Haze finger-pointing: Time for companies to show and tell

Neo Chai Chin Today Online 28 Jun 13;

If you felt confused or none the wiser after reading reports on the names of several major palm oil and pulp companies thrown up as culprits of the haze, as well as their subsequent denials, you could hardly be blamed.

If the companies accused say they are not behind the fires, who is?

Some media reports and non-government organisations (NGOs) have spelled out clearly what needs to be done by governments, corporations, as well as consumers to prevent the haze from occurring annually. This includes Indonesia ratifying the ASEAN Agreement on Transboundary Haze Pollution and enforcing its laws.

An essential — and highly achievable — first step forward is for companies to regularly disclose all their concession areas and geographical coordinates, so that the information can be overlaid with satellite images of hot spots for current and future burning seasons.

Since the names of companies under investigation emerged, some major palm oil and pulp companies have publicly stated their no-burn policies and noted the presence of fire management programmes and efforts to assist in fire-fighting.

But none have volunteered detailed information of their concession areas to enlighten NGO watchdogs and the public.


In the absence of up-to-date, comprehensive information, organisations such as Greenpeace, WWF and the World Resources Institute (WRI) have utilised the best-available data. Over half of Riau province’s fire alerts occurring between June 12 and 23 were in concession areas, the WRI found.

It noted in a June 24 Insight article that “concession maps for 2013 are still not available to the public and cannot be accessed freely online. This and other data, such as details on company ownership, would strengthen the ability of groups working on this issue to conduct analysis, including the Indonesian government”.

Singapore-listed First Resources has indicated its willingness to help establish facts, saying on Sunday that it “welcomes and will provide assistance to any party who wishes to confirm information pertaining to its plantations and concessions”.

This is more than what some others are doing — but it is not enough. Companies need to disclose much more, if we are to move beyond the current stalemate of finger-pointing and better investigate future episodes of burning.

Maps of forestry, timber and oil palm concessions; how they overlay with forest and peatland areas (especially peat areas deeper than 3 metres, which are illegal to develop) and the distribution of hot spots when they occur, as well as information on fire risk and weather conditions should be made available by the Indonesian government on its websites, said Professor Luca Tacconi, Director of the Asia Pacific Network for Environmental Governance.

The Indonesian government should also publish records of companies on whose concessions fires have occurred, the actions taken and their outcomes, Prof Tacconi told TODAY.


On its part, Singapore can legislate the disclosure of concession areas, as well as land-clearing and planting practices by firms, as part of its stock exchange-listing requirements, said Professor Alan Tan Khee Jin, executive committee member of the Asia Pacific Centre for Environmental Law.

At least seven companies with palm oil operations in Indonesia are listed in Singapore, including major players like Wilmar International and Golden Agri-Resources.

The path to greater disclosure may not be easy, however.

Concessions and their boundaries are extremely ill-defined in Indonesia and, often, companies “do not know for certain (nor do they care) where the boundaries are”, said Prof Tan. The land could also be subject to overlapping rights such as community lands and protected areas.

In the confusion, local governments tend to award concessions to large companies without regard to existing occupants, he said. Fires could be set by farmers doing slash-and-burn or out of anger, with companies retaliating in similar fashion, he noted.

It is also inaccurate to assume companies with the concessions own their lands and have control over them, said Prof Tan. The term “concession” could mean no more than a right to purchase the oil palm harvest from local farmers at a pre-determined price, with firms sub-contracting clearing of land and planting to the locals.

“In such circumstances, the companies can claim they have no role in the burnings, and the involvement of powerful and corrupt local leaders often results in little or zero enforcement of anti-burning laws,” he said.

Under Indonesian law, any company or person guilty of an illegal forest fire could be jailed up to 10 years and fined up to 5 billion rupiah (S$640,000).


The challenges are real, but they should not derail any disclosure of information. Companies could report concession zones with caveats on areas that are unclear or ill-defined, for example.

Also, given how some companies have stated that no fires have been detected in their operating areas, the logical assumption is that they are clear what their operating areas are.

One of the purported benefits of palm oil plantations is the provision of jobs and livelihoods to local communities. But when we drove last week through some areas blanketed with smog and close to massive plantations that had been burnt in Riau province, villagers — including children — without face masks were a common sight.

There was no respite for them, no air-conditioned space to escape to. I could only imagine the respiratory and other illnesses that could afflict them through prolonged exposure to the fumes.

The companies owe it to local communities to do better. Greater disclosure could also help consumers around the world to equip themselves with information to make the right choices.

Tackling the haze effectively will be complex and almost certainly long-drawn. But for a start, companies, perhaps with prodding by the authorities, must be more accountable.


Neo Chai Chin is a senior reporter with TODAY who reports on the environment. She spent five days in Riau recently to cover the hot spots and fire-fighting efforts.

More plantations, more haze to come?
Simon Tay and Chua Chin Wei Today Online 28 Jun 13;

In the wake of record levels of haze, environment ministers from Malaysia and Singapore will be meeting their Indonesian counterpart as soon as July 17 for the Ministerial Steering Committee (MSC).

This follows the apology graciously given by President Susilo Bambang Yudhoyono and — more importantly — the actions taken by the Indonesian government to suppress the worst of the fires. Governments must do their part to signal, as well as to act.

But they are not the source of the problem. Past MSC meetings have recognised that palm oil corporations are key to reducing the haze, yet this is the first time that governments in Malaysia and Singapore have called for the companies to be named and pledged to act no matter what the nationality of these companies.

It is right to take action against errant corporations — not only to name them but also to shame and penalise them. While fire has been traditionally used by smallholders for hundreds of years to clear land, the key difference today is scale. The rapid expansion of plantations across Indonesia is the reason why it was only from the 1990s that the haze has caused alarm across the region; further growth explains many of the spikes in haze pollution since.

According to a report, the total plantation area in Indonesia grew by 50 per cent from 2005. Come 2020, this is slated to increase by a further 60 per cent — a total of five million hectares, about 70 times Singapore’s size. Unless the industry can be greened, more haze must be anticipated.

More information needs to be gleaned from transposing satellite images on maps of plantation concessions, but there are gaps in these maps. Plantations also claim that the fires were set by others or spread to their concessions from other areas. Ultimate ownership and responsibility are often ambiguous.

To establish the facts, much hard groundwork is needed. The Indonesian authorities can only do so much of this, given the vast land areas and limited capacity. Non-government organisations will need to work with the local communities to provide eyes on the ground.

To date, few cases have been brought to court and fewer still have been successfully prosecuted.

Given this, some argue that the entire industry must be boycotted. However, palm oil is near ubiquitous — contained in more than half the products sold in a typical supermarket.

Moreover, in a multi-billion-dollar industry, Indonesia is the world’s No 1 producer, Malaysia is second and Singapore supports the trade and financing with some major producers based and even listed here. Governments want to solve the haze but would not want to kill the industry.


Instead of a blanket ban, effort must be made to recognise and incentivise companies to act sustainably. This is best done in tandem with prosecutions, as a stick-and-carrot strategy.

Some palm oil companies do try to institutionalise sustainability plans. When quizzed, Golden Agri-Resources and Wilmar International have been quick to reiterate their zero-burn policy. But having a zero-burn policy is different from enforcing one.

Certification will be essential to differentiate between those who are green from those who merely claim to be. One attempt has been made by the Roundtable on Sustainable Palm Oil (RSPO), an industry-led effort. But, with some RSPO members accused of using fire, some question the group’s effectiveness. Investigations by RSPO against errant members will be closely watched to see if companies dodge responsibility or take steps to reform.

Another measure is to provide traceability — so that traders and buyers in the supply chain can trace the product back to the producer and precise plantation. The demand for traceability of food produce has grown and some companies such as Nestle now commit to using only traceable palm oil. Many others, however, still trade and purchase uncertified and untraceable palm oil.

Citizens — not just in Singapore and Malaysia but also in Riau nearest the fires — have called for the haze to be ended. Governments are starting to address the issue, notwithstanding political sensitivities and the urgency of the meeting of environmental ministers signals progress. But there are clear limits to what environmental ministers can command without the buy-in from their ministerial colleagues in charge of the economy and industry.

Governments will have to coordinate between the environmental ministers who will meet and their counterparts in charge of economic and industry matters. Only then will palm oil and other resource companies have the right stick and carrots to green their businesses.


Simon Tay is Chairman and Chua Chin Wei a Deputy Director of the Singapore Institute of International Affairs.