Forest and Land Fires Pose Operational Challenge for Businesses, Affecting Costs and Logistics
Forest and land fires are not only an environmental problem but can also affect supply-chain efficiency, the distribution of goods and companies’ operating costs. These impacts are reflected in the findings of the Kadin Indonesia Institute’s Kadin Business Pulse Q3-2026 survey, which identified natural disasters and environmental disruption as factors affecting business resilience in Indonesia.
At the presentation of the Kadin Business Pulse Q3-2026 at Menara Kadin in Jakarta on Thursday, 22 October 2026, forest and land fires and haze were identified as the environmental disruption most frequently reported by businesses over the past 12 months. The findings show that the effects of disasters can extend to economic activity, including the smooth running of operations and distribution.
According to the survey, 57.9 per cent of businesses said they had been affected by natural disasters or environmental disruption over the past year, while 42.1 per cent of respondents said they had not experienced any impact.
Forest and land fires and haze were the most frequently cited disruption, at 13 per cent. Other natural disasters or disruptions accounted for 11.2 per cent, followed by extreme weather at 10.9 per cent and drought at 9.7 per cent.
The Kadin Business Pulse Q3-2026 survey was conducted from 14 to 30 September 2026 among 330 Kadin members across 28 provinces and a range of industrial sectors. It used online random sampling, with a margin of error of about 5.9 per cent at a 95 per cent confidence level.
Operating costs are the biggest impact
The Kadin Indonesia Institute’s findings show that the effects of disasters on businesses do not always take the form of direct damage to assets. Businesses often feel the impact through higher operating costs, lower demand and disruption to transport and logistics.
In the survey, increased operating costs were the most commonly reported impact, at 13.5 per cent. Lower sales or demand came next at 11.8 per cent, followed by transport and logistics disruption at 10.8 per cent.
In addition, 9 per cent of respondents reported disruptions to production or operations, while 8 per cent faced interruptions to raw-material supplies. Delays to investment or business expansion were reported by 6.2 per cent.
Other impacts included employees being unable to work or attend, at 5 per cent; damage to assets or facilities, at 4.3 per cent; and disruption to electricity, communications or infrastructure, at 3.9 per cent.