Tantalum and Thailand (TANTAL)

     CASE NUMBER:        262
     CASE MNEMONIC:      TANTAL
     CASE NAME:          Tantalum and Thailand

A.        IDENTIFICATION

1.        The Issue

     As developments in new technology continue to drive a
variety of sectors, high-technology manufacturing continues to
represent both a vital market for trade and a serious threat for
the environment. Refiners of tantalum ore have increasingly come
into conflict with local activist groups and various regulatory
bodies on the subject of environmentally safe refining processes.
The corporate search for more profitable sources of revenue has
been hampered by local citizens' refusal to trade environmental
degradation for a share of these new revenues.  Thus occurred in
Thailand.

2.   Description

     In late 1985, the Thailand Tantalum Industry Corporation began
building a refinery to produce tantalum, a valuable metal
by-product of tin-processing that is used in aerospace, computer,
and nuclear components, in a residential neighborhood on the island
of Phuket. Phuket residents had long been subjected to the
environmental degradation caused by a thriving local tin industry,
watching helplessly as their livelihood, the sea, itself, was
ruined by zealous corporate mining tactics. However, this new
refinery planned to make great use of hydrofluoric acid, a
poisonous chemical used in the production process, which posed a
serious threat to air and water quality.(1)

     Residents' fears continued to mount as construction of
the refinery progressed. In early 1986, local residents formed the
Committee to Coordinate Action Against Pollution in response to the
growing environmental threat from the new refinery. During April
and May of 1986, a Japanese videotape of the Bhopal accident was
anonymously circulated throughout the island of Phuket, further
enflaming local apprehension. The nuclear accident in Chernobyl
only added to the mounting resistance Phuket residents showed
towards the tantalum refinery construction.(2)

     June 1, 1986 was marked by a demonstration of 50,000
people asking the government to halt construction of the refinery.
Government opposition leaders presented a petition signed by almost
65,000 people who promised to boycott the coming general elections
if construction was not stopped. On June 23, 1986, Industry
Minister Chirayu Isarangkun na Ayuthaya arrived in Phuket to meet
with representatives of local opposition groups. More than 70,000
angry residents were on hand to greet the Minister. Chirayu was
unprepared for such a large, emotional welcoming committee and fled
the island, leaving the 70,000 to quarter the island, searching for
some release of fear and anger.

     The rampaging mob, angered by corporate abuse of their
environment and government neglect of their concerns, sought the
most visible target for their rage. By the end of the evening, the
almost-completed refinery was in flames, suffering more than $25
million in damages. Angry rioters prevented any kind of police or
fire rescue response to the arson, blocking access to the burning
refinery and even overturning fire trucks as the new plant went up
in flames and was destroyed.(3)

3.   Related Cases

     COPPER case
     GEDDES case
     MERCURY case


4.   Draft Author:  Joshua Rosen 

B.   LEGAL CLUSTER

5.   Discourse and Status:  DISagree and COMPlete

6.   Forum and Scope: THAIland and UNILATeral

7.   Decision Breadth: 1 (Thailand)

8.   Legal Standing:  LAW

     As a result of the Phuket riot over possible air and water
contamination from tantalum refining, the National Environmental
Quality Act was enacted by the Thailand government, creating a Baht
5 billion environmental fund for clean-ups and giving authority to
the central government for development regulation. Part of this act
provided Baht 1 billion for clean-up and regulation of development
on the island of Phuket.(4)

C.   GEOGRAPHIC CLUSTER

9.   Geography

          a. Continental Domain:    Asia
          b. Geographic Site:       East Asia
          c. Geographic Impact:     Thailand

10.  Sub-national Factors: No

11.  Type of Habitat:  TROPical

     Phuket is a tropical island off the coast of Thailand in
Southeast Asia. As part of a comparatively small nation, any and
all legal measures instituted with respect to this case applied to
the entire nation of Thailand, resulting in a classification of no
sub-national factors.

D.   TRADE CLUSTER

12.  Type of Measure:  Regulatory Ban [REGBAN]

     The National Environmental Quality Act provides more stringent
regulations for tantalum refining, including the treatment and
disposal of hazardous waste with regard to air and water quality.

13.  Impact:  Indirect

14.   Relation of Measure to Impact

          a. Directly related:     YES Tantalum [MINE]
          b. Indirectly related:   NO
          c. Not related:          NO
          d. Process related:      YES Pollution Air [POLA]

15.  Trade Product Identification: Tantalum

16.  Economic Data

17.  Degree of Competitive Impact  Low

     With very little data available, it is difficult to assess the
degree of competitive impact this case had on the tantalum
industry. However, in 1992, the Thai Tantalum Industry Corporation
completed construction of a new tantalum refinery in Mab Ta Put,
replacing its Phuket operation with relatively little difficulty.
Thai Tantalum expects to regain its position as the world's largest
producer of tantalum with a 40% share of the world's output. The
company claims that more than 35% of the hydrofluoric acid used
will be recycled and the remainder will be consumed in
production.(5)
    
18.  Industry Sector: MINE     

     Specifically it falls under Tantalum Refining (SIC Code
#3339).

19.  Exporter and Importer:  Thailand and Many

E.   ENVIRONMENTAL CLUSTER

20.  Environmental Problem Type: Pollution Air [POLA]

     Pollution of drinking water and air could have occurred as a
result of contamination by inadequate treatment and disposal of
hydrofluoric acid. General habitat problems are bound to occur,
effecting all species. Although it is difficult to hazard a guess,
it seems that sink problems of pollution and waste will have the
greatest impact on the sea, damaging the livelihoods of native
fisherman.

21.  Species Information

   Species name:         Many
   Species type:         Many
   Diversity:            3,442 higher plants per km/sq (Thailand)

22.  Impact and Effect:  HIGH and REGULatory

23.  Urgency and Lifetime:  MEDIUM and 100s of years

24.  Substitutes:  RECYCling

     Tantalum refiners must discover new and more effective methods
of hydrofluoric acid recycling to mitigate the danger of such
production processes.

F.   OTHER FACTORS

25.  Culture:  NO

26.  Human Rights:  YES

27.  Trans-boundary Issues:  NO

28.   Relevant Literature

Bailey, Murray, "Phuket: A Name to Reckon With," Asian     
Business Week, V24n10 (Oct., 1988):14-15.

Balakrishan, N., "Not What It Used To Be," Far Eastern     
Economic Review V156n38 (Sept., 1993):79.

French, Hillary F., "Costly Tradeoffs: Reconciling Trade and
the Environment," Worldwatch Paper 113 (March, 1993).

Janssen, Peter, "Tourism Revives Economy of Phuket Island,"
Asian Business V22n1 (Jan., 1986): 42-44.

Jolly, David, "Greener Beaches," Far Eastern Economic Review     
V155n32 (Aug., 1992):58.

Lewis, Kate Bohner, "Thailand's Caribbean," Forbes V153n11     
(May 23, 1994): 224-5.

"Out of the Ashes: Thai Firm Survives Arson and Loss of Partner,"
Far Eastern Economic Review V155n33 (Aug., 1992): 53-54.

Tasker, Rodney, "Paying a Price," Far Eastern Economic Review
(Aug., 1993): 50-51.

"Thailand's Tourist Industry: Beached," Economist V320n7714     
(July 6, 1991): 72.

United Nations Conference on Trade and Development, 1992     
Handbook of International Trade and Development Statistics (United
Nations: Geneva, 1993).

United Nations Conference on Trade and Development, 1992
International Trade Statistics Yearbook V1 United Nations: New
York, 1993).

                           References

1.   Sachs, Dana, "Local Heroes," Sierra V73n5 (Sept., 1988):
p.79.

2.   Ibid., p.80.

3.   Ibid., p.80.

4.   Jolly, David, "Greener Beaches," Far Eastern Economic Review
V155n32 (Aug., 1992):58.

5.   "Out of the Ashes: Thai Firm Survives Arson and
Loss of Partner," Far Eastern Economic Review V155n33 (Aug.,
1992): 5354.