How corruption is fuelling Singapore’s haze

But the barb trading over the haze, an annual annoyance that often strains relations between Singapore and Indonesia, overlooks one of the major causes of the burning – corruption.

Observers here say rent-seeking local leaders and corporations are taking advantage of lax law enforcement and murky regulations to continue clearing forests as an increasingly rapid rate.

Indeed, as it became clear that the bulk of the burning was taking place in Riau province, analysts were quick to point out that the governor there -Rusli Zainal - was currently the leading suspect in a case involving illegal logging permits.

“The haze disaster shows the impact of corruption in the forestry sector,” said Danang Widoyoko, the chairman of Indonesia Corruption Watch, an independent graft monitor.

It recently assessed permitting processes in provinces where the heaviest logging occurs, citing five cases where corruption, which led protected forest to be converted to plantations, led to state losses of nearly US$195 million (Rp1.92 trillion).

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The problem gets worse in election years, when officials need money to fund election campaigns - one reason the burning may be worse this time around, with national elections set for 2014.

In many cases, the money compels local leaders, who are also charged with supervising plantation operations, to look the other way when companies engage in illegal practices, such as burning land in protected forests areas.

The forestry sector has long been a source of rampant corruption. When former president Suharto was in power, he doled out concessions to friends and relatives in return for their political backing. As power has devolved over the past decade from the central government to the local level, analysts say the corruption has fragmented, but become more pervasive.

Conservationists say logging and palm oil companies that cut into virgin forests and peatland are scaling back wider conservation efforts, and they’ are doing it with the backing of local leaders seeking kickbacks from plantation companies in return for operating permits. 

The problem gets worse in election years, when officials need money to fund election campaigns - one reason the burning may be worse this time around, with national elections set for 2014.

In many cases, the money compels local leaders, who are also charged with supervising plantation operations, to look the other way when companies engage in illegal practices, such as burning land in protected forests areas, says Mr. Danang.

“The problem is clearly a lack of monitoring from the forest authority,” he explained. “A lot of corruption cases indicate that regents are easily bribed.”

Officials in the central government admit that some mining and plantation companies are operating illegally, but they say there is only so much they can do. 

“The regents give out the permits; it’s outside the ministry of forestry’s authority,” Hadi Daryanto, the ministry’s secretary general told Eco-Business. He said several officials were headed to Sumatra on Saturday to identify the hotspots and assess the dangers, since it is the central government’s purview to prevent and respond to forest fires.

It is also the central government’s job to issue national regulations that govern the country’s forests – and this is where Indonesia has done well, say forest activists, pointing to several conservation-minded commitments made by President Susilo Bambang Yudhoyono since he took office.

In 2011, for example, Mr. Yudhoyono backed a ban that would prevent companies from obtaining new permits to clear virgin forest and peatlands.

The ban is part of a $1 billion deal with Norway, which has agreed to provide the money in tranches as long as Indonesia is living up to its commitment to curb deforestation. Last month Mr. Yudhoyono extended the ban to 2015, a move commended by the international community.

He did so in the face of lobbying by major logging, palm oil and mining companies, who say the ban hurts their ability to expand, dents profits and could stymie Indonesia’s economic growth, since the majority of the country’s exports are commodities.

But resource analysts disagree.

 “There’s really no reason why the moratorium would curtail economic development in the palm oil sector,” said Kemen Austin, a research associate at the World Resource Institute in Washington DC. She said there is enough degraded land available for oil palm expansion, and the moratorium should be the impetus companies need to utilize their concessions more efficiently.

Another aim of the moratorium, said Ms. Austin, should be to strengthen the permitting process, oversight and forest monitoring to ensure companies “don’t revert to business as usual” once the ban expires.

Still, Indonesia has struggled to balance economic growth with sustainability.

Many local leaders have not been convinced that keeping the forests intact will lead to development. It does not help that several schemes floated under the REDD+ program, a United Nations initiative that aims to pay local governments for preserving their forests, have fallen flat.

Meanwhile, critics of the forest-clearing moratorium say it does not go far enough, since it only applies to new permits, not those already held by plantation companies. 

Indonesia has one of the fastest rates of forest clearing in the world, much of it done to make way for palm oil, an ingredient used in everything from shampoos to sweets to cleaning agents. The country is the leading producer of the commodity, and a top emitter of harmful climate changing carbons, since many of the forests that are being developed stand on swampy peat that releases large amounts of carbon emissions when upended.

It also becomes highly combustible after it decomposes, part of the reason the fires this year are so severe.

On Thursday, environmental non-profit Greenpeace said commercial plantations control half of the land where the biggest fires are burning, and much of it is on deep peat, which is off limits under the moratorium.

Bustar Maitar, a forest campaigner at Greenpeace in Indonesia, says it becomes like “gasoline in the forest,” and can burn for weeks.

While this week’s fires has put a spotlight on corruption in Indonesia’s forestry sector, it has also highlighted the private sector’s role in curbing forest clearing.

On Wednesday, Singapore’s environment minister, Vivian Balakrishnan, asked the Indonesian government to name and shame the companies involved in the illegal burning.

Some of the biggest companies operating in Indonesia – Wilmar International, the Sinar Mas Group and Asia Pacific Resources International – are based in Singapore or Malaysia. All have issued statements saying they abide by strict no burn polices, although Wilmar has reportedly said to Singapore media that it “cannot prevent local practices of slash-and-burn for agricultural and other purposes”.

Some have made even bolder commitments.

In February Asia Pulp and Paper, one of the world’s largest paper companies, said it would immediately stop clearing natural forests within its concessions. Its sister palm oil company, Golden Agri-Resources, has also committed to forest conservation.

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The head of the districts are not accountable to the public at large if there are forest fires and ongoing deforestation. If we can create a system whereby the fate of the forests is [tied to] the head of the district, then there is some incentive for him to do more than participate in deforestation activity.

Agus Purnomo, a special advisor to President Yudhoyono  

Still, companies and governments cannot work independently, argue green groups.

Indonesia will need to step up monitoring and ensure that local governments abide by national laws.

Agus Purnomo, a special advisor to President Yudhoyono and the head of Indonesia’s National Climate Change Council, said better law enforcement by local police and attorney’s generals, improvements in land titling and permit issuing processes are some solutions.

Also key is ensuring better oversight from the ministry of home affairs, which is capable of cancelling regulations that contravene national laws on forest protection. But what really needs to happen is that local leaders need to be held accountable.

“The head of the districts are not accountable to the public at large if there are forest fires and ongoing deforestation,” Mr. Purnomo told Eco-Business. “If we can create a system whereby the fate of the forests is [tied to] the head of the district, then there is some incentive for him to do more than participate in deforestation activity.”