Seeing Green: Sustainable Property Developments

Seeing Green: Sustainable Property Developments

Thailand is well known for its natural beauty. The country is blessed with long stretches of sandy beaches, lush tropical forests and evergreen hills. It is no wonder tourists from all over the world flock in their thousands each year to visit Thailand to soak in its natural splendor. This natural beauty is also the very reason we have seen a huge holiday property boom in the country, particularly in tourist hotspots where developers, both big and small, are establishing real estate projects to keep up with the constant demand. This exponential growth in places such as Phuket, Hua Hin and Koh Samui has inevitably experienced some detrimental effect on the natural beauty of the country's ecosystem. It is difficult to ignore the peculiar sense of irony in all of this but Thailand is fast learning from the mistakes of massive over-development seen in the tourist resorts of Spain and are taking serious environmental measures to maintain sustainable property developments in the country.

Why is it Important?

We've all seen or at least heard about Al Gore's An Inconvenient Truth and despite individual opinions on the matter; it is hard to ignore the effect it has had on the mindsets of people today. Environmental issue is now at the forefront of every political platform in all the developed and developing nations where people are opting for greener alternatives and finding ways to reduce their carbon footprints. The issue has been around for decades but it is only recently that it has had such immense mass appeal. Consumer choices are beginning to affect the way goods and services are produced and this includes the way properties are being built. Discerning buyers are now looking, and at times, demanding for properties to be built in a responsible and sustainable manner. This, in turn, is changing the way property developers conduct their business.

Thailand's Environmental Standards

The shift towards greater sustainability in property construction also stems from Thailand's greater public awareness of environmental issues. Many individual tourist hotspots began implementing its own regionally specific laws in relation to zoning and urban planning. The most renowned example is the Phuket Town & City Planning Ministerial Regulation B.E. 2548 which assigns zoning areas for specific types of developments. Nationwide, more environmental regulations were springing up to cater for the future impact of major projects in the country. This is also where the old Environmental Impact Assessments (EIA) steps in.

EIA had its humble beginnings in the US in 1969 and is now implemented in over a hundred countries worldwide. Thailand adopted the use of EIA some twenty years ago but it has always been met with mixed success. The main problems with EIA in the past were the lack of personnel, expertise and funding which made it very difficult to properly maintain and administer the system. It was often seen as a heavy burden on the bureaucracy with little compensation in comparison to the value the housing projects themselves brought in. As such, it became just another administrative procedure to go through with little or no participation from concerned parties.

The Office of Natural Resources and Environmental Policy and Planning (ONREPP) is the agency responsible for the administration of EIA in Thailand. Since 2005, it has made moves to improve the efficiency of EIA by implementing various new measures which included more funding and greater local community participation. There are currently 22 types of projects which need to obtain an EIA. Property development is in one of these categories. There are also two levels of EIA depending on the scale of a project. Projects deemed to have less environmental impact will only be required to obtain an Initial Environmental Evaluation (IEE) while projects with greater impact will be required to do the full EIA.

IEE vs. EIA

If you are buying a property off-plan in Thailand, check with your developer whether the development requires either an IEE or an EIA along with its status. IEE can be done in much less time as most of the assessments are gathered from secondary data. EIA on the other hand, requires primary field data and a much more comprehensive analysis of major as well as minor impacts on the environment. It will also end up costing the developer more in terms of time and money and this is why some developers try to avoid the need to obtain an EIA by reducing the size of the project to just under the requirement criteria. This may save them some time and money in the short term, but more sophisticated buyers are now more willing to pay more for a greener property and may shun any properties that they think may have taken short cuts.

Both an IEE and IEA will also list any pertinent Green Areas of the project which will require special attention. IEE and EIA are best described as an anticipatory environmental management tool. Therefore, it is important to ensure that the developer you choose have not circumvented any of their obligations to obtain an IEE or EIA. This will also ensure that the property you buy supports sustainability and have been built with the environment and local community in mind.

Final Word

It is beginning to get more and more difficult to ignore the impact we have on the environment. We as responsible citizens feel there is something we should do to help lessen the impact we have on the ecosystem. Certainly, we don't live in an ideal world where altruism in itself can pay the bills. There is a sensitive balance between sustainability and commerce which has traditionally been at odds with one another. Today, however, we are starting to see an emergence of sustainable development and commercial interest being integrated into a fully marketable product. As buyers like us become more sophisticated, the supply in the markets for more sustainable development will inevitably follow. In the near future, we would expect eco-labeling and EIA to be a common standard for all properties in not just Thailand, but the rest of the world.

Kert Stavorn is a senior legal consultant for Siam Legal International. Kert's practice primarily focuses on real estate, construction and corporate matters.