Watchdog group says exports have only increased despite last year’s ban.

A RECENT boom in sand exports from Cambodia to Singapore, fuelled by a “complete lack” of transparency and government regulation, could severely damage the country’s riverine and coastal ecosystems, according to a report released on Monday by international anticorruption watchdog Global Witness.

The 40-page report, titled Shifting Sands, argues that exports to Singapore, where the sand is used for land reclamation projects, are enriching Cambodia’s elite while causing long-term damage to the environment and local livelihoods.

It contends that, despite a sand export ban announced by Prime Minister Hun Sen in May 2009 in response to local concerns, sand mining has spiked in Koh Kong province, which lies at the centre of the local sand industry.

Up to 796,000 tonnes of sand is currently being removed from Koh Kong’s saltwater estuaries and marine areas each month, Global Witness says, compared with a “conservative” estimate of just 60,000 tonnes made by the group in February last year.

“This is clear evidence that the elite capture of very lucrative extractive resources is continuing,” Global Witness campaigner George Boden said.

“There’s a clear discrepancy between what the government is saying and what it is doing.”

The group estimates that the annual value of these shipments is US$28.7 million in Cambodia and $248 million once the sand reaches Singapore, and that the trade is conducted with little regard for international standards or local laws.

“Companies operating in the sand sector as well as Cambodia’s regulatory agencies are ignoring its national environmental and social safeguards, and international industry best practices. The environmental consequences are potentially devastating,” the report states. Because of the country’s opaque budgeting process, it adds, the net benefit to Cambodia of the trade is “impossible” to quantify.

Lucrative concessions

Global Witness says the Koh Kong sand business is dominated by Ly Yong Phat and Mong Reththy, both senators from the Cambodian People’s Party. One of Koh Kong’s larger operations is the joint partnership between Ly Yong Phat’s LYP Group and the Hong Kong-based Winton Enterprises, which was first reported by the Post in March 2009.

It also links LYP Group’s operations, concentrated in the Koh Pao, Tatai and Sre Ambel rivers, to Riverton Group, a company registered in Singapore, and others with ties to the city-state.

Global Witness researchers observed dredging boats operating within Koh Kong’s Peam Krasop Wildlife Sanctuary, a 25,897-hectare protected zone, confirming reports published by the Post last year that dredgers were operating in the area in violation of Cambodian law.

The Mong Reththy Group has also been linked to dredging export operations at Sre Ambel, in connection with a number of smaller local firms.

When contacted Monday, Mong Reththy acknowledged having a licence to export sand dredged as part of the construction of his company’s project at Keo Phos Port in Koh Kong, but denied that any shipments had been made.

“I have never sold any sand, not even one kilogramme. I don’t know where Global Witness got this information,” he said. “I have a licence to export sand to Singapore, but the sand there does not meet [its] standards; therefore I couldn’t sell it to Singapore.”

Pech Siyon, director of the Department of Industry, Energy and Mines in Koh Kong, also challenged the findings, saying sand-mining operations in the province had dropped off since Hun Sen’s ban.

Only Udom Seima Trading – a local company listed in the report – is operating in the province, and LYP has temporarily halted its operations, he said.

“LYP suspended its operation because its contract with Singapore was finished. LYP is now in the process for trying to resume its contract for export to Singapore,” he said, and added that he expected export operations to resume this month.

Another official dismissed the report as politically motivated. “The reports of Global Witness are always exaggerated and attacking the Cambodian government in order to bring a political benefit for a small group such as an opposition party,” said Tith Sothea, a spokesman from the Press and Quick Reaction Unit at the Council of Ministers.

He added that before issuing sand export licences, government experts consider the potential effects on the environment. “Every sand dredging company causing an environmental impact was completely banned by the government,” he said.

DREDGING UP CONCERNS

Cambodia’s lucrative trade in ‘white gold’

• The importers: Since the 1960s, land-poor Singapore has expanded its land area by 22 percent, mostly through land reclamation projects using imported sand.
• The exporters: Global Witness says that the LYP Group and Mong Reththy Group, owned by CPP senators Ly Yong Phat and Mong Reththy, dominate the country’s sand trade, in connection with a number of Hong Kong- and Singapore-based firms.
• The source areas: Most export-grade sand is sourced from saltwater estuaries in Koh Kong province. Global Witness estimates that as much as 796,000 tonnes of sand is being removed from Koh Kong each month.

Putting the sand boom into perspective

• Assuming the sand weighs about 2 kilograms per litre: Every month, exporters could be shipping enough to fill 160 Olympic swimming pools.
• Those pools, stacked one on the other, would be almost three times as tall as the nation’s tallest building, Canadia Tower. After three decades, they would be taller than Mount Everest.
• 796,000 tonnes per month is enough to cover all of Phnom Penh a centimetre deep in just eight months, or Kep in nine.

Ly Yong Phat could not be reached for comment.

Far-reaching effects

But Thomas J Goreau, president of the Global Coral Reef Alliance, echoed the concerns expressed in Shifting Sands, arguing that dredging almost always has negative environmental effects. He said the chief issue is that mud and silt stirred up by dredging ships can smother marine organisms and block the light that is essential to the growth of coral reefs and seagrasses.

The decomposition of organic matter borne by sediment can also decompose, stripping the water of oxygen and causing other organisms to suffocate and die. Due to ocean currents, the affected areas can extend much further than the sites of dredging operations.

Although not familiar with the specifics of Cambodia’s coastal ecosystems, Goreau said that reefs in the Andaman Sea along the coast of Thailand and Malaysia were destroyed long ago by the impacts of dredging by tin-mining operations.

“There is probably no place in the world where dredging projects have not badly damaged nearby aquatic habitats,” he said.

Late last year, hundreds of fishermen in Koh Kong and Kampot provinces protested repeatedly against the dredging operations, saying fish catches had been destroyed by the trade.

Fisherman Matt Sen, 46, from Village 4 in Koh Kong’s Dong Tung commune, said that although there appeared to have been a temporary halt to dredging operations, fish catches had declined by around 40 percent since last year.

“Now there are less sand-dredging activities, but individual fish catches are still declining. I don’t know why,” he said.

A race to the bottom

In January 2007, Indonesia imposed a blanket ban on sand exports due to severe environmental degradation, and Vietnam – currently the leading supplier to Singapore – is set to institute a similar ban next month.

As sand sources are closed off to Singapore, Goreau said, companies will naturally seek out alternatives in countries with less stringent regulations.

“It is only natural that the market will seek the cheapest and closest sources, especially where regulation is weak.”

Boden from Global Witness said the Singaporean government should take action to ensure sand is sourced in a transparent manner in line with international treaties it has signed.

He added that the city-state’s highly publicised passage of a National Biodiversity Strategy last year stood in stark contrast with the local dealings of the Singaporean sand merchants.

“In Singapore’s own policies, they are trying to show that they have a commitment to biodiversity ... but the way in which Singaporean companies are operating in Cambodia is an indication this is not yet being done,” he said.

Officials at the Singaporean embassy in Phnom Penh could not be reached Monday.