Thailand faces uphill fight over gold mine closure

[rooster59]

Thailand faces uphill fight over gold mine closure

By THE NATION

 

File photo: Chatree gold mine.

 

Legal expert says use of article 44 by junta failed to take into account provisions under Australia-Thailand FTA.

 

THE THAI government faces a formidable legal challenge in its dispute with Australian firm Kingsgate Consolidated Limited over the controversial closure of a gold mine in Phichit province operated by Kingsgate’s subsidiary, according to a Thai academic.

 

Following the failure to settle the dispute with the Thai government in the aftermath of the decision last Decembern by the National Council for Peace and Order (NCPO) to close the gold mine in Phichit, Kingsgate decided to start arbitration proceedings against Thailand under the Australia-Thailand Free Trade Agreement.

 

 

Kingsgate operated the Chatree gold mine under the management of its subsidiary Akara Resources whose operations were closed following the NCPO order on January 1.

 

To recover the substantial losses it had suffered, the firm appointed international law firm Clifford Chance to represent it in the arbitration proceedings with Dr Andrew Bell being its lead barrister.

 

“The board of Kingsgate considers that the company has excellent prospects of successfully recovering very substantial damages against the Kingdom of Thailand, and will vigorously prosecute its claim,” the statement said.

 

As the government had used its special powers under Article 44 of the interim charter to close the gold mine, Decharut Sukkumnoed of Kasetsart University wrote on his Facebook page that the Thai government may face a tough legal problem.

 

Though the Thai-Australian free trade agreement empowers the Thai government to suspend a project, the action has to be taken according to legal and other procedures stated in the bilateral agreement that ensure fairness to all the concerned parties.

 

There must also be full disclosure of documents and other evidence to support the action.

 

However, the Article 44 order appears to have not followed the procedures established in the bilateral agreement. In addition, the reasons provided by the NCPO for the closure were brief and, according to Decharut, there were insufficient scientific and academic documents to substantiate the order.

 

Decharut said there is much scientific and academic evidence on this matter, but the dearth of its inclusion as direct support for the special NCPO order could become a factor leading to a legal defeat in the arbitration proceedings.

 

The academic also said it was unfortunate that Thai citizens could not challenge the legality of orders issued under Article 44 of the charter but foreign investors could do so based on the bilateral agreement with Thailand.

 

However, the Industry Ministry said the government is ready to protect the country’s interests in the arbitration proceedings. 

 

Pasu Loharjun, permanent secretary of Industry, said residents had filed complaints against the gold mining operation for a long time due to its alleged impact on the environment and people’s health. This led the NCPO to issue the order on December 13, 2016 to resolve the conflict by suspending all gold mining operations nationwide so that agencies concerned could tackle the problems and take remedial measures.

 

However, Kingsgate Consolidated of Australia, which is the major shareholder of Akara Resources that holds the gold mining concession, said it had suffered as a result of the order and had sought consultations with the government on April 3 under the bilateral Thai-Australian free trade agreement.

 

Pasu said the government had earlier appointed a multi-agency committee to negotiate with the Australian firm to settle the dispute based on the best interests of the country and residents of the affected areas.

 

The committee also ensures that there is fairness for all stakeholders and any settlement is consistent with the national reform and strategy on mining operations as stated in a recently enacted law.

 

The government wants to ensure that there is a balanced approach with all stakeholders’ interests taken into account, covering social, community, environmental, public health, economic, income distribution, and sustainable development aspects.

 

Pasu said the new law on mining and related operations will lead to more efficiency and transparency in the management of the mining industry in Thailand. The government is prepared to settle the dispute under the international arbitration process sought by the Australian firm.

 

He said the arbitration process is consistent with the bilateral agreement with Australia and so far the Thai government has not accepted any demands from the Australian firm.

 

Source: http://www.nationmultimedia.com/detail/national/30330764

 

 

-- © Copyright The Nation 2017-11-04

[Briggsy]

I can see this being another Walter Bau AG case.

 

a. Thai government repeatedly lose the case on arbitration and subsequent appeals.

b. Thai government portray the case as an attack on Thai national interests by foreigners rather than a mess caused by incompetent administration and corruption.

c. Thai government refuse to pay and ignore any court order.

d. Thai government forced to pay years later whilst repeated point b.

[Cadbury]

It would certainly be a turn up for the books if the PM's precious Article 44 failed him. I can imagine much stamping of feet and chewing on the pillow at night. But one thing can be certain....it will be someone else's fault; not his.

The Thai government can now be seen for what it is. A one man government with a self created authority (Article 44) to do anything he pleases while giving himself immunity from the consequences of whatever he does. 

How long can it last?

[rkidlad]

If the Thai government has to pay a lot of money to settle this, how will the PM spin this? He’s the one and only person who can exercise 44 as he is omnipotent inside his head. That makes him 100% responsible. 

 

Maybe just say the money that they lost is worth far less than the health of the locals having health problems. And there will be people who believe that because they’ve not been educated to connect the dots. 

 

 

[Cadbury]

2 hours ago, Briggsy said:

I can see this being another Walter Bau AG case.

 

a. Thai government repeatedly lose the case on arbitration and subsequent appeals.

b. Thai government portray the case as an attack on Thai national interests by foreigners rather than a mess caused by incompetent administration and corruption.

c. Thai government refuse to pay and ignore any court order.

d. Thai government forced to pay years later whilst repeated point b.

Out of curiosity I read up on this case. There was some commentary that losing this case was a positive for Thailand in that the government and presumably future Thai governments would learn from their mistakes and think twice before making decisions which would cause financial damage to foreign investors. The belief was that should in turn attract foreign investment rather than discourage it. A rather perverse way of looking at it.

It seems they have learned nothing and now even worse the one person who presently governs Thailand mistakenly believes his Article 44 overrides anything and everything including Free Trade Agreements.

 

[Oziex1]

The agenda is clear at all levels of Thai society, rip off the foreigner.

 

Will they pay for this one, can they blame someone else?

[lapamita]

The news of kingsgate and akara i followed , in my own intrest, over the last 18month.

my opinion

- there was no prove of 10 local and 5 international companys of any polution,the companys was orderd by thai giverment

-even they issued a closuere without evidence

-KCG repayed all dept within 2017  and closed operation

-a "suspect" takeover offer, at a draction of value of KGC  , was made in July, from a company called Pacific Northern Guld petroleum" , an unknown mini offshore company with thaisharedholders, they mentioned in the staement" we have the abaility and the realtions  to the  goverment ,and could popen mine "within 3 month" of we could take over more than 51% of the company.

Not only the company rejected, as well me, i better loose all than give this  bad guys  my minor stake ( shraeprice at this time 0,27AUD compare to offer 0,05 AUD

here the Pdf file

http://www.kingsgate.com.au/wp-content/uploads/2016/10/KCN_TargetsStatement_14Oct16.pdf

- KGC was handkling cash flow fair, and negotitations with thai gov was refused at all times

-in September the thai goverment renewed /or revoke the closeure order, but isnot willing to pyay compansation for looses

-in september " take the exact words of thaimedia and KGC statment 

The thaileader saied 

" we will give to KGC substancial other benefits, but no direct compensation"

 

waht ever this means, maybe not money  ( because you have note this in the tax booksand maybe one day the leader is personaly responisibilty?? like Yinluck, so  maybe they mean  " give substanital "other benefits" in form of......................,what will not be recorded in the books................

MEANINGFUL OTHER BENEFITS

http://www.nationtv.tv/main/content/378563160/

 

KGC cant open themine and mill tons of ore produced in 2016 , due to the fact of "low cash" , the restart would cost more than 50mb usd, in  a not fully solved enviroment. where its not possible to receive new credits. The cash of KCG is ow primally used for the court claim against thaigov. . what is priority

 

 

A crime??? story at its perfection......................

 

[mercman24]

like you say he is 100% responsible, just like the lady and the rice pledge scheme, oh i forgot that 44 will come in handy for him, do you know who i am syndrome, so was it shut down for polution if so why did one company want to re open it, answers please.

Edited November 4, 2017 by mercman24
mistake

[petermik]

The PM who instigated article 44 in this issue will now issue a "deafening silence" notice and look elsewhere....who me?....will be order of the day......numptie

[the guest]

FTA agreement between Australia and Thailand doesn't mean diddly squat!

Prices for Australian products in Thailand are extremely high, as they are still highly taxed by Thai customs and excise.

 

Loss of face is a big thing in Thailand, so I can't see this case going any further, and besides, this country is controlled by a Junta who has little patience for foreigners.

 

 

Edited November 4, 2017 by the guest

[Briggsy]

1 hour ago, the guest said:

Loss of face is a big thing in Thailand, so I can't see this case going any further, and besides, this country is controlled by a Junta who has little patience for foreigners.

Breaches of the FTA are dealt with by binding arbitration so your comment makes no sense. It is not Thailand's decision whether to proceed or not. Kingsgate are seeking damages and the arbitration will go ahead whether Thailand participates or not.

[ukrules]

Just kick Thailand out of all free trade agreements, they already proved they don't want to stick to them.

 

One country causing problems - boot them out.

[RichardColeman]

Problem is that maybe the people who did 44 wont be in power when Thailand has to answer to it. The new government will look stupid - not the people that did it

[Briggsy]

1 hour ago, ukrules said:

Just kick Thailand out of all free trade agreements, they already proved they don't want to stick to them.

 

One country causing problems - boot them out.

The Thailand - Australia FTA is a bilateral agreement. Kind of hard to "kick Thailand out".

 

http://dfat.gov.au/trade/agreements/tafta/pages/thailand-australia-fta.aspx

[eliotness]

There is a simple solution for Thailand - inist that all non Thai companies operating in Thailand are certified to the ISO standards for Environmental Management and Corporate Social Respnsiility for their operations in Thailand. That should reduce the locals complaints and exclude rogue operators.

[Briggsy]

1 minute ago, eliotness said:

There is a simple solution for Thailand - inist that all non Thai companies operating in Thailand are certified to the ISO standards for Environmental Management and Corporate Social Respnsiility for their operations in Thailand. That should reduce the locals complaints and exclude rogue operators.

In this case (the closure of the mine) the Thai Government provided no scientific basis for closing the mine, other than hearsay and uncorroborated information. Section 44 was used. There is no evidence that Kingsgate was in any way a "rogue operator".

 

This is why it is widely expected Thailand will be ordered to pay compensation by the arbitration tribunal.

[Basil B]

I do not think If one walks in front of a train they could sue the train company...

 

Therefore Kingsgate should have done a little research before investing in Thailand, everybody knows you get screwed in Thailand ...one way or another.  

[chainarong]

If this case hits the media big time , its Thailand's  reputation such as it is and sovereign risk send all the wrong messages to the rest of the international community, if you can't trust a foreign country to do the right thing , don't deal with it....................................

[Srikcir]

45 minutes ago, Basil B said:

I do not think If one walks in front of a train they could sue the train company...

 

Therefore Kingsgate should have done a little research before investing in Thailand, everybody knows you get screwed in Thailand ...one way or another.  

I disagree. Kingsgate did its research by doing the  mine development under the Free Trade Agreement rather than as a free agent. Smart.

 

The Free Trade Agreement is probably the only thing that attracted Kingsgate investment in the mining project in the first place. Kingsgate need only understand in full the ATFTA to know its investment exposure. Because of the free trade provisions, Kingsgate avoids the complexities and erratic behavior of the Thai military government and judicial system - as you say, "everybody knows you get screwed in Thailand ...one way or another." ATFTA fixes a degree of investment risk.

 

It is Prayut using Article 44 that "walked in front of a train" called ATFTA. He is the one who should have done his research before reacting, illegally I might add according to international law and the World Trade Organization. Article 44 cannot revoke or alter the Free Trade Agreement. Unless Prayut wants to discourage any further foreign investment in developing Thailand's natural resources (for example), he needs to comply with the ATFTA processes.

 

[Srikcir]

1 hour ago, Briggsy said:

This is why it is widely expected Thailand will be ordered to pay compensation by the arbitration tribunal.

If the Thai government refuses to pay the arbitration judgement, Kingsgate will have the right to confiscate any Thai state-owned property. Obviously, that would be difficult for property within Thailand but not outside Thailand.

The 51% of Thai Airways owned by the Thai government comes to mind as a possibility - wherever Thai Airways aircraft lands outside of Thailand might be subjected to legal confiscation.

[MadMuhammad]

I’m gonna ride this puppy for a little longer and see where it tops out at ?? Up 72.3% ?

 

Edited November 4, 2017 by MadMuhammad

[janclaes47]

3 minutes ago, Srikcir said:

If the Thai government refuses to pay the arbitration judgement, Kingsgate will have the right to confiscate any Thai state-owned property. Obviously, that would be difficult for property within Thailand but not outside Thailand.

The 51% of Thai Airways owned by the Thai government comes to mind as a possibility - wherever Thai Airways aircraft lands outside of Thailand might be subjected to legal confiscation.

 

Really? And how would they compensate the 49% of Thai airways owners?

[MadMuhammad]

6 minutes ago, Srikcir said:

If the Thai government refuses to pay the arbitration judgement, Kingsgate will have the right to confiscate any Thai state-owned property. Obviously, that would be difficult for property within Thailand but not outside Thailand.

The 51% of Thai Airways owned by the Thai government comes to mind as a possibility - wherever Thai Airways aircraft lands outside of Thailand might be subjected to legal confiscation.

Thanks for the clarification of the far reaching legal consequences mate. I understood they were in a solid pickle but your comments have cemented my belief I invested at the right time for a solid capital gain. 

[Srikcir]

34 minutes ago, janclaes47 said:

 

Really? And how would they compensate the 49% of Thai airways owners?

That's an issue between the government and the 49% public ownership. Not Kingsgate's concern.

Or maybe just take the wings, engines and landing gear off the aircraft.

[Basil B]

9 minutes ago, Srikcir said:

That's an issue between the government and the 49% public ownership. Not Kingsgate's concern.

Or maybe just take the wings, engines and landing gear off the aircraft.

AFAIK you can not seize assets of a limited or public company for the debts of a share holder...

Also many airlines lease their planes, or the banks already have claims on them...

 

Also mange to get on an airfield and pin you write to the cockpit door, then what? parking charges are eye-wateringly high at most international airports.

[Eric Loh]

This will likely to be a protracted court fight and wouldn’t be small beans for both sides. Kingsgate have already issued warning to their shareholders that very substantial expenditures will be incurred in this legal battle. On Thailand side, expect a large claim for lost earnings and opportunities and also future earnings as Kingsgate has indicate that they will not re-start the mine if the junta government don’t give them an iron clad guarantee for the mine future operation.  Maybe the next government can charge Prayut for malfeasance and seize his assets. Now that will be sweet karma. 

[Basil B]

 

1 hour ago, Srikcir said:

If the Thai government refuses to pay the arbitration judgement, Kingsgate will have the right to confiscate any Thai state-owned property. Obviously, that would be difficult for property within Thailand but not outside Thailand.

The 51% of Thai Airways owned by the Thai government comes to mind as a possibility - wherever Thai Airways aircraft lands outside of Thailand might be subjected to legal confiscation.

Just under the law of which country,  which countries courts will allow one to seize assets not 100% owned by the defendant???

[yellowboat]

On 11/4/2017 at 7:05 AM, rooster59 said:

Though the Thai-Australian free trade agreement empowers the Thai government to suspend a project, the action has to be taken according to legal and other procedures stated in the bilateral agreement that ensure fairness to all the concerned parties.

What legal procedures ?  There are legal procedures in Thailand ?  Short cuts are not legal ?   The bullies running the government are going to get an old fashioned school yard pounding, and they deserve it for forcing martial law on everyone then telling others to follow the law.

[baboon]

13 hours ago, MadMuhammad said:

Thanks for the clarification of the far reaching legal consequences mate. I understood they were in a solid pickle but your comments have cemented my belief I invested at the right time for a solid capital gain. 

Just as an aside, what is it with these 'investors' netting their 'capital gains' and other such fancy euphemisms for 'took a punt and got lucky'? You never hear 'I invested $100 at the blackjack table and accrued a capital gain of...' Isn't it just another form of gambling when all is said and done?

[ExpatOilWorker]

13 hours ago, Srikcir said:

If the Thai government refuses to pay the arbitration judgement, Kingsgate will have the right to confiscate any Thai state-owned property. Obviously, that would be difficult for property within Thailand but not outside Thailand.

The 51% of Thai Airways owned by the Thai government comes to mind as a possibility - wherever Thai Airways aircraft lands outside of Thailand might be subjected to legal confiscation.

PTT also have platforms and oil concessions in Australia. Just get paint Kingsgate's logo on them, problem solved. Shiny gold - black gold, same-same.