Thai Ruling Highlights Pollution Concerns - WSJ.com

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By JAMES HOOKWAY

BANGKOK -- Thai government officials said they would appeal a court ruling to suspend dozens of projects at the country's largest industrial park because of pollution concerns, saying the order could alarm investors as Thailand shows signs of emerging from the global economic slump.

Thailand's Administrative Court late Tuesday ordered 76 industrial projects at the Map Ta Phut complex on Thailand's eastern seaboard to temporarily shut down while government investigators examine whether they had disregarded environmental health regulations. The projects include some run by the country's largest corporations, national oil and gas company PTT PCL and industrial conglomerate Siam Cement PCL.

The court-suspension order reflects growing concerns in Thailand over the threat of pollution after decades of rapid growth that has transformed a mostly agrarian economy into a major exporter of automobiles, electronics and consumer goods. It could be viewed as a setback to Prime Minister Abhisit Vejjajiva, who recently returned from a trip to the U.S. in part to drum up investor confidence in Thailand.

Mr. Abhisit on Wednesday ordered Thailand's industry ministry to appeal the court order, said government spokesman Puttipong Punnakan.

Environmental activists say the 76 projects at Map Ta Phut violate a requirement in Thailand's new constitution, enacted in 2007, that says the government must safeguard the right of ordinary people to live in a healthy environment. The activists allege that government agencies had failed to verify the safety of the various industrial projects in the area.

Supavud Saicheua, an economist with one of the country's largest brokerages, Phatra Securities PCL, said the combined investment value of the projects in Map Ta Phut was around 400 billion baht ($11.9 billion), or some 4.5% of Thailand's gross domestic product. "They comprise strategic investments that define Thailand's long-term competitiveness in manufacturing," Mr. Supavud said. A lengthy shutdown, he said, "could have a material impact on investor confidence and affect Thailand's long-term growth potential."

Siam Cement informed the Stock Exchange of Thailand that the ruling could affect a new naphtha cracker plant being constructed by its unit, SCG Chemicals, as well as a number of joint-venture operations. The company said it would work together with the government to find a solution. It shares fell five baht, or 2.2%, to close at 222 baht a share.

PTT, which has 25 projects at the Map Ta Phut complex, said in a statement that it strictly complies with international standards and has been cooperating with government agencies to reduce chemical emissions in the area. Its shares closed three baht, or 1.6%, higher at 262 baht, while the broader Stock Exchange of Thailand Index rose 0.25% to 717.07 points.

Write to James Hookway at james.hookway@wsj.com