The Federation of Thai Industries (FTI) has voiced opposition to three major draft laws, fearing they will undermine investment confidence and competitiveness.

The Federation of Thai Industries (FTI) has requested consideration of the impact of three draft laws: the Labor Protection Act, the Clean Air Act, and the Factory Act, to maintain investor confidence.

12 Nov. 2568 Joint Committee of 3 Private Sector Institutions (CPF) Consisting of the Thai Chamber of Commerce, the Federation of Thai Industries, and the Thai Bankers' Association, they have issued a statement of their stance on three important draft laws: 1. the draft Labor Protection Act, 2. the draft Clean Air Management Act, and 3. the draft Factory Act, requesting a comprehensive assessment of their impacts to ensure they do not affect investor confidence.

Draft Labor Protection Act

Mr. Phot Aramwattananon, Chairman of the Board of Trade of Thailand, as Chairman of the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) It was stated that the House of Representatives had approved the principles of the two drafts of the Labor Protection Act (No. ..) B.E. ... on 24 September 2015 and one of them is being submitted to the House of Representatives.

The FTI has received complaints and concerns from members nationwide, including provincial chambers of commerce in over 70 provinces, provincial industrial councils, various industry groups, over 90 trade associations, and a number of foreign chambers of commerce, who disagree with and oppose the draft law.

In particular, the draft law lacks a comprehensive Regulatory Impact Assessment (RIA), which is an important process for considering its appropriateness and impact on various sectors.

The draft law contains several provisions that could impact the overall economy and increase employment costs for employers amid the ongoing economic volatility, particularly SMEs, who face higher costs due to the new legal requirements.

This could also lead to a decline in confidence among foreign investors, which would impact Thailand's overall ability to attract investment.

• The first draft of the Labor Protection Act (No. ..) B.E. ... of MP Charat Khumkhainam and his team has three impacts as follows: 1. The financial flexibility of Thai workers has decreased (Income Shock), 2. The national production capacity has decreased, and 3. The employment system has no benefit to employees.
• The second draft of the Labor Protection Act (No. ..) B.E. ... of Ms. Wanwipa Maison and the FTI committee believes that the enactment of this law is unnecessary, as the current labor protection law is comprehensive and takes good care of employees.
• Issue 3 of the draft of the Labor Protection Act (No. ..) B.E. .... of MP Sia Champathong and the FTI committee believe that adding a definition of "monthly employment" to be employment that is permanent and full-time, where employees receive monthly wages, is an unnecessary impact on the rights and freedoms of individuals to make contracts and is contrary to the principle of freedom to make contracts.

"Furthermore, the Wage Committee's requirement to annually adjust the minimum wage is based on the FTI's view that minimum wage adjustments are based on economic figures reflecting employers' ability to pay and employees' cost of living, as stipulated in current law. This emphasis is placed on the Wage Committee, the Provincial Tripartite Committee, and Section 87 of the Labor Protection Act B.E. 2541 (1998).

Mr. Poj stated that the FTI Board supports improving the quality of life of workers in accordance with international principles, such as those of the International Labor Organization (ILO), including appropriate working hours, leave rights, and the protection of human dignity. He also supports internal labor relations mechanisms in establishing appropriate guidelines for quantitatively assessing impacts and developing prudent mitigation measures.

It should be emphasized that the drafting process of legislation involving a large number of people, or public law, should involve comprehensive stakeholder consultation and impact analysis. In this case, insufficient information is lacking and may directly impact the relevant groups.

"The Labour Protection Committee (LPPC) therefore opposes the three new drafts of the Labour Protection Act, which are inconsistent with International Labour Organization (ILO) requirements, are not practical, and lack comprehensive stakeholder input. We recommend a comprehensive public hearing, involving representatives from the Provincial Industrial Council, the Provincial Chamber of Commerce, employers' organizations, and employees' organizations (tripartite) from all relevant sectors. The Ministry of Labour and the Department of Labour Protection and Welfare will act as a mediator in this process."

Draft Clean Air Management Act

side Mr. Kriengkrai Thiennukul, Chairman of the Federation of Thai Industries (F.T.I.) The FTI stated that it agreed with the principles and some measures, but that the amendments should be clarified and not redundant. The FTI is deeply aware of the air pollution problem and supports the intent of the draft law, which aims to improve environmental quality and reduce PM 2.5 dust particles.

However, there are concerns about redundancy with existing laws, such as the Environmental Quality Promotion and Conservation Act B.E. 2535 (1992) and the Factory Act B.E. 2535 (1992), as well as specific laws of agencies that already have authority to regulate air pollution, which could create duplication of authority and unnecessary costs for the business sector.
Therefore, the Thai Chamber of Commerce would like to propose the following important points that should be reviewed in order for this law to be truly effective in practice:

1. Board Structure and Private Sector Participation: The FTI proposes that private sector representatives be included in the committees and organizations that oversee clean air management policies at both the national and provincial levels, in accordance with the principle of "Law Enforcement Participation."
2. Economic Tools: The FTI believes that the "economic tools" in the draft Clean Air Management Act B.E. ... may overlap with current laws. Therefore, it should focus on supporting measures and tax or financial incentives to improve the quality of production that reduces pollution.
3. The establishment of the Clean Air Fund has 17 objectives, but there is no clear priority or proportion of funds used to address pollution problems. It has not undergone the proper review process by the Revolving Fund Policy Committee. Therefore, there is concern that the fund may not be established in practice.
4. Penalties and Penalties The FTI supports the rigorous enforcement of the law against violators. However, this draft law stipulates higher penalties than other drafts that the House of Representatives has previously accepted, both civil and criminal. This may not be consistent with Section 77 of the Constitution, which requires criminal penalties only for serious offenses. The FTI therefore proposes reviewing the penalties to balance them with international standards, and there should be an adjustment period for the business and industrial sectors.

"The Office of the National Economic and Social Development Board (NESDB) believes that having a clean air law is essential, but it must adhere to principles that are not redundant, do not increase burdens, and must balance the environment with the country's competitiveness. This is to ensure Thailand moves towards sustainable development, both environmentally and economically, and to enhance investor confidence. Therefore, the NESDB believes it is essential to conduct a measurable RIA based on international standards for laws that will impact the business sector, conducted by a central, independent, and credible agency."

Draft Factory Act

Mr. Kriangkrai also stated that the FTI understands the concerns regarding amendments to the Factory Act to address various issues, such as the impact factories have on communities and the environment, as has been reported in the news recently. The FTI also supports raising the standards of industrial factories.

However, the Federation of Thai Industries (FTI) is deeply concerned about the draft Factory Act (No. ...) B.E. ..., which is currently under parliamentary consideration. This is because the proposed amendments have severely impacted the Thai industrial sector, reducing competitiveness and undermining investor confidence.

With several concerns as follows:

1. The reintroduction of the factory permit system with a validity period is contrary to the Ease of Doing Business principle. The Federation of Thai Industries (FTI) does not agree with the reintroduction of the validity period system, as it has caused problems in the past.
2. The addition of the "Special Controlled Factories" category should be limited to high-risk factories only. The FTI does not object to the idea of ​​imposing stricter special measures to be applied to high-risk factories, but the application of such measures should be limited to those special-controlled factories that deal with hazardous waste or that pose specific risks.
3. Increasing criminal penalties must be based on clear principles. The FTI believes that increasing the penalty rate or changing the type of penalty, particularly changing a fine to a prison sentence, must be supported by empirical data that shows that current enforcement of penalties cannot solve current problems. It must also be based on the principle of proportionality and used sparingly so as not to violate the fundamental rights of business operators.
4. Public observation of factories has raised concerns about conflicts and violations of trade secrets. The Federation of Thai Industries supports the principle of public participation but believes that the government should act as a neutral party to monitor and communicate information to the public in a transparent manner. However, if public participation is necessary, the qualifications of observers and measures to protect trade secrets and business information should be clearly and strictly defined.
5. The requirement for specially controlled factories to provide insurance raises concerns about the readiness of the domestic insurance market. The FTI believes that the domestic insurance market is not yet ready for this type of insurance, which has a significant impact, particularly on SMEs, who must purchase insurance from overseas at high prices. This increases their costs and reduces their competitiveness. The government should therefore expedite the development of the domestic insurance market to ensure readiness before enforcement begins.
6. The solution should focus on law enforcement, not on adding new burdens to the business sector. The Federation of Thai Industries (FTI) would like to note that the majority of factories in Thailand have operating standards and strictly comply with the law. The Federation of Thai Industries (FTI) agrees with taking action against factories that violate the law or cause problems, but believes that new measures should not be imposed that would increase the burden or create obstacles for factories that already comply with the law.

"The FTI reaffirms that revisions to the factory law should adhere to a balance between supervision and promotion of national competitiveness, without unnecessarily placing additional burdens on business operators, the government, and the public."

The Office of the National Economic and Social Development Board (NESDB) has requested a comprehensive public hearing and the preparation of a RIA, specifically an economic impact analysis, with a rigorous cost-benefit analysis. This is to ensure that the new law addresses key issues, does not create undue burdens, and does not undermine investment confidence in the country. This will ensure Thailand can move forward with stability, in all dimensions, including the environment, economy, and investor confidence.

"The National Economic and Social Development Board (NESDB) calls for a thorough review of the legislative process, emphasizing that new legislation with broad economic impacts should adhere to the principles of transparency, open to feedback from all sectors, and conduct RIAs in accordance with international standards. This ensures that enacted legislation balances labor protection, the environment, and the country's competitiveness."