Thai briefing note – Administrative Court flexes its muscles

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he Administrative Court last month stepped in to overturn a Prime Minister’s office decision which sidelined an effective, but politically misaligned, senior civil servant. The decision was a reminder of the impact the court is having on the Thai political and commercial landscape.

Since its inception over a decade ago, the Administrative Court has increasingly left its mark on the Thai government’s economic reform agenda, as well as held it to account in areas which have helped uphold, in a fashion, the independence of the civil service. As it evolves further, we think this and future governments will become sensitive to the potential of power of the Administrative Court, and likely tread more carefully when making decisions which the court could potentially overturn, frustrating their agenda.

This briefing note explores the evolution of the Administrative Court since its inception a decade ago, in light of last month’s decision.

This file is available for download from our website.

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Thai briefing note – Administrative Court flexes its muscles

  1. 1. BRIEFING NOTE - THAILAND 1 Briefing Note POLITICAL AND MARKET INTELLIGENCE 19 June 2013 ‘Inactive Posts’ are a favourite government mechanism to sideline opposition within the Thai civil service. Thailand Thai Administrative Court flexes its muscles again The Administrative Court last month stepped in to overturn a Prime Minister’s office decision which sidelined an effective, but politically misaligned, senior civil servant. The decision was a reminder of the impact the court is having on the Thai political and commercial landscape. Since its inception over a decade ago, the Administrative Court has increasingly left its mark on the Thai government’s economic reform agenda, as well as held it to account in areas which have helped uphold, in a fashion, the independence of the civil service. As it evolves further, we think this and future governments will become sensitive to the potential of power of the Administrative Court, and likely tread more carefully when making decisions which the court could potentially overturn, frustrating their agenda. This briefing note explores the evolution of the Administrative Court since its inception a decade ago, in light of last month’s decision. Our take Sidelining senior bureaucrats for political reasons…now harder to do? The concept of the ‘inactive post’ is the most exquisite of Thai inventions. Practically unable to sack civil servants all but for the most extreme malfeasance (and even then the process is difficult and more likely to land the sacker, rather than the recalcitrant civil servant, in jail), politicians generally shunt dead wood or trouble makers to these ‘inactive posts’. These inactive post holders continue to receive their pay and benefits, but most importantly in the face-conscious civil service, retain their all important civil service ‘rank’. Fortunately for the rest of us, they are kept out of harm’s way, consigned to the Siberia of the civil service, where
  2. 2. BRIEFING NOTE - THAILAND 2 Administrative Court decision will make it harder for governments to sideline those not in political favour... they receive a desk to sit at in an out of the way government department, but not much else. Unfortunately, governments have learnt to use inactive posts as an effective mechanism to sideline those senior civil servants who see their jobs as to provide fearless and frank advice to the government of the day. In these cases the generally talented, but outspoken, civil servant is shunted to a department outside of their area of expertise with a technical promotion and then left to rot by the government of the day. Administrative Court overturns Prime Ministerial Order The end of May saw the Central Administrative Court overrule a Prime Ministerial order and ordered the reinstatement of Thawil Pliensri as secretary-general of the National Security Council (NSC). In 2011 Thawil was ordered out of the position by the Prime Minister, to an ‘inactive post’ at the Office of the Prime Minister. In its decision, the court stated that the Prime Ministerial order was hasty and in effect, took Thawil away from where he was best utilised in government. The reality is that the Central Administrative Court has made it clear that Thawil, not known to be close to this government, shouldn’t have been moved due to his perceived political allegiances. The current government, and its predecessor led by Thaksin Shinawatra, has relatively low tolerance when it comes to criticism, even inside of government and the civil service where advice is delivered privately. When it first swept to power in the early 2000’s, Thaksin sidelined some of his best and brightest civil servants who had the unfortunate attribute of being able to speak truth to power. Case in point was Dr Piyasvasti Amranand, the LSE educated economist who had led the charge to modernise the Thai power sector in his role as Secretary General of the National Energy Policy Office (NEPO). He was sidelined to positions in the Prime Minister’s office, before deciding to quit the civil service to become a highly successful fund manager at Kasikorn Asset Management and later, President of Thai Airways Back then, when the newly elected Shinawatra government began remodelling the civil service to be a more docile and compliant tool under its control, the Administrative Court was still in its infancy, having only been approved a few years earlier as a result of 1997 constitutional reforms, and established as an operational entity in 2001. As a result, appealing unfair or politically administrative civil service reshuffles that occurred under the Thaksin I government would always be an uphill battle, given the relative newness of the court. In this context, the decision by the Administrative Court ordering the government to re-instate Thawil Pliensri as secretary-general of the
  3. 3. BRIEFING NOTE - THAILAND 3 …will we see a more independent civil service over time? Administrative Court also becoming pivotal in major Thai commercial decisions. The court remains best channel for challenges to government administrative decisions that do not rise to the level of the Constitution Court. National Security Council (NSC) represents another potential watershed in the development of an increasingly independent bulwark against the culture of exiling advisors and civil servants who the government deems as troublesome or opponents to its agenda. Administrative and commercial decisions The reach of the Administrative Court has also extended more broadly into areas of commercial activities which are subject to a high degree of government oversight. The Supreme Administrative Court ruling in 2006 effectively caused the privatisation process in Thailand to collapse with its ruling revoking the royal decrees which corporatised EGAT, which was a major setback for the Thaksin government. The court also ruled in 2012 to reject a petition to cancel the concessions of Australian gold miner, Kingsgate. The petition has been bought to the court by local residents. More recently, for a number of years till the end of 2012, the court was effectively in the middle of a war between Thailand’s Telecom’s regulator, the National Broadcasting and Telecommunications Commission (NBTC) and critics of the NBTC’s auction of 3G spectrum licenses. A decision a the end of 2012 dismissed the last of the objections to the issuance of 3G licenses, meaning that Thailand, long a laggard in Telecommunications speeds in SE Asia, finally was able to update its mobile and telecommunications infrastructure. Governments beware? How the court will develop further though remains to be seen – though without doubt it will become more influential in overseeing governance decisions in Thailand. It remains the best channel for challenges to government administrative decisions that do not rise to the level of the Constitution Court. The NBTC decision has shown also that the court will increasingly be forced to adjudicate matters of economic regulation in the Thailand. There is some expectation amongst policy makers CLC Asia has spoken to that the court will at some point evolve into hearing economic regulatory and competition cases – a move which will require the court to take into account economic evidence, something to this point Thai courts have simply not been equipped to do. This will both further enhance the status of the court, and help ensure that there is an increase administrative transparency in Thailand.
  4. 4. ABOUT CLC ASIA Chris Larkin Managing Director Chris is the founder of CLC Asia Chris private sector clients in Asia, Australia and the UK. After beginning his career in Australia, Chris moved to Thailand where he became an internal advisor to the Thai government on privatisation and econo privatisations of PTT and Airports of Thailand, as well as working with a variety of State Owned Enterprises. Since moving to the private sector, Chris has advised a number of private sector clients on and political risk issues, focusing on the mining and oil and gas sectors. He has also performed both financial and non due di leading en His analysis and views have also been sought by a wide range of as well regarded publications, including the Mining Journal and Wall Street Journal, as well as regional publications such as the Bangkok Post, The Chris has an Honours degree in Economics and a Masters of Public Policy and Management from Monash University, Australia, as well as having completed a Minerals Economics course from the University of Melbourne. Chris is citizenship. BRIEFING NOTE - Chris is the founder of CLC Asia. Chris has over 15 years experience working for both government and private sector clients in Asia, Australia and the UK. After beginning his career in Australia, Chris moved to Thailand where he became an internal advisor to the Thai government on privatisation and economic regulatory policy, working on the privatisations of PTT and Airports of Thailand, as well as working with a variety of State Owned Enterprises. Since moving to the private sector, Chris has advised a number of private sector clients on government relations, market entry, policy and political risk issues, focusing on the mining and oil and gas sectors. He has also performed both financial and non due diligence on a number of entities across Asia as well as helping leading energy companies on their IR strategy. His analysis and views have also been sought by a wide range of as well regarded publications, including the Mining Journal and Wall Street Journal, as well as regional publications such as the Bangkok Post, The Nation, and the Phnom Penh Post. Chris has an Honours degree in Economics and a Masters of Public Policy and Management from Monash University, Australia, as well as having completed a Minerals Economics course from the University of Melbourne. Chris is fluent in English and Thai and has dual Australian and Thai citizenship. He is married with two children and based in Bangkok. - THAILAND 4 years experience working for both government and After beginning his career in Australia, Chris moved to Thailand where he became an internal advisor to the Thai government on mic regulatory policy, working on the privatisations of PTT and Airports of Thailand, as well as working Since moving to the private sector, Chris has advised a number of market entry, policy and political risk issues, focusing on the mining and oil and gas sectors. He has also performed both financial and non-financial M&A across Asia as well as helping His analysis and views have also been sought by a wide range of as well regarded publications, including the Mining Journal and Wall Street Journal, as well as regional publications such as the Bangkok Chris has an Honours degree in Economics and a Masters of Public Policy and Management from Monash University, Australia, as well as having completed a Minerals Economics course from the fluent in English and Thai and has dual Australian and Thai He is married with two children and based in Bangkok.
  5. 5. Trevor Bull Associate Director – Governance BRIEFING NOTE - Trevor has been an internal advisor to the Thai government for 15 years. Trevor joined CLC Asia in 2010 as a senior consultant and became an Associate Director in 2012. In addition to his role at CLC Asia, Trevor works as the Resident International Advisor to the Energy Regulatory Commission of Thailand (ERC) since its creation in 2008. His work with the ERC includes supporting the development of procedures and processes for the economic regulation of the power and gas sectors in Thailand as well as capacity building for Commission and Staff. Formerly, Trevor was the Manager of Sector Restructuring at the State Enterprise Policy Office at the Ministry of Finance, Thailand. His work included supporting the development of policy for market and regulatory restructuring for the transport, water, energy and telecom sectors. The Sector Restructuring team supported the establishment and capacity building of economic regulators for these sectors for both price and non price regulation. Trevor was the World Bank’s Privatisation Advisor attached to the Thai Ministry of Finance. Trevor has also managed a team of consultants at the Thai Ministry of Finance for the Asian Development Bank funded project on developing commercial finance for local government units in Thailand. This project on municipal finance involved the design and implementation of capacity building for local government officers and the development of a regulatory framework to govern municipal borrowing. Prior to joining the Ministry of Finance in 1999, Mr. Bull was employed by the National Energy Policy Office, working on electricity and gas sector restructuring. Trevor is an Australian citizen with Thai permanent residency. He is fluent in English and speaks Thai t o an advanced level. - THAILAND 5 government for 15 Trevor joined CLC Asia in 2010 as a senior consultant and works as the Resident ional Advisor to the Energy Regulatory Commission of Thailand (ERC) since its creation in 2008. His work with the ERC includes supporting the development of procedures and processes for the economic regulation of the power and gas sectors in Thailand ll as capacity building for Commission and Staff. was the Manager of Sector Restructuring at the State Enterprise Policy Office at the Ministry of Finance, Thailand. His work included supporting the development of policy for market egulatory restructuring for the transport, water, energy and telecom sectors. The Sector Restructuring team supported the establishment and capacity building of economic regulators for these sectors for both price and non price regulation. Prior to this was the World Bank’s Privatisation Advisor attached to the also managed a team of consultants at the Thai Ministry of Finance for the Asian Development Bank funded project on local government units in Thailand. This project on municipal finance involved the design and implementation of capacity building for local government officers and the development of a regulatory framework to govern municipal he Ministry of Finance in 1999, Mr. Bull was employed by the National Energy Policy Office, working on electricity Trevor is an Australian citizen with Thai permanent residency. He is advanced level.
  6. 6. CLC Asia provides bespoke industry and political related advisory services to investors in Asia. Our services cover four key areas: Market and industry analysis We provide in-depth market studies and initial non- legal/non-financial due diligence for potential investments in Asia. Our work goes beyond ‘off the shelf’ studies available elsewhere in order to give clients a clear picture of a target company, as well as relevant market dynamics and structure, key players, industry trends and market outlook. Political risk analysis Utilising our unique network of contacts and key decision makers, we offer clients comprehensive assessments of political risk events which may arise in a market. These events can include corruption, bureaucratic blockages, poor stakeholder relations, government and policy shifts, terrorism and security, legal and regulatory irregularities, religious and health related concerns. Government relations & communications The principals of CLC Asia have significant experience advising governments and state owned entities in the region. We can help private sector clients refine their message to government clients in a way which best communicates our clients’ business as well as assisting in stakeholder relationship matters. Policy advisory As policy advisors who have worked in the heart of government, we provide our clients with clear and informed background and interpretation on government strategy and policies, helping our clients align their commercial objectives with policy realities and frameworks. Our consultants are based ‘on the ground’ in Asia and have extensive experience in the region. All of our principals have worked for both the private and public sectors in the region, and can provide a unique insight to the political and business environments of the region CONTACT Bangkok All Seasons Place 26th Floor, Capital Tower 87/1 Wireless Road Bangkok 10330 Thailand Tel: +66 1 866 1002 Fax: +66 2 654 3511 Email: enquires@clc-asia.com

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