Fire in the Concession

Riau reached the peak of its dry season in July 2025. On 22 July the governor raised the province from fire emergency alert status, in force since 27 March, to emergency response status, after hotspots rose sharply between 15 and 20 July and haze drifted towards Malaysia (Siregar, 2025). The Meteorology, Climatology and Geophysics Agency reported 135 hotspots on 23 July, mostly in Pelalawan and Rokan Hilir, forecast very high flammability for 23 and 24 July, and said weather modification had been under way since 21 July. Average peat water levels were below 1 metre, a condition the agency described as very critical (Badan Meteorologi, Klimatologi, dan Geofisika [BMKG], 2025).

On 25 July 2025 the Ministry of Environment announced the results of its supervision from January to July. Hotspots had been detected in the concessions of six companies. Four oil palm and forest utilisation concessions, with between 2 and 13 medium-confidence hotspots each, would be sealed and given administrative sanctions, and a palm oil mill with one high-confidence hotspot and stack emissions polluting the surrounding area of Rokan Hilir had all operations halted (Kementerian Lingkungan Hidup [KLH], 2025).

What Was Reported

At the date of this article, KLH stated that supervision was continuing and additional evidence was being gathered; no official report determining the cause of any fire or the liability of any company had been published (KLH, 2025). We therefore do not name the companies and do not speculate on causes. The case study uses the official statements to examine the duties that apply to every concession holder and the lessons for companies further along the supply chain.

Duties of Permit Holders

Government Regulation No. 4 of 2001 on controlling environmental damage and pollution related to forest and land fires is the most specific rule. Businesses whose activities may cause significant fire-related impacts must prevent forest and land fires at their sites (Article 13). They must have adequate prevention facilities: an early detection system, fire prevention equipment, standard operating procedures, an organisation responsible for prevention and suppression, and periodic fire suppression training (Article 14). They must monitor their sites and report at least every six months, supported by satellite remote sensing data (Article 15), and they are responsible for fires at their sites and must respond to them immediately (Article 18) (Pemerintah Republik Indonesia, 2001). Law No. 32 of 2009 adds penalties of three to ten years' imprisonment and fines of Rp3 billion to Rp10 billion for burning land (Article 108) (Pemerintah Republik Indonesia, 2009).

Analysis as Barriers

We read the five elements in Article 14 as layers of defence. Detection tells the company a fire has started; equipment, procedures and organisation determine how quickly it is suppressed; training keeps those layers working. Weather such as low rainfall, strong winds and dry peat (BMKG, 2025) does not remove any layer, but it shortens the time each layer has to work. A hotspot inside a concession does not on its own prove a breach, which is why KLH relies on field verification. Where hotspots recur within a concession, however, it suggests that at least one layer, typically detection or early response, is not performing as intended. This is our interpretation of the regulatory framework, not a finding about any company.

From an ESG perspective the case touches all three pillars. Environmentally, peat fires release large emissions and haze. Socially, the costs fall widely: the World Bank estimated that the 2015 fires cost Indonesia US$16.1 billion, about 2 percent of GDP, with some 2.6 million hectares burned between June and October 2015 (Glauber et al., 2016). In governance terms, sealed concessions and a halted mill interrupt production and supply. For companies buying palm oil or wood products, a supplier's fire record is therefore a business continuity issue as much as a reputational one.

Lessons for Companies

• Treat every hotspot alert as a trigger for field verification within hours, with the response time recorded.
• Monitor peat water levels and maintain canal blocks, water reservoirs and joint patrols, which KLH specifically urged ahead of the dry-season peak (KLH, 2025).
• Train fire crews periodically and test equipment before the dry season, as Article 14 requires (Pemerintah Republik Indonesia, 2001).
• Make the six-monthly fire prevention report a management review item, not only a regulatory submission.
• For buyers, include fire history and prevention capacity in supplier due diligence and in ESG disclosures.

How Nusa Safety Helps

Nusa Safety helps plantation, forestry and processing companies strengthen fire readiness through emergency preparedness and drills, fire and emergency safety audits (FESA) of mills and facilities, and environmental compliance and PROPER reviews. Questions about specific enforcement cases are best referred to a lawyer.

This article is general information and not legal or professional advice for any specific case.

References

1. Badan Meteorologi, Klimatologi, dan Geofisika. (2025, July 24). BMKG ungkap risiko tinggi karhutla di Riau, operasi modifikasi cuaca dilakukan [BMKG reveals high fire risk in Riau, weather modification under way]. https://www.bmkg.go.id/berita/utama/bmkg-ungkap-risiko-tinggi-karhutla-di-riau-operasi-modifikasi-cuaca-dilakukan
2. Glauber, A. J., Moyer, S., Adriani, M., & Gunawan, I. (2016). The cost of fire: An economic analysis of Indonesia's 2015 fire crisis (Indonesia Sustainable Landscapes Knowledge Note No. 1). World Bank. https://documents.worldbank.org/en/publication/documents-reports/documentdetail/776101467990969768
3. Kementerian Lingkungan Hidup/Badan Pengendalian Lingkungan Hidup. (2025, July 25). KLH/BPLH segel empat perusahaan perkebunan dan tutup satu pabrik sawit terkait karhutla di Riau [Environment ministry seals four plantation companies and closes a palm oil mill over land fires in Riau]. https://kemenlh.go.id/news/detail/klhbplh-segel-empat-perusahaan-perkebunan-dan-tutup-satu-pabrik-sawit-terkait-karhutla-di-riau
4. Pemerintah Republik Indonesia. (2001). Peraturan Pemerintah Nomor 4 Tahun 2001 tentang Pengendalian Kerusakan dan atau Pencemaran Lingkungan Hidup yang Berkaitan dengan Kebakaran Hutan dan atau Lahan [Government Regulation No. 4 of 2001 on controlling environmental damage and pollution related to forest and land fires]. https://pasal.id/peraturan/pp/pp-no-4-tahun-2001
5. Pemerintah Republik Indonesia. (2009). Undang-Undang Nomor 32 Tahun 2009 tentang Perlindungan dan Pengelolaan Lingkungan Hidup [Law No. 32 of 2009 on environmental protection and management]. https://pasal.id/peraturan/uu/uu-no-32-tahun-2009
6. Siregar, R. A. (2025, July 22). Gubernur naikkan status tanggap darurat imbas karhutla di Riau meluas [Governor raises emergency response status as Riau fires spread]. detikSumut. https://www.detik.com/sumut/berita/d-8023453/gubernur-naikkan-status-tanggap-darurat-imbas-karhutla-di-riau-meluas