Cablegate: Environmentalists Versus Industrialists: The Map Ta Phut

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E.O. 12958:N/A
TAGS: ECON EINV ELAB ETRD SENV PREL TH
SUBJECT: ENVIRONMENTALISTS VERSUS INDUSTRIALISTS: THE MAP TA PHUT
DISPUTE WORSENS

REF: A. BANGKOK 2555 (AMBASSADOR ENGAGES WITH DEPUTY PM)
B. BANGKOK 1909 (AMBASSADOR MEETS WITH TRANSPORT MINISTER)
C. BANGKOK 701 (ENVIRONMENTAL ACTIVISTS AND BUSINESSES CONCERNED)

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1. (SBU) Summary: On September 29, a Thai administrative court
issued an injunction to halt 76 new industrial projects -- valued at
$10 billion -- at the Map Ta Phut Industrial Estate in Thailand's
much vaunted Eastern Seaboard Industrial Development Zone over
allegations that the government failed to follow the environmental
provisions of the Thai Constitution when approving the projects.
However, implementing legislation for these constitutional
provisions has never been finalized -- a significant legal quandary
that the courts (and parliament) must now resolve. The 76 Map Ta
Phut projects, including a $1.5 billion investment project of Dow
Chemical, are now frozen in legal and bureaucratic limbo. End
Summary.

2. (SBU) Comment: Thailand is experiencing the growing pains of
modern economic development. Whereas industrial growth in the past
could proceed almost unfettered for anyone willing to put in the
money, Thai civil society has now matured to where labor,
environmental and local community organizations have found a voice
and the political clout to force consideration of their interests.
Abhisit's government has a tough nut to crack -- how to balance its
support for environmental and other activist groups with existing
commitments made to businesses and investors. As reported in
reftels, several U.S. businesses, including Dow and Chevron, are
worried about previously-approved multi-billion dollar investments
that now may be halted. The Ambassador recently raised their
concerns directly with the Deputy Prime Minister (ref A) and the
Transport Minister (ref B), but our advocacy efforts are more
complicated now that the case has moved into the courts. Abhisit is
personally leading the government's efforts to find the
least-damaging resolution to the problem, but most analysts believe
the longer the case drags on, the greater the damage will be -- both
to Abhisit's government and Thailand's investment and business
climate. End Comment.

Industrial Projects Grind to a Halt
-----------------------------------

3. (SBU) On September 29, the Central Administrative Court of
Thailand issued an injunction suspending the development of 76 new
industrial projects -- valued at more than $10 billion -- at the Map
Ta Phut Industrial Estate in Rayong Province, less than 150 miles
from Bangkok. The injunction will remain in place until the Court
has ruled on a larger suit filed by environmental activists against
the government, accusing eight agencies of failure to comply with
environmental provisions in the 2007 Constitution when approving the
Map Ta Phut projects. While the government appealed the injunction
to the Supreme Administrative Court on October 2, environmental and
citizen groups continue to push for the revocation of all industrial
project approvals since August 2007 when the Constitution went into
effect.

4. (U) Article 67 of the 2007 Constitution requires that prior to
the operation of any project or activity that "may seriously affect
the community with respect to the quality of the environment,
natural resources and health," the following must be completed: an
environmental impact assessment (EIA); a health impact assessment
(HIA); a public hearing for affected citizens; and an assessment
from an independent environmental body consisting of private
environmental organizations and educational institutions.

5. (SBU) The implementing regulations required under Article 67 of
the Constitution have never been finalized. While existing laws
contain guidelines for environmental impact assessments, no such
guidance exists for the health impact assessments, public hearings,
or the required assessments from the yet-to-be established
independent environmental body. A working committee had been set up
to draft these, but without any laws or regulations (other than the
verbiage in the Constitution itself), questions have arisen from
businesses over how Article 67 would affect the issuance of
government licenses for industrial projects, such as those at Map Ta
Phut. In short, why should their projects be halted when they have
done all that they can to comply with existing regulations?

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Environmental groups, on the other hand, believe the projects should
never have been given even preliminary approval.

A Complicated Case Gets More Complicated
----------------------------------------

6. (U) The September 29 ruling follows a March 2009 decision from
the Rayong Administrative Court that declared the Map Ta Phut
Industrial Estate and the surrounding area a "pollution control
area" per the 1992 National Environmental Quality Act (ref C). As a
pollution control area, more stringent environmental standards
should be applied by the National Environment Board. The government
chose not to appeal this decision and instead required that the
companies submit pollution-control action plans to the National
Environment Board within 120 days. The affected companies completed
these plans in order to comply with the ruling and hoped that the
proposed plans would satisfy the government's requirements and
enable them to move forward with their new projects and expansions.

7. (U) However, environmental and citizen groups in Map Ta Phut
filed additional lawsuits in June, accusing eight government
agencies of violating the Article 67 provisions of the 2007
Constitution and calling for an injunction order to halt the
continuation of the new Map Ta Phut projects, many of which are now
underway. Since the National Environment Board designated Map Ta
Phut as a pollution control area, the lawyers argued that Article 67
of the Constitution must apply, as these projects "may seriously
affect the community with respect to the quality of the environment,
natural resources and health."

8. (SBU) In an attempt to resolve the government's predicament and
address mounting investor concerns, the Council of State decreed in
August that that government could approve industrial projects that
had existing environmental impact assessments -- even though these
assessments were completed pursuant to laws and regulations
predating the 2007 Constitution. For projects with pending
assessments, the government would need to abide by the 2007
constitutional requirements and follow the (yet-to-be-drafted)
regulations regarding health impacts before issuing an operation or
construction permit.

9. (SBU) The September 29 court injunction was an unexpected
development, however, that suspended the activities at the 76
projects, even if the government had already approved the
environmental impact assessments. While the government awaits a
decision on its appeal of the injuction, Prime Minister Abhisit
hopes to push through the necessary legislation required to
implement the Article 67 provisions -- something that could take
many months.

ENTWISTLE

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