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Spread of oil-palm plantations fuels the haze

Far Eastern Economic Review - October 2, 1997

Margot Cohen in Jakarta and Murray Hiebert in Kuala Lumpur – President Suharto's unprecedented apology for the forest fires that are spewing smoke over neighbouring Malaysia and Singapore has drawn praise as a sign of Indonesia's readiness to tackle the annual "haze." In his September 16 speech to an Asean meeting, however, Suharto cited "obstacles that are not easy to overcome," particularly the long dry season and the vast terrain.

But if the president had mentioned a few other factors, the apology might not have sounded so sweet: The strong winds of market demand and the smoldering coals of collusion are likely to keep the fires raging for many dry seasons to come.

Satellite pictures have led the Suharto government to believe that most of the companies which start the fires are oil-palm plantations--now in the midst of frenzied expansion as international demand for palm oil surges. A number of rubber estates and tree plantations were also among 176 companies named by Forestry Minister Djamaludin Suryohadikusumo in midSeptember. These plantation owners are suspected of flouting a 1995 ban on burning forest to clear land.

Suharto reiterated the ban on September 9, calling on the military to help enforce it. Companies were given until October 3 to prove they're not the culprits. Those failing to meet the deadline face revocation of their land-use licences and possible criminal prosecution.

Yet the zeal to keep clearing land for plantations will be difficult to extinguish, industry analysts say--especially in the case of the oil palm. Last year, Indonesian exports of palm oil and palm-oil products were worth more than $1 billion, boosted by growing global consumption of palm-oil products, a 32% increase in the last five years. In fact, official encouragement of the palm-oil industry is partly responsible for the plantation boom. Government plans call for the production of 7.2 million tons of crude palm oil by 2000, with plantation area more than doubling to 5.5 million hectares. Setting fire to the forest and brush is the cheapest, quickest way to clear land for plantations.

"If you do land-clearing in pioneer areas, where no roads are established, the only practical way to get rid of the debris is to burn it," says A.F.S. Budiman, executive director of the Rubber Association of Indonesia. Alternatives, like manual clearing, are much more labour-intensive, he maintains.

And if a local official tries to enforce the ban? "You just bribe him," Budiman says flatly. "At the most, you promise to give him some shares. Then he'll just wash his hands of the matter. Who will know? It's such a big area." The land is allocated from areas deemed "conversion forest" that have usually been logged over by concessionaires. The remaining trees are cut and sold by the plantation before the brush and other debris are burned.

Plantation development also serves the government's long-standing goal of relocating people from densely populated Java to the outer islands. Official incentives include low-cost financing for estates where 80% of the land belongs to smallholder transmigrants and 20% to the company. Some 35 companies are developing plantations in conjunction with transmigration.

Private oil-palm plantations are dominated by Indonesian groups such as Sinar Mas, Salim, Raja Garuda Mas and Astra. But it's the smaller companies that are hardest to control, officials say. The "hot spots" that show up as red dots on the latest satellite photos indicate that more burning is now being done at night, as companies race to finish clearing land before inspection teams show up.

According to official estimates, fire has so far swept through more than 80,000 hectares in Sumatra, Kalimantan, Sulawesi and Irian Jaya, with the potential to spread to 300,000 hectares. That's nothing compared to a 1982-83 blaze that wiped out more than 3.6 million hectares. But this year's debilitating smoke was sufficient to spark the declaration of a national disaster in early September.

The Indonesian government is also investigating reports from industry sources that 18 Malaysian joint ventures and five Singaporean joint ventures set fires on their Sumatran plantations. Malaysian companies should get no special treatment if they are proven guilty, says Law Hieng Ding, Malaysia's minister of science, technology and the environment. "Whenever they go overseas, they are advised to stick to the local laws of the country," he said during the Asean talks in Jakarta. "Whoever doesn't comply has to face the law."

But Malaysia's own laws seem inadequate in controlling the worsening pollution caused by its decade of hectic economic growth. The government has admitted that emissions from vehicles and factories play a part in the haze hanging over Kuala Lumpur and other Malaysian cities. Three years ago, the Department of Environment drew up a Clean Air Action Plan that included steps to control vehicle emissions and a blueprint for a comprehensive public-transport system. The cabinet rejected the plan after it was opposed by several ministers who argued that the costs were too much for industries to bear.

Malaysians are now paying the price. In Kuala Lumpur, where the Air Pollutant Index has repeatedly topped "unhealthy" levels in recent weeks, Prime Minister Mahathir Mohamad donned a surgical mask and urged the public to follow his example. An emergency was declared in the state of Sarawak on September 19 when the index breached the "extremely hazardous" level of 650. All government offices, schools and private businesses were ordered to close.

Asean's management of the smog crisis reflects the grouping's gospel of regional self-reliance. Malaysia has pledged to dispatch 400 firefighters to Sumatra and Kalimantan. Singapore is contributing satellite data. Even Thailand, which is not directly affected by the smoke, is sending two fire-fighting planes. Indonesia and Malaysia will coordinate cloud-seeding operations.

In taking the lead, Indonesia is moving with unusual transparency. The environment and forestry ministries are publicizing the names of suspected companies and putting out 30- second TV spots slamming corporate irresponsibility. Provincial governors and regents were warned that their efforts to enforce the ban on burning will be reported directly to the president.

What most pleases non-governmental organizations is the government's new willingness to pin most of the blame on corporate culprits rather than on slash-and-burn farmers, as in previous years. "The fire is only a symptom of the takeover of people's land by big business," says Niel Hakinuddin of Plasma, a Kalimantan-based NGO that monitors green issues.

In mid-September, for example, a group of villagers from the remote island of Siberut, off West Sumatra, arrived in Jakarta to protest. Back in 1994, Suharto had bowed to environmentalist pressure and ordered all commercial logging on Siberut to cease. Now, 70,000 hectares on the island are slated for two new oil-palm plantations. In July, villagers watched aghast as a Jakartabased firm burned the first 10 hectares.

"We don't allow any burning in the forest," says Paulus Aman Beili Kunen Saumanuk, who argued with his 80-year-old father after he found out that the illiterate clan chief had sold rights to 500 hectares for 300,000 rupiah ($102). "It might destroy all the wood, the rattan and the plants we use for medicine."

The best cure for the smog would be to scale back ambitious plantation targets and revise land-use policies, some analysts argue. Others hold out hope that the plantation companies will stop burning and turn to other methods of land-clearing. "We are not going to continue this expansion at the expense of the environment," insists Derom Bangun, vice-chairman of the Indonesian Palm Oil Producers' Association. That's a welcome assurance, but until it happens, Indonesia's neighbours should not hold their breath for a smog-free future.