Don't underestimate S'pore's determination to act: Shanmugam says govt questioning 7 SGX-listed firms possibly linked to haze fires

The Singapore Exchange (SGX) will be asking questions of seven Singapore-listed agriculture companies and their possible links to the forest fires in Indonesia that have caused haze in Singapore over the past weeks, Senior Minister K Shanmugam said at a doorstop on Oct. 19.

The seven companies are:

• Golden Agri Resources,
• Bumitama Agri,
• First Resources,
• Wilmar International Limited,
• Kencana Agri,
• Indofood Agri and,
• TSH Resources.

The government will look into Asia Pulp and Paper, which is incorporated in Singapore.

It will also be asking questions of First Borneo Plantations, which has ownership links to Singapore-incorporated companies, The Business Times reported.

Companies which are responsible for the fires "should not underestimate the Singapore government's determination to act", the minister said.

Whether they have a presence in Singapore or not, the government will use "every legal and regulatory lever at [its] disposal to exert pressure where it matters", including on their access to financing, Shanmugam warned.

Additionally, three more Indonesian companies have been issued with preventive measure notices by the National Environment Agency (NEA), bringing the total to 10.

Also at the doorstop was Minister for Sustainability and the Environment Grace Fu, who delivered remarks in Mandarin.

Singapore to look into corporations and groups

On the Indonesian companies issued with prevention measure notices, Shanmugam said that the Attorney-General Chambers has advised that the companies may raise "some technical and legal issues".

"We will see. If we assess that the companies are not cooperating, we will see who they are linked to, either in Singapore or internationally, and we will see what further actions we can take," Shanmugam said.

Singapore will look past individual concession holders and investigate large corporations and persons which control them, the minister explained.

He named Singapore-incorporated Asia Pulp and Paper (APP) as an example.

Of the seven Indonesian companies named last week by Minister for Sustainability and the Environment Grace Fu, three are pulpwood suppliers for APP.

The government will "drill into this further", SM Shanmugam said.

Owned by Indonesian conglomerate Sinar Mars, APP incorporated in Singapore in 1994.

Statements not good enough: Shanmugam

Apart from APP, the minister also mentioned Singapore-listed agricultural companies First Resources and Bumitama Agri and said that some of the fires and smoke-sourced points seem to be associated with these companies.

He also mentioned privately-held First Borneo Plantations.

These companies were named in a Greenpeace report as parties responsible for haze-causing fires in Indonesia.

"We will be asking more questions of these companies," the minister said.

While companies such as First Resources have issued a statement on its zero-burning policy, Shanmugam said that such statements are "not good enough".

He said:

"Show us the evidence. Where did the fires start? Who owns those lands? Can they identify who started fires? What exactly did they do to stop the fires? Did the fires conveniently only burn down old trees, or did the fires also burn productive trees? We will ask for the full facts, and we will act based on the facts."

Companies cannot play "hide-and-seek" with corporate structures or escape responsibility simply because their actions take place across national borders, he warned.

Legal and regulatory levers to exert pressure

Shanmugam gave examples of the kinds of legal, regulatory and economic measures that Singapore could take against companies found responsible.

Shanmugam said that the SGX has also asked the seven aforementioned SGX-listed companies about their operations and possible linkages to the haze.

The Singapore Exchange Regulation said in a Oct. 16 statement that it has engaged listed issuers with agricultural operations and plantations in Indonesia to seek information on their operations.

If these companies have a potential connection to haze-causing fires in Indonesia, Shanmugam said that banks would then have to consider the risks arising from environmental and legal issues.

Shanmugam said that the banks have asked these companies several questions.

As the regulator, the Monetary Authority of Singapore also has "supervisory jurisdiction" over the banks to ensure they "manage their risks properly", he added.

Additionally, the government will examine if companies linked to the haze are enjoying benefits in Singapore, such as government grants or incentives.

"These benefits are contingent on lawful and responsible conduct — so we will need to see if they still meet the bar."

Will amend legislation if necessary to ensure cooperation: Shanmugam

Some companies may try to deny responsibility, think it is hard for Singapore to get evidence or that they can "escape scrutiny".

However, Shanmugam warned that they should not underestimate the Singapore government's determination to act.

Singapore will use "every legal and regulatory lever" at its disposal to "exert pressure" on the companies "where it matters", such as on their bottom lines, through their access to financing and standing with investors.

Shanmugam emphasised that such pressure will be sustained even after the haze passes, and that companies cannot "simply wait things out".

"If necessary, we will amend current legislation or introduce new laws on an urgent basis to ensure further cooperation," the minister shared.

Adding to his warning, Shanmugam said that companies responsible for the haze should be "under no illusion" that they can just wait for the haze to clear and return to business as usual.

"We will pursue this matter for as long as it takes."

Singapore's and Indonesia's interests aligned

At the doorstop, Shanmugam was asked about his thoughts on experts who opined that Singapore's decision to pursue legal actions against errant companies could bring about diplomatic implications.

He replied: "What do these experts think we are supposed to do? Shiver in our shoes before we take any legal action to protect our own people? That's not the Singapore approach."

He also commented that there should not be any bilateral issues with Indonesia, owing to aligned interests.

"The Indonesian public is suffering as well, and it is in Indonesia's interest as much as ours to deal with the companies that are causing these problems," the minister remarked.

He added that Singapore's actions against errant companies are in line with those announced by Indonesian President Prabowo Subianto, and hoped for Indonesia's "full cooperation" in going after the companies responsible.