Losing sight in the haze of fire-fighting

Euston Quah & Helena Varkkey Straits Times 31 May 11;

THE early arrival of the haze this month has renewed concerns about forest fires in the region.

As far back as 1972, South- east Asia has experienced pollution almost every year from burning grass, forests and peat, mostly in Indonesia. This transboundary haze affects the health of some 75 million people and the economies of six Asean nations, with the damage amounting to some US$4.5 billion (S$5.6 billion), more than the combined costs of the Exxon Valdez oil spill in Alaska and India's Bhopal chemical disaster.

Singapore is extremely vulnerable to the haze not only because it is so close to the fires but also because, as a people- driven economy, anything affecting the health of its workforce will hit labour productivity. And with travel and tourism accounting for almost 10 per cent of its gross domestic product, the country needs to protect its image as a clean and green destination.

Oil palm plantations in Indonesia are a major source of the fires, with plantation owners using cheap and poorly controlled burning methods to clear land for planting. But a large proportion of the land is foreign owned, which makes it hard to allocate blame. The government has authority over and responsibility for all the land in Indonesia. But if foreign investors own a plot of land, should their country be held responsible too? This issue has been at the crux of the haze debate.

The region should go beyond allocating blame and focus more on the causes of the haze. Indonesia is relatively powerless in policing its vast forests because of internal law and enforcement constraints. Plantation owners often deny using fire to clear land, and blame shifting cultivators for starting fires in their small holdings, which later spread to the plantations.

To overcome this deadlock, Indonesia should adopt the law of strict liability, whereby if a fire occurs in a plantation, its owner is responsible whether the fire started there or not. This principle should hold regardless of who owns the land.

At the moment, proof of negligence must be shown, which is susceptible to delays and transaction costs. As for shifting cultivators, they can be brought on board by offering them incentives and payment if the fires are reduced.

Related to the enforcement problems is the complicated nature of Indonesia's decentralised governance system.

The coordination of responsibility for forest fires and haze is spread unevenly across many central and local agencies, with many overlaps. This gives rise to the classic problem of public good and common property, where everyone owns the commons, yet no one is compelled to be fully responsible for it.

But Indonesia is making some headway. As part of the United Nations' Reducing Emissions from Deforestation and Forest Degradation project, it has signed a letter of intent with Norway for US$1 billion, linked to a moratorium on opening new plantations on its peatlands for two years, to identify which parts are safe for further development.

But it has been less forthcoming in regional efforts. It is the only country which has not ratified the Asean Agreement on Transboundary Haze Pollution, which would streamline aid to it in the event of fire and haze. The Indonesian government has been facing opposition on ratification from plantation lobby groups. Jakarta may be concerned that it does not have a good grasp of the haze situation yet, and that committing to the agreement would incur monetary and political costs. In any case, it may see no point in ratification since it will get help from Asean with or without it.

But by paying too much attention to maintaining its lucrative plantations, Indonesia may be underestimating its losses. The central government in Jakarta, located far away and upwind from the source of most of the fires, may not fully realise the effects of the smoke on its own local communities, as well as on tourism and the economy at large. It may also have underestimated the loss of goodwill in the region and internationally, which will hurt its economy and future business cooperation.

Singapore acknowledges that Indonesia is a developing country that faces crippling problems of corruption. Singapore also understands its position as the more affluent neighbour, and is willing to help. But the Republic should be careful not to suffer twice; first from the haze and then from the assistance that may cost more than the initial damage.

Its latest effort in working with Indonesia on haze management is the Singapore-Jambi project, where it 'adopted' a regency called Muaro Jambi to directly help the community manage its land better. Although there were criticisms that the project focused on too small an area and did not engage with large plantations enough, it was able to report zero fires in the Jambi area in 2009 and last year.

Hopefully, this will encourage other regional heads to set up similar schemes. But Indonesia must realise that Jambi's successes represent only a small step forward in a larger challenge, which will require much political will at both the central and local level to overcome.

Cooperation among countries is crucial, but when the root cause lies within one country, it remains for that country to do all it can to bring about a solution.

Euston Quah is professor of environmental economics at the Nanyang Technological University and Helena Varkkey is completing her doctoral studies at the University of Sydney, Australia.