Globalization of Industrial

Production :
The case of the Electronics
Industry and Its
Environmental Impact

Major factors which have impact

on industrial environmental
management in Thailand :

External Factors

Globalization

Internal Factors Domestic policy

and governance

Major factors which have impact on

industrial environmental
management
in
Thailand
:External Factors : Unilateral investment liberatization
International Trade and Investment Agreements
- Multilateral Agreements (WTO)
- Bilateral and Regional Agreements (such as
FTAs)

Foreign Direct Investment (FDI), increased

by
34% in 2005

Major factors which have impact

on industrial environmental
management in Thailand :-

External Factors : International environmental agreements : Multilateral Environmental Agreement

(MEAs)
(Basel convention, Kyoto Protocol and
CBD etc.)
EU Directives (WEEE, ROH, REACH
etc.)

Current trends in Developed

Countries
(EU,
Japan,
US
etc.)
Developed countries relocate production by

outsourcing the manufacturing process

(deindustrialization) to developing countries
and LDCs, while moving towards high-income
knowledge-based service industries.
After the East Asian crisis, the inflow FDI
service industries (power generation and
distribution, telecoms etc.) rose to 44% in
2001. At the same time their manufacturing
FDI declined from 40% to 35%.

Current Trends in Developing

Countries
The inflow of manufacturing
FDI among developing countries in
:South, East and Southeast Asia increased by 54% in 2005
Large sector inflows are in electronics and automobiles

Motives for Developed countries

outflow
Low-cost
base
ofmanufacturing
FDI :-

- Outsource manufacturing process

involving semi- skilled and un-skilled
labour
- Lower environmental costs leading to
the Pollution havens problem (The
study : Impact on the Environment of
Thailands Trade with OECD Countries,
Asia-Pacific Trade and Investment

Important Conditions :

FDI takes place in the proviso that

technology transfer can not be a requirement.
At the same time Intellectual Property Rights
are strictly protected (through Performance
Requirement and IP of the international trade
and investment agreements.)

Major factors which have impacts

on industrial environmental
management in Thailand
Internal Factors

Development Policy / Approach

- Not in line with sustainable development by focusing on
short-term economic objectives, while ignoring environmental
and social impacts.
1. Promote every kind of investment without considering long
term benefits and costs.
2. Overlooking technology upgrading and human resources
development which has led to the country becoming totally
dependent on foreign capital and technology in industrial
development.
As a result
less bargaining power
attracting foot
loose industry

(detrimental to the environment

workers health)

and

Globalization of supply chain :

The Case of Electronics Industry

Highest valueadded
Control of
Technology ,R&D ,Bran (US,Japan,EU,Kore
High/medium
a etc.)
dname
Contract Manufacturers
value-added
(CM)
(Japan,Singapore,T
Control of logistic and
aiwan,
etc.)
production
plan
Manufacturing
Lowest valueprocess with
added
labour intensive
(Thailand, The
(Assembling)
Philippines, Viet
nam, Indonesia

Major factors which have impact on

industrial environmental management
Internal Factors in Thailand

Environmental governance
- No checks and balances in the industrial
environmental management system (problems
of conflicting roles in the governmental agency.
DIW has both the roles of promoting industries
while regulating their environmental
performances at the same time)
- Wrong incentives (PPP never works) because
law enforcement and monitoring system fails.
- No transparency (Access to information is
not possible)
- No public participation (So far local
communities have limited legal rights in
protecting the environment.)

Important
observation :-

Without bargaining power because of

economic dependency (especially with
no local technology and high quality
human resources), good governance is
even harder to achieve. The country
cannot afford to have and enforce strict
environmental regulations for fear of
driving footloose industries away.

Concluding
picture

Through IP and
Performance Requirement
in Investment Chapters
External
(harder for technology
factors
upgrading)
Low bargaining
(esp. Trade
Low valuepower (highly
and
added
dependent on foreign
Investment
products
technology/intermedi
Agreements)
Internal
factors :ate good/can offer
- Development
only labour for local
Short-term
approach
inputs)
economic
- Environmental
objectives
governance
Attracting low-quality
FDI (foot-loose
industries)
Poor
governance

Environmental
and Health
problems in
Electronic

Sufficiency Economy (S.E.) Philosophy emphasizes a

balanced way of development and strengthening the
countrys immune system.
Appling S.E. Philosophy : focusing on how Thailand can
leverage on the existing trend of globalization and the
same time
protect our peoples welfare and the environment. :Less dependency
improve bargaining power
by upgrading industries
through
technology
competence,
development of human
resources, productivity
improvement
Strengthening Thailand competitiveness by searching for our
potential niche market (agritronics etc.)
Improve environmental governance