Indonesia's courts open new path for haze victims to sue companies
A 2023 Indonesian Supreme Court regulation on 'pollution share liability' may ease claims against companies for transboundary haze, offering a new avenue for compensation.
New Legal Recourse for Haze Victims
Malaysian, Singaporean, and Filipino citizens affected by transboundary haze originating from Indonesia may now find a more direct path to compensation through Indonesian courts. This contrasts with the slow progress offered by regional diplomatic efforts and Singapore's Transboundary Haze Pollution Act of 2014.
Indonesian law permits foreign nationals to file lawsuits, with jurisdiction typically falling to district courts where defendant companies are domiciled. This legal route offers a practical advantage: Indonesian judgements can be directly enforced against company assets within the country.
Simplified Proof of Causation
A significant hurdle in haze litigation—proving which specific fires caused harm—has been lowered by Indonesia's Supreme Court Regulation No. 1 of 2023 on environmental cases. This regulation introduces 'pollution share liability' (Article 46), shifting the burden of proof. Claimants no longer need to identify every contributing company.
Instead, defendant companies must either prove their concessions were not burning or identify other responsible parties. Additionally, the 2009 Environmental Law (Article 88) imposes strict liability on companies engaged in high-risk activities like peatland draining, which courts have previously upheld in government-led fire cases.
Precedent-Setting Supreme Court Case
The application of pollution share liability is currently being tested at Indonesia's Supreme Court. In July 2025, the Palembang District Court declared inadmissible a claim brought by 11 residents against three pulpwood companies, partly because it did not seek environmental restoration. The appellate court upheld this decision, and the case is now under cassation appeal.
The Supreme Court's ruling will be crucial: if it affirms the applicability of pollution share liability, it could pave the way for similar claims by Malaysian and Singaporean victims, potentially as class actions under Supreme Court Regulation No. 1 of 2002.
A favourable Supreme Court ruling would significantly raise the financial stakes for Indonesian companies, particularly those in the palm oil and pulpwood sectors, that operate on concessions prone to fires.
The prospect of substantial compensation payouts, covering both pecuniary losses (medical bills, lost income) and non-pecuniary damages (suffering, anxiety), could compel a change in corporate behaviour. Authorities have already named at least nine palm oil companies among 223 suspects in criminal investigations this year.
Increased civil liability would add a powerful economic incentive for more rigorous fire prevention and peatland management practices.
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