Engaging Companies to Tackle Transnational Haze Problem

Assoc Prof Tan Kheng Boon Eugene asked the Minister for the Environment and Water Resources in tackling the root causes of the transnational haze problem (a) whether the Ministry has engaged, and to what outcomes, Singapore and Singapore-based companies in the palm oil industry on responsible plantation practices; and (b) whether the Ministry can consider imposing environmental, social and governance (ESG) reporting requirements and chain of custody certification requirements on these companies as part of their licence to operate in Singapore.

Assoc Prof Eugene Tan has correctly identified that the root cause of the transboundary haze problem is a commercial one. Errant companies have been clearing land on their concessions through illegal burning because it is the cheapest way to do so. There has been inadequate enforcement to stop them, even though it is clearly against the laws of Indonesia.

As Members would recall, MFA had formally sought clarification from Indonesia, through a diplomatic note, on whether Singapore-linked companies are involved in illegal land clearing practices in Indonesia. MFA also requested that Indonesia provide any evidence of wrong-doing that Indonesia has. We are still awaiting Indonesia's response. If there is credible and usable evidence that Singapore-owned companies or companies operating in Singapore are involved, we intend to take further steps against these errant companies. Of course, the primary responsibility for taking action against these companies still lies with Indonesia, where they are allegedly conducting such illegal activities.

On our part, as my Cabinet colleagues and I have mentioned before, Singapore is also considering legislation to enhance the penalties for companies that embark on irresponsible actions that damage the environment, affect public health adversely and cause transboundary effects. Such legislation will not be easy to draft but we hope to send a clear and unequivocal signal to all companies that this type of behaviour is not acceptable and governments are going to hold them accountable for such misconduct. My Ministry is engaging companies and discussing with them ways to further strengthen environmentally sustainable practices.

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This leads to Assoc Prof Eugene Tan's question on the issue of imposing environmental, social and governance reporting requirements and chain of custody certification requirements on companies as part of their licence to operate in Singapore.

We believe that the entire value chain has to adopt sustainable practices as a feasible and a viable way of doing business. Ideally, companies should see responsible cultivation as a competitive advantage, as a growing number of consumers will demand sustainably-produced goods over time. There are already some positive signs that industry is self-organising towards this goal.

For example, I commend the Singapore Compact for Corporate Social Responsibility for its work to promote sustainability reporting by all major companies. It has recently organised a stakeholder consultation on sustainable agriculture business principles. The Singapore Business Federation (SBF) is also exploring initiatives on sustainable agriculture, with the overall objective to reduce the occurrence of haze – not just for Singaporeans' sake, but also for the health of residents who live around the land clearing areas. I understand that SBF is planning to organise an Asia Pacific Sustainability Leadership forum for key industry players interested in sustainable development, and that a plenary session concerning haze has been planned. Such initiatives should be encouraged and supported. We, as consumers, must also do our part to encourage this by purchasing sustainable products.