Thailand approves draft law to settle industrial row

Reuters 12 Jan 10;

BANGKOK, Jan 12 (Reuters) - Thailand's cabinet approved draft legislation on Tuesday to set up an independent body to oversee health and environmental impact assessments at the Map Ta Phut industrial estate, where a court has frozen certain operations. The draft, which must be approved by parliament, is a step towards allowing 64 suspended operations to go ahead at the world's eighth-biggest petrochemical hub in eastern Rayong province.

In December the government approved regulations on health and environment assessments for new industrial projects and it now expects a 13-member panel to be formed within 60 days to carry out the inspections.

"After the draft has been approved, it would be clearer how to solve this and push the process forward," Prime Minister Abhisit Vejjajiva told reporters.

Companies at the estate include top energy firm PTT PTT.BK, PTT Chemical PTTC.BK and Siam Cement SCC.BK, Thailand's top industrial conglomerate.

Among the foreign companies are a Thai unit of Germany's Bayer and Australia's BlueScope Steel Ltd.

The projects were put on hold because of the companies' failure to carry out health impact assessments (HIA) in line with the 2007 constitution. The government was blamed because it had not set up the body required to oversee the HIAs.

The central bank says the suspensions could cut GDP growth by up to 0.5 percentage point this year, while an industry ministry estimate last month said a protracted legal standoff could cost as much as $18 billion.

The court order stoked concern about legal uncertainty and government competence in a country once seen as a safe haven for investment but now mired in five years of political strife.

(Reporting by Pracha Hariraksapitak and Ambika Ahuja; Writing by Martin Petty; Editing by Alan Raybould)