Singapore has been smothered by the worst haze in over a decade, prompting the government to vow to find the firms responsible for Indonesian forest fires causing the toxic fumes. That weighed on shares of several Singapore-listed palm oil companies Friday.
Air pollution in the city-state reached levels the government classified as "very unhealthy" as a toxic fog covered buildings and halted some activities. Singapore's government has rolled out measures to help the public deal with the haze, such as handing out masks, setting up shelters protected from the fumes, and closing some outdoor sporting facilities.
The smoky conditions, which give off a bitter taste and sharp smell, are due to forest fires in parts of Indonesia, where farmers sometimes illegally burn areas of land to make way for lucrative crops of trees for palm oil, pulp and paper.
The region is prone to wildfires during the dry season, though this year's has been worsened by the El Nino weather phenomenon, which made for drier conditions than usual. Forest fires in recent weeks have engulfed parts of Indonesia, including Kalimantan and Sumatra. In Malaysia, the government has ordered hundreds of schools closed because of the poor air quality.
Singapore Prime Minister Lawrence Wong said in a Facebook post late Thursday that the country is looking into which companies may be responsible for the fires, without naming specific firms. "Where warranted, we will take action under Singapore's Transboundary Haze Pollution Act, and also explore joint action with other countries," he said.
The 2014 legislation allows authorities to take legal action against firms responsible for causing or contributing to the haze in Singapore, even if their activities take place overseas.
Palm oil-linked shares in Singapore declined after Wong's post, with First Resources down as much as 9.1% and Bumitama Agri's shares losing 7.5%. Bumitama Agri's shares pared some of its losses and was down 4.8% before the company requested a trading halt.
Both companies were mentioned in a recent report by independent environmental-campaigning organization Greenpeace, alleging links to the fires in Indonesia. First Resources didn't immediately respond to requests for comment. Bumitama said it expects to later Friday set out its position, "including the circumstances surrounding the recent fire incidents, our fire-prevention and response measures, and the findings currently available to us."
First Resources said late Thursday that it had identified hotspots in the vicinity of its concession in West Kalimantan, of which many were determined to be outside its operating boundaries. Plantation concessions are agreements where a government agency leases land to companies for agricultural cultivation.
Its firefighting teams are on standby and the company will continue to work closely with the authorities and stakeholders to mitigate fire risks, it said.
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