Southeast Asia’s skies over the last 12 months have mostly been free of haze pollution. This is a relief for the warming planet since forest fires, particularly on peatlands, typically release huge amounts of carbon dioxide and cause acrid smog.
The transboundary haze pollution is one source of greenhouse gas emissions that fuel climate change.
Efforts by the Jokowi administration in Indonesia to tackle the fires at source are one reason for the improvement. Wetter weather conditions have also played a major part in the good results. But the weather is changing, and not all for the better.
This year, experts predict the conditions will be drier than normal and fear that the extreme dry weather phenomenon called El Nino will return as early as July. This has triggered concern that severe fires will break out across plantation and forestry concessions across Indonesia, causing a return of the haze.
Efforts to prevent that are being made. On December 1, Indonesian President Joko Widodo signed into law a national ban on the cultivation of carbon-rich peatland. In anticipation of dry weather this year, Indonesia’s Peatland Restoration Agency (BRG) is already doubling up efforts for fire prevention at the local and provincial level.
More broadly, the need is to help steer the value chain of agro-forestry products towards greater sustainability. It is not just dry weather that causes the haze. The smog is a terrible manifestation of various unsustainable practices that plague the plantation sectors across the region. Small-scale growers use fires for land clearance because they see little other choice. Many suffer low productivity and small margins and also lack of access to the right machinery and financing.
On top of this, concerns are surfacing about labour and social violations suffered by workers in the plantations. Beyond small-scale growers, larger agribusinesses too face allegations – even if some are unproven – which can impact their standing and business. A number of Indonesian-based companies continue to be questioned by Singaporean officials for possible fires from 2015. Singapore-based companies too have faced criticism – with instances of alleged clearing of rainforests in Gabon and rights abuses in Indonesia.
The global value chain links back to the financial sector and the financiers behind some agro-forestry companies have not been spared the spotlight. Greenpeace has accused HSBC bank of financing companies that are allegedly responsible for forest destruction. In response, the bank in February issued a new “No Deforestation, No Peat, No Exploitation” policy to underscore the strict conditions attached to financing of palm oil companies.
While financing rules seem far removed from fires on the ground, such measures can and will likely have ripple effects. Companies in the agro-forestry sector already face considerable pressure to adopt more environmentally friendly practices and those who claim to do so will have to have their practices independently verified. A broader and important shift is underway.
Different actors in the value chains who were once part of the problem are now becoming part of the solution. A central pillar of this process will be information and transparency. Banks and investors are increasingly integrating environmental, social and governance considerations in their due diligence, making corporate disclosure on sustainability issues more critical than ever to build trust and confidence. Frameworks to facilitate such information disclosure are emerging. Last year, the Task Force on Climate-related Financial Disclosures outlined a set of recommendations for voluntary and consistent climate-related disclosures, thereby helping companies to better align with investors’ expectations.
Similarly, a growing number of agro-forestry businesses are placing more emphasis on “traceability” so they can choose the growers who adopt more sustainable practices.
New technology is key in ensuring improved information. Increasingly, high-tech drones are being used to map and monitor land use and support the intensification of crop yields, especially in remote areas. Mobile applications to collect farmer data are another innovation, allowing small-scale growers to make more informed decisions about their use of fertiliser and pesticide so that they too can move to both greater sustainability and productivity.
To help promote transparency and the adoption of best practices, NGOs and research institutions can play a critical role. Dialogue across sectors is essential during this time of change in the policy and the priorities of the sector. Governments, large growers and their key customers and financiers need to be brought to the table together. Equally important, gaps in the value chain need to be identified so that small-scale growers can participate and collaborate in the move towards sustainability, rather than oppose it.
Achieving sustainable value chains is clearly not the sole responsibility of any stakeholder and neither should it be. Instead, a concerted, collaborative effort founded on access to quality information is needed to prevent haze and other crises from returning to the region.
Simon Tay is chairman and Chen Chen Lee director (policy programmes) at the Singapore Institute of International Affairs (SIIA). The SIIA is holding the 4th Singapore Dialogue on Sustainable World Resources on “Inclusive Collaboration: Working Together for Sustainable Value Chains” this Thursday at the St Regis Singapore.