Indonesian Political, Business & Finance News

Govt mulls lifting ban on sand exports to Malaysia

| Source: JP

Govt mulls lifting ban on sand exports to Malaysia

Haidir Anwar Tanjung and Adianto P. Simamora, The Jakarta Post,
Pekanbaru/Jakarta

The government is considering lifting the six-month ban on
sand exports from Riau to Malaysia, but it will maintain the ban
on sand exports to Singapore until the outstanding maritime
border issues with the latter are settled, an official has said.

The plan to possibly allow sand exports from Riau to Malaysia
has been hailed by exporters and the local administration, but
has been strongly opposed by enviromentalists.

Safri Burhanuddin, director of research for maritime territory
and non-living resources at the Ministry of Maritime Affairs and
Fisheries, said that the government's monitoring team on sand
exports had visited Malaysia to discuss the possibility of
allowing sand exports to that country.

"We have discussed the plan with the government of Malaysia.
We are now waiting for a joint agreement for the next sand
exports," he told The Jakarta Post on Tuesday.

With Singapore, Safri said that the ban would remain in place
until the two countries settled their outstanding border issues.

The Indonesian and Singaporean governments failed to reach
agreement on the border issues during a meeting in March.

The two governments are expected to meet in August to discuss
this problem.

The government banned sand exports and mining in January in
response to protests from environmentalists that sand mining in
the waters off Riau province had damaged the marine environment.

Uncontrolled sand extraction from the coastal areas of Riau
has caused severe environmental damage, leading to the
disappearance of a number of small islets in the province.

The sand from Riau, both legally and illegally extracted, is
exported mostly to Singapore, which has a high demand for sand to
support reclamation projects in the island state's coastal areas.

Indonesia fears Singapore's continued reclamation projects
will affect its maritime borders with the island state.

According to a government estimate, Singapore has grown from
580 square kilometers to 660 square kilometers following the
reclamation projects.

Singapore is estimated to require some 1.8 billion cubic
meters of sand over the next eight years for its reclamation
work.

Riau has been exporting sand to Singapore for many years. The
sand is sold for S$1.5 per cubic meter to international brokers,
who then sell the sand to Singapore construction firms for S$15
per cubic meter.

Meanwhile, Karimun Regent M Sani said that allowing sand
exports to Malaysia would help increase the local
administration's revenue.

He said that the sand business had so far contributed between
Rp 70 billion and Rp 80 billion in cash to the administration's
coffers.

"But since the ban came into effect, we have had to delay the
development of several infrastructure projects in Karimun
regency," he said.

The Indonesian Forum for the Environment (Walhi) said that
lifting the ban on sand exports would not benefit the local
community.

"For Walhi, the sand exports and quarrying activities have
only caused damage to the marine environment and have never
benefited local fisherman," M. Teguh, a senior official with
Walhi, told the Post.

Chronology of RI's sand export policies

Feb. 7, 2002: Minister of Industry and Trade Rini MS
Soewandi, together with top military leaders, visit Riau to
inspect sand mining activities. She deplores the environmental
damage caused by sand mining and the low price paid by Singapore
for Indonesian sand exports.

Feb. 15, 2002: Government issues a decree temporarily
banning sand exports to allow a government team to explore a
better sand mining and export system.

July 25, 2002: The Ministry of Maritime Affairs and
Fisheries issues a decree on sand mining zones aimed at
restricting the extent of sand mining areas.

Sept. 5, 2002: The Ministry of Industry and Trade issues a
decree limiting the amount of sand that can be exported to
Singapore.

Jan. 23, 2003: The government issues a decree totally
banning sand exports.

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