8 Things to Know About the Revised Thailand Factory Act

The new Factory Act came into effect on October 27th, 2019. The government encouraged investment in the industrial sector, whereby the government made adjustments in the Factory Act. These adjustments intend to support new factory establishments in Thailand and help existing factories adjust to shifting markets more swiftly.

Furthermore, these adjustments aim to make the Factory Act more streamlined with current business environments and to speed up the application processes. Primarily, these adjustments encourage more investments in the industrial sector, which is one of the key areas in Thailand's economy. In this article, we have summarized the essence of this law and picked nine vital points to examine.

1. The main objective of this Act

The main aim of this Act is to make the factory applications more lucid and convenient for factory owners. This Act is beneficial to both small and medium enterprises (SMEs) as well as large factory operations because it helps business owners to operate and adjust their factories more rapidly. Nevertheless, this new Act still caters to people and the environment the same protections. The government enacts identical supervisions and regulations on factory operations.

 2. What constitutes a "Factory."

The new Factory Act changed what constitutes a "factory." Initially, a factory must have at least five horsepowers or seven workers to be considered a factory. With the current amendment, however, a factory needs to have fifty machine horsepowers or more than fifty staff. 

In essence, under the new Factory Act, a factory with fewer machine horsepowers or a smaller workforce does not have to apply for the Factory license. 

3. Renewal of the existing Factory License (Ror.Ngor. 4)

Under the original Factory Act, business operators must renew their factory licenses (Ror.Ngor.4) every five years. This procedure allowed the government agency to monitor, update, and access machines within the factories.

However, with the new Factory Act, factory owners do not have to renew their licenses(when they use their existing machines). The government aims to make the process more convenient for factory owners. Obviously, for factories that have new machines, they still have to update their machinery list and renew their licenses.

4. Private Inspectors

Previously, the government officials from the Ministry of Industry would come, inspect, and evaluate the factories. The evaluation process was done entirely by government officials.

Currently, the government aims to speed up this cumbersome process, and thus decentralizes this evaluation process by permitting certified private inspectors to evaluate the premises. The external inspectors, who have obtained certifications from the Department of Industry.

5. The Qualifications of Private Inspectors.

The private inspectors must be qualified members in engineering, science, or technology fields. They need to have at least five years of work experience in jobs related to environmental, safety, chemical, electrical, energy, mechanical, civil engineering, or other related industries. Moreover, they have to receive training courses from the Ministry of Industry before they can become qualified inspectors.

6. The factory entrepreneurs have the legal

Under the present Factory Act, business owners have to obtain a factory license when their machine horsepowers or staff members exceed the minimum amounts. They have the legal obligations to self-declare and apply for the necessary licenses within a specified period (generally before their factory operations).

 7. Protection for People and Environment

Although there are extensive changes within the new Factory Act, the government still provides equal protection for people and the environment.  Regardless of the amendments in the new Act, the government preserves its quality standard.

8. When will the new Factory Act come into effect?

The new Factory Act would be active within 180 days after the official Royal Government Gazette on April 30th, 2019. Thus, it came in effect on October 27th, 2019.

For factory entrepreneurs who had already received licenses before October 27th, 2019, they could perpetually use the original license.

For further information, please follow the clip below, which entails thorough explanations on the amendments within the new Factory Act as well as the government's initiative-Factory 4.0.

In summary, the enforcement of this new Factory Act should help entrepreneurs to be more competitive and more streamlined in the manufacturing sector. This new Act should bolster better productivity and competitiveness in Thailand's factory operations, and ultimately benefits the country's economy

For further information on the subject, please follow the links below:

https://www.jetro.go.jp/ext_images/thailand/e_activity/pdf/FactoryAct_02_2562.pdf (in English)

http://www.ratchakitcha.soc.go.th/DATA/PDF/2562/A/056/T_0213.PDF?fbclid=IwAR17Zo3QZIEXbLTIcO9CPo0SG16ZqLPwO5I2IKhM3SyFWTOLVL8u1zFcR6s  (in Thai)

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Sources:

https://www.jetro.go.jp/ext_images/thailand/e_activity/pdf/FactoryAct_02_2562.pdf

 http://bit.ly/2GvKvvy

http://www.ratchakitcha.soc.go.th/DATA/PDF/2562/A/056/T_0213.PDF?fbclid=IwAR17Zo3QZIEXbLTIcO9CPo0SG16ZqLPwO5I2IKhM3SyFWTOLVL8u1zFcR6s