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Haze compensation to poor stalls as Indonesia spends on new palm oil cartel

  • Rain has reduced the number of hotspots in Kalimantan and Sumatra but fires continue to rage in Papua and West Papua provinces in Indonesia’s east.
  • Indonesia’s finance ministry has yet to approve a budget for cash payments to low-income families affected by the haze.
  • Indonesia and Malaysia agreed to form a palm oil producers council.

The Indonesian government has yet to provide compensation to low-income families affected by smoke pollution from the archipelago’s wildfire disaster because of bureaucratic delays, a government minister said over the weekend.

“[The compensation budget] has been proposed, we are just waiting on approval from the finance ministry,” said Minister of Social Affairs Khofifah Indar Parawansa.

Official data show more than 500,000 people have been diagnosed with respiratory illnesses, but millions more have faced economic disruption in the regions of Kalimantan and Sumatra. The government has said it intends to provide cash handouts to low-income families in seven of Indonesia’s 34 provinces. Cash handouts were distributed through the post office as recently as 2013 to compensate the poor for fuel price rises. This is a separate compensation mechanism to the payments made to families of people who died from haze-related illnesses such as pneumonia.

“For the victims affected by exposure to smoke 10,000 rupiah (65 cents) a day, multiplied by 90 days, so it’s 900,000 rupiah,” she said.

The government declined to announce a state of emergency over this year’s toxic haze due to concerns that companies could use the status to default on contracts. Khofifah has pledged to pay 15 million rupiah to the families of each of those who died, which raises the total proposed budget to 1.44 trillion rupiah.

The one-off payments under consideration for low-income families are between 40-65 percent of the seven provinces’ monthly minimum wages. South Sumatra province has the highest of the seven, with a monthly minimum of 1.97 million rupiah.

While Indonesia’s treasury has yet to sign off on the cash payments, the government announced this weekend the formulation of a palm oil producers’ cartel with Malaysia. The government is spending $5 million on the establishment of the Council of Palm Oil Producer Countries (CPOPC) in a bid to exert greater control on prices, which have fallen.

Governments continue to call for reforms ahead of a UN climate change summit in Paris beginning November 30 in order to minimize fires in Indonesia’s palm oil producing provinces. Singapore Prime Minister Lee Hsien Loong said the 10-country Association of Southeast Asian Nations (ASEAN) has yet to take sufficient action to minimize the risks.

“It is vital that we deepen cooperation and share information to bring errant companies to account for their irresponsible and unsustainable practices that are the root cause of land and forest fires,” Lee said at the ASEAN summit in Kuala Lumpur this weekend.

Fires continue to burn in the eastern Papua region, particularly in Merauke regency, but the number of hotspots in Kalimantan and Sumatra has declined this month, according to data from Global Forest Watch. The Indonesian military said it was withdrawing 1,000 troops from the firefight in Central and South Kalimantan provinces. The archipelago’s disaster management agency has placed greater focus on its flood operations over the last fortnight as tornadoes and fatal landslides become more frequent with the arrival of the rainy season.

The head of Indonesia’s meteorology agency in Jambi said rain in the Sumatran province would increase in the coming weeks. The provincial government is focusing on preventing landslides in four regencies prone to land slip – Kerinci, Merangin, Sarolangun and Tanjung Jabung Barat.