SIIA Haze Outlook 2021: Opportunities for Climate Action and Green Recovery

The SIIA Haze Outlook 2021, published last month and co-authored by the Singapore Institute of International Affairs (SIIA) and Segi Enam Advisors, has something a little different than last year’s report—a segment exploring opportunities for climate action and green recovery, with particular focus on nature-based solutions (NBS) and carbon markets.

Theoretically, nature-based projects could lead to carbon emissions reduction and carbon offsets, while providing opportunities for investments. While the sector is still in its early stages of development, interest in carbon credits generated form Indonesia-based NBS projects is growing. The Katingan Mentaya Project managed by PT Rimba Makmur Utama illustrates this interest—a forest restoration and protection initiative located in Central Kalimantan, it generates an average of 7.5 million triple gold certified carbon credits a year, and carbon credits generated from the project have already been purchased by major global multinational firms.

Accordingly, many plantation companies that spoke to SIIA have expressed some interest in generating carbon credits from their own conservation projects, both current and future. Ultimately however, it is still too early to assess how willing project developers are to sell credits internationally compared to domestically.

Our previous posts on the SIIA Haze Outlook 2021: (1) Reviewing 2020; and (2) Issues to Watch in 2021

Read the full report here: SIIA Haze Outlook 2021

SIIA Haze Outlook 2021: Issues to Watch in 2021

Continuing from previous posts on SIIA’s Haze Outlook 2021, of which Segi Enam was the co-authors, there are several relevant issues that bear watching in 2021.

On the meteorological front, Indonesia is expected to enter into its usual June–September dry season following a wet spell that was in large part caused by La Niña. Meteorological departments generally expected this dry season to either remain normal or drier than it was in 2020 but much less so than the droughts in 2015 and 2019. Both the Indian Ocean Dipole and El Niño-Southern Oscillation phenomena are forecasted to stay neutral throughout the third quarter of 2021. Overall, however, meteorologists warn that there are still some uncertainty in these forecasts, since it is difficult to make predictions during the transition seasons from April to May.

Given the favourable weather conditions, policy and human factors become decidedly important in the evaluating the risk of a severe transboundary haze. On one hand, the relevant policies in effect are sending a strong message of commitment to sustainability on the part of the Indonesian government, particularly in the areas of peatland and mangrove conservation, net zero emission goals, and haze prevention in the midst of the pandemic. On the other, there are concerns that the more recent policies, namely the Omnibus Law and food estate programme, would leave adverse environmental consequences.

Source: Segi Enam Advisors based on data from The World Bank (2021) for palm oil and rubber prices, GFW (2021) for tree cover loss and primary forest loss, KLHK (n.d.) and KLHK (2017) for official estimated burned area in 2015, 2019, and 2020.

That being said, there are other factors that bear watching. The Covid-19 pandemic is the most obvious; while it has presently not resulted in a severe haze incident despite the disruptions it has caused to fire management efforts, its impact in 2021 and beyond remains unclear. What the pandemic has caused is a near multi-year high in prices within the agricultural commodity market, which in turn raises the question of whether it would drive Indonesia growers to carry out land clearing and replanting activities.

Read the full report here: SIIA Haze Report 2021

PEFC Supporting Sustainable Rubber

The Programme for the Endorsement of Forest Certification (PEFC) has launched the Our Supporting Sustainable Rubber campaign in effort to ramp up sustainability standards within the rubber industry. PEFC held an online webinar to officially kickstart the campaign yesterday, in which several interesting pieces of information were revealed:

1. Problems faced by rubber smallholders are essentially: (1) price volatility; (2) low productivity; (3) unsustainable practices; and (4) compliance issues. To that end, PEFC is a key partner in an initiative with the UN-REDD Programme to develop a sustainable forest trade certification framework, with its pilot project already ongoing in the Lower Mekong region in Thailand.

2. The Global Platform for Sustainable Natural Rubber (GPSNR) is looking to create a risk-based platform that would allow certified companies to assess its sustainability standards against the standards recommended by the GPSNR. The platform was led by tire companies as an alternate (non-certification?) approach. The International Rubber Study Group (IRSG) also has a self-declaration approach to rubber sustainability.

3. There was a point made about the increasing global demand for traceability, and that it may be more beneficial to view the requirement of traceability as a tool to improve sustainability practices rather than to reveal good and/or bad practices in itself. Panellists also noted that there is also a lot of work that still needs to be done to identify pertinent sustainability issues, especially when it comes to social issues such as equality of pay.

Edit (08.07.2021, 12.50 p.m.): Edited to include last two sentences in point 2.

#BenderaPutih Trending on Twitterjaya

As the country continues its movement order control—this time with seemingly no end in sight—Malaysians have again banded together to help each other without waiting for official aid, this time in the form of the #BenderaPutih (white flag) movement. A “sister” hashtag to last year’s #KitaJagaKita, the movement encourages those facing financial difficulties to reach out for assistance by flying a white flag at their homes without fear of humiliation (embarrassingly, like its “sister” hashtag, several politicians attempted to piggyback on #BenderaPutih movement, only to receive the outrage of netizens).

The online campaign has trended significantly on social media—data shows a relatively high usage of the hashtag in many major areas outside of Kuala Lumpur/Selangor, including Kota Bharu, Kuala Terengganu (east coast, Peninsula), Alor Setar, Johor Bahru (west coast, Peninsula), Kuching, and Kota Kinabalu (East Malaysia).

Heatmap showing concentration of #BenderaPutih usage across Malaysia. Note: map is indicative and not to, i.e. bigger than, scale

In comparison, social media attention on #BenderaPutih is significantly higher than some other related hashtags, such as #ProtesDarurat and #BantahDarurat, which cumulatively only received around 16,000 mentions since they were first used in October last year compared to #BenderaPutih’s 73,000 mentions (and counting) this week.

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Sources for aid/if you’d like to help (please note that this list is not exhaustive):

1. #BenderaPutih: Where to get help: MalaysiaKini has compiled a list of programmes that can provide help, which include locations of Shell petrol station food banks and 99 Speedmart’s grocery package programme.

2. Facing #BenderaPutih, Malaysians help each other with free meals, food baskets, free tuition, listening ear: The MalayMail has prepared a list of programmes which include free online tuition by Projek Didik.

3. #KitaJagaKita: #KitaJagaKita maintains a “one-stop shop” website of initiatives where people can either ask for or volunteer help.

SIIA Haze Outlook 2021: Reviewing 2020

Last week, the annual Haze Outlook 2021 was launched, a report on the recurring haze event in Southeast Asia authored by the Singapore Institute of International Affairs (SIIA) and Segi Enam Advisors. Part of the report reviewed the haze conditions—or lack thereof—in 2020.

While initial fears was that Southeast Asia would be battling both the Covid-19 pandemic and the annual transboundary haze simultaneously, no severe haze incident was recorded for in 2020. This was partly due to weather conditions within the region, i.e. a strong La Niña and a muted India Ocean Dipole phenomena resulted in one of the wettest year for Indonesia in the past decade, thereby dampening fire occurrences.

Consequently, much fewer hotspots were recorded in 2020 compared to 2019. The Indonesian Ministry of Environment and Forestry (KLHK) reported that some 297,000 hectares of land were burned in 2020 compared to the 1.6 million hectares in 2019.

Data: Hotspot imagery from NASA’s Fire Information for Resource Management Systems (FIRMS, https://earthdata.nasa.gov/firms), peatlands from Jiren et al. (2019), and Khor Reports estimates. Source: Segi Enam Advisors (2021).

Nonetheless, the outbreak of the coronavirus has had some effect on the Indonesian fire prevention landscape. For one, the pandemic appeared to have somewhat hindered replanting activities in the agricultural sector, although businesses and experts have indicated that this was more apparent in rural areas compared to urban centres. On the other hand, Covid-19 has adversely impacted Indonesia’s fire fighting and prevention capabilities: initiatives such as outreach programmes with fire-prone villages and corporate fire management efforts were scaled back and government resources had to be redirected to manage the pandemic.

Read the full report here: SIIA Haze Report 2021

Identifying Small Wins towards ISPO Certification of 1 Million Palm Oil Smallholders in Indonesia in 2025

Last week, Strengthening Palm Oil Sustainability Indonesia (SPOS), IPB University, and ANGIN-Wageningen University hosted an online dialogue session on the possibility of ISPO-certifying one million Indonesian smallholders by 2025. Overall, experts speaking at the dialogue appear cautiously optimistic about the ambitious goal, with several pertinent points:

1. Marieka Leegwater from Solidaridad Palm Oil Program reiterated that transparency is imperative for ISPO standards to be effectively enforced and receive recognition by value chain and government. In response to a question about fostering a fair relationship between mills and smallholders, Marieke opines that it cannot be forced, as the former are typically in a better position contractually than the latter. 

2. Rukaiya Rafik from Forum Petani Kelapa Sawit Berkelanjutan Indonesia (FORTASBI) was optimistic about the possibility of certifying one million smallholders by 2025. Data is already available, as are incentives, although the latter is not yet well integrated throughout the supply chain. Rukaiyah agreed with Marieke’s answer on the question on mill-smallholder relationships, adding that it presents a good opportunity to encourage smallholders to get certified. 

3. Frans Claassen of Margarine, Fats and Oils (MVO) explained that several initiatives and measures introduced, including the ISPO and relevant presidential moratoria, have contributed towards international recognition of sustainable palm oil from Indonesia. Success stories help, such as the declining deforestation rates linked to palm oil plantations for four years in a row in Indonesia. With specific reference to ISPO, increased transparency, continuous improvements, and clear benefits for the smallholders are key to strengthening its credibility.

Source: Heriawan, National Action Plan of Sustainable Palm Oil (2021). There was a discussion on whether intercropping or agroforestry would be more acceptable to big plantation companies, especially considering that these companies would likely be deterred from agroforestry practices as it may lower their oil palm production rate.

SIIA Haze Outlook 2021

It is halfway through 2021, meaning it is time for another risk assessment report on the infamous haze within the Southeast Asia region. Together with the Singapore Institute of International Affairs (SIIA), we concluded that there is a low risk of a severe transboundary haze incident for this year, on account of favourable weather, pandemic-related disruption to land clearance and planting exercises, and proper forest management by various stakeholders, including the Indonesian government.

As usual, Segi Enam Advisors collected and examined qualitative and quantitative data from various sources, including recent academic literature, meteorological departments, and government agencies. We also provided geospatial analysis of key areas in the Riau and Central Kalimantan regions to give a geographical overview on hotspot intensity in relation to other information such has forest and peatland moratorium areas and districts with food estate projects in planning.

Read the full report here: SIIA Haze Outlook 2021

Edit (28.06.2021, 11.40 a.m.): ANTARA News covered the launch of the Haze Outlook 2021 report during SIIA’s virtual webinar on 24 June 2021. The article reported the statements made by guest speaker Herry Purnomo of the Center for International Forestry Research (CIFOR), who commended both the public and private sectors for their roles in reducing fires and deforestation, and SIIA chairman Professor Simon Tay, who opined that the extension of the Peat and Mangrove Restoration Agency’s tenure shows the Indonesian government’s fire prevention commitments.

Covid-19 and the Johorean Property Market

As the pandemic drags on, one obvious victim is real estate. Market outlook in 2020 have been unsurprisingly bleak, although experts have expressed cautious optimism for 2021 as some aspects within the sector gradually improve. Still, it would seem a relatively long way off until a more significant recovery occurs, as owners of property in Johor Bahru would tell you.

Channel News Asia’s Amir Yusof wrote an interesting piece on how the residential property market has been hit by the Covid-19 pandemic. According to a report by property consultancy firm Henry Butcher, Johor contributed 20% of overhang residential properties in Malaysia in 2019, making it the state with the highest proportion of unsold residential property even before the outbreak of the coronavirus. Segi Enam Advisors principal, Khor Yu Leng, contributed her opinion on the matter, explaining that:

“The spending power of the former Johor daily commuters and Singapore residents who visited Johor weekly or otherwise has diminished or disappeared from the Johor economy… A year later, with Johor’s economic umbilical still cut off from Singapore, and Malaysia suffering a big wave of COVID-19, informal social support activities (to help the lower-income households) have been ongoing.” 

Head over here to read the entire article: How Johor’s residential property market has been hit hard by COVID-19

UPM-CIRAD-MPOB: The New Geopolitics of Palm Oil Industry and Deforestation—From Neo-Colonialism to Post Covid-19

Last week, University Putra Malaysia’s Institute of Tropical Forestry and Forest Products (INTROP) collaborated with the French Agriculture Development Centre (CIRAD) and the Malaysian Palm Oil Board (MPOB) to host a webinar on the geopolitical issues surrounding the palm oil industry and deforestation.

The speakers and panellists approached the subject matter from different perspectives: (1) Jean-Marc Roda spoke about a range of topics, including the regulation of imported deforestation, the ever-evolving issue of food security and consumption, and Europe’s biofuels conundrum; (2) Alain Rival explained palm oil’s vulnerability to climate change and the growing need for more sustainable agricultural systems within Southeast Asia region to address that vulnerability; and (3) Khor Yu Leng discussed social media attention on key commodities as well as recent developments relating to trade and climate governance.

Source: Roda, CIRAD/UPM (2021)

Source: Rival, CIRAD (2021). Experimental palm oil plots of TRAILS, a forest landscape conservation programme tackling the adverse impact of large-scale agricultural expansions on land cover change and biodiversity.

Source: Khor, Segi Enam (2021)

Greenhouse Farming Booming in China Amidst Age of Pandemic

The coronavirus outbreak brought to light another unexpected practice: greenhouse farming. Disruptions to farming caused by the pandemic has spurred several areas in China to turn to more modern farming practices in effort to strengthen its food security whilst ensuring safety and quality. Chongming Island is one such example, where glass greenhouses equipped with high-end technology have been set up by professional greenhouse operators FoodVentures to produce sustainable vegetable crops.

Greenhouses are not new in the Chinese agricultural scene—Shouguang, a city in northern China, are pioneers of greenhouse farming and have seen the use of greenhouses since the late 1980s as a way to guarantee a continuous supply of fresh vegetable throughout winter, while Jiuquan has greenhouses covering 1,666 hectares of land in 2019 to combat its cold desert climate. What the pandemic appears to have done is further accelerate the development in the modern agricultural technology; this, coupled with a growing middle class willing to pay more for better quality produce, has reportedly led to a 28% increase in glass greenhouse use in 2020.