Thailand’s environment law amended to fast track big projects

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The National Council for Peace and Order (NCPO) issued an order, which came into effect on 8 March 2016, to amend the Enhancement and Conservation of National Environmental Quality Act (1992), allowing state agencies overseeing certain state-owned projects to request cabinet approval to seek private contractors, while environmental impact assessment (EIA) results are being finalized.

BLD_THAIUnder the law, an EIA is required for state-owned projects that may impact the quality of the environment, natural resources, and the heath of an affected community. For those that may have a serious impact, an environmental and health impact assessment (EHIA) is required. Through the EIAs/EHIAs, preventive and mitigating measures of environmental impacts must be identified and incorporated into the planning of projects. An EIA/EHIA report must also be submitted to, and approved by, expert committees under the Office of Natural Resources and Environmental Policy and Planning. Certain types of major projects must also be further submitted for cabinet approval. Given the numerous steps and procedures involved, it can take as long as eight years before the EIA/EHIA report is approved by cabinet – and only then will the project be allowed to start.

The NCPO’s order amending the act refers to state agencies overseeing projects involving transport, irrigation, disaster prevention, hospitals and housing, which are awaiting the EIA/EHIA. If these agencies urgently need to implement such projects, they are allowed to seek cabinet approval to proceed with the process of finding private contractors to undertake the projects in tandem with the EIA/EHIA approval process. However, they are not authorized to sign any binding agreements with contractors, or give them any rights while the EIA/EHIA results are pending. This aims to reduce delays in any EIA/EHIA approval process and facilitate important state projects such as double-track rail and the electric train extension.

However, the development has also raised concerns, especially among environmental groups, about whether such a measure would, in effect, undermine the overall EIA/EHIA objective by potentially allowing investors to proceed with the project without having to wait for EIA/EHIA approval. It also remains to be seen whether this measure will help encourage investment, especially whether private investors will be willing to participate in the bidding process without knowing for certain whether the EIA/EHIA will eventually be approved or not and, if so, when.

Business Law Digest is compiled with the assistance of BAKER & MCKENZIE. Readers should not act on this information without seeking professional legal advice. You can contact Baker & McKenzie by e-mailing Danian Zhang at danian.zhang@bakermckenzie.com, or for general enquiries contact Anand Ramaswamy at anand.ramaswamy@bakermckenzie.com