap. But in June 2022, Kimsan posted photos of himself from his time at Conservation International without mentioning how that period of his life came to an end. And at least as recently as 2016, Try Pheap Group listed Kimsan as a senior manager, according to the company’s Facebook page.

It’s unclear whether Kimsan was still working for Try Pheap in December 2019, when the tycoon was sanctioned by the U.S. Treasury Department for corruption in relation to natural resource exploitation.

Santana Agro’s new cashew processing factory also backs onto a rubber plantation owned by Try Pheap; the factory is less than 1 kilometer (0.6 miles) from the plantation’s border.

A return to logging for Ouk Kimsan

While his star continued to rise in local politics, Kimsan’s reputation — and that of Santana Agro — began to take a beating internationally.

CPP loyalists claimed the U.S. sanctions on Try Pheap would have no impact, but Kimsan certainly felt the blow when USAID halted funding to Santana Agro due to his association with Try Pheap.

Wesley Holzer, a spokesperson for the U.S. Embassy in Phnom Penh, said the funding process for USAID Harvest II (and currently Harvest III) followed standard USAID grants management procedures and regulations.

“In December 2019, USAID’s Harvest II implementing partner became aware of the connection between Kimsan and Try Pheap following the US Treasury’s sanctioning of Try Pheap, and at that time USAID and the implementing partner took the decision to begin closing out the grant and to not renew or expand the activity,” Holzer wrote in an email to Mongabay. “Santana has not received any additional funding from USAID since then.”

But withdrawal of international financial aid coupled with the apparent slump in the cashew business hasn’t stopped Kimsan from devouring forests across Preah Vihear.

The man who identified himself as an employee of Santana Agro went on to detail how, throughout 2022 and 2023, people were regularly visiting the cashew processing factory to buy timber that he suspected was logged from Chi Ouk Boeung Prey, a community protected area that sits directly opposite Santana Agro’s factory in Preah Vihear.

The company has been in conflict with the community of Chi Ouk Boeung Prey since 2022.

“Not only luxury wood, but every kind of wood, right down to firewood,” the employee said. “I’m not sure if this is something Santana’s management knew about or whether it was just local guys taking advantage of the situation.”

The sale of timber from Santana Agro’s cashew factory was corroborated by members of the Chi Ouk Boeung Prey community, who alleged the company had hired outside loggers and colluded with members of the community to gut the forest of all the valuable timber species.

Established on Jan. 17, 2003, Chi Ouk Boeung Prey is one of Cambodia’s oldest community protected areas (CPAs), small forests that are protected by local communities in conjunction with environmental authorities. Many of the CPA’s guardians belonging to the Indigenous Kuy ethnic group, a minority group that lives largely in harmony with Cambodia’s remaining forests.

Chi Ouk Boeung Prey spans 2,080 hectares (5,140 acres) and bears the scars of a forest that has been ravaged systematically. The impact of Kimsan and Santana Agro is felt keenly among the mostly Kuy community, for whom the forest provided a lifeline of economic independence.

“We used to be able to collect fruit, mushrooms, honey and resin as products to sell on top of farming. There used to be monkeys and other wildlife, but they’re all gone — everything’s gone now, the community can no longer rely on what’s left of the forest,” said Chun Seiha, a Kuy member of the Chi Ouk Boeung Prey community.

As Seiha took reporters on a tour of the remnants of Chi Ouk Boeung Prey’s forest in late November 2023, he pointed out large stumps of what were once resin trees that had supported the livelihoods of the community.

While Seiha laid the blame entirely at Santana Agro’s feet, he noted that the company hired locals and worked with middlemen to log all of the best timber in the community forest, initially targeting valuable tree species such as ch’teal (Dipterocarpus alatus, listed as vulnerable), korkoh (Sindora siamensis), trach (Dipterocarpus intricatus) and p’deak (Anisoptera costata), the latter two listed as endangered.

The logging of Chi Ouk Boeung Prey was, Seiha posited, part of an orchestrated attempt to undermine the integrity of the CPA: if there’s no forest, there’s nothing to protect.

“Then it can be sold off [to Santana Agro],” Seiha said.

Selling out the community and selling off the forest

Along the road that borders the forest of Chi Ouk Boeung Prey, a few kilometers south of Santana Agro’s factory, San Sea and his wife, Prum Suhen, sat under their small wooden home. A Kuy couple, they were born in Chi Ouk village in the early 1960s and have worked to preserve Chi Ouk Boeung Prey since it was formerly registered as a CPA in 2003.

“We complained to the local authorities [about the logging], but our reports were ignored,” Sea said. “The community forest is controlled by the provincial department of environment, which makes it difficult for us to protect it.”

That Kimsan, the subject of their complaints, is currently the province’s deputy governor, makes taking action particularly difficult.

Suhen alleged that corrupt networks of patronage within the provincial administration had ensured that the community’s complaints against Kimsan weren’t addressed. The scale and extent of corruption in Cambodia is well-documented and with most civil servants’ salaries sitting at little more than $300 per month, patronage becomes the only means for many government employees to survive.

Suhen alleged that even the head of the Chi Ouk Boeung Prey CPA has close ties to Santana Agro.

“In 2022, Touch Leihay became leader of the Chi Ouk Boeung Prey community council,” she said. “Nobody knew her or why a Khmer woman was leading a mostly Kuy community, but she is close to Santana.”

When reporters tracked Leihay down, she was sleeping outside her home on a Thursday afternoon in November 2023. The house, adorned with banners bearing the logos and slogans of the ruling CPP, stands out from that of its neighbors as a more modern build.

Leihay initially agreed to an interview, but quickly became agitated when questioned about Santana Agro’s clearing of Chi Ouk Boeung Prey.

“Santana cleared [forest] based on where the community agreed,” she said. “The community agreed to give the company part of the community protected area for development, I’m not sure when this happened, but it was around 300 hectares [740 acres].”

At first, Leihay said it was the previous council leader who had signed off on the deal with Santana Agro — a man who she said had died a few months previously. Then she said it was her deputy who made the deal, but claimed she couldn’t remember her deputy’s name.

“I don’t have the documents to show that we legally gave the company the land, I’m very busy,” she said.

Besides confirming that she had met a representative from Santana Agro (she claimed not to remember who or when), Leihay didn’t respond to questions about the legality of the land deal or the clearing, which has seen selective logging rob the whole forest of the most valuable trees, rather than just a 300-hectare plot.

At this point, Leihay walked away from the interview and didn’t respond to further questions.

“Chapter 3, Article 11 says that the community cannot sell or rent the land to the companies or to an individual,” Seiha said in response to Leihay’s claims, referring to the Chi Ouk Boeung Prey CPA constitution, which was issued by the Ministry of Environment in 2003 and details the laws that govern the forest.

Seiha said many members of the Chi Ouk Boeung Prey community were outraged that Santana Agro was destroying the forest, while others didn’t speak out because they hoped the company would bring employment to the area.

According to Seiha, some members of the community agreed to sign, using their thumbprints, documents in support of Santana Agro clearing the forest, in the hope of getting a job.

“You have to understand that for many people here, there is simply no choice,” he said. “Many people do not have much access to information, they get scared when they hear the rich or powerful are coming to invest, so they stay silent. That’s what allows the plans of the rich to go smoothly.”

Neither the Ministry of Environment, the Ministry of Agriculture, the provincial administration of Preah Vihear nor the provincial department of environment responded to multiple requests for comment from Mongabay.

Forests devoured by ‘development’

Chi Ouk Boeung Prey has long held out as a small island of forest amid a sea of dubious development, but Santana Agro has been quick to undo the two decades of work by the community that had resulted in the CPA actually expanding from 1,500 to 2,080 hectares (3,700 to 5,140 acres) in 2006 as residents voted to include some of their farmlands in the CPA.

Between 2006 and 2022, Chi Ouk Boeung Prey has lost 365 hectares (902 acres) of primary forest, according to Global Forest Watch. Nearly half of that, 178 hectares (440 acres), was lost in 2022 when Santana Agro began clearing the CPA. From January 2023 to January 2024, almost 7,500 deforestation alerts spanning 90 hectares (222 acres) were detected by Global Forest Watch.

But Chi Ouk Boeung Prey sits within Beng Per Wildlife Sanctuary, a roughly 265,000-hectare (655,000-acre) protected area managed by the Ministry of Environment. Though nominally protected, Beng Per lost roughly 128,000 hectares (316,300 acres) of forest between 2001 and 2022, including some 96,300 hectares (238,000 acres) of primary forest.

Forest losses include some 70,000 hectares (173,000 acres) that were converted into rubber plantations between 2010 and 2011 under Cambodia’s economic land concession (ELC) policy.

Forest loss in Beng Per looks set to continue, according to Seiha and other residents of Chi Ouk village, who warned that Santana Agro is also setting its sights on Beng Per, as well as Chi Ouk Boeung Prey.

Composite satellite imagery shows that, over the course of 2023, what appears to be a new ELC is being carved out of Beng Per Wildlife Sanctuary. The borders cut around the edges fitting neatly around surrounding ELCs, coupled with the subsequent clear-cutting of forest around an existing rubber plantation, suggest that a new plantation is being created.

Some 695 hectares (1,717 acres) of this new clearing was cleared in 2018, one year after Santana Agro was founded, although the government has not made public who owns this plot. If all the forest within the newly built border is cleared, then roughly 3,100 hectares (7,700 acres) of protected forest stands to be lost.

According to one source within the Preah Vihear provincial administration, who spoke on condition of anonymity as they were not authorized to speak to the press, this new clearing is indeed a new ELC and belongs to Santana Agro.

There has been no government announcement regarding the issuance of a new ELC, and environmental, agricultural and local officials declined to comment on the matter. As the land is protected, it can’t be bought or rented privately, meaning that any clearing of forest could only happen with government approval. However, the government hasn’t announced any new transfer of state-public land to a private owner regarding this clearing.

Likewise, it’s not known whether the land, an ELC in all but name, will be for cashew plantations, or for rubber like the neighboring ELCs. But according to the Santana Agro employee, the company is also involved in the rubber business.

“The cashew business has not been very profitable,” he told reporters. “The rubber business brings in more money.”

Try Pheap is already growing rubber on the 9,916-hectare (24,503-acre) concession that sits directly behind Santana Agro’s factory, but the employee said he didn’t know whether Kimsan and Try Pheap were still working together.

Kimsan dismissed satellite imagery of the clear-cutting in Beng Per Wildlife Sanctuary sent to him by reporters via messaging app Telegram and said the clearing has nothing to do with Santana Agro.

“The Santana company doesn’t own a single hectare of ELC,” he said. “I really do not know where you got this information from. The Santana company did not do anything against the country’s law.”

But this information is in direct contradiction to Santana Agro’s own website, which states that the company’s plantation expanded from 1,000 hectares to more than 4,000 hectares (2,470 to 9,900 acres) “and has recently secured the Deforested Economic Land Concession (ELC) from the Government of 12,000 [hectares, or 30,000 acres] for high value crops and trees…”

Kimsan has since not responded to requests for comment, but other sources have also pointed to Santana Agro as the force behind this latest loss of forest in Beng Per.

Heng Sros, an environmental activist who has long worked on forest protection issues, also told Mongabay that he’d heard about the alleged new Santana Agro ELC in Beng Per from an employee of the company, who claimed it would be a new cashew plantation.

“I heard this about a year ago,” Sros told reporters in December 2023. “I’m really concerned about that case as the company seems to have gotten land that will affect both the community protected area and the wildlife sanctuary.

“It’s a government failure on its duty to protect the country’s natural resources if they cut land from a protected area and give it to a private company with close ties to the ruling party,” Sros said. “If the government does not want public criticism about its activities, [it] should stop giving ELCs to those people, end the granted licenses and replant the trees.”

Banner image: A vast chunk of protected forest is being carved out of Beng Per Wildlife Sanctuary. Sources claim Santana Agro is responsible. Image by Gerald Flynn / Mongabay.