วันอาทิตย์ที่ 26 กรกฎาคม พ.ศ. 2558

Inside Licensing Facilitation Act by Chintapun Dansubutra

Thailand’s Facilitation Act:
Easing Business Regulations and Upgrading Transparency
Luncheon Talk
by
Chintapun Dansubutra
Senior Legal Officer
Office of the Council of State
Hosted by
The American Chamber of Commerce’s Legal Committee
Monday 20 July 2015
Plaza Athenee Hotel, Bangkok

*********

Ladies and Gentlemen,

As Khun Pakorn has told us, the Licensing Facilitation Act was borne out of the attempt of the Law Reform Commission or the LRC to reduce unnecessary administration cost and burden created by licensing system.  In the LRC’s view, the licensing system in the past was used as a control mechanism by the government to control and regulate most of private activities, the mechanism that was believed to be suitable for that time.

However, since then the world legal concept has evolved from heavy regulation to deregulation in the 80s before proceeding to better regulations in 2000s, and to better regulations for better lives nowadays.  The LRC is of the opinion that, the close control of government through licensing is no longer compatible with trade liberalization environment of the world today.

This is because, under the licensing system, the power to grant a license is entrusted to Official or authority by Acts of Parliament with vast discretionary power.  And in most cases, the Legislators have even delegated the powers to lay down subordinate legislations to determine rules, procedure and conditions for the granting of each license to Official or authorities as he thinks appropriate.

The rationale for entrusting very vast discretionary power to Official or authority came from the perception that, those Officials or authorities were deemed to be the people who were more knowledgeable than those in private sector at that time.  Even though such rationale may no longer hold true in today’s word, this inherit perspective can still be found in many laws and regulations that have been enacted recently.

With vast discretionary power and broad power to lay down rule for licensing process, the granting of most licenses today depends largely on merit and ethic of Official or authority in each case, which has resulted in inconsistency and unpredictability in the decision of Official or Authority regarding the grant of license. 

And the effect of such inconsistency and unpredictability in licensing system has not only caused unnecessary burden to the public, but it has also created opportunity for nepotism and corruption in Thailand as well.

The LRC has found the situation to be critical. This is because the unnecessary and excessive burdens that licensing has brought to the public is likely to affect trust in Thai legal system.  And when the trust in Thai legal system declines, not only investment in Thailand will be quickly evaporated, but the enforcement of laws would be very difficult if not impossible.

Another hard fact about bureaucracy in Thailand is that, almost all authorities do their works without collaboration with others, even within the same agency.  Working with others in concert manner is something strange in Thailand’s bureaucracy.  People, therefore, have to do hard work at their own cost when dealing with bureaucracy.

If one wants to start a business, he has to find out by himself which license is needed and which authority is responsible for such license.  Where is location of the office of such authority?  And what are documents needed for application for license or permission?

Moreover, since workflow and timeframe for processing of licensing application are normally different from authority to authority, and they are not easily accessible by the public, the people and investors therefore do not know when the license will be granted or how long they have to wait for the license.

The LRC has found this situation unacceptable.  This is because the situation has caused unnecessary administrative burden in term of compliance and administrative costs to the public and businesses.  And this even result in corruption and bribery practices.  But to solve such problems, it is necessary to re-examined and re-evaluated the appropriateness of all the laws that use of close government control system.

In the LRC’s opinion, the use of close government control system for granting license, permit or registration should limit only to certain activities or businesses that directly relate to national security, public order, public health or good moral.

Nevertheless, since Thailand has over 650 Acts of Parliament that are currently in-force and over 2000 licenses, permits or registrations, to review each law or each licensing was deemed to be unsuitable way, simply because it would take several years to complete such task.

The LRC then turned back to analyze these problems again and came to conclusion that the problem of Thai licensing system, in fact, stem from the vast discretion power of authority entrusted by the law.  Such vast discretionary power without proper transparency and accountability is the underlying problem of Thai licensing system.  Hence, in order to resolve the problem, the LRC has proposed that:

First, the standard procedure for the granting of license shall be set up by the Act of Parliament in which all government agencies or authorities have to comply with;

Second, in order to create transparency, such standard procedure must require all authorities to disclose to the public the rules, procedure, conditions, costs and period of time for the applying and granting of each license, as well as all documents and evidences which shall be submitted altogether with the application;

Third, to ensure the ease of licensing, the Act of Parliament on standard procedure for granting license must specifically prescribe that, if any official fails to comply with such standard rule and the manual, he must be subjected to disciplinary action and may even be subjected to criminal penalty in some cases;

Lastly, in order to make current laws and regulations become more dynamic, each authority, with close stakeholders’ consultation, must be charged with a responsibility to review the law that empowers him to grant license as to whether such licensing should be improved, repealed or replaced by any other measures on every certain period of time.

The LRC therefore drafted the Licensing Facilitation bill upon these principles, and submitted it to the Cabinet.  It should be noted that, this bill was one of the first six bills that the current government submitted to the National Legislative Assembly.  This demonstrates that the government has set priority for reducing burden of the public and dealing with transparency problems above all.  The bill had been approved by the National Legislative Assembly and published in the Government Gazette on the 22nd of January 2015, and it will come into force at the expiration of 180 days as from the date of its publication, which is indeed tomorrow.

Now let me turn to the main substance of the Licensing Facilitation Act. The first question anyone would ask is that “To whom this so-called the Licensing Facilitation Act applies to?” And what is the scope of this Act?

The answer is simply that, this Act applies to all government agencies, regardless whether they are a central government agency, local administration, public organization or even professional association such as the engineering council or the medical council. It could be said that if an agency has been empowered by law to grant license, permit or registration, it will be subject to the Licensing Facilitation Act.

Despite broad scope of application, there are still a few exceptional cases where the Licensing Facilitation Act will not apply.  These exceptional cases in the Licensing Facilitation Act are:
(1) the Parliament and the Cabinet;
(2) the Court’s procedure and judgment, and the performance of duty of Official in civil case in accordance with civil procedure;
(3) the execution under the criminal procedure;
(4) the licensing under the law on natural resources and environment;
(5) the licensing related to military strategic operation, including laws related to arms control and private armory; and finally
(6) any other activity or agency that shall be prescribed later by a Royal Decree.

In this regard, I would like to point out that, despite the possibility that some additional activities or agency might be exempted from the compliance with this Act by mean of the promulgation of a Royal Decree at the latter time, the Council of State or Krisdika has already given recommendation to the Cabinet that, the measures under this law should be applied to the greatest extent. Since this Act will enhance transparency in public governance and eases the burden of businesses, both local and foreign investors.  Hence, I don’t think we will see the Royal Decree on the additional exemption anytime soon.

As for other substantial part of the Licensing Facilitation Act, this Act contains four major elements that are based on the aforementioned proposal of the LRC.  These four key elements are:
(1)         Licensing Manual and Standard Proceeding for Licensing Application
(2)         Review of Licensing and Licensing Process
(3)         Reduction of License Renewal Process, and
(4)         Establishment of Service Link Center and One Stop Service Center

For the Licensing Manual and Standard Proceeding for Licensing Application, Section 7 of the Licensing Facilitation Act requires any government agency or authority that has been entrusted by law to grant any license, to prepare a manual for licensing application.  The licensing manual, as stipulated by the Licensing Facilitation Act, must at least contain rules, procedure and conditions (if any) for the application for license together with workflow, period of time for  processing, as well as the list of documents or evidences that are needed to submit with the application.

The Act also requires that such manual must be made available both electronically via website of the agency or authority and displayed at the place for submission.  The hard copy of the manual must also be provided upon request from individual with minimal cost as prescribed in the manual.

The licensing manual that is stipulated under this Act is the most crucial element in creating transparency in the licensing process.  This is because, with the manual that lays out the workflow together with precise timeframe, the public will be, for the first time, able to understand the process and gauge efficiency of each licensing process and agency.

And by disclosing criteria or conditions in making decision for granting licensing, the public will also be able to examine or scrutinize the decision of official regarding licensing, and protecting their own interests, especially in the case where there is an abusive of discretionary power by official in charge.

The requirement for documents or evidences that are needed for submission with a licensing application is also another prominent feature of the manual.  Section 8 of the Act places the duty to the Official at the counter to examine the application as well as attached documents or evidences upon submission of such application without any delay.

Where there is any defect in the application or certain required document or evidence is missing, the Official at the counter shall first notify the applicant to fix it.   However, in the case where the applicant cannot correct or amend such defect at that moment, the Official is required by this Act to make a written record of the defect or requirements that are needed to be fulfilled as well as specified a clear timeframe.

Then both official and the applicant shall sign their names on that record.  A copy of that record must be given to the applicant to keep as evidence which is very important in case the applicant should decide to bring any case against such Official in the future.

Apart from being evidence, such record also has other significant consequence.  In the case where the application has been corrected or the missing documents or evidences have been fulfilled as specified in the aforesaid record, the Official can no longer refuse such application on the ground of defect or insufficient documents or evidences.  The only ground that the application can be rejected now is negligence or dishonest in the performance of duties of the Official who has signed the record.

In such case, the authority in charge of granting license may still order as he sees fit including calling for additional documents or evidences, but in doing so, he is also require by Section 8 of the Act to bring disciplinary action or a charge against the relevant officials at least on the ground of negligence.

The real world effect of this requirement of the Act to bring charge against the relevant Officials is yet to be seen, since this is the first time such requirement has ever appeared in Thai legislation.  The LRC is expecting that the requirement will, in any case, promote accountability in performance of duties of Official in granting license and, at the same time, eliminate the dishonest practices or tactics of some Official in carry on calling for additional documents or evidences in order to delay licensing application process as we see nowadays.

It should be noted here that, in the case where the applicant fails to comply with the requirement on the record within prescribed period or timeframe, Section 9 of the Licensing Facilitation Act stipulates that, the Official, in such case, must return the application together with written statement of the ground for the return.  And in such case, the applicant can choose, either to appeal against the decision in accordance with the law on administrative procedure, or alternatively, simply submit a new application.

Apart from rules, procedure and conditions for the application, workflow, as well as the list of documents or evidences, the Licensing Facilitation Act also requires the licensing manual to specify period of time to process application.  While the agency may, choose either to put exact time or maximum period needed for processing application, Section 10 of the Licensing Facilitation Act requires that Official or authority to complete the processing of application within the period prescribed in the licensing manual, and notify the result to the applicant within seven days as from the date he finishes the consideration.

And in the case where the Official or authority is unable to finish his consideration within the specified timeframe, the Licensing Facilitation Act also stipulate that, such Official or authority shall notify in writing the ground of delay to the applicant every seven days.  Also he must submit a copy of such notification letter to the Public Sector Development Commission or PDC every times, so that the PDC, which is the third party, is made aware of the delayed case. 

And if the PDC is of opinion that such delay is caused by unreasonable ground or by inefficiency in part of the authority or the related agency, Section 10 of the Act also entrusts the PDC with the power to report such case to the Cabinet together with recommendations to increase efficiency.

Nevertheless, it should be noted here that in the case where the Official or authority fails to provide written notification of the ground of delay to the applicant, Section 10 also states that, except where the failure to provide notification is caused by force majeure, such Official or authority shall be deemed to commit or omit an act which causes damages to others, and shall also liable to such damage.

From all the aforesaid conditions and requirements set out by the Licensing Facilitation Act, one can appreciate the fact that, the success of this Act in achieving its objectives is laid upon the compulsory preparation of licensing manual.  Therefore, the LRC who is the drafter of this Act chooses to set a deadline requiring, all agencies entrusted with the power for issuing license, permit or maintaining registration, to complete the preparation of manual thereof within 180 days as from the date of publication of this Act in the Government Gazette which is also tomorrow.

Furthermore, to ensure that the manual is made appropriately, the Licensing Facilitation Act entrusts the Public Sector Development Commission or PDC with the duty to later examine and inspect the manual, as to whether the workflow and timeframe for the granting of license in the manual comply with the rules and procedure for good public governance or not.

And If the PDC is of opinion that such workflow or timeframe of any manual may cause unnecessary delay, unnecessary cost or burden, the PDC may make a recommendation to the Cabinet for changes in the licensing process.

Now, let’s turn to the Review of Licensing and Licensing Process, which is another important element of this Act.

Apart from the licensing manual and standardized process for application, the mandatory review of licensing system is another major component.  Section 6 of the Licensing Facilitation Act requires each authority to conduct review of each law that empowers him to grant license on whether such licensing system should be repealed or replaced by any other measure.

The review must be carried out, every five years as from the date of enforcement of the Licensing Facilitation Act.  The five year period is the minimum standard imposed by the Act.  The authority, where it deems necessary, may choose to review the licensing system any time before the expiration of the five year period.  And if the authority finds that it is necessary to repeal or replace the licensing system, the authority shall file the report of such review to the Cabinet for consideration.  In this regard, the Cabinet must take recommendation of the LRC on the matter into its consideration as well.

The requirement for periodical review of licensing system is based on the assumption that, during such period, the advance in technology such as computing technology or changes in circumstance may render certain requirements under licensing system obsolete.  It is the intention of the LRC to use the mandatory review as a mechanism to force authorities to update or examine the necessity of their licensing system.

In this regard, it should also be noted that, the requirement for review of licensing system every five years under the Licensing Facilitation Act is also in line with another law reform mechanism recently introduced by the LRC, in form of Sunset Law.  Presently, the Royal Decree on Sunset Law has been proposed by the LRC to the Cabinet for consideration.  This Royal Decree requires each Minister to conduct review all laws and regulations under his responsibility, regardless of having licensing or not, every five years.  This is also ex-post evaluation of legislations to ensure that all laws and regulations currently in-force will continue to be relevant with the increasing dynamic world.

Under the proposed Royal Decree, the review of laws and regulation must be conducted with close consultation with stakeholders, and the report shall not only be sent to the Cabinet and the Parliament, but it shall also be disclosed to the public in accordance with open government doctrine.

Moreover, any Minister who fails to comply with this duty under this Sunset Law shall be regarded as willful omission of the performance of his official duty, which will be the ground to remove from office under the law on Counter Corruption Commission and also be a ground for criminal liability under section 157 of the Penal Code.

Another innovative and interesting component of this Licensing Facilitation Act is the Reduction of License Renewal Process, which is in essence the creation of the automatic system for license renewal.

This component has borne out of pragmatism of the LRC. During the course of the study on licensing, the LRC has found that many licenses need to be renewed annually.  And in the process of renewal of these licenses, authorities are required by laws to inspect or carry out certain acts to ensure the compliance of licensees to the laws and regulation.

However, due to limited capacity of most authorities, most of the inspection couldn’t be done in time before these licenses expire.  And by requiring all licensees to be inspected in the renewal process, many license renewal processes are gravely delayed without proper justification.

The LRC, therefore, institutes a new proceeding under this Act for license renewal, whereby a Royal Decree can be promulgated to allow renewal of certain license to be done only by payment of annual fee and bypassing the process specified by the law governing such license.

Nevertheless, in order to introduce such Royal Decree to replace license renewal process, Section 12 of the Licensing Facilitation Act also stipulates a special condition whereby both Office of Public Sector Development Commission or OPDC and relevant agencies must jointly initiate the draft Royal Decree together to the Cabinet.  The Cabinet will then send the draft to the Parliament for its consideration within 30 days.  And only upon expiration of the 30-day period, and without any objection from the Parliament, the draft Royal Decree shall then be submitted to the King for His signature.  This process is deviated from regular process for Royal Decrees which can normally be submitted to the King for his signature without first table it to the Parliament.  The special process is prescribed with the intention to prevent misuse of this new short-cut to reduce responsibility of authorities to the point that it might have effect on public safety.

In addition to such safeguard by adding extra condition for the promulgation of Royal Decree to replace the license renewal process, the LRC has also prescribed Section 13, to places the authority with the duty to impose rules and guidelines for monitoring business or activity of the licensee, as to whether it complies with laws related to licensing or not.  Under Section 13, authorities also have continuing duty to monitor compliance with those rules and guidelines.

Also if it appears to Official or upon any complaint that any activity or business of the licensee causes nuisance or damage to others, Section 13 also imposes duty on Official to conduct investigation and to take any appropriate action under his powers and duties to stop such nuisance or damage without any delay.  Failure to do so is deemed to be the omission of official duties as prescribed by laws and will be liable for damage resulting from such omission.

Now we come to the last key element of the Licensing Facilitation Act that is the Establishment of Service Link Center and One Stop Service Center.
Here, the Licensing Facilitation Act prescribes each government agency to establish its Service Link Center or SLC to accept applications and to provide license-related information as prescribed by the licensing laws under its responsibilities to the public in accordance with the future guideline that will be laid down by the PDC.

The concept of SLC is to reduce the burden of the general public, especially small businesses, that need to obtain several licenses for single activity, and to pave way for future One Stop Service Center which has long been a concept, but it has never become reality before this Act.  

One of the problems that have stopped One Stop Service Center to become a reality in Thailand was a lack of legislation that allowing a central authority to be established.  Moreover, government agencies have always been reluctant to delegate licensing power to other agencies, since they view delegation as reduction of their power. Hence they have always objected or dismissed the idea of the One Stop Service Center.

The LRC tried to solve these obstacles by incorporating Section 14 in the Facilitation Act.  Under Section 14, the Cabinet will have the power to propose a Royal Decree to establish One Stop Service Center or OSSC within the Office of the Prime Minister to act as the central agency for receiving all applications under the laws related to licensing.

Under the Licensing Facilitation Act, any application, documents, evidences or fees submitted to the OSSC shall be deemed automatically to be submitted legally under the laws related to such licensing or rules. And the staff of OSSC will be subjected to Section 8 of the Licensing Facilitation Act as well as the Official or authorities in charge of such license.

As for the question when will the OSSC be set up?  I am under the understanding that OPDC has been studying to find the best model for establishment and operation of OSSC for quite a while already, hence we could hear about the establishment of OSSC in the very near future.

I think, by now, I have covered all the keys elements of the Licensing Facilitation Act 2015 and I should end my presentation here.  I would like to thank you all for your interest and attention.  For more detail information on the Act, there is a translation of the Act into English that has been done by Khun Pakorn. If you haven’t yet been given, you can download it from the English page of the OPDC website at www.opdc.go.th or at Khun Pakorn’s blog at lawdrafter.blogspot.com.


Thank you.

ไม่มีความคิดเห็น:

แสดงความคิดเห็น