Environment: Mab Ta Phut industrial zone humming again & so are “Cancerous Agents”

Apart from people being hurt, wild-life also suffered from Mab Ta Phut

By Tammy, Thai Intel’s humanity journalist

I am very saddened, at the moment of writing this report, about the nature of human beings.

The destruction that we can do, for a few more bucks.

The Mab Ta Phut industrial zone problems started about a year and a half ago, when the Thai administrative court heard villagers who lived around Mab Ta Phut, of odd occurences of cancer in their communities. Teachers also, went to give testimony of how schools in the area, had to send students home because on some days, the pollution was so bad the air reeked of bad smell.

The administrative court issued an injunction against all further development in the area-stopping about 10o mega investments projects in chemicals and other.

The outraged was massive and hit the core of Thailand as a country that welcomes foreign investments. The result is a great deal of pressure, from even the Japanese Ambassador to Japanese trade and investments units, to practically every Thai trade and investment units to “Solve the Investment grid-lock.”

Thailand’s prime minister, Abhisit created a unit to study a solution with the in-put from everyone, and secondly, as the pressure mounted, a superior court over-turned the injunction.

The above sentence sounds simplistic and straight forward-but behind the scene it is a different case.

The panel that was formed to work out a solution, took little interest in the communities in the area but the main objective is to pacify the villagers objection. A host of tactics were used to accomplish that, ranging from support to the villagers that welcomed the investments to under-the-table-payment to bribe many NGOs working in the area to keep silence-along with a massive public relation campaign in the area to show that the investments are not a health concern.

On the court situation, as Thailand is a network oriented country that is very much under an authoritarian system with a highly politicized justice system-the pressure resulted in a near total reversal of the earlier rulings-without a single hearing to listen to villagers-and supported by the opinion of the unit set up to solve the problem.

Being Thailand, the question is not if it is legal or not-but how to over-come the legal grid-lock-which was like a complicated maze. However, one by one, all the locks were released-involving the efforts of everyone, but those villagers and NGOs.

The above is nothing new for Thailand or the globe-when it comes to the struggle between out-of-control-development and humanity.

What is sad, however, apart from “Cancerous Agents” increasing in the area around the Mab Ta Phut area-is that about an hour away from Mab Ta Phut there is an island.

The island is home to wild monkeys.

But because of the air quality is so poor, the food chain on the island had been destroyed. The monkeys, starving on a fast depleted natural food source, had been relying on tourist to the island to feed them food.

But the pollution has gotten so bad in the area and deteriorated the island so much, last year hundreds of monkeys could not wait for tourist to come to the island to feed them.

The monkeys had no choice, but to swim into the ocean, heading to fishing boats that comes close to the island-looking for food.

The fishing boats, reported in the local newspaper Khao Sod, told the newspaper that they do not carry enough food for the hundreds of monkeys that swamped their boats-but the monkey had to fight for the little food that was there and many drowned in the attempt.

The villagers near Mab Ta Phut, has long-lost their way of life, namely, before the set-up of the industrial zone, the area was mainly fruit orchids. The restive area’s tradition, is now one of the regions largest industrial area-with 1,000s of factories.

  • The following is from ICIS:

Project activity at Mab Ta Phut starts humming again after suspensions are lifted

Project activity at Thailand’s sprawling petrochemical hub, Mab Ta Phut, is shifting into full gear now that a court impasse that halted 76 projects has finally been lifted.

The country’s Central Administrative court on September 2 allowed nearly all of the projects in Mab Ta Phut to proceed with construction and operations – nearly a year after it took out an injunction on them.

The decision was based on the list provided by the executive branch of the government, which itemized 11 industries – broadly consisting of the petrochemical industry, power plants, dams and airport runway extensions.

On September 28, 2009, investor sentiment in Thailand, already rattled by political instability, took another blow from the suspension of major projects in Mab Ta Phut. The court injunction was issued on the grounds that the projects were harmful to the environment under Article 67 of the Thai constitution.

“There was no organic law or clear guidelines in place before the court suspended the projects, but now investors [will] have a better idea of which government authority to get their licences or permits from,” says Naphat Chantaraserekul, analyst with securities and derivatives brokerage firm DBS Vickers Securities in Bangkok.

Sutthichai Kumworachai, analyst with Thai brokerage house KGI Securities, says that the list of 11 industrial activities would receive a “standard set” of regulations that would allow firms to decide whether to carry out future investment.

“In our view, this would help the country regain the confidence of foreign investors, as the uncertainty comes to an end and they have a rule to follow,” he says.

Mab Ta Phut, in Rayong province, is one of the world’s largest industrial estates and is home to numerous multinational companies such as US-based Dow Chemical, as well as Thai conglomerates PTT group and Siam ­Cement Group (SCG).

TWO PROJECTS SHELVED

From the provided definition of harmful industries, the court on September 2, 2010 withdrew operating licenses from only two of the original 76 banned projects – PTT Chemical’s 95,000 tonne/year monoethylene glycol (MEG) expansion project and Siam Cement subsidiary Thai Plastic and Chemicals’ 90,000 tonne/year vinyl chloride monomer (VCM) expansion project.

To free themselves from suspension, the two firms need to conduct new environmental and health impact assessments, on top of a public hearing – requirements under the Thai constitution – before they resubmit their application to the court to have their bans lifted.

“We believe that it should take at least six to 12 months for terminated projects to apply for an operating license, get EIA [Environmental Impact Assessment] and HIA [Health Impact Assessment] approval, and conduct a public hearing as required by law,” according to Chantaraserekul.

PTT Chemical is conducting health and environmental assessments on its suspended MEG expansion project and is scheduled to conduct a public hearing by the end of the year.

“The assessments and the public hearing is a requirement by law and they need to complete them before the court could approve them to operate,” Chantaraserekul says.

MOVING FORWARD

The Industrial Estate Authority of Thailand, the official body responsible for processing and handing out most of the operating permits to the projects in Mab Ta Phut, began giving out licenses soon after the court verdict on September 2.

PTT, the largest oil and gas player in Thailand, is believed to have received its operating permits towards the end of September – including the license needed to operate its 1.84m tonne/year sixth gas separation plant (GSP), which would supply around 28% of the total production output from PTT’s GSP units.

It would take a month or longer for PTT to complete trial runs and tests at the GSP unit after receiving an operating permit, analysts have previously said.

The company’s sixth GSP plant would feed ethane gas feedstock to PTT’s 1m tonne/year cracker, which is running at 75% capacity, a company source says.

The cracker would then feed ethylene feedstock to an integrated production complex that produces 300,000 tonnes/year of low density polyethylene (LDPE) and 400,000 tonnes/year of linear low density polyethylene (LLDPE).

PTT’s sixth GSP would also provide propane gas feedstock to a 400,000 tonne/year polypropylene (PP) plant belonging to affiliate HMC Polymer via the cracker, according to the source.

The sixth GSP is expected to run at full capacity by the end of 2010, which would provide the feedstock needed for the 1m tonne/year cracker to run at full capacity.

Other downstream units belonging to PTT Chemical are expected to begin full production soon after the GSP comes on stream, ­analysts say.

PTT Chemical has been handed permits to start running its 300,000 tonne/year high density polyethylene (HDPE) expansion project and its 300,000 tonne/year LDPE projects, says Kumworachai of KGI Securities. They are expected to come on stream by the end of 2010 or early 2011.

Meanwhile, Siam Polyethylene’s new 350,000 tonne/year LLDPE plant has also been given the go-ahead to start operations, with commercial production expected by the end of this year or early 2011. The 350,000 tonne/year LLDPE expansion project will bring SCG’s overall capacity of LLDPE to 650,000 tonnes/year. Siam Polyethylene is a 50:50 joint venture between Dow and SCG.

SCG, Thailand’s largest industrial conglomerate, had 18 projects, worth more than Thai baht (Bt) 57.7bn ($1.9bn, €1.4bn), which were suspended by the court in the 2009 injunction.

SCG’s 90,000 tonne/year methyl methacrylate (MMA) expansion project, to be completed by the end of 2010, has also been given the go-ahead for commercial production. Its new 390,000 tonne/year propylene oxide (PO) plant and its 220,000 tonne/year specialty elastomer project, both to be completed by the middle of 2011, were given permits as well.

German chemical and pharmaceuticals giant Bayer is also expected to begin commercial production at its newly-expanded 280,000 tonne/year bisphenol A (BPA) and 275,000 tonne/year polycarbonate (PC) units in Mab Ta Phut by ­December, according to a company source.

FINANCIAL BOOST

With the Mab Ta Phut case resolved, SCG should be able to operate all of its “high value-added” chemical projects by the middle of next year, according to Chantaraserekul of DBS Vickers.

“Revenue from the company’s HVA [high value-added] assets should rise to 50% in 2015 from 29% currently, ensuring more sustainable margins,” the analyst says.

For 2010, SCG’s net profits are expected to grow by 20.4% year on year to Bt29.3bn, while sales are also expected to increase by 20.4% to Bt273bn, according to DBS Vickers.

PTT Chemical meanwhile is projected to post an 81% annual surge in net profit in 2010 to Bt12.29bn, with earnings partly in the fourth quarter supported by the firm’s new projects in Mab Ta Phut, according to the brokerage. Parent company PTT is expected to see a 22.7% year-on-year increase in its net profit to Bt73bn.

ONGOING PROTESTS

On September 31, 2010, some 500 protesters gathered in Rayong to pressure the government to extend the list of 11 harmful industries resolved by the National Environment Board to a previous list of 18 recommended by a four-party panel. They claimed list of 11 does not cover all projects threatening public health and the environment.

The panel, led by former Thailand Prime Minister Anand Panyarachun, which was studying the environmental issues in Mab Ta Phut, had also demanded that the government clarify its decision to shorten the list of environmentally harmful industrial activities.

In early October, environmental activists filed a lawsuit against PTT and other companies with projects in Mab Ta Phut in a move to urge the government to review its list of harmful industrial activities, which paved the way for the initial court suspensions in Mab Ta Phut to be removed.

Chantareserekul says: “This [lawsuit] will not have any major impact on the GSP as it does not qualify as a harmful activity under the list. Whether the Central court agrees to take up the case or not will not ­matter to PTT.”

By: Nurluqman Suratman

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