Media Interview: Lancet Magazine

I would like to ask you to tell our readers what your analysis of ASEAN negotiations, revealed about how oil palm interests help shape national priorities, and why Indonesia did not ratify the transboundary haze agreement.

The oil palm sector is definitely an important national priority for all countries involved. 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. 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. So it is very hard for ASEAN to find much consensus on what has to be done on the haze.

This is why we see that Malaysia and Singapore have generally been (or eventually become) quite tame with their responses to Indonesia over the haze. Indeed, despite Indonesia’s continued decade-long delay of ratifying the ASEAN Agreement on Transboundary Haze Pollution, other member countries have not put any real strong and consistent pressure on Indonesia to do so. This leniency has enabled Indonesia to repeatedly use the excuse that the agreement gets stuck in parliament. One reason why the agreement continues to be voted down in the parliament is because of the close relationships some of the MPs maintain with major plantation companies. These companies are motivated to lobby against ratification year after year, as they are worried that additional protocols may be adopted into the agreement in the future, which may threaten the sector’s practices. However, even if Indonesia ratifies, there may not be much improvement to the present situation since the agreement (in classic ASEAN fashion), was very vague and lacking in real hard-law instruments like a dispute-resolution and enforcement mechanism, despite being legally binding,.

This protection of economic priorities can be easily seen in ASEAN initiatives. For example, one of the latest regional initiatives is the Adopt-A-District plans, where Singapore and Malaysia were invited by Indonesia to ‘adopt’ certain fire and haze prone areas in Indonesia. The idea was that these ‘richer’ countries could help these ‘poorer’ districts, both in cash and in kind, to better manage fire issues. But, it was very telling to see that most of the projects under the Adopt-A-District plans have been targeted at changing the practices of slash-and-burn farmers, with almost zero involvement or even interest from commercial plantations. (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.) Despite this,  there seems to be a deliberate lack of willingness to engage with the commercial plantations. This clearly demonstrates the tensions that exist between economic interests and environmental security at the ASEAN level.

I am particularly interested in any changes you might have observed in the forces and relationships that have maintained the region’s status quo. Is anything changing, or different this year? (Or is the region essentially trapped by national political/patronage considerations?)

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. To my knowledge, only one company has ever been successfully prosecuted in court thus far, and even that, with a drastically reduced sentence.

The country’s decentralization policies have only exacerbated the problem. Now, local governments are responsible for generating a large part of their own budgets. Therefore, these local agencies are even more motivated to do whatever it takes to attract investment to their region, including colluding with these plantation firms to evade laws and also evade punishment for breaking these laws.

The problem with patronage is that it often involves officials from the very bottom of the ladder to the top. What makes it so difficult to stamp out is that the ones who are supposed to be enforcing the laws (patrons) are also in collusion with those who are breaking them (clients). The responsibility of the patrons in such cases would be to protect their clients for as long as it is beneficial for them to do so. Thus, as long as it continues to be profitable for both patrons and clients to engage in such behaviour, the status quo will be maintained.

Patronage politics is deeply embedded in the business culture of Indonesia, and much of Malaysia and Singapore as well. I argue in my work that this has enabled Malaysian and Singaporean plantation firms, who are already familiar with patronage practices at home, to easily adapt and insert themselves into existing local patronage networks in Indonesia. As a result, 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, the patronage culture will only get increasingly embedded within the sector with time. So there is little chance of any change in the business-government relationships in the sector. 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.

Land-clearing fires are an annual phenomenon. Is something different this year? Has the region reached a critical threshold that is likely to force a reconsideration of priorities — or do you expect corporate/ oil palm interests’ influence over national leaders, to stymie progress on addressing regional haze, as in the past?

I believe that corporate interests will continue to influence how seriously governments pursue allegations of burning on corporate plantations. This has continuously been a major stumbling block to effective mitigation of fires and haze in the region. In the past, when faced by accusations from Indonesia that Malaysian and Singaporean 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. This then results in a stalemate where both sides will not claim responsibility or take action upon these companies.

Several of the more severe haze episodes have cause Malaysian and Singaporean governments to react more sternly, by calling upon Indonesia to release the names of companies involved in fires in Indonesia, vowing that they will not protect any of their companies that are found guilty. However, when Indonesia obliges with names of companies, often these governments take minimal or no action. Usually enquiries are made, but denials by companies are taken at face value.

Indeed, the severity of the haze this year has triggered the second more stern response. In return, Indonesia has released names of companies allegedly involved in fires. And as expected, most of the companies involved have quickly denied any wrongdoing. We have to wait and see this year, whether these denials will be taken by governments at face value again. However, as oil palm continues to be such an important economic sector in the region, it is highly likely that history will repeat itself.

Have public health or other popular concerns, mobilized (or are such things likely to mobilize) the region’s publics in a way that might diminish the influence of the oil palm sector with national leaders?

The public will always get quite vocal during the haze season, and will in turn pressure the (Malaysian and Singaporean) governments to also engage quite vocally with Indonesia. However, the nature of the haze, which is seasonal, also causes the nature of the response to be seasonal again. When the rains come and clear the skies, often nothing more is said or done about the issue. Tensions will dissipate, Malaysia, Indonesia and Singapore will return to cordial diplomatic relations, and plantation companies are once again free to conduct land clearing as they please with very little scrutiny.

We can already see this happening now. Singaporeans were very vocal about the haze last week, but when skies over Singapore cleared early this week, the public was just relived that the worst was over, and there has not really been any sustained public voice on fire and haze issues following this. Without this sustained public pressure, it is very unlikely that Malaysian and Singaporean governments will pursue the matter with Indonesia, due to the powerful economic interests involved, as explained above.

What would need to happen for the region to escape the longstanding status quo? 

An economic solution would be the most feasible way to escape this status quo. 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 seriously pursue more sustainable operations. 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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