Laying down the ‘dictator law’ for money
The government is using Section 44 to drive investment in power plants and other mega projects, but not everyone is buying its arguments
Gen Prayut Chan-o-cha has an ambitious goal.
The prime minister, who seized power in May 2014, wants all Thais to have a better life and increased income, despite looming economic problems.
But to achieve his goal, there’s one condition. Gen Prayut has to use Section 44 of the interim charter, the so-called dictator law, which allows him to bypass checks and balances to fast-track development projects.
Since the beginning of this year, Gen Prayut, as chief of the National Council for Peace and Order, has issued a series of controversial diktats under Section 44.
Orders 3/2559 and 4/2559 were announced on Jan 20 to bypass land-use planning laws for industries located within Special Economic Zones and energy projects respectively.
Order 9/2559 was issued on March 7, with the intention of speeding up construction of the government’s public utility projects.
The hope is that as a result of the orders, 12 new SEZs and dozens of mega projects will pump trillions of baht into the economy by the end of the year.
Samit Yensa-bai, a resident of eastern Sa Kaeo province bordering Cambodia, isn’t confident about the government’s rush to wealth, despite his home being expected to attract new investment from its SEZ status.
Sa Kaeo is among 10 border provinces — along with Chiang Rai, Kanchanaburi, Mukdahan, Nakhon Phanom, Narathiwat, Nong Khai, Songkhla, Tak and Trat — chosen as locations for the 12 new SEZs.
Border trade flowing through these provinces earned the country more than 1.1 trillion baht in 2014, according to a National Economic and Social Development Board (NESDB) analysis on the potential benefits of SEZs.
But few industrial investments have so far been made in the areas.
Mr Samit said the latest version of Sa Kaeo’s land-use plan was released last year. A large slice of the map was coloured dark green to indicate an agriculture zone. But things have changed since the NCPO orders were issued in January to bypass zoning laws.
The Interior Ministry soon introduced a new draft of temporary land-use planning for Sa Kaeo. Parts of the dark green were turned purple — the colour code for an industrial zone.
Sa Kaeo suddenly became the SEZ with the greatest potential. News circulated that the government was taking dozens of Thai and Cambodian investors on a road trip to survey the potential of the area.
Petrochemical companies and transport operators have shown interest in investing. Infrastructure and land rental deals for private companies are being prepared and should be ready within a few years.
About 2,000 to 4,000 affordable flats are being proposed for the expected influx of workers. Plans for a private biomass power plant have also emerged out of nowhere.
Despite all the positive economic news, Mr Samit, who has protested against the new zoning, is concerned.
Sa Kaeo has traditionally depended on farming, processing agricultural products and trade with Cambodia for its economic lifeblood. Border trade alone generates more than 60 billion baht a year.
He also worries about seasonal drought, and fears the arrival of new factories may suck up local water resources.
“If the SEZ fits local potential, no one will go against it,” Mr Samit told Spectrum. “But look at the whole situation now, locals don’t have capacity to reap the benefit of competition with big business people.”
Land-use planning laws were introduced 40 years ago as a tool to protect the environment from development and ward off potential disputes over zoning.
But under Gen Prayut’s edict, land-use planning is described as an “obstruction” to promoting economic projects.
In Chiang Rai and Tak, opposition to the SEZs has already started, with protesters and activists claiming existing planning stipulated that land there was for non-industrial activities.
The usual procedure to amend land-use planning takes 18 months because of the time required for submitting the plans and holding public hearings.
The NESDB is operating on a strategy that identifies private investment and mega projects as the best ways to drive the Thai economy in 2016. Its officials argue there are too many delays caused by land-use issues, environmental impact assessments (EIA) and protests.
The NESDB estimates the successful establishment of the 12 SEZs will result in a 20% increase in investment when they are fully established in two years’ time. Border trade will also increase as a result. But it declined to reveal to Spectrum actual numbers on the financial benefits, saying they are still being studied.
Pojanee Artarotpinyo, the NESDB’s deputy secretary-general, said the best way for the government to urgently attract investors is to use Section 44.
“Existing land-use planning can’t serve the purposes of present development,” she said.
“[Using Section 44] will build confidence for investors. They can clearly see where they can invest. Locals can also trust that environmental measures will still be implemented seriously.”
Renewed focus: Eppo’s Thwarat Sutabutr.
The investment atmosphere for energy projects seems brighter too, since the NCPO issued order 4/2559 which claims Thailand faces energy shortages and waste disposal problems.
To fix that, land-use planning laws can now be bypassed for energy projects including power plants, fuel depots, power lines and oil and gas pipes which usually can only be developed in industrial zones.
The order is seen as opening the way for the government to launch several controversial projects, among them a 2,200-megawatt coal-fired power plant in Songkhla’s Thepha district and an 800-megawatt coal-fired plant in Krabi.
The projects require 70 billion baht in investment and are currently undergoing studies on their environmental and health impacts.
Activists are afraid the new order will exempt the projects from this scrutiny, despite the government remaining adamant that environmental regulations will be enforced.
Twarath Sutabutr, head of the Energy Ministry’s Energy Policy and Planning Office (Eppo), said plants using renewable energy sources will be the main beneficiaries of the new order.
He acknowledged the order could be used to push through all types of power plants, but said the NCPO order won’t cover the Songkhla and Krabi plants because the scrutiny process for both projects has already started.
Eppo plans to use the order to develop new solar, biomass and biogas projects, which were previously considered factories and restricted by zoning laws to industrial areas. The new NCPO order will allow these projects to be located in agricultural zones.
Mr Twarath said the potential to develop green energy had been stifled by outdated zoning laws.
“Some provincial land-use planning was designed seven or eight years ago. It can’t catch up with renewable energy policy,” Mr Twarath said.
As examples of projects that can proceed under the order, Mr Twarath cited a 600-megawatt solar power plant project for government offices, and biomass and biogas power plants in the southern provinces.
Waste-to-energy power plants have also emerged as popular investment options, as they do not require an EIA study. Order 4/2559 has made it even easier for the projects to go ahead because of the land zoning changes.
Gen Prayut’s government wants to fast-track the introduction of waste-to-energy plants to help solve rubbish disposal problems. A total of 53 waste-to-energy plants are in the government’s pipeline, raising concerns of loose oversight of the environmental impacts. But public companies are eager to invest.
“[The order] will drive the Thai renewable energy sector in line with global trends,” said Chanin Chaonirattisai, president of the Electricity Generating Public Company Limited, or Egco. “If government policy is opened up, Egco will jump in.”
Egco, a major Thai energy company focusing on fossil fuels, has been eyeing renewable energy investments including biomass power plants in border provinces, including the SEZs.
The Renewable Energy Industry Club, an informal group of investors, estimates 40 billion baht will be generated from investment in biomass projects in 10 SEZ zones.
While the government has tried to assure the public that environmental scrutiny of new energy projects will remain despite the zoning changes, it faces a harder sell on public utility projects.
Order 9/2559, issued this month, adds a paragraph to Section 47 of the 1992 Enhancement and Conservation of the National Environmental Quality Act, known as the EIA law. It says if state projects involving transport, irrigation, disaster prevention, hospitals and housing are awaiting the results of an EIA but need urgent implementation, state agencies and enterprises overseeing them can seek cabinet approval to open the tender process for contractors.
The order is intended to fast-track construction of new public utilities projects, but activists note contractors will face difficulty presenting an accurate quote when the full technical details of a project remain unclear.
Community protests against major infrastructure projects can often delay their construction by decades. Suvarnabhumi airport, for example, was approved by the government in 1977, but the EIA process and community protests meant it was more than two decades before construction began.
Kasemsun Chinnavaso, permanent secretary of the Ministry of Natural Resources and Environment, said the new order would not weaken environmental scrutiny.
“There’s no EIA bypass,” he told Spectrum. “The NCPO order just helps EIA scrutiny while the tender process continues in parallel. It removes previous limitations.”
According to the ministry, 62 projects which would be covered by order 9/2559 are having EIAs conducted at the moment: 20 public railroads, 17 highways, eight expressways, eight dams and reservoirs, five state hospitals, two ports and two airports.
Most state agencies have listed planned development projects which will be affected by the NCPO order.
Only the Transport Ministry has come forward with 20 “urgent” transport projects needing private contractors before the end of the year. Worth 1.79 trillion baht, they include four high-speed double railways, five BTS lines, five regular railways, three motorways, two sea ports and the Suvarnabhumi expansion.
Chinese and Japanese investors appeared to be the top candidates for the high-speed double railways.
PRIVATE VS PUBLIC
The NCPO orders have been met with distrust and frustration by environmental activists and local communities.
A major concern is that controversial projects such as the Mae Wong dam in Nakhon Sawan and Pak Bara deep-sea port in Satun will be rushed through.
More than 60 civil society organisations have demanded that the orders be rescinded.
“The government is focusing on economic value made by capitalists. But it has no regard for the local economic value that comes from having a good environment,” said Somboon Khamhang, a secretary-general of the Non-Government Organisation Committee on Rural Development in Southern Thailand.
“If a project contractor is selected while the EIA scrutiny process is still ongoing, it’s like putting up a sign that the EIA will pass because someone is already waiting to build it.”
Mr Somboon, a Satun native, has protested against the Pak Bara port since 2009. Community protests led to the suspension of the project, which had already passed its EIA.
Mr Somboon and local residents attacked the EIA process for providing false information and ignoring what he says would be severe environmental impacts on marine life and local livelihoods.
Last year, he raised concerns that Section 44 would be used to fast-track the Pak Bara port after the military government revived the project. A year-long Environmental and Health Impact Assessment, due to be completed next month, was launched to review and replace the old EIA.
“I think Section 44 is being implemented because the EIA regulations are considered a barrier for investors,” Mr Somboon said. “It is clear that the government has sided with the private sector.”
Some lawyers believe the NCPO’s orders will prompt more lawsuits from private companies against state agencies.
Even though order 9/2559 prohibits any contract being signed with private contractors until an EIA has been approved, it could be argued that a successful tender could signify a legal deal, said Surachai Trong-ngam, secretary-general of the EnLaw Foundation, which deals with environmental cases.
A contractor would incur some costs during the tender process, including developing project details and cost estimates, and so could be entitled to seek restitution from the state in the event that the project was terminated on environmental grounds.
“I’m not sure if the government is prepared for that,” said Mr Surachai.
“The order certainly distorts the concept of EIA law.”
LAST WEAPONS LOST
Pictures of people with their wrists tied together have been spread on social media as part of a campaign to protest against the NCPO’s orders, signifying what activists say is a case of the government “forcing people to surrender”.
The protest campaign follows a gathering of a group calling themselves the People’s Network for Sustainable Development in front of Government House in late February, calling on the NCPO to revoke orders 3/2559 and 4/2559.
The week-long sit-in ended with police invoking the Public Gathering Act, saying their protest could not be approved because it was political in nature.
The law was introduced under Gen Prayut’s rule, with the prime minister arguing it was necessary to ensure protests remained peaceful.
Any public gathering whose purpose is to protest or support a certain issue must first seek permission from local police.
Penalties for breaking the law include up to three years in prison.
Local gatherings and sit-ins have played a major part in efforts to drive the private sector away from certain investments. But since public protest is now subject to state approval, activists fear community rights are under threat.
Community rights, which were guaranteed under Section 67 of the rescinded 2007 constitution, have been claimed by local communities across the country to fight against state development projects they believed would violate human rights or cause social and environmental damage.
Section 67 guaranteed the rights of individuals and communities to participate with the state to conserve, maintain and protect natural resources.
Using this section, some local communities have been able to file administrative lawsuits against state agencies responsible for certain projects, and ask the court for that project to be suspended.
But in a draft of the new constitution, released last month, the community rights guarantee was absent.
The draft says the state is duty-bound to provide rights and freedom to all Thais and to protect community rights, but critics say community rights should be the responsibility of the people to protect and not the duty of the state.
Activists say one interpretation of this would be that communities would lose the power to fight on their own behalf. If they want to file a lawsuit to halt a major development, for instance, they might need to lobby the government to do it on their behalf.
By giving this power to the state, some activists believe that community rights could easily be trampled on in the name of issues like national security.
Confronted by public protest, the Constitution Drafting Committee said it might return part or all of Section 67 in an updated draft, to be released on March 29.
The situation has disappointed Direk Hemnakhon, a local of Thepha district which could soon be home to a large coal-fired power plant.
“Land-use planning, EIA fast-tracking, then [the loss of] community rights. We have lost our last weapons,” he said.
“What will I use to fight for my community? Is this for the sake of the national economy? It’s just too easy with Section 44.”
ROAD TO RUIN
Economists agree that promoting investment in government-backed development projects is needed. But it won’t return quick results.
“It will just make the situation not look so bad,” said Somchai Jitsuchon, research director of inclusive development at the Thailand Development Research Institute.
“The real problem for Thailand is that we have a problem in our competitive capacity.”
He suggested state investment should focus on rural development which distributes benefits to local people, such as reasonably priced infrastructure projects that can improve local capacity. In essence, he said, the key to building a strong economy would be to spend small amounts across a broad range of areas rather than focusing on mega projects that benefit only a few.
The government must find a balance between community rights and investment, he said.
Questions are also being raised about how long the NCPO orders under Section 44 will remain in effect.
Only the NCPO has the power to revoke its own orders, or else parliamentary representatives of a new elected government must issue new legislation to cancel the orders. An election date is tentatively set for late 2017 after being postponed from last year.
Many believe that amnesties will be given to all parties involved with the implementation of Section 44 orders.
“The whole country is at risk from Section 44. The government intends to make quick cash, but it will leave long-term ruin,” said Sor Rattanamanee Polka, a lawyer for the Community Resource Centre.
“Who will pay for the cost of environmental and health damage? There may be nobody there by the end to take responsibility.”
Refusing to budge: Protesters want an end to the use of Section 44 for development projects.
In the net: Activists fear Section 44 will stifle opposition to the controversial Pak Bara port.
Loading zone: The government hopes special economic zones like the one proposed for Tak will pump trillions into the economy.
Poised to cross: Trucks wait to drive across to Cambodia at Sa Kaeo, one of the provinces that has been designated a SEZ.
Over the bridge: The fourth Thai-Lao Relationship Bridge links Chiang Rai with Ban Houayxay, and was designed to boost cross-border trade.
‘No eia bypass’: The Natural Resources and Environment Ministry’s Kasemsun Chinnavaso.
Building resistance: Residents of Ban Wang Takien in Tak province placed a sign protesting against a planned special economic zone, which the government wants to press ahead with.