By Laura Southgate for Global Risk Insights
Each year, Indonesia’s recurring haze causes damage to the environment, the health of its citizens, and the economy. It also has a significant impact on Indonesia’s neighbours, with the effects being felt in countries such as Singapore, Malaysia, Brunei, and Thailand.
The haze is a long-term crisis that Indonesia has attempted to tackle with limited success. If Indonesia continues along this path, regional relationships will be strained, and economies will be seriously affected. What can Indonesia do to remedy the situation?
For peat’s sake
Indonesia has been tackling the haze problem for the past two decades. The islands of Sumatra and Kalimantan have rich peatlands that have attracted large industrial plantations seeking to cultivate the land for paper, pulp, and palm oil production. Every year, these plantations and local farmers slash-and-burn the existing plants and trees in order to clear the land for the next season’s crops.
The fires produced by these activities are often very large, and spread rapidly during the dry season of June to September due to the high levels of carbon stored in the peat. According to statistics released by Greenpeace, there is up to 60 billion tonnes of carbon in Indonesian peat, with over 75 percent of fire hotspots in Indonesia occurring on peatland.
These fires cause a thick haze, which affects several countries in Southeast Asia. These countries, all of which are members of the Association of Southeast Asian Nations (ASEAN), have attempted to bring about a multilateral solution to the crisis.
Following particularly severe land and forest fires in 1997-1998, the ASEAN states introduced a legally binding environmental agreement signed in 2002 called the ASEAN Agreement on Transboundary Haze Pollution. Furthermore, an ASEAN Cooperation Plan on Transboundary Pollution was established in 1995, and a Regional Haze Action Plan was established in 1997.
Burning regional bridges
According to the ASEAN Agreement on Transboundary Haze Pollution, the environmental, economic, and social dimensions and impact of Indonesia’s forest fires is profound. A 2003 study of the economics of slash-and-burn activities in Indonesia between 1997 and 1998 found that forest fires cost the Indonesian government US$20.1 billion. This was attributed to the loss of crops and commodities originating from plantations, and the loss of environmental goods such as tropical rainforests.
During the same period, Singapore claimed a cost to the economy of US$9-10 billion due to increased health costs and disruptions to air travel. It has also been estimated that Indonesia will suffer US$4 billion in losses this year. More worryingly, there have been over 22,500 cases of acute respiratory tract infections recorded in Southern Sumatra in 2015.
Clearly the environmental, health, and economic costs of the haze have angered neighbouring countries. In late September, Singapore’s primary and secondary schools closed and Malaysian flights were disrupted. The effects of the haze on neighbouring transport and tourism results in billions of dollars in economic losses.
Singapore’s minister for the environment and water resources stated this week: “This is not a natural disaster. Haze is a man-made problem that should not be tolerated. It has caused major impact on the health, society and economy of our region.” Singapore has responded by launching legal action against those Indonesian companies to blame for the fires.
Finding a solution
Indonesia has taken some steps to address the haze crisis. So far this year, the Indonesian police have arrested executives from seven companies suspected of slash-and-burn tactics. However, many say that Indonesia needs to do more. Indonesia was the last to ratify the ASEAN Agreement on Transboundary Haze Pollution, waiting 12 years until finally signing in 2014.
Indonesia has also angered neighbours by going on the offensive. Indonesian Vice President Jusuf Kalla stated: “Look at how long they have enjoyed fresh air from our green environment and forests when there were no fires […] Are they grateful? But when forest fires occur, a month at the most, haze pollutes their regions. So why should there be an apology?”
According to an economist from the National University of Singapore, financial incentives need to be offered to encourage whistle-blowers to come forward and expose those disobeying Indonesia’s plantation laws. Another scientist at the Centre for International Forestry Research claims current funding to tackle forest fires is too small, and that those ASEAN countries affected by the haze should allocate up to USD$10 billion to deal with the forest fires.
Ultimately, plantation laws must be strengthened and companies operating in these areas must be educated about the impact of deforestation. Otherwise regional economies – and relationships – will continue to suffer.