Wednesday, July 18 2018 | ASIA TODAY INTERNATIONAL - Reporting the Business that Matters in Asia
Thailand defers penalties under new foreign worker laws . . .
IN A RARE backdown, Thailand’s military Government has reversed course on new foreign labour laws, stung by the impact of its measures on Thai industry and especially those in the SME sector . . .
BANGKOK — It was an exodus of epic proportions. On June 23, when Thailand’s Government unleashed a new labour law prescribing five-year prison terms for illegal foreign workers and massive fines for their employers, at least 60,000 migrants from Myanmar, Laos and Cambodia fled back over the borders to their homelands, leaving construction companies, fishing firms and other businesses without manpower.
Besieged by howls of protest from businesses, not to mention global bad publicity, Prime Minister Prayut Chan-o-cha, a blustery General who seized power in 2014, was forced into a rare tactical retreat.
He issued a decree delaying enforcement of the new law for 180 days, providing employers and migrant workers with time to register legally and comply. Most of the still fearful workers, however, have yet to return.
Thailand, like many nations surrounded by poorer neighbours, is a magnet for foreign migrant labourers. And as with many nations, Thailand has a conflicted attitude towards them.
Looked down upon, and sometimes extorted and abused, they are nonetheless essential to the economy, doing jobs many Thais no longer want to do at wages Thais would not accept.
According to the International Organisation for Migration, 2.7 million workers from neighbouring countries are living in Thailand, but only 1.2 million are registered and, therefore, legal.
After announcing the delay because of the heat he was taking, Prime Minister Prayut explained that the law was implemented rapidly because of pressure from foreign countries. That was a half-truth.
The United States and the European Union have pressured Thailand over its poor record on human trafficking, labour rights and treatment of workers.
They are problems that existed well before the Prayut Administration came to power, and to the Government’s credit, it responded by embarking on an extensive effort to register roughly 1.4 million migrant workers, along with cracking down on and prosecuting abusive employers and human traffickers.
What is not clear, however, is why registration was limited to specific timeframes and then closed, considering the fluid nature of migration and labour. And neither the E.U. nor the U.S. has made any overt public threats of punishment or sanctions recently over the issue.
Thai businesses, however, were clearly upset.
“We had to cease production the day after the law went into effect because our employees were gone,” said Nauvarat Songswaddichai, who owns several businesses and is an executive officer with the Employers’ Confederation of Thai Trade and Industry.
Big corporations, such as Thai Union, the world’s largest tuna company, and Charoen Pokphand, a leading shrimp exporter, were largely unaffected, they said, because they had already registered all their foreign workers. It was the small and medium-sized businesses (SMEs) that suffered, and they account for more than 90 per cent of all businesses in the country.
Chanintr Chalisarapong, President of the Thai Tuna Industry Association, said the lack of the migrant workers at a time when SMEs still need cheap labour to operate could disrupt the Thai economy, which, he added, is on the recovery path.
“We demand that the Government seek some rescue measures to reduce the adverse effects on the real sector, which still badly needs those migrant workers, especially the SMEs,” he said.
Businesses also criticised the Government over the way the law was drafted and put into place. They said the national Legislature, whose members were appointed by the military group that seized power, wrote and passed the law without consulting businesses, especially SMEs.
“The new law is the latest in a series of potentially greatly disruptive new policies and laws launched by the military regime without public consultation,” wrote the Bangkok Post newspaper.
The Kasikorn Research Center said the law could decrease gross domestic product by 0.03 per cent because businesses will not have the workers they need.
Industries most affected are agriculture, commercial fishing, hotels, restaurants, merchandising and construction, which account for 65 per cent of Thailand’s migrant workforce.
“The new regulations may cause a labour shortage,” said Thirapat Chirapipat, Managing Director of Chiangmai Rimdoi Plc, a construction firm. “Costs will also be higher because we rely on 80-90 per cent alien workers.”
Nauvarat said the delay is not enough, claiming that the law as written will not solve the problem. “If the registration process is still exclusively tied to few licensed agencies, it will remain difficult and pricey,” he said, for migrants to register and for firms to source registered workers, driving both sides to adopt illegal methods.
The exodus and disruption did have, however, one positive effect.
Both Myanmar and Cambodia said they would send officials to several migrant labour registration offices around Thailand to help migrants obtain “certificates of identity” needed for Thai authorities to issue them work permits.
Otherwise, workers needed to return home to gather or apply for documentation, time-consuming and expensive for them, thus discouraging them from sticking to the legal route.
The disruption and backlash is also seen as an opportunity for Thailand’s leaders.
With nearly six months to work with before implementing the new law, they could and should take the opportunity to consult with Thailand’s business community on how to amend the law in ways that will benefit everyone: businesses, migrant workers and even Thailand’s Government, which could win praise for being less rigid and more responsive to the needs of those over whom it wields power.