Vessel detentions show Jakarta’s disconnect with its people

It is shocking to learn from the MFA spokesman yesterday that Indonesia has yet to release the vessels carrying granite from the Riau Islands to Singapore. The press release did not indicate how many vessels were still being detained, but based on remarks in Parliament on 5 March by Foreign Minister George Yeo, some 12 tugboats and 12 barges — most of which fly the Singapore flag — have been detained. On Friday 23 March, The Jakarta Post reported that at least 20 barges have been detained by the Indonesian Navy since early February — that’s almost two full months!

(Photo: WN)

Aside for the obvious implications on the construction industry in Singapore, which relies heavily on sand and granite imports from Indonesia, the financial impact on Indonesian companies in the business of sand and granite exports has been tremendous. Riau Granite Members Association (APGR) member Muchamad Syafei told The Jakarta Post that business has been “badly affected”, as each vessel can carry between 2,000 and 3,000 tons of granite, with up to 3 round trips to Singapore per day. At US$21 per ton (which was the price of granite before the detentions began), that works out to over US$1 million in losses per week for the Indonesian companies.

And we haven’t even factored in the losses from the ban on sand exports. Based on a 11 March report in Indonesian daily Kompas, Indonesia used to sell sand to Singapore at US$7 per ton. Each day, more than 16,000 tons of sand were being exported from Indonesia to Singapore. The losses in sand revenue for Indonesian companies: US$672,000 per week.

The 17-member APGR has made a complaint to the Trade Ministry, and some companies are even considering suing the Navy for its massive losses. All this while, the Trade Ministry, including its minister and director general, has been denying that there is any ban on granite exports. Indonesian Foreign Minister Hassan Wirajuda also assured George Yeo on 15 March that the Indonesian Cabinet was not considering a ban on granite exports. However, he said that some of the detained barges were “in breach of regulations”. (The Navy alleges that the exporters are smuggling sand concealed under the granite, but the Indonesian exporters have insisted that these were just dust from the crushed granite.)

Jakarta has already let the cat out of the bag that all these bans and detentions are nothing to do with environmental damage, but are instead intended to pressure Singapore to sign an extradition treaty so they can hunt down corrupt businessmen and officials seeking refuge in the city state. Given the conflicting statements and actions of the Indonesian Trade Ministry, Foreign Ministry and the Navy, it is possible that each of these power centres in Indonesia are playing one-upmanship games in order to claim credit for what is eventually going to be a signed extradition treaty. (Singapore has already said that it will sign the Treaty once the details of the parallel Defence Cooperation Agreement are worked out.)

All this points to a serious disconnect between the government in Jakarta and commercial interests in their own Riau Province. While Jakarta officials continue to play games to demonstrate their nationalist credentials, their own people and businesses suffer. Singapore can always find alternative sources of sand and granite. But do the Indonesian companies and their workers have alternative sources of revenue and employment?

Author: Gerald Giam

Gerald Giam is the Member of Parliament for Aljunied GRC. He is a member of the Workers' Party of Singapore. The opinions expressed on this page are his alone.

4 thoughts on “Vessel detentions show Jakarta’s disconnect with its people”

  1. well…

    those losses suffered – probably its the same crooks that Jakarta is hunting down anyway! :-)

    and if they manage to capture their crooks, bring back their monies, the recoups could amount to much much more than the short-term loss in sand and granite?

    i’m not surprised if the amount goes to hundreds of billions of dollars.


  2. Well, lets say the crooks are dumb enough to stay in Singapore to watch the extradition treaty being signed, the recouped losses will probably go back into some other corrupt official’s pockets…and not to the granite miners.

  3. “that works out to over US$1 million in losses per week for the Indonesian companies.”

    Indonesian companies? Many of those affected are Singapore companies. Hong Leong is one major victim.

    For all you know, it may just be another wayang. Some powerful people in SG using Indo govt. to whip another SG company.

    Are you able to name ONE Indonesian companies affected that do not have SG companies ownership. I found none.

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