PRESENT POINT POWER

SINGAPORE “Blackmailed” by INDONESIA Sand Export Ban-Linked to Extradition Treaty Talks & Border Disputes; INDONESIA Renegading on Earlier Agreement; VIETNAM as Alternative Source & NEWSAND in the Making

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UPDATE: FEB 20 2007
February 19, 2007 20:21 PM

S'pore: Extradition Treaty Talks Should Not Be Linked With Sand Export
By Jackson Sawatan
SINGAPORE, Feb 19 (Bernama) -- Singapore has described as "a disappointment" a recent remark in Indonesia that the ban on land sand exports was a way to pressure Singapore into signing an extradition treaty currently being negotiated between both countries. "If this is indeed Deplu's (Departmen Luar) (Department of Foreign Affairs) approach, it is a disappointment to us," a Singapore foreign ministry (MFA) spokesman said in a statement. On Friday, Director-General (East Asia,

The Pacific and Africa) of the Indonesian Department of Foreign Affairs Primo Alui Joelianto was reported as saying that Indonesia's ban on the export of concreting sand was a "key way of placing more pressure" on Singapore (to resolve differences) in extradition and some border negotiations. The MFA spokesman said that the official reason for the ban announced last month was environmental protection but Primo's remarks "lead us to wonder whether that was the main reason for the ban". It said that Singapore had earlier expressed willingness to work with Indonesia on environmental protection, but Indonesia ignored this offer and proceeded with the decision.

Prior to the ban, Singapore was the largest importer of Indonesian sand. The decision caused the price of land sand, which is used to make concrete, to go up. The ban, however, is unlikely to affect ongoing projects including the two integrated resorts -- the Marina Bay Sands by Las Vegas Sands Corp, and Resorts World at Sentosa by Genting International which are slotted for opening in 2009 and 2010 respectively. The MFA spokesman said that Singapore has embarked on negotiations with Indonesia on the Extradition Treaty and border delineation in good faith on the basis of mutual benefit. "On the Extradition Treaty, both Indonesian President Susilo Bambang Yudhoyono and Prime Minister Lee Hsien Loong had agreed in Bali on Oct 3, 2005 that it would be in parallel and linked to the negotiation on a Defence Cooperation Agreement.

"Indeed, on this basis, we have made good progress on both agreements even though some difficulties remain. What is needed is political goodwill on both sides to finalise the agreements which, from Singapore's perspective, is within reach," the spokesman said. He added that unilaterally making sand an additional issue with the objective of delinking the Defence Cooperation Agreement from the Extradition Treaty contravenes the earlier agreement by the two Leader

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UPDATE: Feb 14 2007

Brunei Times; 14 Feb 2007
Singapore's quest for sand; Chua Lee Hoong

INDONESIA'S ban on the export of sand took effect last week. On paper, the ban applies to all countries. But Singapore is by far its largest importer, and one Indonesian official has acknowledged the ban was motivated by bilateral disputes with the Republic. Singapore's leaders, determinedly valiant as always in the face of adversity, have been reassuring Singaporeans that, despite the ban, construction costs will increase only marginally, by 1 to 3 per cent. The government has released sand from its stockpile and is also sourcing it from other countries in the region. Contractors are also looking to rely more on other building materials such as steel and glass. Last Saturday, for instance, this newspaper reported National Development Minister Mah Bow Tan making very much the same points. Then, three pages later, came this short little news item: Ministers

from Singapore and Indonesia had met last Friday to discuss economic cooperation between the Republic and the Indonesian islands of Batam, Bintan and Karimun. This was the fourth meeting since a deal between the two countries was signed in June last year to develop special economic zones on the three Indonesian islands, said the report. Was I missing something here? With the supply of sand from Indonesia halted, Singapore was still in talks to help the latter develop the Batam-Bintan-Karimun special economic zone (SEZ)?

The aid offered so far includes Singapore's Institute of Technical Education tying up with Batam Polytechnic to tailor vocational training for workers. The SEZ aims to attract US$1 billion (S$1.53 billion) of new investments and create about 100,000 jobs over the

next three years. Dr Budiono, the Indonesian minister co-chairing the project with Singapore's Trade and Industry Minister Lim Hng Kiang, said 37 new projects with a total value of US$73 million were approved between June and October. "It is a modest amount, but it's still a turnaround. In the past, you heard about the exodus, but now people are coming back." Yes, Singapore signed an agreement last June to help Indonesia develop the SEZ. And yes, Singapore is a stickler for agreements when it signs

them, it sticks to them, and expects others to do the same. But will the average Singaporean feel the same way? When floods hit Jakarta recently, for instance, some Singaporeans had asked: "Why should we help them since they refuse to sell sand to us?"

Even now, Singapore officialdom treads on egg shells as it prepares aid for Indonesian flood victims, fearing a domestic backlash.To the average Singaporean, the sand ban smacks simply of another instance of diplomatic pique, which hurts Indonesians even as it deprives Singapore of sand. The Indonesian sand-shovellers' association, for instance, has threatened to sue Jakarta over the ban. Indonesia has no shortage of sand. Nor can sand mining be said to be eroding Indonesia's boundaries since it is an archipelago with an abundance of islands 17,000 and counting. The Singapore suppliers who import the sand from Indonesia, said their sand sources include Bintan, Morro, Pulau Sugi, Pulau Citlim, Singkep and Bangka. These islands are located away from the boundaries between Indonesia and Singapore, as fixed under a 1973 treaty, and there is no

danger of boundaries being shifted, surreptitiously or otherwise. Sand mining is affecting the environment? That would be a legitimate concern, if true. China and India, for instance, have both banned sand mining in certain parts of their countries because of the damage to rivers. But rather than an outright ban, would not the better approach have

been to impose stricter rules on where and how mining can be done? The rules should apply to all miners regardless of nationality. If Singapore importers have been guilty of being party to indiscriminate and environmentally devastating mining, they too should be penalised. In any case, Singapore sand importers have not sat idly by since the

ban came into effect. Industry sources say Vietnam is a viable alternative source of land sand. Indeed, the best thing that has come out of the ban so far is the realisation not only that Singapore needs to diversify its import sources, but also that it needs to reduce its reliance on sand itself, whether from the sea or the land. On the streets, never-say-die Singaporeans are advocating NewSand, much as Singapore came up with Newater when Malaysia threatened to cease supplying water to the republic. Among the suggestions I have come across is to extract minerals from the sea waters surrounding Singapore to make concrete, by passing an electric current through the water. The idea sounds electrifying, but hey, drinking water from sewage sounded bizarre too when we first heard about it. Ten years from now, who knows? The Straits Times/Asia News Network

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UPDATE Feb 12 2007

SINGAPORE’S PROJECT DEVELOPMENT Cost Increased by 1- 3% Due to INDONESIA's Sand Ban – Totally Unjustified Laments S’pore Ministers.

Singapore ministers say Indonesian sand ban unjustified
February 12, 2007, 4.47 pm (Singapore time); from Bsuinesstimes; Asiaone

SINGAPORE - Indonesia's grounds for banning sand exports are unjustified,

Singapore ministers said on Monday. Indonesia banned exports of concreting sand last month citing environmental concerns and fears that exports would shrink Indonesia's borders. But National Development Minister Mah Bow Tan told Parliament that the claims were not justified, and that the price of the exports was supposed to factor in environmental degradation. 'Based on what we know, the Indonesian sand suppliers who are licenced by the Indonesian government are obliged to plow some of their proceeds ... into environmental reconstruction, and that is built into the price of the sand,' he said. Indonesia is the main exporter of sand to Singapore.

The Indonesian ban on Jan 23 sent shares in construction companies plummeting amid speculation they would have to import concrete sand from more expensive sources. Mr Mah also said it was regrettable that Indonesia did not take up

Singapore's offers to assist in addressing the environmental concerns before imposing the ban. Foreign Minister George Yeo also disputed Indonesia's claims the ban was imposed to protect the sprawling archipelago's national borders. 'It is not possible for Indonesia's export of land sand to affect its maritime boundaries,' said Mr Yeo in the same Parliament session.

'According to our contractors who imported the land sand from Indonesia, the sources of their Indonesian suppliers were from inland locations away from the border islands of Indonesia,' he said. Singapore's Building and Construction Authority on Jan 31 said it would release concreting sand from its stockpile to make up for the shortfalls caused by the ban. Mr Mah said Monday that sand from alternative sources was expected to be more expensive due to higher transportation costs, and said it would only increase the overall cost of project development by a 'manageable' 1-3 per cent. -- AP

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Singapore is back on an economic boom. After years of slow growth, new government policies like reverse anti-gambling policy are lifting both the economy and peoples’ spirits. Property prices are going up and up steadily, foreign bankers are flooding in with huge public infrastructure projects being carried out and investment capital is streaming in from far and near. All the ingredients for economic growth are looking good then wham – NO MORE SAND TO SINGAPORE, just like Malaysia not selling from Indonesia.
The price of sand has shot up by more than 30 per cent since the ban took effect on Jan 23. We have heard of rubber, tin and oil stockpile in countries. But sand stockpiling? How many countries are doing it; Only in Singapore? And how many weeks or months of stockpiling is the island state keeping?

January 31, 2007 15:56 PM

S'pore To Release Sand Stockpile To Address Shortage

SINGAPORE, Jan 31 (Bernama) -- Singapore is releasing its concreting sand stockpile to make up for any immediate shortfall following Indonesia's decision to ban the export of sand. Singapore's Building and Construction Authority (BCA) said today the stockpile would be released from tomorrow.

"The release of sand will also give the industry price and supply stability for the next few months to allow the industry to make the necessary adjustments," BCA said in a statement. Indonesia announced last week that it was imposing a permanent ban on land sand exports for environmental reasons and to protect Indonesia's border. The ban took effect on Jan 23, but BCA said the Indonesian government had given exporters up to Feb 5 to honour existing sand export contracts. Singapore, which has been the largest importer of sand from Indonesia prior to the ban, had expressed its disappointment with the move but said that the ban was unlikely to slow construction work here. BCA said today that it expected the price of sand to rise due to higher transportation cost involved in shipping sand from distant sources. "As contractors and concrete suppliers with on-going projects may not be contractually protected against this sudden increase in price, developers are urged to work out a cost-sharing arrangement with the contractors and concrete suppliers," it said. Government agencies would take the lead to bear part of the increase in the cost of sand for its existing projects, BCA added. It also recently urged the industry to reduce the need for concreting sand in construction, and to use steel more extensively.

Better Than The Ban ;Posted: Thu, 01 Feb 2007 07:30:00 +0800

Indonesia’s eco-friendly move is potentially lucrative but must be managed well Gavin Chua Hearn Yuit and Martha Maulidia; Today Online
INDONESIA'S blanket ban on the export of sand has caught Singaporeans and regional stakeholders by surprise, and may not be best for the country itself. While the country’s environmentalists and affected communities in the sand-mined areas have won a long-drawn battle to widen the Riau that rely on overseas markets such as Singapore and China are mulling over the loss of their multi-million dollar business. Now staring at price hikes as high as 50 per cent, concrete suppliers and contractors in Singapore are also hard hit by the sudden ban announcement.

Why the ban now? Indonesian Trade Minister Mari Elka Pangestu has invoked “resource conservation” as the key rationale behind the government’s decision. There is truth to this. For the past two decades, environmental degradation from sand-mining activities has been a sadly familiar story. The victims are often fisher folk who have little voice to speak for themselves about coastline erosion and fishing-ground destruction from sand-mining activities that have affected their livelihoods and homes. An investigation by Indonesian non-governmental organisation Kaliptra in 2001 showed that coastline erosion was over 5m in some places, and that several small islands had virtually disappeared. This was despite a Ministry of Marine Affairs and Fisheries Decree disallowing mining activities on any island of less than 2,000 sq km. Polluted waters from the frequent mining traffic has also disrupted fishing activities many kilometres from the shore.

A map released by Indonesia's Ministry of Mines and Energy shows there is "not one square centimetre" of the waters in Riau that has not received sand-mining concessions - which are issued without any prior environmental impact assessment. A January 2005 report in the Jakarta Post also revealed how the sand trade hindered development plans for tourism and industry in Batam and Bintan. The Indonesian government now seems to recognise that these losses outweigh the government revenue. For while Indonesian sand exporters benefited, local government revenue from the export tax has been minimal, due to tax evasion. More broadly, the Indonesian Trade Ministry could be trying to gain more economic mileage by de-emphasising raw material exports to focus more on value-added exports.

In 2002 for example, log exports were banned in favour of value-added products such as plywood. In many ways, these woes and the ban must be set in the wider context of Indonesia’s struggle to govern its natural resources from over exploitation. These include the fires from many large companies that cause transboundary haze pollution and the mudflow in Java for which a major Indonesian company is believed to be responsible.
The question is, will the ban work?
After all, despite the ban on logs, reports indicate that many illegal
logs still go from Indonesia to China and other destinations. Growing
demand and higher prices may well spur illegal trade in sand too,
complicit with corruption and weak governance. The Indonesian government should consider other measures rather than the total ban, which may be difficult or, indeed, impossible to enforce. One alternative is to modify the system of export charges to ensure that the government and local communities receive fair revenue from the total export value of the sand trade. Proper environmental impact assessments and zoning for industries that take into account the concerns of local communities and ecological fragilities should also be enforced. Connected to this, an ethical buying approach should be explored between Indonesia and buyers in Singapore. This would incorporate proper mechanisms for exporters to, for instance, contribute a portion of their export tax to fund environmental protection and monitor the ground for illegal mining.

Such measures, unlike a ban, would allow Indonesia to gain more from the current demand boom while minimising the damage. Even if Indonesia wishes to move away from exporting raw sand, dialogue with buyers and receiving states such as Singapore is important. This could lead to investments for secondary processing to be made in Indonesia.
Indonesia should be applauded if the government is serious about managing its environment better and ensuring the local communities benefit from the development of the Riau islands, including Batam and Bintan. The way the ban has surprised many, however, may affect business and investor confidence unnecessarily - especially when it remains to be seen if the ban will be effective or if illegal trade will soon begin, with yet more negative effects. For Singapore and other buyers, alternatives in construction must be explored, including the options for recycled materials and other, more environmentally friendly, methods of construction.

Gavin Chua is a researcher at the Singapore Institute of International Affairs (SIIA). Martha Maulida is an Indonesian environmental researcher
attached to the SIIA.

= = = = Other related stories

Straits Times 3 Feb 07
IRs 'on track' despite sand, probity concerns
Las Vegas Sands and Genting International say building works are going as scheduled
By Krist Boo & Marcel Lee Pereira

Channel NewsAsia 2 Feb 07
Sand ban from Indonesia not significantly affecting IR construction
By May Wong

Today Online 3 Feb 07
Sand 'glitch' won't hurt IR construction
Two operators say work schedules on track, Govt helping to secure supply
Lee U-Wen u-wen@mediacorp.com.sg