Got a constitution but
need some enabling laws
Thai government negligence
and the Map Ta Phut shutdown
By Jon Fernquest 
Today's
article was written by a lawyer specializing in the finance of large
projectsThe message is clear.
The Thai government has been negligent in carrying out its law-making duties.
The article is jam-packed with useful business law vocabulary.
Map Ta Phut Industrial Estate - one
of Thailand's largest industrial estates located in Rayong
(See interactive
map)
industrial estate, industrial park - a special area especially for factories with special facilities (roads, transportation, water, electricity, waste disposal) (See Wikipedia)
negligence (noun) - failing to do something you should have done
negligent (adjective)
carrying out - doing
jam-packed - has very many, crowded with
industrial estate, industrial park - a special area especially for factories with special facilities (roads, transportation, water, electricity, waste disposal) (See Wikipedia)
negligence (noun) - failing to do something you should have done
negligent (adjective)
carrying out - doing
jam-packed - has very many, crowded with
Economics
THE FINANCE LAWYER
Map ta phut solutions have to start with government
8/12/2009Wirot Poonsuwan
Perceived as very advanced even by European standards, the 2007 Thai Constitution incorporates environmental protection and elevates it to the rights of man and of the citizen to live in a healthy surrounding by reconciling economic and industrial development and forcing it into sustainable development.
perceived as - felt to be,
believed to be
2007 Thai Constitution - the constitution that replaced Thailand's 1997 People's Constitution after the 2006 coup (See Wikipedia)
1997 People's Constitution (or charter) -Thailand's innovative constitution written during a long process of public consultation during the 1990s, guarantees the Thai people many rights (See Wikipedia)
incorporates environmental protection - includes protecting the enviroment too
rights - things that people must or should have as a matter of law or morals, things they are entitled to (See Wikipedia)
the rights of man - rights that every person has, universal rights
elevates it to the rights of man - turns it into right that every person has
citizen - a person who is legally accepted as belonging to a country, and therefore has legal rights and responsibilities (See Wikipedia)
live in a healthy surrounding - live in a healthy place (with no pollution or heath risks)
reconciling X and Y - solving problems so that X and Y can co-exist together (exist at the same time even though they cause each other problems)
sustainable development - the economy developing in a way that can last and continue for a long time
2007 Thai Constitution - the constitution that replaced Thailand's 1997 People's Constitution after the 2006 coup (See Wikipedia)
1997 People's Constitution (or charter) -Thailand's innovative constitution written during a long process of public consultation during the 1990s, guarantees the Thai people many rights (See Wikipedia)
incorporates environmental protection - includes protecting the enviroment too
rights - things that people must or should have as a matter of law or morals, things they are entitled to (See Wikipedia)
the rights of man - rights that every person has, universal rights
elevates it to the rights of man - turns it into right that every person has
citizen - a person who is legally accepted as belonging to a country, and therefore has legal rights and responsibilities (See Wikipedia)
live in a healthy surrounding - live in a healthy place (with no pollution or heath risks)
reconciling X and Y - solving problems so that X and Y can co-exist together (exist at the same time even though they cause each other problems)
sustainable development - the economy developing in a way that can last and continue for a long time
The second paragraph of Section 67 of the charter bans industrial projects considered "severely harmful" until four activities have been undertaken: environmental impact assessment (EIA), health impact assessment (HIA), public hearings within the community and an opinion by an independent agency.
Section 67 of the
charter
environmental impact assessment (EIA) - a report that details the likely positive and negative effects a project may have on the environment (See Wikipedia)
Health Impact Assessment (HIA) - procedures to judge the potential effects of a construction or industrial project on the health of a population (See Wikipedia)
a hearing - an official meeting which presents the facts of some issue before a decision is made
a public hearing - a hearing that is open to the public, the public can listen and respond
independent agency. - a government agency that is not part of any ministry (with people appointed to committee from outside government)
environmental impact assessment (EIA) - a report that details the likely positive and negative effects a project may have on the environment (See Wikipedia)
Health Impact Assessment (HIA) - procedures to judge the potential effects of a construction or industrial project on the health of a population (See Wikipedia)
a hearing - an official meeting which presents the facts of some issue before a decision is made
a public hearing - a hearing that is open to the public, the public can listen and respond
independent agency. - a government agency that is not part of any ministry (with people appointed to committee from outside government)
No legislation implementing the constitution: The EIA has not been much of a problem as the majority of projects in the Map Ta Phut area have undertaken this step. The HIA, public hearings and an independent agency are within the realm of the public sector and remain undone.
There are no implementation laws outlining the legal framework of the HIA, nor setting up the independent agency. By and large, the constitution leaves several unfinished businesses to be implemented in the form of new legislation to be carried out by the cabinet, the lead agency that starts a law enactment process.
the public sector - the government
within the realm of the public sector - under the power and control of the government
implementation laws outlining the legal framework of the HIA -
unfinished business - things that must be done but have not been done yet
take the lead in project - take responsibility to complete project (be leader)
lead agency - be the agency in charge of the project (with reponsibility for completion)
enact a law - make a law
law enactment process - the series of steps in making a law
within the realm of the public sector - under the power and control of the government
implementation laws outlining the legal framework of the HIA -
unfinished business - things that must be done but have not been done yet
take the lead in project - take responsibility to complete project (be leader)
lead agency - be the agency in charge of the project (with reponsibility for completion)
enact a law - make a law
law enactment process - the series of steps in making a law
Without the implementation legislation, the functioning of good governance envisaged by the charter just stops, throwing everything into chaos.
Map Ta Phut is one example and the dramatic fiasco on the third generation of mobile phone services is another. Other problems will ensue as long as the public sector continues to give low priority on its legislation front. Economic efforts always have to be matched by a law reform endeavor for the recovery to be sustained.
governance -
X envisages Y - X believes that Y will be the situation in the future
a charter - a constitution, a set of rules for a government, usually in written document (SeeWikipedia)
good governance envisaged by the charter - constitution written to promote good governance
throwing everything into chaos - making everything disorganized
dramatic - exciting and impressive
a fiasco - a confusing situation (everything mixed up, failure)
public sector - the government
the front of a war - the place where two sides in a war are facing each other, where battles take place
government's legislation front - the place where new laws are happening
give low priority on its legislation front - the government did not treat it as important (therefore it never happened)
reform - improving
endeavor - something that you do
law reform endeavor - a project of improving the laws of a country
recovery, economic recovery - when the economy gets better after a slow period of reduced incomes and jobs
recovery to be sustained - the economy to get better and stay better
X envisages Y - X believes that Y will be the situation in the future
a charter - a constitution, a set of rules for a government, usually in written document (SeeWikipedia)
good governance envisaged by the charter - constitution written to promote good governance
throwing everything into chaos - making everything disorganized
dramatic - exciting and impressive
a fiasco - a confusing situation (everything mixed up, failure)
public sector - the government
the front of a war - the place where two sides in a war are facing each other, where battles take place
government's legislation front - the place where new laws are happening
give low priority on its legislation front - the government did not treat it as important (therefore it never happened)
reform - improving
endeavor - something that you do
law reform endeavor - a project of improving the laws of a country
recovery, economic recovery - when the economy gets better after a slow period of reduced incomes and jobs
recovery to be sustained - the economy to get better and stay better
Urgent solution: The most realistic solution to the dead-end is for the cabinet to rush out the HIA legislation for the private sector to fall in line with and the independent agency legislation for a balanced opinion. The one-month-and-a-half current recess of parliament is a reasonable timeframe for government lawyers and scientists, with a sense of emergency, to produce draft legislation for cabinet approval.
When parliament convenes in late January, the government, with all its might, can push the legislation through the three readings in the lower house and another three readings in the Senate.
The 18-member ad-hoc committee chaired by a former prime minister is a good step in the right direction and should proceed in parallel with the government's plan to enact the two laws. The concern is the government might sit and wait for the outcome of the committee's findings while the paperwork suspends.
State agencies fear and try to avoid public hearings. This is understandable, imagining a protest-like atmosphere involving thousands of angry people. But this is the fact of life in modern society guaranteed by the constitution.
Public hearings are governed by the 2005 Prime Minister's Office Regulation regarding Public Hearings which requires the public agency issuing the project licence to conduct the hearing. This step can immediately move ahead without a need for new laws.
urgent - must
happen quickly
urgent solution - a solution to a problem that must be found quickly
recess of parliament - when parliament takes a break
timeframe - the length of time during which an event or a poject happens
a reasonable timeframe - in a reasonable period of time
legislation readings - a proposed law is read several times alowing MPs to change it, before it becomes a law
* push the legislation through the three readings in the lower house and another three readings in the Senate
ad-hoc committee - not planned in advance, put together to deal with a problem that arose
chaired by Y - meeting led by Y
outcome - the situation that exists at the end of an activity or event
findings - what the committee decided was true, after looking at all the evidence
fact of life - unpleasant things we just have to accept
guaranteed by the constitution - the constitution says it should be law
2005 Prime Minister's Office Regulation regarding Public Hearings -
Health Impact Assessment (HIA) - procedures to judge the potential effects of a construction or industrial project on the health of a population (See Wikipedia)
urgent solution - a solution to a problem that must be found quickly
recess of parliament - when parliament takes a break
timeframe - the length of time during which an event or a poject happens
a reasonable timeframe - in a reasonable period of time
legislation readings - a proposed law is read several times alowing MPs to change it, before it becomes a law
* push the legislation through the three readings in the lower house and another three readings in the Senate
ad-hoc committee - not planned in advance, put together to deal with a problem that arose
chaired by Y - meeting led by Y
outcome - the situation that exists at the end of an activity or event
findings - what the committee decided was true, after looking at all the evidence
fact of life - unpleasant things we just have to accept
guaranteed by the constitution - the constitution says it should be law
2005 Prime Minister's Office Regulation regarding Public Hearings -
Health Impact Assessment (HIA) - procedures to judge the potential effects of a construction or industrial project on the health of a population (See Wikipedia)
Impact on banks: As long as the project owner pays interest and principal on time, there will not be a problem with banks despite project delays. Unless the cabinet shifts to a high gear, the new legislation process to move the project forward can take as long as a year.
Commercially, banks are in the tradition of helping clients and can spend a few months on hold. But a year is a bit extraordinary. Some banks might want to opt out, which they can, through a voluntary arrangement with the owner.
An involuntary exit, while the payment is current, is not common in this part of the world, though the bank has every right to do so through a representation provision.
All project credit agreements contain the borrower's representation that all authorisations and government approvals have been received and valid and the project is in compliance with all laws, a technically and constitutionally untrue representation for Map Ta Phut, although the non-compliance is due to the fault of others beyond the borrower's control.
Force majeure cannot exist in a credit agreement to aid the borrower when a mishap is caused by a third party due to no fault of its own.
The well-being of the borrower depends on how quickly the government can change the status quo and how far the borrower is willing to go in meeting its loan obligations with no generation of revenue.
principal - the
mount of a loan
interest - payments made for the use of another's money for a period of time
pays interest and principal - paying back a loan to a lender means paying back two things: principal and interest
pays interest and principal on time - makes the loan payments before the due date
shifts to a high gear - go faster
clients - customers
on hold - stopped, waiting (not moving forwards or operating for a period of time)
a bit extraordinary.
opt out - choose not to be part of or included in something
voluntary - choosing to do it, doing it because you want to
involuntary - being forced or made to do it (not choosing and maybe not wanting to do it)
voluntary arrangement - an arrangement that people choose and want (not forced on them)
involuntary exit - forced to leave
a provision - one the items or details in a law or agreement
credit agreements - loan agreements (between borrower and lender)
borrower's representation - something that the borrower says is true (for legal purposes)
authorisations - people with authority and power choose to do
valid -
in compliance with all laws - follows all the laws, breaks no laws
compliance - following a rule or law
non-compliance - not following a rule or law
beyond the borrower's control.
force majeure -
mishap is caused by a third party due to no fault of its own.
status quo
interest - payments made for the use of another's money for a period of time
pays interest and principal - paying back a loan to a lender means paying back two things: principal and interest
pays interest and principal on time - makes the loan payments before the due date
shifts to a high gear - go faster
clients - customers
on hold - stopped, waiting (not moving forwards or operating for a period of time)
a bit extraordinary.
opt out - choose not to be part of or included in something
voluntary - choosing to do it, doing it because you want to
involuntary - being forced or made to do it (not choosing and maybe not wanting to do it)
voluntary arrangement - an arrangement that people choose and want (not forced on them)
involuntary exit - forced to leave
a provision - one the items or details in a law or agreement
credit agreements - loan agreements (between borrower and lender)
borrower's representation - something that the borrower says is true (for legal purposes)
authorisations - people with authority and power choose to do
valid -
in compliance with all laws - follows all the laws, breaks no laws
compliance - following a rule or law
non-compliance - not following a rule or law
beyond the borrower's control.
force majeure -
mishap is caused by a third party due to no fault of its own.
status quo
How contractors cope: Unlike banks, the EPC contractors providing engineering, procurement and construction services can suffer only so much when work is suspended and no stream of income is received.
Force majeure is likely to be relevant as the work suspension was ordered by a court due to no fault of either the owner or the contractor but resulting from an omission by the public sector of its acts to issue the implementation laws under the constitution and conduct public hearings.
At the maximum, the contractor can wait no longer than 4-6 months before being forced to invoke the force majeure clause and consider an exit strategy to escape an accumulating loss they can't claim from the owner.
meeting its loan
obligations with no generation of revenue.
cope - deal with a problem (make it manageable, not always solve problem)
how contractors cope - how companies that have been hired to do work deal with problems that arise
EPC contractors - companies hired to do Engineering, Procurement & Construction work
procurement - the official buying of goods and services by an organization
work is suspended - work is stopped temporarily (for a period of time)
stream of income - money that you receive over time
work suspension - stopping work for a period of time
omission - something left out, something that someone forgot to do
implementation laws under the constitution - the laws that must passed before the details of the constitution can become active as law
cope - deal with a problem (make it manageable, not always solve problem)
how contractors cope - how companies that have been hired to do work deal with problems that arise
EPC contractors - companies hired to do Engineering, Procurement & Construction work
procurement - the official buying of goods and services by an organization
work is suspended - work is stopped temporarily (for a period of time)
stream of income - money that you receive over time
work suspension - stopping work for a period of time
omission - something left out, something that someone forgot to do
implementation laws under the constitution - the laws that must passed before the details of the constitution can become active as law
Wirot Poonsuwan is a lawyer with his own firm, Poon & Poon, Attorneys-at-Law and can be reached at 02-633-8867 or wirotp@poonandpoon.com.
(Source: THE FINANCE LAWYER, Map ta phut solutions have to start with government, 8/12/2009, Wirot Poonsuwan, link)
