Flood-hit Businesses Need to Consider Thai law Obligations

Businesses affected by Thailand's worst floods in half a century have been forced to shut-down or restructure operations. From local traders to multinational firms, flooding in major industrial areas around Bangkok has hurt business investment in Thailand. Thai law firm BSA Law says legal and logistical challenges lay ahead for those needing to rebuild their business. End Quote

(1888PressRelease) December 20, 2011 - Businesses hit by widespread flooding in Thailand face legal and logistical challenges, according to leading Thai law company BSA Law.

These include legal, financial and regulatory responsibilities caused by shutting down or scaling back operations.

BSA Law has drawn on 30 years of experience as an international law firm in Thailand to provide business advice to Thailand and multinational firms affected by the flooding.

It has identified key obligations and assistance available to companies under Thai business law and Thai labour law.

"While the water has retreated in many areas, a large number of businesses have been forced to shut down, or restructure their operations," BSA spokesman Apisakde Kongkangwanchoke said. "Under Thai law there are a host of regulatory factors that operators need to consider when taking action to minimise their loss and damages."

The Thailand lawyer said companies forced to stop operating should review all third-party agreements including reporting requirements and payments to banks, business partners and employees. He recommended keeping in regular contact with key parties and updating contact details if necessary.

The Thai law company has also advised flood-affected businesses:

• Carefully check supply contracts (ideally through a corporate legal service). Thailand businesses may need to cancel orders, switch suppliers or recall products as a result of flood-damaged stock;
• Review permit and licence terms and conditions. Under Thai business law's Factory Act of 1992 factories catagorised as type II or III must inform the Department of Industrial Works of any extended stoppages.

Mr Kongkangwanchoke said companies with Board of Investment (BoI) privileges may be eligible for additional assistance, including relocation of materials and machinery.

Thai labor law contains provisions for the payment of wages to be suspended if a company stoppage is caused by a force majeure. Thailand law defines force majeure as 'any event, the happening or pernicious results of which could not be prevented even though the person against whom it happened or threatened to happen were to take such appropriate care as might be expected from him in his situation and in such condition'.

Mr Kongkangwanchoke said flooding did not automatically qualify as force majeure and that other factors, including any contingency plans, would be relevant. He advised owners to check their individual requirements with their business' legal service. Thailand business law (Section 75 of the Labour Protection Act) provides for payment 75 per cent of wages for stoppages not defined as force majeure.

"Operators need to be aware of their responsibilities under Thai labor law. Aside from legal implications, operators may also want to consider their obligations to help employees through this event and retain their services when operations are able to resume."

About BSA Law:

For nearly 30 years, Bamrung Suvicha Apisakdi Law Associates (BSA Law) has focused on providing reliable legal advice and services to the Thai and foreign business community in Thailand. BSA Law seeks to provide international standards of legal services while retaining the customs of the Thai business culture.

For more information please contact:

Jim Byrne
Business Advisor, BSA Law.
Email: jim ( @ ) bsalaw dot co dot th

http://www.bsalaw.co.th

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