Indonesian police have arrested 72 people in connection with 89 forest and land fire cases across nine regional police jurisdictions in Kalimantan and Sumatra since January 1, 2026. Investigators are now tracing financial records to determine whether plantation companies financed the illegal land clearing that has sent smoke across the border into Malaysia.
The arrests mark a potential shift from prosecuting individual smallholders to targeting the corporate actors that may have ordered the burn-offs. The probe is still in its early stages, but the direction of the questioning is clear.
The 89 forest and land fire cases that Indonesian police have opened since January are not just about the people who lit the matches. Investigators are now tracing financial records to determine whether plantation companies paid for the land to be cleared, a shift that could move accountability from individual arsonists to the corporate actors that benefit from cheap land.
The fires, driven by an intensifying El Niño and a prolonged dry season, have burned through hundreds of thousands of hectares across Borneo and Sumatra. Dense smoke has crossed into Malaysia, where schools have closed and air quality has reached unhealthy levels. On August 23, haze blanketed the Musi River in Palembang, South Sumatra.
The question now is whether the financial trail leads beyond those already detained. If it does, the recurring haze crisis that has strained Indonesia’s relations with its neighbours for decades could finally see a different kind of accountability.
The investigation turns toward the money
From January 1 to August 21, 2026, police registered 89 forest and land fire cases across nine regional police jurisdictions in Kalimantan and Sumatra, naming 72 individual suspects, according to Brigadier General Mohammad Irhamni of the National Police’s Directorate of Certain Crimes. In Central Kalimantan alone, Police Chief Iwan Kurniawan said his officers detained 12 suspects in the week leading up to August 21, treating every fire as a potential crime scene.
According to Irhamni, the investigation is focusing on individuals who allegedly burned land to establish oil palm plantations more cheaply, while simultaneously tracing financial flows from the suspects to identify any plantation companies that may have ordered or financed the fires. The probe, he added, could expand beyond those already arrested.
On August 22, the government began deploying 1,500 additional soldiers and six helicopters to West Kalimantan to reinforce firefighting efforts, with operations set to continue through at least August 23. Cabinet Secretary Teddy Indra Wijaya said the government had prepared mitigation measures including three Indonesian military battalions comprising about 1,500 personnel and six heavy-lift helicopters to conduct water-bombing and ground fire-suppression operations.
Between January and July 2026, fires consumed about 285,000 hectares nationwide, according to the Forestry Ministry and Nusantara Atlas. That compares with roughly 103,000 hectares burned in the first six months of the year.
| Entity | Current rule | New rule | Effective date |
|---|---|---|---|
| ASEAN member states | Obligation to prevent and monitor transboundary haze from land and forest fires | Enhanced early-warning systems, coordinated emergency responses, stricter national enforcement | Reaffirmed July 2026 |
| Indonesia (as chair of 27th ASEAN haze meeting) | Commitment to fully implement the ASEAN haze agreement | Pursue a haze-free ASEAN by 2030, with tighter enforcement against illegal burning | July 2026 |
| Malaysia (via Deputy Minister Kurup) | ASEAN haze agreement enforcement | Urging stronger hotspot surveillance, open-burning restrictions, and action on the agreement | Ongoing |
| Source: ASEAN Secretariat; Indonesia Ministry of Environment and Forestry; Malaysian government statements | |||
Environment Minister Mohammad Jumhur Hidayat warned that thousands of hotspots have appeared rapidly across Sumatra and Kalimantan and identified around 335 concession-holding companies with hotspots inside their licensed areas. Malaysia’s Deputy Minister Arthur Joseph Kurup urged ASEAN states to strengthen hotspot surveillance and enforce open-burning restrictions, arguing that current measures are insufficient as air quality in Sarawak repeatedly reaches unhealthy levels.
A pattern that has resisted enforcement
The fires are a symptom of an agricultural expansion model that treats forests and peatland as disposable. For decades, the legal response has targeted smallholders who set fires, while the companies that benefit from cheaply cleared land have largely escaped accountability. The financial tracing now underway is an attempt to break that pattern.
The ASEAN Agreement on Transboundary Haze Pollution, in force since 2003 and ratified by Indonesia in 2014, obliges member states to prevent and monitor haze and to control fire sources. But enforcement has been weak, and the agreement lacks binding penalties. At a July 2026 meeting in Bali, ministers reaffirmed a goal of a haze-free region by 2030, yet the current crisis shows how far that target remains.
The financial burden falls first on Indonesian provincial and national budgets, which fund thousands of firefighters, military deployments, and aerial operations. Local communities then absorb health costs from respiratory illness and lost workdays, while provincial authorities in Sarawak and Kalimantan lose tax revenue as schools close, flights are disrupted, and businesses curtail operations during weeks of hazardous haze.
The investigation’s outcome will determine whether the pattern holds. If financial records lead to corporate indictments, the arithmetic that makes fire the cheapest way to clear land could begin to change. If not, the cycle will wait for the next dry season.
Beyond the headline
The Money Trail
Follow the incentives and this crisis looks less like random arson and more like a cost-saving strategy embedded in plantation economics. When fire remains the cheapest way to clear peatland, fines and jail terms for smallholders alone cannot rebalance the equation. Only if concession holders and their financiers face credible legal and financial penalties will the arithmetic driving these burn-offs begin to change.
The Bigger Picture
Indonesia’s haze emergency is a symptom of a deeper collision between climate-stressed ecosystems and an agricultural expansion model that still treats forests and peatlands as disposable. As El Niño lengthens dry seasons and fire weather becomes more frequent, reliance on clearing land at the forest frontier collides with a regional economy that increasingly depends on clean air, resilient tourism, and climate-aligned export credentials to sustain growth.
The Reach
For European pension funds with ESG mandates, the outcome of these investigations will directly shape investment screens for Southeast Asian agribusiness. A credible link between specific concessions and criminal burning would not only raise divestment pressure on those firms, but also push EU regulators to scrutinize due-diligence claims under anti-deforestation import rules covering palm oil and related commodities.
Four groups with decisions to make
With the investigation widening and the dry season far from over, four groups face immediate decisions.
- Western investor in Southeast Asian agribusiness
You must re-evaluate your portfolio companies’ land management practices and supply chain transparency. Focus on concession holders in West and Central Kalimantan and Sumatra’s peatland regions. Review annual sustainability and deforestation disclosures filed to the CDP and company ESG reports for any exposure to illegal burning liabilities.
- European procurement manager sourcing palm oil/pulp from Indonesia
Scrutinize your Indonesian suppliers’ land clearing methods. Demand robust no-burn and no-deforestation certifications, and prepare for increased due diligence under evolving EU import rules. The criminal probe could soon name corporate entities, making supplier audits urgent.
- Digital nomad or expat based in Malaysia or Singapore
Monitor real-time air quality indexes and haze forecasts via the ASEAN Specialised Meteorological Centre website. Adjust outdoor activities when the pollutant index exceeds 150, and consider short-term relocation if schools close or health advisories worsen. The haze season may extend well into October.
- ESG analyst for a Western financial institution
Update your risk models for Indonesian agribusiness companies. Incorporate the potential for legal and financial penalties related to environmental crimes, and track court records for any corporate indictments. The investigation’s financial tracing could reveal governance failures that affect credit ratings and investment screens.
Explainer
- El Niño
- A climate pattern marked by warmer-than-average sea surface temperatures in the central and eastern Pacific Ocean. It typically brings drier conditions to Southeast Asia, lengthening the fire season and making peatlands more flammable. The current El Niño is intensifying, raising the risk that 2026’s fire season could rival the severe 2015 episode.
- Peatland
- Waterlogged, carbon-rich soil formed from partially decayed vegetation over thousands of years. When drained and dried, it becomes highly combustible, and fires can smoulder underground for months, releasing vast amounts of smoke and greenhouse gases. Indonesia holds some of the world’s largest tropical peatland reserves, much of it converted to plantations.
- ASEAN Agreement on Transboundary Haze Pollution
- A legally binding pact among Southeast Asian nations, in force since 2003, that requires members to prevent and monitor haze from land and forest fires. Indonesia ratified it in 2014, but enforcement has been inconsistent. The agreement lacks automatic penalties, relying instead on cooperation and peer pressure.
- Concession
- A designated area of land granted by the government to a company for activities such as logging or plantation agriculture. In Indonesia, concession holders are legally responsible for preventing fires on their land, but enforcement is patchy. The current investigation is examining whether companies with concessions ordered illegal burning to clear land cheaply.
RELATED STORIES
