Tenggara Strategics, Jakarta – The Joko "Jokowi" Widodo administration has decided to lift the government's ban on exports of sea sand, which had stood for 20 years, amid the threat of environmental degradation to the country's coastal environment. The sea sand export reinstatement came about while the government attempts to prohibit exports of more of the country's critical minerals.
The end of the sea sand export ban came by way of Government Regulation No. 26/2023 on the management of marine sedimentation, which was effective as of May 15. Article 9(2d) of the regulation stipulates that marine sediment could be exploited for export, provided that domestic needs had been fulfilled and the export was done in accordance with statutory provisions. Article 15(5) stipulates that the level of domestic need is to be decided through a ministerial regulation.
The ban was initiated in 2003 by the administration of Megawati Sukarnoputri, who is ironically the incumbent leader of Indonesian Democratic Party of Struggle (PDI-P) which Jokowi is a member of, due to major damage to Riau Island's coastal ecosystems to satiate Singapore's sea sand demand for its land reclamation projects. Indonesia also lost US$330 million annually from 1970 until 2003 because only 900,000 cubic meters (cbm) of exported sea sand was sold legally out of the total 45 million cbm that was mined.
Maritime Affairs and Fisheries Minister Sakti Wahyu Trenggono said the regulation was mainly for fulfilling the domestic demands of sea sand for reclamation projects and that if it was not regulated well then small islands could be exploited for reclamation projects or the bottom of the sea being mined, which would cause further environmental damage.
The minstry's special staffer Wahyu Muryadi added the ministry would ensure the extraction of marine sediment was done with much safer tools for the environment than under the pre-ban regulatory regime and that the policy would bring in revenue for the country. Meanwhile, Riau Islands' Sea Sand Miners Association (APPL) chairman Heri Tosa believed the government had concluded its border dispute with Singapore, which was thought to be part of the motivation behind the previous ban.
However, Greenpeace Indonesia refused to be a part of the research team to implement the regulation, saying the government's justification of the decision was a "greenwashing" attempt. Furthermore, the Indonesian Forum for the Environment (Walhi) warned that the regulation would threaten the livelihoods of fishermen and coastal communities. The NGO also said it would hasten the loss of small islands, which could displace around 23 million people by 2050.
Although the government regulation could reopen a revenue stream for Indonesia amid its infrastructure development, including for the development of its new capital city, it has a steep environmental cost that would lead to future financial losses for the country. The policy gives more benefit to polities looking to import sea sand for land reclamation projects, such as Singapore and Hong Kong, than to Indonesia. Exported sea sand to Singapore contributed to the expansion of the city-state's land area by 25 percent from 1976 to 2001.
What's more
Thirty-three out of 59 mining permits for sea sand went unused due to a lack of buyers caused by the now-lifted ban, even with 2 billion cbm in domestic need for sea sand in 2020. But domestic land reclamation projects using said sea sand displaced 107,361 Indonesian fishermen in 2016 alone, thus adversely impacting the livelihood of many Indonesians in the name of infrastructure development.
The Indonesian government does not have a good track record in punishing domestic violations of marine sediment excavation. For example, sand mining firm Logomas Utama excavated sand only 3.15 kilometers away from Babi Island in Riau Islands, far closer than the 37-kilometer boundary. The government ordered Logomas to cease its sea sand mining operation in neighboring Rupat Island, Riau, following local fishermen groups' direct action against the firm and its appeal to President Jokowi with Walhi's assistance. However, the government did not revoke the firm's mining permit, which the groups worry could allow the company to restart operations.
What we've heard
According to multiple government sources, there have been extensive lobbying efforts to convince the Indonesian government to resume sea sand exports, dating back to the administration of President Susilo Bambang Yudhoyono. These lobbying activities began gaining even more traction during President Joko Widodo's first term in office.
At that time, Maritime Affairs and Fisheries Minister Susi Pudjiastuti faced persistent lobbying from sea sand exporters who urged her to reopen the export channels. However, despite these lobbying attempts, Susi remained unwavering in her refusal to allow sea sand exports.
The call to reconsider sea sand exports resurfaced during Jokowi's second term, particularly following the transition from Susi to Wahyu Trenggono as the new Maritime Affairs and Fisheries Minister. Since 2021, the government started to expedite the development of government regulations (PP) concerning the reopening of sea sand exports.
Initially, there was a lack of consensus among several ministries regarding these government regulations, notably between the Maritime Affairs and Fisheries Ministry and the Transportation Ministry. Nevertheless, the Maritime Affairs and Fisheries Ministry made concerted efforts to persuade other ministries that the material extracted and exported was marine sediment rather than sea sand.
Prior to the widespread news about the reopening of sea sand exports, the Maritime Affairs and Fisheries Ministry officials held meetings with prominent companies entrusted with the task of dredging marine sediment. After the reopening, notable figures such as Tomy Winata and several local companies who have long sought to profit from this industry, expressed their support for this policy.
Furthermore, another source reveals that Singapore has long been struggling to find a reliable supply of sea sand to meet its needs, which has prompted them to continue searching for sources. Meanwhile, Malaysia has already imposed a moratorium on sea sand exports.
This opportunity has been seized by various Indonesian entrepreneurs, as well as authorities suspected of involvement in illegal sea sand export activities. The formulation of sea sand export tariffs reportedly preceded the drafting of the government regulations that serve as the foundation for reopening the export channels. The Maritime Affairs and Investment Coordinating Ministry has taken the lead in formulating these export tariffs.
[This content is provided by Tenggara Strategics in collaboration with The Jakarta Post to serve the latest comprehensive and reliable analysis on Indonesia's political and business landscape.]