Haze and the business heat

AFTER some years of blue skies, the fires and haze have returned, and these are triggering responses. Malaysia’s Natural Resources, Environment and Climate Change Minister Nik Nazmi blames fires abroad for unhealthy air levels in Kuala Lumpur and other urban centres; Indonesia, however, quickly questions and counters to suggest that Malaysian companies are involved.

Finger-pointing is often the response during bad haze episodes. Otherwise, while complaining, many just bear the situation as a temporary nuisance, counting on changing winds and year-end rains to bring respite. Yet, real and enduring concerns emerge for businesses.

This would, first and foremost, involve companies producing palm oil, pulp and paper as well as other products often implicated in outbreaks of fire. But broader effects are felt, since this is a sizeable sector involving some of the largest companies of Indonesia and Malaysia, and some listed entities in Singapore. Manufacturers that use these products in their supply chains can feel the ripples; so might investors and financial institutions.