JAKARTA - Indonesia will file charges against the local unit of Malaysia's third-largest palm oil planter over illegal fires that blanketed Singapore and Malaysia with hazardous smog last month, police said on Friday, prompting the company to deny any wrongdoing.
PT Adei Plantations, a unit of Kuala Lumpur Kepong Bhd, is the first company to be accused by the police of causing Southeast Asia's worst air pollution crisis in 16 years.
"They are going to be charged with environmental damage," said national police spokesman Ronny Franky Sompie.
Police are investigating four other companies for suspected involvement in the fires but have not identified them. The environment ministry last month named eight Southeast Asian companies as possible suspects.
KL Kepong has denied wrongdoing, saying it has a zero burning policy and the fires were outside its concessions.
An individual found guilty of starting a forest fire can face a jail term of up to 10 years and fines of up to 10 billion rupiah ($1 million). A guilty company can also have its profits seized, operations shut down and be sued for damages.
An investigation by industry body, the Roundtable on Sustainable Palm Oil (RSPO), found no evidence that KL Kepong, a member of the group, was responsible for the fires, a spokesman said.
"The RSPO has cleared KL Kepong of this issue. We have made our statements to the relevant parties and we stand by our statements," said Roy Lim, the company's plantations director.
"Looking again at the satellite data, the hot spots are all outside our territory."
RSPO surveillance documents show Adei concessions cover around 14,900 hectares. Of that total, 800 hectares are controlled by local community members.
More than a dozen people had been arrested for lighting fires, police said. But it was unclear if they were employees of any of the eight named companies or independent farmers.
Some farmers illegally clear land using "slash and burn" techniques during the dry season from June to September.