Thai Supreme Adminsitrative Court cancels EGAT privatization

Caution: an overly long editorial from The Nation with my comments interspersed throughout:

Court ends privatisation of Egat

Consumer-rights groups hail ruling to keep state power utility in public hands; TRT key economic policy suffers a blow

The Supreme Admini-strative Court yesterday blew the privatisation of the state power utility out of the water by revoking two Royal Decrees that led to its corporatisation in 2005.

Civic and consumer rights activists who took the case to court, and hundreds of their jubilant supporters, including Chamlong Srimuang, who showed up at the court on Sathon Road, cheered "victory for the people".

They hailed the court's decision as "true justice" which served as evidence that there remains at least one independent organisation still functioning in the country.

The groups called on caretaker Prime Minister Thaksin Shinawatra to take responsibility for issuing the decrees and resign.

...

Judge Jaran Hattakam, who led a committee of five judges, said the court looked at the complaint against the privatisation of the Electricity Generating Authority of Thailand (Egat) very carefully because the case had "national assets and public interests" at stake.

The court said it was also aware that its verdict yesterday would serve as a guideline for future rulings on other privatisation programmes of the government.

"The Supreme Administrative Court spent about four months seeking truth . . . and has reached the conclusion that the process of transforming this state enterprise [Egat] into a corporation was unlawful," said Jaran, reading the verdict statement.

"The court rules that the two Royal Decrees [that supported the process] are now revoked and all the past preparations [for privatisation] are nullified."

Of the two decrees, one served as Egat Plc's charter and the other ordered the dissolution of the status of Egat as a state enterprise. Both decrees, approved by the Cabinet, came into force in June last year.

As a result of this verdict, Egat will remain a state enterprise and all the plans for its stock market listing will be cancelled.

However, experts on power production said the next step was to introduce reform programmes to get rid of Egat's monopoly in the power sector, as well as to increase its efficiency.[ed. let's hope so-- electricity in Thailand is as expensive as in the US, with wages in Thailand 1/10 to 1/4 those of a 1st World country]

Jaran noted that the case had in fact expired because the plaintiffs had not filed their complaint within 90 days of the two decrees coming into force, as stipulated by law.

However, this legal technicality was overruled by the Constitution, which guarantees the plaintiffs' right to protect their interests and those of the public.

[ed. well, some sloppy and transparently results-oriented legal reasoning there, which doesn't bode well for the maturation of the Thai legal system-- one of the sloppiest and most haphazard in the world. What about all the other cases that have been thrown out because they were filed outside the legal timeframe? Is the Supreme Administrative Court saying that whenever a case is "uhm, a really big deal," then the statute of limitations will no longer apply? One of the hallmarks of a mature judicial system is systemic fairness -- all parties and cases handled the same way-- as well as predictability of results. This seems like a case of typical Thai-ness, not being able to take a deadline seriously and then expecting to get bailed out on an emotional appeal. Sadly, it worked. These asshole activists and editorial writers should have filed suit during the 'hearing phase' they claim was so corrupt, not 6 months after the actual (and costly) privatization.]

"The court accepted the case based on the group's intention to protect the country's interests and uphold the system of checks and balances," said Jaran.[ed. so-called good intentions and waving the flag are all it takes to trump legal precedent?]

The court spent almost two hours detailing why it reached the conclusion that the preparation of the two decrees - and hence the privatisation of Egat - were flawed.

The court cited three points: the conflicts of interest plaguing the formation of the committee that worked on the state agency's corporatisation process; the conflict of interest in the appointment of a chairman for the public hearing committee and the improper process of the hearings; and the fact that Egat Plc would still have held state power of land expropriation after being privatised.

The court pointed out that Olarn Chaipravat, who served as an expert on the committee that established the charter for Egat's corporatisation, was not qualified for the job because of a conflict of interest. Olarn was on executive boards at Shin Corp and PTT Plc, which both have related business with Egat.[ed. good point, though I wonder who outside of the energy sector would have been qualified to sit on the committee?]

The public hearing committee, a crucial process in the listing of Egat, was also plagued with conflicts of interest. The committee chairman, Parinya Nutalai, was vice minister for natural resources and the environment. He was appointed by and worked for the prime minister.[ed. well, public hearings are usually run by government officials-- don't really see the issue here]

With Parinya holding a political position, the court questioned whether he could remain neutral in chairing this crucial process.

In the ruling, Jaran said the selection of members of such a panel must be stringent in order to ensure that it consisted of well-qualified people.

Jaran also said the public hearing process did not involve a broad base of stakeholders. For example, there was only one public hearing for Egat employees.

Only 1,057 employees, or 3.87 per cent of the total, showed up because the hearing was held on a workday (a Tuesday), and in Bangkok, while the employees were based all over the country.[ed. another good point, but the more interesting constitutional question is why EGAT employees were not allowed to unionize (and thereby send representatives to the Bangkok meeting).]

The last major point was that the decree on Egat's charter would have given Egat Plc power that the Constitution reserves for the state, such as the power of land expropriation to build power plants or transmission lines.[ed. oops. The government deserved to get bitch-smacked for the lack of thought they put into this.]

Moreover, Egat Plc would have taken with it state assets such as land and power transmission systems.[ed. exactly, 'sunk costs' paid by the people. Unless there were going to issue shares to every taxpayer in Thailand over the past 20 years (an unworkable scheme) or somehow payback on these assets (a liability which would effectively reduce the share market value to zero), there doesn't seem to be a fair way to handle this]

Nakhon Chompuchart, a lawyer for the plaintiffs, praised the verdict as complete and full of integrity.

"The court even saw the crucial details that we overlooked or did not have information on. For example, the flaws in the public hearing process. The ruling will set a precedent for other privatisation cases. We may take on PTT Plc next," he said. [ed. LOL. And I guess now the candy store's open. But since when can a court rule on issues not brought up by either party? That's bizarre)

Plaintiff Rosana Tositrakul, a board member of the Consumers Confederation of Thailand, was pleased with the verdict and vowed to launch an investigation into other state enterprise corporatisation programmes, such as those of the Mass Communications Authority of Thailand, the Telephone Organisation of Thailand and the Communications Authority of Thailand.

"Our victory with Egat today should tell the government that people are not as stupid as Thaksin might have thought," said Rosana.

"We know what he and his cronies are up to. They want government power to sell off national assets to fatten their pockets. We will not allow that to happen. Today proves to us that justice and the people's interest will prevail."

The Administrative Court, which marked its fifth anniversary early this month, was The Nation's Person of the Year for 2005.

"Bad facts make bad law" seems to sum up this ruling, from a legal standpoint.

As to the larger question of whether privatization might in theory have helped make EGAT more efficient-- who knows? With this group of self-interested, pompous, and totally inept monkeys in government in charge of such a radical sale, it certainly would not have.