Asean’s appetite for Indonesian sand could hit fisheries, marine life: BMI

[SINGAPORE] Strong demand for Indonesian sand from South-east Asia and mainland China – following Jakarta’s legalisation of sea sand exports in 2023 – raises environmental degradation risks, said research outfit BMI.

“Construction activity in Asean and mainland China will sustain demand for Indonesian sand throughout the long term, thus keeping environmental risks elevated,” BMI said in a Mar 14 report.

This is set to negatively impact Indonesia’s fisheries sector and “undermine already-weak marine life protections”, it added, noting that only 3 per cent of the country’s territorial waters are protected.

Indonesia previously had a 20-year ban on sea sand exports due to environmental concerns, but this was lifted under President Joko Widodo. In early 2024, the fisheries ministry said that 17.7 billion cubic metres of sand could be extracted from seven locations around the Natuna Islands, East Kalimantan and north Java.

But given that it is difficult to control dredging operations, “the legalisation will likely be accompanied by an increase in illegal mining”, said BMI.

“Marine sand mining has been associated with decreased productivity in the fisheries sector in Indonesia, due to the negative impact on fish populations. In addition to the destruction of marine ecosystems, sea sand dredging can release carbon stored in sediments,” it added.

Indonesia is the third-worst performing Asian economy in the environment policy component of the BMI environmental, social and governance country index.

Silver lining for Myanmar

Sea sand is mainly used for concrete production, land reclamation and beach nourishment for coastal protection.

In 2023, Association of Southeast Asian Nations (Asean) economies imported US$411 million worth of sand, leading the world in terms of imports, BMI noted. Singapore accounted for 45 per cent of these imports, driven by land reclamation projects. Mainland China is the second-largest importer of sand.

BMI forecasts that Asean’s construction industry will grow by 78 per cent between 2024 and 2034, while that of Mainland China will expand by 35 per cent.

Such growth “will add considerable demand for sand despite growth being slower than prior to the Covid-19 pandemic”, said BMI.

The silver lining is that Indonesian sand exports may replace some exports from Myanmar. This would lower mining revenues but benefit farmers and fisheries in Myanmar, BMI noted.

When Indonesia’s ban was in place, Myanmar became a key source of sand in the region, especially to Singapore. Malaysia, Vietnam and Thailand have also banned sand exports.

“Consequent riverbed erosion in Myanmar has destroyed some agricultural land and threatened livelihoods of farmers as well as fishers. Downward pressures on sand mining in Myanmar because of Indonesian competition may thus curb risks for farmers and fisheries,” said BMI.