Dark and bitter times for Lao coffee

Coffee colonialism brews trouble for farmers in Laos

Melinda Boh
October 16, 2012
Dark and bitter times for Lao coffee
Shake and bake: sun-dried coffee beans in Laos

In a situation reminiscent of the blockbuster Avatar, a small ethnic group in Southern Laos is battling an international Singapore-based agribusiness, for the return of their land.

Their faces are not blue. They are brown from hard work under intense sun, and they travel by open truck instead of flying dragons, but the farmers’ intensity and potential for dramatic conflict is equivalent to that of a Hollywood film.

Puan is a thin, angular-faced man and unofficial leader of the five-man delegation of Nya Hitun/Yahern people that came to Vientiane in mid-April. He looked up, his sharp cheekbones catching the light and said, “We will die for our land”.

The way things are in Laos at times, that might just happen. In the hard-line nation, protest is still banned and those who disobey are often arrested and disappear.

“Maybe some have to die so that the world takes notice of what is happening in this country: the misuse of power, the suppression of protest,” said a Vientiane-based lawyer assisting the case who requested anonymity.

This was the second time the men had made the long trek from Paksong in southern Laos to protest the loss of their land to the Singaporean coffee company Outspan Boloven, a subsidiary of agricultural products giant Olam International.

A larger delegation had first come to Vientiane in late February and had by all accounts been harassed and then passed from safe house to safe house. A live-to-air interview with some of the group on national radio might have triggered the surprise cancellation of the programme, Talk of the News.

The five men were dignified and serious as they stood before me. They were obviously tired after the ten-hour journey to Vientiane. Eight families, they said, had nothing to eat. Their farming land had been taken. They were slowly starving.

Twice they have pleaded with Laos’ National Assembly for intervention. Each time they have developed and presented detailed dossiers to the Petitions Office and promises have been made to investigate. Each time those promises have proved empty. Now they are angry and ready to take direct action. “Maybe we shall start to slash and burn again… inside the coffee plantation,” said villager Bounlert ominously.

The Vientiane-based Land Issues Working Group (LIWG), was said to be mediating an agreement with the company and had approached the Singapore Embassy and the company for assistance.

“We don’t want an agreement; we want our land back. [The company representatives] came to the area last week, but no one talked to us. They should leave,” Puan insisted. The rest nodded in agreement.

Lao coffee, like Lao beer, is now internationally known. The organic coffee grown by small holder farmers on the Boloven Plateau sells for premium prices. The rich volcanic soils and coffee-friendly climate of the southern plateau has attracted a slew of big investors, including Vietnam-based instant coffee producer Dao Heung. But contributors to listserve LaoFAB have expressed concern that the district’s organic status may be compromised by big companies with bottom-line eyes.

In 2010, the governor of Champassak, Sonesay Siphandone, a member of the notoriously politically-connected Siphandone family, granted Outspan Boloven the use of 150 hectares of land for 30 years. Over time, and despite protests from the farmers, the company expanded its coffee plantation to 1,460 hectares, destroying over 140 hectares of productive village lands and desecrating graveyards and ancestral shrines. Outspan’s website reveals that the company aspired to a 3,000-hectare holding.

Video shot in early April by a Lao filmmaker, who declined to be identified, shows piles of burnt and smoking timber and bamboo. Bare earth exposed by company bulldozers is ringed by clearly distraught villagers. What was the graveyard is now an undulating pile of dirt and weeds.

Puan, a careful man, opened a huge red ledger resembling a Domesday Book and read out a litany of losses: 205 hectares of productive forest felled; 10 hectares of housing land encroached upon; sacred forest destroyed; 71 hectares of watershed forest felled and replaced with coffee trees; wetlands and ponds filled; coffee plants gone; pampas grass clumps for broom-making gone; and 14 hectares of specialty incense bark trees burned. In all, 52 families have lost their land and income sources. Have any families been compensated? No.

“In 2010, we were told the District Land Management Authority wanted to survey for a concession to Outspan. We had already lost land to Vietnamese coffee growers, so we were not happy, but we know it’s best to cooperate with the authorities,” Puan responded.

No agreement or contracts were signed with the villagers, they said. “If they had asked, we would have offered them unused land within our own areas. We would have cooperated,” an unnamed man said.

With indecent haste, the company brought in tractors and levelled the ground, toppling anything in their way. Their destruction was captured on video.

“They worked day and night. The noise and light did not allow us to sleep,” village head Soumpheng grumbled. “We went out and tried to stop them, but they told us we had no rights any more as the land had been granted by the governor.”

When asked to see official certificates, the survey team referred villagers to local government officials.

A delegation went to the district office. Local officials passed the buck to provincial authorities which promised to send an investigative team. The villagers said that resulting talks were ineffectual and placatory. The officials blamed the company, saying Outspan had mistaken the boundaries of the concession. If the local people disagreed, it was suggested they move somewhere else. This advice was repeated recently by a national investigator who went down to look into the situation. At every level of government, the villagers have been greeted with obfuscation, lies and suggestions that they have no rights over land they have worked for over 100 years.

“Yes, both the police and soldiers threatened us,” said Bounlert.

“The land was granted to us by the [former] Royal Lao Government in 1901 after our ancestors came down from the Annamite Mountains. The French colonials planted coffee in 1954. Later we fought to make them leave our land just like we fought against the Americans. So we are veterans of fighting and are unafraid,” Soumpheng warned.

The people were traditionally shifting cultivators. “After the socialist government forbade shifting cultivation, we had no trouble diversifying. The money we got enabled us to pay our land tax. We have been awarded certificates because we always paid our taxes,” Bounlert said.

An LIWG report noted that because official maps do not include ownership or use, demands for compensation are “difficult” and “[t]his happened in the Outspan case”.
In 2010, official mouthpiece KPL news reported Outspan director general Sanjeet Khurana saying that business would assist local people to grow and produce for export. Instead, the locals have been tossed off their land and their own coffee bushes burned.

Olam International Limited – an integrated agricultural produce supply chain management company specialising in nuts, coffee, edible oils, rice, cotton, teak wood products and spices – reports that the coffee from the first Boloven’s crop has been exported to California. The company had a net income estimated at $444.6m in 2011.

Asked how the existing conflicts and hardship fitted with the company’s corporate social responsibility charter, Olam’s Singapore office referred questions to its London-based PR company, Gong Communications, who said in an email that Olam was “concerned” and “believed in good faith that we had followed national laws and relevant processes”.

Gong spokesperson Sara Firouzyar said Olam was ‘unaware’ that there was such conflict, which must have been overlooked by local management.

Firouzyar wrote that the company had engaged an independent team of consultants to investigate and perform an audit. The aforementioned anonymous filmmaker, a fluent English speaker, describes the April visit: “Foreign men came to the villages. We were told they were from the company. But the strangers didn’t talk to us, and ignored us when we tried to talk to them.”

Meanwhile, Olam is floating other options and has promised 12 stakeholder meetings, Firouzyar wrote in April. If they happen, long-time Laos resident Richard Hollis said in an email, the meetings “may cast unwanted light on multilevel government corruption and ineptitude, and establish a precedent distasteful to the Lao government”.

The Lao government rates low (154 of 180) on Transparency International’s Corruption Perception List.

Olam chose to not disclose if or how much Governor Siphandone was paid for the concession. Firouzyar wrote that Olam is “actively recruiting a qualified, local community specialist to be based in Laos to ensure that we are able to build strong local relationships going forward”.

Asked how they responded to the demands of the farmers for a return of their ancestral lands, Gong was also notably unresponsive.

The filmmaker says that the villagers are planning another visit to the capital. “Outspan gave the villagers 20 tonnes of rice three years ago. That was for over 1,000 people. But in the long run how can the 172 families of Nong Mek, Nong Tua Nong Hin and Nong Tiem live?” he asked. “We have to send emergency food aid down to the starving families.”

“This is our dignity and our lives,” Puan said, as he left Vientiane. “We are not afraid to die.”

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