China’s Belt and Road Initiative has brought lucrative Chinese investment into Cambodia, but at what cost for locals?

Excavators carefully scooped piles of bent steel and rubble, moving it aside under the floodlights surrounding a collapsed building in this coastal Cambodian town. For 60 hours, neighbors and public officials crowded around, watching as emergency responders and soldiers looked for survivors.

The night before, two trucks reportedly dropped workers off at this construction site in Sihanoukville, a rapidly swelling boomtown. But just before dawn on June 22, the seven-story building collapsed, killing 28 people and injuring at least 26.

Laborers were living in the half-completed building, some with their families. With rent in the area too expensive to afford, many were asleep inside the structure when it collapsed around them. One 37-year-old construction worker, Phat Sophal, was trapped for six hours before rescuers pulled him out. Cambodian authorities found that the construction project was illegal and have charged five Chinese nationals with involuntary manslaughter and conspiracy for their role in the accident.

Last week, 86 shipping containers containing 3.5 million pounds of plastic waste arrived illegally at the port in Sihanoukville. The Cambodian government is now investigating Chinese firm Chingyeun Plastics for attempting to import the waste, all of which was labeled for recycling. Authorities are still determining which companies in the U.S. and Canada were responsible for shipping the waste.

China’s Belt and Road Initiative Leads to Cambodia

These incidents are the culmination of a recent tide of Chinese development in Cambodia. The kingdom is key to China’s Belt and Road Initiative (BRI) plans in Southeast Asia, and Chinese firms have invested in everything from highways to casinos. At least 70% of Cambodia’s foreign investments now come from China.

But following the June disaster in Sihanoukville, a group of construction workers, unions and civil society groups is now pushing back against Chinese developers’ violations of Cambodian law. They’re calling for all construction projects in Sihanoukville and across Cambodia to be suspended until independent experts can verify that contractors are complying with laws and safety standards.

“We are concerned about the unregulated Chinese investment projects in Cambodia. The number of projects is so high that we cannot count,” Eang Vuthy, Executive Director at Equitable Cambodia, a civil society group working with unions, told Citizen Truth.

The coalition of unions is calling for the Cambodian government and developers to compensate victims and their families and hold all violators of Cambodian law accountable. 

“Most of the Chinese state-owned and private companies have a bad history of not respecting their social responsibilities, not just in Cambodia but elsewhere,” said Khun Tharo, program manager at the Center for Alliance of Labor and Human Rights (CENTRAL), one of the groups voicing concerns about foreign investment, to Citizen Truth.

The situation has also attracted the attention of the U.N. “A full investigation and public report is necessary to establish what happened, who (if anyone) is to blame and to ensure that any wrongdoing is properly prosecuted,” Professor Rhona Smith, U.N. special rapporteur on the situation of human rights in Cambodia, told Citizen Truth. “A full independent investigation will also allow the authorities to determine if the current system of permits and checks is adequate.”

The emergency response to the building collapse in Sihanoukville in June continued for more than 60 hours (Photo by CENTRAL).

In 2018 more than a third of Cambodia’s 6.2 million tourists were Chinese, eight times as many as in 2011, according to the kingdom’s Ministry of Tourism. Many Chinese flock to the country’s casinos: while gambling is mostly illegal in mainland China and Cambodian law prohibits Cambodians from gambling, foreigners are allowed to partake.

Sihanoukville is ground zero for this Chinese casino boom and much of the Chinese development in Cambodia. Chinese nationals own 90% of the city’s businesses, according to Sihanoukville Police Chief Chuon Narin. The city’s mayor, Y Sokleng, said that the Chinese and Cambodian populations in the area are now roughly equal. The Beijing-built Sihanoukville Special Economic Zone (SEZ) is located on a 1,100-hectare plot just outside the city and has attracted nearly a billion dollars of investments. 

Cambodia’s Lax Approach to Chinese Firms

Unions have voiced concerns that construction workers are increasingly at risk from unregulated foreign investments. Only two months prior to the collapse in Sihanoukville, members of the Building and Wood Workers Trade Union Federation of Cambodia (BWTUC) marched in Phnom Penh to demand safer working conditions.

Without effective regulation, construction workers face immense risks such as illegal contractors who may be unregistered and lack insurance. When local authorities attempt to enforce labor laws and construction regulations, subcontractors shirk responsibility.

“With any accident or violation of workers’ rights, it’s hard to file complaints and to find who the real employer is,” said Tharo.

In Sihanoukville some watchdogs groups estimate that 70% to 80% of the Chinese construction projects have used the same methods as the collapsed building, using steel frames to anchor the structure instead of concrete columns. Some trade unionists have observed that many contractors build foundations with sea sand and suggest this also contributed to the building’s collapse.

The problem doesn’t stem from a lack of laws but from a lack of enforcement. Before the building collapsed, authorities had twice told the contractors to stop construction.

“The investors are really strong and many times they’re not respecting local authorities. It needs a high-level intervention,” said Vuthy.

A 2017 survey by BWTUC found that only 40% of construction workers in the capital considered their worksites were safe and injury-free.

“[Cambodian Prime Minister] Hun Sen and the officials involved have been trying to whitewash the case of Chinese construction and other businesses, many of which have no proper legal permits,” said Sreang Hang, a research fellow at Harvard University. In response, said Sreang, “The Chinese government has declared more support for Hun Sen.”

According to CENTRAL, there are about 223,000 construction workers in the country, making it the country’s second-largest sector.

Cambodia is a lower-income country, and construction is a rapidly growing and attractive industry for workers. Though Cambodia doesn’t have a minimum wage for construction workers, they typically make between $8 and $15 per day in the capital, or slightly more in Sihanoukville, much more than the $182 per month minimum wage for textile workers, the largest industry in Cambodia.

Rescue workers at the scene of the fatal building collapse in Sihanoukville, Cambodia in June (Photo by CENTRAL).

China and Cambodia Respond

The Cambodian government hasn’t suspended construction projects as the unions demanded, but they have taken steps to address the problem. Hun Sen fired Nhim Vanda, deputy director of the National Committee on Disaster Management, for his “lack of responsibility and for lying,” as well as failing to show up at the site of the disaster in Sihanoukville. 

The governor of the province at the time, Yun Min, resigned after the accident but was soon appointed as secretary of state to the Ministry of National Defense. Following demands from unions, his successor ordered that all steel frame construction projects in the province be suspended pending review. The government also established working groups to review construction projects across Sihanoukville province to ensure they’re in compliance with the law. 

The Chinese government is aware of the problem as well. Regarding the arrest of Chinese nationals following the collapse in Sihanoukville, the embassy in Phnom Penh said they support “a thorough investigation of the accident and necessary measures by competent Cambodian authority in accordance with the law.”

Civil society groups are monitoring the government’s moves and say regulations on foreign investments and advancing workers rights are key steps toward development. “Countries need investment to create jobs, markets and infrastructure, but it’s an issue in terms of environmental impacts, accountability and transparency,” said Tharo.

“All we say is truth and these are real concerns. This will benefit all actors, including the Chinese and Cambodian governments, the investors and the people,” said Vuthy.

Chinese investment in Cambodia will only continue to grow. At the second Belt and Road Forum in April, China and Cambodia signed at least nine deals. One covered development in Sihanoukville.

Cambodia is also using its ever-closer ties with China to insulate itself against the potential loss of E.U. free trade privileges, as the European Commission considers ending the Everything But Arms (EBA) program over concerns about continuing human rights violations and political repression in Cambodia. Exports to the E.U. account for about 40% of Cambodia’s outbound trade and the EBA agreement reportedly adds around $676 million per year to the economy.

BRI projects in Cambodia are also affecting the U.S. and China’s rivalry in the region and the trade dispute between the two countries. The U.S. has alleged that Chinese businesses are using the Sihanoukville SEZ to avoid paying tariffs on goods exported to the U.S.

China is also developing a naval outpost at Cambodia’s Ream Naval Base in the area, prompting concern from the U.S. Defense Department, though both countries have denied the existence of any agreement. 

“Let me ask those of you who have accused me of being too close to China: What have you offered me besides cursing and disciplining me and threatening to put sanctions on me?” Hun Sen said at the groundbreaking of a Chinese-backed bridge last year.