Singapore’s Shifting Sands

Is Singapore an empire built on sand, particularly Indonesian sand? A decade-long squabble between the island republic and Indonesia over what seemingly ought to be an inexhaustible commodity has escalated, with Jakarta suddenly slapping a permanent ban on sand exports and risking another setback in the oft-strained relations with its nearest neighbor.

The move is no laughing matter for the wealthy island state, which has built big chunks of its metropolis on Indonesian sand and desperately wants more. Constrained by water on all sides, Singapore believes it must continue to grow physically as well as economically. At the very tip of Malaysia, the country is otherwise almost completely surrounded by Indonesia across the Singapore Strait. Jakarta is becoming concerned that as sand is stripped off for sale from tiny islands, the geography of the country is changing and Singapore will actually encroach the islets that make up its geographical boundary in the strait.

In 1960, the entire island state was only 581.5 square kilometers. It has since grown to some 650 sq km and expects to grow by another 100 sq km by 2030 – if it can find the firmament. It wants the new land for private and public housing estates and recreational facilities for its growing population as well as expanding commercial and industrial activities and transport. The government's incessant sculpting has extended the coastline out to sea in the east, northeast and west, with coastal areas straightened by dykes. Offshore islands have grown.

Accordingly, Mari Pangestu, Indonesia's feisty trade minister, has had enough. She banned the exports, saying the decision is necessary to protect the environment and maintain her country's maritime borders. According to her "the revenue from sand exports hasn't been worth the damage it has caused to the environment."

A blunt response from Singapore's Ministry of National Development expressed disappointment not only with the decision itself, but also with Jakarta's failure to take up Singapore's offer to help resolve Indonesia's environmental concerns. But there are also problems at the northern side of the island. Bernama, the Malaysian government news agency, quoted the Johor Chief Minister, Abdul Ghani Othman, on Jan. 30 as complaining that massive land reclamation work by Singapore at the mouth of the Johor River just across the causeway from Malaysia had contributed to major floods in the state, leaving more than 18,000 people at relief centers.

But it is Indonesia that is complaining loudest. Indonesia has 17,000-odd officially recorded islands, and it wants to keep them all. Sand removal, both legitimate and illegitimate, is causing environmental havoc. Smugglers can suck up as much as 10,000 cubic meters of sand from coastal areas on a given night, allegedly protected by corrupt officials in the Indonesian navy, police and customs.

Environmentalists say marine ecosystems and habitats have been irreparably damaged by uncontrolled sand extraction, which has also led to the disappearance of a number of tiny islets in the province of Riau, 800km northwest of the Indonesian capital. The province is the main source of sand used to produce cement for Singapore's construction sector and coastal reclamation projects, which require an estimated 1.5 to 2 billion cubic meters of sand every year.

The legitimate sand is first sold to international brokers, at about S$1.50 (65 US cents) per cubic meter, who then mark it up to Singapore construction firms at S$20 (US$13). Analysts predict the price of sand could shoot up to S$50 per ton or more because of the ban, with an ensuing increase in overall construction costs.

Singapore's need for Indonesian sand increased considerably after 1997 when Malaysia, at the time Singapore's main supplier, banned exports. Two years later there was another boom in demand following the plan to widen Changi Airport and the Jurong and Pasir Panjang areas

A revival in construction has led to forecasts that construction demand in Singapore may climb to US$12 billion or more this year. Major planned developments include two casino resorts and the new Business and Financial Centre. Recent figures put the imports at 6 to 8 million tons a year and with construction projects up by 40 percent last year, the ban will hit Singapore where it hurts, in the pocket.

There are massive discrepancies in Singaporean and Indonesian trade figures on sand exports. In 2001, for example, official data in Jakarta showed exports of sand as less than 75 million cubic meters, while Singapore's import data recorded 300 million cubic meters. Singapore says it spends as much as $120 million to $160 million a year on Indonesian sand. But in 2005, Indonesia's Central Statistics Agency (BPS) reported US$9.5 million in sand exports, with Singapore bringing in the lion's share of $6 million, followed by China with $2.4 million.

Although sand has been exported to Singapore for almost a quarter of a century, Indonesia has seen little benefit. An estimated 60 percent of the actual trade is thought to have been moved through illegal operations involving well-connected players at both ends. Sand smuggling, mostly by Singaporean-owned dredgers, became worse after the downfall of Suharto, with whom Singapore's founding father, Lee Kuan Yew, had a close personal relationship.

While sea-sand export may be an environmental issue in Jakarta's eyes, at least, it is also very much a political issue because of concerns over borders between Indonesia and Singapore. Indonesia lost two tiny islands, Sipadan and Ligitan, to Malaysia at the International Court of Justice (ICJ) in The Hague after a three-year legal battle. The court's decision in 2002 was based on Malaysia's longstanding occupation of the islands.

Shortly after that verdict, the Minister of Home Affairs, retired general Hari Sabarno, warned of more losses to come if the government, through local governments responsible for outlying islands, failed to "maintain the country's sovereignty through whatever means necessary to demonstrate this sovereignty".

Singapore maintains that all reclamation is within its territorial waters. Jakarta remains concerned that Indonesia's sovereign territory could shrink by default due to the reclamation projects. The small island of Nipah on the maritime border between the two nations s only 20 kilometers across from Singapore's gleaming towers and huge container terminals; it is now almost submerged. It is one of 83 border islands that serve as points of reference for Indonesia's sea borders. If the island sinks completely the international boundary between Indonesia and Singapore will change to Singapore's advantage. A wider Singapore would mean a wider territorial line under the Convention on the Law of the Sea that measures marine territory according to the coastal base line.

Though both countries have an existing agreement on marine territory, they have yet to settle continental coastlines and economic exclusive zones (EEZs) In February 2004, then-Indonesian president Megawati Sukarnoputri sailed to Nipah on an Indonesian warship to pointedly reinforce Indonesia's claim.

"The sea is what holds the country together and we have to keep it intact as a national asset," she warned.

A month earlier her Minister for Fisheries and Maritime Affairs Rohmin Dahuri had let it be known that the Singapore government was not prepared to sit down and talk turkey about its borders with Indonesia. "One of the reasons why sea sand quarrying and exports from Riau were closed down is the issue of the borderline between Singapore and Indonesia," Dahuri said.

Dahuri, who also chaired the Sea Sand Mining Control and Monitoring Team, explained that the government had asked Singapore to hold talks on the position of the border but the offer was refused. Jakarta had temporarily closed down sea sand quarrying activities the year before and Dahuri said that while talks on the border issue, environmental damage, prices and also monitoring remained in limbo, quarrying would remain suspended.

Dahuri is now in jail on charges relating to corruption. In June last year Dahuri's successor, Freddy Numberi, reiterated that Singapore's reclamation of its coasts could confuse the two countries' common borders, and the ban would be lifted once the two countries had mapped out their sea boundaries.

"Boundaries are set from the reclamation point, not from the original point before reclamation," he pointed out, adding that the Foreign Ministry had discussed the issue with Singapore but was unable to reach agreement.

Officials from both countries met, pledging to resolve the issue as quickly as possible based on international law. Yet Singapore's claims that Indonesia had not properly mapped its maritime borders or its continental shelf zones were the basis for the thorny issue being consigned to the pending tray, at least by the Singapore government.