THAILAND Law and Practice Contributed by: Tirayu Songdacha, Nutchaya Khayan, Piyachat Suwanwihok and Lalita Sriboonruang, MSC International Law Office
Implementing Measures in Connection With ESG JV participants and the JV entity should take careful and proactive steps to implement ESG-related meas - ures. The scope and nature of these measures depend on the type of business and applicable legal require - ments. For example, JVs operating in sectors such as mining or power generation are often legally required to conduct environmental impact assessments (EIAs) or environmental health impact assessments (EHIAs) to evaluate and mitigate environmental risks. In addition, JV participants and the JV entity may need to comply with ESG principles even if such require - ments are not explicitly mandated by local law. For instance, JVs exporting certain finished products to the European Union must adhere to due diligence obligations, including providing certifications that their products are not linked to deforestation or forest deg - radation. Failure to comply with these requirements may result in legal penalties or export restrictions under the EU Deforestation Regulation. The Main ESG Regulations in Thailand and the Impact of International Policies and Scenarios At present, Thailand does not have dedicated leg - islation specifically addressing ESG. However, ESG concepts are integrated into several existing laws, including labour regulations that establish minimum employee rights, and environmental laws requiring permits, impact assessments, and public hearings for activities that affect the environment. However, the Securities and Exchange Commission (SEC) and SET supervise listed companies, issuing guidelines encouraging transparent ESG reporting and respon - sible business practices. On the global stage, Thailand’s ESG framework is shaped by internationally recognised standards like the Task Force on Climate-related Financial Disclo - sures (TCFD) and the Global Reporting Initiative (GRI), as well as growing pressure from responsible inves - tors. This drives Thai companies to enhance their ESG reporting and management practices to remain com - petitive and attract investment.
The decision between assignment and licensing is often determined by the parties’ intention to main - tain long-term control, generate ongoing revenue, or transfer the IP entirely as part of a capital contribution to a joint venture or as part of an exit strategy. 8.3 ESG Considerations in JVs The Importance of ESG ESG stands for environmental, social and governance. Nowadays, society places great importance on, and is highly aware of, ESG because it helps organisations adapt and compete rapidly in the market, enhances confidence among consumers and investors both domestically and internationally, and promotes long- term sustainability for businesses through efficient resource use and fair, equitable human resource man - agement. Recent Significant Court Decisions or Legal Developments Relating to ESG/Climate Change Labour rights are a key part of the social dimension within the ESG framework, reflecting a strong com - mitment to social responsibility and sustainable busi - ness practices. Thai labour laws have been steadily evolving to improve worker protections and promote fairness in the workplace. For instance: • In 2023, amid the COVID-19 pandemic, Thai labour law was updated to address work-from-home arrangements by granting employees the “right to disconnect”, allowing them to refuse work-related communications from their employers after work - ing hours or once their tasks are completed. This change supports employee wellbeing and helps maintain a healthy work–life balance, which is a vital aspect of social sustainability. • More recently, the House of Representatives approved a new draft of the Thai labour law that extends maternity leave for female employees from 98 days to 120 days. The legislation also permits spouses to take up to 15 days of leave to sup - port their partner after childbirth. These measures encourage shared family responsibilities and foster a more inclusive workplace culture. These developments highlight how reforms in labour law align with ESG principles by promoting a fair, sup - portive and sustainable working environment.
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