THAILAND can claim a certain level of success in political reform when the latest Constitution allows people's participation in political system. As a result of the reform, civil society has a chance to become involved in various administrative functions.

It will assure social and economic development, including ways to solve environmental problems.

However, if the Multilateral Agreement on Investment (MAI) reaches Thailand, those opportunities will be lessened. I strongly believe that civil groups will work hand in hand to challenge the Thai government to refrain from changing its policies to suit MAI. MAI seems likely to annihilate the spirit of those who have long fought on the road towards democracy in Thailand.

MAI is a new international economic pact currently being negotiated at the Organisation for Economic Cooperation and Development (OECD). It is designed to ease the movement of capital -- both money and production facilities -- across international borders by restricting laws in participating countries that are viewed as impediment to capital flows.

All provisions are based on the investment provisions of the North American Free Trade Agreement (Nafta). MAI would apply to member countries worldwide. The 29 high-income countries that comprised the OECD will join first, and then participation in MAI will be offered to developing countries.

There are key provisions in the agreement which are acknowledged in Thai society such as National Treatment, which require countries to treat foreign investors at least as well as domestic firms. Governments will be prohibited from discriminating against foreign investors.

The other provision is Most Favoured Nation (MFN) treatment, which requires governments to treat all foreign countries and all foreign investors the same with respect to regulatory laws.

However, the provisions of the agreement will affect existing policies and may lead to public debate if Thailand intends to join MAI as a contracting party. There follow some points of interest in the provisions of MAI.

First, foreign investors are to be given the right to enter markets and buy short-term portfolio investments like stocks and other financial instruments and withdraw their money, both profits and initial capital, at their own speed. The provision of the agreement in the ''transfers'' clause on investment protection states:

''Each Contracting Party shall ensure that all payments relating to an investment in its territory of an investor of another Contracting Party may be freely transferred into and out of its territory without delay.''

Coincidently, the Democrat party used this issue during a censure debate against the Banharn Silpa-archa government. Moreover, Thailand already has existing laws in place to reduce the risk of these economic crashes. The economic crisis in Asia has shown the risk of rapid and unstable inflows and outflows of capital. It is very difficult to change the law to fit this provision.

Second, privatisation of government assets favouring wide distribution of ownership to workers, management and the general public in terms of stock purchase and profit sharing, as Sophon Suphapong, president of Bangchak Co, has been doing will be illegal under MAI.

The United States proposal calls this method ''special share arrangements'' and states: ''Special shareholding arrangements, including management/employee buy-outs and voucher schemes for members of the public, are in fact inconsistent with National Treatment and MFN treatment obligations in many instances''.

This was contested by the Hungarian proposal, which stated: ''Nothing in this agreement shall prevent Contracting Parties from using special methods of privatisation or having special rules as regards ownership, management or control of privatised assets.'' Negotiations on privatisation are still going on in the OECD and will resume in Paris in October.

Third, privatising natural resources under an intellectual property-rights regime is covered by the agreement's broad definition of investment, which is ''every kind of asset owned or controlled, directly or indirectly, by an investor, including [i] an enterprise, [ii] shares, stock or other forms of equity participation in an enterprise and rights derived therefrom, [iii] bonds, debentures, loans and other forms of debt and rights derived therefrom and [vi] intellectual property rights''.

This results in MAI including intellectual property rights in the definition of investment by multinational corporations dealing in genetically engineered products and bioprospecting worldwide.

This opens the door to biotechnology corporations who are investors and use biomaterials from tropical rainforests, allowing them to market any genetic products. In this way MAI could pave the way to patenting life forms, as foreign corporations could claim that strict adherence to the laws was a restriction on investment.

Consequently countries rich in biodiversity which sign MAI lay themselves open to foreign investors. By the same token, if government allows local companies and individuals to exploit natural resources, foreign corporations must be given the same latitude.

In Thailand, public debate on this centres around the patenting of Indian basmati rice by a US company, the use of jasmine rice as a trademark by the same US company, the bill to protect traditional knowledge initiated by the Ministry of Health and the Plant Variety Protection bill approved by the Cabinet, both liable to be claimed by investors as restrictions on foreign investors' patent rights. These are big issues that profoundly disturb Thai non-governmental organisations, not that government is likely to pay much attention to them when it comes to changing existing policies to fit in with MAI.

Foreign corporations will be empowered to sue national governments and seek monetary compensation when they believe a law, practice or policy in a country violates investors' rights as established in the agreement. Meanwhile there will be strong protection of investors' rights in environmental matters when these provisions apply, connected with the terms of expropriation.

These read: ''A Contracting Party shall not expropriate or nationalise directly or indirectly an investment in its territory of an investor of another Contracting Party or take any measure or measures having equivalent effect ... except for a purpose which is in the public interest ... accompanied by payment of prompt, adequate and effective compensation''.

In Thailand this would have been applied to the effect on salt mining in the Northeast under the government's executive order to protect public interest under the Environmental Act of 1975. By that order, industrial factories werte prohibited from salt mining apart from a period agreed to in a concession contract.

There are MAI provisions which invite public debate in Thailand, suchy as the limitation on laws which require investors to invest in the economy, to meet social or environmental goals in exchange for market access, to take on a local partner, to invest a minimum amount in the local community or to transfer environmentally beneficial technology to the government or local firms.

Under MAI, a government which signs the agreement cannot require foreign corporations to meet certain conditions even if they are imposed on local companies. Since this law exists in Thailand it would have to be amended should the government sign the agreement.

The labour issue is another problem. A country like Thailand has to consider the fact that more than three million people are unemployed owing to the economic crisis. The agreement contains specific provisions which impinge on employment policy and workers' interests relevant to the requirements stated in the agreement, as:

''A Contracting Party shall not, in connection with the establishment, acquisition, expansion, management, operation, maintenance, use, enjoyment, sale or other disposition of an investment in its territory of a Contracting Party's investor or of a non-Contracting Party, impose, enforce or maintain any of the following requirements, or enforce any commitment or undertaking.''

There are a number of laws in Thailand which contradict MAI provisions, such as the Investment Act of 1979, which requires local workers to be granted a promotion of investment certificate. In addition, the requirement of work permits from foreign investors also violates MAI provisions.

There still remain some questions to clear up:

* How will the public be informed?

* What mechanisms will ensure public participation?

* How many research projects have been launched to protect national interests?

These are challenges to Thai society, and the answers do not necessarily lie in the hands of Parliament or the MPs but with the Thai public. I wonder if the government or the elite may not use this as a means of joining MAI without accounting to the public. Thais may just be told that there is ''nothing to lose at present''.

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Jaroen Compeerapap is a lecturer at the Faculty of Law, Chulalongkorn University.