Last year some two million hectares of land in Indonesia went up in flames across Sumatra, Borneo, and the Western half of New Guinea. The conflagrations caused choking air pollution, hospitalizing hundreds of thousands of people and further denting regional economies already hard hit by the downturn in commodity prices. Daily carbon emissions from the fires during the height of the crisis were higher than the daily emissions from the entire U.S. economy.
Most of the haze was caused by fires burning on degraded peatlands. While healthy peatlands are akin to wet sponges, dried-out peatlands are highly vulnerable to fire. And once ignited, peat fires are nearly impossible to extinguish using conventional fire-fighting techniques. Only sustained rains end the burning. With the prospect of dry conditions returning to the region soon, Indonesia and its neighbors are bracing for another round of fires that could be even worse than last year’s Armageddon, which some observers called the worst environmental disaster of the 21st century to date.
That prospect is terrifying not only the region’s governments and citizens, but also the companies that operate concessions in Sumatra and Borneo. And perhaps no company is more exposed than Asia Pulp & Paper (APP), a forestry giant that sources wood pulp from dozens of suppliers operating across hundreds of thousands of hectares of peatlands. APP took a direct hit last year when several of its suppliers were identified as having fire “hotspots” in their concessions. While APP steadfastly denied that its companies set the fires, it was nonetheless singled out in Singapore, resulting in some stores removing its products removed en masse from shelves and the government threatening multi-million dollar fines.