Electricity Generation and Distribution in

Thailand: Policy Making, Policy Actors and

Conflict in the Policy Process

Thanyawat Rattanasak

A thesis submitted in fulfillment of the requirements for the degree of Doctor of Philosophy in Social Science and Policy

The University of New South Wales

August 2009 PLEASE TYPE THE UNIVERSITY OF NEW SOUTH WALES Thesis/Project Report Sheet Surname or Family name: RATTANASAK First name: THANY AW AT Other name/s: Abbreviation for degree as given in the University calendar: PhD School: SOCIAL SCIENCE AND INTERNATIONAL STUDIES Faculty: ART AND SOCIAL SCIENCE Title: ELECTRICITY GENERATION AND DISTRIBUTION IN THAILAND: POLICY MAKING, POLICY ACTORS AND CONFLICT IN THE POLICY PROCESS

Abstract 350 words maximum: (PLEASE TYPE) This thesis is an analysis of the development of Thailand's electricity industry power generation policy, its institutions and the policy process. It also examines the policy actors ,,working within the process, and their roles, power and influence, factors that have shaped the distinctive characteristics of the electricity industry in Thailand today, an industry that is being confronted by increased opposition to its development from a range of community groups concerned with adverse environmental and social impacts. My research used Historical- Institutionalism and Policy Network Analysis to guide the investigation. A qualitative research methodology, including the examination of documentary evidence and the interviewing of 25 key informants, was used to improve our knowledge of the policy process, and to reveal the nature of the conflicts that have emerged within the Thai policy-making bureaucracy, a bureaucracy that controls the electricity industry, and between these policy actors, the elected and military governments, and other parts of the Thai community. ·My research found that the development of Thailand's electricity generation policy has been complex; influenced by socio- economic and political , factors, as well as by external factors such as conditionalities imposed by foreign governments and multinational lending agencies. These factors have constrained the political institutions and political elites who play a key role in setting the rules for the restructuring of the industry. As Thailand has developed to become more democratic, the emergence of new groups of policy-makers, such as elected-politicians and civil society, has brought about a change in electricity policy direction, and in the structure of the industry. The research identified four key groups of policy actors participating in the Thai electricity policy arena, including first the 'old energy aristocrats'; officials in EGAT who established the industry. They were followed by the officials in EPPO who had a more commercial orientation and who challenged the earlier ideas, leading to proposals to privatize the industry. Civic Society Organisations (CSOs) emerged in the 1970s to challenge the large energy projects proposed by the Government. The CSO's were supported by elected-politicians, particularly the politicians from Thai Rak Thai Party that tried to take control of the industry for their own ends in the 1990s. Each of these policy participants developed their own discourses to influence policy-making and public opinion. To reveal the nature of the challenges faced in developing the electricity industry in Thailand, this thesis focuses on a number of case studies of large electricity development projects, including the Nam Choan and Pak Mun Dam Projects, the Prachub Kirikhan Power Plant Projects, and the Wiang Haeng Coal Mine Development Project. The studies reveal evidence of the significant negative impacts that these projects had and continue to have, on the communities and environment adjacent to them, and on Thai society more generally. These problems emerged due to the fact that the policy institutions were, and still are, dominated by technocrats and political elites, with limited public participation in either the policy decisions made, or the policy developmenl process. My thesis concludes that conflicts in relation to the electricity industry policy process are likely to grow in future years, and so makes a number of SUl!l!estions as to how these issues mi!!ht be addressed.

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Originality Statement

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Date ii

Abstract

Many analysts have attempted to develop a systematic approach towards understanding the public policy framework in Thailand, and the impact of policies on Thai society and the environment. However, approaches so far have been limited in scope, and little has been done to investigate Thailand’s electricity development policy approach, and its impact on society and natural resources in Thailand. This thesis contributes to filling this knowledge gap through undertaking an analysis of the development of Thailand’s electricity industry power generation policy, its institutions and the policy process. It also examines the policy actors working within the process, and their roles, power and influence, factors that have shaped the distinctive characteristics of the electricity industry in Thailand today, an industry that is being confronted by increased opposition to its development from a range of community groups concerned with adverse environmental and social impacts on it. My research here uses Historical Institutionalism and Policy Network Analysis to guide the investigation. A qualitative research methodology, including the examination of documentary evidence and the interviewing of 25 key informants, was used to improve our knowledge of the policy process, and to reveal the nature of the conflicts that have emerged within the Thai policy-making bureaucracy, a bureaucracy that controls the electricity industry, and between these policy actors, the elected and military governments, and other parts of the Thai community.

My research found that the development of Thailand’s electricity generation policy has been complex; influenced by socio-economic and political factors, as well as by external factors such as conditionalities imposed by foreign governments and multinational lending agencies. These factors have constrained the political institutions and political elites who play a key role in setting the rules for the restructuring of the industry. As Thailand has developed to become more democratic, the emergence of new groups of policy-makers, such as elected-politicians and civil society, has brought about a change in electricity policy direction, and in the structure of the industry. The research identified four key groups of policy actors participating in the Thai electricity policy arena, including first the ‘old energy aristocrats’; officials in Electricity Generation Authority of Thailand (EGAT) who established the industry. They were followed by the officials in Energy Policy and Planning Office (EPPO) who iii had a more commercial orientation and who challenged the earlier ideas, leading to proposals to privatize the industry. Civic Society Organisations (CSOs) emerged in the 1970s to challenge the large energy projects proposed by the Government, those supported by elected-politicians, particularly the politicians from Thai Rak Thai Party that tried to take control of the industry for their own ends. The TRT interventing in the industry after it came to power in the 1990s. Each of these policy participants developed their own discourses to influence policy-making and public opinion. To reveal the nature of the challenges faced in developing the electricity industry in Thailand, this thesis focuses on a number of case studies of large electricity development projects, including the Nam Choan and Pak Mun Dam Projects, the Prachub Kirikhan Power Plant Projects, and the Wiang Haeng Coal Mine Development Project. My studies reveal evidence of the significant negative impacts that these projects had and continue to have, on the communities and environment adjacent to them, and on Thai society more generally. These problems emerged due to the fact that the policy institutions were, and still are, dominated by technocrats and political elites, with limited public participation in either the policy decisions made, or the policy development process. My thesis concludes that conflicts in relation to the electricity industry policy process are likely to grow in future years, and so makes a number of suggestions as to how these issues might be addressed. iv

Acknowledgement I would like to express my gratitude to those who played a significant role in my research project. First and foremost, I would like to thank my supervisor, Professor Michael Johnson, who opened my perspectives on electricity generation policy, and the issue of environment conflict. Without the kind guidance, criticisms and all the academic, as well as personal advice he gave me throughout my study period, this dissertation could not have been completed. I am also grateful to the staff and students at the School of Social Science and Policy, The University of New South Wales (UNSW), for their comments and recommendations during staff and student seminars on my topic.

Special thanks go to Chiang Mai University (CMU), for providing me with a three year scholarship. I wish also to express gratitude to my former teachers: Ajarn Sarnsern Charoenphong, Professor Dr Tanun, Professor Dr Mayuree Anuman-rajadhon, Professor Seksin Srivatananukulkit, Ajarn Dr Jantana Sutthijaree and Suparat Chowkasem, as well as my colleagues at the Faculty of Political Science and Public Administration, who provided me with motivation, inspiration and criticism, and also the library officers at the Faculty of Social Sciences library in Chiang Mai University, who helped me to search for the valuable information needed for this thesis.

Special thanks must also go to the following: Suthep Rattananukrom, Assistant Professor Dr Aatit Puangmali, Assistant Professor Jariya Nualnirund, Assistant Professor Dr Usa Sutthisakron, Assistant Professor Dulaya Chittayasodhorn, Mayura Pleumpien, Ratana Vajarasatira, Ajarn Natchapat Ountrongjit, Suwanna Muangkaew, Khanthong Goko, Saitharn Matsu-ura, Pronpimon Aue-anand, Rungruedee Chompuwong, Rutjanayukhan Jinnatham, Pornpit Dechawat, Thitirat Tantiwat, Wallapa Techawatchareekul, Kittikorn Phromchan (in memory), Gary Morrison, and my many relatives and friends, who have supplied me with constant encouragement and moral support throughout, and some of the key informants, who asked not to be named, for providing me with valuable information during my interviews and case studies research. v

Last, but not least, I would like to express my appreciation to my parents, Surarit and Manika Rattanasak, and to my elder sister, Kanocknat Rattanasak, who have provided me with love, assistance, guidance and hospitality through out my life. A debt of gratitude must go to them, who have constantly supplied me with love, encouragement and support throughout. Their contribution has been the most valued of all. vi

Table of Contents Page Originality Statement i Abstract ii Acknowledgements iv Table of Contents vi Bibliography and Appendices xi List of Figures xii List of Tables xiii List of Boxes xiv Abbreviations Used in this Dissertation xv Terms Used in this Dissertation xvii

Chapter 1 Introduction 1 1.1 The Development of the Electricity Industry as a Policy Problem in Thailand 1 1.2 Purpose of the Study and Research Questions 6 1.3 Organization of the Thesis 9

Chapter 2: Historical Institutionalism and Policy Network Analysis as Research Tools in Policy Analysis 11 2.1 Public Policy and Institutionalism 12 2.1.1 Definitions of Institutions 15 2.1.2 Institutions and Organizations 16 2.1.3 Traditional Institutionalism 17 2.1.4 The Emergence of the New Institutionalism 18 2.1.5 Three Schools of New Institutionalism 19 2.1.6 The Relevance of Historical Institutionalism for this Research 23 2.2 Policy Network Analysis 28 vii

Page

2.2.1 The Emergence of Policy Network Analysis 29

2.2.2 Definitions of a Policy Network 31 2.2.3 Policy Network Characteristics 33 2.2.4 Bringing Policy Network Analysis to this Research 34 2.3 Conclusion 35

Chapter 3: Methodology 37 3.1 Qualitative Research 38 3.2 Research Design 39 3.3 Data Collection 40 3.3.1 Documentary Study 41 3.3.2 In-depth Interviewing 42 3.4 Data Analysis 45 3.5 Testing the Data 45 3.5.1 Validity 45 3.5.2 Triangulation 46 3.6 Ethical Issues 47 3.7 Conclusion 48

Chapter 4: Thailand: Governance Structure and Policy System 49 4.1 Introduction 49 4.2 Overview of Political Institutions in Thailand 50 4.2.1 The Thai Political System 50 4.2.2 The Fundamental Institutions Setting Public Policy 55 4.2.3 The Thai Bureaucratic Institutions 59 4.2.3.1 The Emergence of a Bureaucratic Polity in Thailand 59 4.2.3.2 Institutional Perspectives of the Thai Bureaucracy 64 4.2.3.3 The Re-birth of Bureaucratic Polity? 69 4.3 The Thai Economy 70 4.4 Social Sector of Thailand 76 viii

Page 4.5 Conclusion 86

Chapter 5: Electricity Power Generation Industry and Policy in Thailand: Historical Overview and Institutional Structure 87 5.1 Introduction 87 5.2 Historical Development of the Electricity Supply Industry in Thailand 89 5.2.1 The Introduction of Electricity to Thailand 89 5.2.2 Nationalisation of the Electricity Supply Industry (1968-1991) 91 5.2.2.1 Driving Forces for the Nationalisation of Electricity Utilities 96 5.2.2.2 The Process of Consolidation of the Three Existing Public Utilities - 1969 100 5.2.2.3 The Role of Legislation and Rules in Shaping the Structure of the Electricity Supply Industry 101 5.2.3 Liberalization Electrical Supply Industry Period (1992 to the present) 105 5.2.3.1 Driving Forces behind the Liberalization of Electricity 105 5.2.3.2 The Influence of Liberalization Ideology and the Loan Requirements of Multinational Lending Organizations, and Domestic Growth 110 5.2.4 The Unfinished EGAT Privatization 114 5.3 Conclusion 121

Chapter 6: Thailand’s Electricity Supply Industry: Structure and Policy Direction 123 6.1 The Current Structure of the Electricity Supply Industry 124 6.1.1 The Role of New Rules in Shaping the Structure of the Electricity Supply Industry after 1992 124 6.1.2 The Structure of the Electricity Supply Industry since 2005 129 ix

Page 6.1.3 EGAT’s Share in the Electricity Supply Industry 134 6.1.4 Institutional Barrier for SPPs 136 6.2 Analysis of Electricity Power Generation Policy 139 6.2.1 Electricity Generation Policy Objectives 139 6.2.1.1 The Sole Policy Objective 139 6.2.1.2 The Pro-hydroelectric Dam Policy 141 6.2.1.3 Centralized Large-scale Thermal Power Plants 146 6.2.1.4 The Principle of Fuel Diversity 148 6.3 Electricity Generation Policy Formulation Process 154 6.3.1 Power Development Plan: the Role of the Old Energy Aristocrats in Electricity Generation Policy Development 154 6.3.1.1 The Centralized PDP Process 158 6.3.1.2 The PDP and its Strategies 162 6.3.2 Energy Policy Formulation: the Role of New Energy Aristocrats 165 6.4 Conclusion 168

Chapter 7: Electricity Power Generation Policy: Old and New Policy Actors and Their Influence 169 7.1 Introduction 169 7.2 Policy Actors in Thailand’s Electricity Supply Industry 171 7.2.1 The Old Energy Aristocrats (EGAT) 172 7.2.1.1 The Emergence of the Old Energy Aristocrats 172 7.2.1.2 The Members of the Old Energy Aristocrats 172 7.2.1.3 The Major Sources of Power of the Old Energy Aristocrats 177 7.2.2 The New Energy Aristocrats 184 7.2.2.1 The Emergence of the New Energy Aristocrats 184 7.2.2.2 The Members of the New Energy Aristocrats and their Sources of Power 186 7.2.3 The Civil Society Organizations (CSOs) 195 x

Page 7.2.3.1 The Emergence of Civil Society Organizations in the Electricity Power Generation Policy Sector 195 7.2.3.2 The Members and the Sources of Power of Civil Society Groups 200 7.2.4 The Politicians 208 7.2.4.1 The Politicians’ Involvement in the Electricity Supply Industry 208 7.2.4.2 Thai Rak Thai Politicians and the Electricity Industry 213 7.3 Preliminary Findings and Conclusion 216

Chapter 8: Electricity Power Development Policy and Conflicts over the Role of Society and Natural Resources in Policy Decision- Making 222 8.1 Introduction 222 8.2 The Emergence of a People’s Movement against Electricity Development Projects 223 8.2.1 The Controversy over the Nam Choan Dam Project 229 8.2.2 The Controversy over the Pak Mun Dam Project 232 8.2.3 The Controversy over the Prachub Kirikhan Power Plant Projects 239 8.2.4 The Controversy over the Wiang Haeng Coal Mine Development Project 244 8.3 Analysis of Electricity Power Generation Policy and Conflict in Thailand 249 8.3.1 Institutional Factors 251 8.3.2 The Dynamics of Socio-economic and Political Factors, and the Emergence of Civil Society Organizations in the Environment 259 8.3.3 The Different Views of Natural Resources Conflict 261 8.4 Conclusion 262 xi

Page Chapter 9: Thailand’s Electricity Power Generation Policy: The View from the End 263 9.1 Institutions, Policy and Change 263 9.2 Policy Making as a Focus of Study 264 9.3 The Theoretical Framework of Analysis 266 9.4 The Development Context of the Emergence of Electricity Policy Institutions in Thailand 267 9.5 Rules and Bureaucrats Roles in Shaping Thailand’s Electricity Industry and Policy 273 9.6 Who Shapes the Policy? The Role of Policy Actors and Policy Networks 275 9.7 Finding a Better Electricity Policy Model for Thailand 283 9.8 Epilogue 286

Bibliography 287 Appendices I Participants Request Letter a II List of Interviewees c

III Participant Information Statement and Consent Form d IV Open ended questions for interviewees A. For Government officials g B. For Academics and NGO officials j C. For Local leaders l V List of authorities and their membership at the policy level n VI List of EGAT’s associated companies, subsidiaries and joint ventures s VII List of Independent Power Producers (IPPs) u xii

List of Figures Page Figure 5.1 Vertical Integration Monopoly Model 92 Figure 6.1 The Structure of the Electricity Supply Industry since 1992 125

Figure 6.2 EGAT’s Operation 127 Figure 6.3 The Structure of Organizations Associated with Electricity Power Generation at the Policy Level 133 Figure 6.4 Thailand’s Electricity Supply Industry by Industry Share 135

Figure 6.5 The PDP Approval Process 158 Figure 6.6 Linear Electricity Power Generation Policy Process in Thailand 161 Figure 6.7 The Structure of the Energy Policy Making Function 167 xiii

List of Tables Page Table 2.1 Discipline and the Three Schools of New Institutionalism, based on Academics’ Viewpoints 23 Table 4.1 Thailand’s Economic Growth Rate during the Implementation of the National Economic and Social Development Plans 75 Table 5.1 Chronology of the Major Events in the Thai Electricity Sector 90 Table 5.2 Date of Significant Restructuring Initiatives taken in APEC Economies 109 Table 5.3 The GDP and Electricity Consumption in Thailand 112 Table 5.4 Chronology of the Major Events in EGAT’s Privatization 117 Table 5.5 Chronology of Major Events in the Political Economy and the Electricity Supply Industry-Thailand 119 Table 6.1 EGAT’s Associated Companies, Subsidiary Companies and Joint Ventures 128 Table 6.2 Electricity Used, by Economic Sector in 2003 and 2004 141 Table 6.3 The Construction of Hydroelectric Dams from the 1960s to 1990s 143 Table 6.4 The Construction of Power Plants in the 1980s and 1990s 148 Table 6.5 Electricity Generation (Gigawatt: GW) Classified by Energy Type 153 Table 7.1 Major Policy Actors in Thailand’s Electricity Power Generation Policy Framework, and their Discourses 217 Table 7.2 Comparative Key Dimensions of the Four Policy Networks (2005) 219 Table 8.1 Chronology of Major Events in the Timeline of Protest against Electricity Development Projects: 1970s to the present 225 xiv

List of Boxes Page Box3.1 General Questions asked of all interviewees 44

Box 5.1 The Causes of Energy Industry Reform 107 Box 5.2 Full-scale Electricity Sector Reform 108 Box 5.3 IMF’s Financial Assistance Requirements 110 Box 6.1 List of Government Officials in MOEN and Political Consultants with Positions on Energy Policy Committees and who hold shares in Energy Businesses 151 Box 6.2 The PDP Formulation Process 156

Box 7.1 EGAT Performance 180 xv

List of Abbreviations used in this Dissertation

BOB The Bureau of Budget CCOs The Confederation of Consumer Organizations CSO Civil Society Organizations EGAT The Electricity Generating Authority of Thailand EGAT EU EGAT Employees Union EIA Environmental Impact Assessment EPPO The Energy Policy and Planning Office ERC The Electricity Regulatory Commission GMT Green Movement in Thailand HIA Health Impact Assessment IPPs Independent Power Producers MEA The Metropolitan Electricity Authority MOEN The Ministry of Energy NEPC The National Energy Policy Council NEPO The National Energy Policy Office NESDB The National Economic and Social Development Board NESD Plan The National Economic and Social Development Plan NEA The National Energy Authority OCSC The Office of Civil Service Commission PDP The Power Development Plan PEA The Provincial Electricity Authority PPAs Power Purchase Agreements PTT The Petroleum Authority of Thailand RID The Royal Irrigation Department SENT Sustained Energy Network of Thailand SET The Stock Exchange of Thailand SIA Social Impact Assessment SOEs State-Owned Enterprises SPPs Small Power Producers TDRI Thailand Development Research Institute TLFS The Thailand Load Forecast Sub-committee xvi

List of Abbreviations used in this Dissertation (Continued)

TRT Thai Rak Thai Party WCD The World Commission on Dams YEA The Yanhee Electricity Authority xvii

Terms used in this dissertation

Actors are individuals or groups, sometimes referred to as “stakeholders”, who have a stake in a policy issue, because they affect or are likely to be affected by, a government decision (Dunn 1981: 47).

Cabinet is the collective grouping of ministers in the Thai Government. In this thesis the term is used interchangeably with the Council of Ministers.

Commercialization is the process of attempting to introduce commercial incentives into a state department. This is often a precursor to selling a potentially commercial activity (Asia Pacific Energy Research Centre 2000: 31).

Corporatization is the process of turning a state trading department into a state- owned enterprise forced to operate under normal business laws and to compete on a level playing field with private firms. This may or may not lead to privatization (Asia Pacific Energy Research Centre 2000: 31).

Deregulation is the process of relaxing previously tight regulatory controls over either state or private monopolies, and opting for more light-handed, performance oriented regulations, to control both the natural monopoly and competitive elements of the sector (Asia Pacific Energy Research Centre 2000: 31).

Electricity power generation industry, or electricity power generation sector includes all the public and private organizations responsible for electricity generation.

Electrical power generation policy in this thesis covers all the kinds of policy relating to electricity power generation. The National Energy Policy Council (NEPC) and Electricity Generating Authority of Thailand (EGAT) are the key agencies formulating the policy.

National Economic and Social Development Plan, is a medium-term plan covering a five year period, which the Thai Government formulates as guideline for national economic and social development. The first NESD Plan was formulated in 1961.

Policy is a course of action or inaction chosen by a government or its public authorities to address a given problem or interrelated set of problems. xviii

Policy network is the property that characterizes the relationships among any particular sets of actors, and that forms around the issue of the importance of policies to the policy community (Wilks and Wright 1987: 299, Atkinson and Coleman 1996, in Kowch 2003: 11).

Power Development Plan (PDP) is a long-term investment plan covering fifteen years, as formulated by the Electricity Generating Authority of Thailand (EGAT), and as a guideline for its operations and investments.

Privatization policy is the process of selling government state-owned assets and ownership to the private sector (Asia Pacific Energy Research Centre 2000: 31).

Restructuring here is the process of changing the structure of the electricity industry from one of a guaranteed monopoly (a single service provider) over service territories, to one where elements of the sector are exposed to open competition; preferably with more than one service provider (Asia Pacific Energy Research Centre 2000: 31). 1

Chapter 1

Introduction

1.1 The Development of the Electricity Industry as a Policy Problem in

Thailand

After electricity was introduced in the 1880s to the United States and Europe, its use expanded dramatically throughout the world, transforming almost every aspect of daily life through the provision of a usable and readily available new source of energy for lighting, heating and powering machinery (Byrne and Mun 2003:48). In developed and developing countries, including Thailand, building an electricity infrastructure has been among the most crucial factors in both fuelling and supporting national development. The development and modernization of electricity infrastructures has brought with it the promise of new industries, industrial efficiency, increased industrial and economic productivity, and an improvement in the quality of life of the people. Accordingly, most governments in developing countries have concentrated upon the introduction and modernization of electricity infrastructure, in order to assist public agencies, public and private business, educational systems and social institutions in their development. The electricity systems developed over the last century have increasingly relied on building large-scale power plants and the use of extensive transmission and distribution networks, in order to deliver electricity at reasonable prices to an ever growing number of consumers. Electricity utilities were initially developed in most countries as state-owned monopolies, as was the case in Thailand. In the early days of the industry, even when private ownership was present, the companies supplying electricity operated as monopolies in designated franchise areas, regulated by governments that set the appropriate rules and oversaw operations (Byrne and Mun 2003:49). The private provision of electricity services was limited, and until the 1990s, in most developing countries, governments owned, financed and operated their respective electricity infrastructure and delivered electricity services (Asia Pacific 2

Energy Research Centre 2000:3). Broadly speaking, policies on electricity in most developing countries, including Thailand, were dominated by governments and bureaucratic elites who protected the monopolies held by state-owned enterprises. The private sector had been unable to gain a hold in this sector because, as the Asia Pacific Energy Research Centre (2000:11) states:

“In many other nations around the globe, the state assumed the primary responsibility for the development and operation of the electricity infrastructure. There were a number of historical and practical reasons for this, chief among them being the ability of the state to raise the capital required, and the widespread view that such a strategic asset must be under the control of central government. Economies of scale could be achieved by building larger and larger generation plants, in tandem with transmission and distribution networks that gradually extended to even the most remote consumers. Further economies achieved through additional vertical integration into the upstream energy resources sector especially oil, coal and gas” (Asia Pacific Energy Research Centre 2000:11)

In the case of Thailand, electricity generation technology was imported to Thailand in 1884. King Chulalongkorn (Rama V, reign 1868-1910) adopted a policy of reforming and modernizing his Kingdom (Electricity Generation Authority of Thailand (EGAT) 2004a:7). Along with other western technologies such as railways and the telegraph communication system, electricity was seen by the Thai elite as a modern technology considered a top priority for introduction, if the Kingdom was to become a modern state. In the early stages, electricity was produced to service the Royal Palace and Government offices only.

It was recognised that providing electricity services underpinned economic growth and was vitally important to national development, including improving people’s standard of living. The new Thai electricity industry expanded rapidly in the 1950s, following the implementation of the First National Economic and Social Development Plan, a plan that was linked to the Government’s goals of modernization and political integration. Electricity provision was widely touted by the Government as a basic infrastructure requirement that would contribute to both industrial development and help to reduce, along with a new transport infrastructure, the psychological gap between local and urban people (Greacen 2004:132). During the 1950s, the Thai 3

electricity supply industry changed rapidly, with a number of new authorities created to support the expansion of the industry. These included the Yanhee Electricity Authority (YEA), the Lignite Authority (LA), the Northeast Electricity Authority (NEEA) and the National Energy Authority (NEA) (EGAT 1994:31, Greacen 2004:128). However, these authorities were to prove inefficient at managing the sector and therefore in 1968, the Electricity Generating Authority of Thailand Act 1968 was introduced, giving legal consent to the creation of The Electricity Generating Authority of Thailand (EGAT), a consolidation of the existing YEA, LA and NEEA (EGAT 1994:31). EGAT was to play a leading role in the rapid development of the industry in the years that followed.

Over the four decades of modern electricity development in Thailand after the 1960s, the electricity supply industry was structured as a vertically integrated monopoly. The laws introducing it stipulated that EGAT held a monopoly in the generation and transmission of electricity. Thus, there was, after 1968, no competitive market in the electricity supply industry and no choice of electricity supplier for the Thai consumer (Asia Pacific Energy Research Centre 2000:32). The Thai electricity supply industry model also gave EGAT control over the construction of large-scale centralized power plants in order to generate electricity using lignite, the building of large hydroelectric dams and the construction of a centralized electricity transmission and distribution grid (Palettu 2002:21). Since the 1960s, more than 40 large-scale dams have been constructed (Sretthachau 1999:1, Chitipat 2005), together with 40 thermal-electricity generating plants. This expansion has had both positive and negative consequences for the Thai people, as this thesis will show. On the positive side, the introduction of electricity has contributed to the growth of the industrial sector and facilitated the Government’s mission of modernization, a mission designed to bring about the social and educational development needed to allow Thailand to reposition itself from being an underdeveloped country, to a rapidly developing country (Piboolsravut 1997:1). This thesis aims to document the development of Thailand’s electricity industry and to indicate the ways in which changes have been made in public policy, as well as the institutions introduced, in order to develop and manage the industry and to support development in Thailand. 4

In many countries, especially developing countries, the electricity sector has also been used as an instrument of social policy. Electricity has been seen as a means by which governments can provide services for rural communities, and at the same time provide an efficient tool, as in Thailand’s case, to counter alleged communist insurgencies in the 1950s and 1960s. As scholars such as Greacen (2003 online) point out, “Lighting serves a particular counter-subversion need, by reducing the psychological isolation of villagers, facilitating police surveillance and inhibiting clandestine infiltration.” This statement clearly indicates the key reason behind the expansion of the electricity sector in the 1950s. The electricity industry therefore played a key role, not only in economic and social development, but, as I will show in the case of Thailand, its political development as well.

While electricity systems developed by public and/or private monopolies have made large-scale production and consumption of electricity possible in many parts of the world, their operation has also created a number of serious problems (Byrne and Mun 2003:50). For example, mega-power development projects, such as the construction of large-scale hydroelectric dams, nuclear reactors and coal-fired power plants, have become sources of serious ecological degradation. Also, in many developing countries, urban elites have enjoyed electricity services at the expense of large numbers of the rural poor (Byrne and Mun 2003:50). These were also features of industrial development in Thailand, as the country was governed by an authoritarian elite and decision-making power in relation to the electricity industry was held by these same urban elites. Important decisions regarding electricity supply in Thailand were made by a “closed circle of technical experts, government bureaucrats and large corporate clients” (Byrne and Mun 2003:50). This governance structure, coupled with the monopoly status of the electricity utilities, resulted in the state electricity company developing into a powerful organization, with its own political and economic agendas (Patterson 1999, in Byrne and Mun 2003:51). These conditions were all present in Thailand, shaping policy and generating conflict, as I will reveal later in this thesis.

During both the 1950s and 1980s, Thailand was governed by bureaucratic polities that extended their power and control over the core political institutions and policy formulation process generally (Klein 1998:8). These bureaucratic elites, 5

concentrated around Government ministers and their ministries, exerted top-down policy and planning processes, and managed a centralized administrative system that in turn gave these bureaucratic elites a chance to control government budgets, national development directions, and force government agencies providing services to move in the directions they preferred. As this thesis will reveal, the rules established by these elites, including those controlling the electricity industry, stipulated that the Government could implement development projects with little public participation in the policy development process. These policy players, the so called ‘energy aristocrats’, who generally came from the well-educated elite classes, controlled the electricity power authorities and set the rules structuring the industry, controlling policy direction, policy formulation and the policy implementation process. The result, as this thesis will argue based on my research, was that many of the Government development policies, particularly these relating to electricity development policy, concentrated on the development of large-centralized power plants to supply the electricity services required for Thailand’s modernization.

The result, as will be outlined and demonstrated in the following chapter, was the development of an electricity industry established and controlled by institutions dominated by technocrats, who made investment and other decisions that were increasingly opposed by environmentalists and local residents, those who were negatively affected by the projects. The opposition from community and civil society organizations (CSOs), as well as the wider population, eventually led to conflict, conflict that was to result in some projects being abandoned, and this contributed to a growth in social and political movements that have since continued to contribute to the re-shaping of Thai government and polity, in a distinctive way.

Thai politics has begun to change to a more democratic system of government over the last three decades, during which time Thailand achieved, for a period of time, the highest rate of economic growth in the world (Klein 1998:35). The process of economic development has broken down the traditional pattern of policy development, as an expansion in educational and employment opportunities has brought about the emergence of a range of new non-bureaucratic policy actors, including elected- politicians and a politically active civil society. A major goal of this research is to reveal 6

why and how this happened and what its consequences have been. As I will show, these new groups began to organize campaigns against the power development projects, on the grounds of their negative impacts on human health and social integration, and environmental campaigns against the Pak Mun Dam, the Prachub Kirikhan Power Plant Projects and the Wiang Haeng Coal Mine Project, were significant developments in this process.

In conclusion, the development of the electricity industry was and continues to be seen as a major and necessary ingredient for socio-economic development in Thailand, and the various governments in the country have continued to give it top priority, in order to ensure an adequate amount of electricity to supply households and industrial factories, as well as to achieve economic growth and social development. In Thailand, successive military and civilian Governments created a number of institutions, laws and policy procedures that built a policy-making environment in which Government bureaucracies controlled policy direction, until this began to be questioned in the 1990s. The emergence of non-bureaucratic policy actors, including elected politicians and civil society organizations, has brought forth widespread criticism of the Government’s electricity strategy, as well as the direction of the monopolies controlling the supply of electricity; an important development that has not been adequately explored in previous research.

1.2 Purpose of the Study and Research Questions

The previous research into electricity power generation in developing countries has been limited. This study attempts to help fill this gap, focusing on Thailand, a Southeast Asian nation undergoing a rapid expansion of its electricity power generation capacity, seen as a basic infrastructure requirement for supplying core energy services in support of national development. The objective of this study is to help fill a void in the international research studies on electricity power generation policy in developing countries in general, and in Thailand in particular. The second aim of the paper is to gain an insight into and a better understanding of, the factors influencing policy-making in developing countries, with Thailand being a distinctive case in this respect, as this thesis will show. 7

To achieve these objectives, my thesis will start with a review of the existing literature in the areas of policy analysis, electricity generation policy and the impact of policy on civil society conflict and natural resources in Thailand. It will be shown that while electricity generation policy has often been at the forefront of significant public policy development in Thailand, studies examining the policy-making process and the role of policy networks and actors have been few and far between. Scholars such as Hirsch (1993), Sutthijaree (1992) and Sretthachau (2000), have been exceptions, focusing their studies on the conflict over new hydroelectric dam projects. Sapmanee (2002) investigated the conflicts of interest in resource allocation for new electricity generation processes, and Green (2004), as well as Greacen (2004), studied Thailand’s rural electrification projects. Others, such as Sukkumnoed et al. (2006), studied aspects of electrical power sector reform in relation to privatization, while Phuangcharoen (2004) analyzed the controversy over the Kanchanaburi Gas Pipeline Project and Thai- Malaysia Joint Development Area (JDA). Boyld (1993) and Tu (1993) focused their research on an environmental assessment of Thailand’s power development projects. This thesis aims to bring the existing research together, and to contribute a new insight based on its policy-making focus, backed up by new qualitative research, in order to reveal how key policy players and processes have shaped the development of the electricity industry in Thailand and how they will help determine its future direction.

Thirdly, this thesis will examine the way in which bureaucratic elites were able to dominate policy-making in industries such as electricity generation, until rising living standards, the development of political institutions and the emergence of new CSOs, threatened their authority. In undertaking this research, the thesis will also aim to reveal how the democratic process in a rapidly developing country and with new, rapidly growing CSOs, has changed both the direction of policy, but also the way policy is made.

The previous literature on policy-making in relation to electricity generation policy in Thailand was partial in nature and mainly focused on issues relating to the expansion of the industry, with a focus on the impacts on the environment left out. Interestingly, Sutthijaree (1992:138, 158;169) in her 1992 study of Thailand’s policy on public utilities, suggests that EGAT as a state organization has the capacity to produce a 8

sufficient amount of electricity, whereas in the past it had focused on the construction of hydropower dams without recognizing the fact that the industry was going to continue to grow. The research conducted by Sretthachau (2000), research that focuses on the policies with regard to hydropower dam constructions in Thailand between 1955 and 2000, shows that the policy on the construction of hydropower dams has been heavily influenced by multinational lending agencies such as the World Bank, as well as multinational dam corporations. These are important findings, but the research did not examine the role that socio-economic factors have played in this process, factors that are a key point of focus for this thesis. The impact of these processes on the environment, were not discussed at all in the previous researches, a deficiency this thesis will begin to redress. The research conducted by Sukkumnoed and his colleagues (2006) on the Government policy to privatize EGAT between 2002 and 2006, suggests that the policy in relation to the electricity supply industry was formulated without public participation. My new research here aims to examine whether this was actually the case.

Even though the existing literature has provided rich insights into Thailand’s electricity generation policy strategy, it is also true to say that no researchers have conducted detailed research on the development of the electricity power sector from a policy-making perspective. Moreover, those researchers who have examined the impact of development policy and the emergence of natural resources conflicts in the sector, have applied a political economy, political ecology and environmental politics approach to their studies, rather than looking at the specific institutional and policy-making context of power generation development in Thailand, as will be developed here.

The previous literature and policy debates have paid insufficient attention to the influence that the interaction of external and domestic factors has had over electricity generation policy. The overall aim of this research then, is to examine the evolution of electricity generation policy in Thailand. It attempts to develop the foundations of the systematic analytical framework needed to examine the electricity power generation industry, and to examine the policy process and the way this has led to conflict over development goals and priorities, particularly in relation to the environment. 9

The thesis does this through a review of the documentary evidence provided by Thai and foreign researchers, as well as my personal observations while working in Thailand. In summary, there are four fundamental research questions that will be addressed in this thesis, and these are (i) what have been the major factors influencing the development of Thai electricity power generation policy?, (ii) which policy actors have formed the policy network that has provided the distinctive shape and direction of electricity policy in Thailand?, (iii) what has been the impact on electricity power generation policy of the increasing engagement of social and political actors in the policy-making process?, and finally (iv) given the findings of the thesis, how can Thailand formulate a better electricity generation policy in the future?

1.3 Organization of the Thesis

In order to examine the research questions, this study will use the Historical Institutionalism and Policy Network Analysis approaches, as they are suitable to use when wishing to understand the historical development of Thailand’s electricity industry; its formal structure, the policy formulation process, the policy actors, their power, interests, influence, and their role in policy formulation. Details on the Historical Institutionalism and Policy Network Analysis approaches will be presented in Chapter 2.

Furthermore, to address the research questions above, my research uses a qualitative approach that integrates an analysis of historical documents, the informal content analysis of major Thai newspapers, and formal interviews with 25 key informants from relevant Government agencies, CSOs, local leaders and academics, in order to provide an overview of the evolution of Thai electricity generation policy, as well as identify the policy actors and the impacts of policy, on both civil society and natural resources. The research methodology will be discussed and described in Chapter 3.

Chapter 4 provides an analysis and understanding of the processes underway in Thailand from the perspective of the Thai political economy and political institutions, those historically controlled by a hierarchy and using a political system dominated by bureaucratic elites. The role of key policy actors, including the bureaucracy, in shaping 10

the national development strategy and institutional arrangements will be discussed. Electricity generation policy has also been a major component of the macro-economic policies outlined in the many National Economic and Social Development Plans. Over five decades, technocrats in the planning agencies and EGAT, created institutions and laws, policy and Government procedures to ensure the electricity sector would generate sufficient energy to supply the industrial sector. In this instance, the power of bureaucratic actors largely contributed to the institutional development, as well as the achievements, of this sector. In Chapter 5, the detailed historical background of the electrical industry in Thailand, together with the structure of the industry and the formulation of the power generation policy strategy will be outlined and examined. Chapter 6 extends the analysis to examine the current electricity supply industry and the policy formulation processes of EGAT and EPPO.

Chapter 7 focuses on an analysis of the role of policy actors, those who have formed policy networks regarding electricity generation policy. The focus will be placed on the factors contributing to the emergence of each policy network, their role and interests, their sources of influence and the way this has shaped the discourse used to influence public opinion. Chapter 8 reviews four case studies with respect to conflicts over electricity power development projects, including the Nam Choan and Pak Mun Dam Projects, the Prachub Kirikhan Power Plant Projects, and the Wiang Haeng Mine Development Project, in order to reveal the factors contributing to the emergence of conflict, and to help understand the role of the various actors with regard to the issues. Chapter 9 summarizes the finding from this research and provides a conclusion.

As my thesis will show, electricity has played a vital role in the development of Thailand for more than 100 years. The analysis here is designed, not only to find out how electricity policy making has been influenced and shaped by the development focussed elites leading its direction, but also to extend the study to gain an understanding of the role that CSOs have played within modernizing and developing countries like Thailand. By doing this, I will, in the process, help to increase our understanding of the negative impacts of policy strategy on both civil society and natural resources, in a way not previously considered. 11

Chapter 2 Historical Institutionalism and Policy Network Analysis as Research Tools in Policy Analysis

The process of the development of Thailand’s electricity industry has been examined in a number of studies, such as those by Hirsch (1993), Sutthijaree (1992), Sretthachau (2000), Sapmanee (2002), Green (2004), Greacen (2004) and Sukkumnoed (2006), but as I noted in Chapter 1, not from a policy-making perspective. In order to fill this research gap, the question as to how this should be done, and which theoretical framework might be most appropriate and this is the focus of this chapter.

Previous studies of the electricity and energy sectors, have generally focused on the fuels used, society and the environment, energy efficiency (World Bank 2006) or a specific activity related to reform, such as privatization (see Greacen and Greacen 2004). Few have focused systematically on the evolution of policy over time, or the role that key policy-makers (and their networks) have played in the process, elements that are essential to an understanding of the process of change in the electricity industry today.

Most scholars have focused on specific issues. One exception was Sutthijaree (1992), who tried to consolidate all the models of public policy studies in her analysis of Thailand’s public utilities policy-making, and later focused on the conflict that arose over the construction of the Kaeng Krung Dam. Another researcher, Sretthachau (2000), focused his analysis on the study of the perceptions of those Thai elites who controlled the political institutions, and who developed and adopted the policies which promoted dam construction, but he did not present or explore the policy formulation process. Other scholars, such as Sukkumnoed and his colleagues (2006), focused their studies on the issue of EGAT’s privatization by the Thaksin Shinawatra Government (2001-2006). Even though these scholars frequently mention institutional factors, including laws, policy decision-making and policy discourses, factors that informed the stakeholders in the policy system, their studies on the policy process focus on EGAT’s actual 12

privatization. This narrower focus is not sufficient to understand the whole electricity power generation policy process, or the source of the conflicts between the industry and the wider community in Thailand.

The aim of this research is to build on these studies and examine electricity power generation policy in Thailand in terms of the evolution of the electricity sector: its structure, policy direction, the policy actors, their role and influence, as well as the uneven consequences of the policies developed in terms of social and natural resources. With this aim in mind, I decided to set the four research questions shown in Chapter 1, these being: (i) what have been the major factors influencing the development of Thai electricity power generation policy?, (ii) which policy actors have formed the policy network that has provided the distinctive shape and direction of electricity policy in Thailand?, (iii) what has been the impact on electricity power generation policy of the increasing engagement of social and political actors in the policy-making process?, and finally (iv) given the findings of the thesis, how can Thailand formulate a better electricity generation policy in the future?

To address the research questions, I looked for a theory that is able to help explain the evolution of Thailand’s electricity industry and its policies, the structure of industry, and the rules and factors which have influenced both the policy system and those involved in policy making. I chose the Historical Institutionalism approach (Scott 1995) to examine the above-mentioned elements. However, this approach is not sufficient to explain the role and influence of policy actors; a major concern of this study. In order to investigate the role of policy actors, I decided to use Policy Network Theory as a supplement in order to analyze the detailed roles of the policy actors who have played a significant role in the electricity industry policy system.

2.1 Public Policy and Institutionalism

Scholars have offered a number of helpful definitions of public policy. These definitions include Lasswell (1958, in Lamartin 1999: 42), who states that “policy concerns who gets what, when and how.” This definition is simple but attractive because it conveys the broad scope of public policy. However, it leaves unclear the 13

interests of the public and the roles of government. Anderson (1975) describes public policy as “what government chooses to do.” Further, he clarifies it as “a relatively stable, purposive course of action followed by an actor or set of actors in dealing with a problem or matter of concern” (Anderson 1984: 9). Dye (1987: 2) states that that “public policy is whatever governments choose to do or not to do.” However, this definition does not adequately recognize that what governments decide to do and what they actually do may diverge. Additionally, some actions are routine work and not usually thought of as policy matters. Roherty (1980: 10, in Lamarrtin 1999: 42) states that “policy represents interests. Policy is a statement of what a polity takes to be its purpose and goals.” Roherty refers to the role of the polity and the people, and suggests that policies are made by people in political institutions and that public policy represents specific values and the interests of particular groups. By stressing the interests of the public, this statement makes explicit the concept of ‘public’ policy and Colebatch (2002: 9-10) states that “policy implies authority, expertise and order.” I would like to define public policy as “a course of action or inaction chosen by the government or public authorities to address a given problem or interrelated set of problems.”

Prominent scholars in the analysis of public policy, including Dye (1987) Anderson (1997), Howlett and Ramesh (1995), Kingdon (1995), and Bridgman and Davis (2004), have developed the study of public policy as a body of knowledge. Policy is defined by Considine (1994: 4) as “the continuing work done by groups of policy actors who use available public institutions to articulate and express the things they value.”

Traditional studies of policy-making processes have developed from an analysis of political processes. Dye (1987: 19) outlines eight models that political science has used to analysis policy in the work ‘Understanding Public Policy’ (1987). These include: an Institutional Model, a System Model, a Process Model, a Group Model, an Elite Model, a Rational Model, an Incremental Model, and finally a Game Theory Model. Dye (1987) notes that in the Institutional Model, public policy is authoritatively determined, implemented and enforced by government institutions, such as Congress, the Presidency, Courts, states, municipalities, political parties and so on. Policy, he 14

suggests, does not become ‘public’ until it is adopted, implemented and enforced by government institutions, with government itself being seen as the formal institution constituted by the state. Government institutions, he suggests, give public policy three distinctive characteristics, including: (1) that Government is lending legitimacy to policy, (2) Government involvement in policy-making introduces an element of universality. Only government policy, he says, can be extended to all the people in a society, and (3) Government also monopolizes coercion in society (Dye 1987: 21). Examining the role of government as the key institutional player in the policy process must be central to any examination of public policy. The institutional model as outlined by Dye, concentrates on describing specific governmental institutions, structures, organizations, duties and functions, but this perspective can be expanded to include the fact that public policy-making takes place within political institutions (Schattschneider 1960, in John 1998: 38). Political institutions include the formalized rules embodied in laws that are central to every political system, and that can be defined as institutions. In addition, institutions divide powers and responsibilities between the organizations of the state officials, in order to consult and to deliberate; they can include or exclude political actors, such as interest groups, in the public decision-making.

Institutionalism is the oldest approach used for political analysis. Traditional Institutionalism emphasises the study of constitutional and legal structures that create 1 political institutions . These include the establishment of government offices, political 2 organizations , and laws and rules, that are all central to every political system, and that also serve to constrain how decision makers behave. Institutions divide power and responsibilities between the formal organizations of government; they also establish formally the rights of individuals and groups, they impose obligations on state officials to consult and to deliberate, and they can include or exclude political actors, such as politicians, voters and interest groups, with respect to political activities and public policy decision-making processes (Schattschneider 1960, in John 1998: 38). Therefore, institutions are not only accountable for the distribution of power, but they also make

1 Political institutions are those governmental offices and procedures through which political authority is granted and exercise (Fenna 2004: 191). 2 Political organizations include political parties and interest groups. They have a formal structure and exist for political purposes, but do not in themselves carry any of that formal authority (Fenna 2004: 191). 15

political life manageable by formalizing rules and the norms of behaviour. An understanding of institutions is therefore central to revealing, both the formalization of the political power, and the way this influences policy-making.

2.1.1 Definitions of Institutions

What actually defines an entity as an institution? Institutions can be viewed as “the formal rules, compliance procedures and operating practices that structure the relationship between individuals in various units of the polity and economy.” This view, proposed by Hall (1996: 19) is similar to that of Thelen and Steinmo (1992: 2, in Scott 1995: 26) who define the study of institutions as an analysis of “…both formal structures and informal rules and procedures that structure conduct.” As Steinmo (1992 in Clark and Foweraker 2001: online) assert:

“Institutions are simply rules. As such, they are the foundation of all political behavior. Some are formal (as in constitutional rules), some are informal (as in cultural norms), but without institutions there could be no organized politics”

Thelen and Steinmo (1992: 2, in Scott 1995: 26) view institutions in a more dynamic way than the scholars of Traditional Institutionalism, who focus their study mainly on formal rules and structures of political institutions.

Other definitions view institutions as representing patterns of human behaviour. Ostrom (in Sabatier (ed.) 1999: 37) notes that an “institution refers to the shared concepts used by humans in repetitive situations organised by rules, norms, and strategies.” In addition, Ostrom adds more to the definition by stating:

“…rules specify a range of acceptable actions for particular individuals, and specify sanctions for actions our side this range. Norms are identical to rules, except that they do not specify sanctions for non-compliance. Shared strategies simply specify a pattern of behaviour, without placing conditions upon that behaviour (as norm and rules do) or specifying sanctions for actions inconsistent with the behaviour specified (a rules do)”

Prominent institutionalists, including Scott in his book titled ‘Institutions and Organizations’ (1995) conclude that: 16

“…institutions consist of cognitive, normative, and regulative structures and activities, that provide stability and meaning to social behaviour. Institutions are transported by various carriers-cultures, structures and routines, and they operate at multiple levels of jurisdiction, from the world system to localised interpersonal relationships” (Scott 1995: 33)

Scott (1995: 33) also points out that institutions composed of cognitive, normative, and regulative structures and activities, provide stability and meaning to social behaviour. Institutions can be observed obviously from the viewpoint of structures, cultures and routines. In this conceptualization, institutions are multi-faceted systems incorporating symbolic systems, cognitive constructions, normative rules and regulative processes, all of which shape social behaviour.

The aforementioned definitions provide a much broader and useful set of definitions of institutions, those that are distinct from the traditional view and that incorporate informal aspects such as values, rules and practices, aspects that shape or constrain political behaviour. These elements also provide powerful ideas for further exploration of the nature of the public policy-making process.

2.1.2 Institutions and Organizations

The term ‘institutions’ has often been used interchangeably with the term ‘organizations’, particularly in the Organizational Theory and Public Administration literature (Mundy 1999: 23). Some scholars such as North (1996, in Mundy 1999: 23) argue that ‘institutions’ do not mean ‘organizations’; however, there are some differences between institutions and organizations. The distinction between the two terms is important in terms of the level of analysis used in this study, because it provides the additional clarity needed for an interdisciplinary study such as this one. As Lowndes (2002: 98) noted, institutions are the ‘rules of the game’, while organizations are the ‘players’ of it. Institutions comprise formal traits, such as rules, laws and constitutions, as well as norms of behaviour, conventions and procedures. Organizations are formed as the collective actors to engage in purposive activities, such as establishing constitutions and rules. This also implies that organizations are created to take advantage of the opportunities made available by institutions. Institutions can also be seen to determine the opportunities in a society, while organizations arise to take 17

advantage of those activities. This is why it is necessary to distinguish between institutions and organizations in this thesis.

2.1.3 Traditional Institutionalism

The earliest developments in political science were built upon an institutional foundation (Rothstein 1998: 135, Holman 2001: 33), which in turn was built upon the classic works of Political Theory, for instance Plato’s Republic is largely a comparison of different forms of government (Rothstein, in Goodin and Klingemann 1998: 136). Traditional Institutionalism focused on describing the formal structure and legal powers, procedural rules, functions and activities of government, as well as formal relationships with other institutions, such as those between legislative and executive bodies (Anderson 1997: 31).

Since the traditional institutionalists hold the assumption that the rule of law should assume a central role within a government, the independent behaviour of individuals is of little attractive importance to these groups of scholars. As Holman observes, the structure of government ultimately determines individual behaviour (Holman 2001: 34). This has led to the undermining of this approach as an analytical tool, because traditional institutionalists cannot explain the notion of the power affected by an individual upon a given political institution, or the behaviour of the actors involved in political institutions (Lowndes 2002: 92).

The rise of Behaviouralism in the 1950s, shifted the focus of institutional analysis away from the formal rules and structures of political institutions, into the aggregated behaviour of individuals and groups in a ‘new’ institutional approach (Holman 2001). 18

2.1.4 The Emergence of the New Institutionalism

During the 1950s, the behavioural movement arose in direct response to the traditional institutionalists, and this attempted to develop a more scientific basis for the assessment of the agents involved in policy-making, based on an understanding of individual behaviour and motivation (Holman 2001: 35). This movement saw a key role for individuals as self-interested, rational, utility maximizing individuals, and this underpinned the new mode of enquiry. Behaviouralists argued that institutional structures, for instance formal rules, cannot be used solely to define individual behaviour. Thus, behaviouralists started to focus their studies on the decision-making and policy-making processes in government, and this led to the emergence of New Institutionalism. Although a Traditional Institutionalism approach might be useful in describing the formal laws and political structures, it cannot in itself explain those particulars concerned with what the government does, or how policy actors behave. The new institutionalists explain institutions in broader terms, which includes behaviour that can help in an analysis of government decision-making, as well as examining informal rules and values as factors that can lead us to examine how government functions impact on the wider community and the rights of citizens.

New Institutionalism concerns itself, not only with the development of theory, but also the employment of quantitative analysis in order to analyze policy problems. As Lowndes’ (2002: 97) summary of the movement of analysis away from Traditional Institutionalisms to New Institutionalisms states:

“…(1) from a focus on organizations to a focus on rules, (2) from a formal to an informal conception of institutions, (3) from a static to a dynamic conception of institutions, (4) from submerged values to a value-critical stance, (5) from a holistic to a disaggregated conception of institutions, and (6) from independence to embeddedness”

This orientation also focuses its analysis on institutional efficiency (Sutton 2001: 105). The role of values and behaviour regularised and formalized as routines, procedures, conventions, roles, strategies, organization types and technologies, and around which political activity is constructed, can then be revealed (March and Olsen 19

1989: 22). March and Olsen (1989: 22) explain this paradigm to include the “beliefs, paradigms, codes, culture and knowledge that surround, support, elaborate and contradict those roles and routines, as a way of assessing dynamic changes in institutions.”

The New Institutionalism approach focuses on outcomes in the form of public policies or other political decisions, while Traditional Institutionalism emphasizes the legislative process and the new approach utilized process as a way of analyzing institutions. Scholars such as Thelen and Steinmo often suggest that the major difference between Traditional Institutionalism and New Institutionalism is that the new approach attempts to “account for systemic differences and between countries, by isolating intermediate institutions which might account for these differences” (Steinmo, Thelen and Longstreth 1992:5, in Koelble 1995: 237). They suggest that Traditional Institutionalism does not focus on systemic across-country comparisons, but instead focuses its investigation mainly on administrative and political structures.

In summary, New Institutionalism can be seen as distinct from Traditional Institutionalism in several ways, such as through the development of new analytical methods that can be used to analyze human behaviour in politics, and the extension of the analytical boundary, from a political structure analysis, to the analysis of cross- country comparisons as explanations of the forces driving change. The new approach is not a monolithic structure of analysis, but divided into three schools, as the following section will describe.

2.1.5 Three Schools of New Institutionalism

3 The emergence of New Institutionalism can be classified into three schools , differentiated by their original source discipline and focus of analysis. Hall and Taylor (1996: 936) label the schools of thought as Historical Institutionalism, Rational Choice

3 DiMaggio (1998, in Nielson 2001: 505) proposes that the three new institutionalisms (neo- institutionalism) should include: “rational-action new institutionalism, social-constructivist new institutionalism, and mediated-conflict new institutionalism.” These three institutionalisms are seen as originating from economics, sociology and political science respectively. Further to this, Scott (1995: 24- 31) classifies the three new institutionalisms as neo-institutional theory in political science, neo- institutional theory in sociology and neo-institutional theory in economics. 20

Institutionalism and Sociological Institutionalism. These three schools developed their ideology from a political-scientific, economic and sociological perspective. In this dissertation, the terms Historical Institutionalism, Rational Choice Institutionalism and Sociological Institutionalism, will be used to avoid confusion. The section below provides a brief the description of the three schools.

Rational Choice Institutionalism

Rational Choice Institutionalism emerged in the 1970s (Hall and Taylor 1996: 942), and was developed by scholars such as Elinor Ostrom. It has its roots in neo- classical economics and aims to examine what individuals do when they are faced with choices made by other political actors. The central premise of this school is that institutions are the creation of self-interested individuals for specific purposes, and in particular, to secure and maximize the value of individual preferences (Sutton 2001: 9). This school focuses on an analysis of the effects and influences of institutions, including laws, inherited organizational forms and norms (Neilson 2001: 505), with a particular focus on whose interests or preferences prevail in public policy-making (Kato 1996: 557). It makes an assumption regarding the utility maximization of political actors, and that the individual ought to be the central focus in any research (Kato 1996: 557). We can, using different assumptions in this approach, see that the domination of specific bureaucratic interests over popular interests can lead to completely different policy outcomes, and this approach can be used to analyze the link between public preferences and actual policy decisions, through the presence of the incentives provided by a politician’s desire for re-election. Some policies in Thailand can be analyzed using this approach, such as the decision made by Thaksin Shinawatra, leader of Thai Rak Thai Party (TRT), the party in power at that time, to delay the privatization of the Electricity Generating Authority of Thailand in 2003, resulting in the TRT Party gaining a landslide victory in the 2005 general election, as I will discuss in Chapters 5 and 6.

Sociological Institutionalism

Sociological Institutionalism was developed by Stanford sociologists Meyer, Rowan, Scott, DiMaggio and Powell, in the late 1970s (Hall and Taylor 1996: 947). The central theme of this approach is that it defines institutions in broader terms other than 21

as working in the field. Institutions are, as Koelble notes, “themselves dependent upon larger ‘macro-level’ variables such as society and culture, and the individual is a largely dependent and rather unimportant variable” (Koelble 1995: 232). A distinctive feature of this approach is that it is influenced by System Theory, a theory that focuses on “organizations and the ways that they were constructed and reconstructed in the context of social action” (Silverman 1971: 141). Thus, the organizational environment and the members of the organizations, can supply resources and targets for outputs (as policies), and provide a source of meaning and insight into the effects of organizations (Scott 1995(1): 29).

As Hall and Taylor note, sociological institutionalists focus their analysis on the cultural construction of social phenomena, exploring the way in which culture contributes to the expansion of social agency (Hall and Taylor 1998: 959). They contend that individual action is determined by social and cultural factors as individuals “find themselves ‘embedded’ in a cultural and organizational ‘field’ or ‘sector’ that determines the very concept of ‘self-interest’ and ‘utility’” (Koelble 1995: 232). Thus, sociological institutionalists underline the important role that culture, society, organizational identity and industrial sectors play, in the interests a person might hold. Any study therefore, such as this one, needs to take this identity into account when exploring the Thai electricity industry and those policy players playing a key role in policy-making in that industry, a role that also needs to take historical factors into account.

Historical Institutionalism

Historical Institutionalism, the third school of New Institutionalism, was developed in response to both the Group Theory of politics and structural- functionalism, two bodies of thought that were prominent in political science during the 1960s and 1970s (Hall and Tyler 1996: 937). Prominent scholars in this school include March, Olsen, Hall and Skocpol (Scott 1995: 26). They define institutions as “the formal or informal procedures, routines, norms and conventions embedded in the organisational structure of the polity or political economy” (Hall 1986: 19). Historical institutionalists like the sociologists, do not deny the role of individuals in shaping policy; however they argue that outcomes (policies) are shaped by a number of 22

structural and institutional factors beyond individual calculation or control (Koelble 1995: 241). Policies are a product of the interaction among various groups, interests, ideas and institutional structures, that can only be understood in their historical context.

The three schools of New Institutionalism do share some common ideas however, as Kato (1996: 556) points out, whereby the three schools are concerned with the question of how institutions (differently defined) shape the political behaviour and outcomes (Holman 2001: 33). All three schools include in their analysis both formal structures and organizations, as well as informal routines and procedures, to a different degree. Despite these similarities, these three schools of New Institutionalism are different, particularly when explaining the cause of the emergence of institutions. Historical Institutionalism and Sociological Institutionalism see the emergence of institutions as the result of adopting new sources, cultural norms or historical consequences, while Rational Choice Institutionalism pays attention to institutions created by individuals for maximizing their self-interest.

Hall and Taylor (1996: 938-941) indicate the distinction between Historical Institutionalism, Sociological Institutionalism and Rational Choice Institutionalism, by saying that Historical Institutionalism conceptualizes the relationship between institutions and individuals, but rarely makes firm assumptions about the relationship between institutions and individuals. Historical Institutionalism focuses on power and the asymmetrical relations of power. This approach sees the position of groups and their influence as key to understanding the policy and change process, and this aspect reflects its roots in Group Theory, and has the power of ‘policy actors’ as a central concern. Lastly, Historical Institutionalism sees social causation as ‘path dependent’, in the sense that it “rejects the traditional postulate that the same operative forces will generate the same results everywhere”. Instead, Historical Institutionalism supports the view that “the effect of such forces will be mediated by the contextual forces of a given situation, often inherited from the past”. (Hall and Taylor 1996: 941). In summary, institutionalists remind us that an organization can only be properly understood from an analysis of its wider social and cultural context, and that these environments create the regulative, normative and cognitive values that support and constrain the operation of 23

individual organizations and their capacity for change, factors that must be taken into account in an analysis of the formulation process.

Table 2.1 Discipline and the Three School of New Institutionalism, based on Academics’ Viewpoints

Discipline DiMaggio Hall and Taylor Scott Economics Rational-action Rational Choice Neo-Institutional New Institutionalism Theory in Institutionalism Economics Sociology Social-constructive Sociological Neo-Institutional New Institutionalism Theory in Institutionalism Sociology Political Science Political-conflict Historical Neo-Institutional New Institutionalism Theory in Political Institutionalism Science Source: Dimaggio 1998, in Neilson 2001: 505, Hall and Taylor 2001: 936, and Scott

1995 (1): 24-31.

2.1.6 The Relevance of Historical Institutionalism for this Research

Historical Institutionalism theory rests on the contention that interactions and struggles among groups are central facts of political life. According to the Group Theory of politics, public policy is the product of rival groups (Anderson 1997: 27). Public policy is the outcome reached as the groups struggle, and it provides a measure of the balance or interests among the various competing groups. Group Theory can, in this formulation, be used to explain the major dynamics of the policy process in pluralist societies, but this view is not universally accepted. John (1998: 75-76) argues that Group Theory has some limitations, because the approach does not provide insights into the policy decision-making process, and there is circularity in the argument because it focuses largely on explaining everything in terms of group processes, processes that cannot completely interpret the cause and effects of policy. Finally, the last criticism of this approach is that Group Theory pays insufficient attention to the role of institutions 24

as powerful groups; the laws and political structures of the state used as a way to exclude other groups from the decision-making process, or to consolidate their power (Schattschneider 1960, in John 1998: 76). These weaknesses in the Group Theory approach have led scholars to focus on approaches which take into account the role of policy networks in public policy, as I will discuss later in this chapter.

Structural-functionalism focuses on the study of legislatures, executives, bureaucracies and judiciaries, but cannot fill the explanatory gap in Group Theory (John 1998: 39, Hill 1997: 49), in which political and policy tasks are carried out by institutions such as legislatures who make laws, executives who take policy decisions, bureaucracies who implement them, and courts who resolve disputed cases. John argues that the weakness of functionalism is that, institutions, when presented in a functionalist form, do not seem to be an independent factor in policy-making (John 1998: 39). The Political System Theory proposed by David Easton, argues that institutions process demands from the political system and turn them into an output, normally a policy (Anderson 1997: 26-27), but Historical Institutionalism was developed to fill this limitation of the Group Theory of politics and structural-functionalism, and seeks to go beyond both these approaches. Historical Institutionalism accepts the role of Group Theory, which suggests that conflict among competing groups for scarce resources lies at the heart of politics, but looks for a better explanation for the distinctive nature of political outcomes, and for the inequalities that mark those outcomes (Hall and Taylor 1996: 937). In this approach, political economy is the principle factor structuring collective behaviour and generating distinctive outcomes. The Historical Institution approach still has value, however.

The key features of Historical Institutionalism that distinguish it from the other two schools within New Institutionalism, are explained by Pierson and Skocpol (n.d: 4), who state that:

“Historical institutionalists address big, substantive questions that are inherently of interest to broad publics as well as to fellow scholars. To develop explanatory arguments about important outcomes or puzzles, historical institutionalists take time seriously, specifying sequences and tracing transformations and processes of varying scale and temporality. Historical institutionalists likewise analyze macro contexts and hypothesize about the 25

combined effect of institutions and processes rather than examining just one institution or process at a time. Taken together, these three features – substantive agendas; temporal arguments; and attention to contexts and configurations—add up to a recognizable historical institutional approach that makes powerful contributions to our discipline’s understandings of government, politics, and public policies.”

This focus on ‘big issues’ or the investigation of issues on a macro level, such as state policy or state agencies, is an important analytical tool for understanding the emergence of new industrial sectors, like the electricity industry in Thailand. This is demonstrated by scholars like Pierson (1996) who used Historical Institutionalism in his analysis of the emergence of European integration. He found that integration was a process that was spread over time. He investigated the autonomous actions of a supranational organization, the European Community, in controlling the process as a whole, as well as the contribution of individual member-states. Holman (2001) has applied New Institutionalism to examine the organizational change in ecosystems management and the United States Forest Service. He found that organizations changed, not only as a result of the actions of external forces, but also as a result of internal pressures such as the changing institutionalized culture of the organization. Sutton (2001) applied the insight of all three schools in New Institutionalism in his research of school funding policies in Derolph, Ohio in the United States. He used the approach of the three schools to examine the role of rules and norms in shaping institutional development, as well as the roles of the wider policy environment and individuals in their influence over the policies affecting the Ohio Courts and General Assembly. This highlights the value of this approach in analyzing the role of a variety of factors in their influence, both on institutional forms and on policy development, in developing countries such as Thailand. They also provide a basis to examine state-society relations and the influence of society on the role of interest groups, as well as the politicians that represent them (Kato 1996: 557).

Historical Institutionalism can be used to explain the unique and original form of policy frameworks, organizational interests, ideologies and values in certain institutions (Kato 1996: 560). It can also help explain the nature of ‘path dependency’, a logic which argues that countries go through a formative period when the direction of public policy is established, and that this influences both institutions and policies throughout 26

that development, because formal institutions and interests become established and entrenched around them (Fenna 2004: 136). As North (1990: 100, in Fenna 2004: 136) notes “path dependency means that history matters” and no study of policy-making, such as the one here, can ignore this factor.

Hall (1986, in Scott 1995(1): 97) provides a broader definition of institutions, covering formal rules and procedures that structure the relationships of people in an organization or society. He proposes that Historical Institutionalism should focus on both the formal constitutions and structures of the state and its agencies, and encompass the regulative, normative and cognitive processes that shape their form, priorities and effectiveness. He is also concerned with how the structures created to formulate and execute policy advantage some groups of actors over others, and how a person’s location within these structures, shapes the definition of their own interest. For him, institutions can be seen not only as empowering and constraining actors, but also as constituting them and shaping their interests. In this way, Hall (1998: 962) asserts that Historical Institutionalism can develop a more dynamic understanding of how the process of conflict or deliberation can affect political outcomes.

As political institutions are central sources of public policies, historical institutionalists take formal rules and structures seriously in their studies, in order to understand how the political institutions work during particular periods. As Lecours (2001: 53) points out, the central themes of Historical Institutionalism are gaining an understanding of the role of power and the interests of relevant policy organizations and policy actors, in the policy process. Historical institutionalists wish to highlight the bias inherent in political institutions and the laws and policies they develop. This historical approach also shares with Sociological Institutionalism the contention that socio- cultural forces and values (Sutton 2001: 44) influence institutions. Historical Institutionalism stresses that institutions are not ever used by society as symbols of social values, but that institutions influence the understanding of social values. This two-way view is particularly important in the analysis of developing countries’ institutions, those that are subject to rapid change, as I will explore in this thesis. The degree of symbolic value embedded in institutions by society, is influenced in part by the history and actions of the institution itself. 27

In summary, an Historical Institutionalism research focus facilitates an examination of the role of informal structural aspects, such as culture, values and norms, aspects that form both part of institutions, and also influence their development. There are four main reasons supporting the use of this approach, as follows.

First, the most important research goal here is to attempt to develop an insight into electricity generation policy in Thailand, in terms of the emergence of the industry; its distinctive organizational structure, policy direction, policy formulation process and policy actors. Its use suggests using organizations as the unit of analysis, and this allows an analysis of the societal and organizational population, and the policy actors (Scott 1995: 59).

Second, the Historical Institutionalism approach recognizes the fact that political and policy development must be understood as a process that unfolds over time. In Thailand, the electricity power sector has developed over a long period, as I will discuss in Chapters 4 and 5. The sector was originally dominated by bureaucratic elites and electricity power generation policy was formulated by those same people, people who became, as this thesis will show, ‘energy aristocrats’. They created laws and regulations that shaped the structure of the industry, and reinforced the power of those authorities assigned to be responsible for policy formulation and implementation. Understanding how this framework shaped the distinctive nature of the industry in Thailand, as well as how it impacted on civil society as a whole, can be better understood using this approach.

Thirdly, as Scott (1995 (1): 53) suggests, cultural beliefs are embedded, both in the individual mind and the wider environment, implying that Historical Institutionalism also allows an analysis of the organizational environment, as well as the socio-economic factors and governance systems that shape the direction of policy. Thailand’s electricity sector was created as a centralized system, due to the operation of both international and domestic forces (Sretthachau 2000). However, the political situation has changed dramatically in the last two decades, as new policy actors such as business, elected-politicians and civil society have sought to participate in the policy arena. This was to result in the partial privatization of the industry in 1992, a move that 28

ended the previous state monopoly in power generation. Newly elected-politicians, with new values and priorities, sought to extend their influence over the electricity power sector, and they utilized their political power to issue new laws and to launch privatization policies. Society, its values and interests, changed too, and a Historical Institutionalism approach will enable us to investigate the role of the new policy actors in shaping particular policy outcomes.

In summary, the Historical Institutionalism approach was developed from the Group Theory of politics and structural-functionalism, in response to a need to search for a better explanation of the distinctive characteristics of development outcomes. This approach prioritizes the recognition of historical analysis, because political developments must be understood as processes that unfold over time. Significantly however, Historical Institutionalism does not provide a sophisticated method for examining the role and influence of those policy actors involved in the policy system. In response to this limitation, I looked for another policy approach that could be employed as a supplement to Historical Institutionalism, in order to examine in more detail the role and influence of policy actors. I therefore chose a Policy Network Analysis approach as a solution, as it provides a means of better analyzing those governance structures that emerge at the sectoral level (Syer 1998: 27).

2.2 Policy Network Analysis

The emergence of non-bureaucratic actors within certain new political parties and CSOs in Thailand’s political system in the 1970s, brought a new challenge to the Thai bureaucratic elites (Laothamatas 1992), those that had historically dominated political and economic developments in Thailand. The new non-bureaucratic policy actors began to play a more assertive role in political activities, as well as influencing the policy arena. They also sought new ways to participate in the policy formulation process, in both a formal and informal manner. This period in the history of Thailand’s electricity industry has received little attention. Thus, this research will try to fill this void by using Policy Network Analysis to identify the policy actors and their discourses, as well as their roles and activities in Thailand’s electricity policy making system. 29

The Policy Network Approach has been adopted and applied to policy studies over recent decades (Atkinson and Coleman 1996, in Kowch 2003) and has largely replaced the Group Approach, an approach that has limitations in its ability to analyze political actors. Researchers have increasingly employed a Policy Network Approach in order to analyze and explain the relationships between decision-makers, as they operate together in various policy sectors.

2.2.1 The Emergence of Policy Network Analysis

The study of the role of policy actors is of primary concern to scholars, in their attempts to understand the factors that influence public policy. Scholars such as Dye (1987) suggest that using Group Theory and Elite Theory to understand the policy decision-making framework constructed by policy actors and the interactions among participants in the policy process, is insufficient to fully understand the process. Policy Networks and Policy Community Theories were originally developed to address these limitations. The Policy Network Approach as an analytical tool was developed from Inter-Organization Theory (Klijn 1996: 92) and Interest Group politics (Blom-Hansen 1997: 670). The premise of the Inter-Organization framework is based on the assumption that organizations are dependent for their survival on resources that other organization have. Scholars use Inter-Organization Theory to examine the resource exchanges and interdependencies between organizations, those that shape their development. They are also interested in the networks of dependencies that exist and that are of importance if organizations are to be effective in their tasks, and if they are to develop the strategies needed to influence their dependencies with linked organizational networks. These analysts note that network organizations establish coordination mechanisms and linking systems between them, and that they derive these insights from an analysis of the existence of sub-governments and corporatism theory (Syer 1998: 52).

In Britain, Policy Network Analysis developed as the dominant approach in the study of policy-making processes, and it has since gained widespread usage in the rest of Europe and North America (Rhodes and Marsh 1992, Syer 1998). This framework provides a powerful tool to analyze policy actors and the institutional interdependencies 30

forming in policy subsystems, such as those between civil society groups. The Policy Network Framework can be used to analyze government efforts to achieve desirable outcomes, by engaging in ‘timely interventions’ within policy networks (Syer 1998: 52).

The application of the Policy Network Framework for public policy analysis, is used in order to understand the consequences of the dynamics and power relationships between policy actors, organizations and policy institutions, in a particular policy system. Policy Network Analysis focuses on the analysis of the policy actors in a political system, and this is distinct from an interest in political groups in many ways. For example, John (1998: 78) notes that the different types of relationships between group representatives, bureaucrats, politicians and other participants in the decision- making process, helps to account for the various ways in which political systems process policy. Thus, a network framework of analysis is different from the Group Theory of politics, because the relationships between decision-makers matter most, rather than the effects of the presence of an organization in the policy process. However, Policy Network Analysis is still similar in some ways to the Group Approach, because it still focuses on the informal and associative aspects of decision-making, rather than just on formal arrangements.

For public policy analysts, Policy Network Analysis has emerged as a powerful tool, which can, as Syer notes:

“(1) describe actors and institutional interdependency occurring in policy subsystems, (2) analyze governance efforts to achieve desirable outcomes by engaging in “timely interventions” within policy networks, and (3) contribute to the development of new insights into policy processes which take place in policy subsystems” (Syer 1998: 51)

Policy Network Analysis can work as a subsidiary to the New Institutionalism Approach in the analysis of public policy. As Syer (1998: 63) again observes: 31

“…for new institutionalism, the network tool provides an opportunity for the analysis of important institutional structures that have emerged in recent decades - policy subsystems and their accompanying networks. As a theory of public policy, neo-institutionalism offers an immediate solution to some of the difficulties encountered in the attempts to “theorize” network dynamics. The crux of this explanation takes place in institutional contexts. As a result, policy change is directly influenced by the institutional constraints and incentives found in policy networks.”

The Policy Network Approach offers a political view, to reveal in a more insightful and refined way the nature of the group dynamics impacting on policy processes. In traditional hierarchical pyramids of authority, structures which characterized the governance structures in developing countries early in the development cycle, a historical institutional analysis was sufficient to understand the policy process. In middle-income developing countries, with emerging strong CSOs, and increasingly complex industries and systems of government, this was no longer sufficient.

2.2.2 Definitions of a Policy Network

Scholars who developed the policy network approach to policy analysis have proposed a number of definitions to identify a policy network. Benson (1982, in Klijn 1996: 92) defines a policy network as “a cluster or complex of organizations connected to each other by resource dependencies and distinguished from other clusters or complexes by breaks in the structure of resource dependencies.” Referring to organizations that work together in a policy community, Coleman and Skogstad (1990: 25, in Kowch 2003: 44) define a policy community as “all actors or potential actors with a direct or indirect role in a policy area or function who share a common ‘policy focus’ and who, with varying degrees of influence, shape policy outcome[s].” They define a policy network as “a concept reserved for describing networks or relationship patterns that are closely related” (1990: 28, in Kowch 2003: 44). This definition highlights the three features of policy networks, including the presence of policy actors, a form of relationship between them, and a common policy issue. These attributes suggest the definition of policy network as “a form of relationships, with policy actors forming a network around an issue of important to the policy community.” 32

However, one might ask a question about whether there is a distinction between a policy community and policy network. Two distinguished writers, Rhodes and Marsh (1992), use the term ‘policy community’. In their studies, Rhodes and Marsh define a policy community as being characterized by a system of associations defined by the stability of their relationships, including the continuity of a highly restrictive membership, the presence of vertical interdependences based on shared service delivery responsibilities, and the isolation of them from other networks and from the public (Rhodes and Marsh 1992: 182). This concept suggests that policies are made and implemented among many closed groups, which in turn form a policy community. That community comprises, for Rhodes and Marsh, the government officials from government departments (or units within them) and interest groups. The policy community establishes exchange relationships, building on a sense of ‘community’ and possesses a set of common dominant values. The characteristics of a policy community are further refined by the authors, but the key aspect of the community is that it is seen as a group of interdependent actors from the public and private sectors forming a group with clearly defined boundaries.

Some analysts have argued that the policy community defined by Rhodes and Marsh confuses the terms ‘network’ and ‘community’ (Hall 1994: 31, Kowch 2003: 41). Furthermore, there are some limitations for policy community analysis, such as that the framework covers only a small part of the policy process, while ignoring the analysis of the origins of policy, for example policy ideas and policy agendas (Thatcher 1998: 393). Other factors that might have been responsible for the original distribution of power between actors, such as the institutional framework or technological and economic factors, are also not included in this framework. Additionally, the framework does not develop a model of policy-making as a process. To address these limitations, the Policy Network Approach emerged and replaced the Policy Community.

The Policy Network Approach is now widely accepted as providing a potentially useful framework for the analysis of public policy and policy-making. It can also help to describe and explain complex relationships between actors in politics and society in general (Schneider 1992: 109, in Hall 1994: 40-41). This is an important dimension of 33

policy analysis to include in a study such as this one, and in a rapidly developing country like Thailand.

2.2.3 Policy Network Characteristics

Scholars of Policy Network Analysis, such as Klijn (1996: 93-94) indicate that there are three dominant characteristics of a policy network. First, a policy network comprises a number of actors and this implies that a single actor does not always possess enough power to determine the strategic actions of the other actors. All actors in the policy system do have their own goals and interests, but there is no single goal that can be employed as a measurement of effective policy-making. This is because policy is the result of an interaction between many policy actors, and all actors do not have the power to equally influence policy in the interaction process. The power of each actor in turn, depends on the resources that he or she possesses and the importance of these resources in the policy process (Klijn 1996: 93-94). Of course, this importance can change over time.

Secondly, actors in a policy network are dependent upon each other. They wish to reach their own goals, but they have to co-operate with other actors for the means to reach those goals. The interdependency among networks is not static, but is changed by actors engaging and interacting to achieve their goals.

Thirdly, one characteristic of a policy network is that it consists of a pattern of relations. This pattern of relations is created by the interdependency and interaction among actors. These patterns show a certain density and have a lasting character. Rules of conduct emerge that give meaning to the interactions between actors and sustain the interaction patterns. Marsh and Rhodes (1992, in Kircher 2004: 58) suggest four characteristics of a policy network are presented, based on their dichotomous model, including membership, integration, resources and power. The elements of membership include the size of the membership and the type of interests demonstrated by the members. Network integration is determined by how frequently members interact, the nature of basic values shared by its members, and the continuity of members over time. Resource distribution is delineated according to the resources available within a network as whole, as well as those resources distributed unevenly among the individual 34

members. The last dimension, power, is considered by Marsh and Rhodes as the distribution and balance of power throughout the network.

Other scholars such as Van Waarden (1992, in Kircher 2004: 58) build on this model to highlight that the major dimensions of a policy network include the individual actors involved, the network’s functions, its structure, the level of institutionalisation present, as well as its power relations. Important actor attributes include the number of participants, the type of actors and their interests. Network functions are delineated according to type, and include the following: directing access to the decision-makers, consultation, information exchange, negotiation, coordination, and other types of cooperation. Some of the elements employed to determine network structure include size, openness, membership type, frequency of interaction, density and stability. Institutionalisation, as defined by Van Waarden (1992), is a complex characteristic that is closely related to the concept of network structure and stability. As with Marsh and Rhodes (1992), Van Waarden (1992) suggests that power relations should be examined from a balance of power perspective.

2.2.4 Bringing Policy Network Analysis to this Research

This research is directed at discovering and outlining the role of policy actors in Thailand’s electricity generation industry, as well as its policy formulation structure. Policy Network Analysis can assist in identifying the characteristics of the policy actors, as well as their roles and responsibilities in the industry policy subsystems. Policy networks can be identified by the basic values shared by members (in this research, the nature of policy discourse will be used to provide this element). The variables suggested by scholars as the five network characteristics or attributes, were selected and aggregated into three broad categories that I then attempted to examine, these being: network membership, policy discourse and network power. Each of these categories, their discrete dimensions, and their conceptual definitions, are discussed below.

Network membership is the most basic descriptive characteristic of a network. The primary purpose for choosing this network attribute is that this network characteristic focuses on how actors, such as energy aristocrats, bureaucrats, elected 35

politicians and CSOs, form the policy network. As Historical Institutionalism suggests, the dynamic of a policy environment, such as socio-economic, political and institutional factors may lead to a change in both the policy direction and the policy actors involved in the policy arena. Thus, my thesis aims to investigate the emergence of policy networks in relation to the above mentioned factors.

Policy discourse analysis is used to identify networks in the policy system, and as such, I will focus on investigating the values and discourses shared by network members. The discourse of each network can be investigated from the policy direction that each particular policy network proposes. This attribute of a policy network influence reveals the power it has in shaping policy.

In conclusion, Policy Network Analysis has gained influence because it brings forth a theoretical framework that can describe the role of policy actors, their roles, power, and the influence they can the bring to policy decision-making. The central theme of this thesis is to investigate the role and power of policy actors in terms of policy-making within Thailand’s electricity power generation policy system, thus Policy Network Analysis will be used to achieve this goal and to contribute to an understanding of electricity power generation policy.

2.3 Conclusion

This research aims to examine Thailand’s electricity power generation policy, the result of which will help contribute to an understanding of the structure of policy organizations, policy directions, policy actors and the policy consequences. In an effort to develop a powerful analytical framework, I have chosen the Historical Institutionalism and Policy Network Approach methods, in order to analyze this policy framework. Adopting the Historical Institutionalism approach offers the possibility of having a way to analyze the emergence of Thailand’s electricity sector, providing a chronology of major events that can be analyzed using an institutionalism framework, one that examines the roles of rules, norms and values in shaping the sector and its policy direction. These elements are examined in Chapters 5 and 6 of this thesis. 36

Examining the role and influence of policy actors in determining the electricity generation policy system that has emerged in Thailand can provide insights into the role of values in policy decision-making, as well as the power and interests of each policy actor when trying to influence public perception, in pursuit of their particular policy discourse. In Chapter 7, Policy Network Analysis will be described and used to examine the role of policy actors.

One criticism that is widespread in Thai society today, is that power development projects have generally negative impacts on local communities and natural resources. This widely held view has brought about a new phenomena, whereby local people and environmentalists have organized themselves collectively to campaign against the projects, as well as to urge changes in the direction of electricity generation policies. Thus, in Chapter 8, institutional factors and policy actors will be examined, in order to understand how conflict and the need for change, have impacted on the relevant electricity power development projects.

This chapter has reviewed the characteristics of previous studies on the electricity generation industry in Thailand, and showed that these studies have been limited in number, scale and scope, and have focused on particular, critical aspects of the current industry, or on policy-making related to particular events, such as privatization. The determinants of the longer term policy-making process that have so far shaped the industry, have received less attention, and yet it is this deeper process of policy-making that has determined the characteristics of and conflicts within, the electricity generation industry today and are the focus of the thesis. A task that this chapter has shown needs new theoretical tools of analysis to reveal the longer-term dynamics of the electricity industry’s development. 37

Chapter 3 Methodology

The key purpose of this thesis is to gain an understanding on the factors, and in particularly the role of policies, in guiding the development of the electricity industry policy in Thailand. The question as to which theory could be best used to do this, was addressed in Chapter 2. The methods used for collection of the appropriate evidence will be the subject of discussion in this chapter. My review of the previous bodies of research on Thailand’s policy-making, such as the research conducted by Yossomsakdi (1999), Anantho (2001) and Suriyasarn (2002), and the literature on Institutionalism and Policy Network Analysis, carried out in the introduction to Chapter 2, shows that most researchers have utilized qualitative research methodology in their studies. The survey and analysis of the analytical frameworks used to assess the factors shaping policy formation and development, in this thesis indicate that a combination of approaches known collectively as New Institutionalism, combined with Policy Networks Analysis, would be suitable for such a task. These are qualitative methods that employ tools such as in-depth case analysis and comparative studies (Pierson and Skocpol (n.d.): 18).

This chapter assesses the methods that have been used and are available to be used, in undertaking an analysis of electricity power generation policy, the policy actors involved and the policies’ impacts on social and natural resources in Thailand. The first section provides a brief review of the qualitative research approach, a section that links the theory outlined in Chapter 2, to an understanding of the research methodology. The second section presents the research design for this research project, and describes how I captured data and information from documents and in-depth interviews, in order to address the research questions. The third section presents the data collection methods applied, which include a documentary study and in-depth interviews with key informants. In this regard, the documentary study assists in generating a general idea of the major events in the development of policy with regard to Thailand’s electricity power generation sector. In-depth interviews were conducted as a supplementary 38

method, and were used in order to identify the key policy actors and the values of those actors, as well as to provide additional, significant information that any written documentation could not supply. The fourth section discusses the data analysis methods used, including historical analysis, informal content analysis, and the interviewing of key informants. The fifth section presents how tests can be carried out to ensure the accuracy and comprehensiveness of all the data acquired from the data collection process. Ethical issues are presented in the sixth section, followed by a summary of the findings of this chapter.

3.1 Qualitative Research

Qualitative research is the inquiry process used to gain a better understanding of a social or human problem, based on building a complex, holistic picture formed with words, and then reporting the detailed views of informants, as gleaned in a natural setting (Creswell 1994: 2). This approach to research is characterized by an emphasis on describing, understanding and explaining complex phenomena, for example, the relationships of people and the patterns and configurations among factors, or the context in which activities occur. Qualitative research also focuses on understanding the full multi-dimensional, dynamic picture of the subject of study (Creswell 1994: 2).

The distinction between quantitative and qualitative research is that the former approach deals with numbers, using statistical models to explain the data, and is considered ‘hard’ research (Bauer, Gaskell and Allum 2000: 7). The latter approach, qualitative research, aims at dividing the phenomena into manageable, clearly defined pieces or variables. It seeks to understand the phenomena through participant observation and in-depth interviews, methods that aim to produce descriptive data. It is usually less focused at the outset than quantitative research, because it provides the maximum opportunity for a researcher to learn from the subjects or participants in the research. This requires research techniques to be open more than closed (Bouma 1996: 176). Therefore, a qualitative approach is not only useful in providing rich descriptions of complex phenomena, but in constructing or developing theories or conceptual frameworks, and in seeking to explain these phenomena. This is an approach 39

appropriate for this investigation, due to the complexity and policy orientation of the research.

Qualitative research offers a number of methodological options for researchers, including participant-observation, ethnography, photography, ethno-methodology, dramaturgical interviewing, sociometry, natural experiment, case study, unobtrusive measures, content analysis, historiography, and the secondary analysis of data (Berg 2001: 4). My research focuses on an investigation of Thailand’s electricity power generation policy, and I adopted documentary study and in-depth interviews as my methods for collecting data. The reason for this was the lack of published sources available and the need to gain basic information from participants in the policy process – something which a qualitative research design can achieve. The objective of this research is to investigate and provide a historical chronology of the electricity industry in Thailand, and to provide detail on the governance structure, formal rules and policy procedures, as well as norms and values influencing the policy process and policy decision-making in the industry.

3.2 Research Design

The theories of Historical Institutionalism and Policy Network Analysis are used to guide the description, analysis and interpretation of Thailand’s electricity power generation industry and its policy formulation processes, the policy actors involved and the policies’ impacts on social and natural resources in Thailand. The reason for this is the fact that electricity power generation policy in Thailand has been formulated within organizations that have long been established, with a group of energy aristocrats in place who have controlled the policy process over a long period of time. The development path of Thailand from a low income agriculture-dominated economy to a middle income, partly industrialised country, has led the direction of electricity power generation policy to focus on urban-oriented, growth-biased sectors, which in turn has caused an uneven destruction of natural resources and the environment to occur. As a result, local movements have been organized to protest against power development projects in every area of the country. This rapidly changing socio-economic and political environment has allowed the emergence of new policy networks in the social 40

sector, networks that are now attempting to play a greater role in determining electricity development policy in Thailand.

This requires that, in order for my research to describe and interpret the emergent policy developments, processes have to be analyzed at both the macro (institutions and policy process) and the micro (actors) levels. The conceptual framework provides a description of the policy context, the characteristics of the institutions (structure, norms and values), policy actors (roles, power and interests) and their interactions at all levels. These characteristics include a description and an analysis of the role of networks in policy-making capacities and autonomies, as well as the competition among networks that has both reflected the policy direction and the conflict over electricity power generation projects.

In an effort to provide insights into Thailand’s electricity power generation policy and the consequences of such a policy in terms of the development of a social and natural resources conflict, I have adopted a qualitative methodology as the most effective method to acquire information and to contribute to the generation of knowledge about the institutional factors and policy processes involved, and the interactions among the policy actors, but have also extended this to include interviews with key informants selected from both from the old and new policy actor groups.

By adopting a Policy Network Analysis approach as the appropriate research focus, an analysis of the actors’ interactions, relationships and patterns should emerge (Knoke 1996, in Howch 2003: 122).

3.3 Data Collection

There are a variety of techniques for data collection available in the field of qualitative inquiry. Bouma (1996: 176) reports that the main data gathering techniques of qualitative research are “observation (including participant and non-participant observation), in-depth interviewing, focus groups, or the use of textual material”. The data collection methods used in this research were the examination of documentary evidence and in-depth interviewing, the aims of which were to chronologically order 41

major events and documentation, thus enabling me to trace both past events and recent developments in the research field.

3.3.1 Documentary Study

Document collection is important, not only for collecting information, but also in establishing accuracy and a lack of bias and for corroborating and augmenting evidence from other sources. Additionally, the main benefit of this method is that the documentary information and archival records are helpful for historical analysis of information likely to be relevant to the case study. Due to the nature of this research issue, a large amount of secondary data was gathered during library research activities in Australia, and on a fieldtrip in Thailand. The collected material included public documents, such as rules, laws, regulations, policy statements, annual reports, official statistics, newspaper, articles in academic journals and on-line information, as well as documents offered by study participants, which included documents published by CSOs and community groups. The goal was to collect useful sources of data which could contribute to a research understanding about: (1) the institutional factors affecting the industry, (2) the organizational and policy background, (3) the role of policy actors and policy networks, (4) data on the status and growth of social and natural resources conflict in Thailand, as well as (5) the external environments affecting institutional factors, which in turn have shaped the electricity sector in Thailand. Information from official documents is particularly useful in revealing the institutional factors and organizational background, the policy development process and the policy actors involved in policy-making. Information from other sources assists in giving a supplementary understanding of policy network characteristics, roles and influences, and in the understanding of the institutional context. In this study, my research faced an unexpected problem, as documentary data was of limited availability. A restriction was placed on my access to documentary data, particularly primary source documents located at EGAT, due to the desire of some organizations to restrict my access to this information for the purposes of the research. Certain decisions and events may, in any case, have been undocumented. I use both Thai and English documents in this research. The research uses mostly written sources and relies on primary and written sources wherever possible. In my study, the historical analysis includes a review of official documents detailing the policies and regulations pertaining to Thai power generation 42

policy and institutions. These are, for example, the Constitution of the Kingdom of Thailand 1997, The Constitution of the Kingdom of Thailand 2007, the Electricity Generating Authority of Thailand Act of 1968, the National Energy Policy Council Act of 1992, as well as the various National Economic and Social Development Plans and Government policy statements. In addition, other relevant official documents, such as research papers, books, reports, as well as document offered by the interviewees, were analysed.

A content analysis was also undertaken by reviewing the reports and editorial comments contained in Thailand’s major newspapers, both Thai and English language, as well as websites that detail and discuss the various formulations of policy over time. This included an analysis of the issues pertaining to both the formulation and perceived impact of policies and regulations, with respect the historical development of Thailand’s electricity generation policy. The newspapers I selected were the Manager, Matichon, the Nation and the Bangkok Post. These newspapers place a greater emphasis on national and international news than on domestic and regional coverage. The complete databases of these papers were reviewed from the beginning of 1990 to April 2007.

3.3.2 In-depth Interviewing

The second data collection method adopted was the collection of information from personal interviews. Interviewing is probably the most commonly used method in qualitative research, because it provides different data from other kinds of research methods. Apart from documentary study, interviews can supply more information than is normally available in official documents. This method is also useful in generating ideas about ‘informal’ institutional factors, such as the behaviour and values of key policy actors. This method was useful in investigating responses to my fourth research question: how can Thailand formulate a better electricity power generation policy?

In this case, I used in-depth interviews to find out what people thought or felt, and how they reacted to various issues and situations. This method also helped me to gain new insights into areas not available from a study of official information or documents. The interviewing in this research was able to assist my efforts at framing the issues, helped me to learn how the actors involved interpreted events, and also 43

helped me to gain personal opinions on existing problems and solutions. Furthermore, interviewing was a significant factor in helping me to understand how the policy decision-makers were thinking and how they justified policy alternatives. Interviewing served as a supplement in order to reveal this essential information.

Patton describes key informants as “people who are particularly knowledgeable and articulate, whose insights can be particularly useful in helping and observer understand what is happening” (Patton 1987: 95). In this research, the number of interviewees was limited to 25, due to resource and access constraints. The group was classified into three groups of key informants in the relevant government agencies, including the Electricity Generating Authority of Thailand (EGAT) and Energy Policy and Planning Office (EPPO), academics, critics, and civil groups, and local leaders (see list in Appendix II). They were selected from: government officials responsible for electricity power generation policy formulation and implementation, academics with an interest in the field, critics and researchers who worked in related fields, members of CSOs connected to the industry, and representatives of local movements relevant to the policy area. Their names were generated from government directories and newspapers, and they are listed in Appendix II.

Personal in-depth interviews were chosen and conducted in this research in order to obtain the insights of the informants. Each potential interviewee was invited to participate in the study through an introductory letter (see Appendix I), followed by a telephone call or e-mail requesting an interview appointment. A consent form was sent to each participant before the interview, in order to obtain formal agreement for their participation in the study, and to provide a guarantee of anonymity for the participants (see Appendix III). Participation in this study was voluntary and once participants had consented to be interviewed, they were able to withdraw at any time.

Questions used for the interviews were compiled from information gathered from various data sources, such as books, research reports, annual reports, newspapers and websites, all from the literature review period. The formal interview programme was divided into three sets for three different groups of interviewees: one for policy makers and implementers, one for academics and CSOs engaged on this issue and one 44

for members of local movements (see Appendix IV). Within the three sets of interview guides, general questions were asked of all interviewees. The interviews took the form of a series of open-ended questions, as shown in Box 3.1.

Box 3.1: General Questions asked of all Interviewees

1. What is the role and importance of energy and electricity in national development? 2. What are the influential factors on electricity power generation policy? 3. What are the characteristics of the electricity power sector? 4. Who are the key policy actors in the development of electricity power generation policy? 5. How can people participate in power development policy making? 6. Why have electricity power generation projects been accused as a causal factor in natural conflicts? 7. Why have local people continued to protest against power development projects?

The interviewing process was conducted between January and March 2006, and additional interview times were set for August 2006. Most of the interviewing process involved face-to-face contact. The interviews generally took one to one and a half hours, and were conducted in Thai. During the interview process, the interviews was recorded (with the permission of the interviewees) and summarized in notes. In addition, these field notes were useful in identifying the interviewees and when recalling comments that were confused or unclear on the taped versions.

The interviews were semi-structured and followed a general to specific format, beginning with rather broad questions and slowly narrowing to more specific questions and information. The interviews aimed to assess the opinions and values of the interviewees, through questions about their perceptions of the issues relevant to policy formulations at the time, and the perceived consequences of policy implementation.

The interviewing process faced some unexpected problems. Some key interviewees were reluctant to be interviewed, and some were representatives of a top executive who had agreed to participate in the research but could not make the interview at the last minute. These representatives could not express their opinions 45

about the issues included in the questionnaires. Other respondents had difficulty in accurately recalling significant events, and may have been reluctant to divulge certain information. The result of this was that only young officials and members of civil society organizations were interviewed. The evidence collected from the interviews with the key informants is used in this thesis in Chapter 6 and Chapter 7.

3.4 Data Analysis

Data analysis is the process of bringing order, structure and interpretation to the mass of data collected (Marshall and Rossman 1999: 150). When the interview processes was completed, I listened to tapes and wrote a verbatim account of everything that the interviewees said. Transcripts of the raw data included word-by-word quotations regarding the interviewee’s characteristics and overall mood during the interviews. Transcripts from each interview, as well as the field notes, were coded. Data from both the documents and the interviews was analyzed together in Thai. When the analysis was completed, I translated the interviews into English.

The study integrated an analysis of historical documents, with an informal content analysis of the major newspapers and magazines, as well as formal interviews with key informants working with the relevant electricity power generation policies, in order to characterize the development and evolution of Thailand’s electricity power generation policy framework, from the introduction of electricity into Thailand, up to 2008.

3.5 Testing the Data

3.5.1 Validity

In qualitative research, the accuracy and comprehensiveness of data is always a major concern. Opinions differ on the extent to which qualitative research data can meet the traditional tests of quantitative research, such as those of validity and reliability (Lincoln and Guba 1985: 294-299).

Lincoln and Guba (1985: 294-299) use different terminology – substituting truth values for internal validity, transferability for external validity, and consistency for 46

reliability. In its simplest definition, reliability refers to the consistency and stability of ‘scores’. These scores are assumed to result from some ‘measurement process’ (Lee 1999: 147). Validity was problematic for me as the major data in this research is historical and reflects the concepts, knowledge and values of the time during which it was written. The research gathers these observations second-hand, and so increasing the validity depends on the skills of the researcher in gathering data from the respondents.

In this research, the data collected from documentary and interview sources was continually cross-checked. A process of checking was also used during interviews. This process involved restating questions in slightly different forms but with the same meaning, in order to check the accuracy of interpretation. The perceptions of one respondent were also carefully checked against the perceptions of other respondents, in a way (focussed on events) that protected confidentiality. As the number of interviews increased, this process became increasingly valuable in confirming data and improving the validity of responses. . 3.5.2 Triangulation

Miles and Huberman (1994: 266) state that “triangulation is supposed to support a finding by showing that independent measures of it agree with it or, at least, do not contradict it” and this method was used whenever possible during the research. Triangulation is useful because it assists in reducing a misinterpretation. The use of triangulation (crosscheck) includes using multiple subjects, multiple researchers and different theoretical approaches, in addition to different data collection techniques, in order to triangulate on topics and issues. In order to strengthen the credibility of my research, triangulation was employed using a combination of two methods: interviews with multiple key informants and document analysis. In support of both these methods, a variety of data sources, such as government, academic experts, the private sector and public interest groups, were used, and the evidence from each source was compiled and analysed together to enhance the credibility of the study. 47

3.6 Ethical Issues

Ethical issues were faced during both my interviews and my case study investigation of the policy-making process. In overcoming such issues, Finch (1986: 227) notes that, above all else, the research must be technically competent, and rigorously and professionally analyzed and interpreted. Merriam (1991: 184) asserts that the burden of producing a study that has been conducted in an ethical manner lies with the individual investigator, and she urges the researcher “to be conscious of the ethical issues that pervade the research process, from conceptualizing the problem to disseminating the results”.

In this research, I made the assumption that records would be available of the advice which flowed between the Government and administrative authorities. However, access to official information was restricted by Thai Government agencies. Reliance therefore, had to be placed upon documentary data, which was available in the public domain, and also upon interview data. This posed a constant constraint on the quality of the data collection.

Steps were taken to ensure that interviewees were aware of the purpose of the study. An assurance of anonymity was provided to all respondents. Agreement was reached that the transcripts of an interview would be identified in the report by code only.

The study conformed to the ethical guidelines of the University of New South Wales, and was approved by the UNSW Ethics Committee at a meeting on September 20th 2005. Precautions were employed to protect the participants’ rights in the research data collection process. Firstly, the research objectives were cleared both verbally and in writing (both in English and Thai), so that interviewees would be sure to understand these clearly. Secondly, and as previously stated, an informed consent statement was sent to each participant before the interview, to obtain formal agreement for their participation in the study, and to provide a further guarantee of anonymity. Thirdly, participation in the study was entirely voluntary. Interviewees were free to withdraw 48

their consent to participate at any time, and where confidentiality of information was requested this was noted and strictly carried out.

3.7 Conclusion

This chapter has outlined the methodology developed for my research in order to generate the data and information required to address the research questions. The methodologies used to acquire essential information included documentary study of official documents and other relevant literature, such as research reports, newspapers, and on-line information, as well as in-depth interviews with key informants, which were carried out in order to gain supplementary information not available from other sources. This approach helped to generate interview questions, identify interviewees, and understand how they felt about significant issues related to the research objectives. Data obtained from the documents and interviews was analysed in terms of its historical content analysis.

The goal of the methodology outlined in this Chapter, is to provide a firm documentary and evidence base to address the questions in this thesis. The findings of the research are reported in the following chapters, starting with Chapter 4, which provides a history of the development of the governance system in Thailand, a system that has shaped policy strategy during the formation of the electricity industry, and a process that, as subsequent chapters demonstrate, has become increasingly complex and contested. 49

Chapter 4 Thailand: Governance Structure and Policy System

4.1 Introduction

An examination of the role of historical periods and events is an important dimension of the Historical Institutionalism approach, and particularly when wishing to understand the development of institutions and the policies that create and direct them. As Hall (1986: 19) suggests, any study on institutions should incorporate an analysis of the formal rules, compliance procedures and operating practices that structure the relationship between individuals in various units of the polity and economy. Analysis of the structure of governance systems and of formal rules and values has become a key method contributing to our understanding of public policy.

The objective of this chapter is to briefly describe the socio-economic and political development process, as well as governance structure, that has been established in Thailand, through its period of modernization and right up to the present. As this thesis centres upon policy-making, particular emphasis is given to detailing the development and role of institutions, as well as the accompanying policy actors. To achieve this, the chapter consists of three parts. The first part describes basic information about the socio-economic and political development of Thailand and the Thai State. This is important, because the State has been the key policy actor in Thailand’s development, and it is an autonomous organization that has allowed it to create and establish its authority and that has determined the path of development in electricity. The second part concentrates on the development of Thailand under the National Economic and Social Development Plan. The third part investigates the social sector and also examines the non-bureaucratic policy actors that have emerged out of national development policy. 50

4.2 Overview of Political Institutions in Thailand

Institutionalists remind us that no organization can be properly understood without also studying its wider social and cultural context (Scott 1995(1): 151), because these factors create the institutions such as laws, procedures and values that, as I outlined in Chapter 2, constrain and support the operation of actors in an organization. In Thailand’s case these elements are particularly important.

1 Thailand is geographically at the heart of Southeast Asia. It shares borders with Malaysia to the south, Myanmar to the west, Cambodia to the east and Laos to the north (Chirarattananon and Nirukkanaporn 2006: 2521). Thailand has been a Kingdom with a constitutional monarchy since 1932. The country has never been colonized. In fact, Thailand has enjoyed an independence that is rare among its neighbours in Southeast Asia, as many neighbouring countries in the region were colonized by Western powers before the end of World War II. It is acknowledged that a series of administrative reforms and modernization policies formulated by King Chulalongkorn in the nineteenth century, acted against the potential inroads of western powers, and protected Thailand’s independence.

4.2.1 The Thai Political System

From the establishment of the first independent Thai Kingdom in the 13th century until the late 19th century, Thailand’s regions were ruled as tributary states (Glassman 1999: 112). This governance system was replaced by an absolute monarchy, as introduced by King Chulalongkorn (Rama V: reign 1868-1910). The absolute monarchy ended in 1932, when a bloodless coup led by civilian and military leaders replaced the constitutional monarchy and limited the monarch’s power. Since then, the country has introduced different forms of constitutional democracy.

During the period from 1932 to 1944, Thai politics entered a long period in which control oscillated between the army and civilian governments, mediated by the monarchy. There was a brief return to civilian rule between 1944 and 1948, followed by

1 The former name of Thailand was Siam. In 1939, Prime Minister Pleak Phibunsongkram changed the country’s name from Siam to Thailand, meaning “land of the free”. 51

a repeating cycle of military intervention and civilian rule from 1948 to 1991 (National Identity Board 2000: 30-34). The governmental bureaucracy provided an element of continuity, and held great power and status amongst both the civilian and military leadership; its supremacy over routine administration remained unchallenged. The normal workings of a state within a democracy, including the presence of significant political parties, interest groups, labour unions and CSOs was weak and underdeveloped. Political and administrative power was centralized in Bangkok.

Prominent scholars, such as Riggs (1965), define Thailand as a bureaucratic polity state, in which all political decisions are made by bureaucratic elites who take it in turn to rule the country. The bureaucratic elites use the centralized administrative system and top-down policy and planning mechanisms, to extend their power of control over political institutions and the policy making system, in order to ensure that government policy is implemented outwards from the central agencies to provincial and local government (Thandee 1985: 113).

Such a system has both positive and negative consequences. On the positive side, the Thai bureaucracy has been able to achieve a number of important development goals in areas such as macroeconomics, infrastructure and social development, including education and health (ADB 1999: 8).

On the negative side, Thailand has experienced continuous political instability and administrative fragmentation (ADB 1999: 8) from the establishment of the constitutional monarchy in June 1932, right up to the present time. In that time, Thailand has had eighteen Constitutions, eighteen general elections, ten successful coups and 56 Cabinets. There have been 27 Prime Ministers, of whom twelve have been officers of a military background, and fifteen have been civilian. During this period, military prime ministers have assumed power for almost 45 years, while their civilian counterparts have been in office for only 30 years. 52

During the 1980s, Thailand developed into a so-called ‘semi-democracy’ or ‘halfway-democracy’ 2 (Dhiravegin 1992: 209). Parliamentary democracy was re- established, but one in which an unelected ex-military premier functioned with the backing of elected politicians (McCargo and Pathmanand 2005: 2). The army retained its influence over the appointment of the Prime Minister, who in turn often came from the military elite, such as General Prem Tinasulanonda, who ruled from 1980 to 1989.

In 1961, the implementation of the National Economic and Social Development Plan (NESD Plan) led to rapid economic development and the opening up of the Thai political system. Thailand grew economically and was transformed from a rural-based agricultural economy, to a modern economy characterized by thriving agribusinesses, export-oriented industrial production and a dynamic service sector, all reinforced by a highly successful tourist industry. This change had a number of effects, and as McCargo and Pathmanand (2005: 3) note, many farmers became workers in the industrial sector; a new middle class emerged in urban areas, supported by the expansion of education, and a wealthy Bangkok-based business elite also emerged. These changes had a direct impact on the political system. New economic interests and political parties became more powerful as the economy developed. Previously the existing major policy player, the bureaucratic elite’s power went into decline, and the policy arena became a multi- player game, as business interests played an increasingly significant role in organizing business associations to influence the role and policies of these bureaucratic elites. Many business leaders sought to play an important role in the House of Representatives by funding political campaigns and elections. New interest groups such as university students, the media, and a growing urban middle class, were all key players in the development of political and administrative events.

Since the early 1970s, Thailand has had to deal with the increasing forces of globalization. In order to respond to the demands of globalization and to international

2 According to Dhiravegin (1992: 209) there are four features of the “halfway democracy”, including (1) the Prime Minister does not have to run for election. He can be selected to be Prime Minister if he gets enough support from members of the Parliament and support from certain powerful elements including the military and others, (2) Cabinet members can consist of both elected MPs and anyone who has (footnote continued) been approached to become part of the Government. This allows those who did not run for election to become ministers, (3) Cabinet members can come from permanent military officers or civil servants, and they can concurrently hold both positions, and (4) Senators are appointed. 53

pressure, the Thai Government has created a more open economy, and has introduced political and administrative reform. By the 1990s, demands for greater political openness and social justice challenged both the existing political framework and the direction of economic policy (UNDP 2003: 28). Civil society organizations (CSOs), allied with democratic activists, campaigned for constitutional reform. A Constitution Drafting Assembly was created, with its members drawn from provincial representatives (Baker and Phongpaichit 2005: 252), as well as established interests in Bangkok. The new Constitution was officially declared in 1997 and prescribed a change in Thai politics from the old style political system. For example, election procedures were redrawn to encourage a more stable two-party system, the Prime Minister’s position was strengthened and new independent organizations were created to provide checks and balances, as well as to reduce corruption and the abuse of power (Baker and Phongpaichit 2005: 253). A new charter provided a number of provisions to encourage civil society and the public to participate in government activities and decision-making about national development policy.

Globalization led to the opening up of the political order as well as successful economic development between the 1960s and 1980s. A new generation of Sino-Thai politicians started to emerge. By 2001, 90 percent of the members of Parliament had some Chinese ancestry (McCargo and Pathmanand 2005: 4), and by this time Thaksin Shinawatra, a Sino-Thai businessman, had arrived the Parliament and Government House.

Early 2001 marked a turning point in Thai history, when the first general election under the Constitution of 1997 resulted in the Thai Rak Thai Party (TRT) winning a majority (248 seats) in the Parliament (Election Commission of Thailand 3 4 2001: online). Thaksin Shinawatra , leader of TRT Party , was selected to serve as premier, though not without opposition.

3 Thaksin Shinawatra, leader of Thai Rak Thai Party served as the Prime Minister of Thailand from February 9th 2001, to September 19th 2006. 4 The Thai Rak Thai Party (TRT) was found in 1999. The TRT Party sought to define itself as a technocratic party; a party led by a successful entrepreneur (Thaksin Shinawatra) who wanted to bring the same levels of professionalism to politics as he had brought to his private sector activities. The TRT also presented the slogan ‘Think new, act new’, which referred to a focus on political system reform. 54

During 2005, an anti-Shinawatra movement was organized and grew substantially in strength. The movement criticized the failure of Shinawatra’s policies, such as the impact upon local people of his development policies, growing national and personal debt, domestic agriculture being adversely affected by Free Trade Agreements, and the growing in strength of a southern insurgency. Furthermore, Shinawatra was accused of interfering in both the activities of the Senate, and the independent organizations established by the provisions of the Constitution of Thailand of 1997 to counter corruption (The Nation, March 1st 2006: online).

On September 19th 2006, the army, led by General Sonthi Boonyaratkalin and his associates, staged a military coup (The Nation September 20th 2006: online). A New 5 Interim Constitution was announced and shortly after, General Surayudh Chulanond , a former member of the Privy Council, was made Prime Minister. The majority of Chulanond’s Cabinet comprised of retired government officials and technocrats.

In 2007, the Constitution of 2007 was officially declared. A general election was then held on December 23rd 2007, and the People’s Power Party (PPP), a party comprising of former TRT party members and Thaksin Shinawatra's proxy party, won, 6 led by former Bangkok Governor Samak Sundaravej who became Prime Minister. Thailand's new Parliament convened on January 21st 2008.

After May 2008, Thailand experienced increasing political turmoil, with the PPP Government facing pressure to step down amid mounting civil disobedience and civil 7 unrest, led by the People’s Alliance for Democracy (PAD) . On June 2nd 2008, the

5 General Surayudh Chulanond, member of the Privy Council, was appointed to serve as the Prime Minister of Thailand from October 1st 2006 until January 29th 2008. 6 Samak Sundaravej, former Bangkok Governor and former leader of the People Power Party, served as the Prime Minister of Thailand from January 29th to September 9th 2008. 7 People’s Alliance for Democracy (PAD) was originally started as a coalition of protesters against Thaksin Shinawatra, the former Prime Minister of Thailand. PAD’s members consist of middle- and upper-class Bangkokians and people from the southern region, supported by the conservative elite factions of the Thai army, some leader of the Democrat Party, and leaders of state-enterprise employees’ unions. After the 2006 coup overthrew the Shinawatra government, PAD voluntarily dissolved. It was then re-established in May 2008 to protest against the new government which PAD considered to be Shinawatra’s proxy. In August 2008, PAD seized Thai Government House to pressure the Prime Minister Sundaravej to resign. In November 2008, PAD seized Suvarnabhumi International Airport to pressure the Prime Minister Wongsawat, Shinawatra’s brother-in-law, to resign. Shortly after the Constitutional Court 55

Senators and the Election Commission of Thailand lodged two complaints with the Constitutional Court of Thailand and requested the Court to consider whether the premiership of Sudaravej should be terminated under Sections 91, 182 and 267 of the Constitution of Thailand 2007. The complaints stated that Sundaravej’s political position as Prime Minister prohibited him from holding any position in a partnership, company or organization carrying out business, with a view to sharing profits or incomes or of being an employee. On September 9th 2008, the Constitutional Court delivered a decision disqualifying Sundaravej from the premiership in accordance with these complaints. This instantaneously terminated Prime Minister Sundaravej's political role (Matichon Weekly, September 12-18th 2008: 8).

8 Somchai Wongsawat , the new leader of the PPP, was nominated to serve as Prime Minister (Matichon Weekly, September 19-25th 2008: 8), though the PAD continuously campaigned against his Government. On December 2nd 2008, the Constitutional Court of Thailand decided to ban certain political parties, including the PPP, Chart Thai Party and Matchimathispatai Party, which led to a break up of the governing coalition based on charges of corruption during the 2007 general election. The Court also banned Wongsawat and removed him from office. On December 15th 2008, the House of Representatives voted the leader of the Democrat Party, Abhisit 9 Vejjajiva to serve as Prime Minister with the support of six coalition political parties (Matichon, December 16th 2008: 1).

4.2.2 The Fundamental Institutions Setting Public Policy

Historical institutionalists in political science emphasize the study of regulatory regimes and governance mechanisms that operate at the industry level (Scott 1995: 60). They accept that the state is a major actor in a political system, as well as in the policy

dissolved the People’s Power Party, Chart Thai Party and Machima Party, three political parties of the Government coalition, on 2nd December 2008, the PAD held a press conference the next day, where they announced that they were ending all of their protests (Source: http://en.wikipedia.org/wiki/People%E2%80%99s_Alliance_for_Democracy). 8 Somchai Wongsawat is a former judge and former Permanent-Secretary at the Ministry of Justice. He is the brother-in-law of Thaksin Shinawatra and served as the Prime Minister of Thailand from September 9th 2008 to December 2nd 2008). 9 Abhisit Vejajiva, Leader of Democrat Party, has served as the Prime Minister of Thailand since December 17th 2008. 56

arena. They view the state as an autonomous organization that defines what interests policy-makers or rulers pursue, and ultimately attribute the direction of state behaviour to their interests (Kato 1996: 562). Bearing in mind that the state and its governance mechanisms are important to institutional analysis, the next section examines the structure of the Thai Government.

The current Thai political system is a constitutional monarchy, with the King as the Head of State. The King retains a number of formal powers under the provisions of the Constitution. In practice, three political institutions created under the provisions of the Constitution of Thailand 2007, namely the Parliament, the Council of Ministers and the Court, almost exclusively exercise these powers.

Like any other constitutional system, a responsible government is traditionally described through three main activities:

The Legislative creates the laws exercised in Thailand by the Parliament (The House of Representatives and the Senate). According to the Thai Constitution 2007, Thailand’s Parliament is composed of 630 members, including 150 senators and 480 member of the House of Representatives (Section 93 and Section 111).

The Executive is responsible for the administration and enforcement of the law, as well as the management of the resources of government, is carried out by ministers and the administrative agencies of the Government, such as departments and statutory authorities. Under the provisions of the Thai Constitution of 2007, the Prime Minister is appointed by the King, upon recommendation from the Speaker of the House of Representatives (Section 171). The Prime Minister must be a member of the House of Representatives (Section 171 and 172). There are 35 members of the Cabinet in Thailand. The Government is entrusted with policy decision-making, and is responsible for state affairs (Section 171).

The Judiciary interprets and applies Thai law to particular cases. This is the function of the courts. Presently, the Court of Justice is divided into three categories, including the Court of First Instance, the Court of Appeal and the Supreme Court (The 57

National Identity Board 1995: 258). Other Thai courts include a Constitutional Court and an Administrative Court, as created by the Thai Constitution of 1997.

The Administrative System in Thailand is one designed for a unitary state and is highly centralized. According to the provisions of the Government Administration Regulations Act (no.5) of B.E. 2545 (2002) and the Ministerial Restructuring Act of B.E. 2545 (2002), the Thai Central Government consists of twenty ministries and 143 departments. Each ministry is headed by a minister, who is responsible for the policy direction of Government departments and agencies under his or her supervision. All other staff within the ministries and departments are career officials protected by civil service legislation. In a style typical of many Commonwealth countries, the senior civil servant in each ministry is the Permanent-Secretary, followed by the Director-General at the departmental level and the Director at the division level. In Thailand, officials are typically recruited into a particular ministry after graduation and remain there for the duration of their careers (ADB 1999: 10).

In Thailand, the sub-national government level is divided into 76 provinces (Changwat). Each province is divided into districts (Amphoe), each district into sub- districts (Tambon), and each Tambon into villages. Officially, between 40 and 80 Central Government departments are assigned to each province to work under the Provincial Governor, and provincial authority extends over all subsequent levels. Policy-making and major policy execution functions are centralized in Bangkok, but some responsibilities are decentralized to the provincial and local levels.

Thus, a number of local governments in the form of Municipalities, Provincial 10 11 Authority Organizations (PAO) , and Tambon Authority Organizations (TAO) , have

10 According to The Provincial Administration Organization Act of B.E. 2542 (1999), and under the Constitution of the Kingdom of Thailand 1997, the Provinces were decentralized into local government units with an elected Provincial Administration Organization Council. (Source: The Provincial Administration Organization Act of B.E. 2542 (1999). 11 According to the Tambon Council and Tambon Administrative Authority Act BE 2537 (1994), and later under the Constitution of the Kingdom of Thailand 1997, the Tambon were decentralized into local government units with an elected Tambon Council. Depending on its size and tax income, a Tambon may either be administrated by a Tambon/Commune/Sub-district Administrative Organization, or by a 58

been allowed to operate in a semi-autonomous fashion (ADB 1999: 10). These local governments are allowed to obtain revenue from a limited number of sources, primarily related to property taxes.

Apart from central and local agencies, the Government also contains ten independent public agencies, for instance the Bank of Thailand. The Central Government in Thailand also has a controlling interest in state-owned enterprises, such as the Electricity Generating Authority of Thailand (EGAT) and the Port Authority of Thailand, who perform as separate business units.

Key features of Thailand’s Government structure outlined here, including both its formal and informal institutions, are critical to an understanding of its development path, its formal bureaucratic structures and the policy-making process. The combination of a stable monarchy and competing political elites has generated instability when combined with the rapid changes brought about by economic development. The 12 centralized government, rigid bureaucracy and the presence of the Sakdina status system has enabled the establishment of a rigid bureaucratic elite who dominate the decision-making system.

This rigid and inflexible system is reinforced by the economic planning system, which itself is monopolized by key central agencies. The Thai planning system has enabled the development of the plans, policies and resources required for rapid development, but has also served to exclude emerging CSOs, interest groups outside Bangkok and new issues, from being considered in the change process. These are issues which will be examined in more detail in this thesis, after a further examination of Thai bureaucracy and its role in the development of public policy.

Tambon Council. The TAO or TC consists of two representatives from each Moo-ban (village) in the Tambon. From this group a leader is chosen by popular vote, who in practice often, but not always, also happens to be the kamnan (the Tambon leader). (Source: Tambon Council and Tambon Administrative Authority Act BE 2537). 12 The Sakdina system was used to regulate the distribution of land among various classes of people according to each man’s position. This system not only definitely fixed the relative rank of every man in the Kingdom, but also placed a value upon him. According to Akin Rabibhadana, the Sakdina system served as an accurate guide to the different status of the whole population. Its main function was to serve as a guide for behaviour in all social interaction. The amount of Sakdina one possessed correlated with the amount of manpower under one’s control. In this sense, control of manpower was more important than control of the land (Source: Samudavanija 1987: 14). 59

4.2.3 The Thai Bureaucratic Institutions

The model of a bureaucracy, as proposed by Max Weber, is an organization with specific characteristics such as a hierarchical structure with formal rules and appointed career staff with fixed terms of appointment and a fixed salary (Hill 1997: 158). Some critical scholars have expressed the view that by possessing these bureaucratic characteristics, organizations tend to adopt patterns of behaviour such as rigidity, a focus on procedures, a resistance to change, central isolation from the outer layers, a dehumanized treatment of clients, incomprehensible jargon, empire building and a concentration of political power (Yossomsakdi 1999: 38). The question is: how far is this true in Thailand?

In Thailand, the bureaucracy is the most significant institution in society. As this section will discuss, the modern bureaucratic system was created under the King Chulalongkorn period, when he reformed the traditional government style and replaced it with a British bureaucratic system. Bureaucratic elites replaced the monarchy in terms of the Cabinet’s exercising of political power, and since 1932, bureaucracy has become more powerful in the political domain. Institutional instruments such as the law, bureaucratic procedures and legal frameworks, have reinforced the concentration of power in central agencies.

4.2.3.1 The Emergence of a Bureaucratic Polity in Thailand

The notion of a bureaucratic polity is the dominant conceptual framework accepted among both Thai and western scholars in order to understand Thai politics. The term was first introduced by Fred W. Riggs, an American academic who wrote a book entitled, ‘Thailand: the Modernization of a Bureaucratic Polity’ in 1966. Riggs described Thailand as a bureaucratic polity in which the bureaucratic elites took turns to rule the country and made all the major political decisions. Non-bureaucratic groups such as business interests, the media, political parties, civic and citizen groups, as well as scholars, had little influence in the political process. Riggs observed that Thai politics was marked by a deficiency of balance between political policy-making institutions and the bureaucratic policy implementation structure, and this view has since been supported by leading Thai scholars, as well as Suriyamongkol and Guyot (1986: 2). The 60

problem originated in the 1932 revolution, which established a constitutional monarchy, but did little to change the political and administrative systems created by King Chulalongkorn (Klein 1998: 5), other than to transfer political power and patronage from the monarchy to a shifting group of senior bureaucrats and military leaders. The elites who overthrew the absolute monarchy made an assumption that the Thai people were illiterate and incapable of governing themselves. The coup leaders established a guided democracy under the leadership of the People’s Party, mostly comprised of young well-educated bureaucrats. In the process, the absolute power of the monarchy was transformed into the absolute rule of bureaucratic elites.

The ‘bureaucratic polity’ then formed a group which insulated the decision- making on national policy affairs from social and political forces outside the bureaucratic organizations. The bureaucratic elite were, as a result, in a position to determine Thailand’s development priorities and implement their own. Since power did not result from the articulation of interests from society as a whole, bureaucratic decision makers were not accountable to any external forces, such as political parties, interest groups or organized communal interests. Despite this, external groups were able to participate in some area of political activity, but this participation was limited to discourse over implementing national policies, rather than actually deciding them (Jumbala 1987: 116).

Between 1933 and 1973, Thailand was mostly ruled by military dictators (Keyes 1987: 68), interspersed with short-lived civilian Governments. Under the military regime, the main objective of Thailand’s Constitutions was the maintenance and strengthening of the regimes in power. From 1933, the bureaucratic elite, an elite which included a group of senior military officers, provided the Premier and held key positions in the Cabinet. The Constitutions allowed the professional military and the civil servants to double their positions, so that both politicians and bureaucrats played key roles in policy decision-making and policy implementation.

Thai politics could therefore be seen as a ‘bureaucratic polity’, in which executive control was exclusively exercised by the military-bureaucratic elite. When the bureaucratic polity gained power through a coup d’etat, the monarchy transferred 61

legitimacy and authority to them and this indirect use of royal authority enabled the bureaucratic polity to strengthen its power in politics and policy-making, claiming that the policy-makers were acting in the name of the monarchy (Chokprojakchat 2003: 31).

As Thanapornpan (1989: 50) indicates, between June 1932 and August 1988, Thailand had 47 Cabinets with sixteen Prime Ministers. These cabinets assumed power for 54 years and eleven months in total, and Thailand was classified as a ‘full’ democracy for only six years (10.9 percent), a semi-democracy for eighteen years and eleven months (34.4 percent), and as an oligarchy or dictatorship for 30 years (54.6 percent). A civilian Prime Minister held office for only seven years and five months (13.5 percent) during this period. Civilian Prime Ministers served for an average of only 9.9 months, while military Prime Ministers served for an average of 81.4 months (Thanapronpan 1989: 50-51).

Terdudomtham (1994: 85) shows that, during the period between September 1957 and the end of 1989, over 55 percent of all Cabinet members of the various Governments were civil officials and military officials,. Bureaucrats, except for short periods, dominated the Cabinets, such as the one in place from February 1975 to October 1976. The rest of the Cabinets’ members were businessmen related closely to military leaders. Government cabinet and bureaucratic positions were filled by leading members of the military, in order to assure stability and control. Non-military groups in society during this period were weak politically, and dominated by the military through their intervention and influence. Business people could not challenge the military authority, but they cooperated with the military by inviting military leaders to join in business, in order to secure privileges. As Christensen notes, over the past five decades the bureaucratic elite has exercised its power with two explicit purposes:

“…One has been to make the state a more effective instrument for supporting market-oriented industrialization. The second and patently different objective, has been enhancing national security and strengthening the capacity of the central government to control the outlying provinces and hinterlands, right down to the last village therein” (Christensen 1993(2): 3) 62

The aim of the Thai bureaucratic elite has been to encourage stable and rapid economic growth, while bringing all areas of the country and society under the effective control of the central bureaucratic elite. Christensen (1993(2): 3) has called it the ‘Bangkok-based development strategy’, one that has focused on maintaining political authority in the offices of the Central Government, on setting the industrial zones in and around Bangkok, and on transferring resources from the rural sector to the industrial sector. These policy biases have afforded bureaucratic elites and industrialists wide- ranging discretion over decisions for allocating resources nationwide. They have also served to exclude rural residents and civic groups from important decision-making tasks, such as the setting of national development strategy and policy, as presented in Section 4.2.

Members of the bureaucratic elite, as technocrats, have played a particularly important role in the modernization of Thailand, especially in the areas of planning and implementing national development policy. The term ‘technocrat’ is defined by Thandee (1985: 193) in Thai as ‘nak wichakarn’ (aristocrat); someone who has earned an educational degree in a specialist area such as engineering or economics, from either a domestic or foreign university, or even both, especially since the post-war period. The term ‘technocrat’ has also been long used to define a group of Thai officials who are involved in economic policy making. Thanapronpan (1989) defines technocrats as “middle-level executives of government officers who formulate and implement economic policies. Some of these technocrats later become politicians or appointed to be ministers”. On the other hand, Stifel (1976) defines a Thai technocrat as “a well- educated official who plays a ‘significant’ role in national policy formulation and implementation.” In this sense, Thanapronpan focuses his view on those Government officials involved in economic policy-making, whereas Stifel focuses on those Government officials who play a key role in policy making and implementation in general. In addition, Ali (n.d.: 28) defines technocrats as the “group of people who using their expertise on conservative economic policy making and, with their administrative skills, came to dominate the key agencies of macroeconomic management.” This development was very important, because the technical elite used their specialised knowledge to play a determining role in the setting up of the electricity industry in Thailand, an issue that is discussed in more detail in Chapter 5. The power 63

of the technical experts in the bureaucratic elite became critical, after the Thai Government committed itself to the goals of modernization and development in 1957.

In 1957, Field Marshal Sarit Thanarat staged a coup and in the following year, he became the Prime Minister and military dictator. When Thanarat assumed office, he announced his revolutionary Government was committed to national development, included economic, industrial, educational and administrative development (Chaloemtiarana 1979: 227).

In consultation with the World Bank, Thanarat and his economic advisors addressed macro-economic development policy by creating new agencies, such as the National Economic and Social Development Board (NESDB), the Bureau of Budget (BOB) and the Board of Investment (BOI), and then located technocrats within these agencies. The technocrats then played a key role in drafting the National Economic and Social Development Plan, and formulated a series of economic policies directed at investment promotion, private investment, and an import-substitution industrialization program, as discussed in Section 4.2.2 of this thesis.

Thanarat also focused on increasing internal security, state centralization and bureaucratic paternalism, all of which were aimed at consolidating efforts to achieve the development goals set (Christensen 1993: 130). The governance system instituted by Thanarat had a strong paternalistic ideology; the principle of ‘father of the family’ and ‘father of the nation’ (in Thai, Phoban Phomunag) was promoted, and this has continued as a characteristic of traditional Thai politics. Thanarat promoted the idea that the whole nation could be considered a large family, and the bureaucratic elite became the instrument for “the implementation of policies the leadership determined were best for the populace” (Keyes 1987: 77, in Tu 1993: 154). In this way, economic development was linked to the issue of national security, and a centralized administrative system was seen as the way to assist in bringing economic development to solve the problem of national security, and in particular to counter the communist insurgency perceived as threatening Thailand. 64

Over these years, military rule was characterized by limited decentralization in practice. Army rulers permitted civil bureaucrats a great deal of freedom to execute economic development programmes, control the budget, introduce fiscal and foreign exchange reforms, and even introduce counter-insurgency programmes, without their day-to-day direction (Samudavanija 1987: 95). In this way, the senior technocrats were given a strong incentive to remain within the new system, since they were able to introduce their policies or programmes in the national interest. However, these incentives were contingent upon their continued tolerance of military leadership. This incentive towards cooptation, as Samudavanija suggests, was reinforced by the traditional ideology of the bureaucrat as working “in service of the Kings” (Samudavanija 1987: 95).

The non-military component of the bureaucratic elites quickly learned how to manipulate Thanarat’s new system for their own benefit, and the result was bureaucratic atomization, as key bureaucrats took control of their portfolios (Klein 1998: 8). Officially, there was a centralized bureaucracy, which could act in concert when it wished to do, but in practice each Government agency developed its own governing laws and assigned administrative discretion to individual departments, creating new ‘empires’ controlled by key members of the bureaucratic elite, an elites that was going to play a key role in setting up the electricity industry in Thailand. Understanding the role of the bureaucratic elite therefore, and in particular its role in both development generally and new industries like electricity generation, is a key component to understanding how the electricity industry in Thailand has developed in the way it has, a way that has led to conflict, as I will argue through the rest of this thesis.

4.2.3.2 Institutional Perspectives of the Thai Bureaucracy

In Thailand, as it has adopted parliamentary systems, the three branches of Government: the political institutions, judiciary and bureaucracy, have only been imperfectly separated. For example, within Parliament, only the Prime Minister has to be an elected Member of Parliament (MP); other members of the Cabinet can simply be chosen by him or her (Fenna 2004: 194). The coalescence of executive and legislative branches in parliamentary systems, as has happened in Thailand, has given the executive much greater control over the legislature, including the policy formulation 65

process, and this has continued to be a distinctive feature of Thailand’s government system. As mentioned in the previous section, in Thailand bureaucrats have tended to dominate the policy process and to shape policy direction, and this has been reinforced by bureaucratic values and behaviour, as I will discuss in the next section.

Cognitive Perspectives: Bureaucratic Values and Behaviour

Thai traditional bureaucratic values inherited from before 1958 have remained unchanged, allowing the bureaucrats to maintain the status quo in terms of their values, without a significant challenge from other groups in society. A significant scholar, Chai-anan Samudavanija indicates that the dominant value orientation of the Thai bureaucratic system includes (a) a hierarchical organization and allocation of status, (b) personalism, (c) arrogance and disdain for those outside the system, (d) paternalism, (e) 13 a concern for security, and (f) the pursuit of sanuk (Samudavanija 1987: 91). These values and behaviours have led to (a) a tendency towards factionalism, (b) the exercise of personalism, (c) a tendency to spread out responsibility for decision-making to the decision ‘network’ of elite bureaucrats, and (d) a top-down development syndrome. These behaviours have contributed to the inefficiency of the Thai bureaucracy as a public organization, as the interests of key bureaucrats have come to dominate decision- making and corrupt the policy process. Furthermore, these values have prevented the bureaucracy from attaining maximum effectiveness in responding to the needs of the people, and these attributes have contributed to an imbalance of power between the bureaucracy and other political institutions. These problems have persisted through Thailand’s development process.

The Restructuring of Government Agencies Act of B.E. 2545 (2002) and the Act of Adjustment of Ministries, Sub-Ministries, and Departments of B.E. 2545 (2002), adopted during the Shinawatra Government, stipulated the level of centralization in administrative power that should be allocated to Central Government agencies, and that this relationship be hierarchical in manner. Thus, this structural form of Thai Government agencies reflected the hierarchical value of the bureaucratic system. Thus,

13 According to Samudavanija (1987: 91) Sanuk is one core dominant value orientation of the Thai bureaucratic system; it means the tendency to perceive social affairs and ceremonial activities as essential to bureaucratic objectives. 66

the norm for the policy formulation process has continued to be a top-down policy and planning approach.

Regulative Perspectives: The Role of the three Core National Policy

Agencies

In general, the policy-making process in most liberal democratic countries involves the active participation of the legislature, the executive, administrative agencies and the courts. Other participants in the policy formulation process include political parties, research organizations, media, interest groups, as well as individual citizens (Anderson 1997), who influence and join these official policy-makers in the policy-making process.

In the case of Thailand, where an open democratic political process is not fully developed, the bureaucracy plays a dominant role in spheres where technical knowledge is necessary, such as in national development planning (Prasith-rathsint 1987). This is also true in the policy-making process for the energy and electricity power generation industries, where the National Energy Policy Council (NEPC) and National Economic and Social Development Board (NESDB) both play a key role in decision-making.

The governance structure of the Thai administration is distinctive, in that the planning and administrative function of the Government is placed under the jurisdiction and control of ministries, but at the national policy and planning level, the function falls, as it has done since 1959, under the jurisdiction of three core government agencies, these being the National Economic and Social Development Board (NESDB), the Bureau of Budget (BOB) and the Office of Civil Service Committee (OCSC) (Yossomsakdi 1999, OCSC n.d.: online). All these agencies are attached to the Office of the Prime Minister and their heads report directly to the Prime Minister, unlike in other countries where they are assigned to separate ministries. Their main functions are oriented towards formulation of national development policy, financial and budgetary management and manpower planning, respectively. 67

The NESDB was created in 1959 in order to formulate a five-year NESD Plan; to appraise ministerial and departmental plans or projects, as well as to monitor, evaluate and provide recommendations on the development of the annual budget of all the Government offices (Yossomsakdi 1999: 2).

The BOB is responsible for developing proposals on budget policies and plans. National budgets are allocated to the relevant plans or projects, in accordance with the objectives of both the NESD Plan and Government policies. The annual budget is submitted to the Prime Minister and the Cabinet for preliminary approval, before being forwarded to the Parliament for final approval (Yossomsakdi 1999: 2).

The OCSC was created to assume roles and responsibilities with respect to advising the Cabinet on matters involving public personnel management, and to formulate policies on manpower planning in the civil service. This is a critical function, as the OCSC employs and allocates public servants, and regulates entry and exit from the public service. The three core agencies are the most powerful in controlling policy direction, budgets and public manpower in Thailand (OCSC (n.d.): online). Despite the fact that each Government agency has its own governing law allowing it to initiate administrative policy in response to its own function, there is a need for an agency to submit proposals for final approval from the three core agencies, one which enables the three core policy bodies to scrutinize and control the policies submitted by Government agencies, as well as the resources made available to implement them. As Samudavanija (1982: 93) states, where the policies proposed have effects on society, there is little consultation, so while:

“…most government development plans and programmes emphasize the need to get rural people involved in the development process. In practice; however, decisions on priorities, identification of felt needs, sitting, etc., are made from the top down. Officials tend to perceive and define problems and needs according to their own education, urban background, and organizational policies centralized and formulated by the elite in Bangkok…”

Each policy is therefore a product of the elites’ decision. Public policy is not determined by the demands and actions of people. As Anderson notes, public policy 68

does not reflect the demands of people, but rather can be regarded as reflecting the values and preferences of the governing elite (Anderson 1997: 30).

A number of problems have been caused by the top-down development model adopted in Thailand. One such problem is a lack of effective coordination among decision-making authorities at the central level and the various agencies operating in provincial and local areas. Christensen and Boon-long (1993) point to the example of the conflict over water allocation caused by competition between the Royal Irrigation Department (RID) and the Electricity Generating Authority of Thailand (EGAT). While the RID is the primary water allocation authority, its capacity to manage water is limited by the external constraint of EGAT having control over hydroelectric dams for its power generation. In the dry season, as demands for water in downstream areas from dams increases, RID has little power to force EGAT to allow it to manage water resources for other users, and the conflict then extends from being a conflict between state agencies, to a conflict between people in the downstream and upstream areas demanding access to water resources. There is, by and large, no public participation in the policy and planning process.

Currently, policies in Thailand can be classified into various types, such as national security, social and economic development, education, tax and energy policies. Each of these types of policy has its own policy process (Sangchai 2000: 6-8). Traditionally, the process starts at a divisional level, under the control of departments. A draft policy proposal is passed to the department, who then examine and re-group the policy, along with other policy proposals submitted by other divisions. When the Director-General of an agency agrees to the proposal, it is submitted to the Ministry level. The Ministry normally contains a policy and planning office to assist the Permanent-Secretary in scrutinizing policy proposals submitted from departments. After this stage, the Permanent-Secretary passes the proposal to the Minister for consideration. When the Minister agrees with the proposed policy, it is presented to the Cabinet for official endorsement. Plans or projects initiated by Government agencies, are drafted in agreement with the content of the NESD Plan and are forwarded to the NESBD to be scrutinized, in to ensure they are in accordance with the NESD Plan. On 69

NESDB approval, the BOB will a allocate budget to that plan or project, and then Cabinet will endorse the policy proposal. Over time there has been some increase in consultation in this process, but it has remained limited, though over the past three decades, the Thai political system has developed democratic processes that allow new groups in society to access the policy arena, and to challenge the status and control of the bureaucratic elites.

4.2.3.3 The Re-Birth of Bureaucratic Polity?

A long rivalry between bureaucratic actors and non-bureaucratic actors over the previous two decades, particularly business groups allied with the TRT Party, resulted in the coup of 2006. After the coup, the Army appointed the retired General Surayudh Chulanond, a former member of the Privy Council, as Prime Minister. Most of Chulanond’s Cabinet members were retired government officials and technocrats from a range of government agencies. The members of the National Legislation Assembly were also appointed from government officials, both civilian and military, with businessmen, academics and civic groups making up a small part of this assembly. The new arrangements of 2006 indicated that bureaucratic elites were returning to play a dominant role in the political arena. Scholars such as Michael Nelson criticized the form of this interim Government for setting up the same form of bureaucratic policymaking structure as in the past, and noted at the time that:

“It’s very strongly guided by military ideas combined with some technocrats, some people in economic areas and some former bureaucrats” (The Australian, October 9th 2006)

The Thai Constitution of 2007 has since also been criticized, as it reduces the power of elected politicians in national politics. Thus, it seems likely that the new political power will be a mix of elected politicians and bureaucratic elites, with civic groups adding their voice in some parts of the policy-making process. 70

4.3 The Thai Economy

The Thai economy opened up to global forces first in the reign of King Mongkut (Rama V: reign 1851-1868). The economy depended primarily on agricultural production organized along semi-feudal lines. This changed after the end of the Second World War, when Thailand began to modernize its economy, and this accelerated in the late 1950s (Aphornsuvan and Vatiwutipong 2000: 120). The goal became to increase national productivity and to catch up with other industrialized countries, in order to alleviate poverty and combat a perceived communist insurgency.

Development of the modern economy started in 1958, when the World Bank sent a task force group to survey Thailand’s economy and make recommendations for reform. The task force presented ‘A Public Development Program for Thailand’ to Field 14 Marshal Sarit Thanarat , the Prime Minister of Thailand at that time, and proposed a number of reforms (Ruengsakul 1995: 654). The report criticized the inefficient state 15 enterprises created during the Phibunsongkram regime . It recommended an overhaul of the Thai economy, including its direction, management and government organizations. It suggested that the Thai Government should:

“…downsize state enterprises, support privately-owned handicraft industries, revise the legal code, improve the infrastructure and credit system, and set up an institute for planning national economic development” (Aphornsuvan and Vatiwutipong 2000:120).

President Kennedy of the United States wrote a memo directly to Thanarat, the Prime Minister of Thailand, in which he stated:

“…I recommend that you consider this report seriously. Although, the report did not formally reflect US policy, I think it will form a basis for our assistance…” (Aphornsuvan and Vatiwutipong 2000:120).

14 Field Marshal Sarit Thanarat served as the Prime Minister of Thailand from October 20th 1958 to December 8th 1963. 15 The Phibunsongkram regime in this thesis, means the Government led by Field Marshal Plek Phibunsongkram, between December 16th 1938 and August 1st 1944, and between April 8th 1948 and September 16th 1957. 71

President Kennedy’s letter announced the intention of the US Government to provide economic and military assistance to Thailand, concentrating on the development of strategies recommended by the World Bank (Juasiripukdee 1983: 47-48, Phongpaichit and Baker 1995: 128, and Warr 1993: 29-30).

The Introduction of Economic Planning

Thanarat and his advisers were receptive to the World Bank’s advice that the role of manufacturing needed to be expanded through increasing incentives to attract foreign and domestic investment. In response to the recommendations of the World Bank and US Government, various institutes were created to facilitate and divert national development. The key central planning agencies needed to do this, including the National Economic and Social Development Board (NESDB), the Bureau of Budget (BOB) and the Board of Investment (BOI), were created in 1959 (Kaewthep 2000: 96). These bureaux were made directly responsible for economic management, as well as stabilization through promotion and planning (Christensen 1993: 127). Planning for economic development became a formal responsibility of the Thai Government in 1959, when the NESDB was established. Since then, ten NESD Plans have been formulated and implemented. Warr (1993: 29) notes that:

“The underlying philosophy of economic planning in Thailand is a commitment to a market economy. Planning has been directed mainly towards securing a smooth functioning of markets with minimum direct government intervention or controls”

The First National Economic and Social Development Plan (NESD Plan) was officially implemented in 1961 (Poapongsakorn et al. 2000: 23). As Kaewthep notes, the regime’s first NESD Plan took up the World Bank’s proposals and accepted US and World Bank assistance in implementing the plan (Kaewthep 2000: 96).

Formally, the NESD plan played a significant role in guiding economic and social development, and making sure that every Government agency, and the private sector of the country, moved in the same direction. A top-down policy framework, the 72

planning approach and the centralized budget allocation, extended the power of central agencies in controlling the policy implementation process of local agencies.

The objective of the First NESD Plan (1961-1966) and the Second NESD Plan (1967-1971), focused on the building of physical infrastructure, such as transport networks, the electricity sector, ports and irrigation facilities, in order to facilitate industrial development. The Third NESD Plan (1972-1976) shifted its objective to export promotion (Manakit 1998: 89). However, during the Third NESD Plan, Thailand was affected by the downturn in the world economy and the oil crises of 1973 to 1976, and 1979 (Thai Military Bank 1996: 225: 227). Thus, The Fourth NESD Plan (1977- 1981) was set up to address the economic recession and to maintain economic stability. Its objectives continued to support the export sector. However, the substance of this plan was also an attempt to switch from a growth-orientation approach, to an approach that reflected social awareness and the need to spread the benefits of development more widely (Warr 1993: 31).

The Fifth NESD Plan (1982-1986) was designed as an area-based approach; to formulate policies and operational programmes. It balanced the benefits of centralized social and economic development in Bangkok, by distributing income and prosperity to the regions of Thailand (The Thai Military Bank 1997: 229). The main thrust of the Sixth NESD Plan was to solve trade and budget deficits, expand employment and address the deterioration in natural resources and the environment. (Tambunlertchai 1989: 65). The Seventh NESD Plan (1992-1996) that followed was focused on the goal of building sustainable development (Poapongsakorn et al. 2000: 25), as well as on the construction of physical infrastructure, because infrastructure development during the preceding plans had been insufficient, and could not adequately support rapid economic growth. The first seven NESD Plans were formulated through a top-down and centralized process, and technocrats in the NESDB played a key role in the drafting of the plans. The first seven plans all utilized a top-down planning process. The environment and environmental sustainability became a concern from the mid-1980s, building on concerns about the need to readjust development direction from the previous plans (Kaewthep 2000: 103). The concerns of the community were not 73

considered seriously until the mid-1990s, when a bottom-up planning process was proposed. In 1997 there was a change, as the Eighth NESD Plan (1997-2001) was drafted with a bottom-up approach in mind, and the plan adopted a so-called ‘people- centred development’ approach that was extremely different from its predecessors. Although the rationale behind the Eighth NESD Plan was acknowledged as a good one, it was never fully implemented, because in 1997 Thailand faced a financial crisis, and the Thai currency (the Baht) was devalued and floated on the international markets. Thailand sought financial assistance from the International Monetary Fund (IMF), in order to stabilize its currency and economy. The plan was readjusted during the mid– phase, in order to divert public resources to solve short-term economic and budgetary issues. As result, economic growth during the Eight Plan was recorded at -0.9 percent per year.

The Ninth NESD Plan (2002-2006) and the Tenth NESD Plan (2007-2011) have 16 adopted the philosophy of the ‘Sufficiency Economy’ , bestowed by His Majesty the King on his subjects as a guiding principle for national development and management (NESDB 2002: 1, 2007: 1). The philosophy of the Sufficiency Economy, based on an adherence to ‘the middle path’, has been advocated in order to (i) overcome the current

16 ‘Sufficiency Economy’ is a philosophy that has been bestowed by His Majesty the King to his subjects, through royal remarks made on many occasions over the past three decades. The philosophy provides guidance on appropriate conduct covering numerous aspects of life. After the economic crisis in 1997, His Majesty reiterated and expanded on the Sufficiency Economy in remarks made during 1997 and 1998. The philosophy points the way for recovery that will lead to a more resilient and sustainable economy, one better able to meet the challenges arising from globalization and other changes. Sufficiency Economy is a philosophy that stresses the middle path as an overriding principle for appropriate conduct by the populace, at all levels. This applies to conduct starting from the family, through communities, all the way to the level of national development and administration, so as to modernize the country in line with the forces of globalization. “Sufficiency” in this sense means moderation, reasonableness and the need of self-immunity and sufficient protection from impacts arising from internal and external changes. To achieve this, an application of knowledge with due consideration and prudence is essential. In particular, great care is needed in the utilization of theories and methodologies for planning and implementation, at every step. At the same time, it is essential to strengthen the moral fibre of the nation, so that everyone, particularly public officials, academics and businessmen at all levels, adhere first and foremost to the principles of honesty and integrity. In addition, a way of life based on patience, perseverance, diligence, wisdom and prudence, is indispensable to create balance and be able to cope appropriately with critical challenges arising from extensive and rapid socio- economic, environmental and cultural changes in the world (Source: NESDB 2007: 1) 74

economic crisis, and (ii) achieve sustainable development. This plan focuses on the balanced development of human, social, economic and environmental resources. A priority is the pursuance of good governance at all levels of Thai society, in order to achieve real sustainable people-centred development, as stated in the Eighth NESD Plan (NESDB 2002: 1). The hope is to guide Thailand towards being a peaceful society.

Over the entire period of the implementation of the NESD Plans after 1961, the Government has undertaken a number of policy initiatives that have had direct and indirect economic implications. Development strategies under the NESD Plans have all focused on “growth and stability development” (Poapongsakorn et al. 2000: 7), but they have had both positive and negative consequences. On the positive side, Thai society has been successful in transforming itself from a ‘backward’ agrarian country, to a developing country. Thailand’s average per capita income at current market prices, increased from 2100 Baht in 1961, to 99,339 Baht in 2004, which repositioned Thailand from being a poor country, to joining the ranks of the rapidly developing countries (NESDB 2005: 3, Piboolsravut 1997: 1).

On the negative side, the NESD Plans, formulated by technocrats using a top- down planning approach and centralized resource allocation, have been criticized for their inability to cope with rural problems, particularly improving the quality of rural life, social and regional disparities, rural-urban disparities, intra-rural disparities, urban structures, sectoral differentials, gender differentiation, education, employment and political participation, as well as conflict over natural resources by competing groups (Jitsuchon 1991: 25, Pun-Arj 2006: 135-136). 75

Table 4.1 Thailand’ Economic Growth Rate during the Implementation of the National Economic and Social Development Plans

NESD Period Economic Growth Plan Estimated Real GDP GDP per per Capita Capita

1 1961-1966 5.3 8.1

2 1967-1971 8.5 7.8

3 1972-1976 7.0 7.0

4 1977-1981 7.0 7.4

5 1982-1986 6.6 4.4

6 1987-1991 5.0 10.5

7 1992-1996 8.2 6.5

8 1997-2001 - -0.9

9 2002-2006 4.5 5.7

10 2007-2011 - -

Source: Pun-Arj 2006: 128, and Bangkok Bank 2005 to 2008

In summary, since the late 1950s, the Thai economy has gone through major planned economic development. Thailand has formulated a number of National Economic and Social Development Plans, as a guideline for socio-economic development. Ten NESD Plans have been implemented and have had both positive and negative consequences on Thai society, as indicated above. In the process, they have led to the establishment of a growing ethic in Thailand that continues to debate the development of public policy. 76

4.4 Social Sector of Thailand

Thailand, with a growing population of more than 60 million and a land area of 513,000 square kilometres, has a population density which is neither high nor low by world standards (Chirarattananon and Nirukkanaporn 2006: 2521). While sixteen percent of the population remains under the national poverty line, life expectancy, child mortality and illiteracy rates are approaching those of developed economies. It has been recorded that only twenty percent of the population live in urban areas; with over ten million living in the Bangkok Metropolitan area alone. The remaining 80 percent live in rural areas and depend primarily on agriculture-related activities for their livelihood.

Historical studies reveal that the Thai social caste system was inherited from the Sakdina system. The Sakdina was introduced into the Ayudhya Kingdom during the fourteenth to the eighteenth centuries. According to Vichit-Vadakan (1989, in Boyld 1993: 38) Sakdina was used to categorize and assign stratified ranks to all males according to their relationship by blood, or their service to the King, a system often referred to as the Thai form of feudalism (Orandini 2003:91). The Sakdina status determined each individual’s rights (particularly to use the King’s land), wealth, political power and responsibilities to the state and the rest of the society (Wedel and Wedel 1987, in Boyld 1993: 38). This form of social system, still in existence today, is a strongly socialised process which is run using a form of patron-client relationships (Tanabe 1984: 87). These patron-client relations are an important consideration in any understanding of Thai politics, business relationships and the government bureaucracy. This relationship among people in Thai society continues to be an important organizing principle in Thailand, and influences political and economic interactions in this hierarchical society.

Thai society, because of the use of this system, does not naturally provide social equity (Uwanno 2000, in Phuangcharoen 2005: 60). Power is retained in the hands of elite members, who can be divided into three main groups (though often with a substantial overlap), these being: 77

(1) Government officials, ranging from the Prime Minister and high military leaders, through to the bureaucracy, teachers and professors, (2) people with a Royal linkage (either via kinship or through honorary titles), and (3) those with great wealth (Harkness 2002: 67)

Social status continues to be an obstacle for local people, and for grassroots activists participating in political activities, because they have less status and power, as Somvichian notes:

“…the more power, the higher [the] status. The less power, the lower [the] status. The leaders from royal lineage have high status because in the past they had more power. The farmer or worker has lower status because he has never had power” (Somvichian 1979: 165)

A key element of the patron-client relationship is that the elite, or superiors (Government officials), are expected to have the qualities of compassion, loving kindness, empathetic joy and equanimity, and are expected to manifest these four qualities by protecting, aiding, complementing and giving generous donations to subordinate or client (people). Subordinates are expected to provide loyalty and service, in return for protection and advancement by a superior or patron (Girling 1981: 11). Thai people commonly respect these hierarchical relations, and avoid face-to-face interaction or conflict with superiors. This social pattern has been a major obstacle to democratic development, and a supporting factor in the survival of bureaucratic domination in national politics. It continues to be a major obstacle to public participation in political activities, because people do not want to face Government officials, who they believe hold superior power and a higher position in society to them. A slow response to political crises and social conflicts has been one result of this.

The Emergence of Non-Bureaucratic Policy Actors

The rapidly changing socio-economic conditions caused by the effective implementation of the NESD Plans, has fundamentally changed the social landscape in Thailand (Girling 1996: 31). The early development plans and policies, which focused on the development of the physical infrastructure, agro-business, export-oriented industrial production and the service sector, as well as educational improvement, have 78

led to the emergence of new social groups in Thai society, such as workers in industrial factories; a new middle class in urban areas; a wealthy Bangkok-based business class; and provincial businessmen (McCargo and Pathmanand 2005: 3). These groups have become a force to challenge military rule, the first sign of this being the student uprising of 1973, an uprising which overthrew the military government and led to its replacement by a civilian government .

Ockey identifies four prominent groups that have emerged in Thailand since the beginning of planned development. These groups include: (1) a new group of business leaders that has emerged in Bangkok. The emergence of this group has been the consequence of policies promoting private enterprise and the development of the physical infrastructure, (2) a new middle-class, employed in service, transportation, construction and related industries, (3) a group of provincial notables that has emerged as a consequence of development efforts in the regions, those associated with the Vietnam War, and (4) groups of urban workers and the unemployed, such as landless peasants, who have moved to Bangkok and other major cities to work as unskilled workers, and have begun to organize themselves into trade unions and political groups (Ockey 1992: 9-10). These groups grew rapidly in number after 1960, and became more assertive, due in part to the success of rapid economic development. These groups were less politically tolerant of military dictators (Wyatt 2003: 288). The middle-classes led a peoples’ uprising in October 1973, during which time, military power was demolished. The result was that the military elite were forced to temporarily step down from politics, but the technocrats’ role was retained in setting policy priorities (Thandee 1985: 192).

i. Business Groups

The influence of business groups in the policy arena was not entirely new, and Laothamatas (1992) has put forward three arguments to challenge the concept of a ‘bureaucratic polity’ as describing the policy making process in Thailand. His first argument is that, since the late 1970s, business associations in Thailand have become autonomous and effective extra-bureaucratic interest groups. His second suggestion is that organized business has influenced the Thai economy in new and important ways. His last point is that close and supportive relations between the Government and organized business have emerged, and have played a substantial role in initiating or 79

shaping policies to bring about economic development. This may be true, but as this thesis will argue, this influence has not undermined the power or influence of Thai bureaucratic elites.

The emergence of the new actors later in the modernization process, during the 1980s, was distinct from the previous decades. Ali (n.d: 43) argues that there are four reasons to explain this. Firstly, with faster economic expansion, the industrial and service business sector itself grew at an increasing rate. Secondly, society’s perception of business changed and transformed, from the idea of an ‘ethnic pariah’ (given Chinese domination), to a respected position with wealth and power. Business was seen as in playing an active and legitimate role in politics. During the 1980s, the technocrats and business associations also developed closer relationships in pursuing economic reform. Lastly, there were shifts in the relations between business groups and the military, away from business support for authoritarian regimes, to developing an awareness of the damaging impact of military interventions on domestic and international business confidence. This change in the 1980s, led to Governments beginning to open up to the community.

In response to increasing private sector engagement, in 1981 the Tinasulanonda Government created the national Joint Public-Private Consultative Committee on Economic Problems (JPPCC). Business leaders, particularly the top associations, were invited to participate in economic policy decision-making.

Recommendations were then jointly formed and joint action was taken to alleviate various problems confronting the private sector. These included the creation of an Export Development Committee whose aim was to improve export related policies, and the establishment of an International Trade Promotion Fund to assist in the promotion of foreign trade. The private sector’s complaints about bureaucratic red tape were also responded to (Suriyamongkol and Guyot 1986: 25-26).

Some scholars have confirmed that the JPPCC was an important new organization influencing Government economic policy making and implementation. This was reflected in the fact that the Prime Minister chaired the JPPCC, and its 80

members held powerful positions in the Government. Government and government officials, especially NESDB officials, believed that the JPPCC was working on public interest issues that benefited the country (Terdudomtham 1994: 84). Other analysts, such as Sunettra (1991, in Terdudomtham 1994: 81) found that leaders from the business and private sector used the JPPCC to obtain benefits for their own organizations, and in a reported case, a politician involved in the JPPCC had a conflict of interest as, on the one hand, he was the owner of a firm, whilst on the other, he was also a policy maker. This shows that, for the first time, business leaders had been accepted by the bureaucratic elite into the formal policy formulation process.

ii. Elected Politicians

In addition to the emergence of business interests in the national policy setting arena, it is evident that the leading businesses in Bangkok started to become directly and openly involved in Thai politics and the workings of the Cabinet, from the early 1980s (Phongpaichit 2004: 71). Many new political parties, such as the Chart Thai Party, Social Action Party and Democrat Party, were financed by big business and these new centre aligned parties coalesced behind business-oriented political parties, many with Sino-Thai business interests (Klein, 1998: 8). However, the traditional policies and rules of the game did not substantially change. Political power was shared between the bureaucratic elites and elected politicians, resulting in the development of a so-called halfway-democracy, as described in Section 4.2.

The military, the bureaucracy and business interests continued to guide Thai democracy while building the nation’s economy. Thai politics increasingly became a multi-party parliamentary system, with a large number of political parties, but with no single party gaining an absolute majority. Vote buying became well established and widespread among the candidates and ‘rural godfathers’, or in Thai chao por, who having won an election secured top positions in the Cabinet (Anantho 2001: 122). As a result the balance of power in the Government began to change.

Christensen (1993(2): 13-14) states that in the 1970s, politicians from the provinces used the democratic process to gain access to Central Government offices in Bangkok, for two reasons: first, they wished to generate a return on the investments of 81

those business elites who financed their political campaigns, and secondly, they attempted to reallocate budgetary funds or resources back to the provinces, in order to acquire additional support for future elections. These business people, both in Bangkok and the provincial areas, entered political institutions directly through election. Towards the end of the 1980s, power began to shift from military domination to a greater level of cooperation with the civil politicians. The exclusive domain of the military and bureaucrats in Parliament was slowly mixed with a greater political participation by political parties and civilians.

Chatichai Choonhavan, a civilian, came to power in 1988 with strong support from provincial businesses. He was the first Prime Minister to be elected since 1977. Upon his appointment, Choonhavan immediately moved to trim the power of both the bureaucracy and military. At the same time, elected politicians moved aggressively to try and take control of the source of revenues the bureaucratic leaders had long controlled, such as state-owned enterprises, particularly in the energy and communication fields. The Choonhavan Cabinet was criticized for corruption, because a number of large-scale development projects were created and then seen to become a source of ‘rent seeking’ by politicians. In light of the broad wave of criticism over corruption, the military staged a coup in 1991 (Laothamatas 1992: 6), though they were subsequently ousted by a bloody people’s uprising in 1992.

After the promulgation of the Constitution of 1997, Thaksin Shinawatra, the successful telecommunications tycoon, founded the Thai Rak Thai Party (TRT Party). Over the two years following its foundation, the TRT Party became a magnet for some of the business people who had suffered as a result of the Asian economic downturn of 1997. Phongpaichit and Baker (2004: 69-71) indicate that the business sectors, which actively supported the TRT Party, both directly and indirectly, included interests from the telecoms, agro-industrial, banking, property development, manufacturing and construction sectors, as well as from media and entertainment.

The TRT Party won the 2001 general election, and Thaksin Shinawatra was voted Prime Minister. His Government formulated several populist policies, such as a four-year debt moratorium for farmers, combined with orders for Thailand's state- 82

owned banks to increase loans to farmers for the creation of village small- and medium- sized enterprises (SMEs) at low interest rates, the creation of the village fund, a ‘One Tambon One Product’ (OTOP) programme, and the 30 Baht universal healthcare programme, all of which gained significant support from rural people (McCargo and Pathmanand 2005: 89). At the same time, the Government launched administrative reform and state enterprise privatization. Bowornwathana (2004: 135) indicates that 17 Shinawatra attempted to adopt “Prime ministerialism” to concentrate political and administrative power in his hands. As a result, Thaksin was frequently charged with allegations of dictatorship, corruption, conflict of interest and human right offences.

The Shinawatra Government’s policies also made significant changes to the Thai bureaucratic system. When he assumed office in 2001, Shinawatra extended his power step-by-step. Initially, he extended the scope of his own role in routine administration, under the banner of ‘CEO Government’ (Painter 2005: 8). This was achieved, says Painter, in a number of ways:

“…first, he expanded the number of political appointments to positions in the Prime Minister’s office, including teams of policy advisors and TRT stalwarts (Phongpaichit and Baker 2004: 186); second, with his CEO ‘hands-on’ style, he intervened more directly than customary (both behind the scenes and also sometimes publicly) when matters in individual portfolio or departments came unfavourably to his attention; third, he and his closet political advisors became directly involved in key appointments within the police, military and civil service, often for the sake of promoting close associates and relatives, but more generally in order to reward TRT sympathisers and to punish critics. Last, he combined these day-to-day actions with a program of budgetary and administrative reforms that aimed to enhance political control and disrupted existing centres of bureaucratic power” (Painter 2005: 8)

Another institutional change in the Thai traditional policy formulation process was introduced by the Shinawatra Government. In October 2002, the existing fourteen ministries and 126 departments were restructured into twenty ministries and 143 departments. The rationale for this reform was to create a new structure for Government

17 According to Bowornwathana (2004: 135-136) “Prime ministerialisation refers to a phenomenon by which the top executive, namely the Prime Minister, makes use of administrative reform as a means to consolidate and take away power and authority from ministers and senior bureaucrats into his own hands. Therefore, the Prime Minister becomes the sole center of power in political institutions and society. 83

agencies, with a clear hierarchy of co-ordination and control and a more logical grouping of government functions and activities (Painter 2005: 13). With this change, the Government also promoted budgetary reform, using the World Bank’s recommendation to legitimize the change. The Government Budgetary Act was amended in 2001, and the traditional Planning Programming Budgeting System and Line Item Budget, was replaced by the Strategic Performance Based Budgeting (SPBB).

The role of the NESDB was undermined by this restructuring policy, as the NESDB Plan had previously been fed directly into the budgetary process as a framework document. However, the Prime Minister made it clear that the TRT Party’s platform and strategies, not the NESDB Plan, would provide the planning framework, in the guise of a so-called four-year ‘National Strategic Plan’, one which the Shinawatra Government designed (Painter 2005: 11). This was designed to weaken the power and influence of bureaucrats and technocrats in the national policy and planning process.

A series of campaigns against Shinawatra were organized by civic groups from mid-2005 onwards. In September 2006, the Thai army staged a coup. An Interim Government, led by General Surayudh Chulanond, formed a cabinet with former bureaucrats and technocrats regaining a majority.

The lesson here for civilian governments that seek to benefit from government mega-projects and corruption, is that widespread criticism can, and in this case did, result in the need for change. Although the Constitution of 1997 provided a number of significant provisions to prevent the abuse of power and corruption, elected and non- elected politicians have continued to seek ways to manipulate in the same the way the Shinawatra Government did before. This has led to a public mistrust of elected government.

The Constitution of 2007 was then officially declared, and in the general election, which was held on December 23rd 2007, the People’s Power Party (PPP) gained a majority, with Samak Sundaravej voted to serve as Prime Minister. Later, the People’s Alliance for Democracy began to campaign against Sundaravej and his Government, resulting from his policy intent to amend the Constitution of 2007. 84

Sundaravej assumed office for six months and then quit his post in September 2008. Somchai Wongsawat, the new leader of People’s Power Party (PPP) was voted to serve as Premier. The People’s Alliance for Democracy then increasingly campaigned against the Wongsawat Government, seizing Government House and Suvarnabhumi International Airport in order to force the Prime Minister to resign and then, quite separately from the PAD protests, the PPP was eventually dissolved by the Constitutional Court on December 2nd 2008. Wongsawat was then banned from politics for a minimum of five years. Shortly after, Abhisit Vejjajiva, leader of the Democrat Party, was voted by the Parliament to serve as Prime Minister and so formed a new coalition Government.

iii. Civil Society Organizations (CSOs)

During 1969 and 1971, Thailand had the opportunity to adopt a fully democratic system, but it proved unsatisfactory to the military leaders and resulted in the coup of 1971. Thailand then returned to rule by an oligarchy of military and bureaucratic leaders. Democratic forces and civic groups in society continued to grow, starting with the bloodshed on October 14th 1973, and this growth in the involvement of civic groups has continued up to the present time.

Civil society emerged during the 1960s (LoGerfo 1997: 116) and 1970s, when a number of civic groups were organized with a range of purposes, such as the Thailand Rural Reconstruction Movement (TRRM), which aimed at increasing relief for rural communities (Prasartset 1995: 99, in Phathrathananunth 2002: 1). The TRRM rejected the development strategies that focused on centralized economic expansion and searched for alternative methods to spread development and reconstruct the rural sector. The following decades witnessed CSOs established to mobilize people in campaigns against hydro-electric dam construction and other large government development projects. The emerging CSOs searched for alternative development models and policies, and criticized the Government. They questioned the top-down planning and modernization process, as well as the diffusion of large-scale western technology adopted by the Thai Government as a development model (Boonyarattanasoontorn and Chutima 1995: 41). The CSOs emphasized the concepts of ‘self-reliance’ and ‘people’s 85

participation’, as taken from the Russian and Chinese models. Community development activities were promoted, including small-scale income generation activities, and at the same time, people were educated and mobilized with ideas based on self-reliance and participation.

Phongpaichit and Baker describe the strategies the CSOs used to campaign against the mainstream development strategies, as follows:

“First, some NGOs attempted to open up alternative development paths. They promoted appropriate technology to replace capital-intensive inputs, mixed farming to replace export-oriented monoculture, community-based organizations to reduce reliance on the market. Second, some attempted to provide better social and environmental protection. They helped found local movements to resist the assaults on the natural environment by businesspersons and by government. They organized medical services, schools, and welfare services for the villages and slums. Third, they put pressure on government to change policies to protect the environment, to control industrial waste, to allocate forests for community, use rather than plantations, to improve labour legislation, to codify civic rights, to liberalize the media” (Phongpaichit and Baker 1996: 214-215)

The civic groups broadly argued that national development strategies that were top-down and focused on industrial and urban growth, led to an inequity of development (UNDP 2003: 28). Such groups criticized the high economic growth rate, which came at a considerable social and environmental cost, particularly in terms of the rural resources that were extracted to serve the urban population and industrial sectors. Large-scale projects were criticized for their relocation of people, their neglect of agriculture, and the widening of the gap between the rich and the poor.

The widespread criticism of the domination of bureaucratic elites in the policy- making process, led to an effort to encourage greater public participation in the process from the 1980s onwards. The fact that the Government recognized the role of CSOs in development activities, was evident in the policy of promoting local organizations in rural development initiatives (UNDP 2003: 32). Public demands for greater public participation in the policy process won some institutional change by the early 1990s, as CSOs started to gain access to policy making in the areas of health, education, poverty 86

eradication and community development (UNDP 2003: 32). Some senior technocrats became more and more concerned about the source and environmental costs of development theory, in particular the destruction of natural resources and the environment. In the drafting process of the Eighth NESD Plan (1997-2001) (UNDP 2003: 32), technocrats in the NESDB invited civil society to be a part of the process for the first time, a move which resulted in a shift in national development goals, from ‘a growth orientation to people-centred development’.

Over the last two decades, the number of CSOs, such as consumer protection groups, organizations campaigning for democracy and human rights, the assembly of the poor, environmentalists and community forestry groups, has expanded gradually, though no accurate data has been made available on the exact number of these groups. These groups actively publish a significant amount of information to the public for use in criticism, mainly in relation to Government policy, the corruption of government officials and the abuse of power, as well as organize campaigns against the policies that potentially affect people’s rights. In these cases, civic groups have often been invited to participate in the policy making process. However, their role and influence has varied, depending upon whether the Government has accepted their involvement or their ideas.

4.5 Conclusion

This chapter has attempted to provide a fundamental overview of the political, social and economic structure in Thailand. It has also described the emergence of a modern bureaucratic system, a structural power of bureaucracy, and the role of this institution as a key policy actor in the Thai policy-making process. This bureaucratic system has developed over a long period of time, and has played a prominent role in the political and policy system, one that has developed as a centralized administrative system, with a top-down policy-making structure. This central system of government has had overall authority in decision-making at all levels of policy-making. The agencies in the regions or local areas have followed guidelines formulated by the central agencies in the policy implementation process, but this top-down approach has been criticized for its inability to cope with local problems, for creating social inequity, and for contributing to natural resources degradation. 87

Chapter 5 Electricity Power Generation Industry and Policy in Thailand: Historical Overview and Institutional Structure

5.1 Introduction

Electricity is one of the key input requirements for socio-economic development. It contributes to a reduction in poverty by providing a key input into the activities which drive economic growth, and contributes to meeting basic human needs, including health improvement and education. Therefore, it is the major goal of governments in developing countries to produce an adequate amount of energy such as electricity, and to ensure security of supply at a reasonable price.

In Thailand, the electricity sector has a long history, and electricity has played a crucial role in its national development. The development of the sector has been held in the hands of a powerful national bureaucracy, as outlined in Chapter 4, one that has created its own policy framework and organizations responsible for developing electricity supply and distribution. The electricity sector and those people related to it have been investigated by a number of prominent scholars in Thailand, including Sutthijaree (1992), Sretthachau (2000), and Sukkumnoed and his colleagues (2006). Their research however, has not, as outlined in Chapter 2, focused on the role of institutional factors in determining the policy, structure and policies relating to the power sector and its policy process. This chapter fills this void by utilizing an historical approach in order to examine the role that institutional factors have had in shaping the electricity power generation sector and its policies.

It may be recalled from Chapter 2, that Historical Institutionalism as an analytical tool, was developed in response to the Group Theory of politics and structural-functionalism, in order to explain the nature of institutional development and its effects on policy. The central theme of Historical Institutionalism is the role of power 88

and interests (Lecours 2001: 53). The following section briefly summarizes the basic concepts of Historical Institutionalism, as they apply to the discussions in this chapter.

The institutional approach embraces the idea that power is at the core of politics and the historical development of institutions, particularly its role in structuring power relationships and determining policy. A central preoccupation of Historical Institutionalism is that institutional designs favour some groups at the expense of others, while paying particular attention to cross-national and historical variations. This factor is particularly important in the case of Thailand, where the authority of the bureaucratic elite has played a key role in setting policy and managing the policy process.

The significant and common elements of the research applied to Historical Institutionalism, and as presented in Chapter 2, include firstly, institutions; as formal or informal procedures, routines, norms and conventions embedded in the organizational structure of the state. Secondly, the Historical Institutionalism approach recognizes that political and policy development must be understood as a process that unfolds over time. Thirdly, historical institutionalists consider the emergence of institutions as a result of adopting certain norms of behaviour and organization which are of historical consequence (Kato 1996: 561, Lecours 2001: 53). As Hall and Taylor state, institutional design can be used to favour some groups and to distribute power in the polity (1996: 960-961). The analysis in this chapter examines the role these factors have played in shaping the electricity industry in Thailand. The question this chapter seeks to address, is whether the Historical Institutionalism approach, given the evidence presented from Thailand, can be explained using this theory.

I suggested in Chapter 2 that the Historical Institutionalism approach, as suggested by Hall (1986), Scott (1995), Kato (1996), and Pierson and Skocpol (n.d.: online), can provide the analytical tools needed to understand and examine electricity power generation policy in Thailand. To analyze the question posed above, this chapter is divided into six parts, including this as an introduction. The next part outlines the historical development of the electricity sector in Thailand, and provides details of major events during the nationalisation period, from 1969 to 1991. It analyzes the role that international organizations, and socio-economic and political factors had, in 89

determining policy-makers decisions that led to the creation of EGAT and a centralized industry policy-making and planning system. This is followed by an analysis of the changes made during the liberalization period that followed, from 1992 to the present day. The objective is to outline the factors that have determined the current industry framework, and the conflicts that have arisen from this. To accomplish this, I will focus on an analysis of the prescribed powers and authority of EGAT, as the key player in determining policy in this sector.

5.2 Historical Development of Electricity Supply Industry in Thailand

5.2.1 The Introduction of Electricity to Thailand

As Sutton states, a Historical Institutionalism approach requires a long-term historical study of institutional development and activity (2001: 34). It may be recalled from Chapter 4 that King Chulalongkorn centralized political power to keep the country independent from western colonialism and to secure his own authority. As part of his reforms, the traditional bureaucratic system was replaced by a modern bureaucratic system based on the British ministerial model. Western technologies such as railways, electricity and the telegraph were imported into Thailand, in order to modernize the country.

Electricity was first introduced to the US and Europe in the 1880s, and was soon introduced to Siam in 1884 by Field Marshal Chao Phraya Surasakdi Montri (Cherm Sang-Xuto). He purchased two electricity generators and accessories from Great Britain using his own finances. The Royal Palace was electrified for the first time on September 20th 1884, the King’s birthday, and this marked the establishment of Thailand’s first electricity utility. (EGAT 2004 (1): 7). This and subsequent developments are listed in Table 5.1. 90

Table 5.1 Chronology of Major Events in the Thai Electricity Sector Year Major Events 1884 Field Marshal Chao Phraya Surasakdi Montri introduces electricity to Siam 1897 The Siam Government grants concession rights to a private company, namely the Bangkok Electric Light Syndicate, to provide an electricity service in the Bangkok Metropolitan area. 1952 The Royal Irrigation Department (RID) proposes a plan to develop hydro-electric dams to the Government, and the Phibunsongkram Government approves the dam project and requests a loan from the World Bank 1953 The National Energy Authority (NEA) is established; responsible for planning and providing small utilities throughout the country 1957 (1) The Parliament approves the Yanhee Electricity Authority Act of 1957, creating the Yanhee Electricity Authority for the construction of the Yanhee Dam (2) Field Marshal Sarit Thanarat stages a coup (3) The Yanhee Electricity Authority (YEA) is established; responsible for the construction of Yanhee Hydropower Dam. The dam is planned to supply power to 36 provinces in the northern and central regions. 1958 The Metropolitan Electricity Authority (MEA) is established by merging the Bangkok Electrical Work and Electrical Divisions of the Department of Public Works. During the first stage, it is also allowed to generate electricity to service Bangkok Metropolitan, Nontha Buri and Samut Prakarn Provinces. 1960 (1) The Lignite Authority (LA) is founded to develop indigenous coal fuel sources, and to operate a lignite mine at Mae Moh District, Lampang Province. (2) The Provincial Electricity Authority (PEA) is created to reform and upgrade electrification in provincial areas. 1962 The Northeast Electricity Authority (NEEA) is created to construct Ubol Ratana Hydropower Dam and Num Pung Hydropower Dam in the north-eastern region. 1969 The Electricity Generating Authority of Thailand (EGAT) is established by merging the YEA, LA and NEEA. The agency is responsible for electrical power generation and transmission, and sells energy to the MEA and PEA. 1986 The Prem Tinasulanonda Government creates the National Energy Policy Council (NEPC) and the National Energy Policy Office (NEPO). The NEPC is a national committee for energy policy decision-making. The NEPO serves as NEPC secretariat and recommends energy policy and measures. 1992 (1) The National Energy Policy Council Act of 1992 is issued to legitimize NEPC decision-making and to upgrade the NEPO as a permanent authority. (2) The EGAT Act of 1968 is amended and the private sector allowed to develop electrical energy to sell to EGAT. 1999 The State Enterprise Corporatization Act of 1999 is issued as an administrative mechanism in the privatization of state enterprises. 2003 The Thaksin Shinawatra Government launches EGAT’s privatization 2006 In March, the Supreme Administrative Court rules that EGAT’s privatization is unlawful. Source: Complied from various sources such as EGAT 1995 and EGAT 2004 (1). 91

The generation of electricity to supply industry and the wider community, was initially undertaken by the Thai Government and later in 1897, this generation function was transferred to private companies, namely the Bangkok Electric Light Syndicate and Siam Electricity Co. Ltd. (EGAT 2004 (1): 18) with a contract to provide electricity services in the Bangkok metropolitan area. In 1912, a new state-run enterprise to supply electricity was created, when the Government founded the Electricity Division in the Department of Public Works, one that installed a power plant at Sam Sen District with a 25,000 KW capacity (EGAT 1994: 17). This was built to supply electricity for the construction and operation of a filtering plant, the Sam Sen Water Works, but it also distributed its surplus electricity to the public in the northern suburbs of Bangkok (EGAT 2004 (1): 10). As a result, a market containing a mixture of private and publicly owned electricity suppliers was created in the early days of the industry in Thailand.

5.2.2 Nationalisation of Electricity Supply Industry (1968-1991)

Historically, the provision of electricity has often been viewed as a national asset. Supplying electricity is a capital intensive activity, and electricity has been typically produced by vertically integrated utilities covering generation, transmission, distribution, as well as the retail sale of electricity (Asia Pacific Energy Research Centre 2000: 3), and in many cases, these public utilities have been state-owned monopolies (Byrne and Mun 2003: 50), often, “even in cases where the monopoly provider was private (as in the US, from the earliest days of the industry) the state still maintained a tight control over the industry through regulatory policies and measures”, because it is a natural monopoly and electricity generators can influence both the supply and the price to consumers (Asia Pacific Energy Research Centre 2000: 3).

Historically, it was assumed that a vertically-integrated, state monopoly enterprise would provide electricity service at the lowest cost, and with a high degree of security (Asia Pacific Energy Research Centre 2000: 4). A stable and secure supply of electricity to consumers was considered an essential component of the national infrastructure, and this led to the creation of vertically-integrated and state owned monopolies in developing countries, including in Thailand, as indicated in Figure 5.1. 92

Figure 5.1 Vertical Integration Monopoly Model

Source: Asia Pacific Energy Research Centre 2000: 32

In this model, even where a number of vertically-integrated monopoly organizations were created to generate or distribute electricity, each had their own separate franchised area of operation; usually mandated in law. This model developed as a logical way of dealing efficiently with a number of the unique characteristics of the electricity supply industry, at a time when rapid industrialisation required rapid growth in the supporting infrastructure. Furthermore, this model supported the investment required in public goods, and the extension of electrification and the distribution of power to rural communities (Asia Pacific Energy Research Centre 2000: 32).

From the 1950s, every country followed a similar model. In the Southeast Asia region, Thailand’s neighbouring countries, such as Indonesia, Malaysia and the Philippines, after they gained independence, all created nationally owned electricity utilities. In Indonesia, the National Electricity Power Company (PLN) was created in 1950, and monopolized the electricity market in the country by controlling transmission, generation and distribution facilities (Sulistiyanto and Xun 2004: 6). In Malaysia, the Central Electricity Board (CEB)1 was established in 1949, with the responsibility for

1 The Central Electricity Board (CEB) was renamed the National Electricity Board (NEB) in 1965. In 1982, the Perak River Hydro-Electric Company and Kinta Electric Distribution Company were 93

providing electricity to the whole of the Malaysian peninsula, while private companies, namely the Perak River Hydro Electric Company and Kinta Electric Distribution Company, supplied the State of Perak (Akhtar, Asuhaimi, Shaibon and Lo 1996: 29).

In the Philippines, unlike in Indonesia and Malaysia, a single National Power Corporation (NPC) was created in 1936, as a Government owned company with a mission to develop the electricity sector in the Philippines (Sharma, Madamba and Chan 2004: 1488). In addition, a Manila Electricity Railroad and Light Company (MERALCO), was established in 1903, and was made responsible for providing electricity in Manila and in central Luzon, and the two became the most important players in the electricity sector in the Philippines (Sulistiyanto and Xun 2004: 7).

In an effort to cope with electricity shortages in the post-war period, successive Thai Governments initiated a number of electricity development schemes and organizations, to manage and develop the electricity sector. The Phibunsongkram 2 Government created a National Energy Authority (NEA) in 1953, under the provisions of the National Energy Authority Act of B.E 2496 (1953), and this operated under the supervision of the Office of the Prime Minister. The NEA was initially assigned the task of developing hundreds of small utilities throughout the country (Greacen 2004: 128). Further, the Government was interested in developing a large dam to generate hydro- electricity, and sought financial support from multinational lending organizations, in order to develop the industry.

In 1952, the Royal Irrigation Department (RID) proposed a preliminary plan to the Phibunsongkram Government, to develop a large-scale hydro-electric dam, namely 3 the Yanhee Dam , in order to supply the nations increasing demands for electricity

(footnote continued) nationalized and private power generation in Malaysia ended (Akhtar, Asuhaimi, Shaibon and Lo 1996: 29). 2 The National Energy Authority (NEA) was founded by the National Energy Authority Act of B.E 2496 (1953), and worked under the supervision of the Office of Prime Minister. It was renamed the National Energy Administration (NEA) in 1971, and transferred to the Ministry of Science, Technology and Energy in 1979. In 1992, it was restructured and renamed the Department of Energy Development and Promotion (DEDP). In 2003, the department was renamed again to the Department of Alternative Energy Development and Efficiency (DEDE), under the Ministry of Energy. 3 The Yanhee Dam was renamed Bhumibol Dam in 1957, and was presented as a multi-purpose dam that was expected to generate 560,000 KW of electricity, to supply 36 provinces in the northern and central 94

(RID 1986: 386). Later, the Phibunsongkram Government approved the dam project and requested a loan form the World Bank (Chatikavanij 1994: 26). The Yanhee Electricity Authority Act was approved by Parliament in 1957 (Chatikavanij 1994: 30). The Yanhee Electricity Authority (YEA) was then created to be responsible for the construction of the Yanhee Dam and its management. This project was completed with the assistance of experts from the Bureau of Reclamation of the United States (US) Government. This marked the start of an increasingly assertive influence on the development of the industry, through the provision of technical advice and international finance.

During the early 1950s to the 1960s, Thai Governments under three military dictators: Field Marshal Pleak Phibunsongkram, Field Marshal Sarit Thanarat, and Field Marshal Thanom Kittikachorn, developed and coordinated the model of electrification adopted in Thailand, one which was increasingly incorporated into centralized planning (Palettu 2002: 22).

As stated in Chapter 4, when Thanarat staged a military coup in 1957, he served as a military dictator and Prime Minister, and when he assumed office, he announced the aim of his revolution as being national development, including economic, educational and administrative development. Advised by international agencies, particularly the World Bank and the US Government, he announced a series of economic policies addressed at investment promotion, private investment and an import-substitution industrialization programmeme (Chaloemtiarana 1979: 227, Palettu 2002: 22).

On the recommendation of the World Bank, Thanarat created new agencies, including a National Economic and Social Development Board (NESDB) as the state- run economic planning agency, and began the process of formally planning Thailand’s economic development. The First National Economic and Social Development Plan was

regions, as well as Bangkok and Thonburi (The RID 1986: 388). In addition, the dam was to provide water for agricultural areas in the central region, which was considered a contribution to national development. 95

officially implemented in 1961, as stated in Chapter 4. The major objectives of this plan conformed principally to the goals suggested by the World Bank, including creating the economic environment and conditions necessary to stimulate high economic growth (Jitsuchon 1994: 8). Resources were then diverted for the construction of infrastructure, and in particular the construction of a modern transport network and hydro-electric dams, to supply electricity to promote modernization and economic growth. Local people in northeast Thailand knew this rural infrastructure development programmeme by a Thai name: nam lai, fai sawang, taang dee (water flows, lights shine, good road) (Palettu 2002: 22).

The Thai Government accepted that electricity would make a major contribution to economic and social development, and in order to diversify and secure fuel sources for the expected new industries, in 1960 the Government created the Lignite Authority (LA) to develop indigenous fuel sources and operate a lignite mine at Mae Moh District in Lampang Province, in the north of Thailand. The Government also constructed a power station fuelled by lignite at Krabi basin in Krabi Province, in order to supply electricity to southern provinces. In 1962 another electricity authority, the Northeast Electricity Authority (NEEA), was created to construct Ubol Ratana Hydropower Dam and Num Pung Dam; to generate electricity for the north-eastern region.

The construction of Yanhee Dam was completed in 1964, and became Thailand’s biggest dam with a variety of purposes, such as the generation of 560,000 KW of electricity to supply 36 provinces in the northern and central regions, as well as to supply Bangkok and Thonburi (RID 1986: 388). The dam was also expected to provide water for agricultural production in the central region, something which would contribute significantly to national economic development. The two independent electricity utilities, the NEEA and LA, were expected to operate in cooperation with the YEA. Each authority was established under separate governing laws, laws that empowered each of them to be responsible for power generation, though they have since been criticised for being ‘independent’ state-owned enterprises, created upon the recommendation of the World Bank (Chatikavanij 1994: 29, in Greacen 2004: 130). The operation of these authorities was independent, as they lacked common service standards and unity in terms of types of power generation, electricity pricing, or 96

transmission systems. In addition, each authority had a low generation capacity and did not have the capacity to supply to each others distribution grids.

5.2.2.1 Driving Forces for the Nationalisation of Electrical Utilities

From the 1950s, many countries started to centralize control of their public utilities and Thailand was no exception to this. From the 1960s, the Government tried to change the structure of electricity power generating sector. Electricity was seen to be a key ingredient in economic development, and so the idea to consolidate and centralize the sector was an accepted agenda item within the Second National Economic and Social Development Plan. Under this Plan (1967-1971), the existing organizations involved in electricity generation were merged together to create a new Electricity Generating Authority of Thailand (EGAT). Palettu (2002: 22) suggests that the idea to consolidate the electrical power generation came from the World Bank. This is correct, but domestic factors also played a role, as I will outline later in this chapter.

The Influence of Multinational Lending Agencies

Palettu (2002: 22) argues that the idea to consolidate the electricity sector came from by the World Bank. It is accepted that the World Bank, the US Government and other multilateral financial agencies, provided financial support for the construction of a number of large hydropower dams and thermal electricity power plants in Thailand, and also influenced electricity policy development. These agencies provided capital with “low interest loans, long repayment times, and generous grace periods (initial periods for which no repayment is required)” (Palettu 2002: 22). To reduce the risk of the borrowing and to ensure that the agencies had enough revenue to pay them back, the agencies suggested the consolidation of the existing power utilities and the creation of a centralized, monopoly owned electricity authority.

The Government, headed by Phibunsongkram on his second term (1949-1957), did make a significant effort to develop the electricity sector and sought financial assistance from multinational lending agencies. The Phibunsongkram Government proposed the Kaeng Reing Dam Project to the World Bank and requested financial 97

support for its construction, but the project was not approved by the World Bank, due to ‘insufficient information’ being provided (Aphornsuvan and Vatiwutipong 2000: 120). Some authors suggest the World Bank did not respond to Phibunsongkram’s request, because the Government did not respond to the US’s advice to adjust its economic policy model from a nationalist state-controlled economy, to a capitalist, private sector focused economy (Aphornsuvan and Vatiwutipong 2000: 120). During the 1950s, Phibunsongkram did change his foreign policy and Thailand then became a US ally. Thailand sent both troops and rice to help in the Korean War.

In 1952, the World Bank approved a loan, recommended by the Food and Agricultural Organization (FAO) in Thailand, in order to set up a huge irrigation system (Chainat Dam) in the Chao Phraya River basin, the main export rice growing area (Aphornsuvan and Vatiwutipong 2000: 119). It is believed that the US Government played a crucial role in recommending that the World Bank approve this financial support to the Thai Government. The US Government also directly assisted the Thai Government in developing the ‘Plan and Electrical System in Thailand’ (Sutthijaree 1992: 128), as a master plan for future electricity development.

The Thai Government sought a range of ways to address the problem of a post- war electricity shortage. The Royal Irrigation Department (RID) proposed a plan to construct a new hydro-electric dam in order to supply the increasing demand for electricity at the time. It planned to take out a USD65 million loan from the World Bank (Chatikavanij 1994: 26). This request provided an opportunity for the World Bank to extend its role influencing the Thai Government in shaping the electricity sector. The World Bank approved a loan, on the condition that the Thai Government (i) create a new authority to be responsible for the dam’s operation and management, (ii) make sure that the Directors on the Board of the new authority were not politicians or those related to politicians; and, (iii) ensure that the new hydropower dam have its own revenue outside of Government, for supporting the management and operations of the system and for loan repayment (Chatikavanij 1994: 26-27). To meet these provisions, the Thai Government created the Yanhee Electricity Authority (YEA), to be the new organization in charge of the construction and administration of the Yanhee Dam. Thus, 98

the influence of the World Bank and the US Government can be clearly seen as central to the establishment of the monopoly in Thailand. The World Bank required, as part of its conditions, that the Thai Government create a “new, independent” agency, isolated from political intervention in order to avoid benefit seeking and corruption, as well as to guarantee the loan payments. The eventual and original organization structure of EGAT was influenced by the structure of the YEA (Tu 1993: 183).

Domestic Forces

Along with the influence of the World Bank over the Thai Governments shaping the electricity industry, the domestic bureaucratic elites also played a crucial role during this period. They accepted the conditions provided by the multinational lending agencies that funded Thailand’s infrastructure development projects, but worked to assert themselves over the electricity industry. They used the economic arguments that (i) a vertically-integrated, state-owned monopoly would deliver electricity at least cost, and with the greatest degree of security (Asia Pacific Energy Research Center 2000: 39), (ii) electricity is a strategic asset, and security of supply is vital during the industrialization process, and (iii) it made sense to believe that it was much more efficient to have electricity dispatched and delivered by a single command structure: through one organization (Asia Pacific Energy Research Center 2000: 53). These institutions embodied the centralization of control over the Thai industry.

At another level, there was also a strong acceptance by the Thai public that the Government ought to take full responsibility for providing electricity to the general population in Thailand. Thai policy-makers were also concerned that the installed capacity of the three existing electricity utilities could not meet electricity demand (Chatikavanij 1994), and so a new policy of nationalization and centralization of the power authorities, as well as modernization of the power generation system, would enable the authority to serve the growing demand for electricity (EGAT 1994: 35). These bureaucratic elites, as indicated in Chapter 4, preferred to adopt a centralized planning and administrative model through which they could extend their power to control the direction, implementation and budgets of the sector, and problems in relation to these issues reinforced their demands for control of the industry. My interviews with 99

4 a leading scholar studying Thailand’s public utility development policy, show that the centralization of the electricity sector in terms of planning, generation and transmission, served the interests of the controlling Thai elites. The centralized NESD Plan secured their interests and the national interests as well.

Before the announcement of the first NESD Plan in 1961, the existing Government power plants could only service the electricity needs of Bangkok and the other major cities. Power generation in the rural areas relied on the use of small-sized generators that operated only during the night, with few households having access to the service, and as Greacen notes, “by the early 1960s only two percent of Thai villages had electricity” (Greacen 2004: 127). The generation system varied in terms of its capacity to supply adequate, secure services, as “there were over 200 separate small cooperative, municipal or privately owned utilities” (Greacen 2004: 127). In order to address this problem, in 1954 the Government established the Provincial Electricity Organization 5 (PEO) , to standardize the power industry in rural areas (Palettu 2002: 22). The PEO was made responsible for the distribution of electricity in all parts of the country, except for the metropolitan areas.

Security was also important in the consolidation of the three existing public utilities. During that period, Thailand was under pressure due to the perceived threat of a communist insurgency in some parts of the country. The US Government suggested that an electricity supply would help to reduce the psychological isolation of local villagers (Palettu 2002: 22). US advisors also suggested that:

“The view has been advanced by some that the construction and operation of hydroelectric plants…is necessary in order to demonstrate the interest of the Government in the welfare of the people, particularly in the so- called “sensitive areas” where the very low income status of the population makes them susceptible to the propaganda of Asian Communism. Others believe that…the funds available can be put to better use by building transmission and rural distribution facilities to bring power from large, centrally located

4 Interviewee #C011 5 In 1960 the Provincial Electricity Organization (PEO) was renamed the Provincial Electricity Authority (PEA) 100

generation stations which are…less exposed to damage or destruction by subversive or energy action. The team endorses the latter option”. (USAID 1966, in Greacen 2004: 132)

The American advisors recommended an electricity infrastructure based on centralized power plants, because this system would be less sensitive to terrorism (Greacen 2004: 132).

In summary, it can be seen that the role and influence of international agencies, particularly the World Bank and US Government, was significant, but so were the values of the bureaucratic elite, in leading the consolidation of the three existing electric utilities into a national organization, namely EGAT (Chirarattananon and Nirukkanaporn 2006: 2522), which was to be responsible for electricity power generation and transmission throughout Thailand.

5.2.2.2 The Process of Consolidation of the Three Existing Public Utilities -

1969

The creation of EGAT in 1969 followed a Cabinet Resolution on April 26th 1966, approving a proposal by the Minister of Interior to separate the electricity industry into two functions, with generation and transmission in one function, and retail in the other. Under this proposal, the power generators, including the YEA, the LA and the NEEA, were to be moved to the Ministry of National Development, because this authority was responsible for electricity generation. The Minister of Interior also proposed that the authorities involved in electricity retailing, including the PEA and the MEA, should be moved to the Ministry of Interior (EGAT 1994: 31).

Following the Cabinet resolution, the Ministry of National Development drafted a bill to establish the Electricity Generating Authority of Thailand (EGAT), by merging the assets and operations of the YEA, LA and NEEA. On July 5th 1967, the EGAT bill was submitted to the Cabinet and on October 3rd 1968, the Cabinet approved the bill and submitted it to the Senate, which acted as the National Legislative Assembly. The Assembly approved the bill and then presented it to the King for his signature. On October 31st 1968, the EGAT bill was signed and became effective from May 1st 1969. 101

The Electricity Generating Authority of Thailand Act of B.E 2511 (1968), prescribed and created EGAT, and assigned its main responsibilities, which were:

“…to provide electricity…for the whole Kingdom by generating transmitting and selling the bulk energy to two distributing entities, namely the Metropolitan Electricity Authority (MEA) and the Provincial Electricity Authority (PEA), and other energy consumers as prescribed by the Royal Decree, and neighbouring countries. It also undertakes other business related to the production of electricity…contributing to EGAT’s operation…” (OSTC EGAT (n.d.): on line)

EGAT became a vertically-integrated monopoly: owned and directly controlled by the State. It controlled transmission and generation networks throughout Thailand, but left the Provincial Electricity Authority (PEA) and the Metropolitan Electricity Authority (MEA) to distribute electricity to consumers in the Bangkok area and in the provinces, respectively (IEA 1997: 270, Vikitset 1998: 2). These organizations remained unchanged in their areas of responsibility.

5.2.2.3 The Role of Legislation and Rules in Shaping the Structure of the

Electricity Supply Industry

During the nationalization period, the Thai electricity industry was divided into three major functions: generation, transmission and retail. According to the provisions of the EGAT Act of 1968, EGAT had the following objectives:

“-To generate, acquire, transmit and distribute electric power to electricity distribution authorities and other consumers (as directed by Royal Decree), and in some cases, to neighbouring countries -To undertake activities related to the production of electric power, including the development of energy sources from natural resources such as water, wind, natural heat, sunlight, oil, coal, natural gas etc., and -To carry out, individually or jointly with other bodies, the production and sale of lignite or lignite by-products” (EGAT 1987, in Tu 1993: 182-183) 102

The provisions of the EGAT Act of 1968 gave EGAT a monopoly role in electricity power generation and transmission. The retailing function was assigned to the PEA and MEA, in order to service households and industrial factories in the provincial and metropolitan areas respectively. The provisions of the EGAT Act of 1968 empowered EGAT to operate as a ‘self-regulator’, in order to prevent politicians’ intervention and corruption, as reinforced by the terms and conditions of the World Bank. This served to reinforce the authority of EGAT’s Board of Directors and executives when controlling EGAT’s policy-making and operational planning activities, and gave them control over power development projects.

The structure of EGAT was divided into a policy body and an administrative body. EGAT’s Board of Directors were the decision makers, and under the EGAT Act of 1968 Section 13, eleven Directors were to be appointed by the Thai Cabinet. The Directors eventually appointed were representatives from related government agencies, as well as other professionals, and scholars. The Board’s duties were as follows:

“…they shall be responsible for EGAT’s policy formulation and oversee EGAT’s administration, as well as setting up any regulation to facilitate EGAT’s administration” (EGAT Act of 1968: Section 18)

Most of the Directors on EGAT’s Board during the initial period were appointed from a list of credible people, or were distinguished scholars, in line with the World Bank recommendation to create EGAT as an independent organization and thus avoid political intervention and ‘rent seeking’ from politicians (Chatikavanij 1994: 67). The result was, as Chatikavanij asserts, that:

“…with this system, ministers and politicians could not disturb the EGAT Board. The Directors of the Board could not be discharged personally, except in case he or she was criticised on corruption issue, discredited or demised. When the cabinet wanted to discharge the Board, they had to discharge all Directors…” (Chatikavanij 1994: 67)

By the early 1970s, EGAT’s Board of Directors, and its executives, had acted to provide an electricity service that serviced Thailand’s national economic development 103

goal, one that required energy supplies to be extended. Kasame Chatikavanij, the first Governor of EGAT noted that:

“…the Board had perfect authority in decision making. They could approve a high investment power development project without forwarding it to request a re-approval from the Ministry of Finance or other ministries...because at that time, [the] electricity affair was an important issue that Thailand had never faced. Decision-making for a billion Baht power development project could be completed within five minutes in the Board meeting. Sometimes, the Board…approved projects costing ten billion Baht…” (Chatikavanij 1994: 67)

This approach helped to reduce the multiple-layers of bureaucratic procedure in Thailand’s normally bureaucratic system, and prevented political intervention. On the other hand, this system also had its weaknesses, as it gave significant power to a small elite, with a lack of transparency in the decision-making process (Chatikavanij 1994: 67-68). The body lacked legislative oversight, and this became a critical issue, because the lack of public participation in decision-making led, over time, to protests against the decisions made.

6 Apart from its monopoly power over policy, as a scholar from Chiang Mai University interviewed for this study points out, “…the fundamental power structure within the EGAT was designed in a way that places most of the administrative power in the hands of the Governor”. The power of the Governor was determined by the provisions of the EGAT Act of 1968, Sections 21 and 22, which give power to EGAT’s Governor to implement policies and measures prescribed by the Board of Directors. As a result, as the interviewee suggests “the Directors on EGAT’s Board of Directors itself lack [the] authority to set the agenda and submit policy proposals for the Board’s 7 consideration” . This authority lies in the hands of the EGAT Governor. In practice, the EGAT Board of Directors was structured in such a way that “helped facilitate or coordinate the EGAT policy, rather than balancing the power of the Governor 8 in…policy-making and administration” .

6 Interviewee #C011 7 Interviewees #C011 and C014 8 Interviewee #C011 104

These conclusions reinforce claims by Byrne and Mun (2003: 50-51), who state that all the important decisions regarding electricity supplies were made by a closed circle of technical experts, government bureaucrats and large corporate clients in Thailand. The governance structure, coupled with the monopoly status of the utilities, resulted in the electricity industry developing into a powerful organization with its own political and economic agenda. EGAT is a good example. The importance of electricity supplies to national economic development, allowed EGAT to extend its influence over other government agencies, as well as political institutions. EGAT’s priorities with respect to operations and power generation, focused on the maintenance of water levels in the dams for generation purposes, while people downstream needed that same water 9 for agriculture. As one interviewee stated, “the Royal Irrigation Department (RID) could not bargain with EGAT in water resource management. When the issue was raised to the Cabinet, it seemed to support EGAT’s operation, rather than the RID”.

Ryder, in his study of EGAT’s operations, states that its planning and decision- making process was technically oriented and highly centralized (Ryder 1997). Planning, design work and decision-making was made in Bangkok and was relatively autonomous from the regular bureaucratic process. Ryder (1997) also states that by the time a power development project was presented to the Cabinet for endorsement, EGAT had often already designed the power plant and negotiated with the international lending agencies, such as the World Bank, for the finance needed to develop it. When EGAT needed to expropriate land or private assets, or relocate local residents, it could simply request for the Cabinet to issue the required legal decree.

9 Interviewee #C011 105

5.2.3 Liberalization Electrical Supply Industry Period (1992 to the Present)

5.2.3.1 Driving Forces behind the Liberalization of Electricity

Since the early 1970s, Thailand and other countries in the Asia-Pacific region have faced increasing globalization, and this has accelerated since the early 1990s. According to Rondinelli and Heffron (2007: 1) globalization can be broadly understood as “the movement toward greater interaction, integration, and interdependence among people and organizations across national borders”. Globalization is often understood, simply in economic terms, as the increase in international trade and investment; however, the economic dimension is only one manifestation of greater cross-border interaction, one that also has important political, technological and social aspects. The Thai Government and the private sector have recognized the emerging opportunities which accompany the rapid globalization in investment and international trade, adopting an export-oriented development policy (Rondinelli 2007: 39). The Thai Government’s economic policy, one focused on export promotion, manifested itself in the Third NESD Plan (1972-1976) (Manakit 1998: 89). The Thai Government therefore had to invest in providing infrastructure to support this strategy, such as in electricity, energy and transportation infrastructure.

Since the early 1990s, a number of important changes have taken in electricity markets across many countries, and efforts to improve economic efficiency have been a strong driver (Asia Pacific Energy Research Centre 2000: 27). Micro-economic reforms were introduced in many developed countries in the early 1980s, in order to address increased costs and balance of payments problems caused by the global oil crises. Many developing countries also faced the need for infrastructure and other investment, but with limited state financial resources available to meet this need (Asia Pacific Energy Research Centre 2000: 27). They therefore sought financial assistance from international lending agencies, including the World Bank and the International Monetary Fund (IMF), organizations that also faced financial constraints. The international financial institutions called for deregulation, in order to create free 106

competitive markets, and for new measures by government agencies to deliver basic services. These ideologies brought reform to government agencies and the restructuring of public utilities to several countries in the 1990s (Asia Pacific Energy Research Centre 2000: 27).

From the early 1990s, a new set of institutional reforms, including the ‘unbundling’ of large integrated utilities, the privatization of ownership and the introduction of competition into the generation sector, began to be promoted as a global solution to the development and cost problems of the electricity industry (Byrne and Mun 2003: 49). Advocates maintained that governing the electricity industry according to market dynamics, rather than socio-political considerations, would bring greater operational efficiency (Byrne and Mun 2003: 49).

Many factors have contributed to power sector reform over the long-run in Thailand. Scarcity of capital, at least for Thailand, was particularly significant early-on. Many developing countries, including Thailand, financed their state-owned public utilities and supplemented their capital requirements, by accessing international finance institution loans (Emerging Market Group 2004: 2). The electricity industries in many developing countries also experienced problems, such as high levels of technical losses, a lack of cost recovery through pricing strategies, poor management, high levels of corruption, non-payments for services, and mounting debt. The solution to these problems was seen by many, to be the replacement of public management by private management (Emerging Market Group 2004: 2).

Coteh states that electricity industry reform has become a common driver in the electricity sector in many countries, and the pace of change has increased rapidly. These reforms have normally involved restructuring and privatization. The main objective for these reforms, is to improve the efficiency, of the industry. The causes of reforms have varied across countries, as shown in Box 5.1. 107

Box 5.1: The Causes of Energy Industry Reform

• Poor performance of state-owned and state-run power utilities in terms of an unreliable supply and inadequate expansion of access to electricity services. • Inability of the state to finance the building of new capacities and maintenance. • The need to remove subsidies to the sector for other pressing public issues, and • The need for the state to raise immediate revenue through the sale of assets Source: from the Coteh, sector. 2003: 1

Coteh (2003: 1) asserts that there are many measures which can be used to reform the electricity industry, but that generally there are five key dimensions of reform, including:

“…commercialization, privatization, unbundling, wholesale competition and retail competition. The first two deal with changes in ownership, and the last three concern structural changes. Commercialization and corporatization are two ways in which a state’s heavy involvement can be minimized. Commercialization gives greater autonomy for a public enterprise in terms of budget management, setting of a tariff and labour employment. This is a behavioural change rather than organization or ownership. Corporatization is the formal and legal relinquish of control and management, but still allows the state to set policy objectives, the establishment of a regulatory structures to oversee pricing and investment. Privatization is the complete change of ownership and is the deliberate sale by a government of state-owned enterprises (SOEs) or public assets to the private sector. Liberalization, basically, involves the adoption of a free market model to promote competition through the participation of the private sector in the economy, retaining only a subsidiary role for the state” (Coteh 2003: 1-2)

A large number of developing and developed countries initiated electricity sector reforms in the 1990s, reforms that addressed a new market reform focus. According to Bacon and Besant-Jones (2001: 2) and Coteh (2003: 1), many developing countries, particularly in Asia, the Middle East and Africa, started to reform their power sectors by changing an existing market structure dominated by a single state-owned national power utility, one with a legally endowed monopoly and a vertically integrated supply chain encompassing power generation, transmission, distribution and customer services as listed in Table 5.2 and Box 5.2 below. The rationale for these re-structures was to minimise the costs of coordination between these functions, and to encourage the 108

financing of the development of new power systems in these countries, as shown in Box 5.2.

Box 5.2: A Full-Scale Electricity Sector Reform

A full-scale electricity sector reform programme consists of the following

elements: • Obliging the enterprise to operate according to commercial principles • Introducing competition in order to improve sector performance in terms of efficiency, customer responsiveness, innovation and viability • Restructuring of the electric power supply chain to enable the introduction of competition • Privatization of the unbundled electricity generators and distributors under dispersed ownership • Development of economic regulation of the power market that is applied Source: Bacon and Besant-Jones, 2001 in Coteh, 2003: 2 transparently by a completely autonomous agency, and • Giving up o f the state’s role as operator and investor, with divestiture of state owners hip in generation and distribution.

In Southeast Asia, the Malaysian Government corporatized the National Electricity Board (NEB) in 1990, and fully privatized it through offering shares to the public and subsequently listing the utility on the Kuala Lumpur Stock Exchange in 1992 (Akhatar, Asuhaimi, Shaibon and Lo 1996: 29). Furthermore, the Malaysian Government decided to increase the country’s electric power generating capacity and increase competition in the electricity market, by allowing private Independent Power Producers (IPPs) to enter the electricity market in 1994 (Smith 2003: 277). In Indonesia, the National Electricity Power Company (PLN) was transformed from a state-enterprise to a limited liability enterprise (Sulistiyanto and Xun 2004: 11). 109

Table 5.2 Date of Significant Restructuring Initiatives taken in APEC economies

Year Country Institutional Framework

1982 Chile Electricity Power Service Law

1987 Philippines Executive Order #215

1987 New Zealand State-owned Enterprises Act

1990 Malaysia Corporatization of National Electricity Board

1992 Mexico Reform of Electricity Public Services Law

1992 US Energy Policy Act

1992 Thailand Royal Act of Private Participation in State Affairs

1992 Russia Presidential Decrees # 922, 923 and 1334

1992 Indonesia Presidential Decree #37

1993 Australia Industry Commission Report

1995 Singapore Decision to privatize Public Utility Boards

1995 Canada Alberta Electric Utilities Act

1995 Japan Amendment of Electricity Utilities Industry Law

1996 US California Electric Restructuring decision

1997 South Korea Establishment of the Committee for Electricity Industry Restructuring

Source: Adapted from Asia Pacific Energy Research Centre 2000: 19

The electricity sector in Thailand began to undergo a process of restructuring in 1992, when the monopolistic position of EGAT in electricity generation was first eroded; the private sector was allowed and encouraged to develop electric power generation capacity. The Thai public utilities, including EGAT, PEA and MEA, started a process of transition from publicly owned service utilities to autonomous industrial and business groups, a situation that continues today (IEA 1997: 259). 110

5.2.3.2 The Influence of Liberalization Ideology and Loan Requirements from Multinational Lending Organizations and Domestic Growth

During the time that developing countries, including Thailand, adopted the vertical integrated monopoly model during the 1950s, one which allowed EGAT to monopolize the generation and transmission functions, the major deficiencies of the vertically monopolized structure, which included a lack of transparency, poor investment decision-making, ‘gold-plating’ of infrastructure components and political interference, were not fully understood (Asia Pacific Energy Research Centre 2000: 32). These were problems the international agencies tried to control through the introduction of conditional lending procedures. Thai policy makers used domestic factors to adopt such conditions, such as EGAT’s financial difficulties and the need to meet the demand for due to economic expansion. In other words, this particular phase of industrialisation required additional electricity supplies, and the access the capital therefore required. The Asia Pacific Energy Research Centre indicated that countries had to abide by its rules, as listed in Box 5.3 below, in order to meet the requirements for receiving financial assistance (Asia Pacific Energy Research Centre 2000: 30):

Box 5.3 IMF’s Financial Assistance Requirements

International Monetary Fund Lending Policy-Energy Sector. The requirements are: - Corporate restructuring and privatization of utilities - Financial restructuring of utilities and tariff reform - Establishment of independent regulator - Establishment of competitive power market - Integration of transmission grids and sub regional power trade Source: Asia Pacific Energy Research Centre, 2000: 30

Praditsilpa (2003: 71-72) indicates that the agreement that Thailand signed to be a member of the World Trade Organization (WTO), led to the creation of a free market in the industrial and service sectors. This provision had an impact on Thailand’s state- owned enterprises, when a Cabinet resolution on April 1st 1997 proposed to support the private sector competing with state-owned enterprises in providing good and services (Praditsilpa 2003: 71-72). Furthermore, the requirements of the multinational funding 111

agencies became a major force for the reform of the Thai electricity industry in the 1990s. As Rondinelli and Priebjrivat (2000: 631) note:

“In 1993 the World Bank recommended that Thailand as part of its overall structural adjustment policies, sell 24 SOEs-including Thai Airways, the Electricity Generating Authority of Thailand (EGAT), the Thailand Tobacco Monopoly (TTM), the Petroleum Authority of Thailand (PTT), and the Telephone Organization of Thailand (TOT); that were involved in manufacturing or commercial activities”

However, attempts to sell these state-owned enterprises were not realized, because internal political influence prevented the privatization of most state-owned enterprises in Thailand.

Economic Expansion and Financial Constraints

Thailand also experienced strong economic growth through the 1980s and 1990s. Between 1988 and 1990, the growth in Thai GDP was set by the NESDB as nineteen percent per annum (EGAT 1994: 102, Limmeechokchai and Chungpaibulpatana 1999: 48), as shown in Table 5.3. Rapid GDP growth increased the demand for infrastructure such as ports, transportation, communications and electricity, in order to enable the growth to continue. In order to build generation and transmission capacity to meet the demand, EGAT expanded its work force and many power plants were constructed and the capacity of existing power plants expanded throughout this period. According to Nunthavorakarn (2002: 66), “within ten years, i.e., from 1987 to 1997, the total generating capacity of EGAT increased from 6985 MW per annum to 17,805 MW per annum, or by about ten percent every year.” Electricity consumption rapidly increased after 1985, because of the high economic growth rate increasing industrial and domestic consumption (Limmeechokchai and Chungpaibulpatana 1999: 48). From 1985 to 1995, total electricity consumption increased by an average annual rate of 13.5 percent, which was greater than the rate of GDP Growth, at 8.5 percent per annum, as shown in Table 5.3. 112

Table 5.3: GDP and Electricity Consumption in Thailand Year GDP Electricity Consumption Million Baht % change GWh % change 1985 1,191,255 4.65 20,032 7.86 1986 1,257,177 5.53 22,034 9.99 1987 1,376,847 9.52 24,894 12.98 1988 1,559,804 13.29 28,253 13.49 1989 1,749,952 12.19 32,834 16.21 1990 1,945,372 11.17 38,342 16.78 1991 2,111,861 8.56 43,398 13.19 1992 2,285,865 8.24 49,304 13.61 1993 2,481,278 8.55 56,279 14.15 1994 2,702,078 8.90 62,510 11.07 1995 2,941,183 8.85 71,225 13.94 1996 3,135,301 6.60 77,354 8.61

Source: Limmeechokchai and Chungpaibulpatana 1999: 49

The demand for additional generating capacity, as well as the need to upgrade existing distribution and transmission networks, placed a large financial and organizational burden on the rapidly industrializing economy. By the 1990s, EGAT required a large amount of capital: about 50,000 million Baht per annum, to construct new power plants (EGAT 1994: 102). The major sources of EGAT’s loans were from foreign private bank loans, or from the lending of international monetary institutions such as the World Bank, the Asian Development Bank (ADB), and governments of countries willing to offer loans (NEPO 2000 (1): 7). In the early stages of development, the World Bank and ADB were the major loan sources. However, these official institutional sources of loans were insufficient (Emerging Market Group 2004: 2) and the Government adopted liberalization in 2000, as mentioned in 5.3.1, in order to access new private sources of investment. The Government sought to reduce its loan liabilities and its level of debt, and recognized problems with the EGAT loans liability, its high debt levels, and the impact of this on its credit rating, when it noted in 2000 that:

“The fact that electricity tariffs are regulated by the government together with the three utilities’ (EGAT, MEA, and PEA) duties to procure adequate 113

supply to meet domestic power demand, has caused an increase in total debt of the utilities pursuant to the continuous growth of the generation capacity. Every government has recognized the burden of the total state-enterprise liabilities, which have rapidly been increasing and which have posed difficulties for the government, especially during the past decade in which the growth rate of power demand was quite high” (NEPO 2000a: 8).

The problems of managing debt and attracting new capital to the industry had been addressed before. In 1989, the Choonhavan Government had attempted to attract private capital and address the above problem in the electricity sector, by initiating a policy on privatizing government-owned assets, and encouraging independent power producers (IPPs) into the power supply industry, under attractive conditions. However, that attempt to launch EGAT’s privatization faced strong opposition. Choonhavan, to force through the decision, dismissed nine out of eleven of EGAT’s Board of Directors, and attempted to appoint a new Board favorable to the privatization; however, this failed as a result of opposition from EGAT’s employees (Smith 2003: 279).

The strain of raising the capital needed for EGAT’s expansion following Choonhavan’s attempt at a solution, led to a call for the privatization of state utilities to be introduced again in 1991 (Chirarattananon and Nirukkanaporn 2006: 2523), and changes began to appear during the Government of Prime Minister Anand Panyarachun in 1992. A Cabinet Resolution on September 12th 1992 approved a framework for EGAT’s privatization during the period 1992 to 1996, which was aimed at developing EGAT as a public company (EGAT 1994: 102). NEPO was assigned the task of formulating policy for the restructuring and privatization of the electricity supply industry, to encourage competition and private sector participation. The Government amended the Electricity Generating Authority of Thailand Act, allowing private power producers to produce and sell electricity on the power grid, with the outsourcing policy agreeing to purchase electricity from both Small Power Producer (SPPs) and Independent Power Producers (IPPs). The aim of this change was not to launch the privatization of the the industry, but to increase participation of the private sector. 114

5.2.4 The Unfinished EGAT Privatization

The previous sections have revealed the results of the policy of diversification of the fuels used for electricity generation, and the entry of new investors and generators into the industry after 1992. EGAT was linked to the new generators, and was allowed to create new subsidiaries. Meanwhile, international pressure continued to be imposed on Thailand’s lenders, for the full privatization of EGAT.

The Chatichai Choonhavan Government introduced a policy for EGAT’s privatization, and this policy was continued by the succeeding governments of Anand Panyarachun, Chuan Leekpai and Thaksin Shinawatra. However, only the Panyarachun Government achieved partial privatization of EGAT, and created some competition in the electricity markets in Thailand. In turns of the increasing supply of electricity and diversifying the types of generation taking place, some gains were made, especially through the increased use of natural gas. Thailand experienced a period of economic difficulty in 1997 (Asia Pacific Energy Research Centre 2000: 168). The Thai currency (Baht) was devalued and floated, electricity demand decreased substantially, and Thailand entered into a new financial assistance programme of the International Monetary Fund (IMF), in order to address its economic problems.

In the third Letter of Intent, when seeking to gain IMF support, the Leekpai Government stated its intention as being:

“In the energy sector we will accelerate privatization and competition as part of our broader strategy of encouraging the entry of independent private generators to enhance competition. EGAT has initiated sales of its stakes in Electricity Generating (Public) Co. Limited and Powergen 2 (Ratchaburi power plant) during 1998. Over the longer term, we intend to split EGAT into separate generation and transmission companies, which themselves will eventually be privatized” (NEPO 1999: 8).

As Nunthavorakarn (2002: 71) notes, after the economic crisis, the Thai Government under Chuan Leekpai, decided to restructure the electricity system and state enterprises according to this Letter of Intent presented to the IMF. To achieve this goal, the Thai Government adjusted the Eighth NESD Plan to accelerate the privatization of state enterprises (Praditsilpa 2003: 80). The Government also approved 115

a ‘Privatization Master Plan (PMP)’ in September 1998 (Leeprechanon et al. 2000: 715). This plan indicated that all aspects of infrastructure, including communication, transportation, water supply and energy supply infrastructure, should be re-structured.

EPPO proposed a new electricity supply industry structure in 1998 (NEPO 1999). The restructuring of the power industry proposed by EPPO was based on a ‘power pool model’, that similar to the system operating in the United Kingdom. As stated at the time, under the proposed structure, “consumers have choices to buy power either from the regulated regional retailers (SupplyCo) or competitive retailers (RetailerCos), by using the distributing facilities of the Regulated Electricity Delivery Company (REDCo)” (NEPO 1999: 16-34). Under the power pool model proposed by EPPO, EGAT would be divided up over three stages. The first stage was to begin in 1999 and the last stage would be reached with the creation of a fully competitive market for electricity in 2003 (NEPO 1999: 22). In the last stage, it was proposed that a wholesale spot market would be established between generation entities and retail suppliers.

The Leekpai Government also urged the enactment of a new State Enterprise Corporatization Act B.E. 2542 (1999), which would be used as an administrative mechanism for the privatization of state enterprises (Praditsil 2003: 83). It was thought a Royal Decree would be sufficient to amend each Act governing each state enterprise, without the approval of the legislature. This action had the effect of greatly limiting the oversight role of the legislative body and preventing the intervention of a parliamentary process in considering and formulating electricity reform and privatization policy (Sukkumnoed et al. 2006: 48). The policy did not find support from EGAT and other industry participants, especially after the lessons of the California power crisis became clear (Chirarattananon and Nirukkanaporn 2006: 2526). EGAT and its associates, including the EGAT Employees Union (EGAT EU), and CSOs (Sukkumnoed et al. 2006: 3) expressed their concerns in terms of:

“…price volatility, system reliability, and adequate and timely investment in power generation amidst growing power demand, exercise of market power, and the complexity due to the physical nature of the power system”. Other important issues raised include energy security, social equity 116

and [the] need to subsidize rural and poor consumers” (Chirarattananon and Nirukkanaporn 2006: 2526)

As a result, the Government ordered EPPO to revise its proposal and the electricity sector reform was not realized during the Leekpai Government, whose term ended in 2001.

The electricity sector restructuring approach changed significantly again after the landslide election of Prime Minister Thaksin Shinawatra in 2001, who initiated the idea of changing state enterprises into public companies and selling their shares on the stock market (Praditsilpa 2003: 99). The strategy was designed (i) to stimulate investment in the stock market, (ii) to maintain the monopoly power of the electricity companies, and (iii) to use the profits as capital for investment in various countries in the region, according to the idea of creating Thailand as a big business (like Thaksin’s own), and as a ‘National Champion’ or ‘private monopoly’. The previous electricity sector-restructuring plan was first delayed, and finally cancelled in March 2006.

Again, as in the early 1990s, the plan for EGAT’s privatization faced strong opposition from the EGAT EU, leading scholars, as well as the Senate Committee, who argued that EGAT as a state-owned enterprise had a social obligation to protect the interest of stakeholders in the society (The Sub-committee on Study and Analysis of EGAT’s Privatization, Senate 2000: 19). Scholars, including Priebjrivat, have argued that the policy represented corruption by Shinawatra and his Cabinet as they tried to enrich themselves (Priebjrivat 2006: 5). Anti-EGAT privatization groups emerged and claimed “the restructuring was imposed by the IMF and it won’t benefit the general public” (Sulistiyanto and Xun 2004: 15). The opposition was successful and the Shinawatra Government officially cancelled the policy of breaking up EGAT, and the focus for change then shifted to issues around the proposed listing of EGAT on the Stock Exchange of Thailand (SET). 117

Table 5.4 Chronology of the Major Events in EGAT’s Privatization

Year Major events 1989 Choonhavan Government initiates a policy to launch EGAT’s privatization; however, the policy is cancelled due to strong opposition from EGAT employees’ union. 1992 Panyarachun Government launches EGAT’s partial privatization, and creates a competitive market in the energy industry. The EGAT Act of 1992 is amended, in order to promote private sector participation in electricity generation. 1997 Thailand faces a financial crisis. Leekpai Government requests financial support from the IMF. 1998 The Privatization Master Plan (PMP) is drafted by NEPO. According to this plan, EGAT is to be privatized and the Government is to establish a power pool. 1999 The State Enterprise Corporatization Act of B.E 2542 (1999) is enacted. 2000 EGAT’s privatization is delayed because of strong protests from EGAT employees’ union. 2001 (1) Thai Rak Thai Party wins the general election, and Thaksin Shinawatra is appointed Prime Minister. (2) The Petroleum Authority of Thailand (PTT) is privatized. 2002 The Ministry of Energy (MOEN) is created and NEPO is renamed as EPPO. EGAT and EPPO are transferred to report directly to MOEN. 2003 (1) EPPO’s power pool model is rejected by the Shinawatra Government. The BCG is commissioned to conduct a study of Thailand’s electricity power sector reform. (2) The Government announces plans for EGAT’s privatization; however, the initiative faces strong opposition. 2004 In March, the Government announces that EGAT’s privatization would be delayed. 2005 In February, the Thai Rak Thai party wins a landslide victory in the general election. Thaksin Shinawatra is re-appointed to serve his second term as Prime Minister. EGAT’s privatization plan is revised. In June, EGAT is changed to EGAT PLC. EGAT employees’ union and civil society groups (CSOs) demonstrate against EGAT’s privatization. In November, CSOs and the EGAT employees’ union submit a petition to the Administrative Court to suspend the listing of EGAT PLC on the Stock Exchange.

2006 In March, the Supreme Administrative Court rules against the EGAT privatization, citing the process as unlawful

In June 2005, EGAT was changed to become the EGAT Public Limited Company (EGAT PLC), and was scheduled to be listed on the SET in November 2005. CSOs such as the Confederation of Consumer Organizations (CCOs) and some EGAT EU members, submitted a petition to the Supreme Administrative Court on November 8th 2005, before EGAT PLC was listed on the SET. They asked the court to suspend the 118

selling of EGAT’s shares, because the privatization process was unlawful and in contradiction with Thailand’s Constitution of 1997, in particular Sections 29, 35, 48 and 50 (Krungthep Turakij November 8th 2005: online). Furthermore, it was clear that the process had been managed with inadequate public participation (Krungthep Turakij November 8th 2005: online). On March 23rd 2006, the court ruled against the privatization of EGAT PLC, citing conflicts of interest, public hearing irregularities, and EGAT’s continued right to expropriate public land as the reasons (Manager, November 7th 2005: online). This process ended the Shinawatra Government’s initiative to privatize EGAT, and it returned back to becoming a state-owned enterprise, albeit in a new corporate form. 119

Table 5.5 Chronology of Major Events in the Political Economy and the Electricity Supply Industry – Thailand Year Political Economic Electricity Supply Industry Major Policy Actors 1957 Field Marshal Sarit stages The World Bank sends a YEA, NEEA, LA YEA, NEEA, and LA 1958 military coup and task force to Thailand, 1959 Thailand experiences and recommends 1960 a period of military economic improvement 1961 dictatorship The First NESD Plan is 1962 officially declared 1963 Sarit dies and Field 1964 Marshal Thanom 1965 succeeds him into power. 1966 Thailand remains under 1967 military control Second NESD Plan 1968 launched EGAT Act of 1968 is approved. 1969 EGAT established EGAT holds a 1970 EGAT allowed to control the entire monopoly over both 1971 generation and transmission electricity generation 1972 Third NESD Plan functions. and transmission. 1973 Student uprising/full launched 1974 democracy NESDB reviews 1975 EGAT’s investment 1976 Military dictatorship plan. 1977 Fourth NESD Plan 1978 launched 1979 Semi-democracy 1980 1981 1982 Fifth NESD Plan 1983 launched 1984 1985 120

Table 5.5 Chronology of Major Event of Political Economy and Electricity Supply Industry (Continues)

Year Political condition Economic condition Electricity Supply Industry Major Policy Actors 1986 1987 Sixth NESD Plan launched Choonhavan Government launches 1988 EGAT’s privatization 1989 Full democracy 1990 1991 1992 Interim government/ Seventh NESD Plan launched NEPC Act of 1992 creates NEPC as -NEPC, NEPO (EPPO) 1993 Full democracy a national council for energy policy act as policy 1994 formulation. formulation and 1995 regulator bodies 1996 EGAT Act of 1968, amended 1992, -EGAT, IPPs and SPPs 1997 Eighth NESD Plan launched. allows private sector participation act as power 1998 Thailand’s financial crisis in electricity generation. generators. EGAT 1999 controls entire 2000 EPPO proposes power pool model. transmission function. 2001 2002 Ninth NESD Plan launched 2003 Thaksin initiates EGAT’s 2004 privatization. 2005 The interim ERC is established -NEPC and EPPO act 2006 Military coup and as policy formulation bodies. interim government -ERC acts as regulator. -EGAT, IPPs, and SPPs act as power generators. -EGAT retains monopoly in transmission. 121

5.3 Conclusion

In this chapter, I set out to identify the driving forces behind the setting of development priorities, the institutional design of the electricity industry, and to outline the policy development process, as well as the policy direction in Thailand. My research also revealed the institutions, including laws and regulations that the Thai Government employed to establish Thailand’s electricity supply industry. This chapter has found that there were two major driving forces, classified into international influences and domestic conditions, which led to the political bureaucratic elites pursuing the nationalization of the electricity sector in 1968, and then reverse it with the liberalization of the sector after 1992. In terms of domestic forces, economic development conditions and political factors played an important part in the adoption of a policy to consolidate the electricity utilities into a single authority. The liberalization ideology pushed by the World Bank in the 1980s, together with a financial shortfall among the multinational lending agencies, constrained EGAT’s expansion and influenced policy direction. These factors, coinciding with growth in the economy, required a greater amount of electricity infrastructure to be developed, and also for the private sector to be encouraged to participate in power generation, and to sell its output to EGAT for the first time.

The institutional developments in 1968, as well as the institutional changes in 1992, both occurred when Thai politics was dominated by the military. In 1968, a military Government, led by Field Marshal Kittikachorn, launched a policy to centralize the electricity generation industry into the hands of EGAT. During the nationalization period, EGAT completely controlled the electricity generation industry, through laws that reinforced the policy role of its Board of Directors and top executives, a board which became a ‘self-regulating’ body, with significant powers in policy formulation and implementation. In 1992, the influence of both international and domestic forces led to an institutional change in Thailand’s electricity industry. A new policy actor, the EPPO, emerged and extended its role in launching the competitive market in the electricity industry. This policy led to the re-structuring of the industry and established a semi-competitive market in electricity generation, one that private sector actors could participate in, in the form of IPPs and SPPs. However, 122 the new regime maintained a centralized structure and style in terms of policy-making, with EGAT and EPPO both playing a key role, and this left few chances for the CSOs to participate in the policy-making process. 123

Chapter 6 Thailand’s Electricity Supply Industry: Structure and Policy Direction

The previous chapter examined the historical development of Thailand’s electricity supply industry, from its introduction into Thailand up to the present time. Chapter 5 outlined a number of factors that have contributed to the institutionalization of Thailand’s electricity supply industry, including international forces such as the conditions applied by international lending institutions, as well as domestic forces such as socio-economic and political factors. These factors have constrained the political institutions to create EGAT as a state monopoly enterprise, one which has played a key role in the electricity supply industry.

This chapter will examine the structure of Thailand’s electricity supply industry, from the 1990s onwards. It also examines the policy objectives and policy-making processes within the energy and electricity industries, in order to address the research question in this dissertation. The chapter is divided into part three parts that will outline (i) the current structure of Thailand’s electricity industry, (ii) its electricity generation policy and (iii) the policy formulation process.

As outlined in Chapters 4 and 5, successive governments since the 1980s have attempted to privatize Thai state enterprises, including the Shinawatra Government, which tried to reduce the role and influence of the technocrats and bureaucrats in the political arena, and enrich big business interests in Thailand, leading to the launch of a process of administrative reform. To achieve this, the Ministry of Energy (MOEN) was established in 2002, and NEPO was renamed the Energy Policy and Planning Office (EPPO) and downgraded to be just one of several agencies under the Permanent- Secretary’s Office of the MOEN (Sukkumnoed et al. 2006: 50). The other state-owned enterprises relating to energy affairs including EGAT, MEA, PEA and the PTT, were 124

transferred to MOEN as well. A Policy, Strategy Coordination Office (PSCO) was also created to report directly to the Office of the Permanent-Secretary at MOEN, and this has since played a greater role in setting national energy strategy (Sukkumnoed et al. 2006: 14). However, this body has been criticized for overlapping with the work of EPPO, thus reducing the importance of EPPO in the formulation of national energy policy and strategy.

6.1 The Current Structure of the Electricity Supply Industry

6.1.1 The Role of New Rules in Shaping the Structure of the Electricity

Supply Industry after 1992

The electricity sector in Thailand became more complex after 1992. A number of new agencies associated with the electricity industry, including Government and private sector agencies were incorporated into the policy-making process. A National Energy Policy Council Act B.E. 2535 (1992) was enacted. The Act prescribed the upgrade of the National Energy Policy Council (NEPC), which was originally created by Prime Minister Prem Tinasulanonda on September 8th 1983, and chaired by the Prime Minister, to work as the collective council for energy policy and planning, but without clear decision-making power. The Tinusulanonda Government also created the National Energy Policy Office (NEPO) under the supervision of the Secretariat of the Prime Minister (NEPO 2000a: 2). The new NEPC1, also chaired by the Prime Minister, represents the final authority for deciding energy strategy in the country (see Appendix V). The Energy Policy and Planning Office (EPPO: formerly the National Energy Policy Office NEPO), was and continues to be the NEPC’s Secretariat. EPPO was assigned to be responsible for all policies relating to supply-demand forecasts, tariff structures, privatization and management of the IPPs (Pei 2004: 5). The new structure is shown in Figure 6.1 below.

1 Section 5 of the NEPC Act of 1992 prescribes the members of the NEPC, including the Prime Minister who serves as Chairperson, the Deputy Prime Minister, Ministers from the Ministries of Energy, Defence, Finance, Foreign Affairs, Agriculture and Agricultural Cooperatives, Transportation, Commerce, Interior, Energy and Industry, the Permanent-Secretary of the Ministry of Industry, the Secretary-General of the Council of State, the Secretary-General of the National Economic and Social Development Board (NESDB), the Director of the Budget Bureau, the Director-General of the Department of Energy, Development and Promotion and also the Secretary-General of the NEPC. 125

Figure 6.1: The Structure of the Electricity Supply Industry since 1992

Source: Adapted from Chirarattananon and Nirukkanaporn 2006: 2525 126

The National Energy Policy Council Act of 1992, Section 6, stated that the scope and responsibilities of the NEPC, were to “recommend national energy policies, energy management and development plans to the Cabinet” (NEPO 2000(1): 14). The NEPC further created a new Energy Policy Council (EPC), to be responsible for the screening work related to energy management and development, prior to its submission to the NEPC for further consideration (NEPO 2000a: 14). For the electricity sector, the EPPO has statutory powers to set policy on the electricity supply industry and all state enterprises in the energy sector. Previously, the EPPO was the de-facto regulator of the electricity supply industry, while the Ministry of Finance regulated the financial operation of all three state utilities (Chirarattananon and Nirukkanaporn 2006: 2525). Financial plans and annuals budgets, as well as electricity tariffs, are endorsed by EPPO before submission to the NEPC. Since the Prime Minister has chaired the NEPC, approval from NEPC has never been questioned by the Cabinet (Chirarattananon and Nirukkanaporn 2006: 2525).

The EGAT Act of 1968 was also amended in 1992, and this in particular opened the way for EGAT’s privatization. The amended EGAT Act reinforced EGAT’s new powers including:

“…To establish a limited company or a public company for undertaking businesses concerning electric energy and other businesses concerning or in continuity with the activities of EGAT -To collaborate with other entities, or to hold shares in any limited company or public company limited for the benefit of the activities undertaken under EGAT’s objectives, and -To undertake other activities concerning or in continuity with the achievement of EGAT’s objectives” (IEA 1997: 271)

The amended EGAT Act led to institutional and structural changes in the electricity supply industry. The Act allowed EGAT to set up subsidiary companies through which joint ventures with the private sector could be formed (Chirarattananon and Nirukkanaporn 2006: 2523). In May 1992, EGAT created a wholly owned subsidy, the Electricity Generating Company (EGCO), to raise new capital on the Stock Exchange of Thailand (SET) and introduce competition to EGAT, in the power generation business (Nunthavorakarn 2002: 67). This company was partially sold to 127 strategic partners in the private sector. EGCO bought and now operates two of EGAT’s power plants, namely Rayong Power Station and Khanom Power Station, and profitability sells its electricity to EGAT for transmission, under a new negotiated power purchase agreement (PPA) (Chirarattananon and Nirukkanaporn 2006: 2523). EGAT also calls for competitive tendering for new investors, in order to construct, own and generate power for sale to EGAT under negotiated PPAs. A new policy on IPPs and SPPs was formulated, with three main goals being, (i) to attract additional private capital to build new electricity generators to meet demand growth, (ii) to encourage the introduction of new technology, and (iii) to build a more efficient, better managed and more competitive electricity market (Chirarattananon and Nirukkanaporn 2006: 2523, Pei 2004: 7). The new IPPs and SPPs, it proposed would generate electricity, and then EGAT could purchase this electricity and transmit it to consumers. The resulting structure of the new industry is shown in Figure 6.2.

Figure 6.2 EGAT’s Operation

The result of EGAT gaining the authority to form subsidiaries, was the privatization of a whole range of new organisations covering both parts of its existing operations, as well as new ventures, as shown in Table 6.1. 128

Table 6.1: EGAT’s Associated Companies, Subsidiary Companies and Joint Ventures Associated Company The Electricity EGCO Subsidiary Companies Generating Company (1) Rayong Electricity Generating Company Limited Limited (EGCOMP): (2) Khanom Electricity Generating Company Limited EGAT has a (3) EGCO Engineering and Service Company Limited (ESCO) shareholding of 25.41% (4) EGCO International (B.VI) Limited (EGCO BVI) (5) Thai LNG Power Corporation Limited (TLPC) (6) EGCO Green Energy Company Limited (EGCO Green) (7) Egcom Tara Company Limited EGCO Business Joint Venture (8) Gulf Electric Public Company Limited (GEC) (9) EGCO Joint Ventures and Development Company Limited (10) Conal Holding Corporation (11) Nam Theun 2 Power Company Limited (NTPC)

Subsidiary Companies Ratchaburi Electricity RATCH Subsidiary Companies Generating Company (1) Ratchaburi Energy Company Limited Limited (RATCH): (2) Ratchaburi Energy Company Limited EGAT has a (3) Ratchaburi Gas Company Limited shareholding of 45% (4) Ratch Udom Power Company Limited (5) Ratchburi Alliance Company Limited EGAT Joint Venture: EGAT performs a joint venture with the establishment of the EGAT has a District Cooling System and Power Plant Company Limited shareholding of 35% (DCAP). The shareholders of DCAP are EGAT, the PTT Public Company Limited, and the Metropolitan Electricity Authority (MEA), with a proportion of 35, 35 and 30 percent respectively. The company’s objective is to generate and sell electricity and cooling water to Suvarnabhumi Airport

Sources: EGAT Annual Report 2004(2): 57, EGAT Annual Report 2006: 24 129

6.1.2 The Structure of Electricity Supply Industry since 2005

As outlined in Chapters 4 and 5 and in the previous sections, the Shinawatra Government attempted to reduce the role and influence of technocrats and bureaucrats in the political arena and enrich big business interests in Thailand, so he also launched a process of governance reform. To achieve this, the Ministry of Energy (MOEN) was established in 2002 and NEPO was renamed the Energy Policy and Planning Office (EPPO), and downgraded to be just one of several agencies under the Permanent- Secretary’s Office in MOEN (Sukkumnoed et al. 2006: 50). The other state-owned enterprises related to energy affairs, including EGAT and PTT, were transferred to MOEN as well (the MEA and PEA remained under the jurisdiction of the Ministry of Interior). A Policy and Strategy Coordination Office (PSCO) was also created to report directly to the Office of the Permanent-Secretary, and it then played a greater role in setting national energy strategy (Sukkumnoed et al. 2006: 14). This body has since been criticized for overlapping with the work of the EPPO, thus making EPPO less important in the formulation of national energy policy and strategy.

The Committee of Energy Policy Administration (CEPA) was also created by NEPC2, to assist the council in screening the work associated with energy management and development, prior to the submission of changes of the sector for consideration (Sukkumnoed et al. 2006: 14). Membership of the CEPA is composed of the Minister of Energy, key Permanent-Secretaries of relevant ministries, such as Energy, and existing bureaucratic elites in the key ministries associated with economic affairs and transport. The Director-General of EPPO serves as a member and secretary, as do existing bureaucratic elites in the key ministries associated with economic affairs. Representatives from public or civic groups are included, but are outnumbered by Government members and bureaucratic appointees.

2 After the creation of the Ministry of Energy in 2002, the new structure of the NEPC includes the Deputy Prime Minister, who serves as a Chairperson, Ministers from the Ministry of Energy, Defence, Finance, Foreign Affairs, Agriculture and Agricultural Cooperatives, Transportation, Commerce, Interior, Energy and Industry, as well as officials from the Ministry of Industry, the Council of State, the National Economic and Social Development Board (NESDB), the Budget Bureau, the Director- General of the Department of Development of Renewable Energy and Energy Conservation, and the Director-general of EPPO (EPPO (n.d.): online). 130

The policy-making and regulation functions were clearly separated by the changes. The NEPC was set up to consider policy on national energy management and development and recommend it to the Cabinet, and the Government created an Electricity Regulatory Commission (ERC) to be responsible for electricity supply industry regulation, pursuant to the policy established by the Government and NEPC (EPPO (n.d): online).

The ERC was created by the Office of the Prime Minister’s regulation regarding the Electricity Regulatory Commission in 2005 (ERC Regulation of 2005). According to Article 6 of the ERC Regulation of 2005, the interim ERC comprises one chairperson and another three to five Commissioners, and one Commissioner- cum-secretary (Article 7). This collective body is to be appointed from qualified persons who are experts, or have experience in energy, economics, finance, accounting, law, engineering, science, management and other associated fields, which will contribute to the electricity industry. They are assigned to be responsible for duties such as regulating the tariffs for electricity, devising measures to encourage competition and preventing the abusive use of monopoly power, and regulating the operation of the electricity industry operators (Article 12). The Regulation of 2005 clearly specifies that members of the ERC shall not include those involved with any companies or agencies performing electricity-related activities during their terms of duty (Article 7(6)). The Cabinet resolution on September 22nd 2005, appointed seven members of an Interim ERC. The Interim ERC was chaired by Yongyudh Wichaidit, the former Chairman of MEA’s Board of Directors. Other members were appointed from representatives of the NESDB, the Office of Attorney General, academics, land and property business people, the Director General of EPPO, and the former Deputy nd Governor of the PEA (Manager, November 22 2005: online).

On February 3rd 2006, the NEPC approved the delegation of the policy functions pursuant to the NEPC Act of 1992, the regulation function pursuant to the Regulation of 2005, and the termination of sub-committees under the NEPC, whose authority and duties duplicate those of the ERC (EPPO (n.d.): online). The new ERC 131 created six new Sub-Committees3, to be responsible for some work of the ERC as stipulated in the Regulation of 2005. The Sub-Committees are formally focused on load forecasts under the NEPC, and have recently been moved to the ERC. The ERC was also assigned the task of drafting a new Electricity Industry Bill. Although the ERC was created as an independent commission, it was created under the authority of the NEPC, as presented in Figure 6.3. The ERC administration, in the initial period, depended on resources, finances, information and manpower from the EPPO (Article 15), that acted as the ERC’s Secretariat. In light of these conditions being imposed on it, it seems likely that the ERC lacks any autonomy to formulate independent policy.

The establishment of the ERC by the Shinawatra Government, was criticized by a member of the EGAT EU. Sirichai Mai-ngam, the leader of the EGAT EU said:

“…the Interim Regulator was created for political reasons, because the Government was forced to create a regulatory body before the EGAT was listed on the SET. Some of the ERC commissioners were not experts or professionals on electricity” (Manager, November 22nd 2005)

While Rosana Tositrakul, a member of CCO said:

“…the Government attempted to adopt the solution measure in response to public concern about the electricity tariff that might be increased after EGAT’s privatization. However, in fact, the public required the Government to cancel the policy to promote EGAT’s privatization, rather than this agency” (Manager, November 22nd 2005)

Critics such as Sukkumnoed and his colleagues (2006: 116) also note that the ERC should be clearly separated from policy formulation and implementation, in order to ensure autonomy and avoid pressure from stakeholders. Regulatory members need to be selected through a well-defined and independent procedure, in order to

3 ERC’s sub-committees include the Sub-Committee Regulating the Power Tariffs and Service Charges, the Sub-Committee on Consumer Protection, the Sub-Committee on Load Forecast, the Sub- Committee on the Power System Interconnection Regulations, the Sub-Committee Monitoring the Electricity Operation pursuant to the State policy, and the Sub-Committee for the Purchase of Power from IPPs (Source: EPPO, online, www.eppo.go.th/power/regulator/policy_E.pdf) 132 avoid influence by political interests. Also, their work should not favour the interests of electricity-related agencies or companies. This has clearly not been the case.

As the Prachachart Turakij newspaper reported, the Interim ERC had a clear policy to allocate 50 percent of the share of electrical power generation to IPPs, and 50 percent to EGAT (Prachachart Turakij October 25th 2006), and EGAT’s subsidiary companies could not bid in a share of the 50 percent allocated to IPPs. There have 4 been concerns expressed by EGAT about the ERC. As EGAT’s Deputy Governor explained during an interview for this study:

“I saw the name of ERC and felt that these people are not experts or professional in electricity. I don’t know how they can regulate the electricity supply industry”, and “…the ERC misunderstand their authority. The Regulation of the Office of the Prime Minister prescribed their authority to ‘regulate’ EGAT’s operation in accordance with PDP or national energy policy…granted approval from the Cabinet and NEPC. It does not mean the ERC can set new policy guidelines for EGAT operations. The ERC might be confused about the different meaning between ‘regulate’ and ‘control’”

Shortly after the Military Coup of September 2006, Piyasvasti Amranand, leading energy aristocrat and the former Director-General of EPPO, was appointed the Minister of Energy. The media reported that he tried to intervene to limit the authority of the Interim ERC; the same ERC in the electricity industry that allocated a 50 percent share to IPPs (Prachachart Turakij, October 25th 2006). In the end, most of the Commissioners of the Interim ERC resigned on October 18th 2006. The result of this was that the final separation between energy policy setting, control of the public corporatization, the distribution of electricity and the regulatory framework, was not firmly established. Control still rests with the bureaucratic elite, and the influence of the consumers of electricity is still limited.

4 Interviewee #A001 133

Figure 6.3: The Structure of Organizations Associated with Electricity Power Generation at the Policy Level

Source: Adapted from EPPO. (n.d.). Thailand’s Electricity Supply Industry: Policy and Regulation (online). pp.11 and 14 134

6.1.3 EGAT’s Shares in the Electricity Supply Industry

Under the EGAT Act of 1968, as amended in 1992, private power producers were allowed to generate electricity and sell their output to EGAT. The private power producers are classified as SPPs5 and IPPs6. Data released from EGAT states that it is responsible for over 59 percent of electricity generated in Thailand, and the remainder is purchased from SPPs, IPPs or neighbouring countries, as shown in Figure 6.4 (EGAT 2004b: 4).

However, Sukkumnoed (2006: 27) discloses that in fact 70 percent of installed capacity is still controlled by EGAT and its subsidiary companies, because “…EGAT holds a major share in several private producers, both IPPs and SPPs.” EGAT also dominates the entire transmission system in the country and is responsible for electricity distribution to the few large direct customers.

5 The SPPs5 are producers of electricity from renewable energy such as wind energy, solar energy and mini-hydro; from agriculture waste or production waste, transformed products such as rice-husks, bagasse, biogas, municipal waste or endothermic fuel (supplemented to the extent of less than 25 percent of the total thermal energy by commercial fuels; and from cogeneration process (IEA 1997: 285, Vikitset 1998: 8). In 2007, there were 40 SPPs, with 4145 MW, were already selling to 2333 MW of electricity to EGAT (Greacen 2007(1): 66). 6 An IPP is a private company that develops, invests and operates a power plant with a large generation capacity using fossil fuel (NEPO 2000: 26), but must be environmentally clean, acceptable to the public, have stable price and assured supplies, and support the government policy on fuel diversification (IEA1997: 286). The Thai Government has also provided various incentives including tax holidays, and guarantees of fuel supply, in order to attract private producers, particularly IPPs that must be compatible to EGAT’s subsidiary companies. Seven IPPs were originally selected and PPAs signed by EGAT. Three IPPs were to use imported coal and the other four were to rely on natural gas. However, with strong opposition from civic groups and local residents, the two massive coal-fired power plants planned to be developed at Prachub Kirikhan were cancelled. There are now five existing IPPs that operate and sell energy to EGAT (see list of IPPs in appendix VII). 135

Figure 6.4 Thailand’s Electricity Supply Industry by Industry Share

Source: Foran 2006: 7

Greacen notes that EGAT still prefers controlling large, centralized fossil fuel power plants in order to secure consumer confidence in the reliability of the system. Base load electricity production is predominantly thermal and combined cycle generation, using natural gas accounting for 72 percent of output (Greacen 2007a: 19). Natural gas supplied power generators are obliged to purchase their fuels from the Petroleum Authority of Thailand (PTT). This type of power generation also affects consumers, as they are charged in line with the fuel costs of gas. Electricity tariffs vary in line with the cost of fuel prices, which are based on take-or-pay provisions in power purchase agreements that PTT has signed with the Myanmar Government (Greacen 2007a: 23). Electricity operation is based mainly on fossil fuels. Consumers, cannot choose the type of power plants or technology they prefer when purchasing electricity. 136

6.1.4 Institutional Barrier for SPPs

It appears from the above discussion that private power producers (IPPs and SPPs), as a result of the policy changes outlined in Section 5.2.3.2, have been encouraged to generate power and to sell to EGAT for transmission. The SPPs are producers of electricity from renewable energy, such as wind and solar energy, mini- hydro and products from agricultural waste, as well as commercial fuels, and from the 7 co-generation process. As present, there are 40 SPPs (EGAT (n.d.): online) with 78 generators and with an installed capacity of 4145 MW, now selling 2333 MW of power to the grid. Of this, 989 MW of installed capacity (430 MW sales to the grid) is from renewable energy sources (Greacen 2007b: 66).

The EPPO has provided general guidelines for the power purchase agreements between EGAT and the private generators. The power purchase price agreement must be designed based on EGAT’s ‘avoided costs’ formula, and the purchase price structure must be clear to avoid case-by-case negotiation (Vikitset 1998: 8). In order to promote fair competition, the NEPC has also introduced a directive that the tax structure and incentives given to the SPPs and IPPs, must be compatible to those of EGAT in the calculation of the financial costs. These measures are designed to create a supply policy of competitive neutrality between the public and private sector (Vikitset 1998: 8).

The utilization of renewable energy to generate electricity from SPPs, accounts for only a tiny percentage of the electricity produced, because in practice the rules and regulations created by NEPC and EGAT have become a barrier to the

7 SPPs are classified into ‘firm’ and ‘non-firm’, based on the agreements used for EGAT to purchase power from the SPPs at different rates. Ironically, non-firm SPPs get a lower price than firm generators. It has been observed that most non-firm SPPs supply their generators with renewable energy, such as biogas, biomass or other agricultural product, and that their installed capacity is usually lower than firm SPPs, that supply their generators with conventional fuels such as coal and natural gas. One implication flows from this: EGAT prefers to purchase electricity from ‘firm’ power generators. 137 promotion of renewable energy in Thailand. As one interviewee, the Director of 8 EGAT’s Board of Directors , stated:

“EGAT has been forced to promote the utilization of renewable energy”, and “renewable energy is like a cosmetic; EGAT put the promotion of renewable energy into the power development plan in order to suggest that it contributes to the utilisation of clean energy and employs environmentally friendly technology.”

In fact, EGAT continues to invest most of its resources in the construction of coal-fired power plants, as well as the use of natural gas. One reason for this, as 9 expressed by EGAT’s Deputy Governor in my interview with him, is that:

“…the cost to develop renewable energy is very high; when we want to invest to develop the solar cell generator to produce one MW, we need space comparable to ten football fields”

Other perspectives with regard to EGAT’s negative view on the use of non- fossil fuel energy, is reflected in its policy on purchasing electricity from non-firm SPPs. One SPP, the owner of a large pig farm, who utilizes waste gas for power generation and could sell it to EGAT, expressed his opinion in a newspaper article, that “EGAT can purchase only a part of the electricity…that my farm can produce. The surplus has to be thrown away”. Furthermore, he asserted in another published source:

“In the case of IPPs, they were granted tax exemption for the imported power generators, according to the Board of Investment…incentive for IPPs. However, in my case as an SPP, I have to pay tax of twenty percent for imported-power generators, plus seven percent value added tax. This is not fair” (Meetam 2005, in Manager, August 29th 2005)

8 Interviewee #A002 9 Interviewee #A001 138

In response to a question about the power of EGAT and its associated agencies over regular SPPs, a scholar from the Sustainable Energy Network of Thailand 10 (SENT) , stated in an interview that:

“Some large pig farms can produce electric power for their own use. The farm does not buy electricity from PEA, and uses zero units of electricity from the national grid. However, the farm still has to pay 20,000 Baht for electricity tariffs every month. This is a rule mandated to guarantee revenue for EGAT; that the old client who has no longer used its electricity still has to pay at least 70 percent based on the average payment over the last twelve months. This event is quite strange; the farm does not use electricity from EGAT, but still has to pay.”

Moreover, EGAT has justified not taking the power generated by other non- conventional energies, such as rice-husks, by saying that the supply they provide is not continuous; producers cannot supply power for the whole year. EGAT therefore buys more electricity from non-firm SPPs at a lower price (2.10 Baht/kWH), than from firm SPPs (2.56 Baht/kWH) (Greacen 2007b: 66). This suggests that institutional factors in the form of values, rules and institutions, have become obstacles to SPPs participating in the electricity sector, which itself goes against the principle of fuel diversity. EGAT, as the rule maker, has created an institutional framework which involves or excludes source players in the power generation system, according to its predetermined priority to protect its centralised monopoly over the industry. As a result, EGAT has complete control of the regulatory system and the rules covering participation in the electricity industry, such as tax provisions, as well as the PPAs. This has become a barrier to entry for non-firm SPPs wishing to play a larger role in the electricity system.

10 Interviewee #C002 139

6.2 Analysis of Electricity Power Generation Policy

6.2.1 Electricity Generation Policy Objectives

6.2.1.1 The Sole Policy Objective

When EGAT was established, its objective was to provide an adequate amount of electricity to satisfy demand, while ensuring high quality and security of supply, at a reasonable price. This remains its goal. This objective implies that electricity produced by EGAT has to meet the requirements of ‘least cost electricity’ and ‘energy security’. One of the Director’s of EGAT who I interviewed for this research, reinforced this objective when he stated:

“…the most important objective of power generation is to service electricity continuously, or contribute to electricity security. In this sense, electricity has to service anytime and avoid blackouts. In the case we cannot 11 avoid a blackout, it should happen over as short a time as possible. ”

When formed, electricity policy was also made subject to social policy. As the Asia Pacific Energy Research Centre (2000: 60) notes, the electricity utilities were granted a monopoly over distribution subject to a ‘social contract’. The electricity industry was protected from market competition, because it has an obligation to provide a universal service. Underlying the concept of universal service is the fact that “electricity has been considered a national strategic asset and not just another tradable commodity, and also is a social obligation, namely equity” (Asia Pacific Energy Research Centre 2000: 60). In this way, the supply of least-cost electricity provided by EGAT assists the Thai Government to meet a social obligation to increase access to electricity for people in rural areas. As Shrestha and his colleagues (n.d: 1) indicate, access to electricity in rural areas contributes to development and poverty alleviation, and it is the Government’s mission to achieve this. To assist in this, the PEA pays a lower tariff when compared to other consumers, and EGAT recovers the resources transferred to PEA, by charging a higher tariff to the MEA, thus ensuring that revenues from the sale of electricity cover operational costs (Shrestha et al. (n.d.): 18).

11 Interviewee #A002 140

This strategy has been successful in making electricity available to consumers. It is reported that the number of Thai rural households with access to electricity by the early 1970s, had increased from seven percent to nineteen percent by 1978, to 43 percent in 1984, 86 percent in 1986, and 91 percent in 1990 (Shrestha et al. (n.d.): 12). As a result, Thailand has been able to provide an increasing degree of electricity coverage, one that has reduced the gap in power usage between rural and urban areas.

Some of the social, environmental and economic costs of achieving this goal 12 have been ignored however. One key informant for this research, someone who has studied the historical development of Thai policy in this area, expressed the following during an interview:

“The Thai policy makers adopted the unbalanced development policy and provided privilege to investors. The policy makers believed that when the people in a small group, particularly the industrial sector, achieved the level of investment, it led to the growth of…employment. This is old economic theory. The Government supported the investors by helping them to reduce the cost of production, for example, providing least cost energy to supply industrial factories. The least cost energy came from the extraction of natural resources that local people used”

13 Furthermore, one key informant from Palang Thai, the leading CSO working on energy affairs, stated with regard to energy security that:

“…in the policy-makers’ sense, the concept of electricity security focused narrowly on supplying electricity for industrial sector. In this instance, the power providers have to generate electricity continuously to avoid blackouts that would affect economic activities. They sought an indigenous source for fuelling generators and local people used these resources. Electrical power development projects would affect their use of resources, or their livelihood both directly and indirectly. Furthermore, the over-investment on power development projects during the three decades becomes a public debt burden for which the general public has to share this liability…”

12 Interviewee #C006 13 Interviewee #C003 141

This view is supported by analyzing the proportion of electricity generated that has been consumed by rural people in the agricultural sector; it is only a tiny part of the total energy consumed, as shown in Table 6.2 below.

Table 6.2 Electricity Used by Economic Sector: 2003 and 2004

Electricity Consumption by Share of Consumption in Share of Consumption in Sector 2003 2004

Agriculture 223 GwH (0.20%) 247 (0.21%)

Industry 49,062 GwH (45.87%) 50,925 (44.07%)

Residential 23,499 GwH (21.98%) 26,843 (23.23%)

Commercial 34,141 GwH (31.90%) 37,475 (24.73%)

Transportation 34 GwH (0.03%) 41 (0.03%)

Total 106,959 GwH 115,531

Source: DEDE 2005: 46

14 My two key informants suggested that the most important decision-making factor shaping electricity power generation policy, has been the economic factor. Although, socio-political factors such as education, social development, improving the quality of life and national security have become significant factors in the justification for the policy, economics has played the primary role in the expansion of electricity supplies and services.

6.2.1.2 The Pro-Hydroelectric Dam Policy

As indicated in Section 5.2.2, electricity is more expensive and complex to deliver to the user than most other goods. Transmission requires monopoly control in order to coordinate supply and demand at any given moment. In the early period of electricity development in Thailand, it was easy to argue that generation,

14 Interviewee #C006 and Interviewee #C003 142 transmission, and distribution were intimately inter-related, and were therefore best handled by a monopoly structure. This model also allowed for the construction of large-scale power plants and transmission systems, in an industry where the economies of scale are important (Asia Pacific Energy Research Centre 2000: 32).

In order to achieve this since the 1950s, a number of hydropower dams and thermal power plants have been constructed. These projects were designed to exploit indigenous sources of energy, those that assist in minimising the cost of electricity power generation. The National Energy Authority (NEA) was created to create a numbers of small utilities throughout the country and the Royal Irrigation Department (RID) proposed a plan to develop a large-hydroelectric dam for both agriculture and electricity generation (RID 1986: 386). The dam, later known as the Yanhee Dam (or Bhumibol Dam), was constructed with financial support from the World Bank.

Nonetheless, the Government realised that the Yanhee Dam was not sufficient in itself to supply enough energy to support economic activity and an expanding industrial sector, under the implementation of the NESD Plan. Thus, a number of other hydropower dam projects were approved during the 1960s, such as the Num Pung Dam, Kaeng Krachan Dam and Ubol Ratana Dam. These dams were developed and managed by different agencies, such as the Northeast Electricity Authority (NEEA), created in 1962 to provide electricity services to the northeast region and manage the Num Pung and Ubol Ratana Dams, and the YEA, which managed the Bhumibol Dam. After EGAT was established in 1969, it took control of a number of these hydropower projects, those that had been constructed by the NEA, RID and NEEA, and under its mandate, EGAT developed other dams, as listed in Table 6.3, which shows a list of all the dams constructed between 1964 and 1994. 143

Table 6.3: The Construction of Hydroelectric Dams in Thailand: 1960s to the 1990s Year of Hydroelectric Dams Province (region) Completion 1964 Bhumibol Dam Tak (north) 1966 Num Pung Dam Sakon Nakhon (northeast) 1966 Kaeng Krachan Dam Phetchaburi (central) 1968 Ubol Ratana Dam Khon Kaen (northeast) 1971 Sirindhorn Dam Udorn Thani (northeast) 1972 Sirikit Dam Uttaradit (north) 1972 Chulabhorn Dam Chaiyaphum (northeast) 1980 Srinagarind Dam Kanchana Buri (west) 1981 Bang Lang Dam Yala (south) 1981 Tha Tung Na Dam Kanchana Buri (west) 1982 Huai Kum Dam Chaiyaphum (northeast) 1984 Vajiralongkorn Dam Kanchana Buri (west) 1985 Mae Ngut Somboonchon Dam Chiang Mai (north) 1987 Rajaprapha Dam Surat Thani (south) 1994 Pak Mun Dam Ubon Ratcha Thani (northeast)

Sources: Compiled from many sources, such as Chitipat 2005, EGAT 1994 and EGAT PR

Studies by Sutthijaree (1992) and Sretthachau (2000) focused their attention on electricity power generation policy, and in particular hydroelectric dam development. They found that Thailand’s financial dependence on multinational lending agencies, as well as domestic factors such as the elites’ perception of the role of dams in the system, encouraged their development. Thai elites also saw large hydropower dams, and electricity, as symbolic of the country’s modernization. As Sretthachau (2000: 68) points out, a picture of the Bhumibol Dam is printed on the Thai 1000 Baht banknote. This use of this type of symbolism can be seen in the banknotes of other developing countries, for instance Laos and Vietnam. Interestingly, Chatikavanij (1994: 36) notes that when he served as YEA Governor, Field Marshal Thanarat ordered him to accelerate the construction of the Yanhee Dam, because he wished to celebrate the King’s birthday by having the first electricity flow from the 144

Yanhee Dam to Bangkok (Chatikavanij 1994: 36). This, as well as the fact that Thai policy-makers saw electricity from hydropower as reducing Thailand’s reliance on imported-oil, also contributed to reducing the water available for the irrigation of agricultural land.

However, over the entire period of EGAT’s monopoly over the electricity sector, issues of the environment and natural resource costs were overlooked by the policy-makers. As Chatikavanij, the first EGAT Governor, reflected:

“When we talk about a problem from the construction of hydropower dams, we should consider the situation at that time; in the old days, it was necessary to construct the hydropower dams because we faced electrical power shortages and we did not have reserve energy sources, such as lignite or natural gas. Moreover, we did not have a dam, but we had an area to construct it. So, the dam was the best way to solve the electricity problem for that period…” (Chatikavanij 1994: 25)

Along with financial support for dam construction, multinational lending agencies, such as the World Bank, also favoured dam development, as many developed countries did at that time. The World Bank and the US Government provided technical support to train many of EGAT’s key people and these people played a key role in setting policy direction (Chatikavanij 1994: 25). The construction projects of large-scale power development projects, were overseen by engineer bureaucrats, who were less concerned about cost-benefits and environmental issues. The response I received from a Professor of Economics at Chiang Mai University, 15 underlines this :

“…the policy on dam construction was formulated by technicians in EGAT. It was not suggested by economists, according to whom, most of the dams failed to provide benefits in terms of economic rationality.”

15 Interviewee #C008 145

The pro-dam policy reflected an unbalanced and biased policy focus, with a specific goal to produce large amounts of energy to supply industrial and urban sectors, without reference to the regional environmental or economic costs. One person I interviewed stated that this was because they (those who sanctioned the building of dams) believed the benefits of economic growth would be distributed to 16 the rural sector automatically , that is, until rural communities began to oppose these developments in the early 1980s.

The policy to develop hydroelectric dams began to be actively opposed in the 1980s. In 1978, the Nam Chaon Dam Project was proposed; to build a hydropower dam on the upper Kwai River in Kanchanaburi Province (EGAT 1994: 86). The project was listed in the Fifth NESD Plan which started in 1982, and the investment for the construction of this dam was to be provided by the World Bank and the Japan Overseas Economic Cooperation Fund (Hirsch 1993: 139). However, there then followed an unprecedented campaign by the local rural communities against the Nam Chaon Dam Project. The movement included local villagers who would be affected by the flooded areas, students, environmentalists, the urban middle class, activists and the media. These interest groups joined together and identified a number of reasons for scrapping the dam, reasons which were mostly focused on adverse social and environmental impacts (Project for Ecological Recovery (PER) (n.d.): online). The demonstrations resulted in the cancellation of the project in 1987. This marked the first time that a Government development project had been opposed by civic groups. This campaign against the Nam Chaon Dam has since been recognized as the foundation of the civil society movement in Thailand. Following the successful campaign against the Nam Choan Dam Project, there was a series of campaigns against other power development projects, including plans for the construction of the Pak Mun, Rasi Salai, Krang Krung, and Kaeng Sue Ten Dams, and as a result of these protests, it became almost impossible for the Thai Government to develop any new large-scale dam projects in the country.

16 Interviewee #C006 146

6.2.1.3 The Centralized Large-Scale Thermal Power Plants

Another area of the development of the electricity industry that reflected the Thai elites’ perceptions, was the construction of large-scale thermal power plants. There were source justifications for this strategy, as this section will outline, these being: the rapid growth in energy demand, limited accessible water sources for new hydro plants, the limited possibility of using Thailand’s coal reserves for fuel and the availability of loans to build the plants from international lenders. These factors were combined with the perception that national interests would be served by building such plants. The strategy also had a number of less positive outcomes, as this section will now explore. After the Second World War, the Thai Government put in large amounts of effort surveying the indigenous sources of coal, hoping to use it for electricity power generation. It found a source of lignite coal in Mae Moh District, Lampang Province in the north, and another in Saba Yoi District, Songkla Province, in the south. In 1954, the Lignite Organization (later named the Lignite Authority (LA) in 1960) was created to exploit lignite resources. This organization was designed to operate lignite mines (EGAT 1994: 23-24) in these two provinces, and to generate power to serve the far northern and southern provinces. The LA was later consolidated with the other two existing authorities, the NEEA and YEA, in 1969, to establish EGAT as the single body operating across electricity generation and transmission. According to the provisions of the EGAT Act of 1968, EGAT was allowed to own the lignite mines (Section 6 (3)), as well as the hydropower dams it constructed. This institutional arrangement contributed to the development of EGAT as the prime organization in power generation.

During the 1970s and early 1980s, the emergence of Oil Producing and Exporting Countries (OPEC), led to subsequent oil shortages which caused an energy crisis in all countries across the globe, including Thailand. Prior to this, the NESDB consistently planned for the diversification of fuels used for electricity generation, as well as the development of indigenous energy resources, because the costs of importing fuel impacted adversely on Thailand’s balance of payments (Chirarattananon and Nirukkanaporn 2006: 2523). These plans resulted in the development of lignite in the Mae Moh basin, and the building of the Mae Moh Power Station, the largest lignite-fired power plant in Thailand and a main base-load plant 147 for the electricity grid. The Mae Moh Power Plant has developed rapidly since being built. There are now thirteen generating units with a total production capacity of 2625 MW, a demand that consumes about fifteen million tons of lignite a year (Sapmanee 2004: 122). The plants operations have not been without controversy. In early 1992, an air-filtering device on one of the eleven existing lignite-burning units broke down and the toxic emissions released from the plants caused severe air pollution throughout the region during the winters of 1992, 1996 and 1998, pollution that damaged the health of more than a thousand local people, and affected their crops and livestock (Meyers, Goldman, Martin and Friedmann 1993: 82, Nuntavorakarn 2002: 66, Prachathum News Net August 29th 2003, Sapmanee 2004: 122). This problem led to a demonstration by local residents and CSOs, that led to the Government seeking a solution and to introducing compensation measures. To respond to the problem, the Government and EGAT agreed to install desulphurization units in the plant. In the meantime, EGAT sought a source of cleaner coal to generate electricity, and subsequently identified high quality lignite in Wiang Haeng basin, 500 kilometres from Mae Moh, as the solution.

The incident at Mae Moh demonstrated that electricity from coal was not cheap in terms of environmental and social costs. It should be also noted that despite Thailand’s environmental laws being properly enforced, in most cases the coal-fired power plants emitted more pollution and heavy metals than other types of power plants (Palettu 2002: 31). These pollutants have damaging effects on people health and the environment that often cannot be easily measured. The incident also led to a greater concern for environmental issues with regard to electricity generation policy, and calls for more public participation in the policy formulation process. 148

Table 6.4: The Construction of Power Plants in Thailand: 1960 to the 1990s Year Name Province (region) Fuel Type 1960 Mae Moh Power Plant Lam Pang (north) Lignite 1961 North Bangkok Power Plant Nontha Buri (central) Closed in 2001 1964 Krabi Power Plant Krabi (south) Oil 1969 South Bangkok Power Plant Samut Prakarn (central) Oil/gas 1973 Khanom Power Plant Nakhon Si Thammarat (south) Oil/gas 1973 Surat Thani Power Plant Surat Thani (south) Gas 1983 Lan Krabu Power Plant Kamphaengphet (central) Gas 1989 Nam Pong Power Plant Khon Kaen (northeast) Gas 1981 Bang Pakong Power Plant Chachoengsao (central) Oil/gas 1993 Mae Hong Son Power Plant Mae Hong Son (north) Diesel 1995 Nong Chok Power Plant Bangkok (central) Gas 1998 Wang Noi Power Plant Phra Nakhon Si Ayutthaya Gas (central) Sources: Complied from many sources, such as EGAT 1994 and EGAT PR

6.2.1.4 The Principle of Fuel Diversification

A significant objective of Thailand’s electricity generation policy since the 1980s, has been to diversify its supply sources. This objective was based on the principle that “a system should not rely too much on one particular fuel, to avoid instability in system reliability and electricity tariff[s]” (EGAT 2004b: 23). This objective became especially important after Thailand faced trade deficits in light of a series of oil crises during the periods 1973 to 1974, 1975 to 1976 and 1979 (Chirarattananon and Nirukkanaporn 2006: 2523, The Thai Military 1993: 225-227). Imported oil accounted for 23 percent of the total imported products, and electricity generation relied on imported oil for 70 to 75 percent of its total generation capacity during the 1970s (EGAT 1994: 58). At that time, fuel oil represented 70 to 75 percent of all the fuel types, besides coal and hydro sources, in electricity generation. The spill-over effect of this dependence was to increase the cost of all goods and services within domestic consumption, including energy services. 149

To overcome the electricity shortage, EGAT adjusted its strategic power generation plan, one that previously relied on imported oil, to include a greater use of other types of fuel, such as lignite and natural gas, fuels which could be indigenously supplied (EGAT 1994: 168). Also, in 1977 EGAT submitted a plan to develop a nuclear power plant to the Cabinet; however this plan was not approved because the project required a large amount of investment for the construction, and there were concerns from people about the safety of nuclear plants. Following the oil crisis of 1979 to 1980, during the 1980s EGAT reduced the proportion of capacity provided by oil-fired power plants. EGAT also only moderately expanded its installed hydropower capacity, as a result of growing public opposition to hydroelectric dam construction, based on their possible adverse environmental impacts, and relocation issues with regards to local residents.

Fortunately, the discovery of exploitable natural gas resources in the Gulf of Thailand in the mid 1970s, led to further energy sources being developed (The National Identity Board 2000: 172). In 1978, the Government created the Petroleum 17 Authority of Thailand (PTT) , in order to engage in the supplying and refining of oil, gas pipeline operations, gas processing plant operations and the petroleum industry (The National Identity Board 2000: 172). Later, with the cooperation of other government agencies, PTT became a key organization in energy policy, particularly in natural gas supply, and gas pipeline construction and distribution. In 1981, the South Bangkok Thermal Power Plant was renovated and the Bang Pakong Thermal Power Plant constructed, to utilize new generators supplied by natural gas that was to be delivered from the gas fields in the Gulf of Thailand (EGAT 1994: 62). The power plants constructed during that time are listed in Table 6.4.

PTT also sought gas supplies from neighbouring countries. In 1990, the Choonhavan Government asked PTT to discuss natural gas investment with the Myanmar Government (Phuangcharoen 2005: 108), and PTT signed gas purchasing

17 The Petroleum Authority of Thailand (PTT) was created in 1978 during the Prem Government. The authority was incorporated as PTT Public Company Limited in 2001. In 2005, the Ministry of Finance held 48.55 percent of PTT PCL shares (S. Greacen 2006) 150

18 contracts with a consortium , for natural gas to be delivered from the Yadana gas field in Myanmar, in order to supply EGAT’s subsidiary company, Ratchaburi Power Plant (RATCH), located in Ratchaburi Province. It has since been disclosed that the contract arrangement was a ‘Take-or-Pay’ contract that led to an increased public liability for the Thai Government (Phuangcharoen 2005: 105).

As the result natural gas became an important part of the fuel supply for EGAT power plants. It has been estimated that gas accounted for 40 percent (from EGAT power plants and IPPs and SPPs) of the fuel used in electricity generation during the 1980s. There are plans for natural gas to play an even more important role in the future, as shown in Table 6.5. This might affect EGAT, as pointed out in its Power Development Plan (PDP) in 2004 (EGAT 2004b: 23):

“In the long term (2010 onwards), the major fuel indicated in PDP2004 is natural gas. A portion of 76.1% of the total energy consumption in 2010 will be from natural gas, and it will go up to 81% in 2015. This proportion obviously dominates other fuel usage and implies that the country’s power supply fully depends on natural gas, which is contrary to the fuel diversity principle. This principle states that a system should not rely too much on one particular fuel to avoid instability of system reliability and electricity tariff. However, if the future gas price is unpredictable or…gas consumption is excessively high, EGAT has devised an alternative PDP as a way out, which sees domestic coal-fired power plants and foreign hydroelectric power plants as the generation option”

Currently, the Thai electricity generation uses natural gas as the primary fuel for 70 percent of its generating capacity, and Sukkumnoed and his colleagues (2006: 115) indicate that even though natural gas is a clean fuel and causes less of an impact on the environment than using oil or coal, the decision-making process used to approve the use of natural gas is not transparent, and is open to the influencing of interest groups. This is especially possible, when the top officials in MOEN

18 The consortium includes PTT Exploration and Production Plc of Thailand (PTTEP; a subsidiary of PTT); share 25.5 percent, UNOCAL; 28.26 percent, Myanmar Oil and Gas Exploration (MOGE); 15 percent, and TOTAL company of France; 31.24 percent. 151

“…have a close relationship with a self-interested group of natural gas businessmen. Many high level Ministry of Energy staff have roles in the consideration and screening of the investment plans, and these staff also have positions in the management of many energy firms” (Sukkumnoed et al. 2006: 115)

Perhaps the analysis of policy actors and the interests of natural gas businesses, assists in understanding the high level dependency on natural gas in electricity generation, and will help with guiding future research into energy policy in Thailand. The media has reported the conflict of interest that policy decision-makers hold shares in the natural gas businesses, and have been appointed to serve as committee members on a number of electricity and natural gas policy bodies, as presented in Box 6.1.

Box 6.1: A List of Government Officials in MOEN and Political Consultancies, who have Positions in Energy Policy Committees and hold shares in Energy Businesses

Government officials and political consultants who, the Manager Online site claims, also hold shares in energy businesses: 1. Chertpong Sirivich, Permanent-Secretary of Energy was appointed member of NEPC, Sub-committee on FT, Board of PTT PCL, PTTEP, Thai Oil, Thai Oil Power, and RATCH etc. He also holds share in Thai Oil. 2. Norkhun Sithipong, Deputy Permanent-Secretary of Energy was appointed member of NEPC, Sub-committee on FT, EGAT’s Board of Directors, MEA’s Board of Directors. 3. Metta Bunterngsuk, (former) Director-General of EPPO was appointed member of NEPC, Sub-committee on FT, and Board of PTT PCL. 4. Pala Sukvet, (former) PTT’s Governor and political consultant was appointed member of PTT PCL, PTTEP, Thai Oil Power, RATCH, Ratchaburi Power (IPP) and Tri Energy (IPP). 5. Oran Chaipravat, SHIN Corp’s executive and political consultant was appointed member of PTT PCL Board, Thai Oil, and holds shares in TOC that runs business based on Petrochemicals.

Source: Manager, September 19, 2005: online. 152

As a result of this list of policy decision-makers also with interests in electricity generation, critics such as Chuenchom S. Greacen have pointed out:

“…it is clear that…political interest was inserted into the energy business, particularly PTT PCL. The PTT executives and PTT Board of Directors were appointed from top government officials and political consultants…close to Thaksin” (Manager, September 19th 2005: online)

Greacen asserts that PTT, after it was privatized, paid less attention to protecting the public’s interest, than to protecting its own interests. PTT now pushes its costs and liability burden from the Yadana ‘Take-or-Pay’ gas purchasing contract, on to consumers through its electricity tariffs. Through this mechanism, Thailand’s electricity tariffs pass-on fuel price volatility, as well as variations in the costs associated with the ‘Take-or-Pay’ provisions in the Power Purchase Agreements (PPAs), directly to the consumer (Greacen 2007 (1): 23). Consumers on the other hand, have few channels for participation in the policy-making process that allows these costs to be passed on to them. 153

Table 6.5 Electricity Generation (Gigawatt: GW) Classified by Energy Type

Year Hydro Fuel Oil Lignite Diesel Natural gas Purchase Other Total (%) (%) (%) (%) (%) (%) (%) (%) 1970 1577.02 1774.61 262.16 481.53 - - - 4095.32 (38.50%) (43.33%) (6.40% (11.77%) (100%) 1975 2845.90 4883.41 294.98 40.65 - 146.63 - 8211.57 (34.66%) (59.47%) (3.60%) (0.5%) (1.78%) (100%) 1980 1653.31 10,671.63 1327.08 348.77 - 752.94 - 14,753.73 (11.2%) (72.34%) (9.0) (2.36%) (5.1%) (100%) 1985 3870.75 4228.24 4445.31 8.02 10,049.07 755.18 - 23,356.57 (16.58%) (18.10%) (19.03%) (0.03%) (43.02%) (3.24%) (100%) 1990 4831.18 9066.06 10,230.53 258.05 18,058.57 743.03 0.81 43,188.23 (11.19%) (20.99%) (23.69%) (0.597%) (41.81%) (1.72%) (0.001%) (100%) 1995 6684.58 21,376.41 14,849.39 1944.62 26,620.46 7712.87 1.04 79,180.37 (8.44%) (26.99%) (18.74%) (2.46%) (33.62%) (9.74%) (0.001%) (100%) 2000 5296.03 11,467.00 15,450.42 157.16 35,790.01 28,618.28 1.82 96,780.72 (5.47%) (11.85%) (15.96%) (0.16%) (36.98%) (29.57%) (0.001%) (100%) 2005 5671.15 7640.00 18,334.45 178.04 33,065.95 69,937.09 - 134.826.71 4.2%) (5.66%) (13.60%) (0.13%) (24.52%) (51.87%) (100%) Source: Calculated from Electricity generation classified by energy fuel, EGAT PR info. http://prinfo.egat.co.th 154

6.3 The Electricity Generation Policy Formulation Process

Many of the earlier attempts to examine the foundations and development of electricity power generation policy in Thailand neglected to carry out a long term investigation of the policy-making process. The idea promoted by historical institutionalists, is that the analysis of policy-making helps draw attention to the role of institutional factors, such as laws, rules and formal institutional values, and thus helps our understanding of the whole process. It helps to explain how the role of significant interests and new ideas shapes and determines the conduct of policy-making (Parsons 1995: 334). As indicated in Chapters 4 and 5, and reinforced by the analysis in this chapter, the Thai policy-making system has relied on a top-down and centralized policy and planning process. Sangchai has said, in relation to policy-making in Thailand, that most policy proposals have been developed within the Central Government agencies, and then submitted hierarchically to the Cabinet for final approval (Sangchai 2000). This chapter has shown how this has been the case in the electricity industry. Policy has continued to be initiated by the central or national agencies, without the participation of provincial or local agencies, and without consideration for the interests of the wider public. The policies, when approved are sent hierarchically down to the provincial or local agencies, for them to implement.

6.3.1 Power Development Plan: the Role of the Old Energy Aristocrats in

Electricity Generation Policy Development

Policy-making, in its relation to energy development in Thailand, originated in the Government bureaucracies. The bureaucrats that formed an elite have continued to manage policy development in relation to national economic development and the key sectors contributing to it, such as energy policy, and electricity generation and distribution. EGAT, since it was created in 1968, has played a key role in the process. 19 EGAT’s Power Development Plan (PDP) that has continued to be formulated by

19 The PDP normally describes details of: (1) the present status of the generation and transmission system, and projects proposed for implementation during the next fifteen years, to supply electricity in accordance with the demand forecasts of the TLFS, (2) the project, including the generation system, location and scale. These forecasts include the projects undertaken by EGAT, the private sector (IPPs and SPPs) and 155

EGAT, is a long-term plan that serves as EGAT’s investment guideline for the development of new power plants, or renovation of retired power plants, as well as other measures to supply sufficient electricity. The PDP, in turn, has occasionally been modified in response to national economic conditions, those that have affected electricity demand.

There is no record of when EGAT first employed the PDP as its investment guideline for the electricity sector. However, historical studies suggest that the PDP emerged in accordance with the NESD Plan, after it was recognised that electricity underpinned economic development, in 1958. In order to ensure investor confidence, EGAT had to plan to supply electricity to meet demands continuously. EGAT prepared its infrastructure investment plan every five years, consistent with the National Economic and Social Development Plan. Least-cost planning criteria have been used in the last fifteen years of PDPs’ developed by EGAT (Chirarattananon and Nirukkanaporn 2006: 2522), and within the regular policy process, as outlined in Box 6.2 and Figure 6.5.

Often the PDP was submitted to the EGAT’s Board of Directors for approval and then respectively forwarded to the NEPC and the Cabinet for endorsement. This left EGAT able to choose the type of power plant to develop, based on building hydropower dams, and thermal- and gas-fired power plants.

The emergence of NEPO, then in 2004, EPPO and PTT, led to the adoption of a fuel diversification principle as an important guideline in the formulation of power development plans. EGAT began to change its dependence on conventional technology to supply the power generators, and considered other fuels available, such as natural gas, fuel oil or coal, as well as purchasing power from neighbouring countries.

(footnote continued) neighbouring countries, and (3) the fuel type that will be used in electricity generation activities, and (4) the environmental control measurements to be used (Direksathapron 1998: 16). 156

Box 6.2: PDP Formulation Process

Data obtained from interviewees, and documents offered by interviewees, indicate

that there are seven linear steps in the PDP formulation process, as follows:

(a) Forecasting the demand for electricity and the attributes of electricity usage. (b) Analysing the information and capacity of existing power plants. (c) Analysing increasing demand, for the development of new power plants, and assessing their reliability. (d) Analysing information about the type of power plant that will be proposed by the PDP for selection. (e) Setting an alternative plan (specifying information/policy/conditions, such as fuel supply, scale of project and number of each type of power plant). (f) Comparing alternative plans calculated to minimize the cost of each PDP.

The PDP formulation process starts when the Thailand Load Forecast Sub- 20 committee (TLFS) , a body made up of representatives from EGAT, MEA, PEA and EPPO, as well as other relevant agencies, produce a long-term electricity load forecast covering the next fifteen years, consistent with the NESD Plan. In recent times, the TLFS has issued the load projection showing an upward trend on both power and energy requirements, a trend taken from the projected economic growth proposed by the Thailand Development Research Institute (TDRI), which was commissioned to 21 analyse and provide an upward trend in economic growth .

20 The Thailand Load Forecast Subcommittee (TLFS) and its working groups, were created to provide a projection of the demand for electricity over the next fifteen years. The forecast was based on a projection of economic expansion obtained from the Thailand Development Research Institute (TDRI). The load forecast in turn has been used by the three electricity utilities: the MEA, PEA and EGAT, as baseline information in their drafting of operational plans for the achievement of the base load projection. On the electricity generation side of the plan, EGAT has provided this based on a linear projection, as discussed in Section 5.4.2. 21 Interviewee #A003 157

After the load forecast was issued, it served as a guideline for the three electricity utilities on electricity power matters, particularly EGAT, which used the load forecast as a guideline for the formulation of the PDP. Then, in general, officers in the System Planning Division and the Generating System Development Planning Department of EGAT, initiated the PDP. This division of EGAT was assigned to work on “surveys: site investigation and planning of major projects, economic studies: power development programming and system planning, and financial forecasting” (Tu 1993: 185). It developed and updated the PDP, in consultation with EGAT’s executives, NESDB and the Power and Energy Mission of the World Bank.

In justifying the type of power plants proposed, the ‘least cost of fuel supply’ was a key factor used to determine the new generation type, as one of EGAT’s Board of 22 Directors stated:

“Basically, we have to justify the least cost of fuel supply. In case it is unavailable, the consideration will shift to another fuel type even if it is more expensive. Nevertheless, the…lowest cost fuel does not mean the lowest cost in terms of environmental and social features. For example, coal is considered a low cost fuel, but it damages the environment and people, and for that we cannot count how much they lose”

23 When completed, the PDP was submitted to the EGAT Board of Executives , comprising EGAT Governor, Deputy Governors and top-ranking executives, for scrutiny. When the Board of Executives approved the PDP, it was submitted to the Board of Directors for consideration. After the Board of Directors granted approval, the PDP was forwarded to the Ministry of Energy, for Government consideration. The Ministry of Energy, with EPPO giving policy and planning assistance to the Ministry, analysed the PDP and submitted the plan to the CEPA. In 2002, the EPPO organized a forum to allow the public to comment on the PDP, before it was submitted to the NEPC (Matichon, April 2nd 2007: 15). When it was approved by the CEPA, the PDP was forwarded to the NEPC. However, during this step, it was possible that the NEPC would

22 Interviewee #A002 23 Interviewee #A003 158

modify the PDP, such as to recommend alternative options for the electricity generation system, promoting renewable energy, and increasing the power purchased from the private sector and neighbouring countries. Finally, when the NEPC granted approval, the Ministry of Energy forwarded the PDP to the Cabinet of the Government of Thailand, for official ratification.

Figure 6.5: PDP Approval Process

Source: Modified from Tepa 2004, in Sukkumnoed and Nunthavorakarn 2005: 3

6.3.1.1 The Centralized PDP Process

In general, the policy making process in most liberal democratic countries involves various institutions, such as the legislature, the executive, administrative agencies and the courts. Many other participants in the policy formulation process, including political parties, research organisations, media, interest groups, as well as individual citizens (Anderson 1997) give their views to official policy-makers, or apply continuing criticism that can impact on those standing for election. In the case of 159

Thailand, where the political process has not developed and opened up as it would with a full democracy, it is clear that the bureaucratic elite continue to play a dominant role in spheres where technical knowledge is necessary, such as in national development planning (Prasith-rathsint 1987). This is also true in the policy-making process for energy and electricity, as highlighted in the previous section; a policy process that is dominated by bureaucrats and technocrats who develop centralized management systems and top-down decision-making and planning processes. Further, criticism has been levelled at the inadequacy of public participation in this sector. As shown before, the institutions developed by the elites have ensured limited access is given to the broader community, in each step of the decision making process, as well as limited access to the information necessary for them to participate in decisions. One implication of the policy framework initiated by technocrats and technicians is that it relies on the development of large-scale power plants fuelled by natural gas or coal, in order to meet 24 growing energy demands. As a Professor in Economics at Chulalongkorn University stated when I interviewed him for this research, “today technology for electricity generation is developed. But for Thailand, it relies on old technology”, and

“In the institutional framework, with policy makers concerned narrowly on simple methods, the simplest process in power generation will be chosen. It has been influenced by the hydropower industry, coal industry, or natural gas industry, that proposed technology for the development of new power plants. When the policy-makers find the technology…so useful, they will approve. Nevertheless, they have less concern about the environment and new alternative technology such as renewable energy. They hold the traditional institutional framework and old paradigm in power development that concentrates narrowly on large-centralised power systems”

This comment coincides with that of Hall (1986: 259) in his analysis of the development of the historical approach, who states “institutions exist and have [an] impact on how decisions are made, as they provide the context within which judgments are made, but they do not eliminate the ‘free will of [the] policy maker’” (Hall 1986: 259). As the Elite Theory developed by Dye (in Anderson 1997: 30) states, “public policy does not reflect [the] demands of the masses, but rather the prevailing values of the elites.” Electricity generation policy was formulated within an incremental process

24 Interviewee #C001 160

that in practice meant decision-making proceeded by making successive comparisons, and which limited the number of alternatives considered to those that differed in only a small degree from the existing policies, and also ignored the possible consequences of those policies (Hill 1997: 102). Within the development context of Thailand, these incremental changes have minimized the responses made to events that might have threatened the structure of the power generation system, until community based social organisations emerged to challenge them, as discussed in Chapter 7. This has permitted the elite policy-makers, particularly EGAT and the energy aristocrats, to play a dominant role in controlling policy direction, and to maximise their influence on it.

The direction of government policy decision-making has been increasingly contested by academics and CSOs. As the prominent scholar, Pasuk Phongpaichit notes:

“In making such decisions, government employed a relatively narrow assessment of the projects’ economic value expressed in cost-benefit analysis. Very often, such assessment paid little or no attention to the loss of benefits suffered by people whose residence, way of life, quality of life, or health were in various ways prejudiced by the project” (Phongpaichit 2000: 1)

The loss of benefits has increasingly become the focus for calls to move towards a more participatory policy process. The centralized policy process for approving the development of electricity generating plants has also been criticized from another angle. Sukkumnoed and his colleagues (2006: 114-115) point out that within the establishment of new power plants, some decisions might have been strongly influenced by interest groups. They raise the instance of the relocation of the two Prachub Kirikhan Power Plants: Bo Nok and Ban Krut, which were protested against by local and national environmentalists. The Government made a decision to change the location of the two plants, as well as change the type of fuel to be supplied, from coal to natural gas, in order to reduce the opposition in the area. Ban Krut (installed capacity 1400 MW) moved to Ratchaburi Province. Bo Nok (installed capacity 734 MW), operated by Gulf Power, moved to Kaeng Koi District in Saraburi Province. EGAT’s PDP 2004, indicated that EGAT would purchase 1468 MW from Kaeng Koi, meaning Gulf Power would gain a larger share without additional bidding or competition. Critics at the time noted that “the only explanation given is that this is in exchange for Gulf Power “cancelling its effort to demand damages from the performance of [the] Government 161

authority (GFM) and demand[ing the] return of money already invested in the Bor Nok factory” (Sukkumnoed et al. 2006: 115). In this way, it can be argued that EGAT has continued to operate in a non-transparent way, one that lacks any analysis of the costs benefits, and of the impact on electricity users (Sukkumnoed et al. 2006: 115).

Figure 6.6: The Linear Electricity Power Generation Policy Process in Thailand

Source: Sukkumnoed and Nunthavorakarn 2005: 13

The centralized administrative system may also have contributed to a process of inadequate policy formulation and incomplete implementation, due to insufficient coordination among the relevant agencies, and in some instances an overlap between Government agencies. Consistently undervaluing environmental issues has led to the emergence of inadequate and unsuccessful environmental management systems and subsequent conflict alleviation strategies. For instance, Christensen (1994: 60) in his research on water conflict in Thailand, states that policy proposals were developed inside Government departments before being submitted to the Cabinet. They lacked direction and the relevant information needed for decision-makers, because they assigned discretion over relevant policy issues to designated Government authorities. In relation to energy policy-making, the PDP was formulated in a linear policy system and disregarded public participation, as presented in Figure 6.6. The plan focused on 162

introducing power development projects, which EGAT justified on the grounds that they would minimise operational costs and maximize profits, for instance building hydropower dams and lignite thermal power plants. This was done despite their negative social and environmental impacts, as I will discuss later in this thesis.

For those affected by the projects, their capacity to influence was limited, due, as I have already stated, to a lack of information and in fact, the information was often highly technical and complicated. Information on the PDP was conveyed to the public by the electricity authority on television and in newspapers. This information was arranged to focus on issues where the Government sought support from the public; however, it did not seek to gather public opinion, or find alternatives to solve the problems that were identified with EGAT’s plans. One-way communication did not equate to public participation.

6.3.1.2 The PDP and its Strategies

One of the other substantive criticisms of the EGAT PDP, and the policy process, was that the strategies focused on how EGAT should operate to provide sufficient electricity to meet demand. The PDP did not explicitly reveal the role, interests and influence of associated businesses in shaping strategies that maximized their benefits. For example, a Professor of History at Chiang Mai University, in an interview for this research, stated that “the type of power plant selected was pushed by 25 the multinational corporations that develop technology for power generation.” There were however, clear preferences for different fuel sources expressed in the PDPs. The PDP 1999, issued in January of that year, was acknowledged as the PDP for natural gas, because it focused mainly on developing power generation capacity that relied on natural gas (EPPO 2006: 35). It stated that due to the wide criticism of environmental and pollution issues caused by EGAT’s existing lignite fuelled power plants, the PDP promoted the exploitation of natural gas in the power generation system. The utilization of natural gas supplied electrical power generators also, as one interviewee for this study stated, “extended the role and influence of PTT in the energy sector, as according

25 Interviewee #C006 163

to EGAT, it is obliged to purchase natural gas or fuel oil from PTT. The PTT therefore, 26 as part of this process, gained a large share of the profits from electricity tariffs.”

Another change look place on August 24th 2004. EGAT’s PDP 2004, as approved by the Cabinet, stated its strategy was shifting from a dependency on natural gas, to the exploitation of coal, a move that EGAT stated was to improve fuel diversity (EGAT 2004b: 23). The PDP 2004, reported that eighteen new power plants were to be developed between 2011 and 2015, with a total installed capacity of 12,600 MW, all to be supplied by natural gas and making the future energy system 81 percent dependent on natural gas as its fuel (EGAT 2004b: 23, Sukkumnoed and Nuntavorakarn 2005: 10).

After 2004, EGAT and relevant agencies actively supported the exploitation of coal within power generation. EGAT, for example, provided financial aid to support the World Conference on Coal 2005, in Lampang Province, the location of the largest coal basin in the country (Manager, January 31st 2005). Frequently, the former Minister of Energy expressed the view that “coal is cheap, available and minimizes electricity tariffs” (Manager, 31st January 2005). During 2006-2007, there was a series of conferences organised by MOEN, which focused on the issue of the energy crisis that threatened Thailand, due to the supply of natural gas from the Gulf of Thailand ending over the next few years. The agreement to purchase natural gas from Myanmar will also terminate shortly. Thailand has therefore been refocused on exploiting indigenous fuel sources, and in particular the lignite resources at Wiang Haeng basin, with little focus on renewable energy. In the meantime, the possibility of building nuclear power plants 27 has been raised, and proposed as ‘clean energy’. In fact, the proposal to develop nuclear power plants is not new; it was proposed to the Government by EGAT in 1977 (EGAT 1994: 203), and has frequently been proposed as an option for power generation, particularly during the rapid economic expansion in the period between 1985 and 1995 (Limmeechokchai and Chungpaibulpatana 1999: 49).

The PDP 2007 (2007-2018), approved by the NEPC on April 9th 2007, signalled a change in priorities. Its strategies have moved from the utilization of natural gas, to

26 Interviewee #C003 27 Interviewee #C003 164

the exploitation of coal, as well as the development of nuclear power plants. As reported by the Nation newspaper:

“Thai people will see on average one or two large power generating units constructed every year for the next 15 years. These units will be placed in existing and new sites, and will burn natural gas or coal. After 2011, they will consume hydropower from Thailand’s neighbours and liquefied natural gas (LNG). From 2020, Thailand will go nuclear” (The Nation, April 10th 2007: online)

It is quite clear from this evidence that policy-makers have been making decisions about the direction of Thai electricity generation, before initiating any formal policy process. The public has only been informed through information released by agencies, for example, those conferences organized and funded by the agencies themselves. As a result, the bureaucratic elites in the EPPO and EGAT have been able to monopolize the knowledge on electricity generation and policy development, a ‘technologically-oriented policy’, and have maintained an institutional barrier to those Thai people wishing to participate in the process in general. Only a small group of CSOs, such as ‘Palang Thai’, or ‘FTA Watch’, have been able to continue to develop their activities and examine the rationale of the PDP of 2007, as I will discuss in Chapters 7 and 8.

Although, EPPO organized a public hearing for the PDP before it was submitted for final approval by the NEPC (Matichon, April 4th 2007), it was not evident that any comment or recommendation from participants would be accepted by EGAT, nor lead to any re-adjustment of the PDP before being submitted for final approval by the NEPC. As a result, the public hearing can be seen as an institutional ritual organized to give legitimacy to the PDP, as it can say it invited comments from the public. However, this was not achieved, because the public had no effect on the policy decision-making process or its outcomes.

Sukkumnoed and Nuntavorakarn (2005: 4-5) point out that the planning issue is connected to natural resource use, environmental impacts, human health and economic 165

and employment issues, but that the planners formulated the PDP in response to the goal of least-cost energy development, so that the integration of other dimensions into the process were not considered. The energy development goal is thus narrowly focused on expanding electricity infrastructure, in order to achieve the goal of security of electricity supply. It gives little consideration to other goals, those that will contribute to sustainable development. The planners neglect other significant alternatives available within power development, as their perception, as indicated by a Professor of Economic at Chulalongkorn University, is “embedded in the old paradigm 28 that concentrated on the development of large-scale projects.” This is despite the fact that new technologies such as alternative energy, Demand Side Management (DSM) and non-conventional energy management methods, have become available, are important and are being promoted worldwide (The National Identity Board 2000: 230).

6.3.2 Energy Policy Formulation: the Role of New Energy Aristocrats

Energy policy development was, after 1958, firstly assigned to the National Economic and Social Development Board (NESDB) (Foran 2006: n.p.), as energy policy was seen as a key part of macro-economic policy. When the Government created the NEPC, technocrats from the NESDB were transferred to work in this new agency. The Energy Policy and Planning Office (EPPO) became the policy level organisation directly responsible for the drafting of the energy policy framework submitted to the National Energy Policy Council (NEPC) for consideration. Data obtained from 29 interviewing an EPPO official, as well as reviewing documentary studies, shows that policy making did continue to go through a hierarchical process, starting at the top of the policy-making bureaucracy.

The policies developed by the EPPO have served as a broad guideline for relevant agencies to frame their operational policies or plans. Generally, policy concerning electricity matters has been initiated, drafted and analyzed within the Power Division of the EPPO. Influential factors considered in the policy drafting process, as

28 Interviewee #C001 29 Interviewee #B002 166

revealed by an informant I interviewed for this research, have included socio-economic and political factors, electrical technology, natural resources and the environment, international politics and economics, and the role and potential of the private sector in 30 participating in power generation activities. Currently, there is more of a focus on improving public participation in planning, in order to alleviate conflict between government offices and local communities, but this has only been a recent development. When the Power Division completes its policy drafting, the draft is submitted to the Energy System Analysis Bureau for revision. After completing the revision, the draft policy is then transmitted to the EPPO for consideration again, together with other energy related policies submitted from other divisions. The EPPO then submits its draft policy to the CEPA for approval, and when the draft is approved, it is submitted to the National Energy Policy Council (NEPC) for consideration. After the NEPC has endorsed the draft policy, it is forwarded to the Cabinet for final endorsement. In practice, the Cabinet and NEPC, as my informant states, seldom modifies the policy 31 submitted by the EPPO . This process shows the powerful role and influence of the technocrats in the EPPO, in turn reflected in the energy policy initiatives and recommendations made during the 1990s.

After the Cabinet has endorsed policy proposals, the EPPO informs the state- enterprises under MOEN’s supervision, including PTT, EGAT, PEA and MEA, as well as other relevant authorities, of their decisions, and their policy serves as a broad guideline for these authorities to consider when they formulate operational plans. In other words, while policy may be initiated by lower ranking officials, decisions are made by top bureaucrats in the central agency, and approved by the Government, as shown in Figure 6.7. There remains little role for either elected politicians or committees to participate in the policy process.

30 Interviewee #B001 31 Interviewee #B001 167

Figure 6.7: The Structure of the Energy Policy Making Function

Source: EPPO. (n.d.). “Thailand’s Electricity Supply Industry: Policy and Regulation” (online)

Even in the latest policy-making process which goes through the Committee of Energy Policy Administration (CEPA), or the Electricity Regulator Commission (ERC), there is little representation from consumers, the social sector or regional interests.

As stated by Greacen and Greacen, “in practice, the NEPC rubber-stamped much EPPO policy suggestion” (Greacen and Greacen 2004: 522). Energy policy from the EPPO is focused on ‘technical policy’, formulated and examined by energy experts. These ‘new energy aristocrats’, have extended their role and influence over members of the NEPC, made up of politicians without the expertise, interest or capacity to participate in the process. 168

6.4 Conclusion

This chapter has examined the role of rules in structuring Thailand’s electricity supply industry, and the policy process in relation to electricity generation. The evidence indicates that although private generators in the form of IPPs and SPPs are allowed access to supply energy to EGAT for transmission, EGAT still dominates a large proportion of the industry.

The evidence indicates that individual decision-making tends to follow the broader values framework that exists at the institutional level. My analysis investigated this dimension of the policy process, and found a top-down and linear policy process that leads to policy actors in different situations tending to select the same strategies over time (Scott 1995: 60). In practice, decision-making also proceeds through successive limited comparisons with the past, without looking for an alternative method of decision-making. This achieves simplification, not only by limiting the number of alternatives considered by the policy decision-makers, but also by ignoring other policy alternatives, such as the use of renewable energy or demand side management. Significant changes would allow responses to events that might threaten the structure of the power generation system to be considered, whilst a minimum amount of alteration secures the current status of the key policy actors. This issue will be the focus for the next chapter. 169

Chapter 7 Electricity Power Generation Policy: Old and New Policy Actors and Their Influence

7.1 Introduction

In democratic countries, there are often many participants involved in the policy process, both state policy actors and non-state policy actors. These policy actors are individually or collectively referred to as ‘stakeholders’, those who have a stake in a policy issue because they are affected or likely be affected by it, or a government decision relating to it (Dunn 1981: 47). The term ‘policy actors’ has been defined by scholars such as Considine (1994: 5) as “those key politicians and bureaucrats who have command of the institutions, which must give approval to any decision or program.” This term is often used interchangeably with the term ‘policy maker’, and sometimes policy actors are described as participants, or key, or influential policy players (Housego 1964: 5, in Hall 1993: 11).

Every policy has its own history, and that story may be one of deals, alliances and attempts at finding solutions (Considine 1994: 8). The groups and individuals who create this context are usually found to form regular patterns of communication and interaction. Typically, the key participants in a policy system are linked through institutions, groups, networks and other continuing relationships. These are based on “shared understandings, values, common sources of disagreement, as patterns of interactions which can best be described as policy systems” (Considine 1994: 8). However, some policy has its own scope of policy-making that is limited to one particular field (Timmermans 2001: 315), and many scholars define these fields as a ‘policy subsystem’. This chapter sets out to build on Chapter 5, indicating how legal institutions and formal organizations have shaped the electricity industry in Thailand, and identifying the role that the policy actors have played in this. 170

The study of policy actors is necessary in order to sketch the power profile within the policy system, and to indicate those who hold or execute power in the policy process. Scholars in public policy studies, for instance Anderson (1997: 59), indicate that policy actors can be classified into official policy-makers and unofficial participants. Those who are categorized as ‘official policy-makers’, are empowered by institutional factors, including the constitution, law and policy formulation procedures within the relevant organizations. These groups of official policy-makers include those in the legislature, executive, courts and administrative agencies. On the other hand, unofficial participants, such as interest groups, political parties, as well as individual citizens, seek to participate in the policy process in various ways such as by acting as policy advocates and analysts. They are distinguished as ‘unofficial’ actors, because “they themselves do not usually have legal authority to make binding policy decisions” (Anderson 1997: 70).

In an effort to identify the policy actors and the policy formulation process in the electricity industry in Thailand, I reviewed literature which included newspapers and research reports, and found a large number of people who were instrumental, either explicitly or implicitly, in advocating, formulating and implementing electricity power generation policy in Thailand. Key policy actors already referred to in this thesis, include EGAT, EPPO, various government agencies, CSOs, informal policy groups, research institutions, politicians and interest groups. This study attempts to re-group and identify these policy actors, by using some elements of the Policy Network Analysis approach in order to identify policy networks by “the relationships among the particular set of actors that formed around issues of importance to the policy community” (Coleman and Skogstad 1990: 26). Each policy network can be distinguished by the characteristic policy principles or discourse that it holds and disseminates to the public and to policy-makers. The policy actors in this study are classified by their policy principles into four major networks, each associated with electricity generation, for example, the EGAT energy aristocrats are classified by their role and status in the policy process.

As indicated in Chapter 2, my research aims to investigate how policy actors participate in the electricity generation policy system, both as official policy actors and as unofficial participants. Thus, I have focused on the characteristics of the network 171

memberships, their sources of power and the policy discourse or principles held by each policy network. I did not analyze other network characteristics, such as integration, or the density of the networks, as this is beyond the scope of this thesis, though they could be the subject of further research. The focus in this chapter is to concentrate on identifying the policy actors, the cognitive networks and the influence they have, in order to find additional evidence to support my findings regarding the institutional factors, policy processes and policy direction adopted in Thailand’s electricity generation policy framework, as presented in Chapters 5 and 6.

7.2 Policy Actors in Thailand’s Electricity Supply Industry

Chapter 5 outlined a number of driving forces, including the making of laws, which have placed authority in the hands of the bureaucratic elites appointed to EGAT’s Board of Directors, and the EGAT top-executives who have played a significant role in the electricity supply industry. Other major policy actors include officials from EPPO, created by the Government to be responsible for the development of a broader systematic energy policy, one covering electricity power generation policy. As Thailand has become more democratic, new groups, including CSOs and political parties, have been enabled and empowered by the provisions of the constitutions, and have played a more assertive role in the policy-making process, promoting new policy goals and the re-structuring of the electricity industry, actions which have challenged EGAT’s control over the ‘rules’ of the game.

My investigation here will focus on an examination of the role of the four major policy actors in this process, including (1) the Electricity Generating Authority of Thailand (EGAT), representing what I call the ‘old energy aristocrats’, (2) the Energy Policy and Planning Office (EPPO), or ‘new energy aristocrats’, (3) civic society organizations, and (4) politicians. 172

7.2.1 The Old Energy Aristocrats (EGAT)

7.2.1.1 Emergence of the Old Energy Aristocrats

It may be recalled from Chapter 5 that in the 1950s, the Thai electricity sector was made up of a group of fragmented authorities that were subsequently consolidated into a single authority. The Thai Government enacted the EGAT Act of 1968, to create the Electricity Generating Authority of Thailand (EGAT), as the centralized and nationalized authority in charge of electrical power generation. EGAT was established by merging the existing three regional electrical power generators, namely the Yanhee Electrical Authority (YEA), the Lignite Authority (LA) and the Northeast Electricity Authority (NEEA). The EGAT Act of 1968 prescribed that the new authority was to be responsible for generating electricity and creating a transmission grid to service electricity across the country. It sold bulk power to state retailing enterprises, the Metropolitan Electricity Authority (MEA) and the Provincial Electricity Authority (PEA) (EGAT 1993: 31). The driving forces for this included the terms and conditions of loans provided by the World Bank and other lending agencies. These groups recommended that a new independent authority should be created to take care of power generation, and in order to avoid political intervention and corruption in the sector. Domestic influences were also important, as the three existing electricity utilities, the YEA, NEEA and LA, lacked common standards in terms of power generation services, and were uncoordinated in relation to supplying the grid, factors which would affect economic development and shaped the structure and role of the EGAT established in 1968.

7.2.1.2 The Members of the Old Energy Aristocrats Membership is suggested to be the most basic descriptive characteristic of a policy actor (Kircher 2004: 59). EGAT was created during the second premiership of Field Marshal Thanom Kittikachorn (1963-1973), during a period when a small group of bureaucratic leaders, both civilian and military, dominated political institutions. They exercised their control by appointing EGAT’s Board of Directors and EGAT’s executives. 173

EGAT’s Board of Directors

EGAT’s Board of Directors, as prescribed in the EGAT Act of 1968 Section 13, included eleven Directors appointed by the Cabinet. The Directors were to be representatives from relevant government agencies, professionals and scholars (Section 14). The provisions of the EGAT Act of 1968 prescribed the Board’s duties as, “…they shall be responsible for EGAT’s policy formulation and oversee EGAT’s administration, as well as setting up any regulation to facilitate EGAT’s administration” (Section 18). Customarily, the Chairperson of the Board was appointed from non-political circles, in order to create public confidence (EGAT 1994: 71). The first Chairperson, Professor Sanya Dharmasakti (who served from May 1st 1969, to October 13th 1973) was a distinguished scholar and lawyer. He had previously served as the President of the Supreme Court, and the President of the Privy Council. After the bloodshed of October 1 1973, the King appointed Dharmasakti as Prime Minister of Thailand (1973-1975). General Boonruen Boucharoon, a military officer and previous Director of the Board, was then appointed to serve as the second Chairman, and served from October 1973 to November 1982. Following Boucharoon’s resignation, Chao Na Silawan, the former EGAT Deputy Governor and Member of the Privy Council, assumed the Chairmanship, which lasted from November 1982 to June 1989. Promotion to the Chair of EGAT was thus carried out from within EGAT’s ranks, which maintained the close links between the political and bureaucratic elites. When the Choonhavan Government tried to promote the privatization of EGAT in 1989, the Prime Minister discharged the Board, and appointed Thongchat Hongladarom, former Governor of the Petroleum Authority of Thailand (PTT), to serve as Chairman. This Board was short lived, due to strong opposition from the EGAT EU, which organized a demonstration against EGAT’s privatisation (Praditsilpa 2003: 69). The Choonhavan Government appointed a new Board, and Chao Na Silawan, from the old EGAT Board, was re-appointed as Chairman in July 1989, serving until August 1993 (EGAT 1993: 329-342).

1 Professor Sanya Dhammasakdi was appointed to serve as Prime Minister after the student uprising on October 14th 1979. Before serving as Prime Minister, he served as the President of the Supreme Court, Dean of the Faculty of Law and President of Thammasat University, Vice President of the Constitutional Congress, Prime Minister for two terms (October 14th 1973 – February 26th 1975), and was requested by His Majesty to serve as the President of the Privy Council. 174

The power and control exercised by the EGAT Board was significant. EGAT’s Board of Directors had the authority, as prescribed in the EGAT Act of 1968, to approve EGAT’s power development projects before submission to the Cabinet for final approval (Section 18). The purpose of this was to reduce the multiple layers of Thai bureaucratic procedure, and to prevent political intervention. On the other hand, this system also had its weaknesses, as it created a monopoly with little transparency or accountability in its decision-making process (Chatikavanij 1994: 67-68), lacked legislative and public oversight, and employed limited public participation, a factor which became a contentious issue early in EGAT’s history.

2 Information I obtained from one Director of the EGAT Board of Directors indicated that currently, the Board is composed of eleven Directors who can be classified into three groups: government officials from relevant agencies, professional and academics, and the EGAT Governor as ex-officio, who acts as Director and secretary of the Board. In 2005, when the Shinawatra Government promoted EGAT’s privatization, EGAT’s status was changed from a state-owned enterprise to a public limited company. The members of the Board whom were then appointed from among the ranks of scholars, were identified as ‘independent directors’ (EGAT 2004: 12). As one respondent I spoke to indicated, the independent Directors are expected to be representatives of the consumer, and to balance the interests represented on the EGAT Board:

“Generally, the Cabinet appoints the Board of Directors. The Directors are divided into three main groups: government officials from relevant agencies, professionals from business firms or academics, and EGAT’s Governor. The professional group has been called ‘independent Directors’ because the Cabinet has assigned them to…counterbalance the other Directors appointed from government officials and EGAT’s Governor, and to protect consumer interests. I do not know who nominated my name to the Cabinet for appointment, because my lifestyle does not match with the lifestyles of the members of the other two 3 groups”

2 Interviewee #A002 3 Interviewee #A002 175

Some of the Directors appointed in 2005 were from a different group; those formerly appointed. Independent Directors were there to protect consumer interests, after EGAT became a public company. However these was no guarantee that the independent Director would act to protect consumer rights, as there were no representatives from consumer groups or CSOs appointed to the Board.

EGAT’s Executives

The provisions of the EGAT Act of 1968 called for EGAT’s executive to be responsible for policy initiation, setting the policy agenda, implementation and day-to- day work. In practice, they also acted as policy advocates to the Board of Directors. The current EGAT administrative structure is divided into three groups: the development 4 group, the generation group and the transmission system group . EGAT’s Governor has responsibility over all of EGAT’s administration. Eight Senior Deputy Governors have been appointed to take care of EGAT’s key functions and there are 27 other functional divisions in the organization, including policy and planning, finance, and human resources and administration (EGAT 2006: 44-45).

All of the top EGAT executives early in its history, including Kasame Chatikavanij, Anand Thapnan, Thongroj Potchanart, and Pat Ketsamri, all graduated from the Faculty of Engineering at Chulalongkorn University (EGAT 1994: 292), and this source of staff continued over a long period of time (EGAT 1994: 55). As a scholar 5 from Palang Thai , interviewed for this research, noted in relation to the profile of the EGAT staff:

“When I surveyed EGAT’s human resource profile, I found that most of …EGAT’s top executive positions were posted by those who graduated from the Faculty of Engineering, Chulalongkorn University. When…EGAT recruits a newcomer, it maintains this pattern and prefers the applicants who graduated from the same institution”

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This pattern of recruitment has helped to build on the established social and educational links, and has contributed to developing a unity of purpose and a strong organizational culture, as expressed by Chatikavanij, the first EGAT Governor:

“...we came from the same school, because in the past only Chulalongkorn University provided an engineering program. Thus, we knew each other very well and this helped to reduce the problems in EGAT administration” (EAGT 1993: 265)

Most policy proposals submitted to EGAT’s Board of Directors were initiated and developed by EGAT’s administrative body, and were technically-oriented policies written by people with an engineering background. The power development project proposals contained details regarding the power plants construction, but did not seek alternative ways to generate electricity. This could be difficult for EGAT’s Board, recruited and appointed from economists, lawyers and the military, to understand. As one interviewee stated, EGAT’s Board usually approved, without revision, the PDP, 6 plans or project proposals that EGAT’s executives proposed . Thus, it can be argued that EGAT’s executives played a predominant role in shaping and setting the policy direction.

EGAT Employees’ Union

The EGAT Employees’ Union (EGTA EU) was founded in 1975 under the provisions of the first Labour Relations Law that was enacted on February 14th 1975 (Praditsilpa 2003: 70). The Act came from the democratic Government established following the 1973 student-led coup d’etat (Boonyarattanasoontorn and Chutima 1995: 27). Unlike the labour unions of private firms, the EGAT EU did not play an aggressive role in Thailand’s labour movement, or ask for more benefits, because EGAT’s executive provided sufficient welfare for its employees, such as a range of free electricity services for staff, that were considered better than other state-owned enterprises. This resulted in the EGAT EU as an enterprise, working closely with the executives (EGAT 1993: 93).

6 Interviewee #C011 177

The EGAT EU has had long experience playing an active role in politics, such as its resistance to the Government policy of privatization, launched by the Choonhavan Government in 1989 (Praditsilpa 2003: 69). Furthermore, when EGAT was confronted with civic society organizations who campaigned against EGAT’s power development projects, EGAT’s executives used EGAT EU’s influence to counter the civic 7 demonstration, as reported by one scholar I interviewed from the Thai Chamber of Commerce. EGAT has been criticized for using EGAT EU to protect its own interests and for neglecting human rights.

The military coup in 1992 led to the abolition of state enterprise employee unions, including the EGAT EU (Praditsilpa 2003: 70), and the junta extended their power to control existing state enterprises. However, the military allowed them to establish State-Owned Enterprises Employees’ Associations, and signalled the intention of the Government to reduce the rights and activities of the state enterprise employees. In 2000, when the civilian Government was faced with a threat from the US to withdraw trade privileges, the Thai Parliament passed the State Enterprise Labour Relations Act of 1991, which reinstated the rights of workers in state-owned enterprises to form unions, and allowed them to bargain collectively (Asian Labour Update 2004: online). The EGAT EU was then reinstated as a trade union.

7.2.1.3 The Major Sources of Power of Old Energy Aristocrats

Institutional Factors

As Byrne and Mun (2003:50-51) state, in many developing countries there are still undemocratic modes of governance. The important decisions regarding electricity supply and distribution in Thailand were made by a closed circle of technical experts, government bureaucrats and large corporate clients. In Thailand, the governance structure that was dominated by elites, coupled with the monopoly status of the electricity utilities, resulted in the electricity industry developing into a powerful organization. As indicated in Chapter 5, EGAT was created by a bureaucratic elite that dominated political institutions in the 1960s; they thus preferred to create a centralized electricity utility in order to realize economic development goals and ensure energy

7 Interviewee #C012 178

security. The most important law, one which established EGAT’s power and authority, was the Electricity Generating Authority of Thailand Act of 1968, a law that laid-out EGAT’s mission, and helped to form its administrative structure.

Between 1969 and 1992, EGAT continued to enjoy a monopoly role in policy formulation and implementation, a time that coincided with a period of economic growth, growth which required the development of a more robust infrastructure network, including one for energy, in order to support the industrial sector’s expansion. To meet this demand, the technocrats in the EPPO recommended to the Prime Minister, Chatichai Choonhavan, the re-structuring of the electricity supply industry; however, the Government faced strong opposition from the EGAT EU (Praditsil 2003: 69). When 8 Anand Panyarachun was appointed to serve as Premier, the technocrats in the EPPO recommended a change to the EGAT Act of 1968, in order to encourage more private sector participation in electricity power generation (Vikitset 1998: 7-8). This move was aimed at creating a competitive market in the electricity supply sector and encouraging a number of private power producers to participate in the power generation market, both as Independent Power Producers (IPPs) and Small Power Producers (SPPs). EGAT however, retained its 70 percent share in power generation activities, as indicated in Chapter 5 (Sukkumnoed 2007: 27).

This led to EGAT being expanded, in parallel with the growth of the industrial sector. The transmission system was also gradually extended into rural areas, in order to provide electricity services and help reduce support for the perceived rural communist insurgency, as discussed in Chapters 4 and 5. As Ryder comments, throughout EGAT’s expansion, the planning and decision-making processes for the development of electricity projects, continued to be technically oriented and highly centralized (Ryder 1997: 13). As indicated in Chapter 5, effective public participation was limited, because the Government assumed that it had the sole right to formulate policy, as well as to exploit the natural resources of the country. This closed the door on public participation

8 Anand Punyarachun was appointed to serve as Prime Minister of Thailand twice, between 1991 and1992 and once again in 1992. He worked for 23 years in the Foreign Ministry, serving, in turn, as the Ambassador of Thailand to the United Nations, Canada, the United States and West Germany. In January 1976 he was appointed Permanent-Secretary of the Foreign Ministry, and played a leading role in ensuring US military withdrawal from Thailand. He joined the private sector in 1979, and became the Vice-Chairman of the Saha-Union Group in 1979 and the Chairman of its Board of Directors. 179

in the policy process. EGAT’s bureaucratic engineers employed ‘conventional technology’, such as the construction of large hydroelectric dams and massive coal-fired power plants, and centralized electricity planning and management in order to supply energy for the whole country.

9 Interestingly, an executive I interviewed claimed that EGAT has never performed as the key policy-maker. He stated that throughout its history, EGAT has prepared policy alternatives (under the PDP), in order for policy decision makers to make a decision. However, the evidence presented here suggests that electricity generation policy has been formulated by engineers or experts at EGAT, with few policy alternatives being presented outside of any internal debate.

Organizational Culture

Organizational culture is “the basic pattern of shared assumptions, values and beliefs governing the way employees within an organization think about and act on problems and opportunities” (McShane and Travaglione 2002: 534). Organizational culture serves three important functions, including (a) as a deeply embedded form of social control that influences employee decisions and behaviour, (b) as a ‘social glue’ that bonds people together and makes then feel part of the organizational experience, and (c) helping employees to understand organizational events (McShane and Travaglione 2002: 540). The organizational culture constructed by EGAT served to reinforce its unity and strength. Since its creation in 1969, EGAT had developed an internal organizational culture that became an important factor in guiding its performance, including the recruitment of new members and its administration. EGAT’s organizational culture was reinforced by the EGAT executives in 1984, when they suggested that the values required by its employees were: “love the organization, performance excellence, and respect moral principles” (in Thai, “Rak Ong-karn, Mung Ngan Lert Terd Khunna Tham”) (EGAT 1993: 304). By 2004, EGAT proposed in its annual report that its organizational values were “fairness, integrity, responsibility, mutual respect, and performance excellence” (EGAT 2004: 29). EGAT’s own description of these organizational values is shown in Box 7.1 below:

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Box 7.1: EGAT Performance Performance “EGAT people all are competent crew, working efficiently and effectively, with a strong single-minded will to speed the ship to its goal. Long as the ride is, tired as the crew are, when success is achieved, it is the prize and pride for all EGAT people. Though 35 years of operations, Quality and Efficiency have always been EGAT’s priorities. With these in mind, EGAT always strives to further improve its crew competence and team spirit to maintain its competitive edge in future business challenges.

Source: EGAT 2004: 31

As EGAT grew and workers were recruited from various other educational institutions, establishing this organizational culture became a key goal of the management, in order to unite employees and socialize new members. When EGAT expanded its operations to local areas, this organizational culture assisted the small groups of employees in local and outlying areas to feel part of the larger EGAT team, and helped obtain commitment to the aims and goals of the organization.

Leadership

In Thailand, where the political system is not fully democratic, then as Dye (1990, in Anderson 1997: 29) notes, public policy can sometimes be regarded as reflecting the values and preferences of the governing elite. The study of leadership in the early period of EGAT, and its current position, demonstrates that this is the position of EGAT in the Thai political system. Kasame Chativanij, the first EGAT Governor, was a member of the Thai nobility (Chatikavanij 1994: 11-12), and graduated from the Faculty of Engineering at the elite Chulalongkorn University, starting his career at the Department of Industrial Works, in the Ministry of Industry. After working for a few years, he completed a Master’s Degree in hydropower at the University of Utah in the US. When he returned, Chatikavanij was transferred to work at the Department of Royal Irrigation (RID), which was already planning to construct a large hydropower dam (Yanhee Dam), with financial assistance from the World Bank. The Thai Government sent Chatikavanij to Denver to be trained in hydropower dam management, and he 181

drafted the proposal to request financial support from the World Bank in order to build it (Chatikavanij 1994: 24-28).

When the Government created the Yanhee Electricity Authority (YEA) in 1957, Chatikavanij was appointed YEA Governor. In 1969, the Government consolidated the three existing electricity utilities, namely the Yanhee Electricity Authority (YEA), the Northeast Electricity Authority (NEEA) and the Lignite Authority (LA), and created EGAT. Kasame was appointed as the first EGAT Governor and served in this position from May 1st 1969, to May 1st 1985 (EGAT 1994: 343).

During 1977 and 1978, Chatikavanij was also appointed to the Minister of Industry, and doubled as the EGAT’s Governor (EGAT 1994: 77). The Thai media named him ‘Super K’ because of his strong commitment to EGAT’s modernization and to addressing EGAT’s financial problems at the time. His influence was also significant in informal negotiations with Prime Minister Choonhavan, to solve the problem created when the EGAT EU organized the first demonstration against Choonhavan’s policy to promote EGAT’s privatization in 1989 (Chatikavanij 1994: 161-163).

Although Chatikavanij retired from EGAT more than twenty years ago, he has maintained his role as its symbolic leader. During 2003, when Prime Minister Shinawatra attempted to promote EGAT’s privatization, Chatikavanij supported the maintenance of EGAT as a state enterprise and opposed the proposed change. During the demonstration by EGAT EU against Shinawatra’s policy, he also provided moral support to EGAT’s members (EGAT EU (n.d.): online). Chatikavanij has therefore continued to provide a source of direction and stability to the industry, right up to the present time. EGAT’s Governors, following Chatikavanij, such as Kamthon Sindhuvanond and Paopat Chavanalikhikarn, were distinct from him in their views regarding negotiating with politicians, leading to the political interventions that have occurred since the 1990s.

Resources

As Howlett and Ramesh (1995: 56) point out, the bureaucracy’s power and influence were based on a range of resources they could employ in order to pursue their 182

own organizational and personal objectives. EGAT used its resources to support its electricity industry functions and activities, influencing policy. In 2006, EGAT employed a total of 24,209 people (as of August 2005). Males made up 80 percent of these, with over 27 percent of its staff holding bachelor degrees, and 44 percent having completed certificate level education (EGAT Annual Report 2006: 115). As one can 10 interpret from the interviews I carried out for this project, EGAT itself had a significant budget allocated to influencing public perceptions of its operations. The budget was used to buy space in newspapers, and time on radio and television, to promote EGAT projects and policy. EGAT also allocated a budget to support Royal Development Projects, and Government environment projects, such as re-forestation projects (EGAT, 2006: 97-98). As one interviewee noted, funds were also used for the ‘creation of public relations’, in order to build a rapport between local people and 11 EGAT officials . These funds were used to deliver messages to local areas where EGAT planned to develop projects and might face opposition. EGAT also donated money for the reconstruction of local temples, and to support local cultural activities.

The Advocacy of the Old Energy Aristocrats

The discourse of EGAT officials observed by Sukkumnoed and Nunthavorakarn (2005: 59), was directed at the maintenance of a ‘state monopoly’, and served as a priority for the people at EGAT. The management and personnel of EGAT also tried to manage the whole policy environment, including new projects being proposed in the energy policy field. As one interviewee noted, EGAT saw electricity both as a ‘public utility’ and as a ‘national priority’, one that contributed to “national security and 12 economic expansion”, and this legitimized its role in controlling policy . To reinforce consumer confidence in the policy that stated electricity should be developed using large-scale power plants, it was stated that electricity supply could then be assured, and that the use of indigenous fuel, such as lignite and hydropower dams, would help to minimize the operational cost and the risk of blackouts.

10 Interviewees # C003, C011 andC012 11 Interviewee #A001 12 Interviewee #C011 183

Praditsil (2003) claims that the anti-privatization policy movements (sometimes called the ‘anti-globalization alliance’) during the 1990s, used the ‘Neo-Nationalism’ ideology to support their demonstrations. Advocates for this ideology included members of the State Enterprises Employees’ Unions, the middle-classes, socialist academics, and some Thai businessmen (Praditsil 2003: 83). They argued that the policy on state enterprise privatization would allow foreign investors to dominate Thailand’s state enterprises, and would transfer monopolistic power from the Government to the private sector (Praditsil 2003: 89).

13 One EGAT executive stated that, even though EGAT was described as a state- owned enterprise, and as such was meant to provide profits to support Government revenue, EGAT also considered itself a state agency with a social responsibility to provide electricity as a public service, at the lowest cost possible, and that electricity produced by EGAT was cheaper than the services produced by private generators, 14 because EGAT did not seek to maximize profits, as the private sector did . This view was true, despite widespread criticism by CSOs, who suggested that EGAT used its influence to protect its own interests, rather than the public interest (Sukkumnoed and Nunthavorakarn 2005: 50).

The view is supported by some researchers, who after analyzing EGAT’s plan stated that “the ‘predict and provide’ approach is the main approach in this state monopoly’s discourse” (Sukkumnoed 2007: 34). The main idea was to predict the demand growth and later to provide the increasing demands through new investment, to expand power generating capacities. The fifteen percent reserve margin was set as a main criterion for ensuring the availability of power in the system. During the summer of almost every year, EGAT announced a new record high of peak electricity demand and so asked for further expansion. Since, as stressed before, this discourse believes that “no power is the most expensive one”, investment in the electricity sector was always recognized as a good deal for the Thai economy (Sukkumnoed 2007: 34). The CSOs in contrast, commented that EGAT set a high reserve margin, due to its plans to ensure

13 Interviewee #A001 14 Interviewee #C002 184

15 both sufficient energy and new investment for power development projects , using conventional technology (Palettu 2002: 21) and, in particular, to develop fossil-fuelled power plants and hydroelectric dams. As presented in EGAT’s PDP, only these technologies were perceived by EGAT as dependable options for expanding electricity supply (Sukkumnoed 2007: 34). EGAT switched from its dependency on oil to lignite, and subsequently to gas, because it was forced to purchase oil from PTT, as stipulated 16 by Government policy . The EGAT Act of 1968 allowed EGAT to run a lignite mining business (Section 6 (3)).

This section found that the original members of EGAT’s Board of Directors were appointed from distinguished members of the nobility and professional engineers, in order to protect the organization from political intervention. Support from EGAT’s management and the EGAT EU, secured its status and protected its position as a monopoly service provider and as a key agent in setting policy for the sector.

7.2.2 The New Energy Aristocrats

7.2.2.1 The Emergence of the New Energy Aristocrats

As outlined in Chapters 4 and Chapter 5, bureaucratic elites have, over the years, played a significant role in shaping national development policy, and have exercised control over political institutions in Thailand. This Thai political characteristic has been called by Riggs (1966), a ‘bureaucratic polity’. When Sarit Thanarat served as Prime Minister in 1958, he legitimized his ‘revolution’ by announcing a commitment to national development and the bureaucratic elite. Thai development agencies were even invited to take part in it. When Thanarat accepted the World Bank’s report on ‘A Public Development Program for Thailand’, he called for new agencies to be formed, including the NESDB, BOB and BOI, in order to implement the policy. In 1961, the First NESD Plan was officially implemented and the State played a leading role in developing new physical infrastructure, including building a transportation network, electricity and

15 Interviewees #C002 and C#003 16 Interviewees #C002 and C#003 185

irrigation capacity, as well as encouraging domestic and international investors to be part of the country’s development.

During that period, as Foran (2006: 14) notes, the agency most able to constrain EGAT’s self-regulation was the NESDB. Although EGAT’s Board of Directors was empowered by laws which gave it full authority to approve power development plans, they then had to be forwarded to the NESDB for review, particularly investment plans to develop new power development projects. It is evident that during the period 1985 to 1988, the NESDB sent six PDPs previously approved by EGAT’s Board of Directors, back to EGAT for revision. However, in the 1980s when Thailand faced a series of severe energy crises, the Government found that it lacked unity in administering the country’s energy affairs, due to the large number of agencies involved in energy matters. There was no permanent and well-organized system that could oversee both the planning and development of national energy programmes, as well as regulate and coordinate the roles of the public and private sectors of the economy (NEPO 2001: 2). As outlined in Chapter 6, the NEPC and NEPO functioned under the supervision of the Secretariat of the Prime Minister, in order to develop systematic energy policy measures (NEPO 2001: 2). Foran (2006: 17) notes that Amaranand, who had previously neglected EGAT’s PDP while working for the NESB (EGAT 2006:14), was then appointed to serve as the head of EPPO. The EPPO appointment marked a change from the past, because instead of engineers, economists became the key people in leadership positions within in the sector, covering policy management. This group could be seen as the ‘new energy aristocrats’, because they did not originate from within EGAT and were not engineers.

Greacen and Greacen (2004: 522) note that EPPOs’ early years were taken up with the restructuring of the oil sector, which included managing the Oil Fund, used to stabilize oil prices and which was capitalized by a tax on crude oil. However, when it was disclosed that EGAT faced financial difficulties because of the cost of its over- investment in the development of power plants and hydroelectric dams, EPPO paid increasing attention to the electricity sector. The agency recommended to the Government, the setting up of an Energy Conservation Promotion Fund (ENCON Fund), to promote clean renewable energy and energy efficiency. 186

According to Scott, professionals exercise their control via a cognitive and normative process (Scott 1995: 95). The ‘new’ energy aristocrats frequently exercised their influence by generating ideas to inform and influence the decision makers and the public. During the 1980s, the EPPO became a key policy advocate in the electricity generation sector, and used economic analysis focused on the structural reform of the electricity supply industry. The reputation of EPPO was established during the period of Amranand, a prominent economic technocrat and former Director-General of EPPO, who recommended that the Government should create a competitive electricity market, using structural reform and a partial privatization in 1992, and also the creation of a power pool market in the early 2000s.

7.2.2.2 The Members of the New Energy Aristocrats and Sources of Power

The Members of the New Energy Aristocrats and Leadership

The EPPO was established to recommend national energy policies, energy management and development plans to the Cabinet, and to work as the Secretariat of the National Energy Policy Council (NEPC) or ‘Energy Cabinet’. Prior to the restructuring of Government agencies in 2001, EPPO was supervised by the Office of the Prime Minister, and was the agent of the Prime Minister on energy policy affairs. Staff at the EPPO early-on, were economists transferred from the Office of the National Economic and Social Development Board (NESDB) (Chotana and Kanchana 2003: online). It is suffice to say that members of the new energy aristocracy believed in the value of liberalization ideology, a strong role for the private sector in the electricity industry and a competitive energy market.

As Howlett and Ramesh (1995: 56) note, the bureaucracy can employ a wide range of experts to turn it into a premier organization in society. The EPPO tried to achieve this by employing a large numbers of professionals, hired for their reputation as experts in their fields of specialization. Similar to EGAT, that had Chatikavanij, or ‘Super K’, as a symbol and founder, EPPO had Amranand as its key policy player. Amaranand was named by the media as ‘Power Man’ (Chotana and Kanchana 2003: 187

online), because he continuously pushed energy sector reform and ensured EPPO played a key policy role to replace EGAT in the policy and planning process.

Amaranand, like Chatikavanij, came from the noble class. He graduated with a PhD in Economics from the London School of Economics, and was a confirmed neo- classical scholar. Amranand served as Director of Economic Analysis and Projection in the NESDB. During 1986 to 1992, he also worked at NEPO and was appointed to be the Deputy Secretary-General of EPPO in 1992, and later in 1994, became the Secretary- General of EPPO (EPPO 2006: online). The overall direction of energy policy in Thailand during the 1980s and 1990s reflected his ideas in support of the value of the liberalization of the energy sector, as well as structural reform in the electricity sector (Praditsil 2003: 83). Others also played a key role along with Amaranand. The media 17 disclosed that two other key people, Tienchai Chongpeerapian , and Praipol 18 Koomsap , worked in concert with Amaranand in the policy, planning and decision- making process for the formulation of national energy policy at EPPO (Rakbankerd (n.d.): online). The media noted that Koomsap was appointed by EPPO to serve as a member of several working groups, such as the working group drafting a Bill on Energy Regulators, the Sub-committee on the Coordination of the Power Utilities’ Future Operations, and was a committee member of the Energy Conservation Promotion Fund Committee (ENCON Fund). Chongpeerapian was appointed the Chair of Thailand Load 19 Forecast Sub-committee (TLFS) and a member of the working group to draft a regulation mechanism for a power pool (Rakbankerd (n.d.): online). Most of these committees, sub-committees and working groups were created by the NEPC on the authority of Amranand.

The new energy aristocrats were criticized for the conflict of interests in their pursuit of market based solutions for energy reform in Thailand. Chongpeerapian and Koomsup created a private firm, the Berra Company, in 1992, to bid for a number of consultancy projects from EPPO. This company, with Triple J Company, submitted a

17 Tienchai Chongpeerapien is a freelance academic in the energy field. 18 Plaipol Kumsap is a Professor of Economics at Thammasart University. 19 Thailand Load Forecast Sub-committee (TLFS) was created by the National Energy Policy Council to be responsible for the demand forecasting of electricity, as indicated in Chapter 6. 188

series of study proposals to EPPO and later their recommendations were listed in the national energy development document of 1999-2001. Those I interviewed for this study had proposed to establish a new basis for a electricity tariff structure, including 20 21 the introduction of Time of Day rates (TOD) and Time of Use rates (TOU) during 1991 and 1995 respectively. However, when the TRT Party won the general election of 2001 and became the ruling party, the Government rejected the policy recommended by EPPO, because it aimed to adopt a policy based on the previous party’s platform. The power pool model proposed by the NEPC was not TRT Party policy, and so was 22 rejected. Later, in 2002, Amranand was transferred from Secretary-General of EPPO to Inspector-General in the Office of the Prime Minister, which was considered a relatively inactive position (Greacen and Greacen 2004). Metta Banturngsuk was appointed to serve as the Director-General of EPPO from 2002 to 2006. However, unlike Amranand, Banturngsuk kept a low profile, and that led to EPPO losing its position in the energy policy system hierarchy. He was thus replaced by Viraphol Jirapraditkul, who was appointed Director-General of EPPO on December 1st 2006. 23 After the coup of 2006, Amranand was appointed the Minister of Energy and it seems likely that in the near future, EPPO will regain its power and take a leading part in future energy policy formulation.

Institutional Factors as Sources of Power for the New Energy Aristocrats

Institutional factors and leadership were the sources of the new energy aristocrat’s policy framework and its effectiveness within policy-making. They worked through the NEPC, as the central agency in the development of national energy policies, and as empowered by the National Energy Policy Council Act of B.E 2535 (1992)

20 Time of Day Rate (TOD) refers to the use of a formula to automatically adjust the electricity charges according to the consumption periods in a given day. The principle is that electricity tariff rates will be expensive if consumption occurs during the non-peak hours of the day. The objective of introducing the TOD Rate is to enable the distribution of power consumption across as many periods of the day as possible (EPPO 2005: 33) 21 Time of Use Rate (TOU) is an alternative for the current TOD tariff rate users. The TOU tariff structure has been designed to reflect the production costs and the changing patterns of electricity consumption (load curves). This was enforced in January 1997 (EPPO 2005: 33). 22 From 1994 to the present there have been four EPPO Secretary-Generals/Director Generals, including Piyasvasti Amranand (March 1994 - May 2000), Piromsak Laparotekij (October 2000 - 2001), Piyasvasti Amranand (second term: April 2001 - November 2002), Metta Bunterngsuk (November 2002 - November 2006), and Viraphol Jirapraditkul (December 2006 - present). 23 Amranand ended his term as the Minister of Energy on January 29th 2008. 189

(NEPC Act of 1992). The organizational structure of the NEPC consisted of the Prime Minister as Chairman, with another eighteen members chosen from associated 24 ministries and agencies . The main scope of authority and responsibilities of the NEPC were to recommend national energy policy, energy management and development plans to the Cabinet (NEPO 2001: 14).

When enacted, the NEPC Act of 1992 originally provided a number of provisions to authorize EPPO to be responsible for energy policy formulation and implementation. EPPO, in turn, initiated policies which it submitted to the NEPC for approval. Greacen and Greacen (2004: 522) point out however, that “in practice, NEPC rubber-stamped many EPPO policy suggestions”, as the central planning agencies such as NESDB and NEPC lacked the power and authority to enforce or command various energy utilities, that were created in ministerial structures, to follow their policy guidelines. Policy development needed technical analysts and other experts to take part in this process. The technocrats in EPPO were less effective than those in EGAT in this work, and while the Cabinet never changed policies that had been approved by NEPC, they did not have a lot of influence, as the field, in practice, was controlled by EGAT.

25 In an interview with an EPPO Deputy Director-General , he stated that:

“…in the past, when the Governments drafted their government policy for delivery to the Parliament, they frequently asked the EPPO to prepare the national energy policy and they attached the policy submitted from other government agencies”

EGAT developed the PDP in accordance with the framework of a national energy policy, as presented in Chapter 6. This was a negotiated process within EGAT which set the direction of the PDP. Information I obtained from interviews with an EPPO executive showed that EPPO had negotiated with EGAT in its PDP drafting, in

24 Section 5 of the NEPC Act of 1992 prescribes the members of NEPC, including: the Prime Minister serving as Chairman, the Deputy Prime Minister, Ministers from the Ministries of Energy, Defence, Finance, Foreign Affairs, Agriculture and Agricultural Cooperatives, Transportation, Commerce, Interior, Energy and Industry, and other officials from the Ministry of Industry, the Council of State, the National Economic and Social Development Board (NESDB), the Budget Bureau, and the Department of Development of Renewable Energy and Energy Conservation (NEPO 2001: 14). 25 Interviewee #B001 190

order to extend the IPPs’ shares in electrical power generation, and to promote the utilization of renewable energy. The negotiation was carried out prior to the PDP 26 submitting to the NEPC for approval , but did not change EGAT’s goals or priorities.

The new energy aristocrats worked actively during the 1990s to acquire support for their reform proposals from international financial institutions, such as the World Bank and IMF, including the EGAT privatization policy (Ryder 1997). It advised the Government to create a liberalized and competitive market in the electricity power sector, by allowing private companies to participate in electrical power generation under the IPP and SPP programs. The Panyarachun Government, which appointed several technocrats to its Cabinet, also supported the recommendation. The partial EGAT (but not full) privatization of EGAT, and private sector participation in electricity supply industry, followed in 1992. The NEPC Act of 1992 ensured the NEPC was upgraded to be a national committee for energy policy formulation, and EPPO was upgraded to be an office at the department level.

The influence and power of the new energy aristocrats in the EPPO was relatively constant through the first two decades after it was established, but declined dramatically when the TRT Party won the general election in 2001. Apparently, the new Government rejected EPPO’s power pool model as the launching pad for power sector restructuring. The new Government also adopted administrative reform and restructured government agencies, including the Ministry of Energy (MOEN). NEPO was transferred from the Office of the Prime Minister to MOEN, and downgraded to the Energy Policy and Planning Office (EPPO). EPPO was changed to perform the duty of secretariat to the NEPC, and became one of many agencies reporting directly to MOEN, and had to work under MOEN’s direction. The power and influence of the new energy 27 aristocrats was reduced as a result. As a scholar involved at the time noted, “EPPO lost its leading role and leadership to influence the Government on energy policy decision-making.” However, it is expected that the reputation and power of EPPO will be restored in the future, with Amaranand again serving as the Minister of Energy.

26 Interviewees #B001 and C002 27 Interviewee #C002 191

The Discourse of the New Energy Aristocrats: Liberalisation of the

Electricity Market

EPPO has a close relationship with technocrats in relevant agencies such as the NESBD, as well as technocrats in international organizations including the World Bank. Suffice it to say that the new energy aristocrats in the EPPO hold a ‘neo-liberalist’ ideology, one reflected in their pursuit of the creation of a competitive energy market during the 1990s, when they attempted to change the values applied to the sector, and to restructure it. They criticized the electricity industry for being inefficient, because EGAT had a monopoly in generation and transmission. To them, the solution to this problem was the creation of competitiveness within the sector, by breaking EGAT up and encouraging private sector participation under the IPP and SPP programmes, those started in 1992. EPPO tried to change the cognitive values used to guide reform. In order to promote efficiency and greater competition in the electricity supply industry, EPPO submitted a plan for restructuring and privatizing EGAT, which resulted in a Cabinet resolution on March 5th 1996. This gave consent to the separation of the generation, transmission and distribution businesses. Under the plan, EGAT’s thermal power plants were to be separated into business units, and then corporatized, registered and listed on the Stock Exchange of Thailand (SET) (NEPO 2000: 29). Facing a financial crisis in 1997, the Thai Government, led by the Prime Minister Leekpai, requested financial support from the IMF and promised to redress the public debt burden by privatizing a number of state-owned enterprises (NEPO 1999: 8), including the electricity industry. EPPO was assigned as the core agency in planning and coordinating the privatization process. The document, ‘Privatization and Liberalization of the Energy Sector in Thailand’, was released by EPPO in 1999, and outlined the rationale for privatization, as follows:

“Privatization of government owned enterprises and increasing private participation should be implemented whether the country is facing any financial problem or not, as it will increase competition and efficiency in energy-related industries. The current financial condition is providing an even stronger rationale for increasing private sector participation, as it will help to reduce the debt burden of the country and attract investment. The government has therefore decided to speed up the privatization of energy-related industries” (NEPO 1999: 8). 192

This master plan, NEPO said, would bring greater efficiency to the overall industry operation (NEPO 2000: 30). EPPO released more details in 2000 of its proposal for ‘Thailand Power Pool and Electricity Supply Industry Reform’, based on the system operating in the UK (Chirarattananon and Nirukkanaporn 2006: 2525) and Cabinet granted approval on July 25th 2000 (NEPO 2000: 30).

Under the power pool model, EGAT’s generation and transmission functions would be separated from each other. Existing EGAT power plants, apart from the hydropower business unit, would be grouped into three main generation companies (GenCos). These three GenCos would ultimately be privatized (NEPO 2000: 71). Independent System Operators (ISO) would be created responsible for dispatching electricity from power plants, based on generation prices, for system security, and for the financial settlement of bulk power purchases. According to this plan, EGAT would remain an industry holding company, with a regulated transmission subsidiary (TRANSCO), hydroelectric dams and a minority interest in some GENCOs (Leeprechanon et al. 2002: 887). Due to the unique monopolistic characteristics of electricity, in contrast to other normal commodities, the Government would create the rules and covenants governing the power pool trading, referred to as the ‘market rules’, in order to distinguish electricity from other commodities (NEPO 2000: 44). The market rules would ensure the pool price was sufficient to ensure the adequate production of energy to meet demand. The pool price might change hourly or daily, depending on the established covenants (NEPO 2000: 44).

To regulate the system, the Government would establish regulatory controls by creating an independent regulatory authority to ensure non-discriminatory treatment of all generators by transmission (NEPO 1999: 18). Through these proposals, EPPO attempted to remove the power to ‘control’ transmission from EGAT, and transfer it to a new authority, one that EPPO could dominate by setting the regulatory mechanism and by appointing the regulators. EPPO intended to create new ‘rules of the game’ in the ‘re-structure’ of the electricity industry, one that was controlled entirely by EGAT, and transform it into a new competitive electricity market, whilst EGAT became simply one more player in the market, while the EPPO becomes the controller of the rules. 193

In 2000, EGAT did not support the creation of a power pool pricing system, because under this model EGAT would be separated into a generating system and transmission system, and thus lose control of the sector (Leeprechanon et al. 2002: 887). As Priebjrivat notes, under this model the role of EGAT, the MEA and PEA was to be reduced and would reinforce the ability of private power producers to control the electricity market (Praditsil 2003: 105). EGAT raised concerns about “price volatility, system reliability, and adequate and timely investment in power generation amidst growing power demand, exercise of market power, and the complexity due to the physical nature of the power system” (Chirarattananon and Nirukkanaporn 2006: 2526). The EGAT EU raised issues with the privatization scheme proposed by EPPO. It stated that it was not against privatization or change per se, but that it had major concerns about how the changes would be implemented. The concerns of EGAT EU focused on two issues:

“- The impact of privatization on employee…job security and benefits, loss of employment without adequate unemployment benefits”, and also

“- The impact of privatization on the country-tariff increases, adverse affects on adequacy and reliability of electricity supply, neglect of unprofitable customers in rural areas, adverse effects on the environment” (NEPO 1999: 13)

EGAT’s executives did not play a very active role during this debate, because at that time the authority was tackling a liquidity problem, and was seeking a loan guarantee from the Government (Sukkumnoed et al. 2006: 49). However, interviews I 28 held with those who were EGAT executives at the time this was happening, reveal that:

“…most of EGAT’s executives were unsatisfied with the power pool model and the separation of EGAT into a generating unit and transmission unit. EGAT would become one among many electrical power generators and the authority would have to compete with other generators to produce electricity for the market.”

Although EGAT also saw benefits in the policy to create a competitive market in electricity, and also the use of an electricity tariff, as a state-owned enterprise obliged to

28 Interviewee #A003 194

provide electricity services to the whole of society, it thought that the benefits it would accrue would be lower than for the private producers, who would be able to choose where to supply electricity and to gain higher prices for it.

The globalization of market economic ideology applied pressure on Thailand’s energy policy. In 1999, the dissemination of neo-liberalist ideology was effective. With the recommendations of the World Bank and the new energy aristocrats, the Leekpai Government launched a state enterprise privatization, as presented in the enactment of the ‘State Enterprise Corporatization Act of B.E 2542’ (1999). A key element of the legislation was that the Government would use it as an administrative mechanism to privatize state enterprises (Praditsil 2003: 85, 93). The Act authorised the Government to privatize state enterprises without amending their respective governing law. The law also allowed each state enterprise to transform its capital and assets into shares and sell these to companies and the public, in order to mobilize capital for investment. Nevertheless, the anti-privatization movement (mostly those who held neo-nationalist ideology) argused that the Government of trying to sell national assets and allowing foreign investors to hold a share in state enterprises, and to dominate their administration. The anti-privatization movement also argued that the Act was introduced in order for the Government to accelerate the privatization process. Thus, Thailand’s state enterprises would be sold at the lowest price possible, to foreign investors (Praditsil 2003: 89).

The ‘new’ energy aristocrats were the group of technocrats working in the EPPO and its associated agencies. These new energy aristocrats could be distinguished from those in EGAT because of their educational background, and their economic values and discourse. As discussed above, the new energy aristocrats and their advocates believed in the neo-liberalist ideology, and became a closed circle with the technocrats in the NESDB and the World Bank. The new energy aristocrats played a crucial role in energy policy formulation during the 1980s and 1990s, and became leading policy actors in parallel with the old energy aristocrats from EGAT. However, the role of the new energy aristocrats in energy policy making, was then replaced by other policy actors, including CSOs and elected-politicians, as will be discussed in the next section of this Chapter. 195

7.2.3 Civil Society Organizations (CSOs)

7.2.3.1 The Emergence of Civil Society Organizations in the Electricity

Generation Policy Sector

In the case of Thailand, there is some ambiguity in classifying Civil Society Organizations (CSOs), either as official policy actors or as unofficial participants. The Constitution of 1997 provided a number of provisions that stipulated the involvement of CSOs in the policy-making arena. It seemed that in 1997, CSOs would become part of the official actors group, but their role has remained limited, as the governing laws of state agencies have never been amended to include CSOs in the policy process. Thus, CSOs have retained their status as unofficial participants in the policy process.

Under the era of globalization, the Government has faced uncertainty and has had to search for more flexible ways to organize itself. Government can no longer operate with a hierarchical style of bureaucracy (Bowornwathana 1997: 298). The power monopoly of political and administrative government bureaucrats, has been increasingly challenged by the principles of democracy, and by a growing middle-class, as Thailand has pushed for more democratically oriented administrative reforms, those focusing on the accountability of public sector activities. In this situation, CSOs have emerged and now play a more important part in policy-making. CSOs appear to be more numerous today than ever before, though no one is sure of the numbers. CSOs in Thailand frequently perform a policy advocacy role, sometimes leading protests and presenting policy alternatives for policy action. They have also been created to be a source of information for the public and for government officials, information often not available from other sources (Anderson 1997: 70). In this way, they have contributed to the notion of the inclusiveness and rationality of policy formulation, and in the process have attracted increasing support from the community.

The CSOs who have participated in Thailand’s electricity policy process, originally emerged from those environmentalists who organized the early campaigns against hydropower dam construction in the 1980s, as outlined in Chapter 8. As the socio-economic and political situation in Thailand developed along democratic lines, 196

people began to actively seek to engage in political activity, as well as obtain recognition of the value of protecting human and community rights.

In 1986, CSOs started to involve themselves actively in electricity power generation policy development, when EGAT proposed the construction of the Nam Choan Hydropower Dam Project in Kanchanaburi Province. The public broadly criticized this project, because it had the potential to adversely affect the environment and the supply of natural resources (Hirsch and Lohman 1989: 446). Opposition was mobilized at the local, national, as well as international levels, and a coalition of local Kanchanaburi opposition groups was formed. A petition signed by local residents, demanding the cancellation of the project, was submitted to the Government. At the national level, movements were organized in Bangkok by activists and environmentalists, who pressured the Government, urging the cancellation of the dam project (Harkness 2002: 18). The campaign against Nam Choan Dam was long, lasting more than eight years, though the project was finally abandoned in 1988.

It should be noted the emergence of the environmentalist movement in Thailand, did not begin with the Nam Chaon Dam controversy, as it had been involved in land and water issues over a long period. However, it was the first time the movement had had a major campaign success (Rigg 1991: 51). Following the campaign against the Nam Choan Dam, several large-scale dams attracted opposition from different regions in Thailand. In the south, Kaeng Krung Dam Project in Surat Thani Province attracted widespread protests from both local and national environmental groups. In the north, one of the most controversial projects was the Kaeng Sua Ten scheme in Phrae Province, criticized because it would flood an area of teak forest and lead to the relocation of several local communities. It was also an optional component of the larger Kok-Ing-Nan Rivers scheme, a scheme to divert water from the Mekong River to the Chao Phraya watershed, for a range of purposes (Hirsch 1993: 144).

CSOs continued to expand their role as policy actors during the 1990s. A series of campaigns were organized against government projects, including the Pak Mun Dam Project, the Kanchana Buri Gas Pipeline Project and the Rasi Salai Dam Project. Later, CSOs organized a campaign against building two coal-fired power plants in Prachub 197

Kirikhan (Nuntavorakarn 2002: 74). Throughout this campaign, local protesters successfully presented the negative environmental impacts that would flow from the building and operation of the power plants, to the public. Local people and academics revealed severe mistakes and misinformation within the EIA reports, leading to a demand for reform of the EIA process in Thailand. Clearly, CSOs had changed their strategy from being simply a ‘road blockade’, into proposing alternative methods for problem solving in development.

Information I obtained from the leader of a leading environmentalist group, suggests that CSOs started to investigate electricity generation projects because they held “the view (that) electrical power generation policy should not be formulated solely by technicians or engineers.” They found that “EGAT and EPPO monopolized the knowledge and information used to determine and formulate the policy, load forecasts, and fuel tariff (FT) price. They used technical information that was difficult for the public to understand”, and stated that “we use the same data and we can propose an idea for a better electricity power generation policy…that does not harm people and the 29 environment, as EGAT proposes.”

In 1998, CSOs and academics, who worked on different energy issues, formed the ‘Sustained Energy Network for Thailand (SENT)’ (Sukkumnoed and Nunthavorakarn 2005: 23). The network aimed to build a connection between all the organizations working on energy related issues, such as the CSOs concerned with consumer rights, community rights and the utilization of renewable energy, as well as to coordinate civic action for the development of a sustainable, democratic and participative energy system. It was the first time that organizations involved in energy and power matters had joined, shared information and jointly set agendas for policy reform.

In 1998, the Foundation for Consumers (FFC), another CSO, was organized in order to protect consumer rights. Sustained Energy Network of Thailand (SENT) and FFC disclosed that the electricity pricing system was unfair to consumers (Sukkumnoed and Nunthavorakarn 2005: 24). They suggested that the price of electricity was

29 Interviewee #C007 198

calculated to include EGAT’s excessive over-investment costs, those associated with the intensive construction of large power plants and their miscalculation of the load forecast for electricity. As a result of this disclosure, the Thai Government forced EGAT to adjust its pricing mechanism structure and return excessive and miscalculated payments to Thai consumers. Later, in 2001, the Government invited consumer representatives to participate in the Pricing Committee of EPPO for the first time. However, the number of representatives was small and their proportion low in comparison to Government agencies, which were dominant. SENT also campaigned to change the perceptions and attitudes of Thai society, as promoted by EGAT, saying that “the investment in the power sector does not necessarily mean that it is good for the Thai economy…if it is made within a biased power structure and closed system of vested interests” (Sukkumnoed and Nunthavorakarn 2005: 24).

The growth of community organizations forced the Government and its agencies to recognize that CSOs were a significant new policy actor in helping to shape electricity generation policy. The response was that the Government began to include CSOs in the policy process, in order to manage and legitimate the process, as reinforced by the provisions of Thailand’s Constitution in 1997. The result was that between 2001 and 2002, SENT, FFC and other CSOs, were formally invited to participate in several of the decision-making processes (Sukkumnoed 2007: 22) and assist in finding an acceptable solution for the disputation over EGAT’s PDPs. In 2001, SENT and FFC 30 took part in the Fuel Tariff (FT ) revising sub-committee on pricing, and looked for a more acceptable tariff system. Other CSOs, such as the Assembly of the Poor (AOP), also participated in decision- making on the Pak Mun Dam Project, as well as contributed to the debate on the proposed Prachub Kirikhan Power Plants (Sukkumnoed and Nunthavorakarn 2005: 24).

30 Fuel Tariff (FT) was firstly introduced in 1991 and implemented in 1992. It is the actual cost reflected by the power tariffs and help to reduce impact of fuel price volatility on the electricity utilities’ financial status. FT formula includes of fuel costs and power purchasing prices from private power producers and foreign countries, changes in foreign exchange rate, changes in non-fuel operating expenditures, changes in marginal revenue discrepancy charge between the expected and actual collection FT in previous period, and accumulated discrepancy of energy adjustment charge (Sirasoontorn, 2008: 11) 199

The CSOs, in this way, played a proactive role in the policy process when they proposed an alternative PDP to the policy decision-makers, for consideration. In 2004, Witoon Permpongsacharoen, a member of the National Economic and Social Advisory Council (NESAC) and leader of the Towards Ecological Recovery and Regional Alliance (TERRA), a well-known environmental organization, developed an alternative PDP and presented it to the public. He and his organization also criticized Thailand’s electricity supply industry structure; its governance problems, as well specific system planning practices, such as demand forecasting, and the lack of consideration of a role for demand side management (DSM) in electricity policy (Foran 2006: 38). The alternative PDP also recommended that EGAT’s 2004 PDP proposal should increase the supply of electricity sourced from clean renewable energy. This alternative PDP, in practice, gained less attention from EGAT and the public than was anticipated.

In 2004, the Shinawatra Government planned to promote EGAT’s privatization firstly through corporatization, and then selling its shares on the Stock Exchange of Thailand (SET). A public hearing on the proposal was conducted at the beginning of 2004. CSOs joined with the EGAT EU (one part of the ‘old energy aristocracy’) and State Enterprise Labour Unions Association to oppose the policy, and mobilized various demonstrations that resulted in criticism of the reforms. In response to community resistance, in March, the Shinawatra Government announced the postponement of EGAT’s privatization (Sukkumnoed et al. 2006: 50).

In 2005, the Government initiated the privatization of EGAT again. However, EGAT’s privatization was abruptly delayed when some CSOs, including the Confederation of Consumer Organizations (CCOs), People Living with HIV/Aids, Alternative Energy Project for Sustainability, Free Trade Area Watch (FTA Watch) and the Four Region Slum Network, as well as some EGAT EU members, filed a petition with the Supreme Administrative Court for suspension of EGAT’s stock allocation on the SET, because of the claimed large-scale negative impacts on the public interest (Manager, September 12th 2005: online). On November 17th 2005, the Supreme Administrative Court ordered a temporary suspension of the EGAT share allocations, until further notice. On March 23rd 2006, the Supreme Administrative Court ruled against the privatization of EGAT PLC, citing conflicts of interest, public hearing 200

irregularities and problems with the privatization plan regarding the expropriation of public land for electricity industry use (Bangkok Post, March 24th 2006: online).

7.2.3.2 The Members and Sources of Power of Civil Society Group

Membership

Currently, the number of CSOs engaged in Thailand’s power generation policy 31 process cannot be easily counted. Most people I interviewed from the CSOs , and whom I asked to indicate the number of CSOs involved in electricity power generation policy development, varied in their answers, depending upon the specific situation. For instance, where EGAT’s projects affect local people’s livelihoods and local resources, local CSOs usually emerge and become involved in the policy process. This leads to demonstrations by local residents, supported by CSOs, seeking to claim equitable compensation and redress mechanisms incorporated in the projects.

32 Respondents from civic groups suggested that CSOs could be classified into two levels: the national and the local level. Data obtained from interviews, documentary research and the media, indicates that the CSOs in this field include the Sustained Energy Network for Thailand (SENT), the Foundation for Ecological Recovery, Southeast Asia Rivers Network, the World Wildlife Fund Thailand, the Campaign for Alternative Industry Network (CAIN), the Palang Thai Group, the Confederation of Consumer Organizations (CCOs), the Foundation for Consumers (FFC) and the Assembly of the Poor (AOP). The values of these individual CSOs vary, but they serve a common purpose: to protect the environment and the interests of those disadvantaged by poorly designed development projects. These groups engage in a wide range of activities. For example, the Palang Thai Group works on the gathering and analysis of information about energy, and makes recommendations to policy makers, or releases it to the public in order to influence their opinion. Other CSOs work specifically on wildlife and forest conservation. For instance, when an EGAT power development project becomes an issue, the CSOs join together to campaign in relation to the project.

31 Interviewees #C002, C003, and C007 32 Interviewees #C002, C003, and C007 201

It should be noted that some international NGOs are also engaged, such as Greenpeace, in the campaign against the proposed Prachub Kirikhan Power Plant.

33 When I interviewed a representative from SENT , I found that local CSOs tend to be organized when EGAT or other related agencies plans are announced, and in these cases, CSOs at the national level often come to assist local residents in organizing movements against the projects, and supply essential information that local CSOs can use in their campaigns. Local civil society groups who organized a campaign against the Wiang Haeng Mine Development project, included the Wiang Haeng Environment Conservation Network and the Rak Ban Krut Group.

In summary, even though the number of CSOs created to work directly on energy issues is less than other types of CSO, such as those concerned with community development, well-established connections with national NGOs have allowed the CSOs to mobilize resources and manpower to campaign successfully against the Government’s power policies in Thailand.

Institutional Factors

My analysis in Chapter 4 revealed that during the 1990s, the demands for greater political openness and social justice challenged the existing political and policy framework, and led to the drafting of the Constitution of 1997, one that recognized the important role of non-state actors in policy decision-making. The Constitution changed the Thai political system from a traditional polity dominated by bureaucrats, to a new political framework in which people become owners of government. The Constitution provided many provisions which imitated and adopted accountability mechanisms, including an administrative court, an ombudsman office, the Administrative Procedures Act, public hearings, private watchdogs and anti-corruption agencies (Bowornwathana 1997: 299). These included the introduction of public rights to participate in environmental management and conservation issues, and a recognition of the importance of indigenous knowledge and the fact that it should be promoted at a local

33 Interviewee #C002 202

level, as indicated in Chapter 4. For instance, the right to participate in policy decision- making was prescribed in Sections 60, 76 and 79 of the 1997 Constitution, as follows:

“Section 60: A person shall have the right to participate in the decision making process of State officials in the performance of an administrative act which affects or may affect his or her rights and liberties, as provided by law”

“Section 76: The State shall promote and encourage public participation in laying down policies, making decisions on political issues, preparing economic, social and political development plans, and inspecting the exercise of State power at all levels.”

“Section 79: The State shall promote and encourage public participation in the preservation, maintenance and balanced exploitation of natural resources and biological diversity and in the promotion, maintenance and protection of the quality of the environment in accordance with the persistent development principle as well as the control and elimination of pollution affecting public health, sanitary conditions, welfare and quality of life” (Thailand’s Constitution 34 of 1997)

The provisions of the Constitution facilitated the Thai Government in initiating the restructure of Government agencies, the decentralization of power to local government, and creating effective accountability and a transparent public sector. The Constitution heralded a change to the previous policy management style, where more emphasis was placed on the command and control of Central Government agencies. It also constrained Government agencies such as EGAT and EPPO, and forced them to re- consider policy, as I observed in the case of the PDP of 2007, which was opened-up for public criticism (Matichon, April 4th 2007).

In addition, the Enhancement and Conservation of National Environmental Quality Act of 1992 (NEQA 1992), provided provisions to create an opportunity for public participation in the environmental impact assessment (EIA) process. Indirectly, the legislation provided an opportunity for the CSOs to participate in the EIA process (Section 8). This provision prescribed:

34 The Constitution of the Kingdom of Thailand of 2007 also provides these provisions in Sections 57, 64, 66, 67, 85 and 87. 203

“NGOs or judicial persons shall register with the Minister of Science, Technology and Environment to be the ‘NGOs for environmental protection and conservation of natural resources’ and may propose and nominate candidates as representatives of the private sector to be appointed by the cabinet as qualified members of the National Environment Board” (NEQA, Section 8 (5)).

Furthermore, members of NGOs were also invited to sit on the Expert Review Committee (Yap 1994/1995: 322). Thailand’s EIA process, through the legislation, does therefore have a provision for direct public participation, although who participates is still largely controlled by Government agencies, who determine who will be recognized under the provisions of the Act.

Strategies

CSOs’ influence has been dependent upon their level of community support. In order to acquire the public support they need, various other strategies such as campaigns, press releases and public debates have been employed to capture public attention. However, they have often been portrayed by Government officials as the ‘enemy’ of national development (Phuengcharoen 2005: 126). The EGAT executive’s view of 35 CSOs was as a nuisance, as one EGAT executive I interviewed stated:

“…there are many kinds of NGOs in Thailand that are divided into good and bad organizations. The good NGOs cooperate closely with the Government in rural development activities, share information, and accept to be a committee member in case of conflict solution. The bad NGOs try to propose impossible requests. To respond to this requirement, the Government has to form a committee to study the NGOs’ request. The problem solution would take a long time and sometimes there is not a result from the committee’s study. This situation can help NGOs maintain their activities and request funds continuously from international organizations…”

Although, CSOs are viewed as a nuisance by EGAT, they cannot deny the contribution they have made in supporting local people’s interests in relation to Government projects. Generally, the political culture of the Thai people in the 1980s could be described as a belief in the authority of the bureaucracy and an acceptance of Government authority, even when it negatively affected their livelihood or human rights.

35 Interviewee #A001 204

However, when the country became more democratic in the 1990s, there was a call wider public participation in the political process, and CSOs empowered local people within this process.

At that time, CSOs were powerful in a given policy field, when they had linkages with grassroots organizations, such as local social movements, as well as when they built networks among the different CSOs, were well organized, and generated 36 useful information to share amongst each other and with the public . In the case of the campaign against the Pak Mun Dam, CSOs were successful because they produced information about the damage the dam would do to fish species, something that had been ignored by EGAT’s EIA. In order to address this issue, the Government ordered the opening of the dam gate during 2001 and 2002 to increase water flows from the new dam (Sukkumnoed and Nuntavorakarn 2005: 53). In the campaign against the Prachub Kirikhan Power Plants, the local movement pointed out that information about the 37 ecosystem impacts was absent from the EIA report on the project. Moreover, academics and some CSOs, such as SENT and FFC, informed the Thai Government and public of “the high overcapacity situation, how over-demand forecasting and the excessive investment in these two coal-fired power plants would lead to increased electricity bills for Thai customers”, and this led to the Thai Government deciding to cancel the two projects (Sukkumnoed 2007: 22).

The Constitution of 1997 was the first Thai Constitution, to provide a number of provisions extending civic rights and liberties, but these did not ensure that civic rights and liberties would not be violated. There are many ‘undemocratic laws’ in Thailand which give the authorities discretion in relation to civic rights and liberties, as is the case with the Forest Conservation Law which gives the Government the right to declare a conservation area, without consulting locals who have lived there for a long time. In summary, the policy-making role of civil society in Thailand has gradually been strengthened, particularly in terms of the violation of civic rights and liberties by the authorities, but it is still constrained by the fact it is limited to a number of specific areas.

36 Interviewee #C006 37 Interviewee #C002 205

As Boonyarattanasoonthorn and Chutima (1995: 157) indicate, CSOs in Thailand still have several limitations which are constraints on the effectiveness of their activities. These limitations include a number of staff and limited funding support from donor agencies. Apart from these limitations, there is another important limitation which is: “…the lack of skill to synthesize their experience into [a] body of knowledge and information that can be disseminated to…society, especially to the middle class who should be allies of the NGOs, and to turn concrete issues from the villages into policy framework[s] for presentation to the Government” (Boonyarattanasoonthorn and Chutima 1995: 157)

These limitations can also be found in those CSOs involved in electricity generation policy issues. It has been observed that many small CSOs lack effective leadership, which in turn affects the CSOs’ ability to effectively coordinate campaigns. 38 As a scholar from Palang Thai stated in an interview:

“…the CSOs in this policy issue are so small and lack a leader or champion who will perform as fund raiser or coordinator, because civic groups see energy policy as technically orientated compared with other issues, such as land, forest and water, where many organizations focus their work”

There are also a range of other issues that limit the effectiveness of CSOs. Firstly, the electricity industry itself is controlled by just a few organizations, and this has led to a difficulty in accessing information, such as financial data, EIA reports, the PDP and the price setting models used in the industry. This has caused a difficulty for the CSOs when trying to assess EGAT’s operations and plans. Secondly, because electricity generation policy is technically orientated, CSOs in this field have had to create a new body of knowledge to enable them to examine the policy. When compared with electricity generation policy, other policy issue areas, such as forests, land and water resources, have long been examined by a number of CSOs, and these organizations have been able to access information from the indigenous knowledge developed by local communities. As an interviewee for this research noted, there are also other issues that restrict the CSOs’ influence, such as the media paying little

38 Interviewee #C003 206

attention to energy policy because, by its very nature, it is less able to capture the 39 public’s attention .

40 In an interview, the leader of a major environmental group told me that Thai society has long been controlled by the State and bureaucratic rules, and that the Thai public resists accepting the CSOs and people movements’ claims against power development projects. The public believes that most members of society should follow the rule of law and the social order enforced by the State. This reflects the fact that the public is not clear about the people’s movement’s aims, which are to improve society and the policy process in general, improvements will which in turn benefit the whole of society.

The Discourse of Civil Society Groups: Decentralization of Electricity

Management

The central claim of many civic groups is to focus on the need for a more decentralized development of policy, and the promotion of renewable energy. The CSOs propose that problems, such as the conflict over natural resources, the conflict between Government projects and local residents, and the rising price of electricity, have prevented centralization and maintained the monopoly status of the electricity industry. As Sukkumnoed (2007: 38) suggests, this claim emerged after 1988, and more obviously after 1997, due to the demonstrations held against a number of EGAT projects by CSOs, and community concern about the negative aspects of such projects.

Sukkumnoed says that this discourse focused on what was suggested as the three main principles, including ‘fairness’, ‘sustainability’ and ‘good governance’, things lacking in the electricity industry administration (Sukkumnoed 2007: 38). These three principles are in accordance with the common values that, in theory, every country should have to adopt and act upon within the era of globalization. The first discourse, fairness, emerges from the nature of the existing electricity supply industry, a monopoly, which blocks progressive solutions to energy supply and pricing concerns. This is

39 Interviewees #C003 and C007 40 Interviewee #C007 207

supported by the analysis in Chapters 5 and 6, which shows that the main institutional barriers to SPPs’ promotion of renewable energy, is caused by the monopoly power held by EGAT and its efforts to protect its own organizational interests. Some CSOs’ aim to promote the separation of the generation function and transmission function, is designed to address this problem. The CSOs have suggested that the Government should create a new authority to take care of the industry’s transmission function, and then provide grid access to all the power producers, particularly the renewable energy SPPs that hold less negotiating power.

This principle however, is out of step with the power pool model proposed by the EPPO, one that it claims will create ‘fairness’ by allowing market mechanisms to regulate the power market (Sukkumnoed 2007: 38). From the EPPO’s point of view, fairness is interpreted as meaning ensuring price competition, not access. Fairness, in the CSOs’ view, is broader than the old energy aristocrats’ view, because fairness has to 41 include consideration of the rights of civil society and environmental justice , as suggested by one interviewee for this research.

To an extent, this consideration of the public health and environmental impacts of proposed power development projects, has been ignored as well (Sukkumnoed and Nuntavorakarn 2005: 62, Sukkumnoed 2007: 38). The principles to be considered in relation to projects should be “consideration of factors related to sustainable development processes”, as well as ‘economic expansion’ and ‘electrical security’, as in 42 the past . As Sukkumnoed also notes, a more recent form of discourse offers a new system for the measurement of the impact of the policy and planning process, and offers the potential for integrated resource planning and strategic environmental assessment (Sukkumnoed and Nuntavorakarn 2005: 62). However, these principles are still not effectively employed, and so do not attract much publicity.

The last set of principles of ‘good governance’ put forward, includes three associated principles, that is ensuring transparency, public participation and accountability in the policy decision-making and regulating process (Sukkumnoed

41 Interviewee #C003 42 Interviewee #C003 208

2007: 39). This set of principles is also associated with the claimed benefits of decentralization, because the centralized management of the policy formulation process within the electricity supply industry, has long been seen as the main source of the problem of poor governance and ineffective policy making. However, a set of goals has still not been fully realized.

7.2.4 The Politicians

7.2.4.1 Politicians’ Involvement in the Electricity Supply Industry

The Executive (sometimes referred as the Cabinet) is one of the key players in the Government policy ‘subsystem’ (Howlett and Ramesh 1995: 52). The Government, acting through the Executive, is the key policy actor, because it has access to the use of a range of powers, including the granting of special charters, allocating key resources such as financial capital or monopoly status, imposing taxes and exercising regulatory control (Scott 1995: 94).

As outlined in Chapter 4, in the 1989 general election, the Chart Thai Party won a majority in the Parliament and Chatichai Choonhavan was appointed to serve as Prime Minister. As outlined in Chapter 5, the Choonhavan Government also initiated an effort to privatize EGAT. However, Choonhavan’s attempt failed because of strong opposition from the EGAT EU. The scheme was formulated to enable the private sector to participate in electricity generation through the introduction of IPPs and SPPs. Not wishing to lose its monopoly, EGAT established a wholly owned subsidiary, the Electric Generating Company Ltd. (EGCO) (Smith 2003: 280), in order to retain its leading role in power generation, both directly and indirectly, by holding shares in other IPPs. In 1997, facing a financial crisis, the Prime Minister of the time, Chuan Leekpai, initiated a privatization policy aimed at creating a somewhat different approach; a competitive market in the electricity sector using a power pool model as proposed by EPPO, and as outlined previously in this chapter. However, this effort was not successful, due to strong opposition from both the public and EGAT EU.

In 2001, the TRT Party won the general election and Thaksin Shinawatra was appointed the Prime Minister. Shinawatra expressed the view that state enterprises were 209

seen “not as inefficient dinosaurs needing to be enhanced, but rather as potentially powerful engines of the country, if owned and controlled by Thais” (Palettu 2004: 12). This statement signalled the new Government’s intention to reform the power sector, again promising to implement privatization policies within three months of taking office (Smith 2003: 282).

The Petroleum Authority of Thailand (PTT) was the first state enterprise to be privatized, becoming the PTT public company, and with its shares sold on the stock market in 2001. The initial public offering (IPO) of PTT was a strategy adopted by Shinawatra to allow the public to own PTT shares. In fact, there were only around 2000 (politically connected) people who had access to the IPO of PTT shares in 2001 (Palettu 2003: 15). The media also reported that relatives of the Industry Minister and the TRT Party Secretary General were said to have acquired 22 times the maximum amount of PTT shares distributed to retail investors (Prachachart Thurakij 2003, in Greacen and Greacen 2004: 534). These issues did not stop the privatization of PTT, but did stop some further privatizations.

Following PTT’s privatization, the Shinawatra Government put more effort into promoting EGAT’s privatization. The Government utilized the provision of the State Enterprise Corporatization of 1999, to change EGAT’s status from a state-owned enterprise to that of a public company, and proposed to sell its shares in capital markets. EGAT’s staff and the EGTA EU combined to organize a protest movement against the scheme, and in the end, EGAT was not privatized.

As an alternative strategy, in 2002 the Government adopted a policy to restructure all Government agencies. The Ministry of Energy (MOEN) was created by merging the agencies managing energy issues. NEPO was renamed EPPO and transferred to MOEN. The institutional changes in 2002 affected technocratic agencies, such as the NESDB and NEPO, as indicated in Chapter 5. In the new Energy Ministry, EPPO was downgraded into one agency under the Office of the Permanent Secretary of MOEN. Electricity policy-making roles were transferred directly to the Ministry and the Executive of the Cabinet, under the control of politicians (Sukkumnoed et al. 2006: 50). When EGAT fell under the control of the Shinawatra Government, it had to change its 210

strategy again. EGAT successfully convinced the Ministry of Energy (MOEN) to adopt electricity sector reform that protected it from foreign intervention and would position Thailand as a regional leader in the electricity arena. In August 2003, MOEN commissioned the Boston Consulting Group (BCG), a highly-paid international management consulting firm, to conduct a study and come up with strategies for the development of Thailand’s energy sector, and they recommended adopting a power sector efficiency improvement programme (Sirasoontorn (n.d.): 8). It has been suggested that the hiring of BCG, which had a close relationship with EGAT, reflected EGAT’s power in influencing policies within MOEN (Greacen and Greacen 2004: 536). As a result of the research, BCG recommended that EGAT, as a national champion, retain its monopoly authority as a so-called ‘Enhanced Single Buyer’ (ESB) in the electricity market (Greacen and Greacen 2004: 537). It should be noted that throughout EGAT’s history, it has played the role of a single buyer. Nevertheless, the ESB model was different, in the sense that, as Greacen and Greacen noted at the time, “any new IPPs will have to compete directly against EGAT’s generation, raising the question that EGAT may purposefully underbid to drive out competitors, but then pass higher actual costs on to consumers” (Greacen and Greacen 2004: 537). EGAT would maintain its monopoly on transmission, system operations and the bulk of generating capacity. As has been observed by one researcher already, the BCG study team merely followed the Government and EGAT’s guidelines for reform, “without sufficient analysis”, and that “BCG had been hired to justify a foregone conclusion about EGAT’s future” (Palettu 2003: 13).

A campaign opposing the proposal emerged, again led by the EGAT EU, was supported by other state enterprise employee unions, and by CSOs. The campaign also drew wide criticism from the public and academic forums (Sukkumnoed 2007: 19). EGAT’s first Governor, Kasame Chatikavanij expressed his opposition to the proposal to privatize EGAT. The EGAT EU mobilized the EGAT workforce in demonstrations against the policy (Public Services International 2004: online). They set up a permanent protest camp at EGAT headquarters; rallied the support of the rest of Thailand’s public sector unions, introduced public campaigns and released information through both national and the international, media opposing the move (Public Services International 2004: online). Their campaign coincided with a new general election, and as a result, 211

the Prime Minister decided to delay the privatization of EGAT on February 23rd 2004, and the EGAT Governor, Sithipron Ratanopas, resigned. The Cabinet then appointed Kraisri Kannasoot as the new Governor of EGAT.

During 2004, Kannasoot had worked with the EGAT EU and he proposed alternatives to EGAT’s privatization. Hearings were held and surveys of EGAT’s staff opinions conducted, leading to new internal negotiations between EGAT and the Thai Government regarding EGAT’s future. The Government, in an effort to convince the EGAT EU to allow privatization, promised EGAT workers that they could buy shares in the newly privatized company at special prices. In addition, the Government ordered EGAT executives to impose strict disciplinary measures on any worker involved in the demonstrations against the privatization (EGAT EU (n.d.): online). The fundamental issues discussed at that time were: the plan for EGAT’s generating assets to be separated from the transmission system, the setting of the proportion of new power plants that EGAT could construct at 50 percent, and a mechanism to transfer benefits gained from the privatization to EGAT staff. As Sukkumnoed and his colleagues noted (Sukkumnoed, et al. 2006: 50):

“EGAT’s negotiating power was still high and [was used] in a manner to preserve its market share. This can be witnessed in establishment of its affiliates as IPP, [the] unification of [the] power generating and transmission system, [the] determination of [the] proportion in new power plant construction at 50%, and specification of benefits and incentives for EGAT staff”

In 2005, the Shinawatra Government once again started EGAT’s privatization process. The Government announced the launch of the ‘Regulation of the Office of the Prime Minister on the Electricity Regulatory Commission’ in March 2005, to address those issues related to the privatization that were of concern to the Thai public. On June 23rd 2005, EGAT was changed to be the EGAT Public Company Limited (EGAT PCL), under the process stipulated in the State Enterprise Corporatization of B.E 2542 (1999).

A change in the status of the Shinawatra Government after its landslide win in the 2005 general election, as well as the change in EGAT’s Governor, from Ratanopas to Kannasoot, introduced an element of uncertainty into the membership of EGAT. As indicated by Harrop (1992: 275, in Hall 1994: 258), “interest groups want a predictable, 212

controlled environment”, but Shinawatra did not give EGAT’s executive or workers a certain future. Besides, as Coleman and Skogstad (1990: 321) assert, “a major objective of actors within policy communities is to maintain the stable relationships that exist within the community and so avoid abrupt policy change.” Thus, EGAT executives began informal negotiations with the Government, and worked with members of the EGAT EU, to persuade them to support the Shinawatra Government’s privatization policy.

As a result of the EGAT EU campaign lasting one whole year and the resources of the union being stretched thin, their leaders were exhausted from being constantly on the battleground against privatization. EGAT’s management disciplinary measures effectively stopped workers from participating in daily demonstrations. The workers were also enticed to support the process through the promise of cut-price shares (Public Services International 2004: online). The EGAT EU leadership however, decided to change its tactics, and so participated with CSOs, led by the Confederation of Consumer Organizations (CCOs), in a new campaign against EGAT’s privatization. The leaders of EGAT EU and the CSOs supported their campaign by saying that the privatization threatened to destroy one of Thailand’s national assets. As Rosana Tositrakul, Chairperson of the CCOs said at the time:

“…the Government should listen to the voice of Thai people because they do not want EGAT, one of the country’s most valuable national assets, to be sold off. Who will guarantee us that our electric bills will not go up after the EGAT listing? And when EGAT becomes a listed company, investors will be protected, not consumers” (EGAT EU (n.d.): online)

The Prime Minister was suspected of trying to enrich himself and his political cronies as a result of the privatization, in the same way he had done with the PTT privatization (Meetam 2005(2)). With EGAT corporatized, the focus would be on it maximizing profits, and consumers would be forced to pay higher electricity prices to benefit the shareholders. As Tositrakul stated:

“The EGAT float would eventually end up like PTT PCL, which had never benefited the public. Consumers have had to pay more for fuel while prices of essential goods have been going up. The public will definitely lose. 213

Look at the PTT case. Only a small group of people, particularly politicians and their inner circles, got rich from PTT shares” (EGAT EU (n.d.): online)

The opposition political party, the Democrat Party, also joined the resistance to privatization. The Leader of the Democrats, Abhisit Vejjajiva indicated that:

“We oppose any transfer of a monopoly enjoyed by a state-owned enterprise to a private company. Assets were being transferred from the Electricity Generating Authority of Thailand to a new firm, EGAT Plc. Among the most contentious issues is the power grid distribution network, which is among EGAT’s most valuable assets. Power would be distributed through lines provided by EGAT and the opposition fears such a form of privatization would lead to a handful of people benefiting while creating an environment, which is not competitive in the longer term. We are not against privatization; do not get us wrong here. It is about putting the national interest above a certain group of people who may benefit from it” (EGAT EU (n.d.): online)

On November 8th 2005 the CSOs and some EGAT EU members submitted a petition to the Thai Supreme Administrative Court, before EGAT PCL was listed on the SET. They asked the court to suspend the selling of EGAT shares on the SET, because the privatization process was unlawful and in contradiction with the Constitution of 1997, sections 29, 35, 48 and 50 (Bangkok Post, November 11th 2005), as the process had been managed without appropriate public participation in the discussion. On March 23rd 2006, the court ruled against the privatization of EGAT PCL, citing conflict of interest, public hearing irregularities and the continued right to expropriate public land, as the reasons for the decision (Manager, March 23rd 2006). This ended the Shinawatra Government’s privatization efforts.

7.2.4.2 Thai Rak Thai Politicians and the Electricity Industry

Thai politicians, particularly when becoming members of ruling parties, have continued to see their control of the electricity sector as a source of personal wealth and political advantage. This is reflected in the way EGAT was originally set up in order to further the development of the ministries and increase their political influence. Thaksin Shinawatra, a Thai telecommunications billionaire, established the Thai Rak Thai Party on July 14th 1998. There were twenty-three founding members, including former politicians of the Phalang Tham Party, big business representatives, property developers, 214

academics, Government officials and retired officials (Phongpaichit and Baker 2004: 64-65). In the two years following its foundation, the TRT Party became a magnet for some business people who had suffered from the effects of the Asian economic crisis in 1997. The result of the crisis caused the businessmen to consider more active participation in the political arena, in order to avoid disadvantageous policy and economic conditions. The business sector, which supported the TRT party directly and indirectly, included telecoms, agro-industrial, banking, property development and construction companies, the media and entertainment and manufacturing (Phongpaichit and Baker 2004: 69-71).

A general election in 2001 resulted in the TRT Party gaining 248 seats in Parliament out of a total of 500 available. The TRT Party formed a coalition Government with other parties, including the Chat Pattana Party, the Chat Thai Party and the New Aspiration Party. The coalition, as a result, held 364 out of the 500 seats (Phongpaichit and Baker 2004: 95), and this made Shinawatra the new Prime Minister. On February 6th 2005, the TRT Party alone won a massive majority of 375 seats out of 500 in the general election (ERC 2005: 333). This allowed Shinawatra to dominate the House of Representatives and to hold control of the bureaucracy as well. The 1997 Constitution of Thailand stipulated the Cabinet could launch the privatization of a state enterprise by issuing a Royal Decree to amend the State Enterprise Governing Act (Sukkumnoed et al. 2006: 7) and in the instance of EGAT, the change was made by the Cabinet without legislative oversight, even though Shinawatra controlled it. This was a new leadership style to that which had preceded it. At the TRT Party’s launch, Shinawatra had announced various platforms that responded to the needs of the growing Thai urban middle class, to rural poor people, and to the business and industrial sectors. The Government employed a new marketing strategy to promote Shinawatra’s administrative style, coming up with slogans such as ‘think new, act new’, as well as trying to promote a CEO style approach to managing Thailand’s traditional public administration. As Greacen and Greacen state, Shinawatra also “made quick decisions, usually without public participation; took risks, and broke down barriers posed by existing laws, independent media and even the powerful bureaucracy” (Greacen and Greacen 2004: 528). Bowornwathana (2004: 135-136) named this new style of administrative system ‘Prime Ministerialisation’ (as highlighted in Chapter 4) meaning 215

that all political and administrative powers were concentrated in the Prime Minister’s hand. All government officials, central and local alike, and all politicians, both in the Cabinet, Parliament and outside, were under Shinawatra’s control. Shinawatra’s style of administration eroded the power of high-level Government officials, who learned to silently accept the situation or face transfer to inactive posts (Greacen and Greacen 2004: 528). The TRT Party network, as the ruling party, controlled the political power and the state mechanism. Capitalists in the leading industries of the country supported it. These factors led to a network developing which was a powerful policy actor and which brought new challenges to other policy actors.

The Discourse of the Politicians: Private Monopoly Shinawatra announced his idea to the public: ‘the country is my company’. This approach represented an argument that said the ruling businessman saw the country as his company and therefore, believed that the country should be run like a business organization, and copy good business practices and corporate culture from the private sector. The TRT Party, particularly Shinawatra, started to play a key role in electricity supply industry policy, after the party won a majority in the 2000 general election. The TRT Party proposed policy platform; to restructure state enterprises and enhance the ‘competitiveness of the nation’. Concepts including liberalization of the economy and building the competitiveness of the nation, were at the heart of the dialogue, but these were not the only concepts involved. This was evident when the Government supported the monopoly model in some specific sectors, for instance, the electricity sector, but proposed creating national competitiveness in the regional market for electricity. The Government also decided to liberalize air transportation services, for the sake of the ‘competitiveness of the nation’ (Sukkumnoed 2007: 18).

Shinawatra aimed to create Thailand as a regional energy hub, as his way of gaining greater economies of scale for the Thai electricity industry (Sukkumnoed 2007: 37). His view included support for the protection of the existing centralized monopoly power generation system. However, to improve the industry’s competitiveness, EGAT needed a new form of management. In an effort to create greater efficiency and a new management form, the private monopoly and capitalization model was proposed. This view was widely criticized by CSOs, who said that the policy’s clear aim was to follow 216

the Shinawatra Government’s privatization project. Further, Shinawatra did not explain how this fair competition for other power generators would be created, or how the public interest would be protected under the new system (Sukkumnoed 2007: 38).

Despite the fact that the TRT Party, led by Shinawatra, dominated political institutions and administrative power, it formulated a number of policies that led to the restructuring of the central ministries, as well privatization of the core energy state enterprise, namely PTT. The Shinawatra Government controlled Thai politics from 2001 to 2006, until the military coup of September 19th 2006; however, EGAT’s privatization did not proceed. The civilian Government appointed by the military junta who had organized the coup, brought Piyasvasti Amaranand, the former head of EPPO, back to be the Minister of Energy.

7.3 Preliminary Findings and Conclusion

Gaining a better understanding of a policy decision-making framework, rests on understanding the ways in which people are able to influence the decision makers. An examination of the nature and behaviour of policy participants and their position within a given network of actors in the policy process, enables us to understand the decision- making criteria of other policy actors and their influence and power in the overall framework. My investigations in this chapter placed the main policy actors involved in Thailand’s electricity sector, into four key policy networks, including: energy aristocrats from EGAT, the new energy aristocrats from EPPO, the CSOs, and politicians. My research also revealed the asymmetric power regime and the influence of each of the policy actors in the policy system. Among the four policy actors, EGAT, created by the Government and reinforced by several institutional factors, including laws and a policy to protect the authority from political intervention, has remained dominant in the electricity industry in Thailand. EGAT has reinforced these institutional factors by building a tailored organizational culture, through the selective recruitment of new members and other measures, with the aim to create organizational unity and to build upon its political power. This has continued to allow EGAT, despite the efforts of politicians and the ‘new’ energy aristocrats, to increase its control and authority in setting industry policy in Thailand, as shown in Table 7.1. 217

Table 7.1: Major Policy Actors in Thailand’s Electricity Generation Policy Framework, and their Discourses Major Policy Discourse Description Networks EGAT Neo-Nationalism/ EGAT maintains its status as state-owned State Monopoly enterprise; has a 70% share of electricity generation and controls the entire transmission function. EPPO Neo-Liberalism/ Separation of electricity generation and Competitive Market transmission functions. The generation function (power pool) will be separated into three GenCos and will be privatized. These GenCos will operate competitively. The Power Pool Committee will be organized to take care this function. Civic Groups Decentralization of (1) Decentralization of electricity generation and Power Generation transmission will assist in promoting small power producers to participate in the power generation process. It will also promote the utilization of renewable energy (2) Create fair, sustainable development, and good governance. TRT Party Private Monopoly EGAT will be corporatized to be public limited company, but will retain a monopoly in the electricity supply industry, and will have complete control over the transmission function. It will be listed on SET, in order to mobilize the capital required for investment in the new projects.

There has however, been some erosion of EGAT’s influence over time. EGAT, after 1968, easily manipulated laws, policy and resources to accumulate influence and maintain its status as a state-owned enterprise, and exerted control over the electricity supply industry as shown in Table 7.1. It was challenged by other key policy actors, such as the EPPO, which attempted to promote the competitiveness in the electricity supply industry, but EGAT successfully resisted. However, EGAT has had to 218

continuously divert resources to negotiate with the Government and politicians, in order to preserve its status and market share in power generation. This can be seen in the establishment of an EGAT subsidiary company, set up to buy EGAT power plants and affiliates as an IPP, in the partial privatization of 1992. Facing Thaksin Shinawatra’s policy to corporatize it, EGAT formally negotiated to retain both its electricity supply functions and transmission, and to limit competitors’ capacity to build new power plants to 50 percent (Sukkumnoed et al. 2006: 51).

Other policy actors in the electricity industry have, over time, also emerged with distinctive features. The new energy aristocrats or technocrats of the EPPO were created in an effort to create ‘new rules’ for an industry dominated by EGAT. The economic rationalism at the heart of market-based solutions to Thailand’s electricity supply and distribution challenges, gained some support from politicians, and to a lesser extent, CSOs, but as at 2006 were still not dominant in policy debates.

Table 7.2 provides a summary of the key dimensions within the electricity industry’s policy network, including the membership, network characteristics, resources and strategies of the four policy networks, those who have participated in Thailand’s electricity generation policy framework, including EGAT, the old energy aristocrats, EPPO and the new energy aristocrats, CSOs and the politicians. 219

Table 7.2 Comparative Key Dimensions of the Four Policy Networks (2005) Policy Networks Membership Network Characteristic Sources of Power Strategy EGAT -EGAT Board of Directors Unity EGAT Act, Organizational Policy advocacy, -EGAT Executives culture, resources, high informal negotiation, -EGAT Employees Union leadership public relations -Associated Electric & Industry EPPO -EPPO and associated technocratic Unity NEPC Act, public and Policy analysis, formal agencies Government trust negotiation, creation of CSO network Civic Groups -Leading CSOs for energy affairs, Fragmented The provisions of the Creation of network, including SENT, CCOs and Palang Constitution of 1997, laws formal and informal Thai. and regulations negotiation Politicians Thai Rak Thai Party (as ruling party) Unity The provisions of the Formal and informal (Thai Rak Thai and advocates Constitution and a number negotiation, political Party) of laws authorizing the mechanisms Government 220

An assessment of the three policy actors, including the energy aristocrats, CSOs and politicians, finds both strengths and weaknesses in each group. In the case of the ‘old’ energy aristocrats at EGAT, a review of the monopolistic power of their body of knowledge is essential for any analysis of the influence held by the dominant actor.

Apart from the economic logic used in its energy policy making, EPPO seems to lack the resources to negotiate with the Government or other policy actors, and to take control of the policy debate. EPPO was created as the central planning agency for energy policy affairs, but has lacked the authority to command other Government agencies to adopt its policy framework, except in the case of the Tinasulanonda, Panyarachun and Leekpai Governments, who assumed office for brief periods during the 1980s and 1990s. The power of the ‘new’ energy aristocrats increased sharply when the Panyarachun Government accepted a recommendation to promote the launch of EGAT’s partial privatization in 1992. In contrast, this Government hesitated when making a decision to promote the power pool model, one that should have started in 2003. When the TRT Party gained power in 2001, it came with its own policy direction, one that differed from the EPPO ‘power pool model’, and this led to a decline in influence of the new energy aristocrats after 2003. In Thailand’s emerging democratic state, EGAT’s strategy based upon ‘serving the national interest’, was used to sideline the political interests of allegedly corrupt politicians, as well as the market reforms proposed by international agencies and the ‘new’ energy aristocrats.

The Shinawatra Government developed its own policy direction, following criticism of the Government before it, which had tried to promote the privatization of state-enterprises. This led to Shinawatra proposing to maintain EGAT as single authority; however, its potential role changed from a state-owned enterprise to a public company, in order to mobilize capital from the Stock Exchange of Thailand. Even though Shinawatra’s policy to promote EGAT’s privatization was accepted slowly by EGAT members, CSOs and some members of EGAT’s EU supported EGAT maintaining its control over the new energy system. They feared that Shinawatra would take advantage of EGAT’s corporatization to enrich himself, as occurred with PTT’s privatization. 221

These CSOs urged the re-structuring of the electricity supply industry to a more decentralized system, one that would lead to the promotion of fair competition among the power generators. They proposed the separation of the generation and transmission functions, and the creation of a new authority to take care of transmission. The main aim of this proposal was to ensure that SPPs who could generate electricity from renewable energy sources, would have access to the national grid, and would be released from the institutional barriers created by EGAT. The CSOs, especially the environmental groups, introduced an important new consideration, the value of the environment, into debates about the future of the electricity industry in Thailand. In this way, they reshaped the debate about future energy policy in Thailand, as I will discuss in the next chapter. 222

Chapter 8 Electricity Power Development Policy and Conflict over the Role of Society and Natural Resources in Policy Decision-Making

8.1 Introduction

Public policy is a combination of basic decisions, commitments and actions made by a government, or those who hold or affect government positions of authority (Gerston 2004: 7). Scholars such as Dye (1999: 2-4) have defined the term ‘public policy’ as being “what governments do, why they do it, and what difference it makes.” In this sense, public policy can be employed as an instrument of the government to control, allocate, and direct public resources in any direction. Public policy can be used as an instrument to improve public welfare and direct public resource allocation, but can also be a major source of social conflict; conflict that presents itself as a conflict between the poor and the rich, between local communities and outsiders, between rural and urban people, between those wishing to protect the environment and those wishing to exploit it, as well as the competition among various concerned groups to control the policy making process.

Natural resource tensions are characteristic of developing countries, as traditional economic activities are displaced by a shift from largely agricultural activities, to industrial and service oriented ones. Population and economic growth also play a role in driving changes in the pattern of economic activities and of local natural resource use. The building of large energy projects to supply electricity requires land, and uses resources such as water, coal and natural gas to generate power. Local communities that depend on the resources being used for other purposes often lose access to the use of those resources, and this has become a source of conflict between energy utilities, government agencies and local communities worldwide, including in Thailand. 223

The previous chapters showed that the electricity supply industry in Thailand has been controlled by elite groups focused on the development of large-scale projects, whose aim has been national development and, in particular, the need to generate sufficient electricity to meet that development. At the start of this process, and in order to build the industry quickly using scare capital resources, these elite groups were little concerned with efficiency in the industry, or with recognizing social justice or sustainable development goals, and they continued in this fashion until the emergence and growth of social movements and civil society organizations (CSOs) took place in the 1980s, an event that was to challenge industry priorities.

This chapter will first outline the major conflicts that have taken place as a result of the development of electricity development policy in Thailand, and will present four significant case studies covering controversies to do with electricity development projects. These four conflicts are: the proposals for the Nam Choan Dam Project, the Pak Mun Dam Project, the Prachub Kirikhan Power Plants, and the Wiang Haeng Mine Development Project. I researched these conflicts through the use documentary evidence and by undertaking interviews with participants and key informants, including local residents in Wiang Haeng District and members of CSOs involved in the debates. The objective is to reveal how these issues marked a transition in Thailand’s social, political and economic development, and how they served to broaden the scope of public policy and pricing, forcing the electricity industry policy-making elites to take account of the social and environmental costs of their policies, and to change them. In the process, these conflicts have contributed, in a significant way, to the slow emergence of participative, democratic forms of governance, as one important aspect of the peoples’ lives in Thailand.

8.2 The Emergence of a People’s Movement against Electricity Power

Development Projects

In Thailand, public criticism of the electricity supply industry and its negative impacts on society and natural resources has gradually increased. As was indicated in Chapters 5, 6 and 7, the Thai bureaucratic elites who controlled the political institutions and formed the electricity supply industry in the early years, preferred a vertically 224

integrated monopoly model, because this model allowed them to develop large large- scale thermal power plants using coal, or to construct hydropower dams. These schemes contributed to the expropriation of large areas of land, to forest degradation and pollution, and impacted negatively on local people. Thousands of villagers in the areas affected were forced to leave their land, losing it in the process. In the 1980s, as living standards rose and a more democratic system of government emerged in Thailand, local people joined with environmentalists and academics to question and challenge the conventional wisdom of the policy-makers and planners, those who previously had not been forced to confront the social and environmental costs of their policies and projects.

As Chapters 5 and 6 indicated, Thailand’s electricity generation system chose large scale ‘conventional technologies’ such as large centralized power plants using lignite and imported oil, or built large-hydroelectric dams to generate electricity. This electricity was then distributed through a centralized electricity transmission and distribution grid (Palettu 2000: 21). The sole electricity generation policy objective was to supply sufficient, least-cost electricity to consumers, despite opposition based on environmental, social and economic grounds. As indicated on Table 8.1 below, this opposition grew from the 1970s onwards, and has continued to do so right up to the present day.

The literature on policy-making and conflict with regard to natural resources in Thailand, shows that a range of public policies have become a major cause of natural resources conflict over recent times. These have included the national security policy of the early 1960s (Hirsch 1993: 32), water policy, logging concession and forest preservation policy, commercial forestry (Lakanavichian 2001: 7), commercial agriculture policy (Ganjanapan 2000: 83), and other development policies formulated in the development era, since the 1950s. 225

Table 8.1 Chronology of Major Events in the Timeline of Protests against Electricity Development Projects: 1970s to the Present Name of the Project Location and Major Protest Current Status Period Issues Lang Suan Dam Chom Phon (1977- Compensation and Cancelled 1978) resettlement Nam Choan Dam Kanchana Buri Forestry, wildlife and Cancelled (1982-1988) ethnic minorities Kaeng Krung Dam Surat Thani (1990- Forestry and Cancelled 1992) resettlement Pak Mun Dam Ubon Ratchatani Compensation for In Operation (1989-present) loss of fishing income and relocation Mae Moh Power Lampang (1992- Air pollution In Operation Plant present) Kanchana Buri Gas Kanchana Buri Forestry, wildlife, In Operation Pipeline (1997-1998) and safety; human rights Prachub Kirikhan Prachub Kirikhan Marine ecosystem Cancelled Power Plants (1995-2001) Wiang Haeng Lignite Chiang Mai (2002- Forestry, wildlife, air Under Construction Mine Project present) pollution, cultural issues Lam Takhong Pump Nakhon Ratchasims Air pollution and In Operation Storage (2003) health issues Thai-Malaysia Gas Songkla (2001-2002) Air pollution and In Operation Pipeline safety Sources: Complied from many sources, such as Elinoff 2002, Assembly of the Poor (AOP), and the Southeast Asian Rivers Network (SEARIN) 2004. 226

The controversy related to EGAT’s power development projects emerged in the late 1970s, as shown in Table 8.1. Some scholars, such as Sretthachau (1999: 3), indicate however, that the first opposition was organized prior to this. He states that local people organized protests against the construction of the Bhumibol Dam during the period 1960 to 1964 (Sretthachau 1999: 3, 2000: 76). Local people did not agree with the associated relocation programme and refused to leave their villages, the reasons for this being that the level of compensation was poor, the newly allocated land was smaller in size than their previous land, and they simply wanted to live in their existing communities. As the country was ruled by a military dictator at the time, local opposition was unsuccessful, as the Government utilized the law and its military power to enforce the relocation.

During the 1970s and 1980s, when political conflicts emerged, the military still ruled the country, and opposition groups such as farmers and workers, those who sought a ‘fair share of wealth’, were labeled as potential ‘communists’ (Phuangcharoen 2005: 74). They were seen as the enemy of the Government and State, as well as, as an anti- democratic movement (Phongpaichit and Baker 1996, in Phuangcharoen 2005: 74). The negative images of opposition groups used by the Government, allowed it to gain the legitimacy and authority to eliminate them, as it was able to label them as political enemies.

By the 1970s, the legitimacy of CSOs’ calls for reform was recognized. In 1973, a student uprising overthrew the Thai military Government headed by Field Marshal Thanom Kittikachorn, due to dissatisfaction with both the lack of democratization in Thailand, and the blatant corruption and nepotism of Government leaders (Dhiravegin 1992: 191). Even though a constitutional monarchy had been introduced to Thailand in 1932, in practice, the structure of the Government and political power remained in the hands of the aristocrats and an elite group of civilian and military personnel, who became and continued to be Government leaders in the new system (Neher 1996, in Harkness 2000: 108), and in what Riggs (1965) called a political system of bureaucratic polity. This Government bureaucracy, removed from the need of having to be accountable to political leaders elected by the people, controlled the decision-making apparatus in Thailand. 227

During the early 1970s conditions changed, and environmental issues became prominent as the focus of the political concerns of student-led activists (Hirsch and Lohman 1989: 442). During 1974 and 1975, these concerns focused on the actions of the Thailand Exploration and Mining Company (TEMCO), which gave illegal mining concessions in southern Thailand, to a few high ranking Government officials who held shares in the company (Hirsch and Lohman 1989: 443). The student movement at the time was supported by academics and concerned provincial and national level officials, and they succeeded in forcing the Prime Minister to withdraw the mining concession.

After the student uprising in 1973, Thailand experienced full democracy for only a short period, as the military took power again in 1976, as shown in Table 5.5 (Wyatt 2003: 293). A so-called ‘semi-democracy’ regime was then adopted, as the military, bureaucrats and elected politicians shared political power. The political atmosphere in Thailand changed, as people were given more power to speak-up against state policies and because the protection of human rights became of greater concern.

The 1973 demonstration showed that political change could emerge from a popular uprising (McCargo 2002, in Olandini 2003: 95), and since then, civil society has played an increasing role in Thailand’s evolving democracy, and in its policy- making. The army and elected politicians have been increasingly forced to acknowledge the role of the people. Even though power has fallen frequently under military control, as during the Premiership of General Tinsulanonda (from 1980 to 1988) (Phongpaichit and Baker 1998: 225), the political system has seen a gradual increase in the role of parliamentary and participatory politics.

Civil society gradually emerged after the student uprising in 1973 through peoples demands for a ‘better governance system’ (Phongpaichit and Baker 1995: 384, Sukkumnoed 2006: 5), one that recognized and secured human rights. These activities in the years after 1973 were at first focused narrowly on political activity, rather than development and environmental issues. 228

The economic boom during the late 1980s accelerated a decline in the value placed upon natural resources in Thailand, with continuous forest destruction and growing industrial pollution. Power development projects were a major user of the natural resources stock, and this led to social conflict when EGAT accelerated the development of a number of large-scale hydroelectric dams and thermal power plants, to supply energy to industrial factories, such as those listed in Tables 6.3 and 6.4 in Chapter 6. These and other projects became of general concern, and the Constitution of Thailand 1974, drafted after the people’s uprising of 1973, contained a number of provisions reflecting a new national commitment to protect the natural environment (Tu 1994: 134). Under Chapter 5 of the 1974 Constitution, entitled “Directive Principles of State Policies”, Section 77 prescribed that “the state should conserve the balance of the environment and natural beauty, including forests, upstream water sources, and water.” Other provisions, such as Sections 28, 79 and 86, also related to the goals of environmental conservation. Shortly after, the National Environmental Quality Act of 1975 (NEQA 1975) was enacted, and established the National Environment Board (NEB) as the national advisory body on environmental affairs (Tu 1994: 134-135). While this led to higher levels of awareness on environmental issues, it did not significantly slow the building of new hydro-electric dams.

By the 1980s, Thailand was again governed by the semi-democracy system, with Prime Minister Tinasulanonda (1980-1988) backed by the army and sharing power with elected politicians. While people had the freedom to express their views in the public arena, they could not participate in the policy arena. Public participation in the policy- making process was a privilege granted only to executives from the business and industrial sectors, and excluded the general public, particularly local people. This led to the CSOs seeking new channels to participate in political activity.

The environmental movement in Thailand started to show signs of more rapid growth after 1987 (Department of Environmental Quality Promotion 1999: 83), as the response to an increasing concern with the concept of achieving sustainable development from all sectors of society. As natural resources degradation became obvious, the emerging CSOs focused their attention on scrutinizing large-scale development projects, such as hydropower dams. The Nam Choan Dam project was the 229

first project that faced opposition, and later the project was cancelled, as discussed in Chapter 5.

8.2.1 The Controversy over the Nam Choan Dam Project

The controversy over the Nam Choan Dam Project was frequently mentioned by my key informants as being the most significant moment in the history of the civic movement against electricity development projects. The project to construct Nam Choan Dam was proposed in 1978 by EGAT, which planned to develop a 540 MW electricity-generating multi-purpose dam, located on the upper Kwai River in Kanchanaburi Province (Boyle 1993: 104). In 1979, EGAT, with funds from the Japanese International Cooperation Agency (JICA), commissioned a survey to assess the feasibility of the Nam Choan Dam Project. The TEAM Consulting Engineering Company carried out an Environmental Impact Assessment (EIA) prior to the project’s start (Boyle 1993: 104).

In 1981, EGAT submitted the project proposal for Government consideration (Hirsch and Lohman 1989: 444). The project was also incorporated into the Fifth NESD Plan (1982-1986) and the World Bank and Japanese Overseas Economic Cooperation Fund provided loan funding for the project (Hirsch 1993: 139). After the Cabinet had granted formal approval to the project, there was an unprecedented protest campaign against it.

Researchers such as Boyle (1993: 106) and Phongpaichit and Baker (1995: 389), point out that two key factors contributed to the size of the opposition to the Nam Choan Dam Project. Firstly, people in Kanchanaburi Province organized a strong local protest against the project. They campaigned against the project on the grounds that the new dam, and those proceeding it, the Srinagarind and Vajiralongkorn Dams, were being constructed in watersheds and would adversely affect the local climates, soil fertility, water quality and fish resources, and would also increase the likelihood of earthquakes. Nam Choan Dam was planned to flood 223 square kilometers of land (Phongpaichit and Baker 1995: 389), in one of the richest areas in terms of biodiversity, in Asia. The dam was also going to disturb the Karen minority group settled in the area, and so EGAT planned, as part of the project, to relocate 2000 Karen from six 230

communities (Hirsch 1993: 137-138) in the proposed construction area. Evidence indicated that the Karen had lived in that area for more than two centuries, and that the Nam Choan Dam would cause a significant socio-cultural disruption of it progressed.

Secondly, the dam became a major concern for the Green Movement in Thailand (GMT), which was concerned with its environmental impacts (Sretthachau 1999: 4). As a result, opposition to building the dam came, not only from local villagers, but also from university students, environmentalists and the urban middle class, those who supported GMT and other environmental groups. Although their reasons for protesting varied according to their social class, occupation and political beliefs, ultimately they were all united in opposition to the proposed dam (Boyle 1993: 106). For example, wildlife preservation groups joined the protest, because they were concerned that the proposed dam would endanger rare animals at Thung Yai Naresuan, a wildlife sanctuary to be flooded by the dam. Student activist groups pointed out that a wealthy minority would use the cheap electricity, while poor villagers would be made to bear the economic, social and environmental costs. Farmers were afraid that a fourth big dam in the province would change local weather patterns, and the Karen people living in the forest did not want to be displaced and to have to change their way of life (Project for Ecological Recovery (PER) (n.d.): online). Environmentalists and members of the protest groups questioned the Government, asking why the poor had to make sacrifices for the benefit of the privileged few (Kungsawanich 2000: BP).

To find a way to deal with opposition to the project, the Tinasulanonda Government created a special committee to study the dam’s costs and benefits, and to report within 90 days. In addition, the Government set up several other panels and committees to look into various aspects of the impacts of the dam. The Nam Choan Dam dispute gave the Thai environmental movement an increased influence, and its leaders were increasingly asked, after the event, to discuss issues and to explore the means to resolve conflicts arising out of Government officials’ policies and plans, particularly in the key forestry, agriculture and fisheries ministries. In the case of the Nam Choan Dam Project, since many of the Government groups involved in decision- making were seen to be very partisan (pro-dam construction), student activist groups 231

felt that the panels looking into the environmental impact of the dam were biased and distorted the facts (Harkness 2002: 117).

Therefore, after the consultation, student leaders sent a letter to the Prime Minister saying they would demonstrate against the project. In Kanchanaburi Province a coalition of more than 40 groups, including teachers, lawyers, village heads, housewives, conservationists and students, was formed (Harkness 2002: 117). There were rallies held against the dam that attracted the interest of the media. The media itself was crucial in challenging EGAT’s initial monopoly on information resources, and published increasingly penetrating critiques of the project, from environmental, economic, and political points of view (Hirsch and Lohman 1989: 446). Many protest techniques were used in the campaign. For example, banners, letters, the amalgamation of opposition groups to combine their efforts and the involvement of popular singers and celebrities were all used, and these activities led to the eventual cancellation of the project (Harkness 2002: 117). The battle to scrap the Nam Choan Dam Project lasted more than eight years and the project was finally abandoned in 1988 (Department of Environmental Quality Promotion 1999: 90). The struggle to scrap the Nam Choan Dam saw Government agencies protect their policy positions in a traditionally Thai way; ignoring criticism and any of the policy alternatives available.

The protest against the Nam Choan Dam Project clearly revealed the attitude of policy-makers in Thailand, who saw the dam as symbolic of economic modernization, and who held a belief in the benefits of the economy–of-scale principle, that a ‘large dam is better than [a] small dam’, as discussed in Chapter 6. The policy also reflected an urban development bias and the economic growth priorities of the Thai economic and political elites. The fact that the dam’s construction would generate negative impacts on natural resources, arable land, local communities, and some historical sites, was ignored, as they viewed economic expansion as the first priority, that is, until they were forced by the protest movement to take these other factors into account.

The civil society movement against the Nam Choan Dam Project empowered local people and environmentalists, and led to new calls for the improvement of the provisions of the National Environmental Quality Act of 1975 (NEQA of 1975). The 232

promulgation of the Enhancement and Conservation of the National Environmental Quality Act B.E 2535 (NEQA of 1992) (Department of Environmental Quality Promotion 1999: 85) reflected the growing influence of these groups. The legislation prescribed that large-scale projects had to conduct an environmental impact assessment (EIA) before submission for approval (Section 46), which had not been the case when the Nam Choan Dam was proposed.

Very shortly after the Government abandoned the Nam Choan Dam Project in November 1988, extremely heavy rainfall in the deforested uplands of southern Thailand caused landslides accompanied by flooding and an outwash of debris downstream, resulting in the deaths of some 370 people (NESDB 1989, in Boyle 1993: 107). This tragedy pressured the Choonhavan Government to then formulate a logging ban policy, and to accept demands to take natural resources management and environmental protection issues more seriously (Department of Environmental Quality Promotion 1999: 91). The campaign against the Nam Choan Dam marked an important turning point in Thailand’s management of environmental issues, and gave a major stimulus to the further development of the environmental movement.

8.2.2 The Controversy over the Pak Mun Dam

The spillover from the controversy about the viability of the Nam Choan Dam project led subsequently to the cancellation of the proposed Kaeng Krung and Haew Narok Dam, and Kaeng Sua Ten storage projects, because these projects also faced strong public opposition. Despite this, EGAT continued to propose the development of new hydropower dams, in particular the Pak Mun Dam in 1990. The reason put forward for this dam focused on the necessity to develop a new low-cost energy source, in order to supply the growing industrial sector and to contribute to national economic development. The Pak Mun Dam was built, and in 1991 a long series of protests began which have continued to the present day, without a resolution being found.

The Pak Mun Dam is located in the Khong Chiam District of Ubon Ratchatani Province, in northeast Thailand. It was constructed on the Mun River, 5.5 kilometres upstream from its confluence with the Mekong River (TDRI 2000: 1). The dam was built with roller compacted concrete, with a maximum height of seventeen metres and a 233

total length of 300 metres. The reservoir has a surface area of 60 square kilometres at the normal high water level of 108 metres above mean sea level, and has a capacity of 225 million cubic metres (WCD 2000: iii). EGAT built and operates the dam and its assonated hydroelectric plant.

Feasibility studies for the construction of Pak Mun Dam began in 1970, one year after the Government created EGAT. Preliminary environmental studies were conducted in 1979 and detailed studies were done in 1981 (Elinoff 2002: 17). The studies identified significant adverse effects, including the costs of the loss of output from lost agricultural land, the social impacts of relocation and resettlement, the loss of tourist sites, the possible spread of waterborne diseases and their vectors, and also losses to downstream fisheries. Benefits were to include fish production in the reservoir, irrigation development and the generation of electricity (Boyle 1993: 107).

In 1982, EGAT conducted an EIA that indicated that approximately 4000 households would have to be relocated to make way for the project. When originally conceived, Pak Mun Dam planners promised that there would be ‘no significant impact on fisheries or people’ (Usher and Ryder 1997: 97, in Hancock 1999: online). In May 1988, EGAT submitted the ‘Summary Report on the Pak Mun Multipurpose Development Project’ to the Cabinet (WCD 2000: 7). In May 1990, the Cabinet approved the Pak Mun Dam Project with a budget of 3.88 billion Baht (US$155.2 million) and construction began shortly thereafter. In 1991, NESDB approved a modified project cost of 6.6 billion Baht (US$246 million). The eventual cost, by 1999, was 6.507 billion Baht (US$260 million); the project costs had increased by 68 percent from the original estimate. Of this, the World Bank financed US$22 million (AOP and SEARIN 2004: online). The dam’s construction was completed in 1994.

The Government approved the Pak Mun Dam project in 1989, but local people, anglers and environmentalists organized themselves collectively into the “anti-Pak Mun Dam Committee” (Elinoff 2002: 17), and campaigned against the dam’s construction on environmental and resource impacts grounds. They pointed out that the dam would disrupt local fishing and would have unpredictable impacts on the overall river drainage 234

system of the northeast (Dechalert (n.d.): online). EGAT ignored these protests and continued with the construction, until the dam was completed in 1994.

Opposition groups investigated and publicized the impacts of the dam with local communities. As a report produced by the Assembly of the Poor (AOP) and the Southeast Asia River Network (SEARIN) indicated, before the Pak Mun Dam was constructed in 1989, the Mun River was one of Thailand’s richest rivers in terms of its water resources and ecosystem. The Mun River was the largest tributary of the Mekong, and provided a habitat for 265 different kinds of fish species. It hosted a complex ecosystem that consisted of rapids, islands, channels, underwater caves, eddies, rises, pools, seasonally flooded riverine forest, wetland forest and tributaries (AOP and SEARIN 2004: online). All of these were threatened by the Pak Mun Dam.

In terms of income loss, local residents claimed that fishing played a multiple role in supporting their local livelihoods, providing both a source of food and income for the villagers (AOP and SEARIN 2004: online). However, the value of these resources had not been recognized in EGAT’s EIA. A post-project assessment conducted by the World Commission on Dams (WCD), claimed that after the dam was completed, fishing communities located upstream and downstream of the dam reported a 50 to 100 percent decline in their fish catch. The number of local households dependent on fish in the areas upstream of the dam declined from 95.6 to 66.7 percent. Local villagers who had been dependent on fisheries for income, found no alternative livelihoods. Because their food source and incomes had been lost, they sought several ways to manage their lives, including migrating to urban areas and finding work as wage laborers (AOP and SEARIN 2004: online).

The WCD report disclosed that according to EGAT’s survey (in 1982-1983), it had provided for the displacement of only 241 households as a result of building the dam, but in reality, the number of households displaced by the Pak Mun Dam was 1700 (WCD 2000: v) and an even larger number of households were adversely affected due to falling fishing yields, as presented above. The WCD report also stated that up to March 2000, 6202 households had been compensated for their fisheries’ losses during 235

the three-year construction period, payments which had contributed to the increasing costs of the project over that initially planned by EGAT.

The actual operation of the dam was also different from that expected by EGAT. The dam, one of seven projects studied in detail by the WCD, found that it failed to meet its projected benefits, because it was supposed to generate 150 MW of electricity, but barely generated 20.81 MW in high–demand months (Santiwutmethi 2000: 40).

During the dam construction period, NGOs including the International Rivers Network and Southeast Asia Rivers Network (SERIN), got involved in supporting the local movement opposing the dam. They helped organize a petition, signed by 12,000 people, in opposition to the dam, which was sent directly to the Director of the World Bank and the Prime Minister. They also raised the compensation issue, claiming that the 4000 Baht per rai of land that EGAT paid for land expropriation, was far too low. At the time, the appraised value of land was around 35,000 Baht per rai, and EGAT was eventually told to pay this to the villagers (Elinoof 2002: 20). However, EGAT paid little concern to the issues raised by the protest groups, and simply re-iterated its discourse, that the country’s electricity security was essential and its mission was to ensure the necessary electricity supply for national economic development. The campaign left another significant legacy though, with the CSOs opposing the dam developing the capacity to pull together scientifically based evidence on the impacts of such schemes, a capacity which would become more important in future campaigns.

One year prior to the completion of Pak Mun Dam in 1993, the protest movement shifted its strategy from one focusing on the current losses associated with the project, to the future losses from ecological changes to the river (Elinoff 2002: 20). The protest movement drafted six proposals as the basis for a ‘social contract’ between local villagers and the Government. These proposals included: (a) EGAT completing a final map showing the true extent of the flooded area, (b) the Government providing houses and farmland to affected farmers, (c) EGAT to pay compensation for expropriated land, based on current land values, (d) annual compensation to be paid to affected fishermen, (e) EGAT to accept responsibility for the medical treatment of villagers affected by water-borne diseases, and finally (f) in the cases of a dispute, a 236

tribunal should be formed to make a final decision, in relation to compensation. Despite this local and the sophisticated approach to alternative policy development by the CSOs, and the local resistance movement, EGAT’s Governor rejected these measures and concluded that he was ‘in no position to sign such a contract’ (The Thai Development Newsletter 1994, in Elinoff 2002: 21).

The campaign did not end with the completion of the dam. In 1995, the villagers whose major source of income from fishing had been lost, petitioned for compensation for the loss of fishing opportunities during the three-years of the dam’s construction. After several rounds of protests, the Prime Minister at the time, Chavalit Yongchaiyudh, acknowledged the dam’s adverse impacts on the fishing communities and agreed to pay 90,000 Baht compensation to each family for the loss of income during the dam construction. The dam’s construction continued to cause a sharp decline in the fishing haul and deterioration in the Mun River’s ecological system, and so the affected villagers then demanded additional compensation for the permanent loss of their livelihood (Chalermsripinyorat 2004: 547).

The Pak Mun Dam issue led to another evolution in the capacity of the civil society movements opposed to such projects. In 1993, in an effort to create a sustainable network and to combine resources, the CSOs began establishing a network of people affected by dam constructions in each region of Thailand. In 1995, at Pak Mun, they announced the creation of a national network of NGOs and CSOs for villagers affected by dam, forest and land issues related to development projects and other state policies, and established the Assembly of the Poor (AOP) to campaign on related issues (AOP and SEARIN 2004: online, Chalermsripinyorat 2004: 546). In relation to the Pak Mun Dam, the AOP asked for fair compensation, the opening of the sluice gates from May to August for fish migration, and the eventual removal of the dam so that they might regain their way of life (AOP and SEARIN 2004: online, Chalermsripinyorat 2004: 546). After 1997, the Pak Mun villagers no longer appealed for compensation but continued to demand that EGAT open the dam’s gates to help the restoration of the Mun River’s ecological system, and make greater efforts to rehabilitate villagers’ livelihoods. 237

The protests continued both in Ubon Ratchatani, near the dam site, and in Bangkok. In order to address these continuing demands, the Shinawatra Government opened the sluice gates of the dam from June 2001 until November 2002. The fish stocks then revived, enabling more people to regain their livelihood through fishing. However, after the dam’s gates were closed, fish species again declined and this caused further hardship for many local people (Amnesty International, November 2003: 18).

The resistance against the Pak Mun Dam was dissimilar to the protest against the Nam Choan Dam Project. The Nam Choan Dam demonstrations clearly comprised of villagers, academics, activists, students and journalists, as well as the middle classes in Bangkok and urban areas, while the Pak Mun Dam resistance was more localized and gained little attention from the middle classes in Bangkok; some claimed that the demonstrators were just troublemakers, creating traffic problems and disrupting business (Sretthachau 1999: 5). The other difference between the two campaigns was that scientific evidence actual led the policy analysis used in the Pak Mun case.

The Political Change: Opening Opportunities for Social Movement against

Government Development Projects

Thailand’s rapid national development has brought a gradual change to society in terms of the levels of income and welfare. Economic development proved successful as the economy achieved an annual growth rate of about seven percent from the 1970s to the 1980s (NESDB 2001: 1). By the 1990s, Thailand was no longer classified as a poor country (Piboolsravut 1997: 1). Social development also increased in terms of access to healthcare services and levels of education. Thailand is now among those countries in Southeast Asia with the highest literacy rate and possesses a small, but highly educated elite, those trained in Thailand or who have received an overseas education. These groups have been called chon-chan-klang (middle class), and have increasingly become a force for both socio-economic and political change. National development has improved the economy, but the social and environmental impacts of it have clearly been unevenly distributed and also controversial (Sathirathai and Kittiprapas 2002: 3). 238

The economic boom of the 1980s created a new class of highly salaried men and women who graduated from the tertiary education system, but were not, as previously, absorbed into the bureaucracy. Their values and political attitudes were shaped by the student uprising of 1973 and the bloody October 1976 resistance against military rule. They started campaigns against many Government development projects that potentially affected the environment, and in the early 1990s focused on campaigning against political corruption as well (Olandini 2003: 109). Many student activists also moved to rural Thailand to promote an alternative developmental approach, one that recognized rural concerns and led to the empowerment of local villagers.

The Thai political system itself developed into a more democratic form of governance over the years. By the early 1990s, the combined efforts of grassroots community protests, pro-democracy organizations and sympathetic technocrats, had created powerful pressures for change in both the political framework and the orientation of development policy in Thailand (UNDP 2003: 35). The main objective of constitutional reform was to construct a people’s constitution, try to eliminate military dictatorships and limit the power of the bureaucratic administration. The reform movements also aimed at enhancing human rights, creating a new judicial system, and encouraging more public participation in government policy-making and the decentralization of Government power to local government, as well as the creation of a national corruption commission and more democratic election procedures (Phuangcharoen 2005: 86).

In October 1997, Thailand promulgated a new constitution. The new charter was significant, because it provided mechanisms for increased transparency, accountability and participation in the Thai political system. Additionally, the Constitution of 1997 created new independent agencies, such as the Administrative Court, the National Commission of Human Rights and a national Ombudsman. The emergence of these new independent agencies allowed people affected by state policy to submit petitions for better solutions to their problems and forced a limitation on the power of the Government in policy making and implementation. 239

The Constitution of Thailand of 1997 also encouraged and supported a growth of the environmental movement. As Hirsch (1993: 6) states, “the environmental movement in Thailand is a reflection of the political economy, and a force with some influence on developmental directions in its own right”, while Harkness (2002: 1) asserts that protest is an important activity driving social change. The strategies of the movement against Government projects in the past had been focused on such tactics as road blockades and submission of petitions to the King. Campaigns against Government projects after the 1990s changed the forms of strategy adopted, as can be observed from the demonstrations against the Pak Mun Dam. After the Constitution of 1997 was promulgated, opposition groups started to look to new mechanisms prescribed in the Constitution to provide elements in their campaigns. For instance, local residents who suffered from the pollution of the Mae Moh Power Plants raised the issue with the National Commission on Human Rights (NCHR). In many cases and as an interviewee for this research noted, local people, in cooperation with academics, developed access to information and used it to disclose mistakes in Government policies or Government agency activities, such as the disclosure of surplus electricity capacity that caused EGAT to over-invest, which in turn led to an increase in the debt burden across the 1 whole of society . The new constraints on politicians, bureaucrats and policy became more apparent in the two controversies over the Prachub Kirikhan Power Plant and Wiang Haeng Mine Development Projects.

8.2.3 The Controversy over the Prachub Kirikhan Power Plant Projects

The construction of new coal-fired power plants at Prachub Kirikhan Province was first proposed in 1996, as part of the Thai Government’s development policy, which was focused on developing new energy infrastructure in the provinces along the south-west coast of Thailand. It focused particularly on creating Prachub Kirikhan as a ‘Steel Industry Zone’, and in doing so, expanding investment from the private sector in the Thai economy (Greenpeace Southeast Asia (n.d.) (2): online). The projects included construction, by two Independent Power Producers (IPPs), of the Ban Krut and Bo Nok Power Plants.

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The Ban Krut Power Plant Project

Ban Krut Power Plant was planned to be constructed along the Ban Krut coast in Tambon Thongchai, Bang Sapan District, Prachub Kirikhan Province, generating 1400 MW of electricity. The Thai company Union Power Development Co. Limited (UPDC), was to operate the project for the investors, the Japanese Tomen Corporation (34 percent), Fotum Power and Heat Oy (28 percent), Consolidated Electric Power Asia (28 percent) and Union Energy (ten percent) (Union Power Development 1999: 3). The operators were to import 3.75 million tons of coal a year to fuel the new power plant. Of this, 80 percent was to be imported from Australia, and the remainder from Indonesia and South Africa. UPDC signed a 25-year contract with EGAT to supply electricity as an independent power producer (IPP) (Union Power Development 1999: 5). The contract was divided into two phases. Phase 1 was scheduled to see a new plant, generating 700 MW, brought online by October 2002, and phase 2 was scheduled to start generating power by January 2003 (Greenpeace Southeast Asia (n.d.) (1): 10: online).

The Bo Nok Power Plant Project

The plan was to build Bo Nok power plant along the coast of Tambon Bo Nok, in Muang District, Prachub Kirikhan Province (Samabuddhi 2000: 127), about 70 kilometres from Ban Krut Power Plant, and was expected to generate 734 MW of electricity to supply EGAT. The leading companies involved in this development were the Gulf Power Generating Co. Ltd. and Edison Mission Energy from the USA. It was planned that the sub-bituminous coal for the plant’s operation, would be imported from Indonesia from the New Hope mine, a mine owned by an Australian company (Greenpeace Southeast Asia (n.d.) (1): 11: online). Gulf Power Generation signed a 25- year contract with EGAT, as an Independent Power Producer (IPP), and would start to supply power to EGAT from the first generation unit by October 2000 and from the second unit by April 2002.

Environmentalists and local villagers organized protest movements such as ‘Love Bo Nok’ against the two projects, from the date of the announcement in 1996, and ran a campaign for almost ten years. They argued that the natural environment 241

around Bo Nok and Ban Krut was extremely rich in biodiversity, one that would be damaged by the proposed development. Protesters argued that the proposed Bo Nok Power Plant Project was near the Sam Roi Yot National Park; a wetland providing a habitat to more than 200 species of both rare and threatened birds. They said that emissions from the power plant would devastate wildlife, because the plant was located so close to the wetland area. They claimed that emissions from the project would result in a direct increase in disease, the probable loss of threatened species and disruption to the ecosystem. Local human communities would also be threatened, not only by carbon dioxide pollution from the plants, but also from the pollution resulting from the sulphuric acid and dust being discharged, something that would cause a variety of adverse health effects, most noticeably to marine life, and ultimately make its way, through the food chain, into local people (Samabuddhi 2000: 132).

The EIA for the two power development projects were approved by the Ministry of Science, Technology and Environment in 1998 (Bureekul 2000: 28). The two projects were then postponed, because the local people strongly opposed the projects and research had found that a nearby coral reef, as well as the local whale population, would be adversely affected by the project. Although electricity developers maintained their coal-fired plant would be whale-friendly, the existence of whales in the area of the project had not been mentioned in the EIA when it was passed to the Government for consideration (Samabuddhi 2000: 130).

Along with the whales, the area around the plant was a habitat for more than 190 species of fish and several species of dolphin. Local people estimated that the plants’ turbines would draw in an estimated 550 minnows per minute, or some 578 million young fish per year, and that this would affect the marine food chain; also, the plant’s cooling system would pump hot wastewater back into the sea, further endangering marine life (Greenpeace Southeast Asia (n.d.) (3): online).

To find a solution to the environmental and social effects of the plants, the Leekpai Government demanded a public hearing to be held to reduce the opposition. The Public Hearing Committee, with eleven members, was appointed in February 1999, in order to comply with the Public Hearing Regulation of 1996 (Bureekul 2000: 31). 242

The public hearing for the proposed Bo Nok Power Plant was conducted in late 1999, and the public hearing for the proposed Ban Krut Power Plant was conducted in early 2000 (Bureekul 2000: 31). The purpose of the public hearings was to gather the opinions of local people. The result was that the Public Hearing Committee Report concluded that a clear decision could not be made as to whether or not the power plants should be developed in Prachub Kirikhan Province. The Committee also made new recommendations for the developers’ consideration, such as carrying out a study of the coral reef, the construction of a wind shield to prevent the dispersion of coal ash, the establishment of funds for local communities in order to help with human resource development, making proposals for the rehabilitation of the affected environment, and developing short and long term plans to reduce the adverse environmental impacts (Manager 2000, in Bureekul 2000: 38-38).

However, local people were objecting to the project because they simply did not want the construction of power plants to take place in the area. Protests by the villagers took the form of blockades of the Southern Highway in the Province; the gateway to the southern region of Thailand. During the demonstrations, the projects’ opponents in Thailand also received widespread support from international environmental groups, particularly Greenpeace. The environmentalists reinforced local objections by mentioning the global adverse effects of the projects, such as the release of greenhouse gases contributing to global warming (Greenpeace Southeast Asia (n.d.) (1): 11). Domestic concerns were taken further, as organizations such as the National Human Rights Commission (NHRC) expressed concern that the projects threatened local human rights and would become a cause of conflict among local residents and local communities (National Human Rights Commission 2003: 11). The Sustainable Energy Network of Thailand (SENT) and local villagers also publicized a miscalculation of the load forecast by EGAT, one that was causing over-investment in new electricity power development projects in Thailand (Sukkumnoed 2007: 16).

The demonstration against the Prachub Kirikhan coal fired power plants also differed from the past opposition to EGAT’s power development projects, such as the Nam Choan and Pak Mun Dams, where the campaigns had been focused mainly on natural resource degradation and economic and social issues, in particular the local loss 243

of livelihoods caused by the projects (Greacen and Greacen 2004: 531). The campaigns against the Bo Nok and Ban Krut Power Plants extended their case, as the environmentalists challenged energy policy makers through the disclosure of policy failures of both the old and new energy aristocrats of EGAT and EPPO, those at the local, national and international levels. Local villagers and members of SENT highlighted several mistakes and also misinformation that had appeared in the official EIA reports on the two coal-fired power plants, in relation to their impact on the rich biodiversity in the areas, and also the unclear pollution mitigation mechanisms. They presented their analysis widely across newspapers and television talk shows. They criticized the Thai Government for its private sector participation policies, poor plant reliability criteria and investment planning decisions, particularly the Government’s lack of attention to energy efficiency goals and the potential of renewable energy in meeting energy needs (Greacen and Greacen 2004: 531). Their criticism received widespread and popular support, and generated demands for the reform of the overall EIA system, as well as the energy policy formulation process.

To defend the building of the two Prachub Kirikhan Power Plants, EPPO raised the spectre of massive blackouts, grid instability, rate increases and fragile investor confidence, if they were not completed. The EPPO adopted strategies such as hiring public relations firms to inundate the public with television and newspaper advertisements, combined with a series of articles and government publications supporting the projects (Greacen and Greacen 2004: 531). It is evident that the conflict over the two power plants was by this time between the civil society movement and EPPO, rather than EGAT alone. As Greacen and Greacen (2004: 531) pointed out:

“…EGAT’s conspicuous silence did not help bolster NEPO’s legitimacy on technical issues. Though publicly taciturn, EGAT saw the coal IPPs as a threat to its dominant market share and worked behind the scenes in an uneasy strategic alliance with environmental activists. The Petroleum Authority of Thailand (PTT), eager to expand its gas market, joined the flight against coal”

As the conflict between local people and EPPO was increasing, the Government tried to find a solution. In January 2002, Prime Minister Shinawatra visited the proposed sites (EPPO (n.d.): online). Over 20,000 local protesters voiced their disapproval of the 244

two power plant projects directly to Shinawatra, and he promised to make a decision on the projects’ future by the Thai New Year festival in mid-April. The ‘Love Bo Nok’ coalition continued to protest in the months up to the decision-making moment, and international partners like Greenpeace publicized their struggle around the world. The decision making deadline came and Shinawatra said he needed more time to consider the information from energy specialists. Finally, in early May, he announced the plants would be deferred for two to five years, stopping the coal plant proposals (EPPO (n.d.): online), a victory for the grassroots movement opposed to the proposals. It also marked another turning point in the development of the campaigns and influence of NGOs and CSOs, as they campaigned locally, nationally and internationally on the issue.

8.2.4 The Controversy over Wiang Haeng Coal Mine Development Project

The opposition to the Prachub Kirikhan Power Plant Projects was extended to a further project initiated in 1988. The Wiang Haeng Coal Mine Development Project in the Wiang Haeng District of Chiang Mai Province, was initiated in 1988 and formally proposed in 2001. EGAT’s proposed project planned to operate an open-cut coal mine to supply Mae Moh Power Plant in Lampang Province. The project was criticized again, with objectors questioning the necessity of a further electricity supply expansion, and highlighting both the impact on natural resources, and the abuse of laws protecting the environment.

Wiang Haeng District is located in the northwest of Thailand, some 168 kilometres from the central districts of Chiang Mai city. Local people settled in Wiang Haeng around 150 years ago, and it is believed that Wiang Haeng is the place where King Naresuan the Great died, when he fought there during the war against the Burmese in 1605 (ESCAPE 2007: 47). Wiang Haeng District is comprised of three Tambon (sub- districts), namely, Piang Luang, Saen Hai and Muang Haeng. There are ethnic minorities (ESCAPE 2007: 47), living in the Wiang Haeng area, including the Karen, Lahu and Tai (Thai Yai) people, who are mainly involved in agriculture. Geographically, Wiang Haeng is a valley rich in natural resources, such as forests, and the surrounding mountains are the water source for many rivers, such as the Mae Taeng, which is one of the branches of the Mae Ping River, the river that supplies water to Chiang Mai itself. 245

In 1983, the Department of Minerals surveyed the area and found good quality, low level sulphur dioxide coal in the Wiang Haeng basin (Kongman 2002: 1), coal that had an average heating value of 3100 kilocalories per kilogram and a low 1.30 percent of sulphur content (EGAT 2002: 27). The coal from this basin is of the same type as the high quality coal that EGAT was purchasing from local private companies to supply its existing thermal power plant, in operation at Mae Moh.

A Cabinet resolution on March 10th 1988, granted approval for the Department of Minerals to reserve Wiang Haeng basin for mining operations. The Cabinet allowed bidding, but there were no private firms interested in the mine development because it required such high investment levels. EGAT, in response, announced it would operate the mine itself, which would also help to reduce imported coal costs. EGAT conducted an environmental impact assessment (EIA) prior to the project being granted approval by the Cabinet, which was in violation of the law on such actions (Kongman 2002: 2).

In 1998, prior to listing the coal mine project in the PDP, EGAT conducted a survey and worked on developing a public relations campaign aimed at creating support from local residents and proactively preventing local opposition. The public relations targets included having a budget to support the reconstruction of a Buddhist pagoda, Wat Phrathat Saen Hai, including applying a gold leaf cover for the pagoda. EGAT also increased support for local cultural activities, local organizations and local schools, though nobody questioned the purpose of EGAT’s activities. Finally, in August 2001, EPPO approved the EGAT proposal to develop a coal mine at Wiang Haeng District, and the project was granted approval from the NEPC on September 10th 2001 (Kongman 2002: 2). This development was then followed by a Cabinet resolution on September 25th 2001, supporting the project. The Cabinet had therefore allowed EGAT to develop a mine at Wiang Haeng without having to go through a bidding process, on the condition that it conduct a new EIA before seeking final construction approval from the Cabinet (EGAT 2001: 47, Sukin, November 25th 2001: online).

The Wiang Haeng Mine Development proposal was to develop a large opencast coal mine to exploit the approximately 139 million tons of accessible high quality coal reserves appropriate for electricity generation in the Wiang Haeng basin. It planned to 246

produce one million tons of lignite per year for twenty years, from the deposit (Campaign for Alternative Industry Network (CAIN) 2002: 18), in order to supplement existing coal-fuel suppliers for the Mae Moh Power Plants in Lampang Province, 500 kilometres from Wiang Haeng (EGAT 2004: 61, Sukin, November 25th 2001: online). The original Mae Moh Power Plant was built in 1972, and Mae Moh people were reported to have suffered serious respiratory problems from the dust out of the existing lignite mine near the power plants (Prachathum News Net, August 29th 2003: online). Local environmental issues there had also included the impacts on rivers and agricultural products from the continuous malfunction of the filtering devices being used at the power plants. To address this problem, EGAT sought a new source of cleaner coal to generate electricity, and eventually identified the high quality lignite at Wiang Haeng basin as the solution.

After EGAT made its announcement about the Wiang Haeng coal mining scheme in 2001, a number of local people, academics from Chiang Mai and Kasetsart Universities, members of SENT and environmentalists, engaged in activities to oppose the project. The opponents pressured the Government to withdraw the project, citing the negative socio-economic and environmental impacts of the projects on Wiang Haeng District.

In response to the proposal, local people divided into two major groups: a pro- Wiang Haeng Coal Mine Development Project (a pro-mine group), and an anti-mine group. The pro-mine group was comprised of local head men, local politicians and district officials, those that had close relationships with EGAT officials. As one 2 interviewee suggested to me, EGAT arranged trips for local people and brought members of the pro-mine group to visit the operation of the power plant. Another key 3 informant told me that although some members of these groups, such as local head men, were dissatisfied and unsure about the consequence of the project for Wiang Haeng people, they felt they could not express their views openly, because they were part of the Government leadership hierarchy4.

2 Interviewee #D001 3 Interviewee #D002 4 Interviewee #D001 247

On the other hand, the anti-mine group included Buddhist monks, civic groups such as the Piang Luang Phattana Group, and intellectuals, those that were free from 5 bureaucratic domination. Interviews I held with two prominent members of this group revealed that they had a greater opportunity to access independent information from sources outside EGAT. Other members included a local merchant with business connections with other merchants in nearby cities6.

The opposition groups to the project argued that the mine project would cover up to 3000 Rai of land across all three Tambon (sub-districts), or most of the area of Wiang Haeng District, which was the home of 23,000 people. Due to the scale of the project, the mine operation would also have the potential to adversely affect local forests, wildlife, five streams, 21 Buddhist temples and 65 historical sites (Sarakadee October 2003: 30). Wiang Haeng is a watershed for the Mae Taeng River, the main water source for farmers in Wiang Haeng valley and other districts, and also provides drinking water to the population in Chiang Mai city. It was believed that the river would be vulnerable to contamination and a lower water volume if the project went ahead, in turn affecting the supply of water to the city of Chiang Mai.

Local residents were also concerned about the health impacts of the project. The project was to potentially cause environmental problems, including waste water and noise pollution, dust emissions, and was expected to have a negative health impact (Prachathum News Net, November 23rd 2002). Despite these concerns, EGAT had not shown how it would deal with the environmental problems.

Lastly, economists opposed to the scheme pointed out that EGAT’s demand load forecast was an over-estimate of Thailand’s real level of expected electricity demand. An article in the press at that time, suggested that in 2003 EGAT had 24,000 MW of installed capacity, while peak demand was 17,000 MW. Thus, Thailand had an electricity supply surplus of 44 percent, or 7000 MW (Prachathum News Net, May 15th 2003) and therefore it was not necessary to build the mining project at Wiang Haeng, or to invest further in new thermal or hydroelectric power plants. CSOs also suggested the

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Government should promote a renewable energy policy, which make that would the building of large new mines and an increase in thermal generating capacity unnecessary.

During the campaign, the anti-mine group started to ask questions of EGAT in relation to the mine operation. The leader of the Piang Luang Phatthana Group sent a letter to EGAT’s Deputy Governor asking about (a) the transportation plan for the mined coal, because the coal was to be produced in Wiang Haeng District, but would be consumed by Mae Moh Power Plants located in Lampang province, some 500 kilometres away from Wiang Haeng, (b) the poorly defined pollution and dust emission protection plan, and solution mechanisms for the project, and (c) the impact of the mine operations on the Mae Taeng River, which would impact rivers across Chiang Mai as a whole. However, EGAT did not address to these questions (Kongman 2002: 79-80).

Protestors used many strategies, such as erecting signboards seeking outside support, and creating networks with other local movements, for instance the local villagers at Mae Moh Power Plant and those who campaigned against the Prachub Kirikhan power plants, where coal was also to be used for fuel. They also received widespread support from academics, national politicians and other Government agencies, for instance the former Minister of Natural Resources and Environment, Mr Prapas Punyachatirak (Kongman 2002: 79-80).

To assess the impact of the project, EGAT commissioned academics from Chiang Mai University to conduct an EIA. On January 10th and 17th 2003, there was a public hearing organized by the EIA team at Chiang Mai University. At the hearing, local people protested against the terms of the EIA. A key opponent7 pointed out some of the problems that the EIA process for the project would be confronted by:

“The problem is that the Government frequently uses public participation discourse. However, we found in many projects that local residents cannot participate, since the projects have started. Most of the public participation process was set solely by the State. The EIA framework is not set by local people. In fact, local people know Wiang Haeng well and they can set the framework to cover every dimension.

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Nevertheless, they do not have a chance to set the framework for the EIA. This is a critical problem”

During the campaign for the general election of 2005, the anti-mine group was successful in submitting a petition to Prime Minister Shinawatra, and as a result he promised to scrap the Wiang Haeng Coal Mine Development project. However, when the TRT Party won a landslide victory in the general election in 2005, the Shinawatra Government did not follow-up on Shinawatra’s election promise. This did not stop the local protest movement however, because it continued to pressure the Shinawatra Government and its military successor to release cabinet resolutions to formally cancel the project8.

In conclusion, protests against the electricity development projects described above, reflect many aspects of Thailand’s electricity power generation policy process and its direction. During five decades of national development, the political and policy context has changed from being dominated by military dictators, to become a semi- democracy, then to full democracy and back to military rule again, with a range of new policy actors emerging each time, seeking to participate in the policy process. Throughout the period, from the 1980s to the present, Government officials have retained their power to lead the policy process, despite greater public participation, but as these case studies indicate, their capacity to make unilateral decisions affecting the environment and local communities, has been reduced.

8.3 An Analysis of Electricity Power Generation Policy and Conflict in

Thailand

The natural resources conflict in Thailand can be viewed as a competition between various actors to gain access, control and management of policy-making in relation to natural resource use. In Thailand, conflict over natural resources has evolved along with the four stages of the development process and the State’s development policies to promote it, as outlined in Chapter 4 and as demonstrated during the late 1980s in many rural areas of Thailand in the case of forest resources. Ganjanapan

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(2000: 22) asserts that the people who live outside the forests, as much as people who live inside, are major causes of the loss of forest cover in northern Thailand. The outsiders include people who operate businesses related to commercial forestry, such as logging, mining, agricultural industry and resorts, as well as infrastructure developments such as dams and roads. As forest and other resources have been depleted, outsiders have become increasingly concerned at the loss of resources. Conflicts related to the preservation of and access to natural resources, as well as their use, have grown as a result. As Tyler (1999: 264) notes:

“There is ample evidence from case studies of how specific policies, government programs, and their implementation have generated or aggravate conflicts, even when the intention was to reduce the conflict”

Both public policy in general, as well as specific policies and other measures (like mandating EGAT) in relation to large energy related resource projects, has not kept pace with the pressure on resources. Government policy itself has contributed to the conflicts over natural resources, even though its intention has usually been to improve or find a solution to the conflicts. The reason for this is that natural resources policy has been formulated without the active and sustained participation of communities and local users; communities that have new values and the capacity to contest policy and project proposals. In a number of countries, government has adopted centralized control over natural resources, and Thailand is one such country. The Thai Government has, in the past, assumed that it has a minimal responsibility to consult with, or ask permission from local people when it formulates project plans and policy, such as in the case of dam constructions which have generated resistance from local people dependent upon the rivers and land for their fishing and agricultural activities. The interests and values of the energy aristocrats have been focused on engineering solutions (EGAT) and on market values (EPPO), and these clearly do not align with the values of those affected by the policies, resulting in conflict. 251

8.3.1 Institutional Factors

The Static Policy and Planning System

Clearly, as this thesis has demonstrated, community organizations and CSOs have begun to take a much more active part in policy-making. The Thai public, after the Asian financial crisis in 1997, started to actively criticize the administration and power of supposedly ‘independent organizations’ at the national level, those setting policies, such as the Bank of Thailand (BOT). The BOT was created as an independent agency with full authority to formulate monetary policy and the decision-making process, through the hands of the bank’s Governor. The financial crisis of 1997 revealed widespread policy failures by BOT in managing the financial system (Satitniramai (n.d.): online). This criticism extended to other key policy-making institutions, and led to calls for more transparent and accountable administration within the organizations created as independent and self-regulatory bodies, such as the BOT and EGAT.

As my investigation in Chapters 5 and 6 showed, the EGAT Act of 1968 gave EGAT greater responsibility and authority to direct electricity power generation policy during the growth period of the 1970s and 1980s, and other agencies were not allowed to take part in setting power generation and transmission policy, or developing the related services. EGAT’s policy objective was to generate sufficient energy to supply consumers at least-cost, and to do this EGAT relied on conventional technologies such as building large hydropower dams and thermal power plants using coal, and using a centralized transmission system, in order to distribute it to users (Palettu 2002: 21). In 1992, when EPPO emerged and began to play a crucial role in electricity generation policy, it recommended the adoption of a deregulated, competitive electricity market, in order to address Thailand energy needs. EPPO put the focus on recommendations for the re-structuring of the electricity supply industry, and indicated it preferred large-scale power development projects fuelled by a variety of fuel sources, such coal, natural gas and imported-oil, to achieve a lower cost industry, to ensure investor confidence in the industry and to promote private investment. The centralized administrative and political system that resulted from this, contributed to a lack of coordination between relevant agencies and a failure to develop effective environmental and conflict management systems. Electricity policy was not alone. As Christensen (1994: 60) found in his 252

research on water conflicts in Thailand, policy proposals were developed inside Government departments before being submitted to the Cabinet, and lacked the direction and sufficient information needed for decision-makers to make informed decisions on issues such as the potential impacts on communities and the environment, those that emerged in the 1980s.

The four case studies in this chapter show that most electricity development projects have been initiated and approved by Central Government agencies like EGAT and EPPO, without sufficient attention being paid to the laws stipulating that an EIA should be conducted prior to the submission of a project to the Cabinet for consideration, or that the public should be told in advance about the project proposals. In the case of the Wiang Haeng Mine Development Project, EGAT listed the mine operation project 9 with the PDP, prior to submitting the proposal to the Cabinet for final approval . EGAT and EPPO claimed that the urgent need for investment in these electricity power plants led to the projects being initiated without appropriate attention being paid to consultation with those communities that might be affected.

The Role of Politicians in the Decision-Making Process

Politicians’ significant role in the policy decision-making process on all matters relating to State affairs in Thailand, has often made things worse. The decision of Prime Minister Choonhavan to grant approval for EGAT to continue the construction of the Pak Mun Dam was such a case, as outlined in this chapter. Even when the Government made a decision to terminate a project, as took place under the Shinawatra Government in relation to the Prachub Kirikhan Power Plant Project, this decision was actually made by the energy technocrats. Even though the Governments have changed over time, each new Government in Thailand has usually followed the decision patterns of the previous Government. Government attempts to address the questioning of its policies, have been carried out to a minimum degree, and have been based mainly on out-of-date laws, policies and regulations, such as the Resettlement Policy and Guidelines of 1963, the Land Settlement Act of 1968, the Land Expropriation Law of 1987 and the

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compensation appraisals of Committees chaired by Government officials (Sapmanee 2002: 2).

Politics at the central level has also demonstrated that Thailand’s Governments have been concerned with short-term benefits rather than the interests of the people (Phuangcharoen 2005: 184). For example, despite severe criticisms from the public, Prime Minister Choonhavan gave a green light to the development of the Pak Mun Dam project. In contrast, Prime Minister Shinawatra hesitated to give a firm decision on the Prachub Kirikhan Power Plant and Wiang Haeng Mine Development projects during his campaign for re-election, because it might have affected his popularity during the election campaign of 2005. The short-term political cycle of seeking election, has begun in recent times to dominate the policy process, and contrasts with the long-term decisions made in earlier years. This, of course, has policy-making implications which I cannot explore here.

When disputes over Government development projects finally emerged, the role of the Government was, in general, to at first support the Government agencies. The decision of the Leekpai Government to support the Petroleum Authority of Thailand (PTT) with the Kanchanaburi Gas Pipeline construction project between 1997 and 1999 (Phuangcharoen 2005), and the Shinawatra Government’s decision to back PTT in its construction of the JDA gas pipeline, are examples of this.

The evidence is not all negative, as decisions made by the various Governments have sometimes helped to reduce conflict. For example, the Government did eventually agree to pay 4.65 billion Baht compensation to villagers who had been negatively affected by the construction and operation of the Sirindhorn, Rasi Salai and Pak Mun Dams, as well as by other development projects (Chalernsripinyorat 2004: 544). The Yongchaiyudh Government’s decision saw its solution as having both political and social advantages. However, the political climate soon changed after the 1997 financial crisis, and after Yongchaiyudh resigned. Leekpai replaced him as Premier, and his Government was again criticized for its negative perceptions of rural political movements. The Government adopted an antagonistic approach towards the AOP, claiming that protesting villagers were being provoked by this organization. 254

From the four cases reviewed here, we can also see that the Thai Government’s decision making was constrained by the information provided to it by EGAT and EPPO. The decision of the Choonhavan Government to approve the Pak Mun Dam Project is a good example. The project’s EIA was conducted by EGAT in 1981, but the Cabinet only considered and granted approval for the project in 1991. The EIA report itself had been criticized for the absence of an essential assessment, and a lack of consideration of the impacts on fishing stocks in the Mun River. It also lacked a comprehensive assessment of the impact of the project on households whose fishing occupations and incomes would be adversely affected (WCD 2000: V).

The decision of the Leekpai Government to approve the Prachub Kirikhan power plant, was based on a report provided by EPPO showing that the demand for electricity would increase, and that the existing installed capacity was not sufficient, because EGAT should provide a minimum 25 percent reserve margin of its generation capacity, in order to maintain system reliability (Palettu 2002: 30). This was higher than the fifteen percent margin built into earlier EGAT plans. EPPO raised the spectre of massive blackouts, grid instability and other adverse impacts, should the projects not go ahead (Greacen and Greacen 2004: 531). EPPO upped the ante on margins, because as Palettu says:

“…the reason is not really about reliability. It is about politics: the increase to 25 per cent coincided with the policy to encourage private investment in the power sector, and extra “demand” was necessary to justify these new private plants” (Palettu 2002: 30)

This evidence shows that successive Thai Governments have lacked a well- organized policy and planning agency to assist them in policy analysis, before decisions are made. EPPO was created to perform this function; however, it mainly focused its attention on re-structuring the electricity supply industry, and created the perception of an impending crisis, by increasing its reliability margins to obtain acceptance. 255

Inadequacies in Public Participation

The analysis of the major sources of economic, social and political conflict between the Thai Government and the people, has often centred on the issues of natural resources and local rights as a result of development projects planned by Government agencies. When faced by Government projects such as the construction of hydropower dams, local communities have had little political power, or the resources, to express their views, other than through demonstrations and collaboration with civil society organizations. In Western, developed and democratic countries such as in many of the OECD countries, there has been a long-standing policy of engaging people in the policy process (OECD 2001: 12), but this has not been the case in many developing countries like Thailand. The OECD states that public participation is a sound investment and a core element of good governance, because it allows the Government to acquire wider sources of information, perspectives and potential solutions to conflict, and improves the quality of its decisions (OECD 2001: 11). Public participation is not only a major condition for participatory democracy to exist, it also contributes to improved government decision-making in relation to resolving a variety of problematic issues (Bureekul 2004: 6-7), such as conflicts over natural resources and environmental management. The official acceptance of community rights and public participation also affects the policy-making process, making it more complex in terms of the number of policy actors and networks involved. This is obviously a challenge for countries like Thailand, where the mechanisms are under-developed.

The policy process is essentially a process of public deliberation and an opportunity to share ideas among stakeholders, in order to find better policy options, particularly in the case of policy that potentially affects the quality of life of people. According to Fearon (1998: 63, in Abelson et al. 2003: 241), deliberation refers either to “a particular sort of discussion, one that involves the careful and serious weighing of reasons for and against some proposition, or to an interior process by which an individual weighs reasons for and against courses of action.” Deliberative interaction allows concerned groups with different backgrounds, interests and values, to listen, understand, potentially persuade and ultimately come to more reasoned, informed and public spirited decisions (Abelson et al. 2003: 241). As discussed in Chapters 5 and 6, a 256

centralized policy process controlled by bureaucratic elites is an obstacle to deliberation in the policy decision-making process.

Progress is being made in Thailand. Several provisions in the Constitution of 1997, secured the rights of the public and local authorities to participate in the decision- making process regarding projects that may potentially affect their living conditions. However, there has been no supporting law or structures introduced to enable these rights to be used (Bureekul 2004: 17). The relevant agencies have not set or revised their rules to allow the public to participate.

10 Academics, and my interviewees for this study, have stated repeatedly that since the promulgation of the Constitution of 1997, there have remained many obstacles that have reduced its effectiveness. One problem is that the Constitution is not clear as to what extent and to what level the public can become involved (Phuangcharoen 2005: 88). It has been stated that many of the governing laws of various agencies have not been aligned with the principles embedded in the Constitution of 1997. For example, the NEQA Act of 1992, EGAT Act of 1968 and the National Energy Council Policy Act of 1992, have not been amended to allow community members or consumers to participate in the decision-making process. As the NEASC states, there is no supporting law to force the Government agencies to create public involvement in the policy process (Bureekul 2004: 16-18).

Holding public hearings is one process where members of a society are given an opportunity to make suggestions, present information, question the information of others, and to give their opinions on the implementation of a particular project, so that a decision can be made on the basis of the objective facts presented to the authorities (Kanchanasuwon and Hurt 2000, in Bureekul 2000: 21). In Thailand, since 1992, many public hearings in relation to the construction of large-scale development projects have been arranged in order to remove opposition, not to design better policy (Bureekul 2000: 24). Sometimes, public hearings have been organized to solve a problem that has already arisen, and this has often increased tension, not reduced it. The Government enacted the Public Hearing Regulation of 1996, in order to provide guidelines for

10 Interviewees #C013 and C014 257

arranging public hearing activities in relation to major issues affecting the public. According to this regulation, a Public Hearing Committee should be appointed from distinguished scholars, Members of Parliament, representatives from the Council of Lawyers, and some technical experts (Bureekul 2000: 21). The fundamental principles and processes for conducting public hearings are quite complicated. For example, basic information on the project has to be prepared, public hearing committees have to be selected and the processes of a public hearing has to be followed. This sounds appropriate, but as Bureekul (2000: 21) argued, the public hearing processes laid out following the Regulation of 1996 seemed like “a government tool for pushing the projects and claiming that public participation is already included in decision-making”.

There has been some effort made to address the above problem. The holding of public hearings was supported by the new Order of the Office of the Prime Minister on Public Hearings B.E 2548 (2005) (Order of 2005), which replaced the previous order of 1996. The new order regulates the procedures and methodologies to be used for public hearings regarding state projects, and guides their implementation by Government agencies. This order details two sets of guidelines for the use of public hearings with projects that may have a high impact on the quality of the environment, on public health, people’s livelihoods, or other impacts on local communities. According to the new Order of 2005, two new aspects stand out as being needed to improve the role of public hearings (Sukkumnoed et al. 2006: 145). Firstly, the order identified the types of hearings to be set for public participation, such as public hearings, community forums, and stakeholder meetings. Secondly, it required a sufficient timeframe to be set for people to give opinions and present information for inclusion in the drafting of final Environmental Impact Assessment (EIA) reports. These mechanisms, if used properly, could improve participation.

There are still suspicions about the effectiveness of the process. As one interviewee for this research noted, it is evident that “despite the Order of 2005 allowing people inclusion in the policy process, it is used as a mechanism to legitimize 11 Government decisions” . As another interviewee12 from a CSO stated:

11 Interviewees #C009 and C011 12 Interviewee #C007 258

“Despite the public hearing being a legal requirement, the government officials are free to set the procedures, and invite only local people who tend to support the project to participate in the process, while local opponents are not invited or informed in any message”

The reason for this, two CSO activists said, was in the perception of Government officials, who view local people as uneducated and disregard indigenous 13 knowledge and local culture . The problems are worsened when Thai local villagers themselves view community development as a Government function. For this reason, in many instances people who are directly impacted by large-scale Government projects do not participate in the public hearing process, but expect the Government to protect their interests. As Siroros and Haller note, this is because “they are not interested in it and do not believe that they can influence or gain anything from spending time attending [a] public hearing” (Siroros and Haller 2000, in Phuangcharoen 2005: 90).

Along with problems which arise from a misunderstanding of public hearing processes and responsibilities, public involvement is also often misused. As 14 interviewees noted, many of the recent public hearings in Thailand provided by the Government were carried out after decisions had already been made and in consequence, 15 conflicts were more severe than they needed to be. The campaigns against the Prachub Kirikhan Power Plant Projects, the JDA Gas Pipeline Project and other projects that were implemented before the promulgation of the Constitution of 1997, are cases in point. The Wiang Haeng Coal Mine Development Project currently under consideration, should be the first project to allow potentially affected local residents a chance to voice their concern at the project’s beginning. As a senior EGAT’s official stated:

“In the past our strategy focused only on informing the public but now we will concentrate on exchanging opinions with those villagers. Nevertheless, this does not mean that EGAT has made a mistake over the scheme. It would be a mistake made by the whole of society” (Sukin in The Nation, November 24th 2001, online).

13 Interviewees #C012 and C013 14 Interviewee #C009 and C011 15 Interviewee #C009 and C011 259

At the moment, many stakeholders, particularly affected local communities, are reluctant to participate in public hearings conducted by the Government (Phuangcharoen 2005: 91) and this reluctance will be difficult to overcome. Many large-scale projects generate disputes because the location of the proposed project has been pre-determined and land has already been purchased for the proposed project, without the local communities having been informed. Such was the case with the 16 Prachub Kirikhan Power Plant Projects; one interviewee from SENT said the project owners bought land from local residents under the pretext that it was for the development of a golf course, not for a power plant. Government agencies are not much different, as Meetam (2002: 45) states:

“…when the government agencies want to develop any projects, they are clever to find a reason to support the importance of the project, even though the reason they mentioned contradicts government policy… The government agencies can often do that because of Thailand’s lack of social inspection. CSOs lack a communication instrument to present to the public about this failure.” (Meetam 2002: 45)

8.3.2 The Dynamics of Socio-Economic and Political Forces and the

Emergence of Civil Society Organizations on the Environment

Anderson (1997: 28) suggests that in the Group Theory of politics, the central facts of political life examined are the struggles among various groups that become political interest groups, those who make a claim through or upon the institutions of the Government. To have influence and to be able to access the policy institutions or shape government decisions, a group must have the opportunity to express its viewpoints to decision-makers (Anderson 1997: 28). Public policy will reflect the interests of those who are dominant. When groups gain and lose power and influence, public policy will be changed in favour of the interests of those gaining influence, against the interests of those losing it. This has very much been the case in the study presented here.

16 Interviewee #C002 260

The role of policy actors, both individually and as networks of influence in the electricity industry, is one way of interpreting natural resources conflict in the policy analysis field in Thailand. As the country has developed and become more democratic, new actors have come into the policy arena. The changing composition, role and influence of the new policy actors has led to disputes over the priorities set in Government policy or projects. The construction of hydropower dams, thermal power plants and natural gas pipelines, has contributed to the widespread destruction of natural resources, such as land, forest and water resources. The impact of these projects has been significant, as Sukkumnoed notes: “About one million rai (160,000 hectares) of rain forest has been destroyed by large hydropower plants” and “almost 20,000 local households have been moved from their homelands” (Watershed 2002: 48). Civil and community opposition groups have accelerated in size and sophistication in response, and have raised issues related to “private property, the quality of individual life, public property, society, culture, the way of life of the community, and finally, crises of the needy, poor and marginalized communities in society”, in response (Watershed 2002: 47). The Assembly of the Poor (AOP) as a coalition of interests which protested against the Pak Mun Dam, raised issues on land, livelihood and compensation, while the movement against Mae Moh Lignite Power Plant focused on pollution and health impacts. Government agencies in many cases have decided to proceed with development projects, claiming they are in the ‘national interest’, even though, in these circumstances, the Government officials who formulated and implemented the projects, intentionally violated laws and regulations.

Globalization and an increase in the growth of global developments and policy players, have also played a role in the debates. This development has provided an opportunity for the communities in Thailand to access information about environmental problems and environmental movements in other parts of the world. Local CSOs and social movements have built connections to worldwide allies and associated organizations. They have shared information about the environmental and human rights impacts of state development projects in other countries, information absent from the official Thai reports. As I indicated in the case of Prachub Kirikhan Power Plant Projects, the local opposition to them was supported by international environmental organizations such as Greenpeace. 261

8.3.3 The Different Views of Natural Resources Conflict

The conflicts over electricity power generation projects have not always had negative effects; the demonstrations have revealed the capacity to participate in decisions about Thailand future, as well as highlighted the growing degree of 17 democracy in the country. As one leader of an environmental organization told me:

“…when people organize collectively to protest against the government project, it means people know their rights and liberties, and signals the progression of democratic development. If they stay quietly that means they accept the dominant of state power”

18 Besides, and as one interviewee noted, the presence of local people participating in demonstrations and protests has empowered and educated them in their rights and liberties. The protests have also led to people setting up networks with people from other parts of the country potentially affected by power development projects. As an interviewee from Wiang Haeng noted:

“…before EGAT started the mine operation, we did not know about the peoples rights and liberty, and did not know how people protest against the Government projects. We accept and follow the laws and rules the Government enforces. When people started the campaign, CSOs from outside came to educate local people about the rights and liberties of people. So, it reinforced our confidence to protest against the Government project. During the campaign, we had a chance to visit local communities at Mae Moh Power Plants, where people suffered from the pollution released by the power plants. We also visited Prachub Kirikhan Power Plant Projects and joined their campaign against the two power plants there, and we created a network with these CSOs and shared information about the power plants and coal mine”

The development of different ideas among local people when interpreting conflict, has led to different mechanisms to solve problems. In EGAT’s opinion however, most of a project’s impact can be solved by technology and investment, in order to create economic value to replace degraded local natural resources, and those that can be restored after a project terminates. Conflict would therefore end if CSOs

17 Interviewee #C007 18 Interviewee #D014 262

19 20 stopped their interventions . However, academics state that conflict will only be reduced when the Government reconsiders power development policy, creates greater levels of public participation in the policy process and opens up opportunities for public criticism of policy direction. They say that when referring to security, Governments and their policy-making agencies should consider not only national security and investor confidence, but also human security in the decision-making process.

8.4 Conclusion

This chapter has reviewed four electricity generation projects in Thailand, namely the Nam Chaon Dam and Pak Mun Dam projects, the Prachub Kirikhan Power Plant Projects, and the Wiang Haeng Coal Mine Development Project. These studies revealed the political context of electricity power generation policy, and that its political, social and economic dimensions have changed dramatically since the 1980s, with new policy actors emerging and accessing the political institutions, as well as participating in the policy formulation process. Institutional factors, including laws and regulations, originally empowered EGAT to play a monopoly role in electricity generation; supplying cheap electricity to households and the industrial sector, but this power has been progressively undermined. The centralized hierarchical policy and planning system, with power and authority flowing downwards through the hierarchy, has recently been challenged. The energy aristocrats, those who previously played a very critical role in the development of policy and influenced its acceptance by the Government, have increasingly been challenged by outside forces from Thai society.

19 Interviewees #A001 and C004 20 Interviewees #A002, C001, C002, C003, C005, C006, C007, C009 and C011 263

Chapter 9 Thailand’s Electricity Power Generation Policy: The View from the End

9.1 Institutions, Policy and Change

This thesis has examined the historical development of Thailand’s electricity industry, with a central focus on the way that policy-making has been developed and managed by bureaucratic elites, and then implemented over time through institutions and the impact of this on the Thai economy, society and rural environment. In my study, the theories of Historical Institutionalism and Policy Network Analysis were employed, in order to reveal the important roles that formal and informal institutions have played in the policy-making process, supplemented by an analysis of the role played by key central policy networks and actors. In using this approach, my thesis has tracked, not only how a key Thai industry has developed over time, but has also revealed in an original way, how policy has been formed, and how conflicts related to it have emerged. The conflicts have developed between ‘old’ energy aristocrats committed to building electricity generation capacity on the one side, and ‘new’ energy aristocrats, committed to market reforms on the other, as well as between these two groups and the wider community and national not-for-profit organizations. The ‘aristocrats’ have had to modify their strategies to take account of the damage industry policies have imposed on rural communities and the environment, modifications that have transformed the electricity industry policy framework to take into account the social and environmental costs of its actions. These developments have occurred at the same time as new pressures for more open, democratic and transparent governance have taken place in Thailand. Pressures that have been caused, in part at least, by the development of the electricity industry. 264

9.2 Policy Making as a Focus of Study

Thai scholars, in their studies of public policy, have focused their research in the past on specific issues related to the electricity industry, such as the construction of hydroelectric dams and thermal power plants, and the controversy surrounding power development projects. These researchers include Sutthijaree (1992), who attempted to consolidate all the public policy models used to study Thai Government policy on the public utilities, and later focused on a study of the conflict over the Kang Krung Dam Project. Sretthachau (2000) investigated Thai Government policy related to the construction of hydropower dams, in order to find identify those factors influencing the Thai policy elites’ priorities in developing these projects. Others, including Greacen (2004) and Green (2004), more recently investigated Thai Government policy on micro- electricity and rural electrification respectively, while Sukkumnoed and his colleagues (2006) conducted research into the Thai electricity sector, focusing on the issue of EGAT’s privatization. These researchers have made an important contribution to our knowledge of the sector, without improving our knowledge of the process through which electricity policy has been developed.

The academic research carried out frequently mentions the policy actors involved in the electricity industry, including politicians, the bureaucrats from EGAT and EPPO, and civil society, but analyzes them only as policy actors. Some researchers, such as Christensen (1994) and Charoenmuang (1994) mention that one of the major sources of conflict over water in Thailand has emerged as a result of electricity power development projects, but their studies did not focus on the role of institutions and policy actors in the process. My research aims to fill this gap in our knowledge of the policy process in the electricity industry in Thailand. Previous research, to the extent that it has occurred, has applied political economy and environmental politics approaches, but has paid little attention to the public policy field, particularly the important role that institutions, policy actors and networks play in the process. This research has begun the work of developing a systematic policy framework, one that demonstrates that electricity policy formulation cannot be understood, without taking the role of key policy players and networks into account. 265

To focus on Thailand’s electricity power generation policy is important, because electricity plays in important role in people’s daily life. To achieve this goal, I employed Historical Institutionalism and Policy Network Theory to guide the investigation. I developed a qualitative research methodology to support the research, one that included a documentary study and the interviewing of 25 key informants from EGATand EPPO, scholars in various fields such as economics, political science and law, and members of CSOs such as SENT, Palang Thai and local movements in Wiang Haeng District, Chiang Mai Province. My objective was to reveal the ways that the perceptions, values and organizational cultures of the important policy players have shaped electricity policy in Thailand.

Two major problems I encountered during the research fieldtrip in Thailand, were a lack of public documentation being available, and being denied access to official documents. Government agencies restrict access to a wide range of important documents, such as financial reports, primary policy documents, plans and EIA reports, documents that would have significantly added to the analysis. This problem restricted my research capabilities, but I hope that, in future, these obstacles will be removed, as Thai governments become more accountable and transparent in the years ahead.

During the interview process, some key informants, particularly officials in government agencies, were reluctant to be interviewed, or to describe in detail, facts regarding the nature of policy decision-making, the policy process and the negotiation process among government agencies, politicians and local communities. This reflects the need to open up the governance system in Thailand. Some informants for this study, particularly junior officials, stated they had little opportunity to participate in the policy decision-making process, so they could not express their views about politicians or policy-makers. Other respondents had difficulty in recalling accurately significant events, and also may have been reluctant to divulge certain information. Nevertheless, this research would have been impossible just a few years ago and this reflects the growing democratization and opening-up of Thailand’s policy-making system. As this research demonstrates, a policy process that once was formally guided by a narrow elite behind closed doors, is now open to more thorough examination than it was previously. 266

9.3 The Theoretical Framework of Analysis

My research adopts the Historical Institutionalism theoretical approach and Policy Network Analysis to analyze the evolution of Thailand’s electricity generation policy framework, as discussed in Chapter 2. Historical Institutionalism modifies the pluralist assumption of policy being formed solely by the competition between interest groups and the idea that power is the only factor determining politics and policy. It is true, as this research shows, that institutions have been created in Thailand to favour some groups at the expense of others, but the nature of these institutions is also important, and the analysis here clearly shows that the development process and the emergence of new issues such as impacts on the environment of major electricity projects, have become major concerns influencing policy-making as well.

Utilizing an Historical Institutionalism approach in this thesis, I define institutions as formal or informal procedures, routines, norms and conventions embedded in the organizational structure of political institutions. As argued in Chapter 2, my justification for this approach is not only that political institutions, political authorities and political culture play a leading role in the definition, mobilization and organization of interests, but also that an analysis like this one must take into account the structure of the political opportunities that shape the strategies of organized interests, and their beliefs regarding the efficacy of different types of political action (Immergut 1998: 21). I adapted the Policy Network Framework approach as a supplementary analytical tool to help explain the relationship among actors, whether individuals or groups, involved in the electricity generation policy formulation and decision-making process in Thailand. My goal in taking this approach was to reveal in more detail how values and associations have played a key role in the policy process.

As revealed earlier in this thesis, the electricity industry in Thailand has developed its own policy system, and using Historical Institutionalism proved an effective research framework for this study, because it revealed the path dependence and unintended consequences of policy development (Hall and Taylor 1996: 938). As bureaucratic elites have dominated Thailand’s electricity sector for a long time, they have been able to build-up an extensive institutional capacity, including a legal 267

framework of laws, to shape the structure of the industry and embed their authority and control over policy-making. My case studies show that this power has not yet been seriously threatened; CSOs have tried to integrate themselves into the decision-making system, but continue to be unofficial policy actors on the periphery of the policy- making system.

Policy Network Analysis proved to be an effective tool for investigating the role of policy actors involved in the electricity generation sector. However, due to the limited time available, I focused on investigating the characteristics of network memberships, their sources of power, and the policy discourses or principles held by each policy network; I did not go on further to analyze other network characteristics, such as network integration, or the density of networks, which should be the subject of further research. As Thailand develops, an examination through further research on this aspect of networks, will lay the basis for others interested in electricity policy to improve their participation in policy-making.

9.4 The Development Context of the Emergence of Electricity Policy

Institutions in Thailand

Historical Institutionalists, such as Scott, remind us that no organizational form around policy activity can be properly understood without examining its wider social and cultural context. These conditions determine and shape specific institutional forms, such as the regulatory and normative rules, and the cognitive cultures that constrain direct and support the operation of individual organizations (Scott 1995(1): 151). Reviewing the policy environment, including a consideration of any unique socio- economic and political factors, is important for policy analysis in countries like Thailand. Public policy can be viewed as a political system’s response to demands arising from changes in this environment (Anderson 1997: 26) as outlined in Chapter 4 of this thesis. The demand for new policy actions has in Thailand stemmed from the problems and social conflicts emerging in the policy process, those transmitted to the political system by state and civil society policy actors, and others. At the same time, the natural environment in Thailand has set limits in terms of policy possibilities and 268

has directed the policy-makers in terms of their role in policy decision-making and implementation, as I showed in Chapter 4.

Chapter 5 revealed that the policy direction in Thailand’s electricity industry has been influenced by a combination of internal factors, such as the ambition of the Thai elites to modernize the country, as well as the communities’ response to them, and external factors such as the conditions set by multinational lending agencies on Thailand’s borrowing. Revisionist studies have emphasized the emerging role of international institutions in the setting of policy related to both investment in and the institutional design of the electricity supply industry, but as clearly shown in Chapter 6, political and institutional factors within Thailand have also been important in this process. The emergence of new policy actors committed to market reform in the 1980s, also had an influence, despite the fact that they had values and policy perspectives acquired outside of Thailand.

Studying the political history of Thailand, shows how events such as the alleged communist insurgency and Indochina War of the 1950s and 1960s, brought about the gradual expansion of the electricity sector through the construction of large hydropower dams (Sretthachau 2000: 7), in order to provide electricity to regional consumers in the north east, including US Army bases. National development was the top priority of the military governments in place during the period from the 1950s to the 1970s, and they created a number of public utilities responsible for delivering electricity services to local areas, because the Government believed supplying electricity would help to reduce the psychological isolation of local villages and contribute to the economy (Palettu 2002: 22). The delivery of additional electricity services to rural areas has continued to be a priority, but it is interesting to note, as outlined in Chapter 8, that rural areas are now an additional policy problem for the policy-makers in Bangkok, being a potential source of opposition to Thailand’s strategy to increase electricity generation capacity.

The early influence and the resources of external forces reinforced the authority and capacity of the Thai political and bureaucrat elites, who were trained in the US, to control the policy agenda. This can be observed from the institutional arrangements that the ‘old’ energy aristocrats adopted to create electricity authorities such as the Lignite 269

Authority (LA), the Yanhee Electricity Authority (YEA), and the Northeast Electricity Authority (NEEA) (EGAT 1996) in the 1960s. These three authorities were created as regional authorities to provide electricity services to different parts of the country. Later, the ‘old’ energy aristocrats in Bangkok were instrumental in consolidating the three electric utilities in 1968, to create the Electricity Generating Authority of Thailand (EGAT) (EGAT 1994: 31), as the sole organization generating and delivering electricity services. These policy changes and institutional reforms served to concentrate control of the industry in the bureaucratic elites’ hands, but also served to ensure planning and coordination of the development of the electricity infrastructure was centralized and effective.

My analysis of Thailand’s electricity generation policy in the early period, as carried out in Chapters 5, 6 and 7, showed how the political elites (who worked hand in hand with the bureaucracy) also held the perception that dam building was a priority, both as a symbol of the achievement modern statehood, and for economic development reasons (Sretthachau 2000: 68). These projects utilized relatively low cost water (when the social and environmental costs could be ignored), rather than using expensive imported fuels to generate electricity, because successive Government’s in Thailand had a commitment to supply least cost energy. Building hydropower capacity was justified as a means to achieve this, as well as to provide irrigation to agricultural areas. The Thai Cabinet (throughout the frequent changes in government) provided full support to EGAT for its development of large hydropower dams, from the 1960s through to the 1990s, as outlined in Chapter 6 (see Table 6.3). My study in Chapter 6 indicates that an important part of the financial resources needed to develop hydropower dams was provided by the World Bank, and this contributed to the initial decision to centralize the industry in 1968, but rising oil prices and an imperative to encourage rural development also played a role.

As Chapter 5 and 6 showed, the influence of external forces such as the globalization of politics and economics, as well as the increasing power of the World Bank and the IMF, continued through the 1980s and 1990s, driving the liberalization of the power sector, and this contributed to further structural change in Thailand’s energy sector in the early 1990s. During the 1980s and 1990s, The World Bank and IMF 270

encouraged the adoption of free market ideology, by making it a condition for approval of their loans (Asia Pacific Energy Research Centre 2000: 30, Palettu 2002: 24). Smith claims that as a result of this external influence, the EPPO proposed EGAT’s privatization to the Choonhavan Government (Smith 2003: 279). However, the policy was cancelled due to strong protests from the EGAT EU, although the EPPO and its ‘new’ energy aristocrats with their neo-liberalist ideology continued to play a key role in policy-making. The following Government, led by Anand Panyarachun, along with EPPO and backed up by the military junta, was successful in amending the EGAT Act of 1968, legislation that terminated EGAT’s electricity supply monopoly and allowed the private sector to participate in the electricity industry, as discussed in Chapter 5 and 6. This showed that while the direct influence of international agencies on policy- making was becoming less obvious, the indirect influence of market ideas was growing in influence.

The Thai Government implemented national economic and social planning plans (NESB Plans) in 1961, as outlined in Chapter 4, in order to plan, direct and coordinate development policy in Thailand. The NESD Plan incorporated energy supply planning, and EGAT was then formed in 1968 to manage the electricity industry, and to initiate new large-scale development projects with the declared objectives of supplying sufficient least-cost electricity for households and industries, and ensure Thailand’s energy security. As I showed in Chapter 5, economic factors were more important than social factors in setting policy priorities initially, but as Chapter 7 demonstrated, many of EGAT’s power development projects were increasingly being opposed, due to their impacts on society and natural resources, as well as their lack of consideration of the social and environmental impacts and costs.

The process of socio-economic and political development in Thailand has led to rising incomes and the emergence of a new professional and business class. These new social groups are more concerned with issues such as improvements in human rights, community rights and the environment, and they have thus become closely associated with campaigns about these issues. In the past, these new social and economic interest groups were shown not to influence policy, in part because the bureaucratic elites, including the military and civilian bureaucrats, were unconcerned with these issues. 271

However, as the country has developed, economically and democratically, these interests have become a more important influence in shaping electricity generation policy priorities, as new, highly organized NGOs and CSOs and local groups, have sought participation in the decision-making framework related to it. These movements often emerged from group of local residents, those disaffected with Government development projects, who felt unfairly treated as land was expropriated, people displaced and transitional industries disrupted, as outlined in Chapters 6 and 7 of this thesis. As these local problems lay unresolved, they were taken up by the increasingly free national agenda, and attracted support from a growing, educated urban middle-class, environmentalists and other civic groups.

As previously stated, before the 1990s Thai electricity policy-makers ignored social factors when they formulated policy, particularly policy related to the development of physical infrastructure. Government agencies utilized a relatively narrow range of criteria to assess projects’ economic value, by using a restricted cost- benefit analysis of the impact of projects (Phongpaichit 2000: 1). The hydropower dams and thermal power plants planned from the 1980s onwards were contested, as discussed in Chapters 6 and 7, as their negative impact on local communities, natural resources and the environment were identified. As my case study of the proposed Nam Choan Dam Project in Chapter 7 of this thesis shows, the project was opposed in 1987 (Harkness 2002: 117), because it was due to adversely affect wildlife, watersheds and forests, as well as human rights and livelihoods. The project was cancelled, and this cancellation initiated the beginning of institutional and policy change within the electricity generation industry.

In the late 1980s, EGAT increased its consideration of social and environmental issues, and the need to recognize the value of alternative sources of energy and energy generation possibilities. It expanded the use of natural gas to fuel power generators, but paid little attention to renewable energy sources, and this restricted its view of the need for a diversification into low pollution energy sources, a restriction that has continued up to the present day. As I have shown, the campaign against the Nam Choan Dam Project stimulated a wider concern in Thai society for environmental issues. The campaigns against the Pak Mun Dam, the Yadana Gas Pipeline and the Prachub 272

Kirikhan Power Plant projects that followed, continued to highlight the negative impacts of these kinds of project on local communities and the environment, though only the last project has not yet been completed. The series of protests associated with these projects, led to regulatory and institutional change, including an acceptance of the requirement for large-scale projects to undertake an Environmental Impact Assessment report (EIA), a Social Impact Assessment (SIA) and a Health Impact Assessment (HIA), prior to implementation. Later, in 1997, the new Thai Constitution provided a number of new provisions encouraging people to participate in the public policy-making process, in order to ensure that local rights and the protection of natural resources were taken into consideration. This was a major step forward in legitimating participation in decision-making, but government agencies did not modify their specific legislation to enforce it.

The Thai Elites and the Electricity Institutions: Path Dependency

One particular aspect of the Historical Institutionalism approach is known as ‘path dependency’, as I discussed in Chapter 2. One part of the path dependency logic argues that countries go through a formative period, when the direction of public policy is first initiated. As institutions such as laws and governmental organizations are established, policy-making continues down a set path, because, as Fenna points out, interests and assumptions (represented by values and the networks of policy actors associated with them), become entrenched around them (Fenna 2004: 136). The historical studies I covered in Chapter 5 and 6 provide evidence of how institutional factors, such as the authority structure, evolved in Thailand as laws, regulations, norms and administrative procedures, and became embedded in organizational structures. As Chapter 4 shows, Thailand was governed by military dictators and semi-democratic governments from the 1950s through to the 1980s, and this led to a situation where specific groups of bureaucrats and technocrats became embedded in the institutional structure of government, and thus introduced laws to organize the energy industry and its policy-making process, in such a way as to serve their values, expertise and interests. The elites adopted a centralized policy and planning system, and linked EGAT’s policy priorities and direction to this. Their preference was for the development of large-scale electricity generation projects; those they understood and could control. As shown in Chapter 5, the Thai Government and its technocrats introduced laws, policies and 273

regulations to formalize and facilitate their own electricity generation policy priorities. On the recommendation of the World Bank, the Government, in a move that also reinforced the power and authority of its bureaucratic elite, created a centralized energy industry and this led to EGAT becoming established as a monopoly in the electricity industry. These policy-makers paid little attention to social, environmental or environmental resource issues, though the dams and power plants they built had significant, negative impacts on both rural communities and natural resources. The perception of the policy makers was that the benefits of economic growth offset any natural resource costs associated with it, to the extent that they thought about this issue at all. As I have demonstrated, it was to be three decades before these issues began to be taken seriously, and they are still not fully considered in the policy process. One of my findings suggests that an historical analysis of the policy process is essential, if both the processes of past change and the potential for future change, are to be understood properly.

9.5 Rules and Bureaucrats Roles in Shaping Thailand’s Electric Power

Industry and Policy

As historical insitutionalists have indicated, their approach is concerned with the study of the development and impacts of rules, both formal and informal, over time. The structural rules for the Thai electricity industry were embedded in the EGAT Act of 1968, and the NEPC Act of 1992. As my study in Chapter 5 found, these rules, formalized in legislation, created a centralized electricity industry management structure, in the form of EGAT, an organization which became the sole generator and distributor of electricity. EGAT’s leadership; its Board of Directors, were mostly appointed from the ranks of senior bureaucrats, those who would support EGAT’s Governor. Most had a background and expertise in engineering. This provided the basis for recognizing that while formal institutions were important in creating networks of shared interest, professional identity also played a role in establishing shared values and shared understanding within the policy network of the ‘old’ energy aristocrats.

In the 1980s, the old energy aristocrats had their authority over the electricity industry challenged. The National Energy Policy Council (NEPC) and the Energy 274

Policy and Planning Office (EPPO), formerly the National Energy Policy Office (NEPO), were new national organizations formed to challenge EGAT’s monopoly over the electricity policy-making apparatus. They were made responsible for the formulation of overall energy policy, covering oil supply, natural gas and electricity generation and distribution. As discussed in Chapter 6, the NEPC was officially established in 1992 by the NEPC Act of 1992, legislation that empowered the NEPC to develop and submit energy policy proposals to the Cabinet, for its consideration and endorsement (Section 6(1)). The NEPC created the NEPO (later EPPO) to assist it in a secretariat role. Other institutions, such as the Energy Policy Committee (EPC), were created to help NEPC screen the work related to energy management and development, prior to its submission to the NEPC for further consideration. Energy policy formulation in the NEPC followed a bureaucratic process with linear steps, as I showed in Chapter 6. These new institutions and their staff (including their knowledge and values), as well as their networks of influence, were quite different from those of the old energy aristocrats who had preceded them.

As Scott (1995(1): 141) indicates, an examination of top-down policy and planning structures can highlight the extent to which managers with shared interests and in different situations, will select the same organizational structures or strategies, suggesting that they are not inventing, but following an existing pattern of policy process formulation. This can only be said to be partly true in the case of Thailand. My research found that the two policy processes relied on conventional practices embedded in the Thai political system, as it evolved. Policy was made through the decisions of a small group of elite members, a group including the politicians of the major ruling parties, and the top bureaucratic elites from the EPPO, NESDB and EGAT. As the electricity industry’s development was technically oriented in the early days, these experts and technicians extended their power throughout the industry and the policy system. This phase can be seen to equate with Elite Theory, as developed by Dye (in Anderson 1997: 30), which states that public policy does not reflect the demands of the masses, but rather the prevailing values of the elites.

Another view is that policy development is an incremental process, and this was certainly the case in the early days of the electricity generation industry in Thailand, an 275

industry in which decision-making in the policy process was made through successive limited comparisons to the past. This simplified the policy process by limiting the number of alternatives to be considered by the policy decision-makers. This methodology also assisted Thai bureaucrats, both ‘old’ and ‘new’, in their in attempts to ignore other policy alternatives, such as market issues and alternative technologies, and to secure their authority and status as the policy controlling actors. As my thesis shows, this worked to effectively stifle debate about alternatives in the industry, that is until EPPO was created, which was directed by market economists with a different set of values and priorities, though they were themselves restricted in their consideration of environmental problems, problems which they could not easily quantify in their economic models.

9.6 Who Shapes the Policy? The Role of Policy Actors and

Policy Networks

Clare and Foweraker assert that institutions determine who is able to participate in any particular political arena (Clark and Foweraker 2001: online). Chapter 4 identified the major policy actors in the Thai political system, including the bureaucratic and non-bureaucratic actors. In the past, the bureaucratic policy actors included the military and civil officials who had long controlled Thailand’s political institutions. They used laws and military power to facilitate the State’s activities, and to secure their authority. Since the 1970s, non-bureaucratic actors including elected-politicians, interest groups and CSOs, those with quite different values and priorities, have become increasingly important policy actors in the Thai political system. Pressure grew on the Government to consult with the wider community about public policy after 1973, and this pressure has increased steadily since that time. The shared values and concerns of these groups have continued to influence the Government and its agencies, but have not yet been fully incorporated into the policy-making process.

In Chapter 7, I used some aspects of Policy Network Analysis, reviewing network memberships as well as the sources of power and policy discourses/principles held by each policy network, to determine whether such groups played an important role in Thailand. Data used in my analysis in Chapter 7 was gathered from the 276

documents available and from interviews. I found that today there are four major networked policy groups, including EGAT, the EPPO, politicians and CSOs, involved in electricity generation policy. The evidence provided in my thesis, shows that the policy actors in these networks do sometimes act together, because they share distinctive values and principles that they use to influence policy decisions and the public, as well as sharing the institutional affiliations that bind them together. They each have specific social and educational backgrounds and interests in a policy field, similarities that they use to guide policy direction. In the case of the CSOs’ role, the participants are representatives of the broader community’s priorities and interests, rather than those of the bureaucratic elites. After the 1980s, elected-politicians, business interests and CSOs formally established Government positions, and so became more influential. As an increasing number of elected civilian governments came to power, the influence of elected politicians and business leaders grew. New interest groups in civil society also began to play a greater role. The CSOs had initially emerged during the 1960s, as community groups and environmentalists began to play a more active role as national non-government organizations (NGOs), challenging mainstream development priorities (Phongpaichit and Baker 1996: 214-215) that were seen to be top-down, industry-led and urban biased (UNDP 2003: 28). As I revealed in Chapters 7 and 8, a number of civic groups were formed after 1987, both at the national and local levels, to oppose hydroelectric dams. Some large-hydropower dams and thermal power plants plans were cancelled as a result of strong opposition from civic groups, using effective publicity campaigns. As the documents, media sources and interviews I used showed (in Chapter 7), the dominant policy networks, namely the old energy aristocrats at EGAT, the new energy aristocrats at EPPO, and the elected politicians (mostly from the TRT Party), became key players in influencing electricity generation policy.

EGAT has remained the first and foremost actor in Thailand’s electricity generation policy framework. It was created by the EGAT Act of 1968 and assigned responsibility for developing and managing the electricity generation infrastructure, in order to supply households and the industrial sector in support of industrial development in Thailand. Over time, EGAT developed an organizational culture to support the aims of the organisation, and used their shared authority and influence to negotiate with politicians and other policy actors. My research has shown that this 277

influence extended far beyond the organization itself. As Chapter 6 showed, there is strong evidence to suggest that EGAT used its employees and money to directly support its activities, acquiring and managing public support, preventing local protests, and avoiding negotiation with local residents or politicians. This was not sufficient to prevent the questioning of EGAT’s role or policy direction, and the Government responded to this in 1992 by creating a new set of policy institutions. The EPPO, formerly the National Energy Policy Office (NEPO), was established under the provisions of the National Energy Policy Council Act of 1992. The Act directed EPPO to formulate national energy policy and to work as the secretariat for the National Energy Policy Council (NEPC). Members of this policy network, which included economists, were given leadership roles in EPPO, and these members were linked to economists in academic positions, who acted as a source of continuing advice. These actors advocated the economic liberalization of the electricity power sector, and encouraged the private sector to invest and participate in the industry. As a result, and as my research in Chapters 6 and 7 showed, the ‘old’ energy aristocracy (EGAT), focused on engineering and building infrastructure, were replaced by the ‘new’ aristocracy of the EPPO, whose priority was primarily focused on developing and managing the market conditions under which electricity could be generated and distributed. As I showed, EPPO itself lacked the authority to command the various related agencies delivering electricity services, as it was created to be a central planning agency. EPPO’s influence over other related agencies relied on the trust and support of the Cabinet, a Cabinet that was constantly changing, as shown in Chapters 5 and 6. EPPO’s lack of any service delivery role and its limited control of other agencies in the energy sector, limited its power and influence.

The new energy aristocrats responded to their limited control of the electricity industry by attempting to change the ‘rules’ and extend their ‘control’ over the structure, introducing private power producers to compete with EGAT in electricity generation, and allowing them to sell into the transmission grid. In 1992, the new energy aristocrats recommended to the Panyarachun Government that it should amend the EGAT Act of 1968 and allow private power producers to participate in the electricity industry. The Act also allowed EGAT to create subsidiary companies, in a measure designed to reduce opposition to the reforms from EGAT. They succeeded in corporatizing EGAT 278

and involving private sector electricity generators in the industry. After Thailand’s financial crisis in 1997, EPPO was assigned by the Leekpai Government to prepare further power sector reforms, and they subsequently proposed the introduction of a ‘power pool’ market model (NEPO 1999). Under this proposal, EGAT was to be separated into two organizations: a generation function and a transmission function. EGAT members opposed the plan and the Shinawatra Government cancelled it in 2002, as they came under increasing pressure from both the old energy aristocrats and the public about the effects of the reforms on energy supplies and on prices.

CSOs began to extend their influence over Thailand’s electricity policy framework after the 1970s. Initially, their activities were limited to demonstrations and other campaigns against proposed large-scale hydropower dams, campaigns carried out in order to protect local natural resources and local communities, one example being the campaign against the proposed Nam Choan Dam Project in 1987, as outlined in Chapter 7. When the country developed along more democrat lines, the CSOs were also strengthened, and they developed strategies to seek ways to participate in the policy process, both directly and indirectly, as well as calling for political and constitutional reform in the 1990s. The CSOs argued that within the electricity industry, both the state monopoly EGAT and liberalization (supported by EPPO), could be used to promote the development of renewable energy sources, to help achieve environmentally sustainable development. The CSOs advocated a decentralized electricity industry, separating the electricity generation and transmission functions, suggesting that this new system would reduce institutional barriers for SPPs, and would encourage local residents and small power producers who utilized renewable energy, to participate in the electricity generation process. This proposed new policy direction would also assist in reducing the ongoing conflicts between local communities caused by large-scale power development projects, as well as promote public participation in the power generation process. These policy suggestions arose as a result of the negative impacts that large energy related activities had on residents living nearby, such as at the Mae Moh Lignite Power Plant.

As my research revealed in Chapter 8, many factors contributed to the establishment and increasing influence of the Thai CSOs. These included their ability to attract a widespread membership, organizing stalls to raise resources, and their 279

institutional and strategy building activities. The groups emerged to protect local livelihoods and the environment, but were increasingly supported by national and international NGOs. Today, at the national level, the leading CSO organizations include the Sustainable Energy Network of Thailand (SENT), the Palang Thai Group, the Federation for Consumers (FFCs) and the Assembly of the Poor (AOP). These groups have varying goals, and tend to focus on different parts of the electricity sector, such as gathering and analyzing information about electricity generation and distribution, promoting local residents’ use of renewable energy, protecting consumers and promoting human rights, as well as opposing power development projects. They sometimes combine together to campaign against power development projects that will potentially affect local residents, health and the quality of the environment. The number of civic groups changes according to the given situation, and some are not sustained over time, because they are organized to oppose local projects, so that when the Government cancels that project, the movement tends to disappear.

Over time, the CSOs have received support from the community and political groups campaigning for political reform. Long campaigns in the 1990s brought constitutional reform in 1997. The Constitution of 1997 provided a number of specific provisions to include the private sector and the general community in the political process, particularly where policy would obviously affect local livelihoods and natural resources. Civic groups such as SENT invested heavily in research and in generating information to counter the official information provided by Government agencies, those such as EGAT and EEPO, as was evident from the campaign against the Prachub Kirikhan power plants in the early 2000s, as discussed in Chapters 7 and 8.

Thailand has a long history of military rule, but these Governments have increasingly been replaced by elected government since the late 1980s. Elected politicians as policy actors then emerged, as they were allowed to become involved in political processes directly. Elected governments launched EGAT’s privatization in the late 1980s, in order to reduce the public debt burden caused by EGAT’s over- investment in infrastructure and to create a free market in the electricity sector, as recommended by the World Bank and EEPO. However, only Anand Panyarachun, who was appointed Prime Minister by the military after the coup of 1991, was successful in 280

moving towards creating a ‘half’ competitive market in the electricity sector, by amending the EGAT Act of 1968. His Government encouraged the private sector to participate in electricity power generation under the IPP and SPP programmes. There was an attempt by the Leekpai Government to launch EGAT’s privatization again during the financial crisis of 1997, but this attempt was also unsuccessful, because the Government faced strong protest from the EGAT EU and the public.

The TRT Party emerged in the late 1990s led by Thaksin Shinawatra, the telecommunication billionaire. The party gained a majority in the House of Representatives in the general election of 2001 and Shinawatra was appointed Prime Minister. During his first term, he launched a bid for EGAT’s privatization again. He officially announced that it was the intention of his Government to establish EGAT as a private monopoly. EGAT was to be changed to be the EGAT Public Limited Company (EGAT PLC) and would be listed on the Stock Exchange of Thailand (SET), in order to mobilize capital for its investment. Although the TRT Party gained a majority of seats in the House of Representatives and gained popular support, this policy faced strong protests from the EGAT EU, as well as from the public, and the Government had to announce a delay in implementing this policy until 2004.

After the TRT Party won a landslide victory in the 2005 general election, Shinawatra was re-appointed to serve as Prime Minister. He re-launched EGAT’s privatization bid by forcing EGAT to change its status from a state-owned enterprise to become EGAT PLC, and it was scheduled to be listed on the SET in November 2005. This process was then stopped when the CSOs and EGAT EU filed a petition with the Supreme Administrative Court a few days before the company was due to be listed on the SET. In March 2006, the Court ruled a cancellation of EGAT’s privatization, and it ordered EGAT PLC to become a state-owned enterprise again. As outlined in Chapter 7, public mistrust of Prime Minister Shinawatra, after the Government was accused of policy corruption and conflict of interest, led to a military coup in 2006 and after that, the ‘old’ and ‘new’ energy aristocrats were re-established in control of the electricity industry, with the future of the industry still unresolved. 281

The Impact of Electrical Power Generation Policy: Conflict over Natural

Resources and Society

Clark and Foweraker (2001: online) suggest that historical institutionalists are primarily interested in understanding and explaining specific real world political outcomes, which this thesis has extended to an understanding of policy-making. The analysis in Chapter 5 revealed that the issue of electricity generation policy and its negative impacts on society and the environment, emerged after 1987. The four case studies in Chapter 8, which covered the Nam Choan and Pak Mun Dam Projects, the Prachub Kirikhan Power Plant Projects, and the Wiang Haeng Coal Mine Development Project in the 1990s, demonstrate the increasing importance that environmental issues and interests played in determining the outcomes of these proposals, and the increasing interest and support for achieving environmentally sustainable development in Thailand in general.

As I showed in Chapters 6 and 7, EGAT and EPPO were originally empowered by the governing laws of 1968 and 1992 respectively, to adopt a centralized policy and planning system, but this traditional policy formulation process inherited from the Thai Government agencies became an obstacle for informed public debate on policy objectives and the appropriateness of the policies. Even as the growing environmental movement and the general public accepted the goal of sustainable development, this played only a small role in Thailand’s electricity generation policy up to the 1980s. Local communities, as well as civic groups, continually asked for systematic EIAs, SIAs and HIAs to take place for all Government development projects, prior to the Cabinet making its final decisions. Thus far they have not been successful, and EGAT as well as other development agencies have continued their own style of policy development, such as the ‘D-A-D’ (Decide-Announce-Defend) policy style (Watershed 2000: 48), and have continued to try to exclude local residents from the policy process. EGAT has continued to seek natural gas and coal resources to supply its power plants, and in order to achieve the national energy policy goal of increasing the generation of electricity. 282

This strategy has come under increasing pressure in Thailand. Academics, such as Phuangcharoen (2005: 88), indicate that it is unclear what level of public participation can be achieved in the policy making process, because while in principle it was established in 1997, the capacity or desire at the industry level to facilitate it has not been present. There has been no supporting law introduced to force the Government agencies to involve the public in the policy formulation process (NEASC 2005: 1, Bureekul 2004: 16-18). Data obtained from one key informant for this study indicates that much of the public participation process is criticized as being merely a public ‘ritual’, because the Government officials are free to form the procedures, and invite only local people who support the project to respond to the proposals, while opponents 1 are not invited or informed of them . In this way, many development projects have not met the requirements or expectations of local villagers, as evident in the conflicts over the Kanchanaburi and JDA gas pipelines, the Prachub Kirikhan Power Plant Projects and the Wiang Haeng Coal Mine Development Project, as outlined in Chapter 8.

In term of cognitive aspects, the conflicting discourses held by each of the policy networks have been a major cause of natural resource conflict. The policy- makers in EGAT, EPPO, and politicians have preferred to adopt large-scale power development projects in order generate cheap electricity, and to minimize the risk of power blackouts that would affect the confidence of investors. In fulfilling this objective, EGAT has developed an adequate supply of electricity at low prices, but has overlooked the impact of hydropower dams and thermal power plants on social and natural resources. The different perspectives and values held by state and non-state actors when interpreting the costs and benefits of projects, has increased the level of conflict, because as the conflicts have grown, these parties have held on firmly and inflexibly to their own ideas.

1 Interviewee #D001 283

9.7 Finding a Better Electricity Policy for Thailand

The Conditions for Policy Changing

My discussions in Chapter 5 found that since the inception of the National Economic and Social Development Plan in the 1960s, electricity has played a crucial role in supplying households and industry with low cost, accessible electricity services, and has contributed to improving social and economic welfare. However, when policy priorities changed in the 1980s, it did result in some institutional changes in the electricity sector, but not in changes to its goals and the strategies used to implement them. The growing environmental movement in the late 1980s led to the Government adopting the National Environment Quality Act of 1992, one that requires all large-scale projects to submit an EIA report. It stipulates that people should be encouraged to participate in the EIA process, but up to now it has not been implemented.

When electricity industry structural reform occurred in 1992, in response to recommendations from the IMF and the World Bank, the private sector was allowed to participate in electricity generation, but did not assist in managing the increasing negative environmental impacts of the large electricity generation projects that the loans from these agencies enabled. Another equally important factor contributing to policy change in the 1990s was internal politics. The main characteristic of the revised EGAT Act in 1992, was an attempt by political leaders and energy aristocrats to derive political advantage from control of the newly created institutions in the electricity sector, as argued in Chapters 5 and 6. The amended EGAT Act of 1992 ended EGAT’s monopoly in the electricity industry, at least in principle, but in actuality did not do so significantly. It allowed the private sector to participate in electricity generation under the IPP and SPP programmes, but the reforms did not change the dominant role of EGAT.

Since the late 1990s, academics and CSOs have continually asked the Government to promote the utilization of renewable energy, such as bagasse, garbage, solar cell, wind, biomass and other environmentally friendly methods (Greacen 2007b: 66). The adoption of this policy alternative would bring a new diversity to the electricity sector at the micro level; people could potentially participate in the power generation process, thus reducing electricity expenses in households, particularly in rural areas. At 284

the macro level, it could force EGAT both to reduce the number of large-scale projects being constructed, projects that are normally the cause of a large amount of conflict, and to reduce its level of investment spending and public debt. These ideas have also not been taken on, despite the benefits that would arise from them; EGAT continues to block reform and limit the emergence of competition.

Many key informants interviewed for this thesis suggested that the process of public participation in Thailand would continue to develop. There is a manifest difference in power between the State and local residents, particularly during controversies such as those examined in this thesis, and this power differential must be removed. Effective public participation would also enable decision makers to obtain better information on existing plans and thus allow competing interest groups, project proponents and affected communities to manage the policy process better. In addition, Government project proponents might be encouraged by such a process to make public all relevant information on their proposals, including the social and environmental impacts, during the construction and operational periods. A public consultation process should be adopted based on the following principles: (i) the public is notified in the early stages of project implementation, (ii) enough time is given by the Government authority for preparation of an effective public consultation, (ii) every opinion and comment should be considered in the preparation of reports, and (iv) the decision of the policy makers should take account of the outcome of public consultation. Achieving this outcome in the future would contribute significantly to the policy process and to policy outcomes in Thailand.

Improving people’s awareness about the industry is another way to improve the quality of Thailand’s electricity generation policies. As my analysis in Chapter 6 found, the ‘old’ and ‘new’ energy aristocrats have monopolized the knowledge and information regarding electricity generation and energy. Moreover, my study in Chapter 7 found that Government officials have frequently seen local people as uneducated, and have used this to exclude local people from the public participation processes they actually do undertake. The Government should invest more in promoting formal and informal education, in order to empower people to understand the nature of politics, the policy 285

formulation process, and their rights and liberties with respect to participation in state activities. The mass media should be encouraged to be part of this process.

The Government should also improve those laws and regulations that restrict public access to government information. This should be a key political commitment aimed at improving the quality of electricity policies and their formulation process. It would also enhance transparency and accountability in government more generally. In conclusion, a fundamental re-consideration of the objectives of and policy formulation process within Thailand’s electricity generation industry, will help to improve the quality of the policies employed to drive the future development of the industry.

Further academic research would also assist in this process. This study had a limited amount of time and resources to complete its investigations. Future work providing a further investigation of the policy networks examined here would be useful, as pointed out in Section 8.3. Comparative studies would also be valuable. Within Thailand’s energy system, such studies might compare the policy-making framework in the electricity sector, with those existing in oil, natural gas and other sectors. The typology of policy networks developed by Coleman and Skogstad (1990) could form the conceptual base of such studies. Likewise, comparative studies could be made regarding electricity policy-making patterns in neighbouring countries in Southeast Asia, where economic development is at the same or similar levels as in Thailand. Future research should also be conducted, in order to gain an insight into the issue of conflicts of interest or policy corruption, a serious problem within the policy formulation and implementation framework in Thailand. Some aspects of institutional change should also be examined in future research, such as an investigation of policy networks, policy actors and interest groups in terms of their patron-client relationships. In addition, the dynamism and effectiveness of civic groups when campaigning for fairness and good governance in the energy policy system, and their active participation in the public policy process, would also be interesting to investigate. 286

9.8 Epilogue

Electricity generation and distribution has played a significant role in fuelling the development of socio-economic and political life in Thailand. The technology required to generate electricity was imported into Thailand in 1884, and has since played a critical role in developing Thailand as a modern industrial state. As my thesis has revealed, throughout the history of the electricity sector, its policy-making has been controlled by small elite groups and technocrats, whose sole objective has been to provide cheap electricity to households and the industrial sector. This strategy has been reinforced by legislation, such as the EGAT Act of 1968, which established EGAT in 1969, making it responsible for electricity power generation and transmission. The NEPC and NEPO (EPPO) were established in 1986, in order to bring about change to the energy policy formulation process but with limited success, as they, similar to EGAT, adopted centralized administrative systems and top-down policy and planning approaches. These policy actors, through their personal, organizational and network ideologies, preferred to develop large-scale power development projects, projects that continued to cause natural resource degradation and were a source of conflict in society. This continuation of the old style policies brought about the emergence of civic groups, those that sought to participate in the policy process and gain a voice for the communities affected by the decisions. While the growing political power and influence of civic groups became a driving force for changes in electricity policy direction after 2001, up to the present time they have still not realized their goal of turning the electricity policy development process in Thailand, into a more open and accountable process. 287

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Appendices

Appendix I

Participant Request Letter b

SCHOOL OF SOCIAL SCIENCE & POLICY

December 27, 2005

Dear

I am a PhD research student in Social Science and Policy at The University of New South Wales, Australia. I would like to request your participation in a doctoral research project entitled ‘Electrical Power Generation Policy and Conflict in Thailand. The research, as the title suggests, is a study of the development of electrical power generation policy making in Thailand and natural resource conflict. The findings of the study will be presented in the researcher’s doctoral dissertation.

As part of the research process, interviews will be conducted and you have been selected as a possible participant in this study because of your work as policy maker and policy implementer. Your support and cooperation in the completion of this study will make a significant contribution to our understanding of electrical power generation policy in Thailand. It is only through the cooperation of participants like you that this study can be successfully completed.

I will follow up this request with a telephone call to confirm your availability time for interviewing. If you have any question, please feel free to contact Thanyawat Rattanasak, School of Social Science and Policy, The University of New South Wales, Sydney 2052 AUSTRALIA (phone 61-2-9385-1712, fax 61-2-9385-1040, email ([email protected] or [email protected]) and I will be happy to answer them.

If you require confirmation from my academic supervisor, please contact Associate Professor Michael Johnson at the School of Social Science and Policy, The University of New South Wales, Sydney 2052 AUSTRALIA (phone 61-2-9385-3481, fax 61-2-9385-1040, email ([email protected]).

Thank you very much for your interest and support. Sincerely yours

(Thanyawat Rattanasak) PhD research student

UNSW SYDNEY NSW 2052 AUSTRALIA Facsimile: +61 (2) 9385-1040 Telephone: +61 (2) 9385-2292 e-mail: [email protected] Web:www.arts.unsw.edu.au/ssp/ Location: Morven Brown Rm G23 High Street Gate 8 Kensington c

Appendix II List of Interviewees

Code Position Date of Interview A001 EGAT Deputy Governor January 24th 2006 A002 Member of EGAT’s Board of Directors January 25th 2006 A003 EGAT System Planning Division Officer August 9th 2006 B001 EPPO Deputy Director-General January 20th 2006 B002 EPPO Division Head January 20th 2006 C001 Professor of Economics, Chulalongkorn January 20th 2006 University C002 SENT member January 26th 2006, August 26th 2006 C003 Palang Thai member January 27th 2006 C004 Professor of Geography, Chiang Mai February 8th 2006 University C005 Academic Director of Chiang Mai February 10th 2006 Campus, Maha Chulalongkorn University C006 Former Professor of History, Chiang Mai February 26th 2006 University C007 TERRA leader August 10th 2006 C008 Professor of Economics, Chiang Mai August 17th 2006 University C009 Assistant Professor of Law, Chiang Mai August 4th 2006 University C010 SENT member August 2006 C011 Lecturer in Political Science, Chiang Mai February 6th 2006 University C012 Assistant Professor of Philosophy, The January 25th 2006 University of the Thai Chamber of Commerce C013 Lecturer in Public Administration, Ubon February 2nd 2006 Ratchatani University C014 Lecturer in Law, Chiang Mai University August 14th 2006 D001 Local Leader, Wiang Haeng District, February 11th 2006 Chiang Mai Province D002 Local Leader, Wiang Haeng District, February 11th 2006 Chiang Mai Province D003 Local Leader, Wiang Haeng District, February 11th 2006 Chiang Mai Province D004 Local Leader, Wiang Haeng District, February 11th 2006 Chiang Mai Province D005 Local Leader, Wiang Haeng District, February 11, 2006 Chiang Mai Province D006 PhD student and Local Leader, Wiang February 21st 2006 Haeng District, Chiang Mai Province d

Appendix III Participant Information Statement and Consent Form e

SCHOOL OF SOCIAL SCIENCE & POLICY

Approval No.HREC 05218

The University of New South Wales

Participant Information Statement and Consent Form

Electrical Power Generation Policy and Conflict in Thailand

You are invited to participate in a study of “Electrical Power Generation Policy and Conflict in Thailand.” We hope to learn more about electrical power generation policy process, and natural resource conflict from this research. You were selected as a possible participant in this study because of you work as policy decision maker, policy implementer, academics, NGO or local person affected by the project.

The results of this research should be beneficial to Thailand as a whole. The research will contribute to our understanding of electrical power generation policy process and analyse natural resource conflict using a policy analysis framework. This should be of benefit to Thai policy research and useful to organisations interested in policy implementations as well as local people seeking to participate in policy making processes.

If you decide to participate, we will ask you a series of questions. The responses will be tape recorded. The interview process will take around 1-1.30 hour. You may select to keep all or part of your responses confidential.

Any information that is obtained in connection with this study and that can be identified with you will remain confidential and will only be disclosed with your permission, except as required by law. If you give us your permission by signing this document, we plan to publish the results in a PhD dissertation. In any publication, information will be provided in such a way you cannot be identified.

Any complaints about this process may be directed to the Ethics Secretariat, The University of New South Wales, Sydney 2052 AUSTRALIA (phone 61-2-9385-4234, fax 61-2-9385-6648, email [email protected]) as provided with an international reply-paid envelop to send complaints to the Ethics Secretariat directly. Any complaint you make will be treated in confidence and investigated, and you will be informed of the outcome.

Your decision whether or not to participate will not prejudice your future relations with The University of New South Wales and your organisation. If you decide to participate, you are free to withdraw your consent and to discontinue participation at any time without prejudice.

If you have questions, please feel free to ask me. If you have any additional questions later, please contact Thanyawat Rattanasak, School of Social Science and Policy, The University of New South Wales, Sydney 2052 AUSTRALIA (phone 61-2-9385-1712, fax 61-2-9385-1040, email [email protected] or [email protected]) and I will be happy to answer them.

You will be given a copy of this form to keep.

Sincerely,

Thanyawat Rattanasak, PhD Research Student f

The University of New South Wales

Participant Information Statement and Consent Form (continued)

Electrical Power Generation Policy and Conflict in Thailand

You are making a decision whether or not to participate. You signature indicated that, having read the Participant Information Statement, you have decided to take part in the study.

Signature of Research Participant Signature of Witness

Please PRINT name Please PRINT name

Date Nature of Witness

Thanyawat Rattanasak

Signature of Investigator Please PRINT name

REVOCATION of CONSENT

Electrical Power Generation Policy and Conflict in Thailand

I hereby wish to WITHDRAW my consent to participate in the research proposal described above and understand that such withdrawal WILL NOT jeopardize any treatment or my relationship with The University of New South Wales.

Signature Date

(Please PRINT Name)

The section for Revocation of Consent should be forwarded to Associate Professor Michael Johnson, School of Social Science and Policy, The University of New South Wales, Sydney 2052 AUSTRALIA (phone 61-2-9385-3481, fax 61-2-9385-1040, email [email protected]).

UNSW SYDNEY NSW 2052 AUSTRALIA Facsimile: +61 (2) 9385-1040 Telephone: +61 (2) 9385-2292 e-mail: [email protected] Web: www.arts.unsw.edu.au/ssp/ Location: Morven Brown Rm G23 High Street Gate 8 Kensington Page 2 of 2 Thailand Electrical Power Generation Policy g

Appendix IV Open Ended Questions for Interviewees

A. For government official

Interview Topic 1: For Government officials, the Energy Policy and Planning Office (EEPO) and the Electricity Generating Authority of Thailand (EGAT) Introduction: Thank you for agreeing to meet with me. I would like to ask you questions about your knowledge and experience in the electricity power generation policy making process in Thailand, as well as your attitude about natural resource conflict caused by electricity power generation policy. Participation is completely voluntary and you can refuse to answer any question. Your information will be combined with others responses and no one will know your name or what you said. It should take about 1-1.30 hours. Specifically, my interest is in electricity power generation policy and conflicts over natural resources. To that end, I am interested in your answers to these questions. 1. Please explain what you think is the role of electricity in national development? 2. Please explain the history of electricity development in Thailand. 3. Please describe the electricity power generation system in Thailand (process, fuel, hydroelectric system, thermal electrical system etc.) 4. What is the major goal of electricity power generation policy in Thailand? How has it changed from the past to present? 5. Which are the management institutions engaged in the electricity power generation policy formulation and implementation process? Could you please explain in detail each of these topics: 5.1 The role of the major institutions 5.2 Institutional background - how have they changed? 5.3 How were these institutions were legally established? 5.4 What is their authority, role, and influence? 5.5 What other institutions are engaged with them? 6. How has the electrical power generation policy been developed? Please outline in the detail the: 6.1 Policy drafting process and offices involved 6.2 Policy formulation process 6.3 Policy decision-making and offices involved h

6.4 Decision making criteria 7. How has electricity generation policy been implemented? Please explain in the detail the: 7.1 Policy implementation process 7.2 Offices involved 8. Please outline the major factors influencing the policy environment in the electricity power generation policy formulation and implementation process in detail, including: 8.1 Socio-economic factors 8.2 Political factors 8.3 International factors 8.4 Natural resource and environment factors 8.5 Local community factors 9. What is the role and influence of the Government in the electricity generation policy formulation and implementation process? 10. What is the role and influence of the electricity corporations, international financial institutions and foreign governments in electricity generation policy formulation and implementation? 11. Who are the official policy actors and unofficial participants in the electricity power generation policy process? Please explain in detail: 11.1 The formal policy actors and unofficial participants 11.2 The role and influence of these policy actors 11.3 The relationship among these policy actors 12. How can people participate directly or indirectly in the electrical power generation policy formulation/ implementation process? 13. What do you think is the impact of electricity power generation policy on the society and natural resources? 14. Why has the electrical power generation policy become a source of social and natural resource conflict? 14.1 Which stage of the policy process has contributed to conflict? 14.2 Which factor in the policy do you think contributes to the conflict in society? 14.3 Why have local people organized the movement to protest against power development projects? i

14.4 What is the solution? 15. What is the significance of local protest movements against power development projects in term of socio-economic and political development? 16. How can the Government formulate a better electricity generation policy, to alleviate social and natural resources conflict? 17. What is the benefit of the Wiang Haeng Mine Development Project in terms of electricity generation and national development? Why should the Government adopt this project? 18. What are the impacts of the Wiang Haeng Mine Development Project on local communities, natural resources, the environment, health and culture? How can EGAT solve problems relating to its impacts? 19. How has the conflict between EGAT and local people at Wiang Haeng emerged? What is the main reason that local communities oppose this project? What is EGAT’s solution? 20. How can the electrical power generation policy process improve? j

B. Open ended question for academics and NGOs Introduction: Thank you for agreeing to meet with me. I would like to ask you about your knowledge and experience in the electricity power generation policy making process in Thailand, as well as your knowledge of the natural resource conflict arising from these policies. Participation is completely voluntary and you can refuse to answer any question. Your information will be combined with others responses and no one will know your name or what you said. It should take about 1-1.30 hours. Specifically, my interest is in the electricity power generation policy process, and the conflicts that have arisen over natural resources. To that end, I am interested in your answers to these questions. 1. Please explain what you think is the role of electricity in national development? 2. Please explain the history of electricity development in Thailand. 3. What do you think the major goal of electricity generation policy in Thailand? How has it changed from the past to the present? 4. What are the major institutions engaged in the electricity generation policy formulation and implementation process? Please outline the role in the industry of: 4.1 Major institutions 4.2 Their authority, role and influence 4.3 Any other institutions involved in the industry and their role 4.4 The role of networking among electricity institutions 5. Please explain the role of institutions in influencing the policy environment in the electricity generation policy formulation process, in relation to these factors: 5.1 Socio-economic factors 5.2 Political factors 5.3 International factors 5.4 Natural resource and environmental factors 5.5 Local community factors 6. What is the role and influence of the Government in the electricity power generation policy formulation and implementation process? 7. What is the role and influence of the electricity corporations, international financial institutions, and foreign governments in the electricity generation policy formulation and implementation process? 8. Who are the major official policy actors and unofficial participants in electricity power generation policy? Please explain in detail: k

11.1 The formal policy actors and unofficial participants 11.2 The role and influence of these policy actors 11.3 The relationship among these policy actors and their network 9. At present, how can people participate directly or indirectly in the electricity generation policy formulation and implementation process? 10. What are the impacts of electricity generation policy on society and natural resources? 11. Why has electricity generation policy become a source of social and natural resources conflict? 11.1 Which stage of the policy process has contributed to conflict in society? 11.2 Which factors in policy formulation have contributed to conflicts in society? 11.3 Why do local people organize protests against power development projects? 11.4 What is the solution? Who should be responsible for it? 12. What is the significance of the local protest movements against the power development projects, in term of socio-economic and political development? 13. How can the Government formulate better electricity generation policies, in order to alleviate social and natural resources conflict? 14. What is the benefit of the Wiang Haeng Mine Development Project for electricity generation and national development? Why should the Government adopt this project? 15. What are the impacts of the Wiang Haeng Mine Development Project on local communities, natural resources, the environment, health and culture? How can we solve the impact problems? 16. Why has the conflict between EGAT and local people at Wiang Haeng emerged? What is the main reason leading to local communities protesting against this project? What is the solution? 17. Have you engaged in activities relating to the Wiang Haeng Mine Development Project? What was/is your role? Why did you engage with this project? 18. What is the information strategy and solution that local people could propose to the public and the Government, to modify and/or withdraw from this project? What is the information strategy and solution that EPPO and EGAT should propose to the public and the Government to continue this project? l

19. In relation to the conflict between EGAT and local communities in the case of Wiang Haeng Mine Development, what is your opinion of the relationship between the government authorities and local communities in the policy formulation and implementation process? 20. How might local people participate in the electricity power generation policy formulation and implementation process more fully? How can the electricity generation policy process be improved?

C. Open ended questions for Local Leaders Introduction: Thank you for agreeing to meet with me. I would like to ask you about your knowledge and experience in the electricity power generation policy making process in Thailand, as well as your attitude to conflicts arising from electricity power generation projects and policy. Participation is completely voluntary and you can refuse to answer any question. Your information will be combined with other and no one will know your name or what you said. It should take about 1-1.30 hours. Specifically, my interest is in electricity power generation policy, electricity projects, and conflicts over natural resources. To that end, I am interested in your answers to the following questions. 1. What is your knowledge of the role of electricity and electricity generation in national development? 2. What is your knowledge or opinion of current energy policy in Thailand? 3. What is your understanding of the influential factors affecting energy policy making? in particular: 3.1 Socio-economic factors 3.2 The role of political factors 3.3 The role of international factors 3.4 The role of natural resources and the environment in policy making 3.5 The role of local communities 4. Do you know about any conflict between local people and government officials in relation to Government electricity development projects? Which project? What is your opinion of it? m

5. In your view, what are the main factors that explain the conflict between EGAT’s electricity power generation projects and local communities? Why do local people continue to protest against such infrastructure projects? 6. What are the characteristics of Wiang Haeng’s geography, population, culture, local life, natural resources and environment, and how do these contribute to conflict? 7. How has EGAT initiated the Wiang Haeng Mine Development Project? When did local communities hear about the Wiang Haeng Lignite Mining project and from which source? How have people in the community related to the project? 8. Have local people participated in an EIA or other process linked to the approval of this project? 9. Why have local communities organized protests against the Wiang Haeng Mine Development project? When did the movement organize? 10. Please explain the characteristics of Wiang Haeng movement protesting against the Wiang Haeng Mine Development Project in detail, and in relation to: 11.1 The structure of the movement 11.2 The leaders 11.3 The group activities 11.4 The network with the NGOs and other local communities 11.5 Information provided to improve the understanding of the public 11. What are the main reasons for local people organizing the movement against the Wiang Haeng Mine Development project? Explain in terms of the role of: 12.1 Historical factors 12.2 Natural resource and environmental factors 12.3 Local right’s stipulated in the Constitution of 1997 and the right to participate in Government project related to it. 12. What is the information or strategy that local people should consider for persuading the public and the Government to withdraw or modify the project? How and why? 13. What is the most important impact of the Wiang Haeng Mine Development Project on Wiang Haeng communities? How and why? 14. What action would be recommended, for the Government to improve electricity power generation policy? 15. What might be the local communities’ proper role in Government electricity development projects? n

Appendix V

List of Authorities and their Membership at the Policy Level

Organization Authority and Responsibilities Members

The Cabinet According to the Interim Constitution of Thailand of 2006, Section 14 prescribed that the The Prime Minister and 35 other ministers cabinet is “responsible to carry out state affairs.”

The National Energy According to the National Energy Policy Council Act of 1992, Section 6, the scope and Section 5 of the NEPC Act of 1992 prescribes the members of Policy Council responsibilities of the NEPC include: NEPC which include: the Prime Minister as Chairperson, the Deputy Prime Minister, Ministers from the Ministries of (NEPC) (1) To recommend national energy policies, energy management and development Energy, Defense, Finance, Foreign Affairs, Agriculture and plans to the cabinet. Agricultural Cooperatives, Transportation, Commerce, (2) To establish rules and terms in determining energy prices that will be consistent Interior, Energy and Industry, and other officials from the with the national energy policies, energy management and development plans. Ministry of Industry, the Council of State, and the National (3) To monitor, supervise, coordinate and support the efforts of all energy-related Economic and Social Development Board (NESDB), the committees, government authorities, state enterprises and the private sector on energy matters, Budget Bureau, and the Department of Development of to ensure consistency with the national energy policies, energy management and development Renewable Energy and Energy Conservation (Decharut et. al. plans. 2006: 62-63).

(4) To evaluate the implementation of the national energy policies, and [the] energy management and development plans, and

(5) To perform any other task that may be assigned by the Prime

Minister or by the cabinet” (NEPO 2001: 14) o

List of Authorities and their Membership at the Policy Level (continued)

Organization Authorities Members

The Committee of The CEPA was created by the NEPC to assist the council in screening work related to energy The CEPA membership comprises: the Minister of management and development, prior to its submission to the NEPC for consideration. Its Energy, Permanent Secretary of Energy, Permanent Secretary Energy Policy authorities include: of Transport, Permanent Secretary of Natural Resource and Administration (CEPA) Environment, Permanent Secretary of Commerce, Permanent “(1) To recommend the national energy policy and energy management development Secretary of Commerce, Secretary-General of the Council of plans, as well as energy-related measures. State, Secretary-General of the National Economic and Social (2) To provide comments on energy programs and projects of various agencies and Development Board, Director of the Fiscal Policy Office, recommend their priorities. Director of Energy Policy and Planning Office (who serves as (3) To set petroleum products and rates of contributions to the Oil Fund in line with member and Secretary) and a representative of the Energy the policy framework set by the NEPC, and perform any other task as may be assigned by the Policy and Planning Office serves as member and as Deputy Prime Minister with regard to the management of the Oil Fund, and other duties under the law Secretary. on the remedy and prevention of petroleum shortages.

(4) To recommend policies and measures on energy pricing, and to monitor the power tariff adjustments according to the Ft formula, and

(5) To consider and recommend to the NEPC, Royal Decrees, ministerial regulations and other measures, to be issued under the Energy Conservation Promotion Act” (EPPO (n.d.) [online] p

List of Authorities and their Membership at the Policy Level (continued)

Organization Authorities Members

The Electricity The Office of the Prime Minister’s Regulation on the Electricity Regulatory The ERC is comprised of one Chairman and another Commission of 2005 prescribes authority and duties of the ERC in Article 12 as the following: three to five commissioners appointed by the Prime Minister, Regulatory Commission pursuant to the recommendation of the NEPC (Article 6). (ERC) “(1) To regulate the tariffs of electricity industry operators, in line with the guidelines, criteria, procedures and conditions established by the National Energy Policy Council;

(2) To devise measures to encourage competition and prevent the abusive use of monopoly power, inspect the operation of the Power Network System Operator, as well as establish the process and monitoring of the bidding for new power plants construction;

(3) To regulate the operation of the electricity industry operators, taking into account the good governance, the promotion and improvement of efficiency in the electricity industry;

(4) To set and regulate the technical and safety standards of the electricity industry operation and the customer service standards and quality, including measures to protect electricity consumers and those adversely affected by the electricity industry operations, as well as consider the petitions and appeals of electricity consumers, electricity industry operators and those adversely affected by the electricity industry; q

List of Authorities and their Membership at the Policy Level (continued)

Organization Authorities Members

The Electricity (5) To provide recommendations and advice on the connection to, utilization of, operation and control of the power network systems, and on the purchase of power; Regulatory Commission (6) To develop and propose the load forecast, the plans for power procurement and (ERC) (continued) fuel diversification in electricity generation, from both domestic and foreign resources, and the power network system expansion plan;

(7) To analyze, examine and coordinate investment plans in the electricity industry;

(8) To issue the Requests for Proposals for the purchase of power and establish the criteria and procedures of the evaluation and selection of the power purchase proposals, as well as select the power producers in compliance with the specified criteria and procedures, and

(9) To perform any other necessary task with regard to the electricity industry regulation, or as stipulated in this Regulation or in other laws as part of the Commission’s authority and duties”. r

List of Authorities and their Membership at the Policy Level (continued)

Organization Authorities Members

The Energy Policy The NECP Act of 1992 prescribes the duties and responsibilities of the EPPO as follows: The organizational structure of the EPPO consists “ (1) to study and analyse the National Energy Policy and National of two bureaus, namely the Energy Policy and Planning and Planning Office Management and Development Plan for submission to the National Energy Policy Bureau, and the Energy System Analysis Bureau, as well as (EPPO) Council; one Office of the Secretary. (2) to monitor and evaluate, and to act as a coordinating and support centre for the implementation of the National Energy Policy and the National Management and Development Plan; (3) to collect data, to monitor the changing situation of energy, to analyse the trend and evaluate the anticipatory impact for the purpose of preparing the proposals in respect of the National Energy Policy and the National Management and Development Plan, and to disseminate, statistics related to energy, and (4) to perform other functions as entrusted by the Prime Minister or the National Energy Policy Council”. s

Appendix VI

EGAT’s Associated Companies, Subsidiary Companies and Joint Ventures

Associated Companies The Electricity Generating Company Limited (EGCO) EGCO Subsidiary Companies (1) Rayong Electricity Generating Company Limited (2) Khanom Electricity Generating Company Limited (3) EGCO Engineering and Service Company Limited (ESCO) (4) EGCO International (B.VI) Limited (EGCO BVI) (5) Thai LNG Power Corporation Limited (TLPC) (6) EGCO Green Energy Company Limited (EGCO Green) (7) Egcom Tara Company Limited EGCO Business Joint Venture (8) Gulf Electric Public Company Limited (GEC) (9) EGCO Joint Ventures and Development Company Limited (10) Conal Holding Corporation (11) Nam Theun 2 Power Company Limited (NTPC)

Subsidiary Companies Ratchaburi Electricity Generating Company Limited (RATCH) RATCH Subsidiary Companies (1) Ratchaburi Energy Company Limited (2) Ratchaburi Energy Company Limited (3) Ratchaburi Gas Company Limited (4) Ratch Udom Power Company Limited (5) Ratchburi Alliance Company Limited t

EGAT’s Associated Companies, Subsidiary Companies, and Joint Ventures (continued)

EGAT Joint Venture EGAT is a joint venture with the establishment of the District Cooling System and Power Plant Company Limited (DCAP). The shareholders of DCAP are EGAT, the PTT Public Company Limited and the Metropolitan Electricity Authority (MEA), with proportions of 35: 35: 30 respectively. The company’s objective is to generate and sell electricity and water cooling to Suvarnabhumi Airport

Source: (EGAT Annual Report 2004: 57). u

Appendix VII

List of Independent Power Producers (IPPs)

Project MW Fuel Type

BLCP Power (BLCP) 1346.5 Coal

Gulf Power Generation 1468 Coal

Glow IPP 713 Natural Gas

Eastern Power & Electric 350 Natural Gas

(ECEC)

Independent Power Thailand 700 Natural Gas

(IPT)

Ratchaburi Tri-Energy 700 Natural Gas

Union Power 1400 Coal