Thailand's controversial Foreign Business Act, which proposes tighter rules on future foreign investment, will go back to parliament early next month, Commerce Minister Krirkkrai Jirapaet said on Friday.
A committee has been working to make the Act "clear, investment friendly and implementable" for investors, particularly a clause on management control, he told Reuters in an interview.
"I think the committee will be able to re-submit it to Parliament in the beginning of next month," he said, expecting it to be passed before the end of the army-appointed government's term in January. Business chiefs fear foreign companies will be driven away by the new rules, drawn up after the furore generated by the take-over of Shin Corp, the telecoms giant founded by ousted Prime Minister Thaksin Shinawatra.
The Act, introduced after Thaksin was removed in a bloodless coup last year, would limit foreign shareholding rights, as well as equity to 49 percent - plugging a loophole that has existed for 30 years. However, the legislation has been in limbo since August when rebel members of the army-appointed National Legislative Assembly (NLA) inserted a clause limiting foreign management control of firms.
"I just want to make clear to both existing investors and new investors what do we mean by management control and by controlling power," Krirkkrai said. He said the new definition was "too lengthy" to make public now. "What we are looking at is how to deal with this NLA version to make it clear, investment friendly and implementable," he said.
Some diplomats have said limiting foreign management control of firms could violate commitments Thailand made when it was negotiating entry to the World Trade Organisation (WTO) and could trigger a challenge at the global trade body.
The 64-year-old Krirkkrai, who was the country's trade representative at the WTO from 1996 to 1999, said those concerns were unwarranted. "I have said from day one that we will honour our international agreements, but we have the right to regulate," said the 22-year veteran of the Commerce Ministry. "It is not true that Thailand is turning its back on investors. I think people have not studied the law carefully and receive only hearsay and make their own judgement".
If the Act is passed by the current parliament, it may not survive the new government sworn in after the December 23 general election. The leader of Thailand's Democrat Party and a leading candidate for prime minister, Abhisit Vejjajiva, told business leaders last month he would scrap the Act if he led what most analysts expect will be a coalition government.
Krirkkrai said any party that comes to power "has the right to do anything they want. We shall see". "If you define it in such way to make it more foreigner friendly, then nationalistic people will make noises, and vice versa. We have to strike a balance between liberalisation and regulation."