When villagers in Kampong Speu’s Thpong district were forced off their land in 2010 by economic land concessions the government granted to two sugar companies, they received about $300 and faraway plots of infertile earth in restitution for the land they used to farm.

“Now the villagers face food shortages because they have no farmland,” Phal Vannak, a village representative from Omlaing commune, said yesterday. “They are living in a difficult situation.”

Cambodia’s sugar industry is rife with unethical (at times illegal) land grabs, child labour and a host of other human rights violations, observers say. But a study released on Monday by NGOs Equitable Cambodia and Inclusive Development International finds that a European Union initiative intended to help the world’s “least-developed countries” integrate into the global economy is enabling such abuses by sugar companies operating in Cambodia.

Enacted in 2001, the EU’s Everything But Arms (EBA) arrangement grants 49 countries duty-free and quota-free trade with the union. However, the report says, beneficiaries of the lucrative trade agreement include sugar companies in Cambodia that – with government consent – engage in brutal land grabs, destroying the livelihoods of citizens the EBA was designed to help.

“Sugar plantations just make people poorer than before,” said Moeun Tola, head of the labour program at the Community Legal Education Centre. “They turn farmers into labourers.”

Following a 2011 complaint that CLEC filed on behalf of 200 Koh Kong villagers who lost their homes to land grabs, international sugar industry monitor Better Sugar Cane Initiative Ltd (Bonsucro) subsequently suspended the membership of the London-based Tate & Lyle sugar company.

The July suspension (still in effect) came partially due to its failure to conduct a third-party review of practices of its supplier, Khon Kaen Sugar Industry Plc (KSL) – which allegedly forced hundreds of villagers off their land in 2006.

Officials from Tate & Lyle and KSL did not respond to emailed requests for comment.

Despite calls from the European Parliament to withdraw EBA benefits from Cambodia’s sugar industry, the European Commission has found that it “lacks the necessary legal conditions to initiate the withdrawal procedure”, the report says.

An official with the EU delegation to Cambodia said the office could not answer questions about the report until tomorrow.

“[The EU] has the power to tell private companies to respect human rights,” said Sovanna Sek, a program manager for Equitable Cambodia. “If the company refuses to follow the order, they can get suspended.”

The study found that regardless of the standards EBA sets for its beneficiary countries, the EU has little enforcement power over the companies, which operate relatively unmonitored.

“There is no effective, independent accountability mechanism at the European Commission, or anywhere within the EU structure, that is available to people affected by EU policies,” the report concludes.

ADDITIONAL REPORTING BY MAY TITTHARA