Thailand's electrical and electronic equipment (EEE) sector has expanded dramatically over the past decade and has been among the main sectors contributing to export-led growth in the country. This rapid expansion has raised a number of environmental concerns relating to production processes, the generation of EEE waste (or e-waste) and recycling capacities. The paper assesses how trade liberalization in the EEE sector could harm the environment, while highlighting the commercial benefits that could arise from promoting production methods that minimize such impacts. It concludes by outlining options for government policy-making, private sector engagement and capacity building to improve the sector's environmental performance.

Key findings:

• Thailand ranks among the top three EEE producers in the region (along with China and the Philippines) that together accounted for nearly one third of the value of world EEE exports in 2003.

• The production of EEE consumes significant amounts of raw metal and energy while contributing to soil and water contamination.

• The volume of e-waste, which often contains high levels of hazardous or toxic substances that can seep into the soil and groundwater, has grown at an alarming rate of 12 per cent per annum.

• The development of recycling activities is hampered by failure to enforce existing waste control regulations and lack of market-based incentives to encourage stakeholders to take an active role in waste management.

• Measures to minimize or recycle e-waste could provide opportunities for increasing competitiveness, accessing foreign markets and responding to consumer demand.

Key recommendations:

• Take steps to urgently enact the draft Thai WEEE Act as a framework for the public and private sectors involved in the EEE sector.

• Support the development of the domestic EEE de-manufacturing industry through the use of Board of Investment (BOI) incentives and other tax measures on waste discharge.

• Encourage the Thai EEE industry to play a proactive role in terms of building innovation in product design and working with government agencies to meet the challenges of increasingly rigid environmental requirements in export markets.

• Raise awareness of effective waste management strategies among de-manufacturers and recyclers, including through training and certification.

Lao relies heavily on the import of oil. A switch to locally-produced bio-fuel sources may not only help alleviate that dependency, but also provide a new economic opportunity for Lao PDR. This paper provides an overview of the bio-diesel sector in light of increasing trade liberalization between Lao PDR and its key trade partners. It seeks to explore the environmental issues, both positive and negative, surrounding the trade liberalization of the bio-diesel sector, while also flagging key environmental factors to be considered in trade negotiations.

Key findings:

• With limited natural mineral and oil resources, Lao PDR relies on imports of fuel for transport and industry. The recent rise in crude oil prices and the rapidly-growing demand for oil in China have highlighted the importance of developing an efficient energy policy, including alternative energy sources.

• The rational for the government's plans to increase the production and use of biofuels is based on the premise of potential positive environmental and social impacts, notably the mitigation of climate change through greenhouse gas abatement, conservation of fossil fuels, security of energy supply and maintaining employment in the agricultural sector.

• There are real concerns about the environmental and social impacts associated with bio-diesel production such as the conversion of natural forests to mono-crop plantations, conversion of land to food crop production for biofuels, expansion of biodiesel crop cultivation into areas with rich biodiversity and endangered species, and water pollution from the use of fertilizers and pesticides.

• While many government policies and regulations indirectly govern the biodiesel sector, a cohesive national policy on biofuels does not exist at present and will require coordination between government ministries and provincial authorities.

Key recommendations:

• mainstream environmental considerations into bio-diesel policy and regulation development processes—for example, conduct a strategic environmental assessment of the national biofuel policy in coordination with the ministries and provincial authorities concerned, which clearly outlines environmental and social policies and is integrated with, and included in, a national energy production and management plan; and

• encourage the private sector to adopt best practices by strengthening the strategic environmental assessment process to ensure the private sector addresses environmental and social issues of their operations in Lao PDR and by providing incentives to attract investment from both domestic and foreign sources to develop suitable bio-diesel crops in line with strategic environmental assessment findings.

In Lao PDR, investment has been booming in the industrial sectors of mining, hydropower and construction materials with actual Foreign Direct Investment (FDI) more than doubling between 2004 and 2006. This paper provides a preliminary commentary on the key environmental concerns of these three sectors and examines both positive and negative environmental impacts that may arise as a result of increased trade and investment, combined with inadequate policies and standards to monitor these activities.

Key findings:

• Due in part to the improved national investment policy climate, investment has been booming in the industrial sectors of mining, hydropower and construction materials. With actual investment more than doubling between 2004 and 2006, this trend is expected to continue well into the next decade.

• The scale and growth of FDI in Lao PDR should also be viewed within the international context of the increasing demand for resources. Global demand for energy, minerals and construction materials is high, and Lao PDR, being well-endowed with these resources, is in a strong position to accept only the most economically-, environmentally- and socially-beneficial investments for the country.

• The hydropower, mining and construction materials sectors can all be viewed as large “ecological footprint” sectors—that is, they all have substantial impacts on the natural environment because of their use and reliance upon natural resources. The extent of environmental impacts as a result of growth in these sectors will be determined by the policy and regulatory framework in which increased trade takes place, in order to accentuate the opportunities and mitigate potential negative environmental impacts.

• The Government of Lao PDR is making a concerted effort to review its FDI policies and practices to ensure that the country benefits economically, socially and environmentally from this investment. However policy-makers are finding it difficult to keep pace with the scale of investment and economic growth.

Key recommendations:

• improve environmental governance by developing the commitment of the government and the private sector to address environmental concerns, strengthen institutional capacity (especially at the provincial and district levels) to implement government policies, and ensure better coordination/collaboration between all levels of Lao society;

• build closer regional cooperation on investment to ensure environmental concerns across the region are addressed;

• facilitate a domestic business environment that attracts responsible business and international best practice; and

• realize growth-led environmental conservation opportunities such as supplying the energy-efficient construction materials sector regionally.

Regional demand for Lao PDR's medicinal plants is rising significantly. And while this is presenting opportunities for economic growth, it is also placing increasing pressure on the country's natural resource base. This paper provides a commentary on some of the key environmental concerns in this sector and presents case studies on the production and use of medicinal plants in Lao PDR to illustrate positive and negative practices in the industry, including suggestions for the future.

Key findings:

• the medicinal plant and spices sector is earmarked as a sector with key export potential due to increasing demand for these products regionally;

• the development of medicinal plants and spices for export can help to generate increased income among farmers, reduce poverty, stimulate entrepreneurship and create a favourable business environment to integrate into the global marketplace;

• while development of this sector can bring many economic benefits, significant expansion requires significant resources and has raised some concerns about the inappropriate and unplanned use of medicinal plants, leading to unsustainable harvesting and ultimately the destruction of the resource base; and

• key issues facing this sector at present, include a lack of systematic and scientific approaches to harvesting, specific plans for cultivation and strict enforcement of laws and regulations, weak collaboration amongst concerned authorities (between central and local authorities and between public and private sectors), and limited awareness among rural people on the preservation of biodiversity.

Key recommendations:

• collaborate with neighbouring countries on the conservation of bordering protected areas and the control of illegal trade in wildlife and prohibited plant species;

• work towards more scientific and community-orientated management of forest resources in order to generate timber and non-timber forest products at sustainable levels;

• improve statistics on resource harvesting and exporting to guide future policy in the sector;

• develop and enforce laws and regulations related to the forestry sector as a whole, and especially to non-timber forest products;

• identify appropriate measures for improving awareness on environmental impacts for rural communities;

• improve the quantity and quality of exported medicinal plants and spices to meet the demands of foreign markets; and

• encourage the private sector to consider the environmental impacts of unsustainable harvesting and unplanned cultivation, and gain their support in addressing these issues by establishing incentives for environmental best practice.

Lao PDR has only recently penetrated the organic agricultural products market. Export performance is still underdeveloped. Not enough goods are produced to meet the demand. Non-tariff barriers such as certification remain a major hurdle. This paper explores the potential environmental impact of this sector and finds an inherently environmentally-friendly industry with the potential to grow and prosper in the future.

Key findings:

• Trade liberalization makes evident the potential benefits of increasing value in certain sectors and expanding green niche markets. For the agriculture sector, trade liberalization provides an incentive to grow organic to supply the growing demand for organic produce abroad.

• Many Lao producers already grow organic produce by default. However, only a handful have penetrated the organic agricultural products market. On the whole, there is a low awareness of the potential economic and environmental benefits of this form of agriculture.

• Organic agricultural practices are usually environmentally-friendly, following natural processes and using natural raw materials without the use of chemical fertilizers or pesticides. In this way, they can provide many environmental benefits, enhancing soil fertility and managing ecological interactions within an agro-ecosystem. However, if the industry was to grow significantly, the potential for negative environmental impacts such as deforestation to increase arable land (including shifting cultivation and protected area encroachment) or carbon emissions resulting from increased transportation, should be recognized and managed.

Key recommendations:

• The Government of Lao PDR, through relevant agencies like the Ministry of Agriculture and Forestry, should consider ways of supporting Lao producers to compete in international markets by having a formal organic certification process.

• The government should consider developing policy and programs to support the supply chain for increasing the quantity of organic products sold in domestic and international markets, with premium prices for organic and Fair Trade products sought in these markets. To meet the export demand, Lao producers should consider forming “farmers' groups” to lobby for support of the sector.

• A key next step for the Government of Lao and the development of the organic agricultural sector is to draft laws and regulations to implement policies for organic agriculture, food safety and food quality assurance. Potential negative environmental impacts of developing this sector such as deforestation, protected area encroachment and other land-use changes, should be recognized and addressed in these policies.

Demand for Lao's naturally dyed and often handmade silk products is growing steadily and providing key export earnings and potential opportunities for domestic producers. This paper examines the environmental impacts of this growth sector and finds an inherently environmentally-friendly industry with the potential to avoid negative impacts and capture the potential of green markets.

Key findings:

• Demand from regional and international markets for Lao silk handicrafts is growing steadily. The most important development for this sector in recent years has been the resumption of Normal Trade Relations with the United States—now a key export market for Lao silk handicrafts.

• The handicrafts sector in Lao PDR consists predominately of small family businesses spread across the country in rural and urban areas. Mainly due to the small and dispersed nature of these businesses, the sector remains largely unorganized and there are presently many barriers to supplying international markets such as supply of raw material inputs, supply of end products, lack of quality assurance, national standards and certification.

• As the sector attempts to scale-up its production to meet increasing demand, there is potential for negative environmental impacts to occur, such as increased water consumption and water pollution as production increases. There is also potential for positive impacts to arise from increased international demand for natural “green” silk handicrafts produced in an environmentally-sound manner.

Key recommendations:

• implement the National Export Strategy and work with the Lao Handicraft Association and the Lao National Chamber of Commerce and Industry through the creation of a silk handicraft fund to promote this sector;

• work with industry actors to improve environmental performance by redesigning waste-water treatment systems, reducing water used in the production process by recycling waste water and upgrading to technologies that have fewer environmental impacts; and

• enable the Lao silk handicrafts sector to grow sustainably through initiatives such as an annual environmental performance award to recognize quality and raise awareness of Lao brand-name silk products.

The development of the tourism industry in Lao PDR over the last two decades has been striking. In 1990, just over 14,000 people visited the country. In 2006, arrival numbers stood at 1.21 million and generated 173.2 million dollars for the Lao PDR economy. This paper seeks to identify some of the key impacts, both positive and negative, of this sector and outline strategic policy recommendations to ensure this increase in business for Lao PDR results in a sustainable industry that enhances the surrounding environment.

Key findings:

• The tourism sector in Lao PDR is growing as a result of better regional integration through ASEAN, increased relationships with countries beyond Asia such as the U.S., Europe and Australia, and successful national tourism promotion policies and projects.

• Tourism is a key sector that meets all the Government of Lao PDR's key development objectives by generating a substantial amount of foreign currency each year. It is: labour-intensive, thus providing jobs; is inherently pro-poor, as earnings are made by many small businesses including poor villages in and around key attractions; and above all it works in harmony with nature.

• If done well, tourism can have many positive effects on Lao PDR's natural environment, but without careful planning and a strong commitment from all stakeholders, negative impacts affecting the very asset on which the industry relies can arise.

• Key to sustainable tourism is recognizing the “carrying capacity of an area”—the threshold level of tourist activity beyond which damage to the environment will occur.

Key recommendations:

• continue to engage closely with the regional and international community to facilitate and promote the regional adoption of policies, practices and approaches to ecotourism;

• strengthen the Lao National Tourism Authority's ability to engage with the private sector and investment decision-makers to encourage best-practice ecotourism and tourism development;

• explore the potential of certification for the tourism industry in Lao PDR, both at the national and provincial levels;

• strengthen central/provincial cooperation in the tourism sector; and

• continue to support conservation with particular emphasis on National Protected Areas and linking with regional initiatives that promote tourism and conservation in the Greater Mekong Subregion and ASEAN.

The wood and wood products sector in Lao PDR is undergoing significant transformation. In the wake of increasing demand for wood resources, declining natural forests, low-value exports and illegal trade, the Government of Lao PDR has implemented a number of reforms to address these issues. This paper examines the environmental impacts of trade liberalization on the wood and processed wood products sector, focusing on the wood-processing industry and its supply of wood from natural and plantation forests.

Key findings:

• Regional demand for wood is high and main importers of Lao wood and wood products are Thailand, Vietnam, China and Japan. Significant demand is now coming from China, with imports of timber products to that country rising from 14 million to 45 million cubic metres in just 10 years.

• Lao PDR needs to continue to reduce the export of low-value wood products and work towards adding value to its domestic wood-processing sector. To do so, understanding, integrating and increasing relationships with regional and international markets is vital.

• The capacity of wood-processing factories in Lao PDR is estimated to be high. However, the efficiency of factories is low due to the prevalent use of old machinery, low technology with low recovery rates and low value-added products. Moreover, there is a lack of certification of processed wood products for exports.

• While measures have been taken to ensure that more value from such exports is retained in-country, a number of issues such as illegal logging and timber exports (reducing supply for local businesses) and an underdeveloped, under-resourced local wood-processing industry are hampering this effort, and fuelling environmental issues such as forest decline, biodiversity loss and loss of watershed services.

Key recommendations:

• encourage value-addition to stimulate processing industries and obtain greater economic returns while minimizing resource use;

• strengthen dual policies on plantations and production forests to ensure a sustainable supply of timber for the wood and wood products sector. Promote the scaling-up of forest management certification;

• continue to improve law enforcement in the forestry sector; and

• promote cooperation mechanism between public and private sectors, including in forestry, plantations and wood-processing.

Thailand's fisheries sector continues to provide an important source of export earnings, livelihoods and domestic food supply. However, production growth is increasingly threatening the sustainability of marine fisheries resources while aquaculture and fish processing have brought with them a range of environmental impacts on land and water resources. The paper outlines environmental concerns in Thailand's capture fisheries, aquaculture production and processing industry. It assesses how trade liberalization in this sector might exacerbate some of the existing problems while also providing opportunities for reducing some of the impacts, for instance through market opportunities for sustainably-produced fish product. It concludes by identifying some regulatory, policy and knowledge gaps that would need to be addressed to ensure the long-term sustainability of the Thai fisheries sector.

Key findings:

• Marine fisheries catches have increased tremendously since the mid-1960s, following the introduction of trawl gear. Today, most of the demersal fish resources near the coast and some pelagic species have been severely depleted and are now considered overexploited.

• The rapid expansion and intensification of aquaculture production since the mid-1980s has resulted in the destruction of mangrove forests, contributed to the degradation of land and aquatic environments, and put further pressure on fish stocks as a source of fish feed.

• The fish processing industry has had a number of environmental impacts, although the scale of the impact remains difficult to assess due to a lack of data.

• These pressures are likely to increase with anticipated trade liberalization in this sector in light of underdeveloped fisheries management systems and regulatory frameworks to reduce environmental impacts.

• Increased export opportunities for "green" products might provide an incentive for sustainable production, as demand for certified seafood products continues to increase. The aquaculture sector, notably sustainably farmed shrimp where demand is expected to grow rapidly, might provide the most promising opportunities in the short term.

Key recommendations:

• Prioritize the implementation and enforcement of effective fisheries management schemes as a fundamental prerequisite for ensuring the sustainable exploitation of Thailand's marine resources.

• Strengthen efforts to reduce the volume of trash fish and to strongly encourage the use of less-destructive fishing gear that is better adapted to the marine environment.

• Promote wider compliance with and strengthen marketing campaigns for the "Thai Quality Shrimp" label to increase supply of and stimulate demand for labelled shrimp.

• Advocate for further reducing tariff escalation in key markets in order to facilitate exports of value-added products, thereby obtaining more value for fewer resources.