Will Singapore’s tougher haze law follow the money? What to watch in the first designations

Résumé détaillé

Singapore’s amended haze law empowers the government to cut companies off from banks, suppliers and insurers without a conviction – but its impact will depend on whether the first orders reach the groups behind Indonesia’s fires.

Singapore’s toughened haze law will let the government order banks to stop lending to companies linked to Indonesia’s fires. But whether those orders will extend to parent companies – where much of the borrowing is concentrated – may remain unclear until the powers are first used, according to a Singapore Management University (SMU) academic.

“Whether an order follows the money up to the parent or stops at the named subsidiary is a question the first designations will have to answer,” Holly Yang, Professor of Accounting at SMU, told Eco-Business in response to queries.

Singapore’s Parliament unanimously passed the amendments to the Transboundary Haze Pollution Act on 4 November, raising the maximum fine tenfold to S$20 million (US$15.6 million) and allowing the government to designate companies without a conviction. The National Environment Agency (NEA) can also direct companies to hire private assessors at their own expense.

Yang’s research highlights the difficulty of identifying the companies ultimately responsible for fire-affected concessions. She and her student Ashmit Bansal examined about 2,400 Indonesian concessions, and could not identify the ultimate controlling parties for about 80 per cent of them, even with commercial ownership databases. Those concessions accounted for about 75 per cent of the fires recorded in 2026, she said.

The financial exposure is substantial, according to SMU’s Yang. Malaysian and Singapore banks have extended several billion US dollars of credit since 2013 to groups connected to this year’s fire-affected concessions, based on her reading of Forests & Finance data. Lending to such a group does not establish responsibility for any fire.

Much of that lending goes to parent companies, rather than concession-holding subsidiaries, Yang said. A parent company could argue that a designated subsidiary is a separate legal entity over which it does not exercise control, potentially complicating efforts to restrict financing at the group level.

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