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Published on August 10, 2007

Commerce Minister Krirk-krai Jirapaet was forced to withdraw the draft amendment from the NLA on Wed-nesday after members voted 76 to 64 to reject the Commer-ce Ministry's version. Instead, the NLA accepted the draft version introduced by Som-chai Sakulsurat and the mino-rity members of the House committee scrutinising this bill. Some 30 members decided to abstain.

Fearing that the NLA might proceed to vote on the draft version of the minority House committee members, Krirk-krai asked that the matter be put on hold. All the members of the NLA agreed and the consideration of the draft amendment reached a stalemate. The Commerce Ministry's draft version of the Foreign Busi-ness Act was mild compared to that of the minority members of the House committee.

To prevent foreign shareholders from using nominees to exercise control over Thai companies doing business in restricted sectors, the Commerce Ministry introduced the draft to stipulate that foreign shareholders must not hold more than 49 per cent in these companies. In addition, their voting rights in these companies must not exceed 49 per cent. But Somchai and other minority members of the House committee argued that, in order to settle the nominee issue once and for all, the draft amendment must include a clause - apart from the shareholding and voting rights limits - which would prevent foreign shareholders from exercising control over the management.

This "management control" clause is very sensitive because in practice it is very difficult to impose or regulate.

But the version of the bill promoted by the minority members of the House committee included this "management control" clause.

Krirk-krai believed that this clause was too stringent, leading him to ask for a withdrawal of the draft amendment altogether.

Yesterday, he indicated that he would revise the draft amendment to satisfy the majority of the NLA members. But he did not say how he would revise it or when he would complete it.

Foreign companies, foreign trade representatives, and embassies in Bangkok have been following the development of the draft amendment of the Foreign Business Act closely. They have expressed their opposition to any attempt to revise the law, which would restrict existing foreign operations. In addition, Thailand has failed to make the rules and regulations clear from the outset.

At the same time, the Retail Business Act, which the Commerce Ministry is also keen to pass within the term of this administration, looks unlikely to progress any further. The draft law is now being scrutinised by the Council of State, the country's supreme legal body. The Council reportedly disagrees with the draft on the grounds that it is not legally solid.

For instance, the draft law would loosely authorise local communities to regulate retail businesses. But what would become of Thailand's rule of law if a particular kind of retail company was allowed, for example, to open in Prachuab Khiri Khan, but was not allowed to do business in Nong Khai?

There are four major groups flexing their muscles over the Retail Business Act - retailers, the Commerce Ministry, consumers, and the employees of Tesco-Lotus, the UK-based superstore.

Small retailers are up in arms about the expansion of the giant retailers. The Commerce Ministry is trying to bring about order by introducing the country's first retail law. Consumers are in favour of the big stores because they feel they benefit from their presence. The employees of Tesco-Lotus have been lobbying fiercely against any attempt to curb the expansion of the superstore outlets, claiming that their jobs and those in related businesses are at stake.

The Council of State does not seem to support the Retail Business Act, hence the Commerce Ministry, the sponsor of the bill, will find it difficult to it push through.

To push the bills through Parliament, the government needs to introduce them through the Council of State or through at least 50 supporting members of the NLA. At present, the prospect of the government succeeding in mustering 50 NLA members to introduce the Retail Business Act looks very remote.

Thanong Khanthong

The Nation