German Supply Chain Law: Monitoring employment practices and environmental issues in Thailand

last updated on 5 May 2022 | reading time approx. 5 minutes

• Which risks occur along supply chains in Thailand? »

• Which industries appear particularly vulnerable to adverse impacts of human/labor rights or environmental issues in Thailand? »

• Is there any legislation in Thailand which addresses these risks? To what extent is it enforced in practice? »

• Can you provide a case example (e.g. taken from local media coverage) in which a foreign or local company had to deal with such adverse impacts? »

Which risks occur along supply chains in Thailand?

Common risks concerning supply chains in Thailand are as follows:   

• Forced labour and human trafficking in the Thai fishing industry: Companies should be aware that the Thai fishing industry has been found to be implicated in forced labour and human trafficking.
• Child labour, human trafficking and forced labour has also been an issue for the food processing industry (notably seafood and fruits) and garment manufacturing.
• Forced labour and unequal treatment of workers has been an issue in the construction industry, which seems particularly susceptible to exploitation of stateless people. Stateless people are a vulnerable group of people (registered around 440,000 people, estimated up to two million people). While the general law prohibits discrimination, stateless people face de facto discrimination with very limited options for remedy.
• NGOs further report on issues concerning domestic workers, relating to illegal working conditions, as well as employment of minors. This could be an issue in case of working with agencies for outsourcing employment.
• Furthermore, Thailand faces environmental risks, especially concerning illegal deforestation for various purposes. Illegal logging and trading of tropical woods on the black market is an issue. Illegal forest fires for the purpose of agriculture as well as gaining suitable construction space is another issue.
• An increasing environment risk stems from pollution of ground as well as from water usage, especially in areas with extensive industrial development, such as the Eastern Economic Corridor (EEC) in the provinces Chachoengsao, Rayong and Chonburi. There have been several reports lately (mainly addressing Chinese investment) which point to pollution issues.
• Lastly, companies operating in Thailand should be aware of the fact of employment of minors in various industries. While Thai law prohibits employment of minors below the age of 15, NGOs estimate that about 1.3 million children from the age of 5 to 14 are conducting some kind of work.

Which industries appear particularly vulnerable to adverse impacts of human/labor rights or environmental issues in Thailand?   

Human rights

Environmental

(For an optimal display of the table, the use of a desktop PC is recommended).

Is there any legislation in Thailand which addresses these risks? To what extent is it enforced in practice?

Thailand has signed various international charters and policies and has passed multiple pieces of legislation to ensure compliance with human rights. However, companies should be aware that enforcement faces problems such as lack of efficiency and corruption, particular in more remote provinces. Please find a general overview of main pieces of legislation in the following:

Labour:

• Thai Labour Protection Act:

• Prohibition to employ minors under the age of 15 as well as other restrictions
• General prohibition of discrimination
• Access for outsourced employees to the work under similar conditions as employment contract employees

• Thai Maritime Labour Protection Act: Addresses working conditions on ships as defined under the act.
• Minimum wages: Thailand prescribes minimum wages which vary between the provinces, generally between THB 310 to 340 per day.
• Social Security Act: Compulsory social security for employees as well as other benefits
• Occupational Health and Environmental Act: Duties for employers  to ensure a safe workplace
• Collective employment legislation:

• Right to form unions/associations
• Right to strike/lock-out
• Right to form Worker Committees

Environment:

• Enhancement and Conservation of National Environmental Quality Act: General duties to protect the environment
• Factory Act (parts of the Act): Parts of the act stipulate rules to mitigate any environmental impact of factories (including industrial waste management, water discharge, soil and groundwater monitoring, noise standards, fire prevention, etc.)
• Industrial Estate Authority Act of Thailand: Covers environmental issues in Industrial Estates
• Hazardous Substance Act: Relates to controlled substances, e.g. dangerous chemicals, etc.

The government regularly announces policies to combat certain issues, for example the “National Policy and Plan to Eliminate the Worst Forms of Child Labour” or the “Cyber Tipline”.

Enforcement

The state’s departments and agencies are tasked with enforcing the various laws and regulations. As aforementioned, companies should be aware that enforcement could be better at times, mainly due to a lack of efficiency – especially in remote provinces, as well as certain corruption issues on the local level. Relevant authorities:

• Department of Labour Protection and Welfare, Ministry of Labour: Child labour, human trafficking, forced labour
• Ministry of Social Development and Human Security: Child labour, forced labour
• Royal Thai Police, Anti Human Trafficking Units: Human trafficking
• Thai Maritime Enforcement Command Center: Especially Thai Fishing Industry

For example, in 2019, 260 child labour violations were registered (10 in 2020; however, the decrease might be related to the Covid-19 pandemic).

In general, the relevant department conduct routine as well as unannounced inspections. Most departments have some complaint mechanism in place. There are processes in place were authorities exchange information, for example between labour and social departments, as well as the Royal Thai Police.

Can you provide a case example (e.g. taken from local media coverage) in which a foreign or local company had to deal with such adverse impacts?

There are several well documented cases of forced labour in the Thai Fishing Industry. A major case in 2014 were allegations against the CP Group for sourcing prawns from suppliers in the Thai Fishing Industry which clearly engaged in slave labour practices.

Another famous case was the allegation made by British journalist Andrew Hall against working conditions in the Natural Fruit Company. According to Hall, workers would receive unlawfully low wages and were forced to work overtime. Additionally Hall alleged child labour as well as confiscation of personal documents of workers. Natural Fruit Company subsequently sued Hall for defamation and other crimes. In 2018, the Court of appeals acquitted Hall. In 2021, the Thai Supreme Court dismissed the last case of NFC against Hall.

A case that recently captured the public attention was against the president the Italian-Thai Development Plc., a major construction company in Thailand. The president was personally arrested for hunting wildlife in a national park dedicated as World Heritage. The park rangers found that the hunting party had several arms in their possession, as well as cadavers of several protected animals, including a black panther. The president was subsequently found guilty by a court of crimes in relation to poaching (and subsequently bribery).

The case was extensively covered in the local media. Graffiti artists sprayed several black panther murals in Bangkok. However, there is no good metric to assess the impact of the case on the business of the company.