Corrupt Scheming Traders Keep Thailand's Farmers Poor by Phairath Khampha 27 August 2002 Thailand's crooked politicians, state officials and businessmen have cashed in on every government's eagerness to please rubber farmers through price intervention schemes. When rubber prices fell, the government of the day, fearing its popularity would be dented, naturally enough, would dump billions of baht into the market to shore up the rubber price. Chances were, however, that rubber growers would derive little or no benefit. Most of the money went into the pockets of four or five influential groups with close ties with politicians and government officials. A source said these groups, some of which owned big rubber trading firms, would first manoeuvre the government into opening its coffers to "save" the local rubber trade. It is nothing more than a multi-million dollar scam, which further impoverishes the poor. That could be achieved by inciting rubber farmers to block roads in protest over falling prices and demand financial help from the government. "Any government, past or present, has always had the view that if it stands to benefit politically by helping the farmers, then it will help them," he said. Once the funds were approved, those influential groups sold their own rubber stocks to the government. Then they stored it in their own warehouses and charged the state rent. After a while, they would claim the rubber's quality had deteriorated because it had been stored too long. That made the government rush to sell off its stockpile at exceptionally low prices. These influential groups would then buy back the rubber and resell it overseas at high prices. These groups had registered ghost companies in Singapore, Taiwan and Hong Kong, which bought low-priced government rubber stocks for export. If these firms had a major export deal with foreign buyers but could not procure enough rubber to meet their contractual obligations, they resorted to setting fire to their warehouses. This made delivery impossible and at the same time they profited by claiming insurance money. Such a huge rubber warehouse fire occurred during the second week of August 2002. It also destroyed and damaged dozens of ordinary people's homes. Local firms are barred from buying state-owned rubber for export. Pairat Chantara-udom, a member of the Southern Farmers Rehabilitation Fund, said cheating would not be possible without the help of politicians and officials overseeing the rubber industry. They could earn kickbacks of from 20 satang to up to seven baht per kilogramme of rubber every time the government sold its stockpile, he said. [1 baht = 100 satangs = 0.02380 US Dollar] The source said it was by no means clear whether the International Tripatrite Rubber Company, a joint venture between Thailand, Malaysia and Indonesia, could really overhaul the old rubber trading system and eliminate all the corruption, given that in at least two of the countries the very people who could bring about changes profited immensely from the current set-up. The three countries, the major rubber exporters, set up the cartel this month in a bid to control supplies and keep world prices up. Rubber sale scanadal: Jurin refuses to meet police Thailand's Democrat Party MP Jurin Laksanavisit said on August 20 he would not meet police investigators to answer charges over irregularities in the sale of 38,500 tonnes of government stockpiled rubber between 1993-1994 unless police obtained authority from the House to take legal action against him. The Democrat also asked investigators from Thailand's Central Investigation Bureau (CIB) to speed up the process of obtaining House permission to lift his immunity against legal action during the parliamentary session. CIB Commissioner Pol Lt-General Chaj Kuldilok challenged Jurin to turn himself in to answer the charges and prove his innocence. The CIB launched an investigation into corruption in the sale of the stockpiled rubber to two Hong Kong-based companies - Carne Trading Co and Chang An Corporation. The sale to Carne Trading Co was made through Thai-owned Thong Thai Rubber Co, which acted as the agent for the transaction. Carne Trading, however, was later discovered not to exist. Police investigators suggested that, as the deputy commerce minister who authorised the rubber deals, Jurin and other senior Commerce Ministry officials illegally benefited from the sale. Jurin said he had not yet seen the summons for him to meet investigators and did not know yet what specific charges he would face. "I would like police to submit the summons to the House as soon as possible so that I can request permission from the House to fight the case," he said. A group of Democrat MPs on the same day went to meet Chaj to ask him to speed up the process. However, Chaj was not available. The CIB chief later told reporters he would ask investigators to submit the summons to the House to seek approval from the chamber to take legal action against Jurin. Parliament President Uthai Pimchaichon said, meanwhile, that if Jurin wanted to forfeit his legal immunity, he could meet police right away instead of waiting for clearance from the House.