If a treaty did not work, do we need another strategy to reduce Indonesia’s haze episodes?
On last February, forest fire hotspots in Riau have produced dangerous air pollution and have raised alert Indonesian government. President Joko Widodo (22 Feb) ordered local authorities in Riau to prepare the infrastructure. The president has also warned that more forest fire could break out this year, with the worst come between August and September. After relatively haze-free in 2020, Indonesia’s haze could hit Southeast Asia countries in 2021.
Indeed, recurrent forest fires in Indonesia has caused haze across the nation and several neighbouring countries, particularly Singapore. Together with other ASEAN members, Singapore agreed to share technology, provide assistance, and establish a cooperation mechanism. As a result, the ASEAN Agreement on Transboundary Haze Pollution (AATHP) is signed in 2002, with Indonesia ratified the treaty latest in 2015. However, Indonesia’s effort to combat the problem turned out to be little given the existence of the binding commitment and full concern by Singapore.
This article argues that Singapore can help the treaty works by committing to provide a compulsory fund scheme for the haze problem while making the opt-in scheme for other ASEAN members and countries around the world.
Indonesia’s haze
The return of Transboundary Haze Pollution (THP) is certainly not only a major problem to Indonesia but also to other ASEAN members, particularly Singapore. The forest fire in 1997/1998 and 2013 was estimated to cost Singapore by USD 74 million and USD 1 billion (Guinness & Nurhayati 2016). Unfortunately, the haze was still happening almost annually. In 2019, the latest forest fire occurred, affecting more than 942,000 hectares of forest area throughout Indonesia with total damage at least USD 5.2 billion (Suroyo & Diela 2019). The haze shrouded Singapore and worsened its air quality to dangerous effect, which was the worst level for the first time since 2016.
Singapore has tried certification and legislation approaches to address the THP. Under the Singapore Alliance for Sustainable Palm Oil, the country has ensured the availability of certified sustainable palm oil since 2016 (RSPO 2016). While this approach may send a clear commitment to sustainable forestry activity, the policy is limited only in Singapore. Meanwhile, through the establishment of the Transboundary Haze Pollution Act in 2014 by Singapore’s legislation, the country has prevented haze harm. Singapore also has participated in haze mitigation efforts, such as developing capacity-building projects in Indonesia’s provincial, providing technology and cloud-seeding aircraft to tackle forest fire. Furthermore, Singapore has pushed Indonesia brings the issue more seriously into Indonesian legislative actions. As a result, slowly but surely, there is some goodwill to solve the problem from Indonesia.
Indonesia, as the main polluter, has issued several laws and take actions on the haze caused by human activity. For instance, Indonesia police have arrested 185 people suspected in slash-and-burn practices and several corporate executives in relation to the haze (Walden 2019). To address unclear property right, Indonesia has accelerated the issuance of the land certificate. This policy has established excludability which is a key to solve the common-resource problem (World Bank 1992, p. 70). The forest moratorium also has been made permanent in 2019, which estimate can save 66.2 million hectares of forest area (Samadhi 2019).
Nevertheless, despite the effort, Indonesia’s haze is a wicked problem which mainly caused by slash-and-burn practices and weak forestry governance (corruption and lack of enforcement). Singapore’s efforts seem not to tackle down the former, and improving the latter need Indonesia’s political support. To some extent, changing the behavioural of clearing land method takes time, while the binding regional agreement cannot mandate Indonesia to overcome its institutional problem. Many traditional farmers and big corporations were unable to see the negative consequences of their irresponsible practices. The negative externalities have existed due to the divergence between private and social cost (Howes 2020a). Singapore also should not expect that Indonesia’s good economic growth over a decade may heal the environmental degradation, citing evidence that the environmental Kuznets curve hypothesis was not confirmed in the country (Sasana & Aminata 2019). Arrow et al. (2015) point out that economic growth is not the central issue; moreover, it is a matter of policy effort and institutional concern. Due to the weak capacity of Indonesia, the haze problem may get more severe if there is no closer cooperation in the region.
Treaty as a solution for transboundary haze problem
ASEAN members agreed to deal with this international environmental issue and signed the ASEAN Agreement on Transboundary Haze Pollution (AATHP) in 2002, entering into force in 2003. In the absence of the international government, the treaty helped to address the prisoner’s dilemma problems (Howes 2020b). AATHP would act as a form of governance, creating a commitment mechanism between Indonesia as a polluter and other members, particularly Singapore and Malaysia, as victims in THP.
Historically, the number of treaties’ compliance is high even though it needs time to make treaties right. The North Pacific Fur Seal Treaty and the Montreal protocol are some examples of the successful treaties on the global environmental issue. The former managed to distribute the more significant gain to every party on the case of common resource good, while the latter was remarkable successful in addressing the destruction of the ozone layer which is a global public good. However, the real challenge is to make a treaty scheme attractive. Hence, it is essential to promote compliance by providing an incentive to all the actors (Barret 2003).
In the context of tackling haze, ASEAN members can learn from previous successful treaties. More than a decade after the ratification of the treaty, AATHP does not seem to work well and experiences a regional challenge. The practice of the ‘ASEAN way’, which is characterised by non-interference principle and consensus, may deteriorate the effectiveness of the treaty. This ineffectiveness in addressing regional environmental affairs can be seen in the 2019 Indonesia’s haze. At that time, the direct intervention from other ASEAN members was minimal in terms of financial and non-monetary assistance. The assistance was mostly in the form of supporting relevant data. The ‘soft law’ also does not require Indonesia to accept international offers on fire-fighting assistance, leads to the annoyance of the Singapore government.
A compulsory fund
To support the action plans of the AATHP, the parties established the ASEAN Transboundary Haze Pollution Fund (ATHP Fund) in November 2006 with an initial size of USD 100,000 (Tacconi et al. 2008). Every party could make voluntary financial assistance to support haze prevention and mitigation. As a wealthy and respectful neighbouring country of Indonesia, Singapore needs to step up by designing a compulsory fund scheme and firstly contributing to it. A study shows that Singapore would be willing to pay USD 643.5 million per year to combat the haze issue in the regional (Lin et al. 2017). The bigger monetary commitment thus would be attractive for Indonesia and generate a more incentive to overcome the cause of recurrence haze in the country.
Three things have to be considered to implement the proposal of the compulsory fund. First, the compulsory fund, which is a form of Victim Pays Principle (VPP), must go through the ATHP fund scheme. Although the money is from Singapore, the supervision of the funding should be under ASEAN task force to maintain the national sovereignty of Indonesia. The funding has to provide greater flexibility for Indonesia in allocating funds. This will ensure non-interference principle under the treaty. Second, the compulsory fund needs to reconsider that some additional assistance will be given if several outcome-based that is committed together is achieved. Rather than giving punishment, the proposal would award incentives that also comply with regional commitment. Third, it is essential to distribute incentives for Indonesia’s local actors to help implement programs. The additional incentives could be used to address slash-and-burn practices in order to fulfil the zero burning policy. For instance, subsidizing a sustainable method for clearing peatland area helps prevent the recurrence haze. In light of decentralization, the fund also could be allocated for local governments as a reward for reducing forest fire cases.
Furthermore, Singapore can negotiate Malaysia to join into this commitment fund scheme, as both are the most impacted countries due to severe haze. On the next step, THP should be a concern at the global level since it has produced an enormous amount of emissions. Singapore, along with ASEAN parties, could raise this issue into the international forum. The opt-in scheme at the global level would be provided in the ATHP Fund. ASEAN’s dialogue partners, such as Australia, Japan, China, could play a role in a more extensive regional effort to tackle the haze remains to be seen.
Constraint
The major constraint to implement the effectiveness of compulsory fund is the lack of Indonesia’s effort to put this international environmental problem as the top priority. To address this, Singapore needs to gain political support from Indonesia’s government and simultaneously win the heart of the citizens. This approach is a bipartite strategy. Singapore could mandate its world-class universities and research institutes to conduct rigorous studies, such as the impact of FDI or tourism loss to Indonesia, and communicate it in a populist way. The public awareness would bring higher political pressure and hence create a sense of urgency for the government. Such robust evidence is also beneficial to communicate in the global arena, which may complement with persuasive diplomacy approach.
The second constraint is the limited budget of Singapore to provide additional assistance. One option is that Singapore can reallocate the budget from unrealised haze mitigation cost since the haze would be reduced. Another option is that the country can issue a green bond and sell it to the international market. This action would improve global awareness for THP issue in ASEAN.
No panacea
While the AATHP is a sound initiative, the treaty has not solved the wicked problem of Indonesia’s haze. The implementation of the agreement has faced a significant challenge due to the ASEAN way, combined with Indonesia’s weak forestry governance. Providing a more monetary incentive through Singapore’s compulsory fund on the ATHP Fund would create an incentive for Indonesia to be committed in the treaty. Finally, the opportunity to opt-in in the compulsory fund scheme should be provided for other countries. Through collaborative and progressive cooperation, ASEAN countries can all take steps to overcome the THP problem.
