Indonesia, Malaysia
Where sand is politics
To Singapore, sand is a simple trading issue, but neighbours see it as one for governments to deal with. Bill Guerin, Asia Times.
Aug 2, 2003

Jakarta - IN a region with some of the most ubiquitous white-sand beaches in the world, there is an unlikely sand war in Southeast Asia.

It is fuelled to a major extent by the steadily growing island of Singapore and the suspiciously shrinking Indonesian island of Riau, and complicated by the politics of Malaysia, Indonesia and Singapore.

For most of history, Singapore had hills - not big ones, but hills. Today, it is virtually flat, the hills having been dumped into the sea to make the island bigger.

The Housing Development Board (HDB) pioneered such projects in the early 1960s with the aim of creating more land in the land-scarce republic to cater for housing, industry, infrastructure and recreation needs.

Singapore's sand needs boomed in 1999, after Singapore's plan to widen Changi Airport, Jurong and Pasir Panjang.

Singapore is some 33 square kilometers bigger than it used to be - 5 percent of its total land area - and it aims to get even bigger yet.

Predictions are that it will have grown to 820 square kilometers by 2010.

For that, it needs another 1.8 billion cubic meters of sand over the next eight years for reclamation works including Tuas View, Jurong Island and Changi East.

An estimated 300 million cubic meters is dug out every year from the seabed in Riau and Bangka-Belitung provinces adjacent to Singapore, although Jakarta caved in to pressure from environmentalists and banned sand exports and mining this January.

The ban was supposed to be lifted after three months but disputed borders between Singapore and Indonesia prompted the government to propose lifting the ban for exports to Malaysia only.

Sand is hardly dirt cheap. The commodity fuels a US$200-million-a-year business, allegedly protected by the Indonesian navy and police and customs, the Riau regional administration, and top figures from the Jakarta elite.

The sand is first sold to international brokers, at about S$1.50 (85 US cents) per cubic meter, who then mark it up to Singapore construction firms at S$15 (US$8.50).

Riau, 800km northwest of the Indonesian capital Jakarta, is the main source of sand used to support Singapore's construction sector and coastal reclamation projects.

Land reclamation costs an estimated S$15 per square meter, though the reclaimed land is then sold at, currently, about S$850 (US$484) per square meter.

Marine ecosystems and habitats have been damaged irreparably from the uncontrolled sand extraction, which has also led to the disappearance of a number of small islets in the province.

It is only in the last two years, though, that Singapore's aggressive expansion of its coastal territory and its land reclamation policy have sparked problems with neighbours Indonesia and Malaysia.

The issue has evolved into a two-pronged maritime border dispute.

Nipah Island, one of 83 border islands serving as points of reference for Indonesia's sea borders, is at the centre of Singapore's current dispute with Jakarta.

Nipah lies dead in front of the main reclamation work and is now almost submerged.

Minister of Maritime Affairs and Fisheries Rokhmin Dahuri points out that if the island sinks completely the international boundary between Indonesia and Singapore will change - to Singapore's advantage.

Though the two countries have an existing agreement on marine territory, they have not yet settled their continental coastlines and economic exclusive zones (EEZs).

The Convention on the Law of the Sea states that marine territory is measured based on the coastal base line.

Jakarta is concerned that in the future, some Riau land could thus be claimed as Singapore's on the basis that if Singapore gets wider, its territorial line will also get wider.

From Singapore's perspective, the land reclamation is not an issue and it has refused to elevate what to them is a simple trading issue to a government-to-government level.

Jakarta, however, insists on an official agreement between the two countries.

Singapore, whose container port is Asia's second-busiest after Hong Kong and is crucial to the island republic's economy, is also facing problems with Malaysia.

Malaysia has said the reclamation work could obstruct ships headed for its US$1 billion state-of-the-art Tanjung Pelepas port in its southern state of Johor, just half an hour's sailing time from Singapore Port.

In fact, Malaysians claim that the project was designed to obstruct shipping and sabotage the progress of the port, being promoted to rival Singapore's, and officials in Kuala Lumpur have criticised Singapore for allegedly ignoring their concerns.

Johor Chief Minister Abdul Ghani Othman said fisherman in his state had complained of a sharp drop in their catch since shortly after the project began.

Malaysian Prime Minister Mahathir Mohamad entered the fray, demanding a guarantee from Singapore that the project would not unsettle the sea bed and affect passage for boats through its waters.

Feelings can run high.

In Malaysia the opposition Islamist Parti Islam SeMalaysia (PAS) in its annual conference last year rallied party support against Singapore's land-reclamation project.

PAS Johor state leader Mazlan Aliman told party members that Singapore's continuation of the reclamation work was a threat to his state and branded Malaysians who sell sand to Singapore for use in this project as traitors.

The Singaporeans say these concerns are unfounded, as its reclamation works are about seven kilometers away from the shipping lane.

Nonetheless, some members of Indonesia's house of parliament, the DPR, also accused the government of treason for allowing Singapore to "expand its territory" adding extra coastline to the small island nation-state.

To add insult to injury, they said, Singapore reclamation works were using Indonesian sand to claim extra territory.

There are also questions of how much sand has been taken, leading to suspicions that some sand smuggling has taken place, or at least some sand skulduggery.

Indonesia's House Commission VII for the Environment was shocked to note in February last year that official data collected showed Indonesia's exports of sand in 2001 as less than 75 million cubic meters, while Singapore's import data records 300 million cubic meters.

Singapore in fact reported that they had imported 1.8 billion cubic meters so far, while Indonesian figures show exports of only 167 million cubic meters.

In February last year, a decree temporarily banned sand exports to allow a government team to explore a better sand mining and export system.

All land reclamation projects in Singapore reportedly came to a standstill since no alternative sources of sand supply were available.

Last July the Ministry of Maritime Affairs and Fisheries issued a decree on sand mining zones aimed at restricting the extent of sand mining areas and halting the deterioration of the environment.

The move was motivated by the need to bring the illegal practice under government control to obtain revenue as taxes and licensing fees from the trade.

Indonesia's central government, seeing that the regional administrations involved, and the state treasury, were missing out on billions of dollars of potential revenue from taxes and licensing fees, took the authority back from the provincial administration.

The minister of industry and trade, Rini M S Soewandi, who has recently been involved in a row with her Singaporean counterpart George Yeo over wide discrepancies in trade statistics, issued a decree in September limiting the amount of sand exported to Singapore.

The quota for the final quarter of 2002 was set at 26 million cubic meters, based on 75 percent of the minimal sand demand of Singapore for three months.

The price of sand was also raised from US$3 from $1.50 per cubic meter, double the price for the illegal stuff.

Sand exporters had to pay the government some 80 US cents per cubic meter in export tax and 60 cents in royalties.

They were also meant to set aside about 1.5 cents for community development programmes.

This forced them to renegotiate their contracts with buyers in Singapore, but many buyers refused to pay the new price and quarrying activities ground to a halt in Riau.

Dredgers from Belgium, the Netherlands, Russia and South Korea made Riau waters the busiest in the world for dredging as Singapore seeks to expand.

Some 54 sand dredgers out of a total of 70 such vessels worldwide were operating near Riau last year.

Though public perceptions in Indonesia may be that foreign dredgers are smuggling and stealing Indonesian sand, which is then dumped to expand the coastline of wealthy Singapore, the truth could just lie nearer to home.

High-profile figures from the Suharto regime and others from the corridors of power are alleged by local media sources to have been involved in raiding Riau's sands for years.

The Riau provincial administration took over the control of licensing for sand quarrying from Jakarta after the regional autonomy law went into effect on January 1, 2001.

Within two months Governor Saleh Djasit had issued quarrying licences for 18 companies exporting to Singapore. His administration last November formed a cartel to control the business.

The Association of Sea-Sand Mining Corporations of Riau, set up by Saleh's office, awards contracts to dredge sand from the Indonesian seabed and deliver it to government-owned Jurong Town Corp (JTC) and other Singaporean government customers.

This is the governor who said last week, "We don't want the recurrence of the sand export like in previous years which caused losses to the country and people."

Saleh was announcing a review on the Malaysian request for sand - a review which, he said, covered matters of environment, socio-economic conditions of the coastal people, costs and businessmen participation.

Malaysia gained kudos when it recently banned the sale of marine sand to Singapore after allegations that the sand being dredged in its own waters for a Johor port development was being covertly shipped to Singapore.

Malaysia is officially recorded as importing 600 million cubic meters of Indonesian sand last year and Jakarta appears ready to go ahead and regulate sea-sand exports there on the government-to-government basis rejected by Singapore.

Indonesia and Singapore failed to reach agreement on border issues during a meeting in March and will meet again next month for more discussions
Asia Times