Thailand's Mab Ta Phut needs clear environmental standards

20 March 2009 05:06  [Source: ICIS news]

By Bohan Loh

SINGAPORE (ICIS news)--Thailand will have to lay down clear environmental standards that petrochemical plants need to adhere to in Mab Ta Phut industrial estate after a court this month declared the area a "pollution control zone", industry officials and analysts said on Friday.

Thailand’s Rayong Administrative Court declared Mab Ta Phut -- major production site for chemical giants such as PTT Group and the Siam Cement Group (SCG) -- a pollution control area in the first week of March. However, the court or the government has yet to specify environmental standards that the companies must follow.

The Petrochemical Industry Club, an arm of  Federation of Thai Industries, has urged the government to carefully consider the court’s ruling because investor confidence could be adversely affected by the decision.

“A panel of experts will now be formed to study the effects of the ruling in-depth," said Adisak Nobthai, board secretary for the Petrochemical Industry Club. "And (they) will submit a report as soon as it is completed," he told ICIS news. 

The panel, a collaboration between the Petrochemical Industry Club and the Petroleum Institute of Thailand, another arm of the Federation of Thai Industries, is set to meet next week, Nobthai added.

The Federation of Thai Industries has estimated that up to Baht (Bt)288bn ($8.05bn) in petrochemical investments could be at risk if rules and standards were not clear.

The ruling by the Rayong Administrative Court was in response to petition filed by health and pollution control officials who said area residents were at risk from pollution or from any industrial-waste related accident

“There remain uncertainties over the new rules,” said Naphat Chantaraserekul, a senior investment analyst at brokerage firm, Kim Eng Securities, 

“We believe that if new rules are in line with international standards, they should not affect PTT’s 7th gas separation plant and phase II petrochemical project,” Chantaraserekul said. “But if [the] new rules are stricter, they might have to invest more,” he added.

However, market sources said different standards would have different impact on each industry.

An official of the PTT affiliate, PTT Aromatics and Refining (PTTAR), said the company was in full compliance with Thai Environmental Regulations and it regularly reported its emission levels to the relevant government agencies.

“Furthermore, all of our projects are Environmental Impact Assessment (EIA) approved. All the environmental impact has been evaluated and appropriate mitigation measures and monitoring program have been implemented,” said Panugorn Puengpradit, investor relations manager at PTTAR.

Sirima Dissara, an analyst with brokerage house KGI securities, said the current plants operated by the Siam Cement Group adhere to emission standards set by the European Union (EU), which are generally regarded as the most stringent levels.

“SCG does not expect to invest more based on the current standards,” she said.

SCG has four ongoing joint venture projects in Mab Ta Phut with US major Dow chemical, estimated at Bt53.7bn.

($1 = Bt35.76)

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By: Bohan Loh
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