The agreement is a reaction to an environmental crisis that hit Southeast Asia in the late 1990s. The crisis was mainly caused by land clearing via open burning in the Indonesian island of Sumatra. Satellite images confirmed the presence of hot spots throughout Borneo, Sumatra, the Malay Peninsula and several other places. Malaysia, Singapore and to a certain extent, Thailand and Brunei were particularly badly affected.
From Sumatra, monsoon winds blew the smoke eastward and hence creating negative environmental effects (externalities) on other Southeast Asian nations. Thick haze covered much of Southeast Asia for weeks and caused noticeable and widespread human health problems.
As of June 2007, eight countries have ratified the agreement.
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