15 Peatland Protection in Indonesia: Toward the Right Direction?
323
the year, making it “naturally fire-resistant”. Thus, peatland drainage is the principal
cause of peatland fires. In addition, fire does not normally spread in the undisturbed
peatlands, which are typically moist with the closed-canopy environment. Once fires
occurred, positive feedbacks could take place, by which the burned peatlands become
more susceptible to fires (Harrison et al. 2009, p. 158).
Hence, timber and plantations might indeed constitute abnormally dangerous
activities, especially if the activities involve the drainage of peatlands. Categorizing
peatland draining activity as an abnormally dangerous activity is scientifically sound.
It is a clear statement that from a legal perspective, the draining activity is a dangerous
human interference to the otherwise naturally wet and moist environment. Consequently, those who gain benefits from such a dangerous activity should bear the costs
incurred by others resulting from the activity.
More importantly, the use of strict liability in fire litigation is defendable under the
polluter pay principle. Principle 16 of Rio Declaration urges that states “endeavour
to promote the internalization of environmental costs and the use of economic instruments, taking into account the approach that the polluter should, in principle, bear
the cost of pollution…” From Principle 16, one could see the relation between the
polluter-pays principle and the idea of internalization of environmental costs. From
an economic perspective, an externality is a form of market failure, indicating that
the market fails to consider the total cost, that is, pollution, caused by a production
process. Thus, an externality is evidenced by prices that do not reflect environmental
costs. Externality gives the wrong direction to the individuals when making a decision because with this externality the market is unable to reflect the actual price of a
product or activity (Pindyck and Rubinfield 2001, p. 592. Solberg 1982, p. 540. Faure
and Skogh 2003, p. 95). Therefore, from an economic perspective, environmental
law is primarily aimed at internalizing the externalities. This process is designed to
induce parties to include considerations on environmental costs in their decisionmaking process. In this way, consumers are expected to face real product prices
(Faure 2001, p. 10; Hunter et al. 1998, p. 108).
Theoretically, Polluter-Pays Principle is an application of economic theory to
allocate costs for pollution and environmental damage, but then has implications for
the development of international and national environmental law, especially when
damage occurs or when environmental costs are borne by the public. This principle
was first noted in some of the recommendations of the OECD in the 1970s, which
states that the principle requires polluters to bear the necessary costs in the framework
of efforts taken by public officials to keep the environmental conditions at acceptable
conditions. Put it differently, the prices of goods and services that cause pollution
should reflect the costs incurred to carry out environmental measures (Boyle 1994,
pp. 179–182; Birnie and Boyle 2002, op. cit. pp. 92–95).
The chapter argues that one way to implement the Polluter-Pays Principle is
through the implementation of strict liability. Certainly, strict liability is applicable
only for activities that belong to abnormally dangerous activities; and as discussed
earlier, peatlands draining activities can be seen as abnormally dangerous.
2. The Precautionary Principle and Water-Table Level
323
the year, making it “naturally fire-resistant”. Thus, peatland drainage is the principal
cause of peatland fires. In addition, fire does not normally spread in the undisturbed
peatlands, which are typically moist with the closed-canopy environment. Once fires
occurred, positive feedbacks could take place, by which the burned peatlands become
more susceptible to fires (Harrison et al. 2009, p. 158).
Hence, timber and plantations might indeed constitute abnormally dangerous
activities, especially if the activities involve the drainage of peatlands. Categorizing
peatland draining activity as an abnormally dangerous activity is scientifically sound.
It is a clear statement that from a legal perspective, the draining activity is a dangerous
human interference to the otherwise naturally wet and moist environment. Consequently, those who gain benefits from such a dangerous activity should bear the costs
incurred by others resulting from the activity.
More importantly, the use of strict liability in fire litigation is defendable under the
polluter pay principle. Principle 16 of Rio Declaration urges that states “endeavour
to promote the internalization of environmental costs and the use of economic instruments, taking into account the approach that the polluter should, in principle, bear
the cost of pollution…” From Principle 16, one could see the relation between the
polluter-pays principle and the idea of internalization of environmental costs. From
an economic perspective, an externality is a form of market failure, indicating that
the market fails to consider the total cost, that is, pollution, caused by a production
process. Thus, an externality is evidenced by prices that do not reflect environmental
costs. Externality gives the wrong direction to the individuals when making a decision because with this externality the market is unable to reflect the actual price of a
product or activity (Pindyck and Rubinfield 2001, p. 592. Solberg 1982, p. 540. Faure
and Skogh 2003, p. 95). Therefore, from an economic perspective, environmental
law is primarily aimed at internalizing the externalities. This process is designed to
induce parties to include considerations on environmental costs in their decisionmaking process. In this way, consumers are expected to face real product prices
(Faure 2001, p. 10; Hunter et al. 1998, p. 108).
Theoretically, Polluter-Pays Principle is an application of economic theory to
allocate costs for pollution and environmental damage, but then has implications for
the development of international and national environmental law, especially when
damage occurs or when environmental costs are borne by the public. This principle
was first noted in some of the recommendations of the OECD in the 1970s, which
states that the principle requires polluters to bear the necessary costs in the framework
of efforts taken by public officials to keep the environmental conditions at acceptable
conditions. Put it differently, the prices of goods and services that cause pollution
should reflect the costs incurred to carry out environmental measures (Boyle 1994,
pp. 179–182; Birnie and Boyle 2002, op. cit. pp. 92–95).
The chapter argues that one way to implement the Polluter-Pays Principle is
through the implementation of strict liability. Certainly, strict liability is applicable
only for activities that belong to abnormally dangerous activities; and as discussed
earlier, peatlands draining activities can be seen as abnormally dangerous.
2. The Precautionary Principle and Water-Table Level