Laos Sees Chemicals Law Facilitating Economic Growth

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By Lien Hoang

When Lao Banana Co. first laid down roots a decade ago, it was quickly beset with tenacious pests, rot from fungi, and difficulty shipping through China. All of that made it hard to export, a problem for both the company and Laos, which hopes to catch up to bigger economies around Southeast Asia.

Laos, whose 7 percent gross domestic product growth is one of the world’s highest, is now trying to clear the thicket for such businesses with its first major stab at regulating the use of pesticides, acids, hydroxides, polymers and other chemicals.

The Laos Law on Chemicals, which took effect last month, slots chemicals into four categories based on their hazard levels and corresponding restrictions. It regulates how businesses label, store and transport chemicals, while banning those that are unregistered, fake or of low quality.

In the past, Laos’ import, storage, treatment, and disposal of chemicals did not match international standards, said Somphong Soulivanh, deputy director at the country’s Industrial Environment and Chemistry, told Bloomberg BNA.

The former French colony intends its chemical law to change that, paving the way for Laos to join the global club for classifying substances, he said.

‘No Safe Way’

Companies are still waiting for the government to publish guidance on the broad law, Khamphone Keodalavong, who directs the Industrial Environment and Chemistry Division, which is under the Ministry of Industry and Commerce’s Department of Industry and Handicraft, told Bloomberg BNA April 11.

Companies must use chemicals for their intended purpose under the law, and may not burn, bury, or otherwise discharge the substances into the environment. An English translation of the law is expected to be published in May, said Khamphone.

Companies dealing mainly in chemicals must register with the Laos government, form their own safety divisions, create a chemicals database, send regular reports to authorities and bear liability for damages under the chemical law.

Lao Banana Co. is teaching employees how to handle chemicals, such as the fungicide it ended up spraying to keep crown rot off its banana trees, but the legislation doesn’t offer many specifics on training or best practices, said company manager Ole Andersen.

Joining the Global Club

“The law says that we have to dispose of waste chemicals in a safe way, but here in Laos there [is] no safe way to get rid of old chemicals and containers,” said Andersen, whose company runs two small farms just southeast of Vientiane, the capital.

“One important piece of legislation that still is missing is rules about classification and labeling of chemicals,” Ule Johansson, senior adviser for development cooperation at the Swedish Chemicals Agency, told Bloomberg BNA. “The government in Laos is planning to adopt the globally harmonized system (GHS), and I think that this will be the most important next step.”

Swedish Expertise

Laos consulted the Swedish state agency while drafting the chemical law.

Somphong called the law “very important” for the safety of society and an environment still dealing with contamination from the Vietnam War. He also considers the legislation an essential phase in the evolution of Laos’ $14 billion economy.

“The chemical usage is necessary for economic development, especially in the main sector of the economy such as mining, manufacturing, agricultural and health sectors,” Somphong told Bloomberg BNA.

Agriculture employs three out of every four people in the country landlocked by China, Thailand, Vietnam, Myanmar and Cambodia.

To contact the reporter on this story: Lien Hoang in Ho Chi Minh City at correspondents@bna.comTo contact the editor responsible for this story: Greg Henderson at ghenderson@bna.com

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