Foreign Companies Aim to Purchase Indonesian Sea Sand

Director of Marine Services at the Ministry of Maritime Affairs and Fisheries, Miftahul Huda, explained that out of 71 companies that registered for a license to mine sea sand, 66 have been declared to have fulfilled the requirements for document completeness. The next phase is to clarify the company's partner vessels used for suction dredging, or reclamation partners who will purchase the sea sand.

Several potential buyers of sea sand companies are reportedly from foreign countries, including Singapore, China, Johor (Malaysia), and Brunei. Meanwhile, the proposed foreign suction ship companies are from the Netherlands, Belgium, Japan, Singapore, and China.

"The government is currently clarifying the legality of the company, cooperating with proposed ship partners, as well as reclamation partners who buy sea sand. This is important to avoid personal interests," said Huda when contacted on Tuesday (23/4/2024).

Also read: Government Examines Companies That Will Exploit Sea Sand

Huda added that the volume of sea sand mining proposed by each company varies, ranging from 50 million to 200 million cubic meters. Thus, the demand for the volume of mining of marine sedimentation is estimated to be at least 3.3 billion cubic meters.

The locations for sea sand exploitation offered by the government are spread throughout the Java Sea, namely in Demak Regency, Surabaya City, Cirebon Regency, Indramayu Regency, and Karawang Regency. In addition, the waters around Kutai Kartanegara Regency and Balikpapan City, as well as the waters around Karimun Island, Lingga Island, and Bintan Island in the Riau Islands Province are also included.

State revenue

Huda added that the government would check the ability of sea sand mining companies to pay the initial stage of non-tax state revenue (PNBP) related to the use of sea sand. Apart from that, technical clarification is also needed involving a team of experts. The initial PNBP amount that must be paid is 5 percent of the PNBP value for sea sand utilization.

Based on Government Regulation Number 85 of 2021 concerning Types and Tariffs of Non-Tax State Revenues applicable to the Ministry of Marine Affairs and Fisheries, the calculation of PNBP tariffs for domestic use of sea sand is 30 percent of the benchmark price (HPP) of sea sand multiplied by the volume of sea sand taken. Meanwhile, the use of sea sand for foreign purposes is 35 percent of the HPP value multiplied by the volume of sea sand excavated.

Meanwhile, the domestic utilization price of sea sand is set at Rp 93,000 per cubic meter, while the overseas utilization price is set at Rp 186,000 per cubic meter, based on the Minister of Maritime Affairs and Fisheries Decision No. 6 of 2024.

As an illustration, a company that obtains a quota of 50 million cubic meters of sea sand mining for utilization abroad is charged a sea sand PNBP tariff of IDR 3.25 trillion. Out of that amount, the initial mandatory PNBP payment is 5%, which is IDR 162.75 billion.

Also read: Sea Sand Mining Threatens Environmental Sustainability

According to Huda, the company and its partners' verification phase is scheduled to be completed by the end of April 2024. Afterward, the company is required to pay the initial PNBP and manage permits and pay the PNBP rates for the Spatial Utilization Compliance Agreement (PKKPRL) amounting to Rp 18,680,000 per hectare.

The massive exploitation of sea sand will result in the death of small fishermen's fishing areas.

In addition, managing other permits such as environmental permits, and sales IUP. Companies that use foreign ships and foreign workers must also manage permits for the use of foreign ships and permits for the use of foreign workers.

"The process must be followed. Even if the process has been completed, if the company cannot pay the initial PNBP, it will be cancelled. The obligation to pay is to anticipate the prevention of permit trading," said Huda.

Abdul Halim, the Executive Director of the Center for Maritime Studies for Humanity, regrets that the massive exploitation of sea sand will have an impact on the death of small-scale fishermen's catchment areas. They have to go further out to sea. There are indications that sea sand mining companies will be used to dredge Indonesia's sea sand for export, such as to Singapore.

From the Ministry of Maritime Affairs and Fisheries data, the potential volume of sea sand offered by the government is 17.64 billion cubic meters, including 5.58 billion cubic meters in the Java Sea, 2.97 billion cubic meters in the Makassar Strait, and 9.09 billion cubic meters in the Natuna North Sea.

Previously, the Director General of Marine and Coastal Management at the Ministry of Marine Affairs and Fisheries, Victor Gustaaf Manoppo, stated that the use of marine sedimentation will be focused on meeting domestic needs. As for the potential state revenue from the use of sea sand, it depends on the volume proposed by business actors.