Environmental policies in Thailand are governed by the Factory Act B.E. 2535 (1992) (“Factory Act”) in conjunction with other legislation. The Factory Act aims to increase public participation and follow the “polluter pays” principle.[1] Different stakeholders are involved in the process for the EIA such as the business undertaking the project, the Office of Natural Resources and Environmental Policy and Planning (ONEP), the permitting agency, the Expert Committee Review (ERC) and various consultants.
In order to receive a permit, businesses must undergo several assessments to ensure that their factory level of pollution has been properly assessed.[2] Before starting the process, businesses must:
✓ Define the type of projects and activities of the factory;
✓ Decide whether it intends to obtain a BOI certification for promoted activities;
✓ Identify where they intend to build the factory; and
✓ Understand the process of obtaining environmental & health impact assessments.[3]
Type of factory
Since 2019, a ‘factory’ means
buildings, premises, or vehicles using machine with total power from 50 horsepower or equivalent of 50 horsepower or more or which employ 50 workers or more with or without machinery to engage in factory operation in accordance with the type or kind of factory as prescribed in the Ministerial Regulations.[4]
The Factory Act establishes 3 types of factory groups:[5]
If a BOI promotion is also part of the business’ intention to settle in Thailand, companies must ensure that they seek assessment either before or after the issuance of BOI certification, depending on the type of promoted activities.[8] A Group 3 factory is one that requires a Ror. Ngor. 4 permit from the Industrial Works Department.[6] The process will depend on the type of approval needed, which will be based on the 107 types of projects and activities specified by the Ministerial Regulations.[7] This permit will not have to be renewed, and annual fees are required. Among the requirements, the factory must be constructed away from public areas or buildings and must not cause a nuisance to the public.
Once the factory has been categorized into a group, MPG can assist in submitting the application for the permit for the public hearing as well as other documents[9] required to be submitted.
The permitting agency can delay the process while waiting for the impact assessment to be reviewed by ONEP and approved by the ERC. It is important for businesses to understand when those impact assessments are required.
Analyzing the environmental impact of a business
To establish a business, an entrepreneur must examine whether the business falls under the scope of any of the following reports:
Initial Environmental Impact Report (IEI): an initial study to forecast the environmental impacts using primary data or available data.
Environmental Impact Assessment Reports (EIA): The report must be prepared by a licensed consulting firm registered with ONEP, who will then receive the report and comment for approval. 36 project types and seizes require an EIA.[10] It is the responsibility of the owner to hire the consultants. Important criteria set by the Notification to EIA are:
✓ Projects or activities of government agencies, state enterprises or private sectors that may cause severe impacts on the community. An Environmental Impact Assessment report must be prepared for projects or activities that may seriously affect the community in terms of environmental quality, natural resources, and health, and a process for public hearing and stakeholders should be established.
✓ The person who prepares the report according to the announcement must be a licensed person who has the right to prepare an environmental impact assessment report and has been registered with the Office of Natural Resources and Environmental Policy and Planning, Ministry of Natural Resources, and Environment.
The ERC, made up of ONEP officials, the permitting agency and the consultants will review the report and will grant the permit upon approval.
Environmental and Health Impact Assessment (E/HIA): 12 types of activities and projects require E/HIA.[11] There are several key criteria when it comes to public hearings throughout the EHIA process for activities that may cause severe impact on the community in terms of environmental quality, natural resources and health.[12]
Environmental Safety Assessment (ESA):[13] the aim of this report is to:
✓ Identify adverse impacts to the environmental, and natural resources associated with the business and to formulate effective environmental management and monitoring plans to mitigate identified environmental impacts.
✓ Identify health and safety hazards and formulate hazard management measures for prevention purposes.
A fifth report may be required, known as the IEE, if the proposed project/activity is located within an Environmentally Protected Area or in Asia Industrial Estate in either Rayong or Samut Prakan Provinces.
The EIA needs to be approved before the issuance of a permit. The time period can vary but the decision is generally delivered within 60 days of the submission to ONEP.
Obtaining a factory license is a complex process requiring an in-depth analysis and a thorough understanding of the various components of the business. Accordingly, companies should always seek legal advice prior to commencing an application.
[1] Thailand Board of Investment Guide on Environmental Regulations, p2.
[2] Ministerial Regulation No.3 B.E. 2535 (1992), Issued pursuant to the Factory Act B.E.2535 (1992).
[3]Notification of Ministry of Industry Re: Preparation of report on the study of prevention and mitigation measures on the impact to environmental quality and safety B.E. 2552
[4] Factory Act (No. 2) B.E.2562 (2019), section 5.
[5] The Ministerial Regulation Prescribing Categories, Types and Sizes of Factory, B.E. 2563 (2020), Published in the Royal Gazette 5 Aug 2020.
[6] Factory Act (No. 2) B.E.2562 (2019.
[7] Ministerial Regulations No. 1 B.E.2535 (1992), Issued pursuant to the Factory Act B.E.2535 (1992).
[8] Thailand Board of Investment Guide on Environmental Regulations p46 and p53.
[9] Regulation of Ministry of Industry, Re: Public hearing on the approval of a receipt of notification on factory operation commencement, a factory operation permit, a factory expansion permit in pursuant to the factory law B.E. 2555 (2012).
[10] Notification of the Ministry of Natural Resources and Environment on Projects, Undertakings, or Operations Required to Provide an Environmental Impact Assessment Report and Rules, Procedure, and Conditions in Providing an Environmental Impact Assessment Report (“Notification to Provide EIA”), Annex 3.
[11] Environmental and Health Impact Analysis of Projects Affecting the Environment and Natural Resources.
[12] Notification of The Ministry of Natural Resources and Environment: Prescribing Criteria, Methods, Procedures, And Guidelines for Preparation of Environmental Impact Assessment Report for Projects or Activities That May Cause Serious Impacts to The Community in Both Environmental Quality Natural Resources and Health (No. 4), B.E. 2560 (2017)
[13] Notification of Ministry of Industry, re: Preparation of report on the study of prevention and mitigation measures on the impact to environmental quality and safety’ dated September B.E.2552.