Reading Coca-Cola and Nestlé’s websites, you could be forgiven for thinking these companies were the corporate incarnations of Mother Teresa. But behind the carefully crafted façades, allegations of abuse linked to companies in the brands’ supply chains tell a different story.
Both companies buy from Thai sugar giant Mitr Phol, which in 2008 and 2009 colluded with Cambodian authorities to violently evict more than 2,000 farming families across 26 villages to make way for its sugarcane plantations.
The sugar industry isn’t the only culprit. A few years later in another part of Cambodia, Vietnamese agribusiness giant Hoang Anh Gia Lai (HAGL) seized and bulldozed the farmland, sacred forests and burial grounds of 15,000 Indigenous Peoples in 14 villages to make way for plantations to grow rubber, used in consumer products like cars. Peugeot, BMW, Kia and Mazda likely use rubber from HAGL.
For too long, consumer brands have sourced raw materials from abusive companies. We’ve seen up close the damage this has caused in Cambodia, and how elusive remedy has been for affected communities.
But with mandatory due diligence laws on the horizon in Europe, communities will finally have the opportunity hold brands accountable for violations in their supply chains. HAGL and Mitr Phol—two Asian companies with atrocious track records, who benefit from nearly unbridled access to the global market—exemplify just how necessary this legislation is.
Affected communities’ quest for remedy
The United Nations Guiding Principles on Business and Human Rights (UNGPs) led to the widespread acceptance of businesses’ responsibility to respect human rights and contribute to remedy—at least, in theory. In practice, meaningful implementation of these soft-law norms is a different story.
HAGL and Mitr Phol exemplify the problem. Years after being violently evicted, the affected communities’ situations remain dire. In both cases, sustained international advocacy and complaints to non-judicial mechanisms have largely failed.
All told, the communities harmed by Mitr Phol have filed five separate complaints: two to Bonsucro, a multi-stakeholder initiative for sustainable sugarcane producers, of which Mitr Phol is a member; one to the Thai National Human Rights Commission; one to the UK National Contact Point (against Bonsucro); and a (still ongoing) groundbreaking transboundary class action lawsuit in Thai courts. While some complaints, such as those to Bonsucro, were mishandled and dismissed, others had more success. For instance, in 2015, the Thai National Human Rights Commission found Mitr Phol directly responsible for serious human rights violations and ordered the company to “correct and remedy the impacts.” Nonetheless, Mitr Phol has steadfastly refused to even negotiate with the Cambodian families whose lives it destroyed.
HAGL, meanwhile, has been dragging its feet in a tumultuous, nearly seven-year mediation process. Despite an important win in 2015, when HAGL reduced its land concession, preventing 10,000 hectares of deforestation and further harms to communities, the company has largely failed to remediate past harm. As recently as March 2020, the company brazenly bulldozed a swath of culturally significant land previously demarcated for return to villagers, while the communities sheltered in place due to COVID-19 lockdowns.
Consumer brands’ inadequate responses
Throughout all of this, the brands with business links to HAGL and Mitr Phol have been reticent to act.
While opaque supply chains make it difficult to trace rubber from HAGL’s Cambodian plantations to the automotive sector, public reporting suggests HAGL’s dirty rubber has ended up (or may end up) in the tires of high-profile customers of HAGL’s parent company, Truong Hai Auto Corporation (THACO).
When approached about the allegations, most of the car brands tried to distance themselves. Peugeot claimed its tire supplier did not source rubber from HAGL—a claim that is impossible to independently verify due to a lack of transparent reporting–while Kia and Mazda failed to respond at all. Only BMW committed to engage its supplier.
Attempts to engage buyers of Mitr Phol’s sugar took a similar course. While Coca-Cola took some initial steps, it has since attempted to dissociate itself from the problem rather than fulfil its promise of zero tolerance for land-grabbing in its supply chain. Nestlé claims to have raised the issue with Mitr Phol, while simultaneously downplaying its ability to do more.
While it is not insignificant that some companies have raised the issues with their suppliers, such efforts have clearly not been sufficient to fix the serious, ongoing abuses.
The New Wave: Mandatory human rights due diligence legislation
The tide has begun to turn in favor of legally enforceable corporate accountability, with a wave of initiatives seeking to codify the UNGP standard into domestic law. The trend has gained particular momentum in Europe, with the 2017 enactment of the French Duty of Vigilance Law, and multiple similar proposals under negotiation in the Netherlands, Switzerland, Norway, Germany, and at the European Union level.
The laws will finally create ‘teeth’ for corporate human rights standards by opening companies to the possibility of legal liability, financial sanctions and other consequences when they cause or contribute to harm.
In other words, consumer brands need a strategy to address problems in their supply chains, or they may be obliged to do so by force of law. For the Cambodian communities affected by the activities of HAGL and Mitr Phol, this could be a momentous turning point.
Companies cannot afford to wait to address complex legacy abuses
HAGL and Mitr Phol, two Asian companies with their sights set on expansion in Europe, can no longer sweep past and ongoing harms under the rug. If they fail to remedy past harm now, a well-documented trail of unaddressed human rights abuses will follow wherever they go—making them reputationally toxic and legally hazardous business partners in an already competitive European market.
Similarly, consumer brands no longer have the luxury of hiding behind a friendly corporate image while sourcing raw materials from abusive suppliers. Responding to entrenched legacy impacts along their supply chains will be complex, to say the least. For this reason, consumer brands simply cannot afford to wait until they are compelled to act by legislation.
Customers of HAGL and Mitr Phol would be wise to seize the opportunities open to them right now, to ensure their suppliers sit across the table from the Cambodian communities and reach agreements on remediation. Otherwise, these legacy human rights abuses may well become enforceable legal liabilities.
Communities in Cambodia—like many others around the world—will finally have the tools they need to assert their rights and secure redress.