May 12, 2022
An organization’s ability to manage contract activity effectively is crucial to its success. Large organizations typically have several thousand active contracts that require oversight to ensure compliance and profitable delivery. However, without good systems and controls, it is virtually impossible to manage them effectively and this can lead to significant risks, including: Missing critical contract dates and deadlines Failing to meet contract obligations Failing to make use of the most recent contract terms Inadequate governance and approval processes Time wasted on manual and administrative tasks Financial concerns, such as discount renewals, revenue leakage, and annual price hikes According to the International Association for Commercial and Contract Management, “companies lose 10% of their bottom line through ineffective contract management.” Contract lifecycle management (CLM) is described as a solution and process for managing the lifecycle of contracts from initiation through execution, performance, ongoing obligations and renewal/expiry. There are typically six key stages of managing the lifecycle of contracts: Initial requests – capturing contract requests consistently and accurately each time from the involved parties Triage, allocation and tracking of requests – reviewing, prioritizing and allocating each request to the right team and tracking it through to completion Creating contracts – gathering relevant terms, conditions and clauses that define the boundaries of the agreement Reviewing, negotiating and amending – negotiating specific parameters of the agreement and updating the contract to reflect the final positions Approval and execution – once all parties have agreed on the terms and conditions, the contract can be approved and executed Monitoring and tracking obligations – monitoring, tracking and reporting on compliance against key contract terms Technology, alongside the...
April 28, 2022
Although it is still early days, there is no doubt that the global economy has begun the process of transitioning from fossil fuel-based energy structures to lower carbon alternatives. The energy transition has already given rise to disruptions in markets, and these are likely to continue. One of the largest disrupters on the horizon is hydrogen; the prospects of a hydrogen-fueled energy transition is rapidly gaining traction. Hydrogen has the potential to disrupt numerous sectors due to some of its unique characteristics. Unlike fuel sources currently being used to power the electricity grid, hydrogen gas does not exist in significant quantities in nature, meaning it needs energy inputs to be produced. As such, it is often thought of alongside batteries, pumped storage, and other technologies that can help resolve intermittency limitations inherent in variable renewable energy sources, such as wind and solar. In addition to its energy storage capabilities, it can also be used as a feedstock in industrial processes. In this brief newsletter, we will provide an overview of the emerging hydrogen industry and the potential applications for the fuel, followed by a brief overview of Thailand’s potential for development and current legal framework. The Emerging Hydrogen Industry The colorful world of hydrogen Pure hydrogen exists as a transparent gas in ambient conditions, though as mentioned above, it does not exist naturally in this state in great abundance. As such, pure hydrogen must be produced from one of a variety of different processes with varying levels of carbon intensity. To provide shorthand reference points, the industry has adopted an unofficial color-coding scheme to identify the various processes involved. Grey...
March 1, 2022
Prioritizing the BCG Model At the end of 2021, an urgent global action plan to limit global warming from rising beyond 1.5 degrees Celsius was announced. During the 26th Conference of Parties (COP26), Thailand pledged to increase its nationally determined contributions to cut its emissions by 20 to 25 percent by 2030 with the aim to reach carbon neutrality by 2050 and reach a net-zero goal by 2065. Among many steps to be taken, the Thai Government has announced that a Bio-Circular-Green (BCG) Model will be part of the national agenda for the country’s development. A BCG Model Framework will be in effect from 2021 to 2026. The framework places a focus on farming and food, healthcare and pharmaceuticals, bioenergy and biomaterials, tourism, and creative economy sectors. Investment in the BCG Model will boost Thailand’s competitiveness in selling local products and services in the global market as well as attracting foreign investment. This is especially the case where a commitment to the environment, social, and governance (ESG) factors is increasingly expected from customers and investors around the world. For further information on ESG, please see our previous article (click here). What is a BCG economy – the cornerstone of the reform? BCG encompasses ‘Bioeconomy’, ‘Circular economy’ and ‘Green economy’. Bioeconomy aims to convert renewable biological resources into value-added products using science and new technologies. Circular economy focuses on the management of resources (e.g., reducing raw materials, extending product lifespans, reducing waste generation, and minimizing adverse impacts on the environment) and keeping the products and materials in use (i.e., reduce, reuse, recycle, remanufacture, and reprocess) to reach their maximum value....
February 28, 2022
On 6 January 2022, the Securities and Exchange Commission (the “SEC”) approved, in principle, the criteria for restricting digital asset business operators from facilitating the use of digital assets as a means of payment for goods and services (the “Draft Criteria”). The SEC, the Bank of Thailand and the Ministry of Finance also announced on 25 January 2022 that they are working together to determine how to regulate the use of digital assets as a means of payment for goods and services. Currently, the Draft Criteria has not yet come into force and is under the process of public hearings which will end on 8 February 2022. After the hearings, the SEC will consider enacting and issuing a regulation. Note that the Draft Criteria is subject to potential changes prior to its enactment. In this article, we will provide an overview of the Draft Criteria and discuss possible implications that may arise upon its enactment. Background Currently, cryptocurrency, which is a digital asset under the Emergency Decree on Digital Asset Business B.E. 2561 (the “Digital Assets Emergency Decree”), has attracted more attention as means of payment for goods and services in Thailand, particularly in the real estate sector. Despite this, digital assets are not considered legal tender under Thai law. Some digital asset business operators have expanded their businesses to cover services relating to the settlement of payments for goods and services with digital assets. This has been achieved by providing systems to facilitate the receipt of digital assets by merchants (the “Merchant”) as a means of payment for goods and services. The authorities have raised concerns over the...
February 23, 2022
The rise of open innovation and open source software has caused some organizations to rethink long-established practices, including their attitude towards intellectual property (IP) and IP Rights (IPRs). Add to this the growing presence of insurance firms, lenders and venture capitalists willing to use IPRs as collateral for financing, and a definitive shift in mindset can be seen taking place. To further fuel the trend, in late 2021, China announced amendments to its procedures to register patent pledges after the China National Intellectual Property Administration (CNIPA) proposed a few amendments in its Proposal on Revision of the Patent Pledge Registration Method (Draft for Soliciting Comments), consultation period which closed on 10 August 2021. The updated measures, announced in November 2021 (http://www.gov.cn/zhengce/zhengceku/2021-11/17/content_5651398.htm), include provisions outlining what is needed to register a patent pledge, such as a contract (Art. 3), consent of all co-owners (Art. 4), and application requirements (Arts. 7-9), as well as provisions dealing with amendment (Art. 13) and cancellation (Art. 14). Two Words, Two Meanings It is important to note here that the term ‘patent pledges’ lacks a clear definition in general. Some may think of patent pledges as vehicles to be used by organizations to promote certain technologies, such as: IBM’s promise not to assert 500 of its patents against the development, distribution and use of open-source software Denso Wave Incorporated, which holds a number of patents on QR Code, allowing free use of the QR Code as long as the standards for QR Codes in JIS or ISO are followed Tesla CEO, Elon Musk, announcing, in 2014, that Tesla would not “initiate patent lawsuits against anyone”...
February 23, 2022
SME vendors and service providers in Thailand may have little bargaining power when facing and negotiating with larger buyers, and often must accept long credit terms requested by these buyers. In fact, SME operators in Thailand, when dealing with large and powerful buyers, often face credit terms that are on average much longer than those of SME operators in neighboring countries in the region. This, unfortunately, causes financial difficulties for Thai SME operators due to the impact on cashflow. This also has a negative impact on the whole supply chain and on employees. In contrast to credit terms with larger buyers, credit terms between SME buyers and SME vendors or service providers are ordinarily short, much like in other countries. Hence, the root cause of these extraordinarily long credit terms is the imbalance of negotiating power. The Thai Trade Competition Commission, operating under the Trade Competition Act of 2017, issued a regulation to combat this imbalance so as to assist SME operators during the period of economic hardship that has been exacerbated by the COVID-19 pandemic. The SME credit term limitation regulation (the “Regulation”) limits the credit term that a buyer may request from an SME vendor or service provider to 45 days and further shortens credit terms to 30 days for businesses dealing in the agricultural sector, including agricultural products or processed agricultural products with non-complex production procedures. The Regulation was enacted on 18 June 2021 and became effective 180 days thereafter, on 16 December 2021. It is important to be aware that since the regulation already provided a 180-day grace period, it is unlikely that the authority...