Posts Tagged ‘palm oil’

Southeast Asian economies get a lift from China. Later, they may get the bill

September 8, 2017

By Marius Zaharia

HONG KONG (Reuters) – Southeast Asia appears to be on a roll.

The Philippines is boasting the second-fastest growing economy in Asia, Malaysia has posted its best growth figures in more than two years and Thailand in more than four.

The growth is being fuelled by China, whose expanding economic presence is propping up fundamental weaknesses around Southeast Asia. It also underlines China’s dominance in a region that will be under increasing pressure to follow Beijing’s lead.

Even as the rest of the world feels the pinch of Beijing’s clampdown on outbound capital, China is ploughing money into Southeast Asia – much of it into infrastructure projects related to President Xi Jinping’s signature Belt and Road initiative.

Chinese tourists are also flocking to beaches, temples and shopping malls around the region. And trade is surging.

Exports to China from Indonesia and Malaysia grew more than 40 percent in the first half of the year; from Thailand and Singapore it was almost 30 percent, and more than 20 percent from the Philippines, according to Reuters calculations.

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Malaysia — China’s Forest City development is the biggest by a Chinese property developer

China has been investing heavily in infrastructure and property in the region and buying commodities such as rice, palm oil, rubber and coal. It is also buying electronic components and equipment from countries like Malaysia, Thailand and Singapore.

Going the other way is everything from cheap T-shirts to high-end telecommunications systems.

Welcome as all this economic activity is to the region, it could also present political problems, as countries confront China over issues such as its claims in the South China Sea, as both Vietnam and the Philippines have found.

And it raises the risk that China could apply economic pressure to get its way.

“The large rise in ASEAN’s exports to China have increased potential vulnerabilities to geopolitical risks,” said Rajiv Biswas, Asia Pacific chief economist for IHS Markit.

SOUTH KOREA‘S EXPERIENCE

For a glimpse of how that feels, Southeast Asian countries could look at South Korea’s experience.

The deployment in South Korea of a U.S. anti-missile defence system that China opposed resulted in a sharp decline in Chinese tourists. South Korean companies doing business in China, like Lotte Group and Hyundai have also been hit in the diplomatic fallout.

“The South Korea example is a highlight of how the geopolitical vulnerability to China can increase as the bilateral economic relationship expands,” Biswas said.

The Philippines found itself subject to a Chinese ban on its fruit in 2012 after challenging China’s maritime claims. The ban was only lifted last year as President Rodrigo Duterte adopted a friendlier stance towards Beijing.

“Any sector that you have with a big exposure – tourism inbound like Thailand, bananas outbound like the Philippines, coal from Indonesia – is vulnerable,” said Dane Chamorro, senior partner and head of South East Asia at Control Risks, a global risk consultancy. “You can imagine how that would be pretty easy for China to stop or hinder.”

Leaders of Malaysia’s ruling party last year voiced concerns after Prime Minister Najib Razak secured deals worth $34 billion on a trip to Beijing, saying it opened the door for a more direct Chinese influence on Malaysia’s affairs, besides saddling the country with billions of dollars in debt.

A planned $5.5 billion rail link through Thailand to southern China also hit resistance, with Thai critics targeting what they said were Beijing’s excessive demands and unfavourable financing. However, Thailand’s cabinet in July approved construction of the first phase of the project.

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Chinese tourists pose for photos as they visit Thailand

CHECKS AND BALANCES

There has also been popular opposition to such deals around the region, raising the stakes for leaders.

In Myanmar, a $10 billion Chinese oil pipeline linked to the Belt and Road project sparked angry protests in May. Three years ago, the deployment of a Chinese oil rig in disputed waters in the South China Sea triggered anti-Chinese riots in Vietnam.

“The next level from here is you can see more social outcry,” said Sanchita Basu Das, lead researcher for economic affairs at the ASEAN Studies Center at ISEAS-Yusof Ishak Institute in Singapore.

“These are the checks and balances for some of these countries, especially those where leaders are elected for a specific number of years,” she said. “China will be mindful of that as well.”

GROWING DEPENDENCE The growing economic dependence on China is another concern for countries in the region with underlying vulnerabilities.

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Singapore’s skyline is seen June 17, 2017. REUTERS/Thomas White/Files

Consumption growth has been lagging in countries like Indonesia and Philippines, which are dependent on domestic demand, even as they posted growth figures of 5 percent and 6.5 percent in the second quarter. And investment from sources other than China is slowing, as are portfolio inflows.

Indonesia, which has been lagging its regional peers, cut interest rates last month.

In Thailand, where the economy grew 3.7 percent in the second quarter, the baht THB= has been surging in recent months, putting pressure on exporters, while the Philippine peso PHP= has been weakening on concerns over the country’s shrinking current account surplus.

If there was a downturn in China, it could have serious ripple effects in export-reliant countries like Thailand and Malaysia. Malaysia grew 5.8 percent in April-June.

“Southeast Asian countries are becoming more dependent on China,” said Jean-Charles Sambor, deputy head of EM fixed income, BNP Paribas Asset Management. An event like a sharp slowdown in China could have “a very significant spillover,” he said, citing exports, financing and investment.

For the moment, the Chinese economy remains strong and it appears that Southeast Asia is weathering a crackdown by Beijing on overseas acquisitions.

Data from China’s Ministry of Commerce shows outbound direct investment globally nearly halved in the first half of the year. But data from the American Enterprise Institute shows Chinese investments and construction contracts of $13.46 billion in the period, almost unchanged from a year earlier.

The initial stages of a rail line on Malaysia’s east coast, in which China Communications Construction Company has already invested $2 billion, according to the data, is one of the most high-profile investments.

Other investments, many of which are tied to the Belt and Road initiative, include energy projects in Laos, Cambodia and Philippines, another large railway investment in Indonesia and real estate purchases across the region.

This week, Thailand signed contracts worth 5.2 billion baht ($157 million) with Chinese state enterprises for a high-speed rail project with China.

“Notwithstanding the recent introduction of restrictions on outbound investment, Chinese investment in Southeast Asia is likely to remain strong over the coming years,” said Stephen Smith, lead partner at Deloitte Access Economics.

“Chinese authorities appear to remain strongly committed to investment in projects tied to the Belt and Road Initiative.”

Graphic – Southeast Asia’s export growth in key markets: tmsnrt.rs/2g7DKWN

Additional reporting by Joseph Sipalan in Kuala Lumpur; Editing by Philip McClellan

See also:

11 PROJECTS THAT SHOW CHINA’S INFLUENCE OVER MALAYSIA – AND COULD INFLUENCE ITS ELECTION

http://www.scmp.com/week-asia/politics/article/2105440/11-projects-show-chinas-influence-over-malaysia-and-could

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Indonesia to Buy $1.14 Billion Worth of Russian Jets

August 22, 2017

JAKARTA — Indonesia will buy 11 Sukhoi fighter jets worth $1.14 billion from Russia in exchange for cash and Indonesian commodities, two cabinet ministers said on Tuesday.

The Southeast Asian country has pledged to ship up to $570 million worth of commodities in addition to cash to pay for the Suhkoi SU-35 fighter jets, which are expected to be delivered in stages starting in two years.

Indonesian Trade Minister Enggartiasto Lukita said in a joint statement with Defence Minister Ryamizard Ryacudu that details of the type and volume of commodities were “still being negotiated”. Previously he had said the exports could include palm oil, tea, and coffee.

The deal is expected to be finalised soon between Indonesian state trading company PT Perusahaan Perdangangan Indonesia and Russian state conglomerate Rostec.

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Indonesian Air Power – Pilots of the Air Force’s Sukhoi SU-30MK2 aircraft walk on the tarmac after a rehearsal of the 2016 Angkasa Yudha airborne training module at Hang Nadim Airport in Batam, Riau Islands, on Oct. 3, 2016. (Antara/MN Kanwa)

Hong Kong Closes 13 Beaches as Congealed Palm Oil Washes Ashore

August 8, 2017

HONG KONG — Hong Kong has closed more than a dozen beaches after a palm oil spill washed foul-smelling, Styrofoam-like clumps ashore, the latest environmental disaster to blight the territory’s waters.

The Chinese-controlled city closed two more beaches in the south of Hong Kong island on Tuesday, bringing to 13 the total shut since two vessels collided in the Pearl River estuary.

It took two days for mainland Chinese authorities to inform Hong Kong about the collision, the government said. Media said the accident happened on Thursday.

The spill has sparked outrage among some residents and environmentalists and comes just a year after mountains of rubbish washed up on Hong Kong’s beaches, with labels and packaging indicating most of it had come from mainland China.

It also comes at the height of summer, when beaches and outlying islands are packed with daytrippers, campers and holiday makers, especially at weekends.

The Hong Kong government said it had collected 50 tonnes of palm oil so far, most of it congealed, while workers scooped up 110 bags of palm oil waste on one beach alone on the popular Lamma Island.

Media reported that 1,000 tonnes of palm oil spilled into the water after the vessels collided.

The Environmental Protection Department has collected water samples from affected beaches and said it planned to release its results later in the day.

The government said in a statement that palm oil was non-toxic and harmless, but given the large amount that had washed up on beaches and the fact that the laboratory results were not yet available, the beaches would remain closed.

Hong Kong’s coastal waters and beaches are often strewn with rubbish from mainland China, where some companies discharge waste into the sea to save the cost of proper disposal, according to conservationists.

In 2012, hundreds of millions of tiny plastic pellets washed up on Hong Kong’s beaches following a container spill during a typhoon, prompting a massive clean-up operation.

(Reporting By Anne Marie Roantree and Donny Kwok; Editing by Nick Macfie)

Indonesia to Barter Coffee, Palm Oil, Tea And Other Agricultural Commodities for Russian Jet Fighters

August 6, 2017

Jakarta Post

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Indonesian Air Power – Pilots of the Air Force’s Sukhoi SU-30MK2 aircraft walk on the tarmac after a rehearsal of the 2016 Angkasa Yudha airborne training module at Hang Nadim Airport in Batam, Riau Islands, on Oct. 3, 2016. (Antara/MN Kanwa)

Indonesian state-owned trading company PT Perusahaan Perdagangan and Russian state-owned company Rostec have signed a memorandum of understanding to barter Indonesian agricultural commodities for Russian jet fighters.

“The barter deal, which is under the supervision of the two governments, will involve 11 Sukhoi SU-35 jet fighters and several commodities like coffee, palm oil, tea and others,” Trade Minister Enggartiasto “Enggar” Lukita said in a statement on Friday.

Enggar, who is on an official visit to Russia from Aug. 3 to 5, expressed his hope that the agreement would be followed by other agreements in other sectors.

Read also: Indonesia working on Russian barter offer: Trade MinisterRussia currently faces economic sanctions imposed by the United States and the European Union. In response, Russia has limited imports from the US and EU and is looking to other countries for commodity imports.

“It is an opportunity we have to seize. The great potential for economic cooperation during the embargo and counter embargo goes beyond trade and investment issues. We also have the opportunity to enhance cooperation in tourism, student exchange, energy, technology, aviation, etc.,” Enggar added.

Trade between Indonesia and Russia in 2016 amounted to US$2.11 billion – with Indonesia posting a surplus of $411 million – compared to $1.9 billion in 2015. Indonesian non-oil exports to Russia grew by 8.50 percent in the last five years to a value of $1.3 billion in 2016, while Indonesian exports from January to May this year grew by 54.43 percent to $1.12 billion. (bbn)

http://www.thejakartapost.com/news/2017/08/04/indonesia-to-barter-coffee-cpo-for-russian-jet-fighters.html

Indonesia in haze warning as fires flare

August 19, 2016

AFP

© AFP | Forest fires in Ogan Ilir, Indonesia’s South Sumatra province

JAKARTA (AFP) – Indonesia warned Friday that haze from forest fires was floating over a key waterway towards its neighbours, and that the number of blazes was rising.

The fires and resulting smog are an annual dry season problem in the archipelago, when blazes are started illegally to quickly and cheaply clear land, typically to make way for palm oil and pulpwood plantations.

But last year’s haze outbreak was among the worst in memory, shrouding Malaysia, Singapore and parts of Thailand in acrid smoke. The crisis forced school closures and caused thousands to fall sick across the region.

While this year’s fires have yet to reach the levels of 2015, the number has been rising in recent weeks as Indonesia heads towards its peak dry season in September.

Disaster agency spokesman Sutopo Purwo Nugroho warned that smoke had Thursday started floating across the Malacca Strait, which runs between Indonesia, Malaysia and Singapore.

“Smoke from forest and land fires in Riau (province) has started to enter the Malacca Strait,” he tweeted.

“Let’s prevent and put out the fires.”

Riau, on western Sumatra island, is a major centre of the palm oil and pulpwood industry, and many fires occur there every year.

He also said the number of “hotspots” detected by satellites — areas of intense heat that are either already on fire or vulnerable to going up in flames — had increased in West Kalimantan province, on Indonesia’s part of Borneo island.

A total of 158 hotspots were detected in the province on Friday, up from 106 a day earlier.

The governor of the province, a centre of the palm oil industry, had asked the disaster agency to provide helicopters for water-bombing and “cloud-seeding”, or chemically inducing rain, said Nugroho.

Indonesia has faced intense criticism from its neighbours and the international community over its failure to halt the annual smog outbreaks.

Jakarta has promised tougher action. It has announced a plan to stop granting new land for palm oil plantations, and established an agency to restore millions of hectares of carbon-rich peatlands susceptible to fires.

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Smoke, Haze and Air Pollution Harmful to Human Health: Singapore has served notice on Indonesian companies — “We are going after, to put it starkly, the bad guys that are causing this problem.”

July 3, 2016

AFP

JAKARTA (AFP) – Singapore is refusing to back down in its pursuit of those responsible for haze-belching forest fires in South-east Asia last year, despite struggling to bring the perpetrators before the courts and drawing a sharp rebuke from neighbouring Indonesia.

Forest fires are part of an annual dry-season problem in Indonesia, started illegally to quickly and cheaply clear land for cultivation – particularly for palm oil and pulpwood.

But last year’s haze outbreak was among the worst in memory, shrouding Malaysia, Singapore, and parts of Thailand in acrid smoke and forcing school closures as pollution reached hazardous levels and thousands fell sick across the region.

Singapore has served notice to six Indonesian companies it believes may have cleared land by burning but could target others as investigations continue, according to Singapore’s ambassador to Indonesia Anil Kumar Nayar.

“We are going after, to put it starkly, the bad guys that are causing this problem,” he told AFP in an interview last week.

However, the city-state’s efforts to punish Indonesian companies under its own anti-haze law have become a flashpoint with Jakarta.

Singapore argues that international rules allow states to take action – even if harm is being caused by activities outside its jurisdiction – but Jakarta has questioned how Singapore could pursue Indonesian citizens for prosecution, especially in the absence of a ratified extradition treaty between the neighbours.

The latest sabre-rattling came after Singapore issued a court warrant in May to detain a director of an Indonesian company linked to the haze while he was in the city-state.

Afterwards, Indonesia’s Environment Minister Siti Nurbaya Bakar said that she would be reviewing her ministry’s cooperation with Singapore on environmental issues.

“Singapore cannot step further into Indonesia’s legal domain,” Bakar told reporters in June. Her spokesman declined to comment further on the matter when contacted.

Nayar reiterated that Singapore wasn’t crossing any line pursuing these companies and was within its rights to enforce its law.

“We are not doing something that is extraordinary. It is not targeting any country, or anybody’s sovereignty,” he said.

The law threatens local and foreign firms with fines of up to S$100,000 for every day Singapore endures unhealthy haze pollution.

So far just two of the companies have responded to the court order, Nayar said, without naming specific firms.

Singapore has repeatedly asked Indonesia for details about companies – such as maps showing who owns what concessions – but says Jakarta has not provided any information.

Singapore would “continue to press”, Nayar said, but added the evidence needed to prosecute these companies could be found by other means.

“We could go that way as well, but at the end of the day this is part of a legal process. We want to be working with the Indonesian government,” he said.

One of Indonesia’s main arguments is that a regional approach to solving the haze crisis would be more effective than individual action.

“They (Singapore) know our view on this, on how we can best address this issue of haze through the Asean mechanism,” ministry spokesman Arrmanatha Nasir told AFP.

The Association of Southeast Asian Nations has an agreement to create a haze-free region by 2020, though it took 14 years to be fully ratified.

Nayar says regional progress on curbing haze has been slow.

Fellow Asean member Malaysia, which also suffers during the haze outbreaks, has expressed interest in adopting its own law similar to Singapore’s to pursue errant companies.

Jakarta has promised tougher action in the wake of last year’s haze disaster, which turned skies yellow in Indonesia’s part of Borneo island and dealt the economy a US$16 billion blow.

The government announced in May it would no longer grant new land for palm oil plantations, and established a new agency to restore millions of hectares of carbon-rich peatlands susceptible to fires.

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Fires raged on peatlands on the outskirts of Palangkaraya, Indonesia, on Nov 1.
Fires raged on peatlands on the outskirts of Palangkaraya, Indonesia, on Nov 1, 2015. Photo: Getty Images
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Singapore Central Business District, or CBD skyline is covered with a thick haze.
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An Indonesian woman and a child walk on a bamboo bridge as thick yellow haze shrouds Palangkaraya on Oct 22, 2015. AFP photo

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Indonesia hits back at Singapore in latest haze row

June 13, 2016

AFP

© AFP/File | Forest fires in Indonesia produced acrid smog that shrouded Singapore, Malaysia and other parts of the region for weeks in 2015

JAKARTA (AFP) – Indonesia insisted Monday Singapore cannot take legal action against its citizens over the haze that choked Southeast Asia last year after the city-state sought to question the director of an Indonesian company.

Forest fires in Indonesia produced acrid smog that shrouded Singapore, Malaysia and other parts of the region for weeks, pushing air quality to unhealthy levels, causing many to fall ill and disrupting air travel.

The blazes are an annual occurrence during the dry season as land is cleared using slash-and-burn methods but they were the worst for years in 2015, with Singapore particularly angered at what it said was Jakarta’s failure to take action.

Tempers have frayed again after Singapore last month attempted to call in the director of an Indonesian company suspected of being linked to the haze for questioning, Singaporean media reported, citing the National Environment Agency.

The director of the firm did not turn up for the interview with Singaporean authorities despite being served with a legal notice and has since left the city-state, the reports said. The agency did not name the individual or the firm.

Singapore is seeking to take legal action under a 2014 law that allows for cross-border prosecutions but Indonesia hit back Monday at the latest move.

“We do not agree with this Singaporean idea,” Husain Abdullah, spokesman for Vice President Jusuf Kalla, told AFP.

“As it happened in Indonesia, it’s part of Indonesia’s jurisdiction.

“If Singapore could easily try Indonesian citizens, it could be a violation of Indonesia’s sovereignty.”

He said that Indonesia had made substantial progress in preparing for this year’s fires, with the dry season expected to begin in the coming weeks.

The 2014 law allows Singapore to levy heavy fines on local or foreign companies that contribute to unhealthy levels of haze pollution in the city-state.

Singapore has also given notices to six Indonesian-based firms, asking them to explain what they are doing to put out fires on their land.

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Fires raged on peatlands on the outskirts of Palangkaraya, Indonesia, on Nov 1.
Fires raged on peatlands on the outskirts of Palangkaraya, Indonesia, on Nov 1, 2015. Photo: Getty Images
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Singapore Central Business District, or CBD skyline is covered with a thick haze.
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An Indonesian woman and a child walk on a bamboo bridge as thick yellow haze shrouds Palangkaraya on Oct 22, 2015. AFP photo

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Singapore taking action against companies responsible for haze

April 21, 2016

By Zakir Hussain, Deputy News Editor (Politics), in Tel Aviv
The Straits Times

People walking on the street during a hazy day in Singapore on Sept 10, 2015. PHOTO from THE NEW PAPER

TEL AVIV – Singapore is taking action under the Transboundary Haze Pollution Act to go after companies that started fires or let their concessions burn, and contributed to last year’s haze, Environment and Water Resources Minister Masagos Zulkifli has said.

It has issued notices to six of these Indonesia-based companies, asking them to explain what steps they are taking to put out and prevent fires on their land.

Two of them have replied. A director of one of the four firms that have yet to respond has also been served with a notice to provide information on what his company is doing to mitigate fires on its land and prevent a repeat.

“He has left, but he is required to return,” Mr Masagos told reporters.

“Should he not return, he would have violated our laws and therefore, among others, we can arrest him upon entry later than the notice on which he is supposed to return,” he added.

Mr Masagos declined to reveal the name of the director or his company, but said he can also be detained in Singapore if he does not give the information required.

“We must not let companies, corporations get away with their most egregious acts,” he said.

Mr Masagos made these points when asked by Singapore reporters about comments by his Indonesian counterpart questioning what Singapore had done to combat forest fires.

Indonesia’s Environment and Forestry Minister Siti Nurbaya Bakar had told environmental news site Foresthints.news last week that her country had been attempting to prevent the recurrence of land and forest fires, and consistently enforcing the law.

“My question is – what has the Singaporean Government done? I feel that they should focus on their own role,” she was cited saying.

Mr Masagos noted that Singapore has a good relationship with Indonesia on many fronts because both countries are working together.

But he said the haze was a complex issue that had to be tackled not just bilaterally, but also at the Asean and regional level.

For instance, Singapore led an Asean peatland management programme to raise awareness of what people can do to manage and restore peatland, on which most forest fires take place.

The National Environment Agency had served notice to Asia Pulp and Paper last year, asking for information on steps its subsidiaries and Indonesian suppliers are taking to put out fires in their concessions.

“We are now looking at them to see how we are going to move forward,” Mr Masagos said.

But he would not be drawn into commenting on what actions could be taken against the companies, saying investigations are still ongoing.

“The message to everybody is: whether you are Singaporean, whether you are a foreigner, if you violate our laws, we will take the law to its full extent.”

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Fires raged on peatlands on the outskirts of Palangkaraya, Indonesia, on Nov 1.
Fires raged on peatlands on the outskirts of Palangkaraya, Indonesia, on Nov 1, 2015. Photo: Getty Images
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Singapore Central Business District, or CBD skyline is covered with a thick haze.
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An Indonesian woman and a child walk on a bamboo bridge as thick yellow haze shrouds Palangkaraya on Oct 22, 2015. AFP photo

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Should Indonesia Be Allowed To Pump Smoke Upon its Neighbors? At What Cost is Our Health? It appears like Jakarta is taking “one step forward and two steps back”

April 17, 2016

No consistency in Jakarta’s green push

Conflicting statements show dilemma that world’s largest palm oil producer is facing

Indonesia wants its palm oil sector to go green in order to stay competitive in international markets, but the authorities struggle to find a consistent voice in enforcing the policy.

The dilemma facing the world’s largest palm oil producer is made apparent in the conflicting statements from President Joko Widodo and his underlings this week.

On Thursday, Mr Joko declared plans for a moratorium on new concessions for oil palm plantations, arguing that yields from existing cropland could be doubled with better seeds.

 

While a date has yet to be set, the moratorium would spell an end to expansion by palm oil companies.

“We have to be brave to do that, we have to be concrete, real,” he said. The move has been lauded as bold and visionary by experts and green groups, but it is neither surprising nor new.

Fragmented governance is a challenge in the palm oil sector. Critics point to the lack of harmony, tussles between ministries, conflicting interests of local politicians and investors, and weak law enforcement.

After all, Mr Joko banned licences for peatland concessions last October after people started dying from respiratory illnesses during the peak of the transboundary haze crisis caused by raging forest fires.

His latest move would not have raised eyebrows had the Agriculture Ministry not gone to town this week mulling over whether it should disband a historic “zero deforestation” pact signed by major palm oil companies over cartel allegations.

The 2014 Indonesia Palm Oil Pledge, or Ipop, commits palm oil firms to make their supply chains more sustainable, but officials claim that small-time farmers are being squeezed out as they are unable to meet high standards, hence easing the way for the signatories to form and operate a cartel.

While the allegations are being investigated, the call for disbandment begs the question of whether the government is serious about promoting environmentally friendly and sustainable forestry practices, or whether it is paying only lip service.

While experts and green groups say there are valid concerns that raising sustainability standards might have an adverse economic impact on the industry and smallholders, and pose a threat to local laws and national sovereignty, it appears like Jakarta is taking “one step forward and two steps back”.

“If managed well, it can benefit both the bottom line and the environment – government officials should be embracing this approach, not beating it down,” said Eco-Business founder Jessica Cheam, a former environment journalist and long-time observer of sustainable practices in the region.

Fragmented governance is a challenge in the palm oil sector. Critics point to the lack of harmony, tussles between ministries, conflicting interests of local politicians and investors, and weak law enforcement.

One thing, however, is certain: There needs to be clarity on objectives and transparency regarding the rhetoric on the ground, said University of Indonesia environmental analyst Tarsoen Waryono.

He added there is no doubt that Mr Joko and his government have the same vision and mission, and are serious about protecting the forests and environment.

“Their communication to the public, however, is not always clear or in sync with one another and Jokowi tends to throw new ideas without preparing his ministries,” said Mr Tarsoen, referring to the President by his popular moniker.

“Policies cannot be changed overnight, but as all that is being sorted out, someone must take control to avoid confusion.”

A version of this article appeared in the print edition of The Straits Times on April 16, 2016, with the headline ‘No consistency in Jakarta’s green push’.
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Fires raged on peatlands on the outskirts of Palangkaraya, Indonesia, on Nov 1.
Fires raged on peatlands on the outskirts of Palangkaraya, Indonesia, on Nov 1, 2015. Photo: Getty Images
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Singapore Central Business District, or CBD skyline is covered with a thick haze.
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An Indonesian woman and a child walk on a bamboo bridge as thick yellow haze shrouds Palangkaraya on Oct 22, 2015. AFP photo

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Indonesia to appeal rejection of $565 mn haze lawsuit

December 31, 2015

AFP

 

Indonesia is punishing more than 20 companies in an unprecedented move for starting deadly forest fires that killed 19 people

Indonesia is punishing more than 20 companies in an unprecedented move for starting deadly forest fires that killed 19 people ©Adek Berry (AFP/File)

Jakarta (AFP) – The Indonesian government will appeal a court’s rejection of a $565 million lawsuit against a pulp and paper company accused of failing to prevent fires that blanketed Southeast Asia in toxic haze, an official said Thursday.

The court on Sumatra island Wednesday dismissed the civil suit brought by authorities against Bumi Mekar Hijau, a supplier to global giant Asia Pulp and Paper, over fires on plantation land in 2014, saying there was insufficient evidence.

The haze-belching fires occur every year as land is cleared using slash-and-burn methods to make way for palm oil and pulp and paper plantations on Sumatra and the Indonesian part of Borneo island.

The damages would have been the biggest ever levied against a firm over such burning activities in Indonesia, and environmentalists said the rejection was a major setback in efforts to take on those behind the annual haze outbreaks.

Environment ministry spokesman Eka Widodo Sugiri said the government would file an appeal against the court’s decision within two weeks.

“Our nation’s dignity was disturbed, we received complaints from neighbouring countries,” Sugiri told AFP.

Plantation companies are responsible for ensuring fires do not break out on their land, but blazes still occur frequently.

Major firms have “zero-burn” policies and typically insist fires inside their concessions start outside before spreading in, and are started by people not working for them.

Authorities accused Bumi Mekar Hijau of failing to prevent widespread fires in a concession in South Sumatra province last year, according to state-run Antara news agency.

The company is also being investigated over this year’s fires, with its operations frozen in December.

The 2015 blazes, which occurred mainly in September and October, were the worst for years, prompting thousands to fall ill, and leading to flight cancellations and school closures across the region.

Bumi Mekar Hijau was one of 20 firms who were punished in an unprecedented move over the blazes.

Activist Riko Kurniawan, from The Indonesian Forum for the Environment, said the lawsuit rejection set a “bad precedent”.

“We really regret the decision of the judges who rejected the lawsuit, it is another failed attempt to seek justice for victims of the haze,” he said.

The haze crisis also caused huge damage to the Indonesian economy, with the World Bank estimating the cost at $16 billion — more than double the sum spent on rebuilding Aceh province after the devastating 2004 tsunami.

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Three companies have been shut down permanently by Indonesia after having their licences revoked over their role in the blazes that choked vast expanses of s...

Three companies have been shut down permanently by Indonesia after having their licences revoked over their role in the blazes that choked vast expanses of southeast Asia with acrid haze ©Adek Berry (AFP/File)