Singapore's anti-haze bill to bite?

Singapore proposes a Transboundary Pollution Bill. It looks as though this bill has a good chance of going through. It has teeth by shifting the burden of proof to errant entities based in Singapore and beyond (including companies in Indonesia and Malaysia). These entities and members of their management teams (anyone who steps foot in Singapore territory) will be subject to criminal and civil liability. Further enhancements may add even more bite e.g. larger penalties and whistleblower rewards. The bill is in public consultation until 19 March 2014, and Singapore hopes to pass the Bill by mid-2014.  

Some industry experts note that the 2013 record SE Asia peat smog haze was a watershed in pushing forth stronger palm oil sustainability measures. Singapore's bill could add to this by enhancing the push for a tougher compliance regime for plantations and other entities. However, palm oil sustainability experts (including NGOs) have consistently found that the key cause of Sumatran peat fires affecting Singapore are now more likely to be small farmers and less likely to be large companies. The latter  have being changing their practices. Specialists tell us that in consultation with Singapore advisors that they have already pointed this out. On the use of historical remote sensing images and trends, they have pointed out the neer to discern the different fire patterns of recurring farmer land clearance versus mass fires (in the past) from large-scale plantation development.

In not directly addressing the bulk of the problem i.e. fires in non-plantation estate areas in key peat zones in Riau and Jambi (and even in the Peninsula), it is not clear how this bill will have a strong impact in alleviating the problem. However, the Singapore authorities may feel the need to implement such a bill as it seems the least they could do to address the pollution problem that afflicts its people. 

Khor Reports' contributor  Helena Varkkey is a specialist on the SE Asian smog haze air pollution problem and plantations. She has contributed an analysis of Singapore's draft bill to this blog. Below are excerpts from her review presented in an abridged, Q&A format.

Why is Singapore introducing this bill? 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.... 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 (2014).

Why is this approach unique? 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.... 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.

Who may be caught? Currently, the only way to catch entities based overseas is if somebody in the entity’s management position comes to Singapore.

What are the legal implications? 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.

 But isn't it hard to bring a case against a company? 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... 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.... 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.... 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.

Does this have to go through foreign government channels? 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.... (But others say that )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.

How will bank financing be affected? 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.

What suggestions are being made to add teeth to the proposed bill? 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.... 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.

Is there support for this bill?  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.

View Helena Varkkey's full briefing here: http://khorreports-palmoil.blogspot.com/2014/03/singapores-transboundary-pollution-bill.html