Agriculture, Climate Change, Deforestation, NGOs, Supply Chain

Singapore haze crisis slowly shifting from reputation to legal liability

Some six months ago, when we were putting together our conference, how business can tackle deforestation, which begins tomorrow in Singapore, I asked my friend Brendan May, whose company, Robertsbridge, is sponsoring the conference, for his views on a sub title for the event.

His suggestion? “Deforestation: A make or break issue for Asia’s corporate reputation”.

At the time I thought it sounded a trifle exaggerated as a sub title suggestion.

How wrong I was, at least in the case of some industries. These being, of course, palm oil and forestry companies, which are being blamed for the current dangerous smog drifting around south east Asia, which is set to continue for perhaps another six weeks or so.

I sit here in Singapore looking out at only “moderate” haze, it’s hard to tell the difference between the moderate smog of today and the “pea souper” haze that caused schools to be shut on Friday, when I arrived here. See below. The images may look like they are the wrong way around. They’re not. It can be confusing given local fog and mist.

Haze friday

Friday haze: Over 300 PSI

Singapore Haze

Haze Sunday: 80 PSI

But the measurement technology doesn’t lie. Citizens, as you might imagine, are not happy. New activist groups are emerging to put pressure on the government here, and the Singapore Straits Times today is packed with detail on the topic, from the front page inwards. See here for a useful simple infographic.

 

Politicians in Singapore and Indonesia are exchanging sharp words on social media as the worst haze crisis in two years occupies the minds of everyone here.

The difference now is that in 2014 Indonesia finally ratified the 2002 regional “Agreement on Transboundary Haze Pollution“.

As a result, and due to the bad haze this year, Singapore appears to be losing patience with companies whom appear to have a role in the haze, and is now becoming much more aggressive where the authorities feel they can have an impact.

It’s becoming clearer that given the commitments by big companies to preventing deforestation (which continues apace this year, with Royal Golden Eagle group’s APRIL and Jardine’s-owned Astra Agro signing up) and the reputation damage the sector has suffered, that these firms are increasingly less and less responsible for the haze issue in Singapore and elsewhere.

Instead the haze is more likely caused by rural communities and smaller companies, suggest researchers:

“Studies of fire and haze in Kalimantan and Sumatra point firmly towards small-scale farmers and other under-the-radar, mid-scale land-owners, rather than large companies as the main cause of fires and haze.

A study published last month in the journal Environmental Research Letters clearly shows that, on Sumatra, 59 per cent of fire emissions originate from outside timber and oil-palm concession boundaries. These non-concession-related fires generated 62 per cent of smoke exposure in equatorial South-east Asia (primarily Singapore and Malaysia).

In Kalimantan, non-concession fires play an even bigger role. Fires outside concessions generated 73 per cent of all emissions and 76 per cent of smoke affecting equatorial South-east Asia.

These findings are in line with similar results based on more detailed studies in Riau and published in Nature last year. In Riau, 52 per cent of the total burnt area in 2013 was within concessions. However, 60 per cent of these burned areas were occupied and used by small and medium landholders.”

But of course it’s hard for Singapore to go after smaller firms and communities based in Indonesia.

So they are doing what they can, ramping up demands on companies where they feel they can gain some traction.

The most prominent of these is Asia Pulp & Paper. The company has made some serious commitments to prevent deforestation, set land aside, study the long term impact of forestry concessions and work with NGOs and communities on sustainability issues. (See my slideshow report from last year, when I visited one of their concessions to see for myself)

But as within any large company’s supply chain, there are always a few errant suppliers who aren’t up to scratch, hence the current demands from Singapore on the company, which is vulnerable in Singapore via it’s parent firm, Sinar Mas, which has Singapore-listed companies in its portfolio.

Screen Shot 2015-09-27 at 14.47.07

See 24/25 September boxes above for reasons why the haze is on the front pages here in Singapore this week. Not for the last time.

See here for reporting by the Straits Times today on how Singapore’s environment agency is using the Transboundary Haze Pollution Act to demand information on subsidiaries, and what the company is doing to stop suppliers causing forest, land and peat fires.

This is significant, according to Jessica Cheam of Eco-Business, a Singapore based green business magazine, quoted in the Straits Times article above, because:

“It is the first time that Singapore has commenced legal action and also the first time that the Act will be tested since it was passed last year,” she said. “The litmus test would be how the companies respond to it, and whether it would prove an effective measure for taking companies to task if they are found responsible for the illegal fires.”

This article, also from today’s Strait’s Times, reports that NGOs and others are planning to try and sue companies responsible for the haze, alongside boycotts, which will somehow promote “haze free palm oil“.

And this article suggests how much legal action, at least initially, may cost companies. Up to $1.4 million apparently, although one suspects that may rise over time, perhaps considerably.

At the conference tomorrow we’ll be discussing all these issues with APP and many of the other big companies and key NGOs in the space. It’s Chatham House rule based, however, so we can’t report too much, or we risk the ability of companies and others to speak freely at the event.

APP of course, and other large firms, have responded that they are largely not responsible for the haze (science seems to back this up) and that it’s far from their economic and reputation interests to do so.

The upshot of all this, and a main focus of our conference tomorrow and Tuesday here in Singapore, is what role large companies, NGOs and particularly government can play in preventing land/peat and forest fires by working with an empowering rural communities to take a different path, and create legal/financial incentives for smaller firms to stop these practices.

Suddenly the tagline for our event tomorrow suggested by Brendan May many months ago, doesn’t seem quite so hubristic:

“Deforestation: A make or break issue for Asia’s corporate reputation”. Indeed.

Whether it goes beyond reputation damage here in Singapore, we may soon see.

I’ll report back on the blog in due course, what I can from the event without breaking our essential Chatham House rule (entirely needed, alas) 

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