Jakarta says it wants to stop sand exports to Singapore

$475 million is lost each year due to illegal mining in Riau Extensive mining in Riau has destroyed natural habitats

By Robert Go
STRAITS TIMES INDONESIA BUREAU

JAKARTA - Indonesia is to halt sand exports to Singapore to give itself time to clean house and better regulate the sector, which is now rife with corruption and illegal mining activities, officials at the Ministry of Trade and Industry have said.

But the ban is not effective immediately. Aides to Indonesian Minister of Trade and Industry Rini Soewandi said a formal decree suspending the trade temporarily would be issued later this month.

Ms Rini could not be reached for comment yesterday.

But Mr Ferry Yahya, director for the exportation of agricultural and mining products at the ministry, told The Straits Times: 'Two core issues are environmental damage done by sand-mining operations in Riau and rampant illegal mining activities.'

Estimates from the ministry say Indonesia loses as much as 2.5 trillion rupiah (S$475 million) each year due to illegal sand mining in Riau.

Extensive sand mining in Riau has also been blamed for causing the destruction of natural habitats in parts of the province, and even for the disappearance of several small islands offshore.

Mr Ferry confirmed the ministry would be examining a host of issues, including what happens to legal contracts currently in force between Indonesian sand suppliers and buyers in Singapore, before issuing its ruling.

The root of the problems, it seems, could be traced back to the implementation of Indonesia's regional autonomy programme, which gave local administrations vastly increased powers in January last year.

Ms Rini said in the Riau capital of Pekanbaru on Thursday: 'There have been too many mining permits sanctioned by the Mines and Energy Ministry.

'According to regional autonomy, they should have been issued by the provincial administration.'

Mr Ferry elaborated: 'This is also a corruption issue, as officials at the local, provincial and central levels have been issuing lots of permits to take sand from Riau, and most of these were issued illegally.

'The solution is greater supervision and coordination from Jakarta.'

The Indonesian navy and army, whose top leaders accompanied Ms Rini on her inspection of Riau, have pledged full support for her plan.

The ministry's move is consistent with recent moves by President Megawati Sukarnoputri's government to revise the regional autonomy programme, an effort that many critics have described as an attempt to 'recentralise' power back to Jakarta.

However, Mr Ferry downplayed that assessment, saying the Jakarta government has to provide an umbrella structure for economic activities taking place in the provinces.

When asked if the ban would lead to increased sand prices for Singaporean businesses, he said: 'If the prices increase, Indonesia will be grateful.

'But our objective now is to fix this domestic problem, not to get higher prices.'