Singapore’s Pollutant Standards Index reached 288 in the central region on 14 October, the highest reading of the year. The response has followed a familiar playbook. Fortuitously, N95 masks were made available to vulnerable residents on the same day, and air-conditioned rooms at community clubs were opened as haze shelters. Singapore has also revived a health subsidy scheme for the first time in more than a decade. These are sensible, well-run measures. They are also measures that merely treat symptoms of a larger systemic problem.
The harder questions sit upstream. The ASEAN haze agreement was signed in 2002, and Singapore passed its own Transboundary Haze Pollution Act in 2014, which was tested almost immediately in 2015. Yet no company has been fined or prosecuted under the Act. On 16 October, the government announced that they were currently in the process of reviewing data on the companies responsible for the current forest and peatland fires.
Indonesia points to its reporting obligations being met, and police have named 112 suspects in fire cases since January, with five company licences suspended. Even so, Jakarta has declined to declare a national disaster, Malaysia’s Prime Minister has said the regional mechanism has room for improvement. ASEAN foreign ministers are due to discuss the haze later this month. All of this raises the question of how effective government action has been in addressing a long-running problem.
None of this was unforeseen. Authorities warned of haze risk between June and October, with an even earlier warning in March. ASEAN declared its highest haze alert level on 26 August, and by 16 October, Singapore had experienced a 12-day consecutive stretch of unhealthy air, the longest streak since the 2015 crisis.
This unresolved peril does will have far-reaching implications on health. For now, subsidies are absorbing the price of primary care visits for children, the elderly and lower- to middle-income residents. Issues arising from potential chronic respiratory and cardiovascular conditions, hospital admissions and lost working days, could arrive later and land on the books of health and life insurers and on employer group schemes. It is too early to say how much. But the industry should be asking now how it prices and reserves for a risk that recurs and that its customers cannot control.
Copernicus Atmosphere Monitoring Service (CAMS) data cited by the Jakarta Post put CO2 released by this year’s fires at an estimated 106m tonnes. Experts say that puts in doubt Indonesia’s pledge to make its forestry and land-use sector a net carbon sink by 2030. Many insurers in the region have set sustainability targets of their own, covering both underwriting and investment. Those targets rest partly on the credibility of the public commitments made by the jurisdictions where they operate. When major forest fires are allowed to run rampant, that credibility is tested for everyone.
Already, images of Kalimantan enveloped by an orange sky has filled regional social media. Increasingly, sustainability targets set by companies around the region sound like lip service. A
Ahmad Zaki
Editorial Director
Asia Insurance Review