SINGAPORE: Singapore-listed palm oil producer Kencana Agri is facing an inquiry by Indonesian authorities over incidents of forest fires at its subsidiary in North Kalimantan.
Several other companies listed on the Singapore Exchange (SGX) moved on Friday (Oct 16) to distance themselves from the fires and haze, including Golden Agri-Resources and Wilmar International.
In response to queries from Singapore Exchange Regulation on Thursday concerning the recent forest and peatland fires in Indonesia and the resulting transboundary haze, Kencana Agri said Indonesian authorities have launched a preliminary inquiry into a fire incident at its subsidiary.
The inquiry concerns suspected land clearing by burning in the affected area, which is located along the boundary between the group’s land and an adjacent third party’s land.
Kencana Agri said in the bourse filing that based on information currently available, its subsidiary did not carry out land clearing or land preparation in the affected area.
Investigators conducted a field inspection of the affected area in September, and the subsidiary has provided information requested by investigators, the company said.
The firm noted that the inquiry is still ongoing and that it is cooperating fully with the authorities.
It said that it has not received any other inquiries, allegations, notices or requests for information from government authorities, the media or other stakeholders concerning the recent fires.
Kencana Agri also said it does not undertake land clearing by burning or use fire for land preparation, in line with its policies and government regulations.
Based on the group’s operational review, the management assessed that the information currently available does not indicate that the group’s operations or activities materially contributed to the recent forest and peatland fires or transboundary haze.
It added that it strictly enforces a zero-burning policy and maintains surveillance to prevent fires from spreading into its estates.
Kencana Agri’s plantations and mills are located in Sumatra, Kalimantan and Sulawesi, covering a total planted area of about 67,862ha.
The company recorded fire incidents within concession areas operated by its subsidiaries in North and East Kalimantan, affecting an estimated 62 hectares, or less than 0.09 per cent of its total planted area.
“Based on preliminary internal assessments, it indicates that the fire did not originate from within the group’s operations, but rather spread from adjacent areas,” the company said.
“The fire was handled by the relevant subsidiaries’ firefighting teams, working together with the relevant authorities and local communities, with drones and fire observation towers used to locate active fire fronts and to direct ground crews.
“The incidents are under control, with ongoing monitoring and precautionary response measures being maintained.”
Kencana Agri added that it maintains fire prevention, detection and emergency response protocols across its Indonesian plantation operations.
“The board notes that the inquiry by the relevant authorities … remains ongoing and will continue to monitor its progress closely,” said the company.
“In the meantime, the group continues to maintain heightened prevention and monitoring measures across its operations to manage and assess any potential operational impact arising from the prevailing dry season conditions.”