SOUTHEAST ASIA'S BURNING ISSUE: FROM THE 2015 HAZE CRISIS TO A MORE ROBUST SYSTEM
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POLICY BRIEF
SOUTHEAST ASIA’S BURNING ISSUE: FROM THE 2015
HAZE CRISIS TO A MORE ROBUST SYSTEM
April 2016
EXECUTIVE SUMMARY This policy brief suggests that in the
immediate and short-term future, emphasis
The 2015 haze crisis will be remembered as should be placed on mitigating the spread and
one of the worst haze episodes in Southeast impact of the fires in Indonesia. Stakeholders
Asia. For months, peat and forest fires in on the ground, from local governments to
Indonesia caused the region to suffer from plantation companies to local communities
severe haze pollution, with the Pollutant should be equipped with the appropriate
Standards Index in some Indonesian provinces resources and know-how in fire-fighting. In
hitting above 2,000. The prolonged haze addition, the Jokowi administration should
exacted enormous social, economic, and push ahead with legislation to ban the
environmental costs on the region; the gravity burning of land, regardless of their size. Clear
of the situation prompted swift and decisive and strict law enforcement must be followed
actions from a range of stakeholders including to punish those found guilty of instigating or
the Indonesia and Singapore governments, causing peat or forest fires. This will hopefully
plantation companies, retail companies, act as a deterrent against anyone seeking to
financial institutions, and the civil society. benefit from the fires at the expense of local
communities and national interests.
Yet the root causes of the haze are complex
and there is no single, quick solution to the As financiers of the agroforestry sector, banks
problem. A tradition of fire-based agriculture and financial institutions in the region can
and the politics of land management remain play a strong role in “greening” the sector by
at the heart of the issue. Corruption, weak demanding for clients to meet certain
law enforcement, and the lack of environment, social and governance (ESG)
transparency surrounding the supply chain in standards. As one of the worst affected
the plantation sector help explain the ASEAN countries by transboundary haze
persistence of the fires and haze, despite the pollution, Singapore can and should do more
efforts of Southeast Asian governments and in this area given its reputation as the region’s
ASEAN in the last decade. financial hub and in tandem with counterparts
in Indonesia and Malaysia.
Page 1 of 18For the middle to longer term, our key Indonesian Meteorology, Climatology and
recommendations go to Indonesia, the Geophysics Agency (BMKG) has labelled it “a
industry and the governments and peoples of crime against humanity”. 2 The social,
ASEAN. economic, and environmental costs suffered
by the region are enormous; yet the full
To address the challenges of unclear land impact of the haze can only be determined
tenure, lack of accurate maps and technical much later. Given the long existence of this
capabilities, and poor public consultation on problem, questions have been raised as to
land transactions, the Indonesian government why existing measures have failed and what
needs to promote and institutionalize good more can be done post-2015.
forest and land governance. At the industry
level, major agribusiness companies must Last year, some 2.6 million hectares of forest
remain committed to “zero burning” policy and farmland in Indonesia – or four and half
and establishing traceability across their times the size of Bali – were burned from June
entire supply chain. Companies should strive to October. 3 At the height of the crisis,
to comply with existing international and Palangkaraya, the capital of Central
national certification standards as well as Kalimantan and one of the most affected
promote sustainability internally and regions, saw its Pollutant Standards Index (PSI)
externally with their stakeholders. soar above 2,000.4
Public dialogue and policy advocacy on Six Indonesian provinces declared a state of
understanding and stopping the haze must be emergency: Riau, Jambi, South Sumatra, West
an ongoing effort. Continued pressure from Kalimantan, Central Kalimantan and South
the people to the governments and Kalimantan. In Riau’s capital, Pekanbaru,
corporations to tackle the haze problem thousands of residents fled to the nearby
cannot be let up. Similarly, the advocacy work cities of Medan and Padang. Schools in parts
can benefit from a more systematic mapping of Indonesia, several states of Malaysia as
and analysis of the political economy of the well as Singapore were forced to close; many
haze-producing fires on the ground. flights were either delayed or cancelled. With
more than 43 million people exposed to
INTRODUCTION
2
McKirdy, Euan (2015) Southeast Asia’s haze crisis:
For close to two decades, transboundary haze A ‘crime against humanity’, Cable News Network,
pollution from Indonesian forest fires has 29 October 2015, [Online], Available:
http://edition.cnn.com/2015/10/29/asia/southeas
affected its ASEAN neighbouring countries, in
t-asia-haze-crisis/. Retrieved: 14 January 2016
particular Malaysia and Singapore. Far from 3
The World Bank (2015) Reforming amid
being resolved, the year 2015 saw one of the uncertainty, Indonesia Economic Quarterly,
worst haze episodes on record,1 affecting at December 2015, [Online], Available:
http://pubdocs.worldbank.org/pubdocs/publicdoc
least six of the ten ASEAN countries, including
/2015/12/844171450085661051/IEQ-DEC-2015-
southern Thailand and Vietnam. The ENG.pdf Retrieved: 14 January 2016
4
Heng, Eve Sonary (2015) Haze forces 4,778
1
Chan, Francis (2015) Haze crisis set to be ‘one of schools to close today; 2,696,110 students
the worst on record’, The Straits Times, 3 October affected, BorneoPost Online, 22 October 2015,
2015, [Online], Available: [Online], Available:
http://www.straitstimes.com/asia/haze-crisis-set- http://www.theborneopost.com/2015/10/22/haze
to-be-one-of-the-worst-on-record Retrieved: 14 -forces-4778-schools-to-close-today-2696110-
January 2016 students-affected/ Retrieved: 14 January 2016
Page 2 of 18smoke from the wildfires, deaths climbed to 2015, the Jokowi administration estimated
19 across Central Kalimantan, South that the recent haze crisis cost Indonesia as
Kalimantan, Jambi, South Sumatra and Riau; much as US$33.5 billion (475 trillion rupiah).8
more than half a million cases of acute Similarly, the World Bank placed the cost to
respiratory tract infections were reported.5 Indonesia at about US$16.1 billion, or 1.9 per
cent of predicted Gross Domestic Product
The Jokowi administration estimated that (GDP) that year. 9 The economic costs to
the recent haze crisis cost Indonesia as Singapore is about US$515.3 million (S$700
much as US$33.5 billion. million) 10 while Malaysia’s costs remain
ambiguous at this point. Given the duration
and high PSI readings in 2015, some experts
The environmental costs are substantial. A
have predicted losses that are comparable to
recent report found that since early
or higher than that incurred in 1997.11
September 2015 carbon emissions from
Indonesia’s fires had exceeded average US
The haze is a repeated point of political
daily output on 26 out of 44 days.6 The US is
tension between Indonesia and its neighbours
the second-largest source of greenhouse
every year. In Singapore, one of the worst
gases in the world, after China while
affected countries, the Government felt
Indonesia is commonly regarded as the fifth-
compelled to act in the face of widespread
biggest emitter. In addition the impact
public dissatisfaction, and invoked the
on Indonesia’s fauna, which is among the
Transboundary Haze Pollution Act for the first
world’s most diverse and a broad spectrum of
time. Early on, the Singapore Government
wildlife, has been severe. The lives and
offered assistance to the Government of
habitats of endangered species such as the
Indonesia to combat the raging forest fires.
orangutans, Sumatran tigers and Sumatran
However, Indonesian authorities vacillated
elephants have also been threatened.7
between accepting and declining Singapore’s
The economic costs are also striking. The first 8
Chan, Francis (2015) $47b? Indonesia counts
incidence of severe transboundary haze costs of haze, The Straits Times, 11 October 2015,
pollution in 1997 cost Southeast Asia an [Online], Available:
http://www.straitstimes.com/asia/47b-indonesia-
estimated US$9 billion. But as of October counts-costs-of-haze Retrieved: 14 January 2016
9
The World Bank (2015) Reforming amid
uncertainty, Indonesia Economic Quarterly,
5
(2015) Minister: Haze death toll climbing, The December 2015, [Online], Available:
Jakarta Globe, 28 October 2015, [Online], http://pubdocs.worldbank.org/pubdocs/publicdoc
Available: /2015/12/844171450085661051/IEQ-DEC-2015-
http://jakartaglobe.beritasatu.com/news/haze- ENG.pdf Retrieved: 14 January 2016
10
death-toll-reaches-19/ Retrieved: 16 January 2016 Barratt, Olly (2016) Haze episode cost Singapore
6
(2015) Carbon from Indonesia fires exceeds US estimated S$700m last year: Masagos, Channel
emissions: Green groups, Channel NewsAsia, 21 NewsAsia, 15 March 2016, [Online], Available:
October 2015, [Online], Available: http://www.channelnewsasia.com/news/singapor
http://www.channelnewsasia.com/news/asiapacifi e/haze-episode-cost/2605406.html Retrieved: 17
c/carbon-from-indonesia/2207404.html Retrieved: March 2016
11
16 January 2016 Scawen, Stephanie (2015) The true cost of
7
Cochrane, Joe (2015) Indonesia’s forest fires take Malaysia haze, Al Jazeera Media Network, 23
toll on wildlife, big and small, The New York Times, October 2015, [Online], Available:
30 October 2015, [Online], Available: http://www.aljazeera.com/indepth/features/2015
http://www.nytimes.com/2015/10/31/world/asia/ /10/true-cost-malaysia-haze-
indonesia-forest-fires-wildlife.html?_r=0. 151023122841586.html Retrieved: 1 February
Retrieved: 1 March 2016 2016
Page 3 of 18offer of assistance; and eventually opened its means. In addition, the residual ash is
doors to international aid on 7 October 2015. believed to release more nutrients into the
soil, thereby reducing the need for added
Indonesian President Joko Widodo has said fertilisers in the early years of a plantation
that it would take three years to solve the when nutrient requirements are high.
haze problem – a goal that many industry
players say is overly ambitious. At the Previous studies have shown that the majority
December UN climate summit in Paris, he of fires occur on plantation lands and less
promised to enforce the moratorium on than one quarter occurs in forest areas.12 In
forests, and to review the issuance of the 2015 haze episode, nearly 40 per cent of
peatland permits. Indonesia also pledged to fire alerts came from pulpwood plantations,
cut its greenhouse gas emissions by 29 palm oil concessions and logging
percent by 2030. During Jokowi’s recent concessions.13
March meeting with Norway’s climate and
environment minister, Vidar Helgesen, he told Comprised of partially decayed organic matter,
the Norwegians that he would ban the peatlands are usually water-logged and
clearing and draining of undisturbed peatland formed over thousands of years. But growing
from 1 June 2016. oil palm and pulpwood acacia trees require
peatlands to be drained. Drained peat is
This policy brief aims to map some of the root highly flammable during the dry season and
causes of the haze, as well as the key actions smoke is released when fires are used to clear
taken by Indonesia, Singapore, Malaysia and peatlands.14 Peat fires are also challenging to
the Association of Southeast Asian Nations suppress as they occur under the ground and
(ASEAN). It will end with policy can easily go undetected.
recommendations towards mitigating the
haze-producing fires in Indonesia in the short Currently, 60 per cent of the world’s tropical
and long term. peatlands are located in Southeast Asia,
covering approximately 24 million hectares.
1. ASEAN’S RECURRING Of this, 70 per cent of the region’s peatlands
TRANSBOUNDARY HAZE POLLUTION
1.1 The science of fires and haze 12
Emmerson, Donald K. (2008) Hard choices:
Security, democracy and regionalism in Southeast
Since the late 1990s, the fires and haze from Asia, Walter H. Shorenstein Asia-Pacific Research
Center, pp. 233
Indonesia have grown to assume domestic, 13
Global Forest Watch Fires (1 Sept to 31 Dec)
regional and global significance. While El GFW fires analyses, [Online], Available:
Niño-induced droughts – observed in 1997, http://fires.globalforestwatch.org/app/js/views/re
2002, 2004, 2006 and 2009 – increase the port/report.html#aoitype=ISLAND&dates=fYear-
2015!fMonth-9!fDay-1!tYear-2015!tMonth-
frequency and severity of fires in Indonesia, 12!tDay-31&aois=Sumatra!Kalimantan!Lesser
the haze that blankets Southeast Asia Sunda!Maluku!Papua!Sulawesi!Java Retrieved: 13
annually is a man-made environmental January 2016
14
Fogarty, David (2015) It’s not just haze, forest
disaster. To make way for cultivation, land is
clearing lead to subsidence, The Straits Times, 1
often cleared using fire, or the ‘slash-and- October 2015, [online] Available:
burn’ method, due to its lower cost and http://www.straitstimes.com/asia/se-asia/its-not-
higher efficiency in contrast to mechanical just-haze-forest-clearing-leads-to-subsidence
Retrieved: 31 March 2016
Page 4 of 18are found in Indonesia. 15 Much of the Considering cases where the plots of
plantations and forests sit on great domes of small-scale farmers exist alongside or
carbon-rich peat. According to Global Forest within large companies’ concession areas,
Watch Fires, more than half of the 2015 fires it is possible for fires to spread
occurred on peatland areas, concentrated uncontrollably into concession plots,
mainly in South Sumatra, South and Central exceeding the two hectare limit.
Kalimantan, and Papua.16
Indonesia law forbids the use of fire as a tool
1.2 Causes of fires and Indonesia’s domestic
for large-scale land clearing and holds
challenges
companies responsible for fires in their
concessions. At the same time, Law 32/2009
Although the scientific facts are well-
Environmental Protection and Management
established, the identity of the primary
permits small-scale farmers to slash-and-burn
culprits remains in contention. Indonesian
up to two hectares of forested land for
non-governmental organisations (NGOs)
cultivation.
allege that the fires and haze originate mainly
from lands owned by big companies engaged
Considering cases where the plots of small-
in logging, palm oil and other forestry and
scale farmers exist alongside or within large
plantation industries. Recent research shows
companies’ concession areas, it is possible for
that most cases can be traced to peat fires
fires to spread uncontrollably into concession
from forest conversion or burning on peat
plots, exceeding the two hectare limit. This
soil.17 Others – including some officials and
situation is exacerbated when peatlands are
corporate spokesmen – blame smaller-scale
involved and drained repeatedly. The ground
farmers. There have also been claims that
becomes drier and increasingly flammable
smallholders are employed by large
over the years.
companies to slash-and-burn.
The truth is, clearing land by fire provides
Conclusive proof one way or the other will be
economic benefits to some people. The
hard to establish. Yet this is only one of the
Center for International Forestry Research has
many issues within the wider structural
found out that compared with cutting down
challenges facing ASEAN’s largest economy,
trees, the benefits derived from burning land
Indonesia.
is about $856 per hectare with half of the
profits going to the local elites.18
15
ASEAN Haze Action Online (n.d.) Combating haze
in ASEAN: Frequently asked questions, [Online], Indonesia’s convoluted land ownership is a
Available: http://haze.asean.org/about-
well-known fact. Land tenure in Indonesia is
us/combating-haze-in-asean-frequently-asked-
questions/ Retrieved: 13 January 2016 often unknown or disputed, making it difficult
16
Harris, N. et al. (2015) Indonesia’s fire outbreaks to establish where responsibility lies.
producing more daily emissions than entire US Indonesia currently lacks a comprehensive
economy, 16 October 2015, [Online], Available:
and up-to-date reference map that accurately
http://www.wri.org/blog/2015/10/indonesia%E2%
80%99s-fire-outbreaks-producing-more-daily- accounts for all land use in the vast
emissions-entire-us-economy Retrieved: 1 March
18
2016 Purnomo, Herry & Shantiko, Bayuni (2015) ‘The
17
Varkkey, Helena (2016) The haze problem in political economy of fire and haze: Root causes’,
Southeast Asia: Palm oil and patronage, Routledge, presented at Global Landscapes Forum, Paris, 5-6
pp. 58 December.
Page 5 of 18archipelago, leading to widespread This ambiguity creates a convenient excuse
uncertainty over land ownership. As recent as for companies to blame one another or the
late 2014, different ministries and local communities for environmental
government bodies were relying on their own violations. Others may also capitalise on this
maps for decision-making. Information on the confusion to perpetuate more illegal activities.
allocation of land-use permits is seldom
shared across agencies. Consequently, Indonesia’s judicial system has often been
multiple permits could be legally issued for criticised for its limited deterrence. At times,
the same area, creating multiple legal vested interests in the form of corruption and
concession holders and sparking land conflicts collusion may stand in the way of effective
between companies and/ or local law enforcement. 20 A review of recorded
communities. The absence of accountability cases shows that the penalties meted out to
has in turn allowed elites at the local and companies found guilty of starting fires or
central level to benefit from burning land. using fires illegally tended to be “wholly
inadequate” or “ineffective”.21
A lack of coordination is also evident between
the central government and district Information on the allocation of land-use
governments. The fall of authoritarian permits is seldom shared across agencies.
president Suharto in 1998 paved the way Consequently, multiple permits could be
toward a democratic state and a legally issued for the same area, creating
decentralised power structure where district multiple legal concession holders and
governments enjoy considerable autonomy in sparking land conflicts between
natural-resource management. Theoretically, companies and/ or local communities.
a decentralised regime could facilitate
environmental policies that are more suited
to local community needs. However, a higher 2. RESPONSES TO THE HAZE
degree of local autonomy coupled with direct
local elections have instead created a more 2.1 Indonesia’s responses
revenue-oriented mind-set among many local
governments. Local regulations may be With the haze first and foremost a domestic
interpreted by those who stand to profit from crisis, the Jokowi administration has
the deals, to justify the exploitation of natural demonstrated more political will than his
resources and the environment.19 To further predecessors to tackle and resolve the
maximise revenue, some permits are also problem. At the peak of the haze crisis,
allocated within the boundaries of existing President Jokowi visited the South Sumatra
concessions, adding to the confusion. province to understand the forest fires first-
hand. He laid down orders for the police chief
to “get very tough” on errant corporations
19
and charged the Forestry Minister to revoke
Widianarko, Budi (2009) ‘Democratization,
decentralization and environmental conservation
in Indonesia’, Budi Widianarko, Graduate Student
of Environment and Urban Studies, Soegijapranata
20
Catholic University (UNIKA), Indonesia, presented Tan, Alan Khee-Jin (2015) The ‘haze’ crisis in
at the 9th Asia-Pacific NGO Environmental Southeast Asia: Assessing Singapore’s
th
Conference (APNEC9) and the 30 Anniversary of Transboundary Haze Pollution Act 2014, NUS Law
Japan Environmental Conference (JEC), Kyoto, Working Paper 2015/002, February 2015.
21
Japan, 20-21 November. Ibid.
Page 6 of 18the license of those found guilty. 22 The In an unprecedented move in 2015, the
President also shortened his US trip23, heading Indonesian government revoked the licences
directly to Palangkaraya the capital of Central of three companies for their role in the fires.
Kalimantan to personally lead the haze The Environment Ministry further froze the
countermeasure efforts.24 operations of 14 companies which will likely
face closure should they fail to meet the
With the haze first and foremost a authorities’ demands for fire prevention. A
domestic crisis, the Jokowi administration total of 23 companies have been sanctioned
has demonstrated more political will than since the Ministry started its investigations
his predecessors to tackle and resolve the into 276 companies.26
problem.
Demonstrating his determination to avoid a
repeat of the 2015 transboundary haze crisis,
The Indonesian government formed a “haze Jokowi has vowed to sack local military and
emergency” task force involving the National police chiefs who are unable to control the
Police and the Indonesian Army (TNI) as well spread of land and forest fires in their
as the National Disaster Mitigation Agency provinces. In January this year, he established
(BNPB). The Environment and Forestry the Peatland Restoration Agency (BRG) which
Ministry served as the main coordinator. The is led by former environmental activist Nazir
task force sought to address the lack of Foead. Reporting directly to the President, the
financial support and coordination with the BRG consists of a head, a secretary and four
central government which had hampered deputies. It will also be supported by a team
attempts to prevent and extinguish fires at of technical directors comprising governors,
the provincial level; the usage of existing academics, professionals, research
technology such as cloud seeding projects, institutions and community leaders. 27
were also given priority to enhance fire-
fighting efforts and focus on regencies The Indonesian government has declared
susceptible to forest fires.25 peatland conservation as its key strategy to
prevent forest fires in the future. It has
committed not to issue new permits to
22
Nazeer, Zubaidah (2015) Indonesian President convert peatland into commercial plantation.
Joko Widodo goes to haze’s ground zero, The
Existing peatland areas will have to follow
Straits Times, 7 September 2015, [Online],
Available:http://www.straitstimes.com/asia/se- strict procedures to ensure no peatland fire in
asia/jokowi-goes-to-hazes-ground-zero Retrieved:
17 January 2016 6/haze-task-force-set.html Retrieved: 17 January
23
(2015) Indonesian politicians criticise Widodo’s 2016
26
visit to US, Channel NewsAsia, 27 October 2015, (2015) Indonesia punishes 23 firms for forest
[Online], Available: fires that contributed to haze, TODAYOnline, 23
http://www.channelnewsasia.com/news/asiapacifi December 2015, [Online], Available:
c/indonesian-politicians/2220910.html Retrieved: http://www.todayonline.com/world/asia/indonesi
17 January 2016 a-punishes-23-firms-forest-fires-contributed-
24
(2015) Jokowi to stay in haze-affected regions, haze?singlepage=true Retrieved: 17 January 2016
27
AsiaOne, 28 October 2015, [Online], Available: (2016) Indonesian President Joko Widodo sets
http://news.asiaone.com/news/asia/jokowi-stay- up peatland restoration agency, The Straits Times,
haze-affected-regions Retrieved: 17 January 2016 13 January 2016, [Online], Available:
25
Jong, Hans Nicholas (2015) Haze task force set http://www.straitstimes.com/asia/se-
up, The Jakarta Post, 6 September 2015, [Online], asia/indonesian-president-joko-widodo-sets-up-
Available: peatland-restoration-agency Retrieved: 1 February
http://www.thejakartapost.com/news/2015/09/0 2016
Page 7 of 18the future. 28 The government is currently Indonesian NGOs, have lauded the Act as an
running an analysis of 20 million hectares of alternative redress mechanism to Indonesia’s
peat to determine how much of it is degraded. laws and courts. This can complement
The BRG has targeted to restore 2.5 million Indonesian laws that forbid fires on
hectares of peatlands by 202029. Indonesian soil.31
To address land ownership and tenure issues, Under the Act, Singapore has served
the Indonesian government is implementing Preventive Measures Notice on seven
its One Map initiative, first conceived under companies by the end of October 2015. 32
former president Susilo Bambang Yudhoyono. Among other things, the notices require the
In late 2014 after consolidating spatial data companies to devote manpower to extinguish
from 13 government agencies, Indonesia’s or prevent the spread of any fire on land
Geospatial Information Agency rolled out a which they own or occupy and halt any
standard land cover map. Drawing up the burning activities on such land. Still, the Act
legal boundaries and concession maps, should be seen as a baby step even as it was
however, will be a time-consuming process triggered during 2015’s haze crisis. Strong
and one that is unlikely to be concluded in the cooperation with foreign officials, especially in
short run. Indonesia, is necessary for successful
prosecution and enforcement. The Act is also
2.2 Actions by Singapore and Malaysia far from being a silver bullet to the
transboundary haze pollution.
Against these limitations, Singapore has
stepped up efforts to combat haze from its Other civil society groups in Singapore have
own jurisdiction. The Transboundary Haze used their influence and resources to
Pollution Act, which came into effect on 25 implement punitive measures, even as
September 2014, attributes liability to entities investigations by the Singapore authorities
that conduct or condone an act – occurring are still ongoing. The Singapore Environment
within or beyond Singapore – which causes or Council (SEC), a Singapore-based NGO
contributes to haze pollution in Singapore. focusing on sustainable urbanization, has
This extraterritorial reach is “double-edged” temporarily suspended Asia Pulp and Paper’s
as it is often perceived as infringing another (APP) exclusive distributor Universal
state’s national sovereignty and is only Sovereign Trading’s use of their green label.
triggered after the haze pollution has The Singapore Green Label endorses products
occurred. 30 But others, including some
http://www.todayonline.com/commentary/going-
beyond-law-fight-transboundary-
28
Panjaitan, Luhut (2016) ‘Preventive actions to haze?singlepage=true Retrieved: 14 January 2016
31
avoid major forest fires in Indonesia’, Luhut Tay, Simon & Lau, Xin Yi (2015) Confusion clouds
Panjaitan, Coordinating Minister for Political, Legal regional cooperation to fight haze, TODAYOnline, 4
and Security Affairs, presented at the Tropical September 2015, [Online], Available:
Forest Alliance 2020 General Assembly, Jakarta, http://www.todayonline.com/commentary/confus
Indonesia, 11 March. ion-clouds-regional-cooperation-fight-
29
Foead, Nazir (2016) ‘Peat Restoration Agency haze?singlepage=true Retrieved: 14 January 2016
32
Program’, Nazir Foead, Head of Peatland Tan, Audrey (2015) Fight haze at regional,
Restoration Agency, presented at the ICOPE 2016, bilateral and national levels: Masagos, The Straits
Bali, Indonesia, 18 March. Times, 31 October 2015, [Online], Available:
30
Tan, Eugene KB (2015) Going beyond the law to http://www.straitstimes.com/singapore/fight-
fight transboundary haze, TODAYOnline, 22 haze-at-regional-bilateral-and-national-levels-
September 2015, [Online], Available: masagos Retrieved: 2 February 2016
Page 8 of 18that are environmentally friendly. Following The ASEAN Agreement on Transboundary
this, supermarket chains NTUC Fairprice, Haze Pollution (“Haze Agreement”) was
Sheng Siong and Prime Supermarket have all signed in June 2002. Written in response to
pulled APP products from their shelves. the air pollution episode in 1997/98, this
treaty outlines the obligations of ASEAN
Although Malaysia does not have legislation members, as well as the preventive measures
similar to Singapore’s Transboundary Haze and responses expected. It requires them to
Pollution Act, the government has enforced cooperate in haze prevention by controlling
the order to ban open burning in several fires, instituting early warning systems and
states since March 2014. Applicable to states providing mutual assistance.
such as Selangor, Malacca, Negeri Sembilan,
Kuala Lumpur and Putrajaya, the notice Ratification of the ASEAN Agreement on
forbids all forms of open burning except for Transboundary Haze Pollution will allow
cremation, religious purposes, barbecue and Indonesia to seek assistance from other
flaring. 33 The Malaysian government is also ASEAN countries to help suppress the
considering enacting a law similar to that of fires.
Singapore’s Transboundary Haze Pollution Act.
This is a positive step forward in tandem with
prosecution in Indonesia. This treaty is significant for at least two
reasons. Firstly, it is legally binding, which is a
2.3 Fighting haze through ASEAN contrast to ASEAN’s historically soft approach
of framing statements of intentions in
As far back as 1990, ASEAN countries have declarations and plans of action. Moreover,
come together and placed transboundary the treaty offers the most detailed and
haze pollution on the ASEAN agenda. In late comprehensive roadmap for cooperation and
October 2015, ASEAN environment ministers coordination thus far. Of particular note is its
expressed their commitments to develop an provision for setting up institutional
ASEAN Haze-Free Roadmap in order to structures, including the ASEAN
achieve the vision of a haze-free ASEAN by Transboundary Haze Pollution Control Fund to
2020.34 However, ASEAN’s performance and implement the Agreement, and an ASEAN
achievements as a regional bloc to date have Coordinating Centre for Transboundary Haze
been mixed. Pollution Control that aims to undertake the
many operational activities stemming from
the Agreement.
33
(2015) Many cases of open burning despite ban,
The Star Online, 8 September 2015, [Online], For the treaty to be enforced, states must not
Available: only sign but ratify it. In international law,
http://www.thestar.com.my/news/nation/2015/0
9/08/many-cases-of-open-burning-despite-ban- ratification is the essential act of acceptance
317-incidents-recorded-from-aug-31-to-sept-4/ by the respective Parliaments or assembly of
Retrieved: 1 February 2016 representatives. Following 12 years of delay,
34 th
Media release, 11 Meeting of the conference Indonesia eventually ratified the treaty in
of the parties to ASEAN agreement on
transboundary haze pollution, Haze Action Online, September 2014, becoming the last ASEAN
29 October 2015 [online] Available: country to do so. Ratification of the
http://haze.asean.org/2015/11/media-release- Agreement will allow Indonesia to seek
11th-meeting-of-the-conference-of-the-parties-to-
assistance from other ASEAN countries to
the-asean-agreement-on-transboundary-haze-
pollution/ Retrieved: 31 March 2016
Page 9 of 18help suppress the fires. 35 However, one The joint haze monitoring system (HMS)
observer noted that regional engagement in adopted in 2013 further supports the tracking
ASEAN centres on the maintenance of down of culprits behind the annual
national sovereignty. Even with a legally transboundary haze pollution. Developed by
binding nature, the Agreement still gives Singapore, the monitoring system relies on
priority to national interests, rather than the high-resolution satellite images coupled with
collective regional interest.36 land use and concession maps to identify
those who burn land illegally.
Case Study 1: Forest governance in Brazil
The HMS was intended to allow the
One of the most biodiverse places in the overlaying of thermal hotspots and satellite
world, the Amazon Forest offers multiple images on concession maps from each
ecosystem services, particularly water country to help identify suspects thought to
regulation. However, the Amazon suffers be using slash-and-burn practices. However,
from several significant pressures, such as two years on, the system still has yet to be
agricultural expansion, mining and the introduced, as the Malaysian and Indonesian
growth of infrastructure. The government governments remain opposed to the release
of Brazil sought to improve forest of concession maps to the public domain.
management and decrease deforestation Senior officials from Indonesia have
through a range of measures. emphasised that they are legally barred from
sharing concession maps with the general
For instance, Brazil has granted lands to public. Recent reports also suggest that they
indigenous peoples, and implemented are disinclined to even share information on
environmental regulations and licensing hotspot locations and concessions on a
programs to control agricultural, forestry government-to-government basis. Some
and infrastructure expansion. private sector companies have stepped
forward to voluntarily release their own maps,
From August 2011 to July 2012, Brazil saw but the legal situation remains unclear.
a 27% decline in its rate of deforestation,
contributing to a 76.27% overall reduction Historically, the public disclosure of data such
compared to its 2004 baseline. as concession maps had often evoked mixed
reactions. While Singapore has urged exigency
Source: World Resources Institute in intergovernmental cooperation, the
Indonesian and Malaysian authorities, for
instance, have opposed the sharing of
concession maps publicly and on a
government-to-government basis. Some
35
Aritonang, Margareth S. (2014) RI ratifies haze officials from Indonesia and Malaysia have
treaty, The Jakarta Post, 17 September 2014, respectively alluded to its Public Information
[online] Available:
http://www.thejakartapost.com/news/2014/09/1
Disclosure Act and its Official Secrets Act 1972
7/ri-ratifies-haze-treaty.html Retrieved: 31 March in defence. Part of this motivation may stem
2016 from an unwillingness to disclose who owns
36
Varkkey, Helena (2014) Regional cooperation,
patronage and the ASEAN Agreement on
transboundary haze pollution, International
Environmental Agreements: Politics, Law and
Economics, Vol. 14, No. 1, pp 65-81
Page 10 of 18the concessions and whether these front. While primary efforts must be made by
concessions have been allocated fairly.37 the Indonesian government and companies in
the involved industries, there are also
However, according to some Indonesian law responsibilities for neighbouring states,
experts, existing regulations do not prohibit especially Singapore and Malaysia, and for
the sharing of concession maps and hot spot financial and other institutions. Many
locations. On the contrary, the lack of recommendations such as those involving
transparency hinders the advancement of better peatland management have also been
Indonesia’s environmental and forestry proposed by different stakeholders over the
management. many years of dialogues organised by the SIIA.
3. POST-2015 RECOMMENDATIONS Based on these observations and recent
developments, we have identified the
The Singapore Institute of International following policy recommendations as top
Affairs (SIIA) has been working on the haze priority:
issue since the 1997-98 fires. We have
engaged key stakeholders in governments, 3.1 Recommendations for immediate steps
environmental groups, and non-governmental
organizations in the region as well as major 3.1.1 Increase Capacity to Prevent and Fight
corporations in the resource supply chain and Fires
their financiers. We have also organized
public education efforts in Singapore to help The fact that fires are persistent and recurring
consumers and citizens understand the haze in some areas clearly signals that there has
and launched a web portal to help make been no development of effective fire
information on participatory mapping and prevention strategies and that existing fire-
remote sensing data available to groups fighting capacities are inadequate. Therefore,
investigating the haze. an immediate measure is to strengthen and
enhance the capacity to prevent, locate and
extinguish fires. To support the Indonesian
While primary efforts must be made by
provincial and local governments at the front
the Indonesian government and
line of this effort, there needs to be greater
companies in the involved industries,
coordination and collaboration across related
there are also responsibilities for
institutions and ministries in Indonesia.
neighbouring states, especially Singapore
Especially important will be the National
and Malaysia, and for financial and other
Disaster Mitigation Agency (BNPB) which has
institutions.
existing BNPB standard operating procedures
in preventing forest fires, and the military
Past recommendations have often centred on who has been at the forefront of much of the
the ASEAN level and these must continue. But fire-fighting last year. This should be further
with the recurring fires in Indonesia and supported by the newly-established Peatland
Jokowi’s commitment to solve the haze Restoration Agency. Even with more
problem in three years, Indonesia has shown coordination and assistance provincial
that it can and wants to be leading on this authorities and resources will no doubt
become overstretched.
37
Proceedings from SIIA Haze Tracker Working
Group Meeting, 23 November 2015.
Page 11 of 18As such, plantation companies should take a can set off fires in larger areas, accidentally or
greater responsibility to protect their otherwise.
concession areas from fire, especially those
on peatlands. These companies should report This gap should be closed with the issuance of
on their preparedness and capacity and be a government regulation in lieu of law
pressed to increase their investment in fire- (Perppu) to repeal the relevant legislation and
suppression capacity. make the burning of land illegal for all. With
this, local communities should start to change
Additionally, larger plantation companies mind-sets that regard land burning as an
should also be given responsibility to assist acceptable practice.
the small and medium-sized growers and to
protect areas adjacent to their concessions. To complement this ban, financial and other
The larger companies have a clear and direct assistance should be provided to these small
interest to prevent the fires from spreading growers to enable them to shift to fire-free
and damaging their concessions. and sustainable practices. This can be
provided by government agencies and larger
Drawing on their extensive field experiences, plantation companies that buy the production
large companies are also better positioned of these small growers. Community to
and resourced to involve and train local community projects to assist small growers
communities in schemes for volunteer fire- and the surrounding communities can also be
fighting. Many more local communities must nurtured so that livelihoods are not negatively
be incentivized, assisted and better-equipped impacted.
to prevent and deal with the fires, to give
them greater ability to stave off a crisis that Larger plantation companies should
affects them most directly. assist the small and medium-sized
growers and protect areas adjacent to
3.1.2 Eliminate Slash-and-Burn Policies and their concessions. The larger companies
Practices have a clear and direct interest to prevent
the fires from spreading and damaging
The Jokowi administration should close all their concessions.
remaining gaps in laws, regulations and local
practice that might still create “grey areas” for
3.1.3 Strengthen Law Enforcement
some to use fire. Article 69 of the 2009
Environment Law still allows smallholders to
Last year the Indonesian government’s strong
clear two hectares of land or less by burning.38
actions and sanctions against companies
This provision has often been abused by local
liable for causing peat or forest fires sends the
farmers, as well as major plantation firms, to
right signal that it is taking the issue seriously.
engage in slash-and-burn practices and this
Building on this, laws must be effectively
enforced going forward. Severe penalties and
38
sanctions should be imposed on companies or
Parlina, Ina (2015) As haze clears, government
individuals found guilty of instigating or
finally acts, The Jakarta Post, 5 November 2015,
[Online] Available: causing forest fires.
http://www.thejakartapost.com/news/2015/11/0
5/as-haze-clears-govt-finally- Clear and strict law enforcement on the
acts.html#sthash.34wNYavU.dpuf Retrieved: 1
ground will deter government officials, large
March 2016
Page 12 of 18companies, and individuals from capitalising need not mean that they cut off all clients in
on legal ambiguities to perpetuate their this sector completely. A more workable
interests at the expense of local communities approach would be for banks and investors to
and national interests. Government officials engage clients who fail to meet their ESG
embroiled in corrupt practices should be duly criteria to improve on their environmental
punished to deter future crimes. and social performance before disbursing
loans. Financial institutions should also
These actions by the Indonesian authorities monitor their clients’ ESG practices on an
and courts can be complemented by the ongoing basis, akin to commercial risk.
transboundary laws passed by Singapore in
2014. Malaysia should be encouraged to take In addition, banks and financial institutions
similar strict enforcement on plantation can encourage clients from the agriculture
companies both operating in Malaysia and in and forestry sector to create value by
Indonesia. improving their management practices. This
includes favouring innovations that increase
3.1.4 Increase Sustainable Lending and productivity without compromising on the
Investments within the Financial Sector environment and human rights. The
sustainability bar can be further raised by
Banks and financial institutions in the region giving priority financing to firms with
need to be more discerning in lending to and outstanding sustainability records for instance.
investing in companies which have a dubious Indonesia’s Financial Services Authority (OJK),
record in meeting their environmental, social the government agency that regulates and
and governance (ESG) standards and/or supervises the financial services sector, has
where there are concerns that such published a roadmap for the development of
companies have been causing the fires in the sustainable finance sector. Addressing
2015. The agriculture and forestry sector is both mid-term (2015-2019) and long-term
often embroiled in controversies such as (2015-2024), the roadmap aims to reduce
deforestation, land conflicts and haze bank financing for sectors – such as
pollution. Banks and financial institutions can agriculture, energy and fishery – that
and should play a stronger role in greening potentially damage the environment. Where
the sector or else risk exposing themselves to bank financing cannot be reduced, the client
potential reputational damage and loan is expected to conduct business in a way that
defaults. minimises the adverse impact on the
environment.40
Banks in Indonesia, Malaysia and Singapore
need to start disclosing the use of ESG
standards in their credit processes. 39 This
Environmental-Social-and-Governance-standards
Retrieved: 1 March 2016
39 40
Stampe, Jeanne & McCarron, Benjamin (2015) Indonesia Investments (2015) Indonesia’s
Sustainable finance in Singapore, Indonesia and Financial Services Authority (OJK) releases
Malaysia: A review of financier’s ESG practices, sustainable finance roadmap, 24 November 2015,
disclosure standards and regulations, WWF [Online], Available: http://www.indonesia-
Sustainable Finance Report 2015, May 2015, investments.com/news/todays-
[Online], Available: headlines/financial-services-authority-ojk-
http://www.wwf.sg/?246790/WWF-ASEAN- releases-sustainable-finance-roadmap/item6217
regional-banks-and-investors-behind-on- Retrieved: 5 February 2016
Page 13 of 18In Singapore, the new responsible financing those companies that do issue such reports,
guidelines issued by the Association of Banks they may choose to follow global reporting
in Singapore (ABS) is a small first step to standards for sustainability or adapt them to
relook at the way local banks screen loans for their company needs, again provided that
sustainability. The guidelines require explanations for such variations are given
disclosure of senior management’s transparently.
commitment to responsible financing, the
institution of a governing body as well as In a similar vein, Bursa Malaysia Securities
building staff capacity on this subject. ESG Bhd has put together a proposal to enhance
issues are also covered. sustainability practices and disclosures in the
marketplace. This consists of a new
A next step would be for ABS to develop an sustainability reporting framework that
industry-level roadmap that outlines involved amendments to the listing
expectations for member banks with respect requirements as well as formulating a
to sustainable lending practices. This will sustainability reporting guide. Besides helping
encourage banks to adopt a long-term view listed issuers recognise sustainability-related
towards profit-making and deter an attitude matters that impact their operations, the
that strives for the minimum standards guide aims to advise how sustainability can be
outlined in the guidelines. Internal embedded within their business as well as the
adjustments or reorganisation should also be disclosure obligations following the proposed
done with this long-term view in mind. changes to the listing requirements.42 These
are steps in the right direction. But more can
Singapore can and should do more in the be achieved if this is supported by similar
area of sustainable financing, as it is by a efforts in Malaysia’s banking sector.
number of measures the leading financial
hub in the region. However, there is a The industry operates across borders in the
need to harmonize measures with others region and indeed globally. As such, it is key
in ASEAN to prevent firms which cannot that the regional financial institutions
meet the ESG standards preferring to recognize and take concrete steps to address
shift to other markets and lenders with the issue. In this, Singapore can and should do
lower or no standards. more in this area, as it is by a number of
measures the leading financial hub in the
region. However, there is a need to
In yet another encouraging sign, the harmonize measures with others in ASEAN to
Singapore Exchange (SGX) will soon make it prevent firms which cannot meet the ESG
compulsory for listed companies to publish standards preferring to shift to other markets
their sustainability reports on a “comply or
explain” basis. Companies must publish a January 2016, [Online], Available:
sustainability report within five months of http://www.straitstimes.com/business/sustainabili
their financial year-end, starting in 2018, for ty-reporting-rules-sgx-seeks-views Retrieved: 4
February 2016
the financial year concluding on or after the 42
(2015) Bursa seeks public feedback to enhance
31st of December 2017. Otherwise, they will sustainability practices, The Star Online, 27 July
have to explain their failure to do so.41 For 2015, [Online], Available:
http://www.thestar.com.my/business/business-
news/2015/07/27/bursa-seeks-public-feedback-
41
Wong, Wei Han (2016) Sustainability reporting to-enhance-sustainability-practices/ Retrieved: 21
rules: SGX seeks views, The Straits Times, 6 March 2016
Page 14 of 18and lenders with lower or no standards. As problem. It is in the interests of all that
such, banks and financial regulators in ASEAN Indonesia moves quickly to institutionalize a
and especially Indonesia, Malaysia and good forest and land governance system that
Singapore should begin to discuss the steps addresses all of these challenges.
that they can take collectively. To this end,
the SIIA can play a role by hosting a workshop Firms that have committed to “zero
for all financiers in the region and facilitate burning” policies across their entire
further dialogues. supply chain should look to establish
traceability back to mills and plantations,
3.2 Medium to longer term intermediaries and other smaller actors
recommendations that are part of the supply chain.
In the medium and long-term, Indonesia has
made a commendable effort to strengthen its At COP21, President Jokowi said the country
peatland restoration to prevent future fires will use its One Map policy to govern land and
both in oil palm and pulp and paper forest areas. To this end, Indonesia needs to
plantations. Coupled with the urgency of the expedite the One Map initiative to provide
One Map initiative, it is imperative to begin more clarity on existing land use, thus
these longer term efforts immediately. This minimising the incidence of land conflicts and
policy brief focuses on a few pertinent other illegal activities. The issuance of
medium to longer term recommendations. Presidential Regulation 9/2016 on One Map
Policy Development Acceleration in February
2016 is an indication of progress on this front.
Indonesia needs to expedite the One Map
initiative to provide more clarity on
At the industry level, major agribusiness
existing land use, thus minimising the
companies must remain committed to “zero
incidence of land conflicts and other
burning” policy across their entire supply
illegal activities.
chain, and demonstrate willingness to be
more transparent and accountable. Firms that
Firstly, it is imperative that the Indonesian have committed to “zero burning” policies
government promote and institutionalize across their entire supply chain should look to
good forest and land governance. Indonesia’s establish traceability back to mills and
current forest and land governance system plantations, as well as intermediaries and
allocates various responsibilities to district, other smaller actors that are part of the
provincial and national governments. These supply chain. Companies need to get other
include spatial planning, land concession smaller industry players on board to green its
licensing, budgeting for environmental entire supply chain including production and
management, and environment safeguards. transportation. This makes for better
However, compliance with existing management practices that can bring about
regulations and procedures is often low, and long term cost savings, increase productivity
law enforcement is weak. As discussed earlier and help green the industry as a whole.
in this policy brief, factors such as overlapping
or unclear regulations, lack of accurate maps In addition, companies should share best
and technical capabilities, unclear land tenure, practices and coordinate more closely to
poor transparency and public participation, as promote sustainability, including complying
well as corruption all contribute to the with existing international and national
Page 15 of 18certification standards such as the Roundtable verified. They should exceed and complement
on Sustainable Palm Oil (RSPO) or the Forest the aforementioned international
Stewardship Council (FSC). Where possible, benchmarks rather than conflict or undermine
leading industry players can come together to them. After all, sustainability extends beyond
socialize or elevate these standards. A case in green procurement methods.
point is the Indonesia Palm Oil Pledge (IPOP).
Signed at the United Nations Climate Summit Public dialogue and long-term policy advocacy
in 2014, the pledge commits major industry are necessary to keep the haze issue on the
players to standards and practices that are top of the agenda. One may be inclined to
intended to go beyond the baseline dismiss the transboundary haze pollution as a
Indonesian laws and even existing fleeting environmental problem once the sky
certification standards. clears, but doing so will only risk another haze
episode in the future, and the potentially
Therefore, a similar initiative for better severe and widespread damage it might bring.
corporate practices should be considered for NGOs in Indonesia should continue to serve as
the pulp and paper industry. International checks and balances to companies and
standards such as the FSC and the Programme governments. Further, NGOs in affected
for the Endorsement of Forest Certification countries should continue to work together to
(PEFC) as well as Singapore’s own Green Label understand the ground situation and deliver
provide a good starting point. But major pulp accurate messages to the public. Their
and paper companies can go further by campaign messages to the public to demand
establishing consensus and best practices in green products, timely actions from their
the areas of fire management, community governments, and companies meeting ESG
engagement and transparency. standards should be an ongoing effort.
More research needs to be devoted to
Case Study 2: Empowering Singapore
understanding and demystifying the political
consumers to demand sustainable and
economy of the haze-producing fire on the
haze-free products
ground. The network of actors who benefit
from the fires and land transactions for
In July 2015, a haze campaign “We breathe
plantations is highly complex and involves a
what we buy” was jointly launched by the
wide range of entities from farmers, small-
World Wide Fund for Nature (WWF)
scale oil palm owners, and village heads to
Singapore, the People’s Movement to Stop
large-scale paper/oil palm companies to the
Haze (PM.Haze) and the SIIA. The
central government. The opaqueness of the
campaign aims to educate Singaporeans
plantation industry and the entrenched
on sustainable palm oil production and to
patronage networks that support many
collect 50,000 pledges in the next few
companies continue to be a stumbling block.
months. A reflection of domestic demand,
At the grassroots level, experts we spoke to
these public pledges serve as a basis for
say that more research is also needed to
future corporate engagements to
establish and disseminate successful methods
encourage the adoption and use of
of tropical peatland restoration. These
Certified Sustainable Palm Oil (CSPO).
methods can in turn, be replicated to cover
larger tracts of tropical peatland in the long-
As with all industry-led efforts, these will have term.
to be closely monitored and independently
Page 16 of 18CONCLUSION AUTHORSHIP AND
ACKNOWLEDGEMENTS
Indeed, complex issues and interests lie
behind Indonesia’s fires and will not be This policy brief is authored by Simon Tay, SIIA
resolved just by the word of one person, even Chairman, Lee Chen Chen, Director of Policy
the President. A full solution will demand time, Programs and Lau Xin Yi, Policy Research
resources, and at the very least – political will Analyst as part of the Singapore Institute of
– from governments, companies, and financial International Affairs (SIIA)’s Sustainability
institutions. Program.
In all of these, Indonesia’s leadership is We would like to express our thanks to the
indispensable both at home and abroad. After participants of the Singapore Dialogue on
all, the fires and haze are first and foremost Sustainable World Resources, Haze
an economic loss to Indonesia and affects her Roundtable and Haze Tracker Working Group
citizens the most. Brazil’s successful war Meeting. Some of the content from these
against deforestation might provide some events are included in this policy brief and we
lessons for Indonesia when it comes to are grateful to the experts who shared their
tackling the haze problem. Brazil put in place views.
strong legislation to protect her trees and
land, and these laws were rigorously enforced, All views expressed in this policy brief are
including prosecuting illegal loggers and land those of the authors, unless otherwise cited.
grabbers. More importantly, the push to stop
deforestation was advocated by broad
segments of the society – from the people of
Brazil to the upper echelon of the political
environment.
As shown in this policy brief, the effects of the
annual fires and haze from Indonesia are far-
reaching and it is impossible to put a price on
the long-term consequences of people’s
health, the loss of biodiversity, and climate
change. A mind-set shift from short term gain
to long-term sustainability of the agroforestry
sector needs to happen now. At the same
time, the Indonesian government, with the
support of the private sector, will do well to
ensure that opportunities for sustainable rural
livelihoods and income exist for the country’s
rural poor. Indonesia has shown more
political will and concrete actions to lead the
way. More can be achieved when we stand
ready to lend our full support.
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