Global Scrutiny Mounts as Thailand’s Junta faces Backlog of Industry Problems

Thai officials inspect fishing boats docked at the compound of Pusaka Benjina Resources fishing company in Benjina

Thai officials inspect fishing boats docked at the compound of Pusaka Benjina Resources fishing company in Benjina



BANGKOK – Thailand’s military junta is facing a snowballing backlog of safety and compliance problems within key industries that previous civilian governments failed to tackle.

International scrutiny of industries such as fishing and aviation poses another challenge to a military which has struggled to revitalize Thailand’s economy and thaw diplomatic and trade relations with Western countries since its May 2014 coup.

A report commissioned by Swiss food giant Nestle SA released on Monday said its seafood supply chain in Thailand included slave labor, sparking renewed calls to clean up a $3 billion industry long dogged by allegations of abuse.

Two days later, a study released by labor rights groups Swedwatch and Finnwatch said factory workers from Cambodia and Myanmar also faced exploitation by Thai brokers and employers who withheld their passports and levied exorbitant fees.

And next month Thailand faces crucial judgments by international bodies that could threaten seafood exports and shake confidence in the country’s aviation industry.

The European Union (EU) will decide whether to ban fish imports from Thailand after issuing the country a yellow card in April for failing to crack down on illegal, unreported and unregulated (IUU) fishing.

The junta subsequently ordered a clean-up of the fishing industry, prompting some fishermen to go on strike to protest against what they said were unfair and unrealistic measures.

Earlier this month, Prime Minister Prayuth Chan-ocha said the government would continue to prosecute human trafficking suspects and would send teams to inspect fishing vessels and seafood-processing plants.

A seafood ban could cost Thailand dearly.

Thailand is the world’s third-largest seafood exporter. Its annual exports to the EU are estimated to be worth between 575 million and 730 million euros ($641 million-$813 million), according to the Thai Frozen Foods Association.

Thailand’s aviation industry also faces a downgrade by the U.S. Federal Aviation Administration (FAA) over persistent safety issues. In July, the FAA gave Thailand 65 days to take corrective measures.

That deadline has now passed and the FAA’s decision is expected soon. Thailand could be demoted from the FAA’s category 1 to 2, which carries a flight ban to the United States.

No Thai airline currently operates flights to the United States, which means the commercial impact would be minimal. But it could undermine confidence in the industry, especially when Thailand’s safety ratings were already downgraded in June by The International Civil Aviation Authority (ICAO) of the United Nations.

While the junta won’t be blamed for problems inherited from previous governments, it could be faulted for not solving them, say analysts.

Prayuth has amassed immense power since May 2014 and prides himself on a reputation for fighting corruption and getting things done.

The backlog of problems he now faces was built up during years of political chaos “where nothing has been done”, said a Bangkok-based Western diplomat, who declined to be named due to the sensitivity surrounding issues to do with the junta.

“Some of these problems have existed in Thailand for a while but not everyone was aware of them. It’s not like these organizations thought: We hate the military government and we’re going to do something against them,” the diplomat told Reuters.

“A greater light has been shone on Thailand since the coup with more media stories being done and more scepticism.”

Rahul Bajoria, regional economist at Barclays Capital in Singapore, said the government was trying to improve industry standards.

“But it’s likely to be a long-term process and cannot be done immediately,” Bajoria told Reuters. “I do think there will be efforts made to avoid any kind of ban.”

By Amy Sawitta Lefevre and Andrew R.C. Marshall

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Posted by on Nov 28 2015. Filed under Economy & Business. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.
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