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Crisis on traditional sources of energy and a new scenario for renewable energies in Latin America and South East Asia

24 Mar Crisis on traditional sources of energy and a new scenario for renewable energies in Latin America and South East Asia

Since the early controlled handle of fire by Homo Erectus more than 400,000 years ago, the history of humanity has been a tenacious struggle between men and women seeking to regulate and generate source of energy. Dating back to the dawn of humanity, methods of producing natural resources have collided. In the past, this has been evident with the early control of fire and the property of fossil (carbon and petroleum to name two) and nuclear fuels. Presently, we can understand the discussion of renewable resources as a contentious topic in the geopolitical dialogues that exist today. Aside from the debate surrounding renewable energies, the topic also presents itself as an area of interest for both public and private sectors throughout the world.

This leads us to posit the question: what is the current reality of renewable energy resources today? Moreover, how can we understand the dichotomy between old and new methods of harvesting these materials as the industry continues to evolve as we move further into the 21st century?

At the moment, we are living in a period of transformation, as societies, governments, and industries begin to switch from the use of traditional resources like petroleum to the implementation of renewable materials like wind and solar power in energy projects. Despite recent large oil discoveries spanning from Coober Pedy (Australia), Vaca Muerta (Argentina) to the Gulf of Mexico, in addition to the African countries of Mozambique, Angola, and Nigeria, the fact remains that the Oil and Gas industry has experienced a number of obstacles in the past five years. While it is certain that the revenue generated from the oil industry remains highly profitable, it is evident that the industry is struggling. This is notable when we look at the case of the multinational Tullow Energy Oil Company, which in 2013 suffered, more or less, twenty dry holes resulting from wells drilled for gas that yielded none.

With regard to the topic of nuclear energy, the environmental disasters of Chernobyl in 1986 and Fukushima in 2011 gave rise to a new social awareness throughout the world. With the dissemination of graphic images, memories and accounts from these disasters throughout the world, civil society has begun to think more clearly about the potential risks and dangers of nuclear power. Energy experts such as Mycle Schneider have pointed out that: “the nuclear industry was arguably on life support before Fukushima. When the history of this industry is written, Fukushima is likely to introduce its final chapter.” In addition to Schneider’s argument, it is also important to consider that acts of terrorism and natural disasters such as Tsunamis can also increase the vulnerability and shortfalls of nuclear energy, as nuclear power stations can be easy targets for terrorists seeking to create widespread damage, as well as the unpredictable nature of environmental catastrophes.

Based on my professional experience in the legal consultancy sector throughout Europe, South America and Southeast Asia (where I currently practice law in Bangkok), I have identified a strong trend of authorities in the Oil and Gas industry that are shifting their attention and investments to the promise of the renewable energy sector. Having worked for geologists, petroleum engineers and drilling engineers in Malaysia and Singapore, I have noticed the attraction among these industry executives toward solar and wind energy projects. Believing that these sectors provide exciting new opportunities and potential, investors remain eager to explore this expanding market, predominately throughout Southeast Asia, with an emphasis on Thailand and the Philippines.

While this article may lead us to understand that the Oil and Gas industry is currently undergoing a period of transition, it is crucial to emphasize that this will be a slow transformation. Due to the energy industry’s progress in embracing natural resources, we can speculate that Asia and Latin America are likely to become the two largest markets for renewable energies within the next two years. As Latin America continues to grow its middle term, Asia is also expected to continue experiencing rapid economic and industrial development.  As a result of this predicted growth, experts estimate that world energy consumption will increase 56% by 2040, led by China and India.

Although the two industrial giants of India and China tend to dominate Asia’s projected economic development, we must also remember that South East Asia is also experiencing one of the area’s highest levels of economic augmentation. In countries such as Singapore, Indonesia, the Philippines, Thailand, and Vietnam, investment often reaches that of $128,000 million USD, a significantly higher figure when compared to the $120,000 million USD that China attracts.

Concerning Latin America, the renewable energy sector continues to boom, as the region generates 7% of the world’s electricity, with 65% of this coming from renewable sources. In the last seven years, the potential to generate green energy has grown 270%. Clear examples of this “green revolution” can be seen with projects such as the $100 million solar energy project in Chile’s Atacama desert, the $124 million investment in San Juan, Argentina by the Schmid Group, in addition to the new renewable energy regulations and affable policies in Costa Rica, Mexico, Chile and Uruguay. On top of these groundbreaking projects, the Inter-American Development Bank (IDB) published a comprehensive report on renewable energies in Latin America that affirmed that these sources would be enough to supply more than twenty-two times the electric demand of the region in 2050.

Aside from the evident shifts toward renewable energies and policies in both Asia and Latin America, it is critical to acknowledge that these economies still tend to rely on revenues from oil, gas and coal. Nevertheless, while the United States Energy Information Administration (EIA) expects a growth of an estimated 1.9% annually, this may increase if military occupations (such as the cases of Libya and Iraq) continue to sweep petroleum-endowed countries, with the possibility of Syria and Venezuela as possible targets. Additionally, when we consider the case of Saudi Arabia’s foreign interference in Yemen’s internal matters in March 2015, we can hypothesize that entire regions are at risk of loosing political stability.

Furthermore, it is also of worth highlighting that, aside from the previously mentioned impact of natural resources on the energy market, the commitment to the environment and the awareness of the pollution produced throughout the developing world (an already sensitive issue in the main capitals of Latin America and Asia) can yield to a decrease of energy dependency on fossil fuels. While it is critical to implement a realistic, regional and legal framework under a strict protocol of sanctions surrounding the emerging natural energy industry, cases of non-compliance can bring us further from achieving what the ASEAN Plan of Action for Energy Cooperation set as guidelines from 2010 to 2015.

With globalization creating new possibilities for renewed energy markets, these markets are also constantly being restructured. Geographically, we can identify this by observing how photovoltaic power stations were built in California, and later Spain, which by 2008 became a staple product in the renewable energy industry. Today, China’s renewable energy market has overtaken that of Germany, while large-scale projects have already materialized in South East Asian locations such as Lopbori in Thailand or Palawan in the Philippines. This is to say that when we look at the relationship between geographic change and displacement, we also see a rapid evolution and reorganization of these renewable energy markets.

Regarding solar energy, Thailand continues as the leading beneficiary of foreign investments in Southeast Asia. The decrease of the price of solar panels (solar PV module costs declined by 83% between 2000 and 2013) have led Thai officials to better understand the negative impact that could result from making Thailand 70% dependent upon sources of imported natural gas. Moreover, Thailand’s commitment to rely upon 25% renewable energies by 2021 comes from a power-purchase agreement of twenty-five years and a feed in tariffs (FiT) system, similar to that of Malaysia, the Philippines and Indonesia. This agreement offers a fixed price for generating electricity and selling it to the grid for a specific duration of time. This, as well as Thailand’s potential to generate daily solar exposure at around 19-20 MJ/m2-day make it a hotspot for solar energy in both Southeast Asia and the World. And the plans go forward because by December 2015, Thailand will have more solar power capacity than all of Southeast Asia combined.

While climate change remains the biggest enemy of renewable energy projects in Latin America and Southeast Asia, the affinity of various MERCOSUR and ASEAN members to petroleum and coal poses an equal threat. As a result, it will be vital for MERCOSUR and ASEAN governments to identify the enormous potential in renewable energies and the contribution this sector can make to their local-regional economies, as well as the benefits for quality of life it will provide for their residents and forthcoming generations. The challenge remains on the table for the two largest emerging regions in the world.

 J&C awarded Legal Consultant of “Type A” Government Projects

14 Jun J&C awarded Legal Consultant of “Type A” Government Projects

Once again our law firm has been awarded by the quality of our professional services. We are glad to announce that since 6th of January 2016 Jus Laws & Consult J&C is recognized by the Ministry of Finance and Thai Consult to deliver legal advice and provide consultancy services to “Type A” government projects in Thailand. In other words this allows our firm to be accredited consultants in most of the infrastructure and energy projects taken place in the future of Thailand.

 

JAPAN INVESTMENT IN THAILAND AND NEW INFRASTRUCTURE PROJECT IN HAT YAI

During a recent visit to Thailand, the Japan Foreign Minister announced a 3 years plan to develop public infrastructures in the Mekong region with a budget of 750 billion yen. On the other hand the Airports of Thailand (AoT) just announced another new infrastructure project to upgrade the International Airport of Hat Yai that today has a capacity of 2.5 million passengers but is expected to host 10 million in the next years.

 

RDF, WASTE TO CLEAN ENERGY, RECYCLING SOLUTIONS AND ENVIRONMENTAL MANAGEMENT IN THAILAND

Due to the rapid increase of population, Thailand has a growing waste problem. More than half of the waste produced per day – 48,000 of 74,000 tons – could be reused for energy or recycling but less than 3,700 tons per day are. Nowadays in Thailand offer excellent opportunities for Refuse-derived fuel (RDF) Production, Waste to Clean Energy, Recycling solutions and environmental management. Jus Laws & Consult (J&C) through our Corporate, Project Finance and Energy divisions, provide full Advice & Process for your project in Thailand and Asean countries. Our engineers, lawyers and project finance team will assist you on: Project Feasibility, Project Concept, Design and Layout, Project Creation and Project Finance.

Legal Aspects on renting out a condominium unit on AirBnB in Thailand

18 Aug Legal Aspects on renting out a condominium unit on AirBnB in Thailand

State agencies in Phuket recently warned condominium owners that renting out a condominium unit on daily basis using AirBnB might violate the Hotel Act. Furthermore, Land and House Tax and Personal Income Tax is rarely paid on such rental income (if not on any rental income). As if that wasn’t bad enough, renting out on a daily basis might in some cases be regarded as conducting a commercial business and consequently violate the Condominium Act, which forbids commercial activities, and in the case of foreigners the Foreign Business Act.

From a political perspective AirBnB has been criticized for various reasons in many jurisdictions worldwide: short-term renting to tourists is regarded as a misuse of limited rental space and takes away affordable apartments from the locals, it is regarded as unfair competition for hotel operators who have to comply with many requirements and pay taxes, and amounts to bypassing consumer protection regulations.

AirBnB tenants might not enjoy the standard of safety which they can expect in a hotel in case of accidents or disputes with the landlord. For example, under Sections 674 to 679 of the Thai Civil and Commercial Code (CCC) a hotel is liable for any loss or damage suffered by its guests, even if such loss or damage was caused by strangers, and it is not clear whether the Thai courts would apply these sections in the case where a condominium unit is rented out.

Finally, other co-owners often feel that frequent arrivals of new AirBnB tenants negatively affect the quality of life in the condominium in many regards.

The advocates of AirBnB reply that AirBnB is a success story. It was called one of the highest valued start-ups worldwide with a value of 30 billion USD. It offers affordable accommodation to budget-travelers and contributes to the growth of local economies, and is even increasingly popular with business travelers who wish to go local. It plays an increasingly important role also in Thailand’s hospitality sector, especially in Bangkok and in Phuket, and even though regarded as illegal by some, the law is rarely enforced by state authorities. However, all these are factual arguments and say nothing about the legality of AirBnB’s success in Thailand. Are there legal arguments which can be cited in defense of the short-term rental which became so popular thanks to AirBnB? And in what cases exactly is renting out a condominium illegal in Thailand?

The most fundamental legal provision in this context is Section 1336 of the CCC which provides that within the limits of the law, the owner of property has the right to use the property and is entitled to its fruits. And for co-ownership Section 1360 of the CCC sets forth that each co-owner is entitled to use the property in so far as such use is not incompatible with the rights of the other co-owners.

What are the “limits of the law” and the limits deriving from the rights of other co-owners when it comes to daily rentals in condominiums? Please note that we could not find any precedent court decision which would clarify the issues as discussed below. So we can only point out the statutory framework.

1.      Limitations under the Condominium Act

Unfortunately the Condominium Act provides relatively little clarification as to what this means for the rights and obligations of co-owners in a condominium regarding their relationships towards each other. Still, it contains provisions regarding the management, the Condominium Regulations, juristic condominium, co-owners’ general meetings and resolutions.

And according to Section 17/7 no commercial trading shall be conducted in a condominium building except in the commercial area specified in paragraph one. According to Section 65 whoever violates Section 17/1 shall be penalized with a fine of not more than fifty thousand baht and the offender shall be further penalized with a daily fine of not more than five thousand baht throughout the period of violation or not complying with such provisions.

2.      Limitations under the Hotel Act

The Hotel Act requires that a special Hotel License must be obtained before operating a hotel. For operating a hotel without license the Hotel Act imposes imprisonment of not more than one year or a fine of not more than 20,000 Baht or both and a fine of not more than 10,000 Baht for each day of violation.

The Hotel Act defines hotel as a the place established for business purposes providing temporary residence against remuneration, but according to Section 4 (b) excludes places which are rented out on a monthly basis.

This is good news for all condominium owners as it means that they can rent out their place on a monthly basis without worrying about a Hotel License. The Hotel Act might still apply to condominium owners who rent out on a daily basis, typically using AirBnB which has facilitated short-term rental for everyone, enabling any condo owner to operate his own small “hotel”.

The Ministerial Regulation to the Hotel Act of 2005 contains an exemption for certain places which has given rise to a passionate discussion whether these exemptions from the Hotel Act also apply to condominium owners renting out their places on short – term basis:

“Any residential premises open to the public for rental with no more than 4 rooms on all floors in aggregate whether in a single building or in several buildings, and with a total service capacity of 20 guests, operating as a small business which provides an additional source of income for the owners” is exempt from the Hotel Act. The owners of such premises are also required to report to the Hotel Registrar but do not require a Hotel License and do not have to comply with all requirements for hotels.

The controversial issue is: does “residential premises” refer to each condominium unit or to the whole condominium meaning the entire building? This legal issue has not yet been clarified in a court decision as far as we can see.

3.      Can a condominium apply for a Hotel License

If a condominium is to be rented out on a daily basis as on AirBnB, one might consider applying for a Hotel License in order to legalize such “condotel”.

This is possible in theory, but the requirements for obtaining a Hotel License are considerable. In order to be eligible, the hotel would not only have to have a qualified hotel manager but also to comply with the Building Control Act and have a Building Permit and Use Certificate which need to state that the building can be used as a hotel. If the Building Certificate and the Use Certificate do not cover such use, these permits can be changed, if the existing building fulfils the fire and other safety requirements for hotels which are higher than for condominiums.

4.      What taxes are levied on rental income

By Thai tax law rental income is subject to the current House and Land Tax with a rate of 12.5% and to Personal Income Tax with progressive rates (withholding tax rate 5% at source or 15% if the rent is transferred abroad unless a double taxation agreement provides otherwise). The House and Land Tax can normally be deducted from the assessable income of the Personal Income Tax.

5.      Legal recourse against co-owners renting out on a daily basis?

This question has been brought up by some co-owners who find that the renting out on a daily basis interferes with their enjoyment of the common areas in a condominium for various reasons.

The Thai Civil and Commercial Code contains provisions which protect the co-owner against excessive disturbance and damage. The affected co-owner can sue his renting out neighbor in a civil lawsuit seeking damages or an injunction order.

But what if the disturbance does not reach the threshold of disturbance and damage caused by the renting out which must be proven and must be substantial enough? Has the co-owner who is unhappy about the coming and going of AirBnB tenants any rights?

Supposed renting out on AirBnB actually violates the Hotel Act, can the co-owner invoke the Hotel Act and derive individual rights from it? He can surely bring a violation to the attention of the competent authorities and hope that they enforce the Hotel Act; but a complaint on grounds that the Hotel Act is violated filed by an annoyed co-owner would most likely not be found admissible by a court. But a complaint might be admissible on grounds that contractual obligations are breached or the Condominium Regulations are violated.

Therefore, our recommendation to co-owners and juristic condominiums who dislike AirBnB would be to draft and approve regulations which forbid renting out of units on a daily basis, or to seek a reconciliation of interest between the interest of renting out a property and the interest of the neighbors who disapprove of such renting out. Condominium regulations, sales and purchase agreements and hire of property agreements can be drafted to such an effect and will be binding on all parties.

Finally, based on a resolution of the co-owners the juristic condominium can take measures to enforce such resolution, and according to Section 39 of the Condominium Act the juristic condominium may exercise the right of joint-owner covering all the common property in defending it against outside persons or demanding the return of property for the benefit of all joint-owners. Appropriate measures would not violate ownership rights of the co-owners who have subjected themselves to the Condominium Regulations. What measures precisely the juristic condominium can take to enforce Condominium Regulations is to be decided by the courts on a by-case basis.

Phorn Patimon, Senior Associate at Juslaws & Consult

Christian Moser, Senior Associate at Juslaws & Consult

Marriage in Thailand

Marriage in Thailand
Thailand – a place where surreal views and pristine waters surround the country. A place full of different cultures and ethnicities. it’s no wonder that many wish to get married here. Although the process may not be that difficult in order to register your marriage, there are a few things to consider before proceeding. You must first determine whether you are eligible for such a marriage and if so, there are certain requirements that must be adhered to as well as the proper process in order to successfully register your marriage. Once registration has been complete, there are also other matters to take into consideration after marriage such as separate or matrimonial property and how each is to be dealt with and owned, consideration of prenuptials and marriage visas. Hence, it is imperative to have at least basic knowledge on the processes involved in getting married in Thailand, and to consider that it is not as easy as it sounds. Although the process may not be complicated, it is always essential that when doing things outside your home country, that you know exactly what is entailed.

Eligibility for Marriage Requirements:

  • Must not be below the age of 17.
  • Either party must not be insane, mentally unstable or incompetent.
  • Must be of blood relationship, ie, brothers, sisters, cousins, fathers, mothers, etc.
  • Either party must not have the same legal guardians, ie- parents who have adopted them.
  • Either party should not have a spouse at the time of marriage. If woman whose husband has died or whose marriage has become terminated, the marriage can only take place after expiry of 310 days from   such death or termination of marriage,but before such period if:
  1. A child has been born during such period;
  2. The divorced couple remarries;
  3. There is a certificate issued by a qualified doctor who is a lawful physical practitioner in medicine showing that the woman is not pregnant
  4. There is an order of the Court allowing the woman to marry

There are various kinds of marriage ceremonies in Thailand whether this be a traditional Christian wedding with a black suit white dress, a traditional Buddhist ceremony or even an underwater marriage. However, all this does not effectively provide you a legal marriage certificate. To obtain this, you must register your marriage at the local district office depending upon your circumstances and of course where the Thai woman’s house registration outlines. It is essential to note that same sex marriages are although not prohibited with relation to ceremonies, however, they are not recognized in Thailand and cannot be registered.

For a foreigner to be able to successfully register their marriage, they must present an affirmation of freedom to marry, or a single status certificate which has been translated into Thai and approved by the Ministry of Foreign Affairs, and also their passports with their visa stamp pages. The documents may vary depending upon the local registrar and circumstances of each individual and their nationality. If married to a Thai national, you may obtain a marriage visa for your stay in Thailand. You may also consider the fact of prenuptials as well.

It is imperative to ensure that you check with a professional before proceeding in order to save time and costs. Contact us today at Juslaws & Consult for a free basic consultation on getting married in Thailand!

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