In recent months, Indonesia has taken major steps to prevent a repeat of last year's epic fires. The Joko Widodo administration, shocked into action by the scale of the damage and impact on ordinary Indonesians, has decided to act like no other Indonesian government has before.

These steps are crucial and long overdue, though only part of the solution.

In April, President Joko said the government will issue a moratorium on new palm oil concessions to reduce the sector's impact on the environment. Oil palm plantations have expanded rapidly in Indonesia - they now cover an area a little larger than South Korea - destroying rainforests and peatlands, often through the use of fire. Curbing expansion will drive up palm oil yields on existing concessions and limit deforestation.

Making good on the pledge, last month a Ministry of Environment and Forestry official said all outstanding requests to establish plantations in forest areas had been rejected. The expansion proposals by 61 companies covered 851,000ha, about 12 times the size of Singapore.

In another step, the President established the Peatland Restoration Agency in January.

Restoring large areas of fire-prone peatlands has the potential to be a game changer in the fight against haze and deforestation.

Here's why.

Flooded peatlands store huge amounts of carbon. When cleared of forests and drained via deep canals, they dry out and can easily catch fire. Most of the thick, toxic smoke from last year's fires came from burning peatlands.

The agency's goal is to bring companies, communities and local officials together in restoring and replanting damaged peatlands - with the stick of high-tech monitoring and threat of enforcement.

The aim is to instil a greater sense of responsibility for the landscape and a deeper understanding that better land management practices can reduce economic losses from fires, raise food yields and improve relations between companies and communities.

It also provides an alternative development path compared to the expand-at-all-cost agriculture practices that have wiped out large areas of forests and peatlands, and primed Indonesia's landscape for huge annual fires - a no-win scenario.

The agency's efforts are vital in driving this change, long called for by experts but never properly acted upon by successive Indonesian governments. But to be truly effective, the government must also step up prosecutions against company officials proven to have started fires and halt illegal land grabs. Prosecutions after last year's fires have been slow. This must change as the environmental, social and economic costs of fires and deforestation grow each year.

Estimates vary but Indonesia has between 15 million and 20 million hectares of peatlands, about half of which are now degraded, including large areas badly damaged by deforestation, drainage and fire.

Peatlands are important because they store large amounts of water and lock away huge amounts of carbon, so they act as a brake on climate change. Restoring them is a good strategy to reduce fire risk and curb climate change.

The peat agency is tasked with restoring about 2.2 million hectares of peatlands over the next five years by re-wetting them, mainly through blocking drainage canals.

These areas will be detailed in maps to be released this week by the agency. The majority - about 1.9 million hectares - is cultivated land, a mix of company and community lands, the agency said.

The priority areas are those that are badly degraded and have repeatedly caught fire. Under new regulations, burnt plantations on peatlands cannot be replanted with oil palms and acacia, and the area has to be restored to make it less fire-prone. Alternative crop or timber species that thrive on flooded peatlands can be planted, though not in conservation zones.

The agency faces challenges.

Some companies will see the mapping work as an effort to take back some concession land, while others want to continue operating with little government oversight.

So far, agency head Nazir Foead, an Indonesian conservation veteran, does not expect too much pushback. Several large palm oil and pulp and paper companies - Wilmar, Golden Agri-Resources, Musim Mas, Asia Pulp & Paper and Asia Pacific Resources International Holdings - say they support the agency and have also shared their concession maps.

All have told The Straits Times they have halted any development on peatlands and, in some areas, have started restoring peatlands in their concessions.

Mr Nazir thinks he will not suffer too much pushback because the agency is targeting peatland areas that have been repeatedly burned and are economically unviable. So it makes sense to re-wet them. Companies, though, might complain about the restoration costs.

Part of the plan, too, is to explore planting alternative crops on reflooded peatlands in concession and community areas. Wet peatland agriculture, or paludiculture, can still make use of the land but protects it from fires.

Mr Nazir wants to encourage local communities to explore paludiculture as a way to earn extra income from fisheries or food crops and as a way to protect remaining forests. He also wants companies to explore alternative crops on reflooded peatlands and for them to be willing to give up part of their concessions where necessary to protect key peatland landscapes.

This could also help overcome conflicts with communities angered by past actions of companies - fires are regularly started by locals as a way to hit back at companies.

"If the conflict can be resolved, the land can be flooded and it can be planted with certain crops that benefit the companies and the farmers. Everybody wins - instead of the future of fires every year," Mr Nazir told The Straits Times recently.

The agency has started restoration projects in several areas and Mr Nazir is keen to show tangible examples of how the agency's work can drive change. He ultimately hopes peatland management and protection will become ingrained practice.

It is a development model for Indonesia that needs to succeed to ensure reduced fire risk and more responsible food production. Success will bring credibility to Indonesia's efforts to clean up its agriculture sector.

It can help root out a development model beholden to corruption and ignorance with no care for the future well-being of the nation - or Indonesia's neighbours.

•S.E.A. View is a weekly column on South-east Asian affairs.