Last June saw Singapore battling with its most severe
episode of haze yet. During that period Singapore’s Pollutant Standards Index
hit the all time record high of 401. This event ignited a diplomatic row
between Indonesia and Singapore, with Singapore’s Ministry of the Environment
and Water Resources , Dr. Vivian Balakrishnan almost immediately accusing
Indonesia of not caring about the welfare of its neighbours. It was also around
this time that Dr. Balakrishnan first revealed plans to table a Transboundary
Pollution Bill that would provide for criminal and civil liability for any
Singaporean or non-Singaporean entity causing or contributing to transboundary
haze pollution in Singapore.
Of course, culprits may exploit any loophole to demand if the haze is indeed caused by them. For example, associate professor Burton Ong of the national University of Singapore suggests that entities might claim that they had no control over sub-contractors who start the fires. This is a common reason given by companies when confronted by authorities.
About the contributor
The Draft Bill
A draft version of the Bill has now been released, and the
Ministry of the Environment and Water Resources is seeking the views of the
public on this draft. The consultation period will last until 19 March 2014,
before the bill is reviewed and tabled at Parliament. Dr Balakrishnan hopes to
have the Bill passed within the first half of this year.
The Bill is unique for its application of
extra-territoriality; it covers the operations of all Singapore and
non-Singapore entities whose activities outside of Singapore contribute to haze
pollution in the city-state. The Bill would be the first of its kind for
Singapore, as Singapore usually only punishes action overseas only for severe
crimes, such as corrupt acts or illegal sex with minors. It will also be the
first of its kind in the region and the world, as there is currently no law in
the world that allows a country to prosecute commercial entities in other
countries for such offences. Currently, the only way to catch entities based
overseas is if somebody in the entity’s management position comes to Singapore.
The Bill makes it a criminal offence when an entity engages
in conduct, or authorizes any conduct which causes or contributes to haze in
Singapore. A penalty of up to SGD300,000 can be imposed, and this may be
increased up to SGD450,000 if the entity has deliberately ignored requests by
authorities to take appropriate action to prevent, reduce, or control the
pollution. An individual company officer can also be held personally
responsible.
Affected parties may also bring civil suits against errant
entities. The civil damages recoverable under the Bill will be determined by
the courts of Singapore based on personal injury, physical damage, or economic
loss. Civil action can also be taken against errant entities by industries
(such as aviation, tourism and construction) if they can prove that they have
suffered serious economic consequences.
Presumptions allow the court to assume that a fact is
correct until prove otherwise. Since proving what happens abroad is difficult,
evidential presumptions relating to causation (linking open burning elsewhere
and wind direction with the presence of haze in Singapore) and culpability
(based on ownership and occupation of land) have been inserted, and help to
give teeth to this Bill. Among others, it importantly allows for reliance on
satellite imagery, meteorological information, and maps as evidence.
The presumptions put the burden of proof on entities to
provide a rebuttal through their own land maps. Hence, a company can defend
itself by proving the fires were caused by natural disaster or by parties not
under its direction. Showing that the concession maps used by the authorities
are wrong can also rebut the presumption.
Prospects
With companies having to prove that they are not liable for
the haze, they should feel more pressure to be transparent and responsible.
Hence, this new Bill should incentivize
companies to be more forthcoming about their landholding and practices, especially
with regards to sharing their internal land maps and concession maps with
authorities. This has been a long-standing problem between the firms and
authorities, and this shift in the burden of proof could potentially resolve
this issue once and for all.
Academicians have also pointed out that the Bill would
surpass the diplomatic need of going through government channels when faced
with wrongdoing. Professor Simon Tay of the Singapore Institute of
International Affairs said that since the proposed law allows individual
lawsuits against companies, it will be able to bypass any ‘friction’ that might
occur of the matter has to go through governments. As governments have usually
resorted to diplomatic consultations with home countries when foreign companies
were suspected of burning, most of these cases were resolved diplomatically and
not legally. Environmental Law professor Laode M. Syarif from Hasannudin
University added that the new law will also be able to address criticisms that
Singapore is lenient towards suspected companies that are headquartered in
Singapore but operate in Indonesia. It could also stop Indonesians from using
the excuse that Singapore-linked companies get away with environmental
destruction in Indonesia.
Prof. Tay also foresees potential positive developments
among financial lending practices if this Bill is put into place. With the new
law, banks would become more careful when approving loans to companies since
these financial institutions would not want to expose themselves to more risks
of civil or criminal liability. There are already some banks who evaluate loans
based on sustainability and reputational risk, but these remain the minority.
Challenges
However, identifying errant companies may be problematic.
One Singaporean Member of Parliament pointed out that the National Environment
Agency would need to work closely with their counterparts in Indonesia to build
a case against these companies, and questioned if the authorities would be able
to work well together effectively. Indonesia has thus far shown a weak track
record; clearing land through burning is prohibited in Indonesia but
authorities have so far only successfully prosecuted a handful of companies for
starting such fires. Enforcement of land clearing laws is weak in Indonesia due
to lack of skilled ground staff to assess remote areas. Furthermore, corruption
is rife in Indonesia, and companies have been able to continue to burning large
tracts of forests every year, clearing it for planting trees for palm oil or
paper production. Efforts on the Singaporean side must be matched by equally
strong measures from the Indonesian government, for errant companies to be
brought forward to face the music.
Once these companies are brought to court, building a case
against these companies would be an equally challenging proposition. One lawyer
explained that with criminal liability, it would be difficult to prove
causation or contribution of conduct to haze pollution in Singapore. The
prosecution would have to prove beyond reasonable doubt that haze pollution at least partially came
from that fire. That would entail considering how thick the smoke was and
whether the smoke from that fire actually travelled to Singapore.
With civil cases, a claimant would have to show on a balance
of probability that his personal injury, disease, mental or physical incapacity
of death is a consequence of the defendant’s conduct. This may prove difficult
as firstly, there may be a time lag between the haze and the personal injury.
Secondly, haze may be only one among several other contributing factors to the
injury. Also, the defendant’s conduct may have only resulted in one or a few fires
relative to the total number of hotspots at the time. How would the court attribute
the proportion of the defendant’s responsibility?
Of course, culprits may exploit any loophole to demand if the haze is indeed caused by them. For example, associate professor Burton Ong of the national University of Singapore suggests that entities might claim that they had no control over sub-contractors who start the fires. This is a common reason given by companies when confronted by authorities.
Suggestions
Legal experts recommend that a thorough exploration of the
nature of the liability arising from the acts of independent contractors used
by firms to clear land. They suggest that ‘strict liability’ clause should be
applied, wherein the harm caused (the impact on public health and economic
liabilities)justifies a non-delegable duty of care. Hence, in such cases
companies can no longer claim that they are not responsible for the actions of
their contractors.
Other commentators also suggest increasing the severity of
the punishments suggested, as the current proposed fines are too low to cause
any real damage to the multi-billion dollar companies that operate in
Indonesia. Suggestions include a demotion in the status of companies,
compulsory reforestation projects, compensations to the victims of haze, seizing
any assets the entities may have in Singapore, and even prohibitions from doing
business in Singapore. Nanyang Business School professor Ivan Png further suggested
that penalties be proportional to the land area a defendant owns.
To address the issue of the difficulty of compiling evidence,
professor Ang Peng Hwa at the Nanyang Technological University proposed that
NGOs like Greenpeace should be encouraged to work closely with authorities,
including providing the authorities with what evidence they have compiled from
their own investigations. Professor Png also also suggested that the law
include an incentive for whistleblowers to provide evidence.
Outlook
It is hoped that this Bill will send a strong signal of
deterrence to potentially errant companies, especially considering the damage
that could be inflicted upon the company of it was publicly exposed that it
conducts itself in such an irresponsible behaviour. In relation to the bill, a
spokesperson for First-Resources, a Singapore-listed company, said it will
support any move to hold those directly responsible for contributing to the
haze. Golden Agri Resources reaffirmed their view that businesses must act
responsibly, however Asia Pacific Resources International (APRIL) declined to
comment on the bill until it has had time to review it. In general, it can be
seen that major companies are paying attention to the new developments in
relation to the proposed Bill, and can be expected to take the necessary steps
should the Bill come into force.
As a whole, the Bill shows that Singapore is willing to take
action where it can. Public views so far has been generally supportive, and
environmentalists and observers have lauded the proposed legislation as a good
step forward in tacking the haze menace. If passed, the Bill will definitely be
an interesting test case to explore the effective reach of extra-territoriality
in transboundary pollution issues. Furthermore,
if passed, the Bill would indirectly put pressure on Indonesia to step up its
own efforts to resolve the haze problem.
References
Newspaper articles, official government websites and
commentaries by various stakeholder organizations and think tanks.
Helena Varkkey, PhD Sydney
Senior Lecturer, Department of International and Strategic
Studies, University of Malaya. Deputy Editor, Malaysian Journal of International Relations. Research focus: transboundary pollution in Southeast Asia,
particularly pertaining to the role of patronage in agribusiness, especially
the oil palm industry, and its link to forest fires and haze in the region. Website: http://malaya.academia.edu/HelenaVarkkey