By Petchanet Pratruangkrai

Foreign investors are observing the ongoing legal wrangling over industrial development with grave concern, urging the government to carefully address the issue and balance economic and environmental concerns.

The Central Administrative Court last week ordered an injunction against 76 industrial projects worth over Bt400 billion (S$16.92 billion) in Rayong, pending a final judgement on claims against eight government agencies by Rayong residents and the Anti-Global Warming Association.

"We [foreign businesses] are particularly concerned that the ruling might lead to projects not being able to make their contractually committed commercial-operations date, or that project financing might be withdrawn from Thailand due to the uncertainties," said Nandor von der Luehe, chairman of the Joint Foreign Chambers of Commerce in Thailand (JFCCT), after the ruling.

Saying that foreign businessmen are as concerned with the ruling as Thai businessmen, he said that to avoid hurting investor confidence, the government needs to promise fairness, predictability, the upholding of the rule of law and an environment of consistency in which to set up, operate and develop businesses in Thailand.

He added that investors respect that the court ruling was based on existing laws.

"The foreign business community fully supports environmental protection but at the same time the government should look at the laws [to see] whether they are balanced in support of environmental protection and at the same time supportive to investments," he said.

The Attorney General's Office on Friday filed an appeal to the Supreme Administrative Court. PTT Group, which owns 25 of the projects, has cried foul over the injunction. It plans a brainstorming session with other operators to seek a way out, if the appeal is turned down.

Among the 76 projects, several belong to foreign companies, including three owned by India's Aditya Berla Chemicals, two by Germany's Bayer, and one each by Australia's Bluescope Steel and Japan's JFE Steel Corporation. Several of them are joint ventures between Thai companies and foreign partners, like Siam Yamato Steel, a joint venture of Siam Cement Group and Yamato Steel; and MTP HPPO Manufacturing, a 50-50 joint venture between Dow Chemical and Siam Cement Group.

Munenori Yamada, president of the Japan External Trade Organisation (Jetro)'s unit in Bangkok, said that to increase foreign investors' understanding of the situation, Thailand needs to formulate and implement balanced environmental protection and economic development laws.

The Thai government could utilise the experience of the Japanese government, which faced and resolved similar difficulties in 1970s and 80s through adopting new technologies and proper regulations, Yamada said. This would help Thailand clear up its policies on investment promotion in the future, he said.

Dusit Nontanakorn, chairman of the Board of Trade of Thailand and the Thai Chamber of Commerce, said the court ruling had dangerously shaken investors' confidence, as it created a sense of uncertainly over regulations.

He backed the government's move to appeal and urged it to urgently boost investor confidence, or investors may consider shifting to other countries.

He said that nobody wants to invest in a country with unclear regulations, insisting that professional businessmen are now taking into account environmental concerns.

"Nobody wants to break the rules or cause troubles in the countries they are operating in. The Thai government must speedily clear up the conflict to further attract investment, as it is still necessary for the country's economic development," he said.