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Environmental law and policy struggles with the simple fact that ecology does not respect national borders. Environmental concerns that cross boundaries between nations or regions, require systems of cooperation among sovereign nations. Conversely, environmental concerns that lie within the borders of a single State are often seen as a function of domestic jurisdiction, which is reserved to the representatives of that State. To make law and policy to respond effectively to environmental concerns requires thinking through different levels for action: international, regional, national and local communities. This article reviews the Indonesian forest fires and haze of 1997 and 1998 which have had considerable impact upon Indonesia, Malaysia and Singapore. Responses to the fires are assessed, and the efforts of ASEAN, and what may be politically acceptable to Indonesia and other parties considered. Emphasis is placed upon the linkage of economics and environment towards sustainable development. © Kluwer Low International, 1998.