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  Today Online 1 Feb 07
Better than the ban
Indonesia's eco-friendly move is potentially lucrative but must be managed well
Gavin Chua Hearn Yuit and Martha Maulidia

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 2003 ban on coastal sand to include other types of sand and soils, sand exporters in 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 fisherfolk 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 have 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.
links
Sandy Situation a huge pile of articles about sand, reclamation and Singapore on the leafmonkey blog; also on the environmental news blog

Related articles on Singapore: general environmental issues and wild shores
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