VZCZCXRO2135
OO RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHBK #2742/01 3010713
ZNR UUUUU ZZH
O 280713Z OCT 09
FM AMEMBASSY BANGKOK
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8740
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC IMMEDIATE
RUEATRS/DEPT OF TREASURY WASHINGTON DC IMMEDIATE
RUEAWJL/DEPT OF JUSTICE WASHINGTON DC IMMEDIATE
RHMFIUU/DEPT OF HOMELAND SECURITY WASHINGTON DC IMMEDIATE
RUEHCHI/AMCONSUL CHIANG MAI IMMEDIATE 7212
RHHMUNA/CDR USPACOM HONOLULU HI PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS PRIORITY
RUEHC/DEPT OF LABOR WASHINGTON DC

UNCLAS SECTION 01 OF 02 BANGKOK 002742 
 
STATE FOR EAP/MLS, EEB, DRL 
STATE PASS TO USTR FOR BWEISEL, BKLEIN 
COMMERCE FOR EAP/MAC/OKSA FOR JKELLY 
TREASURY FOR OASIA 
SINGAPORE FOR FINATT BLEIWEIS 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958:N/A 
TAGS: ECON EINV ELAB ETRD SENV PREL TH
SUBJECT: AMBASSADOR WEIGHS IN ON DOW CHEMICAL PROJECT SUSPENSION 
 
REF: A: BANGKOK 2678 (PRIME MINISTER MEETS WITH ASIA-PACIFIC 
AMERICAN CHAMBERS OF COMMERCE) 
¶B. BANGKOK 2597 (ENVIRONMENTALISTS VERSUS INDUSTRIALISTS) 
 
BANGKOK 00002742  001.2 OF 002 
 
 
¶1. (U) Summary:  As reported ref B, the Industrial Estate Authority 
of Thailand (IEAT) has been ordered by Thailand's Central 
Administrative Court to halt construction in the Map Ta Phut 
industrial zone, where U.S. firms Dow Chemical and Chevron have 
multi-billion dollar projects underway.  IEAT has been ordered to 
suspend the issuance of new construction permits in accordance with 
the court injunction, a move that could cost Dow alone $10 million a 
month.  The Ambassador has weighed in with the Prime Minister on the 
situation, emphasizing our respect for the court ruling and the 
support that the U.S. firms involved have for the environmental 
issues. The Prime Minister noted that his government has appealed 
the court ruling, but it could be months before the appeal is heard. 
 End Summary. 
 
 
¶2.  (SBU) In accordance with an injunction issued by the Central 
Administrative Court on September 29, IEAT has been ordered to halt 
all construction currently underway in Map Ta Phut. However, as IEAT 
does not have authority to suspend construction of a private entity 
unless the company is found to be in violation of specific codes, 
the IEAT is limited in its ability to affect on-going construction. 
And, to mitigate against any possible lawsuits that might be 
initiated by investors who may suffer losses as a result of actions 
taken by IEAT, the government body is moving very cautiously as it 
seeks to satisfy the stipulations of the injunction.  Where the 
IEAT's hands have been tied is in the issuance of new construction 
permits, which has now ceased in accordance with the court 
injunction. 
 
¶3.  (SBU) According to Dow Thailand representatives, this new move 
leaves Dow without an additional 20 permits needed for the 
completion of its $1.5 billion investment in MTP.  As Dow's 
construction in MTP is done in a module by module manner, permits 
are sought on an "as needed" or "just-in-time" basis.  Thus, Dow has 
yet to receive construction permits for modules planned for next 
month and beyond.  Complicating matters for Dow is the fact that 
while its Environment Impact Assessment (EIA) for the construction 
of its hydrogen plant (joint venture with Belgian company Solvay) 
was approved just one week prior to the announcement of the court 
injunction, the issuance of the actual certificate of approval was 
held up in the Office of Natural Resources and Environmental Policy 
and Planning (ONEP) in the  Ministry of Natural Resources and 
Environment.  Now that the court injunction is in place, the 
Ministry of Natural Resources and Environment will not issue the 
certificate of approval. 
 
¶4.  (SBU) Despite the freeze on the issuance of new construction 
permits, Dow representatives claim to have been given verbal 
permission by IEAT officials to proceed with its USD 1.5 billion 
project.  In a teleconference between U.S. Ambassador Eric G. John 
and Heinz Haller, Dow Executive Vice President, the Ambassador fully 
endorsed Dow's interest in remaining on the right side of the law. 
 
 
¶5.  (SBU) According to Dow, the immediate cost to their operation of 
halting construction is calculated at $10 million/monthly.  Dow 
estimates that the indirect costs could go as high as $60-80 
million/monthly, and affect 6,000 jobs currently and another 4,000 
jobs that were to have been created over the next four months. 
 
¶6.  (SBU) In response to the Ambassador's inquiry about the Map Ta 
Phut dispute in a one-on-one meeting (ref A), the Prime Minister 
expressed frustration with the process and emphasized that his 
government had appealed the ruling by the Administrative Court and 
that he hoped the Supreme Administrative Court would overturn the 
ruling so that companies, including Dow Chemical and Star Petroleum 
Refining Co. (a subsidiary of Chevron), could proceed with their 
investment projects.  However, he acknowledged that a decision by 
the Supreme Administrative Court could take a couple of months, and 
indicated that the government is currently reviewing other options 
to enable the projects to proceed, particularly if the court's 
initial ruling is upheld. The Ambassador stated that the U.S. 
Government will not interfere with the legal process and stressed 
that all parties want to reach an environmentally friendly solution 
 
BANGKOK 00002742  002.2 OF 002 
 
 
to the problem. 
 
¶7.  (U) According to industry players, the Joint Standing Committee 
on Commerce Industry and Banking (a non formal consultation group 
co-founded in 1977 by the Board of Trade, Federation of Thai 
Industries and the Thai Bankers' Association) has formed a Working 
Committee on Map Ta Phut.  The first meeting of the Working 
Committee on Map Ta Phut was held on October 20, and attracted 
representatives from Thailand's Ministry of Industry, the Federation 
of Thai Industries, the Joint Foreign Chambers of Commerce in 
Thailand, the Thai Banker's Association, the Board of Trade and the 
American Chamber of Commerce in Thailand, together with local 
residents (who have an interest in seeing the projects proceed). 
The parties discussed possible solutions that would meet the needs 
of all.  At the conclusion of the meeting, the group endorsed the 
idea that "economic development and environmental protection can 
co-exist," but was unable to produce a plan on how to proceed to 
resolve the current impasse. 
 
JOHN