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Carbon credit market regulations

Carbon Credit Market Regulations
Currently, Thailand applies voluntary program called Thailand Voluntary Emission Reduction Program (“T-VER“) for controlling and managing of carbon credit market. No compulsory laws or regulations to control or manage of carbon credit market.

However, there are currently 3 draft laws related  to the carbon credit market under the process of public hearing which are:
1. Draft Act on Promoting Greenhouse Gas Reduction and Carbon Credits B.E. ….
2. Draft Act on Climate Change B.E. …. (proposed by Department of Climate Change and Environment, Ministry of Natural Resources and Environment
3. Draft Act on Climate Change B.E. …. (proposed by Ms. Saniwan Buaban, the House Representative)
(all herein after referred to as “Drafts“).
DefinitonsActivity dataNot mentioned in the guideline of T-VER.
Baseline yearNot mentioned in the guideline of  T-VER.
Compliance MechanismGoverning Authorities
Thailand Green House Gas Management Organization (Public Organization) (“TGO“).
Obligated Entities
As Thailand currently applies for voluntary program, thus, there is no spcified obligated entities. However, the definition of obligated entitiies are mentioned in the Drafts.
Application for Registration in T-VER
T-VER has designated the types and categories of the businesses registering to join the program (e.g. renewal energy business, transportation business, waste management business). Such businesses may submit application and required documents to TGO. The duration for consideration of the application is 60 days.
Once the business is registered, the business shall have the duty to prepare for monitoring report regarding amount of Green House Gas (“GHG“) emission for further requesting for carbon credit certificate.
GHG Emission Intensity Trajectory and TargetsThe Types of GHG
Under the guideline of T-VER, the GHG covers
◾ carecarbon dioxide (CO2)
◾ methane (CH4)
◾ nitrous oxide (N2O)
◾ hydrofluorocarbons (HFCs)
◾ perfluorocarbons (PFCs)
◾ sulfur hexafluoride (SF6)
◾ nitrogen trifluoride (NF3)
The Calculation of GHG Emissions Intensity
The calculation of GHG emission intensity  will be calculated by the business opeartor. Given that the sum amount of GHG emission result known as “Ery”, it must contain no decimal.
Monitoring and Reporting ProcessSubmission of Monitoring Report of GHG Emission
The business is required to prepare the monitoring report of GHG emission for further requesting for  carbon credit certificate. The monitoring report of GHG emission must be submitted together with
1) Verification report made by a third party known as Validation and Verification Body (“VVB“)
2) Calculation of the amount of GHG emission in excel form
3) Lists of tools used for recording of GHG emission of the business.
Verification and Assessment of PerformanceFor T-VER, the verification process applies the standard of ISO 14064-3:2019 for assessing the reduction of the GHG emission from the business. The verification and assessing must be conducted by VVB.
Issuance and Surrender of Carbon Credit CertificateIssuance of Carbon Credit Certificate
Business may request for carbon credit certification by submitting application and related documents to TGO. This certification must be requested within 2 years from the date which status of being business under T-VER is terminated. If the business operator fails to do within this period, they will no longer be able to request for further carbon credit certification for their business.
Once TGO approves the registration of carbon credit certificate, a carbon credit certificate will be issued within 20 working days from the date of completion of the review.
Surrender of Carbon Credit Certificate
The surrender of carbon credit certificate can be conducted through Thailand Carbon Credit Registry (“TCCR“) which is electronic platform for carbon credit market. 
Trading of Carbon Credit CertificatesTrading of Carbon Credit
The seller and buyer of carbon credit must have an account registered with TCCR, and every transaction (i.e. sellign and trading) has to be moitored and approved by the carbon credit registrar appointed by the TCCR.
Tax Benefit
Profits earned by business  from the sale of carbon credits in Thailand under T-VER  will be exempted from corporate income tax.
Banking of Carbon Credit CertificatesProvisions regarding banking and carbon credit certificate are not mentioned in the guideline of T-VER, including the expiration date of  carbon credit certificate.
Compliance with GHG Emission Intensity TargetsTGO will assessed the GHG emission amount of the business under T-VER for the improvement of GHG emission reduction.

Source: International Business August 2024 (antea-int.com)

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Economic: Comprehensive Strategy Proposed by Thailand’s Private Sector to Drive Sustainable Growth

As Thailand grapples with a complex web of economic challenges, including a global economic slowdown, weak domestic recovery, and constraints faced by small and medium-sized enterprises (SMEs) in accessing credit, the country’s private sector has come together to present a comprehensive strategy to revitalize the economy.

The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB), a coalition of prominent business associations, has compiled a detailed White Paper, outlining a multi-faceted approach to tackle the pressing issues and unlock Thailand’s full economic potential. This White Paper was recently presented to the Prime Minister during a meeting between the Prime Minister and JSCCIB.

The JSCCIB’s White Paper identifies four key areas of focus: economic problem-solving, assistance for SMEs, water management, and enhancing the country’s competitiveness. Within these areas, the private sector has proposed a range of policy measures, including:

  1. Reducing the burden of living costs for the public and operating costs for businesses i.e. controlling essential goods and services prices, restricting electricity and diesel fuel prices, increasing the minimum wage, and solving debt problems, especially non-performing auto loans.
  2. Implementing energy price reductions and restructuring.
  3. Implementing economic stimulus measures e.g. digital wallet, increasing purchasing power, Easy e-receipt, and other tax incentives.
  4. Enhancing the competitive capabilities of entrepreneurs e.g. using data-driven strategies to promote Thai products on e-commerce platforms, increasing investment measures with a focus on local content, and imposing taxes on foreign digital services.
  5. Supporting SME development i.e. easing loan approval requirements, promoting and pushing entrepreneurs towards adopting Smart SMEs, and improving laws and regulations to facilitate ease of doing business.
  6. Developing a corporate digital authentication system (Corporate Digital ID).
  7. Urgently overhauling regulations and procedures related to licensing and the use of technology in government operations.
  8. Enhancing investment in the Eastern Economic Corridor (EEC) i.e. improving large-scale infrastructure, proposing incentives to encourage and attract investment in the EEC, and expanding the EEC to include Prachinburi province, which would significantly boost investment in the region.
  9. Facilitating trans-shipment i.e. establishing a transshipment sandbox for container ships at Laem Chabang Port for a 1-year period.
  10. Developing logistics infrastructure and promoting border trade, resolving restrictions and obstacles in transporting goods from Thailand to neighboring countries, and amending regulations to enhance the efficiency of importing and exporting goods.
  11. Safeguarding domestic industries and enhancing the global standing of Thai products.
  12. Promoting the transformation of the automotive industry e.g. transitioning from combustion engines to future vehicles, expanding and maintaining the automotive production base.
  13. Promoting a Green Economy or Eco-friendly Economy, including bioeconomy, circular materials, and waste symbiosis.
  14. Implementing policies to foster a cashless and digital economy and providing tax incentives for businesses adopting transition finance and green investments.
  15. Implementing policies to attract foreign investment and establish Thailand as a regional economic hub.

The JSCCIB believes that the partnership between the government and the private sector will effectively implement the proposed measures to address economic challenges and revitalize Thailand’s economy. The ambitious target is to achieve a sustainable GDP growth rate of 3-5% or more in the near future.

birds eye view of a city

Key Takeaways from the White Paper:

  1. Easing the Burden: The strategy calls for measures to reduce the burden of living costs for the public and operating costs for businesses. This includes controlling the prices of essential goods and services, restricting electricity and diesel fuel prices, increasing the minimum wage, and solving debt problems, particularly non-performing auto loans.
  2. Boosting Competitiveness: The proposals aim to enhance the competitive capabilities of entrepreneurs and promote Thai products. This involves using data-driven strategies to market Thai goods on e-commerce platforms, increasing investment measures with a focus on local content, and imposing taxes on foreign digital services.
  3. Empowering SMEs: The White Paper emphasizes the need to support SME development, including easing loan approval requirements, promoting the adoption of smart technologies, and improving laws and regulations to facilitate ease of doing business.
  4. Strengthening Infrastructure and Trade: The strategy underscores the importance of developing logistics infrastructure and fostering cross-border trade. This includes facilitating transshipment at Laem Chabang Port, resolving restrictions in transporting goods to neighboring countries, and amending regulations to enhance the efficiency of importing and exporting.
  5. Regulatory Overhaul: The JSCCIB calls for an urgent overhaul of regulations and procedures related to licensing and the use of technology in government operations, recognizing the need to streamline bureaucratic processes.
  6. Embracing Sustainability: The proposals incorporate a strong emphasis on promoting a green and sustainable economy, including the transition towards a circular economy, the bioeconomy, and the transformation of the automotive industry.
  7. Digital Transformation: The strategy underscores the significance of digital transformation, with initiatives such as the development of a corporate digital authentication system and the promotion of a cashless and digital economy.

Author: Panisa Suwanmatajarn, Managing Partner.

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A draft Announcement on the Additional Duties for Digital Platform Services in Specific Goods Market Categories

A draft Announcement on the Additional Duties for Digital Platform Services in Specific Goods Market Categories

The Electronic Transaction Development Agency (“ETDA”) has conducted a public hearing on the subordinate regulations under the Royal Decree on the Operation of Digital Platform Services Business that are Subject to Prior Notification B.E. 2565 (2022) (“Royal Decree”), a draft Announcement on the Additional Duties for Digital Platform Services in Specific Goods Market Categories as prescribed in Section 18 (2) of the Royal Decree B.E. …. (the “Draft Bill”). The Draft Bill has recently undergone public consultation, where comments and feedback provided therein may be reflected in the further revision of the Draft Bill. Nonetheless the following summarizes the initially proposed provisions.

The Draft Bill imposes additional obligations on Digital Platform Services (DPS) that pose risks to financial and commercial security, reliability, and creditability in data message systems, or potential harms to the public, as prescribed under Section 18 (2) of the Royal Decree as follows:

  1. Registration, Authentication, and Verification of the Business Users: The DPS is required to put in place an authentication and verification of the identity of the person who offers goods or services to consumers through a digital platform service (“Business User”). The authentication and verification may be by means of a collection of information or the use of an authentication system having a reliability standard of no lesser than the Identity Assurance Level (IAL2);
  2. Maintaining Record of Registry: The DPS is required to maintain a record of registry for Business Users, it may be required to submit such record to ETDA periodically or upon request.
  3. Obligations in Relation to the Products that Are Subject to Specific Quality Standard: Certain types of products may be subjected to a specific quality standard under the law relating to industrial product standards, foods, medicines, or cosmetic products (“Products with Specific Standards”). In this regard, the DPS is required to (1) have in place a policy regarding the advertisement or sale of the Products with Specific Standards. Such policy must be specified in the terms and conditions of the DPS; (2) prohibits the sale and advertisement of products that are restricted by the law; (3) requires the Business User to submit relevant permits or approvals in relation to the Products with Specific Standards; (4) display information relating to the Products with Specific Standards onto the platform; (5) provide a channel for users to verify accuracy of information relating to Products with Specific Standards against the government agency database; and (6) display a symbol or message indicating that such products are Products with Specific Standards.
  4. Obligations in relation to the Unlawful Sale or Advertisement of Products with Specific Standards: Apart from the preventive mechanisms prescribed above, the DPS is also required to (1) put in place a notice-and-takedown mechanism for the users to notify the DPS of unlawful Products with Specific Standards; (2) put in place a remedial measure for the users; and also (3) maintain a record of users who reviewed the Products with Specific Standards on the platform.

Under this Draft Bill, the DPS is required to specify the penalties for Business Users who fail to comply with the aforesaid obligations, the level of penalty is left open for public opinion on whether there shall be a written warning and grace period for correction, or Business Users failure to comply shall be subjected to termination of service by the DPS without prior notification.

Subject to the result of public consultation under this round, there may be an additional round of public consultation before finalization.

Author: Panisa Suwanmatajarn, Managing Partner.

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Cyber Security: Thailand Strengthens its Cyber Defense

In a significant move to bolster its national cybersecurity infrastructure, Thailand’s National Cyber Security Agency (NCSA) has unveiled comprehensive guidelines for information system security assessment. Published in the Royal Gazette on November 11, 2024, these guidelines mark a pivotal shift in how the kingdom approaches digital security and critical infrastructure protection.

The announcement is at a time when nations worldwide are grappling with increasingly sophisticated cyber threats. This initiative demonstrates Thailand’s proactive stance in safeguarding its digital assets and critical infrastructure.

The Framework’s Foundation

The new guidelines are built upon the foundation laid by the Cybersecurity Act of 2019, representing a mature evolution of Thailand’s cybersecurity framework. At their core, these guidelines establish mandatory security assessment protocols for a broad spectrum of organizations, including government agencies, critical infrastructure operators, and regulatory bodies.

What sets these guidelines apart is their comprehensive approach to security assessment. Organizations are now required to evaluate not just their computer systems, but their entire digital ecosystem – including networks, programs, and data storage facilities. This holistic approach reflects a modern understanding of cybersecurity, where vulnerabilities can exist at multiple levels of an organization’s digital infrastructure.

a woman looking afar

Implementation and Organizational Impact

The immediate implementation requirement of these guidelines signals the government’s urgency in addressing cybersecurity concerns. Organizations falling under this framework must now integrate security assessments into their operational DNA, with reviews mandated at least every three years. However, the guidelines go further by requiring additional assessments whenever significant changes occur in an organization’s information systems – a dynamic approach that acknowledges the rapid pace of technological change.

Critical infrastructure organizations face particularly stringent requirements. They must establish detailed security assessment procedures and implement classification systems for their data and systems based on importance levels. This tiered approach ensures that resources are allocated appropriately, with the most critical systems receiving the highest levels of protection.

A New Era of Accountability

Perhaps the most significant aspect of these guidelines is their emphasis on accountability and documentation. Organizations must maintain detailed records of their security measures and regularly evaluate their effectiveness. This requirement creates a paper trail of security decisions and their outcomes, enabling better oversight and continuous improvement.

The NCSA, through its Secretary-General, has been empowered with significant authority to ensure effective implementation. This includes the power to issue additional directives, clarify requirements, and make binding decisions on any implementation disputes. This centralized authority structure aims to ensure consistent application of the guidelines across different sectors.

Looking Forward

The introduction of these guidelines represents more than just a regulatory change – it signals Thailand’s commitment to creating a robust digital infrastructure capable of meeting modern cybersecurity challenges. By establishing clear standards and accountability measures, Thailand is positioning itself as a leader in regional cybersecurity governance.

For organizations affected by these guidelines, the path forward involves significant adjustments to their security protocols and organizational processes. The requirement for regular assessments and documentation will necessitate new workflows and possibly additional resources dedicated to cybersecurity compliance.

red dot lights on black surface

The Broader Impact

These guidelines will likely have ripple effects beyond their immediate scope. Private sector organizations not directly covered by the regulations may choose to adopt similar frameworks voluntarily, recognizing them as best practices in cybersecurity management. This could lead to an overall elevation of cybersecurity standards across Thailand’s digital landscape.

Furthermore, the emphasis on regular reviews and updates acknowledges the dynamic nature of cyber threats. By building flexibility and regular assessment requirements into the framework, Thailand has created a living document that can evolve alongside emerging security challenges.

As nations worldwide grapple with cybersecurity challenges, Thailand’s comprehensive approach provides a potential model for other countries looking to strengthen their digital defenses. The success of these guidelines could influence regional cybersecurity policies and contribute to the development of international cybersecurity standards.

The true test of these guidelines will lie in their implementation and the ability of organizations to meet their requirements effectively. However, their introduction marks a significant step forward in Thailand’s journey toward a more secure digital future.

Key Takeaways:

  1. Strategic Implementation
    • Immediate enforcement following the Royal Gazette publication
    • Mandatory security assessments every three years minimum
    • Additional assessments are required after significant system changes
    • Comprehensive coverage of digital infrastructure including systems, networks, and data
  2. Organizational Requirements
    • Mandatory risk assessments for government agencies and critical infrastructure
    • Implementation of data and system classification frameworks
    • Regular monitoring and documentation of security measures
    • Development of detailed security assessment procedures
  3. Governance Structure
    • NCSA Secretary-General granted extensive oversight powers
    • Authority to issue additional directives and clarifications
    • Centralized decision-making for dispute resolution
    • Clear accountability chain for implementation
  4. Compliance Framework
    • Regular audit requirements
    • Documentation of all security measures
    • Alignment with national cybersecurity standards
    • Dynamic response to system changes
  5. Long-term Impact
    • Enhanced national cybersecurity posture
    • Potential influence on regional security standards
    • Framework for continuous improvement
    • Model for International Cybersecurity Governance

Author: Panisa Suwanmatajarn, Managing Partner.

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Thailand’s – Landmark Gaming Industry Bill

Thailand’s Digital Economy Promotion Agency (DEPA) is spearheading efforts to revolutionize the country’s gaming industry through a comprehensive draft bill. The proposed legislation, aimed at supervising and promoting the gaming sector, is expected to play a pivotal role in establishing Thailand as a regional gaming hub.

DEPA, along with other government authorities, such as the Ministry of Commerce, Revenue Department, Cybercrime Investigation Bureau, and Bank of Thailand, announced that the agency is in the process of drafting the bill, which is aimed to come into effect by 2025. The legislation is designed to address the rapid changes in the digital landscape, acknowledging that gaming has evolved beyond internet cafes to encompass various online platforms.

A key component of the draft bill is the registration of game entrepreneurs, developers, and platform providers operating in Thailand. This measure is intended to create a structured framework for the industry while offering benefits to registered entities. These benefits include tax deductions and other fiscal privileges aimed at fostering the development of the gaming sector and promoting employment opportunities.

pexels-photo-965875.jpeg

Content regulation forms another crucial aspect of the proposed bill. DEPA plans to implement a game rating system and measures to prevent issues such as online gambling and excessive violence in games. To ensure effective supervision, the agency will collaborate with relevant authorities, including cybercrime units and digital payment agencies.

The draft bill also focuses on enhancing the competitiveness of Thai entrepreneurs in the global market. It aims to promote various aspects of game development, including storytelling, character design, animation production, and esports tournaments. This comprehensive approach is designed to attract foreign game developers and solidify Thailand’s position as a regional gaming hub.

To gather input from stakeholders, DEPA has scheduled public hearings on the draft bill for September 2024. Following these consultations, the bill will be presented to the Cabinet, the Office of the Council of State, and the House of Representatives for consideration and approval.

The proposed legislation represents a significant step towards creating a well-regulated gaming ecosystem in Thailand. By balancing supervision with promotion, the bill aims to foster a thriving gaming industry that adheres to local laws and societal standards while attracting investment and driving economic growth in the digital sector.

As the gaming landscape continues to evolve, this forward-thinking approach positions Thailand to capitalize on the opportunities presented by the global gaming market while ensuring a safe and regulated environment for consumers and industry players alike.

Key Takeaways:

  • The Digital Economy Promotion Agency (DEPA) is drafting a bill to supervise and promote Thailand’s gaming industry.
  • The bill aims to establish Thailand as a regional gaming hub and is expected to come into effect by 2025.
  • Public hearings on the draft bill are scheduled for September 2024.
  • Key features include registration requirements, tax incentives, and content regulation measures.
  • Collaboration between various government agencies is planned to ensure comprehensive oversight.

Author: Panisa Suwanmatajarn, Managing Partner.

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Data Privacy – Thailand Draft Exemption for Small Organizations Acting as Data Processors

The Thailand Personal Data Protection Act B.E. 2562 (“PDPA“) governs personal data processing and defines the roles and responsibilities of parties involved in such activities. Under the PDPA, a “Data Processor” is defined as a person or entity that processes personal data on behalf of another party. Since Data Processors do not have authority over processing activities, the Personal Data Protection Committee (“PDPC“) has determined it necessary to reduce certain regulatory burdens for smaller entities. Consequently, the draft Announcement on the Exemption for Small Organizations Acting as Data Processors (“Draft“) has been prepared and is undergoing public consultation through 14 November 2024.

Data Processor obligations are prescribed under Section 40 of the PDPA. Specifically, Section 40 (3) requires Data Processors to record personal data processing activities according to PDPC – prescribed criteria and methods. The Draft exempts the following types of organizations from this obligation:

  • Small and medium enterprises, as defined by the Small and Medium Enterprise Promotion Act B.E. 2543 (2000)
  • Community enterprises, as defined by the Community Enterprise Promotion Act B.E. 2548 (2005)
  • Social enterprises, as defined by the Social Enterprise Promotion Act B.E. 2562 (2019)
  • Cooperatives, as defined by the Cooperative Act B.E. 2542 (1999)
  • Foundations, associations, religious organizations, and non-profit organizations
  • Condominium associations, as defined by the Condominium Act B.E. 2522 (1979)
  • Individuals conducting household activities in a non-commercial capacity
  • Individual data processors (as distinct from organizations or larger entities)

(collectively referred to as “Small Size Data Processors“).

person in white long sleeve shirt using macbook pro

However, this Draft exemption does not apply to personal data processing activities that:

  • Pose risks to the rights and freedoms of data subjects
  • Involve regular or systematic collection, use, or disclosure of personal data (as opposed to occasional processing)
  • Involve the processing of sensitive personal data

Additionally, the exemption does not apply to any Small Size Data Processor that is required to appoint a Data Protection Officer, also known as, DPO.

Author: Panisa Suwanmatajarn, Managing Partner.

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Technology: Thailand Accelerates Digital Transformation through National Digital Economy and Society Committee Initiatives

Thailand’s National Digital Economy and Society Committee (NDESC) recently convened its third meeting of 2024, steering the country’s digital transformation agenda forward on multiple fronts. Chaired by the Deputy Prime Minister and Minister of Digital Economy and Society, the high-level committee reviewed and endorsed several key initiatives aimed at modernizing government operations, enhancing public service delivery, and bolstering the nation’s digital infrastructure and cybersecurity.

e-Office:

A primary focus of the meeting was the expanded use of electronic documents within the government’s e-Office system, which operates on the Government Data Center and Cloud Service (GDCC) platform. The committee set an ambitious target of reaching 3 million e-Office users by 2027, underscoring the administration’s commitment to digitalizing public administration and transitioning towards a truly paperless governance model.

Cloud First Policy:

In parallel, the NDESC oversaw the progress of various specialized sub-committees tasked with driving specific aspects of the digital agenda. This included the Cloud First Policy committee, which is working to establish legal frameworks and management standards for the government’s adoption of cloud computing services. Additionally, a dedicated sub-committee was formed to oversee the integration and optimization of the country’s nationwide network of closed-circuit television (CCTV) systems, aimed at reducing redundancies, lowering costs, and enabling more effective data utilization.

Smart City:

Beyond the digitalization of government operations, the NDESC also prioritized the acceleration of smart city development across Thailand. Recognizing the transformative potential of connected urban environments, the committee placed this strategic initiative under the purview of the Committee for Promotion and Development of Digital for Economy and Society, ensuring a coordinated, whole-of-government approach to urban modernization.

red dot lights on black surface

Cybersecurity Safeguards:

Complementing these technological advancements, the NDESC also addressed the critical issue of cybersecurity. Tasking the National Cyber Security Agency (NCSA) to develop comprehensive guidelines for government agencies, the committee aimed to bolster the protection of personal data and mitigate the risks of information leaks, a pressing concern in the digital age.

Through these multifaceted initiatives, Thailand’s National Digital Economy and Society Committee is spearheading the country’s digital transformation journey, leveraging the power of technology to modernize public services, enhance economic competitiveness, and safeguard national interests in the rapidly evolving digital landscape.

Key Takeaways:

  1. The National Digital Economy and Society Committee (NDESC) chaired a meeting to discuss important initiatives for driving the country’s economic and social development through digital transformation.
  2. The meeting reviewed the progress on the use of electronic documents in the e-Office system under the Government Data Center and Cloud Service (GDCC), aiming to have 3 million users by 2027.
  3. The committee discussed the progress of various sub-committees established under the Digital Development for Economy and Society Act, including those focused on cloud computing policies, legal frameworks for government cloud procurement, and cloud service management standards.
  4. The NDESC endorsed the acceleration of smart city development, with the Smart City initiative now falling under the purview of the Committee for Promotion and Development of Digital for Economy and Society.
  5. The committee also addressed the need to integrate and optimize the use of closed-circuit television (CCTV) systems nationwide, to reduce duplication and enable effective data management and utilization.
  6. Regarding cybersecurity, the NDESC tasked the National Cyber Security Agency (NCSA) to propose guidelines for government agencies to prevent personal data leaks, which will be reviewed by the National Cyber Security Committee and the Cabinet.

Author: Panisa Suwanmatajarn, Managing Partner.

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Labor: The Battle for Fair Treatment

In the intricate world of labor law, a case emerged that would challenge the principles of fair treatment and equality in the workplace. This is the story of a quality control inspector who fought for his rights and set a precedent for labor practices in Thailand.

The Employment Journey:

The plaintiff, once an employee of the first defendant and later a contract worker for the second defendant, was sent to work in the production department of the second defendant on 25 January 2017. His final position was as a quality control inspector. On 6 May 2020, the second defendant returned the plaintiff to the first defendant. During his tenure with the second defendant, the plaintiff received a housing allowance of 750 baht per month, while direct employees of the second defendant received 2,300 baht per month. The plaintiff never received annual bonuses or diligence allowances from either defendant.

The Dispute:

The plaintiff filed a lawsuit seeking for housing allowances, diligence allowances, and bonuses. The labor court found that the defendants were not liable for the housing and diligence allowances. However, the court ruled that the second defendant’s failure to pay bonuses to contract workers, who performed the same tasks as direct employees, constituted discriminatory treatment under Section 11/1 of the Labor Protection Act B.E. 2541 (1998).

The Appeal:

The second defendant appealed, arguing that under the Labor Relations Act B.E. 2518 (1975), they had the right to set different criteria for union members and non-members. Since the plaintiff was not a union member, he was not entitled to the bonus. The Specialized Court of Appeal dismissed this argument, stating it was a factual dispute rather than a legal one.

crop asian judge working on laptop in office

The Supreme Court’s Decision:

The Supreme Court had to determine whether the second defendant’s appeal was a legal issue. The court found that the second defendant’s argument was indeed a legal one, as it involved the interpretation of the Labor Relations Act B.E. 2518 (1975) and the Labor Protection Act. B.E. 2541 (1998). The Supreme court ruled that the second defendant’s practice of not paying bonuses to contract workers was discriminatory and violated Section 11/1 of the Labor Protection Act B.E. 2541 (1998). The Supreme Court also addressed the second defendant’s claim that applying the employment conditions agreement to non-union members violated the Constitution. The Supreme Court found that this was not a constitutional issue but rather a matter of legal interpretation.

The Outcome:

The Supreme Court upheld the lower court’s decision, ordering the second defendant to pay the plaintiff a bonus of 124,796 baht, with interest. The Supreme Court also adjusted the interest rate to comply with the new Civil and Commercial Code amendments, which reduced the default interest rate from 7.5% to 5% per year.

Key Takeaways:

  1. Equality in Benefits: Employers must provide equal benefits and welfare to contract workers and direct employees performing the same tasks.
  2. Legal Interpretation: Disputes involving the interpretation of labor laws can be considered legal issues and are subject to higher court review.
  3. Non-Discrimination: Discriminatory practices in the workplace, such as unequal bonus payments, are prohibited under labor protection laws.
  4. Constitutional Claims: Arguments based on constitutional grounds must clearly demonstrate a conflict with constitutional provisions to be considered valid.
  5. This case underscores the importance of fair treatment in the workplace and the legal avenues available to employees’ seeking justice. It serves as a reminder that equality and non-discrimination are fundamental principles in labor law.

Author: Panisa Suwanmatajarn, Managing Partner.

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Eastern Economic Corridor: Benefits for Special Knowledge Personnel

A Comprehensive Analysis of Thailand’s Strategy for Attracting Global Talent

Executive Summary:

Thailand’s Eastern Economic Corridor (EEC) has introduced a transformative draft announcement to attract and retain highly skilled professionals. The framework, outlined in two major draft laws, establishes comprehensive criteria for Person Possessing Special Knowledge (PSK) status and associated benefits. This analysis examines the key provisions of these draft laws, which completed their public hearing process on 15 October  2024, and explores their potential impact on Thailand’s technological and industrial development.

Eligibility Requirements:

Core Qualifications

  1. Professional Excellence
    • International recognition in relevant fields
    • Minimum 20 years of specialized experience
    • Demonstrated expertise in innovation or technology
  2. Employment Requirements
    • Minimum 5-year employment commitment with EEC entrepreneur
    • The position must relate to targeted industries
    • Salary must meet minimum thresholds (to be specified in subsequent regulations)
  3. Clean Record Requirements
    • No criminal history (excluding minor offenses)
    • Sound financial standing
    • Compliance with immigration regulations
high rise buildings during night time

Industry Focus Areas

Priority consideration for PSK status in:

  • Advanced technology and digital innovation
  • Automation and robotics
  • Aviation and aerospace
  • Biotechnology and smart farming
  • Clean energy and environmental technology
  • Next-generation automotive
  • Smart electronics

Benefit Structure:

Tax Benefits

  1. Income Tax Reductions
    • Years 1-3: 17% maximum rate
    • Years 4-6: 14-12% maximum rate
    • Years 7-8: 11-10% maximum rate
  2. Foreign Income Considerations
    • Exemption from foreign income taxation
    • Special treatment for overseas assets
    • Simplified tax reporting requirements

Immigration Benefits

  1. PSK Holder Rights
    • Permanent residence eligibility
    • Streamlined visa processing
    • Multiple entry privileges
  2. Family Benefits
    • Extended to parents, spouse, and children
    • Up to 20-year stay permissions
    • Simplified renewal processes
    • Access to education and healthcare systems

Professional Benefits

  1. Work Authorization
    • EEC-specific work permits
    • 10-year permit duration
    • Multi-employer flexibility
    • Industry-specific authorizations
  2. Professional Development
    • Access to government research grants
    • Collaboration opportunities with Thai institutions
    • Leadership roles in technology transfer programs

Additional Rights:

  1. Property Rights
    • Land ownership privileges in designated areas
    • Extended condominium rental rights
    • Special zoning considerations
  2. Asset Registration
    • Aircraft and yacht registration rights
    • Simplified vehicle import procedures
    • Special consideration for personal effects importation
  3. Financial Benefits
    • Excise tax refund eligibility
    • Banking privileges
    • Investment opportunities in restricted sectors

Implementation Process:

Application Procedure

  1. Initial Screening
    • Documentation review
    • Background verification
    • Professional qualification assessment
  2. Committee Review
    • Technical evaluation
    • Industry relevance assessment
    • Benefit package determination
  3. Final Approval
    • Policy committee confirmation
    • Benefit activation
    • Registration and documentation

Compliance Requirements

  1. Ongoing Obligations
    • Annual reporting requirements
    • Employment status verification
    • Tax compliance monitoring
  2. Insurance Requirements
    • Minimum medical coverage of 50,000 USD annually
    • Coverage must extend to family members
    • Thai-registered insurance policies

Monitoring and Enforcement:

Oversight Mechanisms

  1. Regular Compliance Reviews
    • Annual status checks
    • Employment verification
    • Benefit utilization assessment
  2. Violation Consequences
    • Benefit suspension procedures
    • Appeal processes
    • Remediation options

Timelines and Implementation:

  • 15 October 2024: Public hearing completion
  • Q4 2024: Review and revision phase
  • Q1 2025: Expected implementation start
  • 2025-2026: Phased rollout of benefits

Conclusion:

Thailand’s EEC PSK framework represents a comprehensive and strategic approach to attracting international expertise in technology and innovation. The detailed benefit package and clear eligibility criteria demonstrate Thailand’s commitment to developing its eastern corridor as a hub for specialized industry and technological advancement. While the framework awaits final approval, it provides a strong foundation for attracting and retaining highly skilled professionals in the EEC region, potentially transforming Thailand’s industrial and technological landscape.

This analysis reflects the draft legislation as of October 2024. Final provisions may be subject to modification based on public hearing outcomes and subsequent legislative review. Stakeholders are advised to monitor official announcements for updates and changes to the implementation timeline and specific requirements.

Key Takeaways:

  • Thailand is implementing a structured framework to attract specialized talent to the EEC, positioning it as a competitive hub in Southeast Asia Region
  • The legislation offers comprehensive benefits including tax reductions, visa privileges, and property rights
  • Minimum employment duration of 5 years is required for PSK status, ensuring long-term commitment to Thailand’s development
  • Benefits extend to family members, including 20-year residence permits, making relocation more attractive
  • Work permits can be issued for up to 10 years, providing long-term stability
  • The framework includes significant property rights and investment opportunities for PSK holders

Author: Panisa Suwanmatajarn, Managing Partner.

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Labor: Private Higher Education Institutions with Special Labor Protections

Background:

Dr. James (a pseudonym) had been a dedicated professor in the Faculty of Liberal Arts at a private university for over 28 years. His commitment to teaching and research was unwavering until the day he received a retirement notice from the university.

“I felt betrayed,” Dr. James recalls. “When I started working here, there was a regulation about severance pay that was more beneficial to employees. But the university changed the rules without my knowledge.”

Feeling that he had been treated unfairly, Dr. James decided to sue the university in the labor court, demanding severance pay according to the original regulations.

“I thought this was a violation of labor rights,” he says. “But I was not sure if standard labor protection laws applied to private universities”.

Dr. James’s case went through the Central Labor Court, the Specialized Appeal Court, and finally reached the Supreme Court.

The Supreme Court’s decision in 2023, surprised Dr. James and many in the academic community. The Supreme Court ruled that private higher education institutions are not subject to regular labor protection and labor relations laws.

“I had no idea there was specific legislation for private higher education institutions,” Dr. James says, disappointment evident in his voice. “But at least this law stipulates that employees must receive benefits no less than those prescribed by general labor protection laws”.

Although, he lost the case, Dr. James’s fight was not in vain. His case helped raise awareness about the rights of personnel in private higher education institutions.

“I hope my story will be a lesson for my colleagues,” Dr. James concludes. “We need to know our rights and closely monitor any changes in regulations.”

Key Takeaways

  1. Private higher education institutions in Thailand are governed by specific labor protection laws, not subject to general labor protection and labor relations laws.
  2. Employees in private higher education institutions must receive benefits no less than those specified in general labor protection laws.
  3. Changes to internal regulations of private higher education institutions are not considered amendments to employment conditions under labor relations law.
  4. Personnel in private higher education institutions should regularly monitor changes in internal organizational regulations.
  5. Labor lawsuits, even if unsuccessful, can help raise awareness about the rights of employees in private higher education institutions.

Author: Panisa Suwanmatajarn, Managing Partner.

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