Sand quarrying activities in Riau come to a standstill

Sand quarrying activities in Riau come to a standstill

Adianto P. Simamora, The Jakarta Post, Jakarta

Sand quarrying activities in Riau have come to a standstill
for months as miners cannot afford the new tax and royalties
imposed by the government.

"The miners have suspended operations since the government
raised the base export price," Safri Burhanuddin, director of
research for maritime territory and nonliving resources at the
Ministry of Marine Affairs and Fisheries told The Jakarta Post.

Last October, the government raised the base price for sand
exports to US$3 from $1.5 per cubic meter.

Based on the new export base price, Safri said, sand exporters
had to pay the government some 80 U.S. cents per cubic meter in
export tax and 60 cents in royalty. They also have to set aside
about 1.5 cents for community development programs.

He said such an increase had forced exporters to renegotiate
their contracts with buyers from Singapore.

"We have heard that buyers have refused to pay the new price
that's why the quarrying activities have stopped in Riau," he
said.

The Association of Riau's Sand Exporting Companies (Hipepari)
confirmed that all sand quarrying companies had suspended
activities for two months.

But association chairman H. Ficky, said the suspension was
caused by a licensing procedure set by the government, which he
said was complicated.

"Although businessmen have received mining contracts from the
local government, they still need to seek another 14 licenses
from the central government," Ficky said as quoted by Antara.

He said that such a tight policy had made it difficult for
local businessmen to start up a business.

Sand from Riau has been exported to Singapore for many years
to support the island's coastal reclamation project.

The export of sand to Singapore however, has sparked protests
from many parties, including legislators, who say that it only
causes losses to the local and central government.

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

Aside from quarrying activities by licensed operators, a large
of amount of sand from Riau has been reportedly illegally
quarried and smuggled to Singapore, which is thus far the sole
buyer of Indonesian sand.

To help protect the marine environment, the central government
has taken over the supervision of sand quarrying in the province
from the regional government.

President Megawati Soekarnoputri has established a special
team to control sand exports and illegal quarrying in Riau
waters. The team, which is led by Minister of Maritime Affairs
and Fisheries Rokhmin Dahuri, consists of several ministers and
top military officials.

Rokhmin earlier said some 300 million cubic meters of sand
were being smuggled out of the country every year.

Rokhmin issued a decree on a zoning mechanism to help reduce
the number of areas where sand can be mined.

Under the zoning mechanism, some 50 percent of existing sand
mining areas will be off-limits to mining operations.

The Ministry of Trade and Industry is in charge of the
supervision and issuance of licenses for sand mining and its
export.