Malaysia was criticised Tuesday for abandoning plans to introduce legislation that would have punished its firms operating in neighbouring Indonesia if they are found to have caused smog-belching forest fires.

Massive blazes, often started to clear land for palm oil plantations, burn out of control in Indonesia every year, blanketing the region in toxic smoke.

Last year's were the worst since 2015 due to dry weather, with the haze forcing many schools in Indonesia and Malaysia to close and putting the health of millions at risk.

Indonesia claimed that fires had blazed out of control on some plantations owned by several Malaysian firms.

This prompted the Malaysian government to look at drafting a law that would have punished companies from the country found to have contributed to causing smog-producing fires overseas.

But a new administration that took office in March announced Monday it was ditching the plan.

Environment Minister Tuan Ibrahim Tuan Man said officials would instead work with other countries in the region to tackle the problem and pointed to a similar law in Singapore, which has been criticised as ineffective.

But Greenpeace Malaysia campaigner Heng Kiah Chun criticised the "premature shelving" of the law.

"Taking action against Malaysian-owned companies operating abroad that contribute to the haze is a good step to ensure that the companies operate responsibly," he told AFP.

"The haze has been affecting Southeast Asian countries for years -- tackling this regional haze is in the interest of everyone."

Indonesia has already been hit by fire outbreaks this year, although there has not been a major spread of smog across the region yet.

Last month, an Indonesian province on Borneo island declared a state of emergency while in May tens of thousands of personnel and water-bombing aircraft were deployed to tackle the season's first blazes.

There are growing fears over Indonesia's ability to tackle the crisis this year, with funds and personnel redirected to battling an escalating coronavirus outbreak.

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