Media Interview: The Financial Times

You can read the full article here.
1. How far is patronage politics to blame for the failure to resolve the transboundary haze problem after so many years?

As you know, the two major manmade sources of transboundary haze are from commercial plantations, and small-scale slash-and-burn farming. Research have placed 60-80% of blame on either direct or indirect action of commercial plantations in the past, however there has not been any definitive figures for this year. But there has been general agreement that commercial plantations continue to be the major source of these fires and haze, and also these plantations would be the parties most capable of doing something about it. Most slash-and-burn farmers cannot afford to use mechanical means to clear their land, but the same cannot be said for plantations.

In terms of commercial plantations, two factors tied closely to patronage politics continue to drive fires and haze. The first is related to the allocation of land to plantations. Indonesia has laws against  the use of peatlands for commercial plantation purposes. Peat is highly flammable, and resultant fires are very hard to put out. When peat burns, it releases carbon-rich, sooty smoke that result in very bad haze. However, these peatlands are very attractive to plantation companies, especially oil palm plantations. This is because oil palm yield is slightly higher in peatland, and also there are usually not many communities living in the wet peatland areas, reducing the eventuality of land rights issues with locals. Patronage linkages have enabled companies with good relationships with central and local governments to obtain licenses to develop plantations on peat, despite the laws. 2010 figures indicate that at least 27% of all oil palm plantations in Indonesia is situated on peatland, and this figures should be higher now. These companies are already placing their concessions at risk of fires by opening up these areas. Even if these  companies do not deliberately burn these areas for land clearing, drained peat is highly susceptible to accidental fires.
Secondly, companies which do deliberately burn, or have accidental fires on their concessions due to negligence, are often able to escape exposure and punishment if they have maintained good patronage relationships with central and local officials. While compelling evidence has been found in the past (eg. very low budget reports for land clearing which did not match the expenses required for mechanical clearing, and remnants of oil in jerrycans on site), very rarely are these cases pursued seriously in court. Only one company has ever been successfully prosecuted in court thus far, and even that, with a drastically reduced sentence.
2. What actions could the governments of Malaysia and Singapore possibly take against plantation companies based or listed there who are responsible for forest fires in Indonesia?

In the past, when faced by accusations from Indonesia that their companies are contributing to the fires and haze in Indonesia, the governments of Malaysia and Singapore usually shift responsibility back to the Indonesians by saying that they do not have control over what these companies do in other countries, and only Indonesia has jurisdiction to punish these companies. It remains to be seen what these countries’ responses will be this year.
However, I believe as home governments, more can be done before this escalation of events. In my research, I also discuss the close relationships between these companies and their home government. The governments of Malaysia and Singapore often played an important role in facilitating the entry of their companies into the Indonesian plantation sector, through MOUs, trade missions etc. Hence, these home governments should take advantage of these healthy pre-existing relationships to place pressure on corporate boardrooms at home, to encourage these companies to be more responsible over the operations of their units overseas. This approach would be more realistic, as home governments would not be too eager to ‘name and shame’ or truly punish these powerful companies which also huge economic contributors to the sector.
3. How far does the transboundary haze problem challenge Asean nations’ hitherto central policy of non-interference in the domestic affairs of other member states?

In the past, ASEAN’s non-interference policy did not face any serious challenge in the face of the haze. A good example is the 2002 Agreement on Transboundary Haze Pollution (ATHP), which was signed by all ASEAN member countries in response to worsening haze situations in the region. The ATHP was greeted with much optimism as it would be the first legally binding environmental agreement in ASEAN. However, despite being legally binding, the agreement still showed many classic non-interference characteristics, drastically reducing its effectiveness. For example, apart from the very vague language, the agreement contained no dispute resolution or enforcement mechanisms. Furthermore, Indonesia has still not ratified the agreement after more than a decade, and none of the countries have put any real strong and consistent pressure on Indonesia to do so.
Simply put, ASEAN as a bloc has been unable to effectively manage haze and similar transboundary issues because the nature of ASEAN, the so-called ASEAN way, is such that each country is able to pursue its own national interest with minimal resistance, while ensuring that the regional atmosphere is healthy and supportive (and essentially non-interfering). The problem is, this severe environmental problem is tied in very closely with a major regional agribusiness sector. Indonesia and Malaysia are the world’s two biggest oil palm producers, and Singapore is the home base of several of the world’s major oil palm companies. And powerful business entities from all three of these countries operate in Indonesia. So, when the issue of haze is brought to the ASEAN level, we have Indonesia, Malaysia and Singapore, which to a different degree are both victims and culprits, trying to protect their economic interests. So it is very hard for ASEAN to find much consensus on what has to be done on the haze.
4. Given your arguments about the importance of patronage politics to the plantation economy, how likely is it that the transboundary haze problem will be tackled in a meaningful way over the next few years?

There is little chance of any change in the business-government relationships in the sector. Alongside local Indonesian firms, Malaysian and Singaporean firms control a large majority of this sector. So, with almost all of the major players engaging in such behaviour, patronage culture is bound to get increasingly embedded within the sector with time. Thus, as long as it continues to be profitable to burn, and as long as the companies can continue to get away with it under the protection of their patrons, this region should continue to suffer from seasonal haze.
Hence, an economic solution would be a more likely way to break this fiery cycle. Market pressures have been felt in the past with consumers in Europe, Australia and New Zealand putting a dent in the sales to those regions, due to concerns of fires and treatment of animals on plantations. This had spurred several companies to initiate more sustainable policies. If the market continues to reward plantations that can prove that they do not use fire on their plantations, companies which have yet to take zero-burning laws seriously may start to see that it is more profitable to spend a little more to comply with all regulations.

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