Court Verdict On Map Ta Phut Will Make Investment Climate Better

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WATCHDOG

Court verdict on Map Ta Phut will make investment climate better

By Nophakhun Limsamarnphun

Last Thursday's verdict by the Administrative Court, which allowed most of the 76 suspended industrial projects in Rayong province to go ahead, will provide a boost to the country's investment atmosphere. The ruling comes at a time when the export sector, the Thai economy's main engine of growth, accounts for more than 60 per cent of GDP, but is about to slow down.

After strong growth in the first half of 2010, Thai export figures will likely level off in the second half of this year because of the weak US economic recovery. This factor is having negative effects on the rest of the world, too.

In the first and second quarters of this year, Thailand's GDP grew by 12 per cent and 9.1 per cent, respectively, marked by a double-digit increase in export shipments.

According to a regional bank's research, overall Asian GDP growth, excluding Japan, is forecast to fall by nearly half in the second half of this year from the 10 per cent expansion in the first half.

The current strong inventory cycle in major export markets is also unlikely to be sustainable into 2011 unless there is greater demand recovery in the US, Europe and Japan.

Besides private consumption, Asian economies - especially Thailand, Malaysia and Hong Kong - gained from post-recession inventory build-up in large economies. This factor accounted for one-third of the growth in Asia in the first half of this year.

The strong growth in production has also boosted the investment sector, as capacity utilisation is rising to pre-crisis levels, especially in Taiwan and the Philippines.

As for Thailand, the investment atmosphere was hit hard by last year's court injunction on the 76 industrial projects at the Map Ta Phut industrial zone and other areas in Rayong.

Non-government organisations and villagers took a case to court, accusing the government of failing to comply with Article 67 (2) of the Constitution, as licenses were issued to these industrial projects without public hearings on environmental and health assessments. Many of these projects, with a combined investment of Bt400 billion, were already in the advanced stages of development, leading investors - especially those from the US, Japan, and Europe - to lose confidence in Thailand.

In response to the crisis, the government set up a four-party committee to resolve the conflict between the communities and the large-scale industrial schemes.

On August 31, 2010, the Natural Resources and Environment Ministry issued a list of 11 "harmful" industries that would be subject to stringent requirements in accordance with Article 67 (2) of the Constitution. Based on this list, most of the suspended projects in Rayong were let off the hook. Only two petrochemical schemes from PTT and the Siam Cement Group will see their licenses revoked, according to a state attorney.

In general, the country will now be more selective about large-scale industrial projects, with highly-polluting schemes such as coal-fired power plants or certain upstream petrochemical projects subjected to the stringent requirements on public participation as well as environmental and public health protection. On the other hand, more environmentally-friendly projects, such as renewable energy schemes or downstream petrochemical schemes, will still be welcome.

Overall, the September 2 verdict and the ministry's list of "harmful" industrial schemes have set a new benchmark for Thailand's industrial policy and public welfare. This will bode well for foreign investors still interested in putting their funds into Thailand's industrial sector.

-- The Nation 2010-09-04

[thaimelody]

I admire your humour of using "climate better" in the title:lol: But it really sucks that people will die because of this

[pookiki]

I really don't understand why the Constitutional requirement for the preparation of an environmental impact statement was circumvented. The establishment of a committee to determine what may or may not be 'harmful' industries give certain industries 'carte blanche' to develop without providing the public with specific information regarding how they will operate or the impact on the environment.

In addition, the government has said that the decision of the committee was based on 'international' standards. It would be interesting to see exactly what 'international' standard was relied upon in determining whether such industries are harmful or not. Many countries in SE Asia allow companies to pollute the environment with substances that are known carcinogens in the US and EU.

I feel sorry for the residents near Map Ta Phut who will pay the ultimate price for corporate profits.