Just as the no-deforestation agreements are starting to yield real benefits, Indonesia and Malaysia are moving to destroy them. The new council aims to pressure corporations to drop their no-deforestation pacts.
In the midst of its worst fire crisis in living memory, the Indonesian government is taking a leap backward on forest protection.
The recently created Council of Palm Oil Producing Nations between Indonesia and Malaysia, signed at the weekend in Kuala Lumpur, will attempt to wind back palm oil companies' pledges to end deforestation.
This is despite Indonesia's efforts to end fires and palm oil cultivation on peatlands.
If successful the move will undo recent attempts to end deforestation from palm oil production, and exacerbate the risk of future forest fires.
Since August, forest and peatland fires have become so widespread across Indonesia that, in satellite images, the nation has looked like an over-lit Christmas tree.
The fires have been so bad that carbon emissions from peatland burning alone (forgetting about the many thousands of additional forest fires) have equalled those produced by the entire United States
Some 500,000 people have so far suffered respiratory distress. Nearby Singapore has threatened legal action against several Indonesian companies whose activities have been linked to the fires, provoking a serious diplomatic spat between the two nations.
Recent rains have dampened things somewhat. But climatologists tell us the 'Godzilla' El Niño that worsened the fires this year will likely continue for several months more.
Good news, then bad
In the wake of the alarming fire crisis, Indonesian president Joko Widodo recently banned peatland fires and the planting of peatlands with palm oil.
The president must be lauded for this crucial action. Although belated, it's central to efforts to staunch the present fire crisis and to limit future crises. But we're not out of the haze yet.
Between them, Indonesia and Malaysia produce around 85% of the world's palm oil. Palm oil is intimately linked to forest loss and burning. For example, most of the peatland fires have occurred because deep channels were carved into the peat swamps, so they drain out and become dry and easy to burn.
While oil palm plantations can be established on cleared lands, many legally and illegally involve deforestation, because it allows them to use timber revenues to help offset the costs of plantation establishment.
The destructive impacts of oil palm on rainforests and peatlands is a key reason why palm oil corporations have come under heavy fire in recent years to clean up their environmental acts.
And this has fomented a true revolution. Under growing public and consumer pressure, many of the world's biggest palm oil producers, as well as many large multinationals (such as Procter & Gamble, Nestlé and Cargill) that buy and use palm oil, have adopted 'no-deforestation' agreements. This has all happened in the last two years and it's been one of the most remarkable environmental advances of the last decade.
But just as the no-deforestation agreements are starting to yield real benefits, Indonesia and Malaysia are moving actively to destroy them. One of the aims of the new council is to pressure corporations working in their nations to drop their no-deforestation pacts.
They argue that the pledges are an affront to sovereignty, in being driven by Western consumers, and disadvantage smaller palm-oil producers. However the coalition coordinating no-deforestation efforts among Indonesian producers - known as the Indonesia Palm Oil Pledge - is working to help smaller firms and community producers achieve no-deforestation compliance.
In my view, the arguments by Indonesia and Malaysia are just another smokescreen to expand palm oil production. For instance, Indonesia is planning to convert 14 million hectares of degraded forest to plantations and other resources, which will likely involve deforestation.
The new council also plans to lobby China and India, both massive palm oil consumers who've so far shown little interest in anything other than buying large amounts of palm oil as cheaply as possible, to accept its new palm oil scheme.
While the council has promised sustainable palm oil and to limit forest fires, it is unclear how this will be achieved with a massive expansion of the palm oil industry.
The fires and dense haze that have plagued Southeast Asia this year are certainly not a one-off event. In fact, they've been an annual occurrence for many years, albeit worsened this year by an intense fire-breathing El Niño drought that we've long known was coming.
Indonesia is destroying its rainforests faster than any other tropical nation, and it is at the heart of the recurring air-pollution crisis in Southeast Asia. Its policies will have a huge impact on forests, biodiversity and the global climate. President Widodo's recent pledge to halt peatland fires is an essential initiative and one that should be heartily applauded.
But if the newly formed council holds sway, any benefits from Widodo's peat-burning ban could be overwhelmed by increasing forest destruction in some of the biologically richest real estate on the planet.
And I predict that any corporation rash enough to backslide on its hard-won no-deforestation pledge will be quickly targeted by environmental groups and, hopefully, punished by consumers.
Petition: 'Stop the fires - save Indonesia's rainforests!' by Greenpeace.
William Laurance is Distinguished Research Professor and Australian Laureate, James Cook University.