CHAPTER
8
FACTORIES
In
general, the construction and operation of factories is subject to a licensing
procedure. A license is required before a factory can be built, operated, modified
or transferred. The basic law is to be found in the Factories Act (1969) as amended,
together with regulations issued under the Act.
Definition
of factory A factory is defined as any place
that uses machinery of two or more horsepower or that employs seven or more
workers, generally for the purpose of producing, altering, packing, repairing, maintaining,
testing, improving, processing, conveying, storing or destroying anything
included in the classes or types of factories listed in ministerial regulations.
The Act does not apply to
factories owned or operated by government agencies for the purpose of national
security or safety, except that such factories must use the procedures of the
Act as guidelines for their operations.
Factory
Establishment License An application to establish
a factory must be submitted to the Ministry of Industry in Bangkok, or if the
factory is outside Bangkok, it may be submitted to the provincial office. Full
plans and details concerning the construction and proposed purpose of the
factory must be submitted. Where required, an Environmental Impact Study must
be submitted as well and approved before a Factory Establishment License may be
granted.
Factory
Operating License After the construction of
the factory, the manufacturer must apply for a Factory Operating License. If on
inspection it appears that the factory and its machinery conforms to the
Factory Establishment License, a Factory Operating License will be issued.
Regulation by the Ministry of Industry The Ministry of Industry may issue
regulations for all categories of factories dealing with the following matters:
1.
A
description of and the category or type of machinery and equipment to be used
in the factory business.
2.
The
location, environment, the interior, and a description of the factory.
3.
Requirements
for employees who have specific knowledge to carry out duties in the factory.
4.
The
manufacturing process and provision of equipment to prevent, stop, or reduce danger,
loss, or disturbance that may occur to the public or property in the factory or
nearby premises.
5.
Standards
and procedures for the control or release of waste, pollution, or other things
arising from factory operations which may affect the environment.
6.
The
supplying of necessary information and documents by the factory operator to
ensure compliance with the law.
7.
The
supplying of any thing that may affect the safety of operations.
Validity of licenses Licenses granted are valid until the end of the
fifth calendar year from the year in which the factory started operations,
except where the factory is transferred, leased or subject to hire purchase, or
where operations cease. In such cases, the license is deemed to expire on the
date of issue of a license to the factory’s new operator, or on the date of
cessation of operations.
Renewal of licenses Applications to renew a license must be submitted
before expiry. Once submitted, the license is deemed extended unless there is
an order stating otherwise.
Powers of the Ministry The Ministry of Industry has the power to issue
regulations concerning:
1.
The
size and number of factories in each category which should not be established
or expanded in any locality.
2.
The
type, quality, origin, and proportion of raw materials to be used in the
factory.
3.
The
type or quantity of products to be manufactured in the factory.
4.
The
type of energy to be used in the factory.
The Ministry may also prescribe that a factory’s products
should be used in certain industry or that a percentage of production should be
exported.
Factory ceasing operations If a factory in category 2 or 3
above, ceases its operations for more than 12 months, the operator must notify the
Ministry in writing within 7 days of the expiry of the 12cmonth period and
notify the Ministry before resuming operations. In the case of a category 3
license, the operator must obtain written permission from the Ministry before
resuming operations.
Notification of accidents If there is an accident that causes
death, injury, or illness that incapacitates an employee for more than three
days, the operator must notify the Ministry within three days from the date of
death or the end of the three day period. If an accident causes the factory to
cease operating for more than seven days, the factory operator must notify the
Ministry within ten days from the date of the accident.
Further requirements A factory operator must apply for consent to move
machinery to another site temporarily, or to transfer a factory to another
site. Consent must also be obtained to transfer, lease, offer to hire purchase,
or sell a licensed factory. In these cases, the prior license is considered to
have expired and a new license must be applied for within seven days.
Expansion of a factory A factory operator who wishes to expand the factory
must apply for consent in advance. Expansion is defined in the Act to mean:
1.
An
increase in the number of machines, or any change or modification of machinery
to increase its power by 50% or more.
2.
The
addition to or alteration of any part of the factory building that causes any
part of the foundation s to bear a load of an additional 500 kilograms or more.
When a licensee increases the quantity of machinery; changes
or modifies machinery used for production or generation of power, by less than
50%; constructs or increases the factory space by more than 100 square meters,
an application for approval must be submitted within seven days of the date of
the change.
Regulatory powers The Ministry has general regulatory
powers as follows:
1.
A
factory that causes serious danger to the public may be ordered to cease
operations or to make specified improvements. The Minister may order removal of
the plant to a location where the public will not be threatened.
2.
A
factory may be ordered to cease operations, modify or repair machinery, or to
undertake other remedial measures.
The issue of a factory establishment
license or a factory operation license does not exempt the licensee from
compliance with other applicable laws concerning the proposed activity.
Licenses may be suspended for violations of the Act or for failure to carry out
orders issued under the Act by competent officials.
Enforcement Breach of duties imposed under the Act may incur
fines or imprisonment. If the factory is owned by a juristic person, the
directors, manager, or other persons responsible for committing the offence are
subject to the same punishment, unless they can prove that the offence was
committed without their knowledge or consent.
Revised 1 December 2006