Industrial zone ruling creates investment risk for Thailand

The government has come under attack for ignoring repeated warnings to set up an independent body to oversee the HIAs.

A local environment group, which started lobbying governments 13 years ago to clean up Map Ta Phut, says 2,000 local people have since died of cancer as a result of pollution from the plants, although doctors have not said industry is to blame.

Sutthi Atchasai, head of the Network of Eastern People, said his group was not targeting investors and urged the government to resolve the issue before environmentalists pursue legal action over some of the other 36 industrial zones in Thailand.

“We don't want companies to move elsewhere, we just want them to clean up,” he told Reuters.

The court injunction appeared to have caught Abhisit off guard as he battles to revive the economy, Southeast Asia's second biggest, while fending off mass protests and attacks from political rivals and his own bickering six-party coalition.

Thailand's bourse tumbled last week as panicked investors offloaded assets over concerns about the health of King Bhumibol Adulyadej, a figure of unity in Thailand, illustrating investors' fears about future uncertainty.

The protracted political strife has triggered downgrades in credit ratings for Thailand and analysts say a decline in investment would pile more pressure on the government in the deeply polarized country.

“Politics and the economy have distracted the government and it has underestimated the severity of this dispute,” said Somjai Phagaphasvivat, a politics and economics lecturer at Thammasat University.

Map Ta Phut has become one of the biggest tests of Oxford-educated Abhisit's effectiveness and while the companies involved are unlikely to move, potential investors might seek new pastures if they think his government is unable to protect them.

“This, combined with another bureaucratic misstep or excessive delay in resolving the issue, would hurt investor perceptions,” said Roberto Herrera-Lim, a Eurasia Group analyst.

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