Streamlining Thailand’s Industrial Operations: Amending the IEAT Act

Thailand’s industrial sector, a key driver of economic growth and investment, is poised for a significant overhaul with the proposed amendments to the Industrial Estate Authority of Thailand Act, B.E. 2522 (1979) (“Act”). On May 7, 2024, the Industrial Estate Authority of Thailand (IEAT) initiated a public hearing process on the draft of the new Industrial Estate Authority of Thailand Act, B.E. …. (“Draft Act”). This legislative effort aims to address longstanding challenges and obstacles encountered during the enforcement of the original Act, aligning its provisions with contemporary conditions and future developments in industry and commerce.

At the heart of the Draft Act lies a redefinition of IEAT’s mission and objectives. The current Act lacks an explicit delineation of IEAT’s role, leaving its focus somewhat ambiguous. The amendments seek to clarify and expand IEAT’s powers and objectives. This clarity is crucial in determining whether IEAT’s primary emphasis should be on promoting investment in industrial estates with a focus on profitability, fostering a conducive investment environment, or striking a balance between these aims while considering environmental impacts and ensuring harmonious coexistence between the industrial sector and society.

A significant aspect of the Draft Act revolves around the amendment of the permit system. Recognizing the potential impact of various activities conducted within industrial estates, such as pollution or resource utilization, on surrounding communities and environmental quality, the Draft Act proposes the establishment of pollution control standards and waste emission regulations. To effectively control and oversee activities that significantly affect life, rights, freedoms, society, or public interests, the Draft Act introduces measures prohibiting such activities or businesses until the necessary permissions are granted.

Furthermore, the Draft Act seeks to enhance the committee system by granting broader authority to issue regulations, rules, criteria, and policies to support the operations and activities of IEAT, industrial operators, and commercial operators. This expanded power encompasses the committee’s ability to issue regulations or rules concerning engineering specifications, environmental standards, and safety standards for activities and operations within industrial estates, as well as sale prices, rental rates, hire-purchase rates, and the duration of leases and hire-purchase agreements for real and personal property, as well as maintenance fees for facilities and service rates within industrial estates.

Recognizing the potential risks of accidents or damages affecting public order, the Draft Act grants enhanced authority to officials to prevent and maintain public order, address urgent situations requiring immediate resolution, and manage obstacles that may hinder their efforts to prevent and maintain order. Officials will be empowered to apply the principles of the Disaster Prevention and Mitigation Act, B.E. 2550 (2007) in such circumstances.

Additionally, the Draft Act proposes adjustments to various penalty provisions. While some criminal penalties will be replaced with disciplinary fines to provide appropriate punishment for offenders and avoid criminal records, certain criminal penalties will remain in place for specific offenses to prevent misconduct and effectively regulate industrial and commercial activities.

The public hearing process for the Draft Act is currently underway and will continue until June 15, 2024. The proposed revisions to the IEAT Act reflect a proactive response to the evolving challenges of the industrial sector, tailored to modern demands and focused on promoting sustainable development while reinforcing Thailand’s industrial prowess for future competitiveness and growth.

Author: Panisa Suwanmatajarn, Managing Partner.

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