Singapore Ag Stocks Fall After Minister Warns on Haze Responsibility

Shares of Singapore-listed agricultural companies declined Tuesday after Senior Minister K Shanmugam warned that firms cannot evade responsibility for their role in the haze affecting the city-state. Shanmugam stated that seven companies had been questioned by the Singapore Exchange regarding their corporate structures and potential links to the smoke sources.

Bumitama Agri experienced a drop of up to 6.5%, while First Resources fell to a low of 4.83%. Golden Agri-Resources and Wilmar International each slipped by almost 2%. The minister, who also serves as home affairs minister, indicated that specific fire or smoke source points appear associated with First Resources, Bumitama Agri, and the non-listed entity First Borneo Plantations.

Shanmugam criticized corporate communications, noting that detailed statements on zero burning policies and firefighting efforts are insufficient without supporting evidence. He named Golden Agri-Resources, Wilmar International, Kencana Agri, Indofood Agri, and TSH Resources as other companies under scrutiny. The haze has impacted daily life and businesses in Singapore and Malaysia over recent weeks, with Singapore air quality reaching levels not observed since 2015. In Malaysia, schools in the state of Johor Bahru have closed due to unhealthy air quality levels.

The minister emphasized the government's determination to act, stating that authorities will utilize all legal and regulatory tools to pressure companies. This includes actions affecting their bottom lines, access to financing, and standing with investors. Shanmugam revealed that Singapore may amend or introduce new laws on an urgent basis to ensure cooperation if necessary. Additionally, companies linked to the haze will be assessed for their continued eligibility for government grants or incentives.

When asked about potential diplomatic implications for relations between Singapore and Jakarta, Shanmugam dismissed such concerns. He responded to a question referencing an article by local media outlet CNA, which cited legal experts suggesting that actions against Indonesian haze-causing firms could carry diplomatic weight. Shanmugam argued that protecting the population takes precedence over diplomatic considerations, asserting that the Indonesian public also suffers from the haze. He stated that addressing the responsible companies serves the interests of both nations.

Shanmugam further noted that Singapore's actions align with the broad policies of Indonesian President Prabowo Subianto. He expressed hope for full cooperation from Indonesia in pursuing the companies involved in generating the haze.