'Cannot play hide and seek': Singapore minister's warning over haze sends agricultural stocks lower

Shares of several Singapore-listed agricultural companies fell Tuesday after Senior Minister K Shanmugam warned they won't "escape responsibility" for their possible role in the haze blanketing the city-state.

"Companies cannot play hide and seek" with different corporate structures, hoping that will help them, Shanmugam said, revealing that seven companies had been questioned by the Singapore Exchange.

Bumitama Agri fell as much as 6.5%, while First Resources dropped to a low of 4.83%. Golden Agri Resources and Wilmar International slipped almost 2%.

We will use every legal and regulatory lever at our disposal to exert pressure where it matters, including on their bottom lines, including on their access to financing, and including on their standing with investors.

K Shanmugam

Senior Minister, Singapore

Shanmugam, who is also home affairs minister for the city-state, said that some of the fires or smoke source points seem to be associated with First Resources, Bumitama Agri, as well as non-listed First Borneo Plantations.

"Take, for example, First Resources. It issued a detailed statement on its zero burning policy and firefighting efforts ... but statements, no matter how well drafted, are not good enough. Show us the evidence."

The other companies named by the minister were Golden Agri-Resources, Wilmar International, Kencana Agri, Indofood Agri and TSH Resources.

The haze has affected businesses and daily life in Singapore and Malaysia in the past few weeks, with the air quality in Singapore hitting levels not seen since 2015.

Schools in the state of Johor Bahru in Malaysia have also closed due to the air quality reaching unhealthy levels.

"They should not underestimate the Singapore government's determination to act," Shanmugam said, adding, "we will use every legal and regulatory lever at our disposal to exert pressure where it matters, including on their bottom lines, including on their access to financing, and including on their standing with investors."

He also revealed that Singapore could even amend laws or introduce new laws "on an urgent basis" to ensure cooperation, if needed. Companies potentially linked to the haze would also be examined if they still meet the standards for government grants or incentives.

'Shiver in our shoes?'

When asked if Singapore's actions will affect bilateral relations between the city-state and Jakarta, Shanmugam dismissed the concern, saying, "Our people are suffering. What do these experts think we are supposed to do? Shiver in our shoes before we take any action to protect our own people? That's not the Singapore approach."

He was responding to a question about an article published by local media outlet CNA, which cited legal experts saying that actions taken by Singapore against haze-causing firms in Indonesia may carry diplomatic implications.

"If we think like that, there will be no Singapore, and we do not think there should be any bilateral issues. The Indonesian public is suffering as well, and it is in Indonesia's interests as much as ours to deal with the companies that are causing these problems."

He said that Singapore's actions against companies are aligned with the broad policies of Indonesian President Prabowo Subianto.

"In fact, we hope to get full cooperation from Indonesia in going after the companies," Shanmugam added