As haze shrouds Singapore, Indonesia suspects stay silent

[JAKARTA] A week after being named as potentially responsible for forest fires blanketing Southeast Asia with haze pollution, most of the companies involved have stayed silent.

Indonesia is investigating more than 100 companies for blazes found on their land and a week ago named four of those, freezing or revoking their permits, while Singapore on Friday named another four. Out of these, only one has made a public statement, saying it was not responsible.

Indonesia's enforcement of its laws against plantation owners is key to resolving the region's haze, Singapore's environment minister has said. Indonesia has laws banning the burning of forests yet enforcement so far has been limited in a sprawling archipelago with overlapping land rights, widespread corruption and decentralized government.

"Singapore has to understand our difficulties to extinguish fires because it isn't a simple thing," Teten Masduki, President Joko Widodo's chief of staff, said on Monday, adding the government was focusing on the legal process against arsonists and revoking business licenses.

The air quality in Singapore deteriorated to a "hazardous" level on Thursday, forcing the city-state to shut its schools on Friday for the first time in 12 years and suspend some outdoor events. The three-hour pollutant index rose to an "unhealthy" level of 173 as of 8 am, covering the island with a layer of haze. Singapore said 127 "hot spots" were detected in Indonesia's Sumatra on Monday.

The plantation companies with suspended permits are PT Langgam Inti Hibrindo, PT Tempirai Palm Resources and PT Waringin Agro Jaya, and the forestry concession revoked by Indonesia was held by PT Hutani Sola Lestari. Langgam Inti Hibrindo, majority-owned by Jakarta-listed PT Provident Agro, issued a statement to say it was not responsible and will cooperate with the authorities. Bloomberg News has been unable to reach the others for comment.

Singapore also named PT Rimba Hutani Mas, PT Sebangun Bumi Andalas Wood Industries, PT Bumi Sriwijaya Sentosa and PT Wachyuni Mandira. The companies didn't respond to phone calls made to their offices by Bloomberg News seeking comment.

Singapore's environment ministry also said it has served Singapore-based Asia Pulp & Paper with a notice for information on measures taken by its subsidiaries and suppliers to put out fires on Indonesian land. Rimba Hutani Mas and Sebangun Bumi Andalas are both APP suppliers.

APP said it has had a zero burning policy in its supply chain since 1996.

"We cannot work in isolation in the landscape," APP said in a statement. "Other actors in the landscape must do the same, and importantly they must not start fires. This has not been the case," it said, adding the causes of fires included local community rights, illegal activity by small and medium enterprises and complexities over land use and spatial planning.

Pollution from the fires also climbed to levels considered "hazardous" to health in the past week in Indonesia's Kalimantan on Borneo island, and were at a reduced "very unhealthy" level in Singapore on Monday.

Indonesia has said it's also investigating Singaporean and Malaysian companies, home to the region's largest listed planters. Wilmar International Ltd and Golden Agri-Resources Ltd, both listed in Singapore, said on Friday they have halted palm oil purchases from suppliers under investigation.

"Singapore has enjoyed a supply of oxygen from Indonesia in the past nine months and we also know that there are many plantation and mining companies that keep their export proceeds in Singapore," Masduki said. "This is what we are thinking about, disincentives to reduce the motivation to burn forests."

BLOOMBERG