Malaysia needs to take concrete steps against palm-oil companies who are responsible for the haze problem

Media Statement by Dr. Ong Kian Ming, MP for Serdang, 17th of September 2015

Malaysia needs to take concrete steps against palm-oil companies who are responsible for the haze problem

Every year the haze from Indonesia engulfs Malaysia, causing the Air Pollutant Index (API) to reach unhealthy levels and bringing untold health, financial and social costs to millions of Malaysians. And every year, the Malaysian authorities are helpless in its demands for the Indonesian authorities to take concrete steps to prevent this from happening.

Even after the ratification of the ASEAN Agreement on Transboundary Haze Pollution by Indonesia in September 2014, it will take a few years before the proper mechanisms including the sharing of land use and concessions maps, and for the implementation of the ASEAN sub-regional Haze Monitoring System (HMS).[1]

In the meantime, Malaysia cannot stand by and just wait on the side lines. It needs to take concrete steps to mitigate the irresponsible slash and burn practices in Indonesia that are the cause of the haze problem. The government should pass a legislation similar to Singapore’s Transboundary Haze Pollution Act 2014 which was passed in August 2014.[2] Professor Alan Tan Khee-Jin of the National University of Singapore wrote the following with regards to the powers of this act:

The legal implications of the Act for Singapore‐linked companies or entities are tremendous. Under its provisions, a convicted entity that engages in conduct, or engages in conduct that condones any conduct by another entity or individual which causes or contributes to any haze pollution in Singapore (or the entity that participates in the management of a second entity that owns or occupies land and engages in the relevant conduct) can face a fine not exceeding S$100,000 (about US$80,000) for every day or part thereof that there is haze pollution in Singapore.18 If the entity has failed to comply with any preventive measures notice, there can be an additional fine not exceeding S$50,000 (US$40,000) for every day or part thereof that the entity fails to comply with the notice.19 Overall, the court must not impose an aggregate fine exceeding S$2 million (US$1.6 million).[3]

This act gives the Singapore authorities the power to go after companies which cause the haze in Singapore even if they have no operations whatsoever or are not registered as a company in Singapore. The Act also allows for civil suits against companies which cause the haze, where the civil damages are theoretically unlimited.

Dr. Nigel Sizer, Global Director of Forests Program of the World Resources Institute, a renowned think tank in the field of advocacy for the sustainable management of natural resources, praised the Act:

“Singapore’s transboundary haze law marks a new way of doing business for governments and companies seeking to address forest and peat fires. It sends a powerful message that those who burn land and forests illegally will be held accountable. In particular, any companies caught using fire illegally now face the massive reputational risk of being dragged into court in Singapore as soon as their executives step foot on the island. Their customers, bankers and insurers will surely shy away from doing business with them.”[4]

The Act has allowed Singapore’s National Environmental Ministry to formally ask Indonesia’s Minister of Environment and Forestry to provide a list of companies suspected to be behind the land and forest fires once the information has been confirmed.[5]

Having such an act will allow the Malaysian authorities to go after these irresponsible companies which are responsible for causing the haze which envelops the region year after year. A good place to start would be at home, since many of the oil palm plantations which are at least partly responsible for the slash and burn activities in Indonesia are Malaysian owned or controlled. A plantation manager working for PT Adei Plantation and Industry, a subsidiary of Kuala Lumpur Kepong, a company which is listed on the KL stock exchange, was convicted of negligence in failing to prevent irresponsible parties from setting forest fires in an estate belonging to the company in September 2014. The plantation manager was ordered to serve 1 year in prison. At the same time, a director of the company was ordered to pay a fine and serve 5 months in prison.[6] But these kinds of convictions have been few and far between because of a legal system that is suspected of being compromised by corruption. With the implementation of such an act in Malaysia, the government will no longer have the excuse of pushing the burden of enforcement and prosecution solely to the Indonesian authorities as indicated by the parliamentary reply to my colleague, Chong Chien Jen, the Member of Parliament for Kuching (See Appendix 1 below).

One cannot help but wonder if the reluctance of the Malaysian authorities to take any concrete action against Malaysian companies with significant palm oil operations in Indonesia is due to the lobbying power and influence of many of these large plantation companies including KLK, Sime Darby Plantations, Genting Plantations, IOI Plantations and Tabung Haji Plantations, just to name a few.[7]

It is high time that the Malaysian authorities stop sitting on the side lines and do something concrete with regards to this haze problem, starting with the companies it should have the most influence over namely the Malaysian companies with significant operations in the hot spot areas in Indonesia.

Dr. Ong Kian Ming
Member of Parliament for Serdang

Appendix 1: Parliamentary Answer on action taken by Malaysia against Kuala Lumpur Kepong (KLK) whose subsidiary in Indonesia was found to be responsible for causing forest fires in Indonesia