Pakorn Nilprapunt[1]
[1] Regulatory reform plays important role in economic, social and
political development of all democratic States. In economic perspective, the
objective of regulatory reform is to bring all regulations to be in line with
current economic conditions. The
regulations which are efficient, effective and efficacy will so far facilitate
economic activities at all levels upon fair administrative and compliance costs
and eliminate duplications and red-tape. In term of social development,
regulatory reform is going to bolster regulations which are in compliance with the
real needs of the people via the essential element of regulatory reform; public
consultation. As for political
dimension, regulatory reform enables the public to take part in the making of such
public policy as regulatory policy. The
accomplishment of regulatory reform therefore will not only strengthen the
competitiveness of individual entrepreneur and national competitiveness which
is good for national economy, but it also abounds social and political healthy.
[2] The concept of regulatory reform in Thailand does not deviate
from the mainstream as above mentioned. We have exercised the techniques for
reform in accordance with international best practices as well. Many existing regulations however evidence
that Thai regulations are not in line with current global conditions as well as
current needs of the public. The most distinguished example could be found by
through ‘legal mechanism’ used in the existing legislations. As we all aware that the current
international trade bases upon liberalization, more than ninety per cent of
Thai legislations still base on ‘strict control system’ which is inherited from
the outdated protectionism. That is the
main reason why the national competitiveness ranking of Thailand still in the
middle-low of the table and democratic development is quite slow. The main purpose
of this article is to survey the hurdles of regulatory reform in Thailand
through historical approach.
[3] Akin to any other country, regulatory reform in Thailand was
conducted from time to time for hundreds years, but the greatest one had
emerged from an initiative of King Rama V in 1897. At that time, Thailand and other peaceful
countries in Indochina Peninsular faced with serious threat of colonization of the
western countries. Many had been
colonized upon different ‘accusations’. Particularly
to Thailand, the super powers claimed that Thai laws were barbaric, so they
requested the extraterrestrial right for their subjects living in Thailand until
Thai legislations became ‘civilized’ upon the ‘western standards’. His Majesty realized that this might be the
first step of full colonization process. His Majesty reacted to this ill will responsively
by establishing the ad hoc Laws Drafting Commission in 1897 to prepare
the Penal Code, the Civil and Commercial Code, the Civil Procedure Code and the
Criminal Procedure Code along the same line with the laws of the European
countries. This ad hoc Commission composed of experienced legal
practitioners and law professors from the United States and European countries with
a view to bar the western imperials from denying the Codes to be done. The Penal Code came into force in 1908, the
Civil and Commercial Code came into force in 1925 while the Civil Procedure
Code and the Criminal Procedure came into force simultaneously two years after
Thailand adopt the democratic regime of government with the King as the Head of
State in 1932.
[4] When the four Codes came into force, the extraterrestrial right
of all western countries over Thai jurisdiction had been lifted up country by
country. After the last one was released, regulatory reform seemed to be an unimportant
work. The government left this duty to each Ministry or Department dealing with
the problem in which the reform was required.
However, the key player in regulatory reform during this period was the
Office of the Council of State (OCS), a central legal agency of the government
and the successor of the Laws Drafting Commission of 1897. Since the main
function of OCS was regulatory drafting, OCS had to monitor and observe the ‘social
reality’ domestically and abroad for the purpose of both drafting and reviewing
the existing regulations to meet with any ‘change’. It could be said that this
institution has dealt with regulatory reform for very long period.
[5] In 1988, the Cabinet launched the Regulatory Impact Assessment
Initiative based upon the ‘deregulation policy’ which was fashionable at that
time. This initiative required the government agency which proposed the bill
for Cabinet’s approval to annex the regulatory impact assessment (RIA) report
altogether with the bill for its consideration.
The objectives of this initiative were to reduce State regulation in
doing businesses of private sector, to increase self-regulation of operators in
each business sector, and to enhance competitiveness of individual
entrepreneur. In the RIA report, the
government agency had to clarify the following questions rooted from the ‘Blue
Checklists’ of the Federal Republic of Germany:
·
Is regulation
unavoidably required to solve that problem?
·
What are the
adverse effects to State administration and public service if there is no such proposed
regulation?
·
Is the
proposed regulation creating additional step of work?
·
Is that step
of work necessary?
·
Is duration
of that step of work specified?
·
Is the
proposed regulation use permission or licensing system?
·
Is it
possible to use other system in lieu of permission or licensing?
·
If
permission or licensing system is unavoidable, rules and period thereof has
been clearly specified?
[6] The 1988 initiative unfortunately came up with unfruitful
result. In the writer’s view this
failure based on two grounds. Firstly,
the government failed to entrust specific government agency to be responsible
for quality control of RIA report. Many evidences supported that the RIA
reports of that day clarified nothing about the 8 questions, just yes or no. Secondly,
the RIA initiative was a newly imported idea at that time. The government official had no technical knowledge
and experience thereon and the government failed to educate the officials on
how to prepare the RIA report properly. In political perspective, just a few
politicians other than the Prime Minister General Chartchai Chunhawan
and the Minister without portfolio named H.E. Meechai Ruchuphan paid
serious attention to deregulation policy. Without strong political back up as
such, this initiative had then been forgotten shortly. The 1988 initiative did not totally fail
nevertheless. It sowed the seed of thought on regulatory reform to many
academics and progressive politicians and produced fruitful result in the next
few years.
[7] Lessons learnt from the failure of the 1988 initiative plus the
frog-leap development of information technology that made the World closer as
well as the relaxation of protectionism of international trade and the
portrayal of regional trade regime urged the numbers of policy makers and
academics realize the significant of regulatory reform. This time they emphasized the need for
regulatory reform in term of economic that if the regulation was unable to
response the rapid changing environment, Thailand shall inevitably lost her
national competitiveness in the global market.
The government decided to establish the Law Reform Commission (LRC) in
1992 so as to assure the continuity of regulatory reform work and established
the Law Reform Revolving Fund especially for regulatory reform work. Statutory
mandates of LRC are:
·
Considering
and proposing to repeal of obsolete or unnecessary regulations;
·
Bringing the
regulation in the line with current conditions and ensuring that it meets
current needs;
·
Removing
defect in the regulation;
·
Simplifying
the regulation.
By realizing that OCS has dealt
with regulatory reform work for many years, this institution has been entrusted
as secretariat unit of LRC by the provisions of the Council of State Act of
1979. With strong government back up and financial support, LRC initiated many
regulatory reform projects. The first
priority was to bring the regulation in the line with current conditions and
ensuring that it meets current needs.
[8] Unluckily, long political turbulence in Thailand which began in
the mid of 1992 in conjunction with Tom Yum Kung crisis in 1997 had
frozen LRC initiative. After recovery from economic crisis in 2002, regulatory
reform became dominant policy of the Thai government once again until 2006. During
that period, the government invested much effort and resources for regulatory
reform work. It had been annexed, as a critical part, with the flag ship policy
of the government, i.e. the public sector reform policy. The key
performance indicator for the achievement of regulatory reform had been
designated and all government agencies had to come across the median. Output of
this regulatory reform was impressive, more than 40 Acts of Parliament which
were obsolete or unnecessary had been repealed while more than 100 Acts of
Parliament and numbers of subordinate legislations were amended in the line with global
economic and social conditions of those days. RIA had been reincarnated with an
advice of the former H.E. Meechai Ruchuphan, but upon OECD regulatory
checklist this time. In this regard, OCS as secretariat of LRC had been
entrusted by the Cabinet to prepare manual for the making of RIA report while
the Office of Cabinet Secretariat had been entrusted to provide training on the
preparation of RIA report to government officials and to be Quality Control
Unit of RIA report. In preparing the RIA report, the government agency required
to hear the voice of all stakeholders concerning with the proposed regulation
prior to making of decision thereon. The outcome of this effort was quite
impressive as well. Thailand National Competitiveness assessed by many
international institutions during 2003-2005 was in satisfactory ranking. In the writer’s view, this was the golden
period for regulatory reform in Thailand since 1934.
[9] Unfortunately, Thai politics has become unstable once again
since late 2006 till 2014. The government had nothing to do other than solving political
turmoil and daily street protests. The problem became harder since Thailand had
also affected by the World worst financial crisis 2007. These situations had
adverse effects not only to State administration, but regulatory reform as well. Outcome of this hard time evidenced by sharply
plunged of Thailand National Competitiveness ranking during this period.
[10] The light of regulatory reform however shined brightly in the mid
2014 when political chaos came to an end and the Constitution of the Kingdom of
Thailand (Interim) 2014 came into force. Section 27 of this Constitution
establishes the National Reform Council to incite reformation in many aspects,
including regulatory reform. Though the
selection for the members of the National Reform Council is in process, the
Cabinet established under the provisions of the Interim Constitution of 2014
pays high attention to regulatory reform. The administration policy stated to
the National Legislative Assembly on September 12, 2014 clearly shows
industrious effort of the Cabinet in regulatory reform. The Administration promises to ‘bring the
laws and regulations in the line with current global conditions’ and to ‘ensure
that laws and regulations meet current needs’.
The key objective of this policy is to accelerate the National
Competitiveness of both individual and the country.
[11] What the writer found from historical analysis as above mentioned
is that the hurdle of regulatory reform movement in Thailand is ‘continuation
of government policy.’ Whenever Thai politics was stable like 1897-1932 period
and 2002-2006 period, regulatory reform policy was driven strongly and
continually and the output and outcome of this effort produced satisfactory
effect to the country as a whole. The
continuation of this policy however depends on ‘political stability’ which is
not within the arms’ length of Law Reform Commission or the Office of the
Council of State. If the government
could come across this hurdle, it is possible for Thailand to move forward
dramatically.
[12] As a Law Reform Commissioner, the writer views that regulatory
reform ideology is now generally accepted by Thai government officials, academics,
politicians and private sector since the result thereof produce impressive
output and outcome for the past years. We have the statutory institution like
Law Reform Commission to be responsible directly and continually for regulatory
reform function and best practice in so doing has been set up. We are able to
reap additional knowledge and experience in regulatory reform from many
successful countries like OECD and APEC member countries. The vision of the
existing LRC on regulatory reform, after analyzing the international trade
perspective is ‘Better Regulation for Better Lives’. The first step is to bring the existing
regulations to be in line with the existing global conditions. With strong political support and the call of
the public for ‘Country Reform’ nowadays, LRC plans to take 3-5 years from now
on to complete this pace. During this period, the Sub-committee shall be set up
so as to develop, through public participation process, the ‘better lives index’.
In the next session, LRC is going to apply such developed index as an indicator
for the achievement of regulatory reform in each field.
[1]Full-time Law Councilor and Law Reform
Commissioner, Office of the Council of State of Thailand <pakorn.nilprapunt@gmail.com> © 2014
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