When a small, seven-story condominium collapsed in Cambodia in late June killing 28 construction workers, the reverberations could be felt all the way in Beijing. The building was an illegal construction in the coastal city of Sihanoukville, a hub for Chinese investors and the “first port of call” on the infrastructure network known as the Belt and Road Initiative.
Sihanoukville is on the cover of a new report from the Asia Society Policy Institute called “Navigating the Belt and Road Initiative.” Lead author and veteran U.S. diplomat Daniel Russel presents an overview of the China-sponsored construction boom unfolding across Southeast Asia along with a few cautionary tales about freewheeling builders along the Belt and Road.
Chinese developers are popular across the region because they work fast and deliver superior results. But their marketing pitch can be deceptive, says Russel who was formerly U.S. Assistant Secretary of State for East Asian and Pacific Affairs. In a podcast interview with The Diplomat, he envisions a typical scenario: “Your doorbell rings and the Chinese construction company equivalent of an Avon sales lady says, ‘here’s what I’ve got for you. I’m going to build you a big, beautiful fill-in-the-blank facility. Railway, stadium… Here’s the financing. Here’s the blueprints… I can start tomorrow.'” But in the “wild headlong rush” to sign on the dotted line, construction companies often end up “corner cutting” and “leapfrogging over due diligence.” Malaysia’s East Coast Rail Link was one notable example with corruption on an “epic scale” and a 65-kilometer discrepancy in the length of the track.
The condominium in Sihanoukville was not part of Belt and Road. But it had one feature in common with many flawed constructions described in the report, namely a builder who skirted the law in a country with a weak regulatory system. The building lacked a permit even though it was almost 80% complete. A recent World Bank report on urbanization in Cambodia called these “build first, license later” constructions and noted that they had been proliferating in Sihanoukville since 2016. Cambodia is a notoriously corrupt nation and according to a World Bank Enterprise survey, 87% of contractors were expected to “give gifts” in order to obtain a construction permit. Some contractors rushing to complete a building presumably choose to bypass this step. Following the accident, Cambodian Prime Minister Hun Sen lashed out at local authorities for allowing the overseas contractors free rein saying, “We do not need to be [officials] of the state if we do not have the ability to prevent the construction of buildings like this.”
But Hun Sen was careful not to criticize the backers of the real estate boom. “If there were no Chinese investors, let me ask you, would we have tall buildings like this?” he said on a visit to the disaster site. At a groundbreaking ceremony for a Chinese-built road last year he praised the Belt and Road Initiative. “China talks less, but it does a lot and it is different from others talking much, doing less,” he said in a not-so-subtle reference to the U.S. which cut aid after Hun Sen dissolved Cambodia’s main opposition party in 2017 imprisoning politicians, journalists and human rights activists.
In “Navigating the Belt and Road Initiative,” Russel explains that leaders of Southeast Asian nations typically welcome China’s hands-off policy. “China takes a very laissez-faire approach to the responsibilities of the host country under the guise of non-interference in another country’s affairs,” he says. But that strategy emboldens developers who flout local laws and regulations in a manner that “would not be tolerated within China’s own borders.” Turning a blind eye to questionable practices could turn out to be costly for China in the long run warns Russel. He urges developers to adopt international best practices developed by organizations like the World Bank or the European Bank for Reconstruction and Development.
The report’s 12 concrete recommendations are intended for Belt and Road planners. But in the aftermath of one of Cambodia’s worst building disasters, they are a timely reminder on due diligence for all China-based contractors operating in Southeast Asia. The sections on workplace safety, migrant worker’s rights, anti-corruption measures, and community engagement are especially relevant. Migrant workers were sleeping on the second floor of the condominium when it collapsed. Although a common practice in Southeast Asia, the use of a work area as a living space violates international safety standards for construction workers.
Last week, authorities in Sihanoukville ordered the demolition of a nine-story building owned by a Chinese developer. It was found to be structurally unsound with cracked walls and a sinking foundation.
*Sribala Subramanian is a freelance journalist writing about India and Asia, with a focus on the environment, with stories having appeared in the Guardian, The Wire and Earth Island Journal. Tweets @bsubram