Thailand’s
Facilitation Act:
Easing
Business Regulations and Upgrading Transparency
Luncheon
Talk
by
Pakorn Nilprapunt
Full-time Law Councillor
Office of the Council of State of Thailand
Hosted by
The
American Chamber of Commerce’s Legal Committee
Monday
20 July 2015
Plaza
Athenee Hotel, Bangkok
*********
Members of American Chamber of
Commerce’s Legal Committee,
Distinguished guests,
Ladies and Gentlemen,
First of all, I would like to thanks the AmCham’s Legal
Committee in providing my friends, Khun Chintapun Dungsubutra, and I an
invaluable opportunity to talk about Thai regulatory reform initiatives to all
of you today. It is very much
appreciated. My special thanks go to Chris
for his industrious works. He actually contacted me to talk on this topic
to AmCham first time when I attended ASEAN-OECD meeting on Good Regulatory
Practice Conference in KL in March. Unfortunately, I am unavailable at that moment
because of my tough schedule. However, Chris
never give up though he is a very busy man! He came to see me at my office last
month and finally bring me here. Thank
you so much Chris.
Ladies and Gentlemen, I am going to provide all of you
the overview of regulatory reform initiatives in Thailand since the present
Government took office last year, and then Khun Chintapun is going to
clarify details of the Licensing Facilitation Act of 2015 which is one of many products
of the regulatory reform initiatives of this Government to ease of doing
business and to lift up transparency in Thai administrative procedure to you. Talking to this Act today is very appropriate
moment because it will come into force tomorrow!!!
Ladies and Gentlemen, let’s me turn back to regulatory
reform initiatives of the current Government.
When the Government of General Prayuth Chan-o-cha took office
last year, it had found that the past Governments, almost all, invested really
big public money in the provisions of such hard infrastructure as construction
of roads, power and water supply system, airport, seaport, IT and so on with a
view to enhance trade and investment of the country.
However, the
researches of international trade and investment institutions, both WEF and IMD,
on national competitiveness indicate that those investments are not attractive
enough. Additionally, corruption index
climbs up to considerable level while government efficiency is at the middle
low.
The current
Government was therefore of opinion that perhaps hard infrastructure may not be
problem of our national competitiveness, but such soft infrastructure as laws
and regulations and normal day-to-day working procedure of government officials
as well as their attitude which strict to the outdated bureaucratic fashion may
be the real iceberg for our progress. The
Government then entrusted the Law Reform Commission of the Office of the
Council of State, or you may know this Office in Thai name as “Krisdika,”
to do research on this matter.
After the research, the Law Reform Commission which is
now chaired by H.E. Meechai Ruchuphan; the former Speaker of the
National Assembly, found 3 main problems:
Firstly, legal mechanism of most of Thai’s laws
and regulations still based upon the close government control system which was
fashionable style of regulations during the 50s to the 70s.
This sort
of regulation is fit for trade protectionism regime of that day, but it becomes
hurdle for market-orientated economy of the World today. Under the close
government control system, permission or license of the authority is required
before doing almost all activities, even in our daily lives. Tons of document and evidence have to be
submitted to the authority for consideration in granting of any permission or
license. Step of works, work flows and
duration for consideration of the government officials of each step is known to
the government officials only, they are not disclosed to public. Significantly, there is no standard rules on
licensing procedure. Granting of license, therefore, depends on the “mercy” or
“efficiency” of each responsible government official which is variety.
In business
ankle, all these unclear practices make the applicants of license to be in dumb
daze, and they generate unnecessary administrative cost and burden to all who
have to apply for such license. Further,
this outdated legal mechanism provide the authority with very broad discretion in
granting of license. This loophole is
the ground for the misuse of discretionary power of dishonest authorities and may
lead to the most disgusting of all; the corruption.
Secondly, the review of Thai legislations in the
past was made from time to time, mostly depending on the order of the portfolio
Minister. You may assume by this fact
easily that most of Thai legislations are not fit for global super-dynamic
character of the World today. Many backbone regulations such as town and city
planning law, consumer protection law, energy law, petroleum law etc. have been
amended only for 3-4 times for the past 30-40 years as from the date these laws
comes into force, while the important law related directly to trade and
investment such as competition law has never been amended since it was enacted
in 1999!!
Thirdly, most of all politicians, officials and
the public
do not aware of impacts of regulations. Once
problem happened, almost all Thai politicians, officials or the public always
though that there were no legislations to cope with such problem despite we
have more than 650 Acts of Parliament that are in force today. They always cry out for “new” legislations
without regard to the existing one or the alternative measures other than legal
measure which are capable to solve that problem. They do not aware of duplication of the newly
proposed regulation with the existing. The
most important issue is that they do not realize the impact which may be caused
by the outcome of such legislation even in short term or long term.
Actually, the
Regulatory Impact Assessment Statement has to be annexed with all bills which
are submitted for approval of the Cabinet since 1988, but the RIA statements which
had been submitted to the Cabinet for legal policy approval composed of only rough
information or summary of legislations rather than detailed analysis of positive
or negative impact of the proposed legislations to economics, social,
environment and politics. Further, the cost-benefit
and cost-effectiveness relationships had never been assessed scientifically and
systematically. So, RIA Statement of the past years seem to be just a form for filling
such short answer as yes or no in the blanket!
Therefore, the Law Reform Commission proposed 3 regulatory
reform initiatives to the Government; that is to say:
1. to ease of doing business in Thailand and to enhance
transparency in Thai administrative procedure through the enactment of
Licensing Facilitation Act. This bill
passed by the National Legislative Assembly in the early of this year and it is
going to come into force tomorrow. In
summary, this initiative aims to narrow discretionary power of the government
official and it will make licensing process, work flow and duration of the
process known to public so as to establish transparency and accountability
environment in licensing procedure.
According to this initiative, the government officials shall have to do
their works at their best as it should be if they do not want to go to the
Court. Upon the Open Government Doctrine,
transparency is the most efficient champion against corruption. The details of
which shall be explained to you all by my colleague, Khun Chintapun, in
the next session;
2. to establish mandatory review of all legislations and
regulations through the enactment of law of what all lawyers call “the Sunset
Law.” This law requires the Minister
having charge and control of the execution of each law and regulation to conduct
review the law and regulation under his portfolio every 5 years or earlier, with
close consultation with stakeholders. The result of the review shall be
disclosed to the public and shall also be tabled to the Cabinet and the Parliament
as well. This initiative is going to
make all Thai laws and regulations become dynamic as it should be, rather than
sitting still as ever. At this moment,
this law has already been introduced to the King for His signature;
3. to lift up the regulatory impact assessment process to
be the legal procedure that “must-do” prior to submission of any
regulations to the Cabinet for policy approval.
The draft law on RIA is now under consideration of the Law Reform
Commission. This initiative will help the Government in making decision on regulatory
policy upon sufficient and scientific evidences for sustainable development and
better lives of the public rather than political popularity. The Law Reform
Commission is of opinion that this initiative is going to raise the quality and
reliability of Thai legislations for better lives of the people. The
Commission plans to propose this law to the Cabinet for approval in the mid of
August.
In evaluation of
achievement of the 3 regulatory reform initiatives as I have mentioned, the Law
Reform Commission is going to use the ranking of Thailand in both WEF and IMD
reports as our KPI. Our target is to
lift up our ranking for two levels from the existing stances in the first two
years after the completion of all three initiatives.
By now, I think I should stop my speaking on the overview
of regulatory reform initiatives of the existing Royal Thai Government and let
my college, Khun Chintapun, to go through the key principles
and details of the Licensing Facilitation Act of 2015 which is the main topic
of this meeting.
Thank you very much for your attention. Thank you.
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