Exploring Illegal sand mining issues in Selangor

July 15, 2010, 8.35 am. Kamal was already late to work that forenoon. The traffic was at a base still although it was merely a rock throw a manner from where he was to the chief gate of the Selangor State Secretariat Building. From inside his auto, he could see that the chief gate to the province secretariat edifice was kept closed. Curious, he rolled down the window and lodge his cervix out to look into more of what was go oning. From where he was, he could see two opposing dissenters with streamers and handmade postings, intoning and scoffing angrily to one another. If his eyes could be believed, he besides saw a hassle broke out. “ Wow, this sand excavation issue has truly turned into a dust storm this clip around “ , he murmured.

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Yet, what he did non understand though was that illegal sand excavation in the province has been around every bit far as his memory could retrieve. “ These cats should truly look at the existent issue here. Illegal sand excavation was non successfully addressed before and it is non being addressed successfully now either! “ , he said to him self. The clip showed that it was already 9.30 am when Kamal eventually managed to edge his auto passed through the chief gate. Kamal was truly disquieted that forenoon and merely hoped that the authorities could rapidly happen ways to work out efficaciously this job for good.

Kamal ‘s sentiment on the illegal sand excavation issue is shared by many in Selangor. This job has been blighting the province authorities for so long that people are now demanding it to be addressed efficaciously. However, the fact that illegal sand excavation activities have been able to go on for so long merely proves that the stairss taken by the province government- old and current – have been mostly uneffective.

Illegal sand excavation is basically an economic activity. Merely as any other economic activities, the operations of sand excavation follow some economic rationals and rules. It is through analyzing the economic sciences of it that effectual solutions to this illegal sand excavation job could be found. Hence, the extreme of import thing to make foremost for the province authorities is to analyse the job from the economic position before any job work outing solution could be introduced. For the Menteri Besar Tan Sri Khalid Ibrahim, that means seting on his economic thought cap and traveling back to the pulling board.

Background

Recently, there was a public call over the issue of sand in Selangor being illicitly mined by unscrupulous sand mineworkers. The reaction from public is apprehensible given that illegal sand excavation in Selangor is rampant. Harmonizing to the State Agriculture Modernization, Natural Resources And Entrepreneur Development Committee Assistant Chairman, Shuhaimi Shafiei1, the Selangor authorities has late shut down five major illegal mining musca volitanss in assorted territories in the province but has besides identified 30 smaller 1s with an end product of up to 600 lorry loads a twenty-four hours. The outgrowth of these smaller illegal excavation sites, harmonizing to him has doubled the sum of sand illicitly mined and sold. The illegal mineworkers have besides become bolder in their tactics to avoid from being spotted and caught which merely makes it more hard for the governments to collar the job.

So rampant is the illegal sand excavation in Selangor that it has now become controversial and attracted close media attending. At the tallness of the tenseness, the intelligence media reported the issue about daily. Each clip the media made studies, there would ever be accusals hurled on who was to be blamed for this debacle. The current State disposal is faulting the sand buccaneering on its predecessor while the predecessor is stating otherwise. The contentions between these two sides on this issue are still traveling on and make non seems to hold abated.

To be just, the old and current disposals understand the earnestness of the state of affairs and hold carried out ways to control the illegal sand excavation in Selangor. The former disposal, for illustration, had created a particular enforcement squad to supervise and forestall sand larceny while licences were merely issued for sand excavation on private land or in old Sn mines, and non on state-owned land. This was done to do the monitoring of the illegal sand excavation easier. In contrast, the current disposal is turn toing the issue by consolidating sand excavation in the province under a freshly formed state-owned company, Kumpulan Semesta Sdn. Bhd. ( KSSB ) .

The truth is, illegal sand excavation and the issues environing it are non something new in Selangor. In the olden yearss, sand used to be found in copiousness after the Sn excavation industry in the province wound up, and could be bought stingily where purchasers needed to pay merely for the transit. However, due to the rapid and relentless economic development growing in the provinces particularly in the building sector, the demand for sand shot up and efficaciously turned sand into a much sought after mineral. It ‘s a no brainer so to understand why the sand industry be legal or otherwise to boom.

In the average clip while the argument continues on who is to be blamed, the illegal sand mineworkers on the other manus continue to hold their field yearss in looting this moneymaking plus. The sand siphoned from illegal mines in the Sepang, Kuala Selangor, Hulu Langat and Kuala Langat territories and are said to be sold at RM18 to RM20 per metric ton have built a multimillion ringgit industry2.

A REAL PROBLEM FOR SELANGOR

The illegal sand excavation which has been traveling on for so many old ages has brought many jobs to the province. The State authorities for one has lost some direct grosss due to its inability to roll up royalty for sand extraction from the illegal mineworkers. The existent gross lost from royalty due to the illegal sand excavation is really difficult to come by since it is really difficult to gauge the volume of sand that have been stolen.

However, The Malayan Insider in its 31 May, 2010 study quoted an estimations by the State authorities which showed that there are at least 30 illegal excavation sites runing in Selangor with end product capacity of up to 400,000 metric tons a month or 4.8 million metric tons a twelvemonth. This has resulted in gross doomed of around RM728,000 a month or RM8.74 million a year3. At the recent Select Committee on Competency, Accountability and Transparency ( Selcat ) public hearing, Kumpulan Semesta Sdn Bhd ( KSSB ) executive manager Ramli Abdul Majed said that based on a study from KSSB ‘s adviser, the company could merely sack up to RM31 million in sand royalty from the sale of 15 million metric tons of sand a year4. Hence, the gross lost due to illegal sand excavation is every bit high as 28.2 % of the entire possible gross for a twelvemonth from sand royalty. This estimation in lost gross nevertheless may be an underestimate because there could be more illegal sites than already identified. Harmonizing to Ramli, there were 46 illegal sand mines at 23 locations in Selangor5. The gross lost could hold been used for other intents like supplying aid for echt enterprisers, better rural roads, better societal public assistance plan or others.

The illegal sand excavation have besides brought approximately irreversible devastation to the environment due to the indiscriminate ways that the illegal sand mineworkers are using. Already, the ecological balance of the State ‘s rivers has been disturbed doing impairment in the quality of its H2O. The concern over the deteriorating H2O quality of the States ‘ rivers has moved Syarikat Bekalan Air Selangor ( M ) Sdn. Bhd. ( Syabas ) to put up toll-free river ticker telephone hotline. The hotline which has been in operation since 1997 has enabled the populace to inform Syabas of incidents of pollution such as the indiscriminate dumping of untreated waste, illegal sand excavation and logging activities which Syabas have highlighted to the relevant governments for enforcement6.

The State ‘s touristry sector can besides endure negative impacts due to the harm sand excavation brought to the environment. Already, there has been mounting force per unit area from several parties like the Tourism Minister Datuk Seri Dr Ng Yen Yen7 and conservationist group, The Malayan Nature Society to do the State authorities return decisive action to halt the sand excavation from being damaging to the Paya Indah Wetland in Dengkil, Selangor8.

Illegal sand excavation activities besides causes incommodiousness to people ‘s life. The lorries transporting tonss of sand have severely damaged paved roads, making chuckholes and jeopardizing other route users. Not merely that, illegal sand excavation activities have besides damaged the public utilities assets in the State. In October 2008, three pipes imparting H2O to the Semenyih works explosion, interrupting supply to 75,000 families in Sepang, Kuala Langat and Hulu Langat territories and the harm was due to suspected sand-mining activities9. In another event, it was reported that three Syabas pipes burst due to illegal sand excavation near Jenderam cutting off H2O supply to 350,000 residents10.

Government POLICY ON SAND Mining: IS IT EFFECTIVE?

In seeking to better pull off the sand industry, the current authorities has taken a different attack than what had been practiced by the old disposal. One obvious difference is by consolidating the industry through a freshly set up of province government-linked company called Kumpulan Semesta Sdn Bhd ( KSSB ) .

Under the new agreement, the licences for excavation are still issued by the territory offices and KSSB has no authorization to publish licences. However, KSSB is the lone company given the licences to sand mine in the province. This is because alternatively of publishing licences to single contractors that have applied for the licences as antecedently done, the territory office now issues the licences merely to KSSB. KSSB so choose through unfastened stamps, suited contractors which have the capablenesss and expertness in sand excavation to transport out sand excavation activities. KSSB will so pay royalty to the State authorities on the sale of sand, based on computations that had been agreed upon earlier. Through this agreement, it is hoped that the sand excavation activities could be monitored easier and minimise illegal sand excavation activities.

The State authorities has besides beefed up in footings of its enforcement. Harmonizing to the Selangor State Secretary Datuk Ramli Mahmud11, enforcement officers have been placing several illegal excavation locations and carry oning topographic point cheques every twenty-four hours. This attempt has to some extent been successful. “ As cogent evidence, we have seized 27 excavators, 33 lorries and other machinery in connexion with illegal sand excavation conducted on State land from last twelvemonth till early this twelvemonth in Klang, Sepang, Gombak, Hulu Langat, Kuala Selangor and Kuala Langat “ he said. However the challenge in transporting out enforcement is still at that place. Harmonizing to the Sepang District Officer Mohd Amin Ahmad Ahya12, “ We believe there are many more mines and we are invariably appraising the countries but the touts are non doing it any easier for us. Since the closing of some of the hot spots, our motions are invariably being monitored. Some of our officers face bullying from them but fortuitously nil untoward has happened as they ( enforcement officers ) have kept their cool, ” . The State authorities has besides introduced the “ Rakan Pasir ” SMS service for public tip-offs on sand-theft and wages strategy to promote the populace and jurisprudence hatchet mans to curtail these illegal activities11.

However, what the province authorities has done so far has non truly been effectual in controling the illegal sand excavation activities in Selangor. Judging from the recent public call on this issue, one can safely presume that illegal sand excavation in Selangor is still rampant, at least for now.

THE ECONOMICS OF ILLEGAL SAND Mining

Demand outstripped Supply

Sand is something that is ne’er short in demand, in fact the demand for it in topographic points like Selangor and the Klang Valley are really healthy. As the State ‘s economic system grow better peculiarly in the building and building related industries, so does the demand for sand. In fact, for the following tenth Malaysia Plan, the demand for sand in Selangor could be shifted higher since the province is projected to increase its entire Gross Domestic Product ( GDP ) from RM120.186 billion in 2010 to RM157.932 billion in 2015 and building sector ‘s GDP from RM4.68 billion in 2010 to RM7.74 billion in 201513. Repeating to this, the Master Builders Association Malaysia ( MBAM ) president Kwan Foh Kwai14 said: “ As the tenth Malaysia Plan end product machinery goes into full cogwheel, the demand for sand will increase as more undertakings are expected to be implemented in the twelvemonth 2011 to 2015, ” . He added that ingestion of sand before 2007 was approximately 15 to 17 million metric tons and that if the 10th Malaysia Plan was to be implemented on agenda, the demand of sand ingestion could about make 20 million metric ton.

However, there is some concern by the industries that the recent contention over the sand excavation could acquire worse to the point that the supply of sand is affected. To avoid this, Kwan suggested that “ the authorities should see opening up more sand cavities and publish more licences, harmonizing to market demand to avoid deficit of sand supply. ” The possibility of supply deficit is existent as it had already happened before in 2006 where as a consequence of the deficit, the monetary value of sand has shot up by every bit much as RM40 a metric ton compared with RM15 to RM18 a tonne15. The deficit in supply of sand could besides do holds or worse still, conveying undertakings to a deadlock.

The projected higher demand of sand due to the coming 10th Malaysia program and the deficit of supply to run into the demand could fuel the illegal sand excavation industry.

Elasticity of Demand

To some industries, sand is the important input to the concluding merchandise. As such, these industries are dependent to the usage of sand than any other industries. Harmonizing to the Master Builders Association of Malaysia ( MBAM ) secretary general Yap Yoke Keong15, sand is the indispensable ingredient of the building sector because “ We ca n’t do a individual brick without sand. We need sand for stacking, concreting, to construct roads and drains, ” . Besides the building sector, some fabrication companies besides depend on sand as a natural stuff. The Federation of Malayan Manufacturers ( FMM ) Selangor subdivision president Tan Sri James Alfred said most building stuff makers had limited stocks to fall back on and “ If they do non acquire their sand supply, production of tiles, bricks, concrete beams, pillars could be halted, ” 15.

The grade in which some industries are depending on the handiness of sand merely seems to propose that there are no other near replacements for sand available. With the deficiency or non being of replacements coupled with the fact that it is an indispensable point to some industries, the demand for sand tends to be inelastic. With the demand tends to be inelastic, a monetary value addition would non do the measure demanded for sand to drop that much.

Market Structure

The determination to put up KSSB by the province authorities is non without unfavorable judgments. Many parties complained that the province authorities has really assisted in making a monopoly in the industry. This monopoly, as some accused, has really resulted in the illegal sand excavation industry to boom. How is this so?

With monopoly, KSSB is able to put its ain monetary value for sand. However, the monetary value presently set by KSSB is good above the market monetary value of RM18 per tonne16. The Selangor Youth Council ‘s frailty president Badrul Hisham Badrudin reveled that presently KSSB has set it ‘s monetary value for sand at RM21 per metric ton, which makes the monetary value of sand in Selangor the highest in the country17. The difference in the two monetary values has presented chances that could be exploited and helped do the illegal sand excavation industry thriving. Even the accredited mineworkers have besides been alleged to hold sold sand in the black market as it is more lucrative16.

Meanwhile, Tengku Shaiffuliazan Tengku Zainal Abidin of the Selangor Malay Sand Operators Action Committee ( SMSOAC ) 18 criticized that the move by the province authorities to merely let KSSB to obtain sand excavation permits has resulted in sand excavation operations being monopolized by companies or bargainers with big capital. He added that the smaller operators could non afford to go contractors for KSSB because of the steep RM300,000 one-year warrant sedimentation to pull out sand. The cost would besides be higher if gasoline and operation costs were included. The royalty imposed for river sand extraction of RM6.00 per metric ton is besides high and non profitable for operators. The monopoly of KSSB and the trouble in come ining the moneymaking industry due to the inflictions of entry barriers like the high warrant sedimentation and high royalty rate could hold encouraged some operators to fall back to illegal excavation. Prompted by this concern, could be the ground why MBAM has asked the authorities to publish more sand cavity licenses to minimise illegal excavation and forestall a monopoly.

In seeking to interrupt the monopoly, SMSOAC has urged the province authorities to acquire KSSB to manus over direction of sand excavation in the province to the District and Land Office. The call for the monopoly over sand excavation to be broken could besides be heard from within the disposal. Mohamed Azmin Ali ( PKR-Bukit Antarabangsa ) said a healthy competition would be created if private companies were given the chance to fall in the disturbance while heightening corporate administration and transparency19.

Fringy Benefits vs Marginal Cost

The illegal sand mineworkers are into this for economic grounds. High in demand, somewhat short in supply, inelastic nature of its demand, low engineering demand, free natural beginnings, no complicated procedure to pull out and polish have all contributed to the benefits of sand excavation. While there are high benefits in sand excavation, the cost of making it illicitly is pretty low.

Although there are already heavy punishments for illegal sand excavation and transplant related to illegal sand-mining activities imposed by the State and Federal authorities, these punishments merely put into consequence if the wrongdoers are caught. So far, the illegal sand mineworkers have had it easy for them in footings of enforcement by the authorization. They have been able to work around some enforcement loopholes to enable them to go on with the illegal activities. Harmonizing to Arfa’eza Aziz, imperativeness secretary to the Selangor Menteri Besar, the province relied on the territory office to move against illegal sand-mining operations. The territory office playing as the hatchet man can merely direct agents from clip to clip and when they make their foray, the illegal operators stop their sand-mining operations. Hence, she said, “ The enforcement officers really seldom catch them on the topographic point, ” . To do affair worse, the State Executive Councilor for Environment Elizabeth Wong16 said the illegal sand industry has a complex support web, including bad chapeaus in enforcement bureaus. “ The mobs even installed CCTVs wholly along the roads taking to the illegal sites and on site to observe the motions of those who go in and out. “ , she added. Since the opportunities of acquiring apprehended is slender, the illegal sand mineworkers and those who work in cahoots with them became more aggressive in making their concern.

Epilogue

What new or improved solutions to this illegal sand excavation jobs can the Selangor province authorities offer? The current authorities knows excessively good that detaining in work outing the illegal sand excavation could hold a far making effects. In the average clip, Selangorians like Kamal are waiting for the solutions from the authorities and their forbearance are thinning.

Endnotes:

“ Selangor identifies 30 illegal sand excavation sites ” The Star. July 23, 2008.

“ Shutting store ” The Star. December 1, 2008.

“ Khir Toyo claims Selangor sand mineworker illegal ” The Malayan Insider. May 31, 2010.

“ Director: Forecast sand royalty manner excessively high ” New Straits Times. June 4, 2010.

“ Land Office unmindful to illegal sand-mining activities in Sepang ” The Star. June 17, 2010.

“ At Puncak Niaga We Care: Health, Safety & A ; Environmental Policy & A ; Report ” [ online ] Available at hypertext transfer protocol: //announcements.bursamalaysia.com/EDMS/subweb.nsf/7f04516f8098680348256c6f0017a6bf/fb6a8d95a267cc8f48256ea9001764ad/ $ FILE/Puncak- % 20Pullout % 20- % 20Health-Safety-Environment % 20Policy % 20Report % 20 % 28615KB % 29.pdf.

“ Wetlands may lose touristry potency: Nanogram ” [ on-line ] Available at hypertext transfer protocol: //www.mysinchew.com/node/42108. July 21, 2010.

“ Malaysia Nature Society wants Government to halt sand excavation ” The Star. July 18, 2010.

“ Tapss run dry due to split pipes ” The Star. October 17, 2008.

“ Dayss numbered for sand mineworkers ” The Star. December 1, 2008.

“ State Secretary claims action taken on illegal sand excavation operations since last twelvemonth ” The Malay Mail. July 20, 2010.

“ Not easy to stomp out illegal sand excavation ” The Star. June 28, 2010.

tenth Malaysia Plan. [ on-line ] Available at hypertext transfer protocol: //www.epu.gov.my/html/themes/epu/html/RMKE10/rmke10_english.html. June 10, 2010.

“ Issue more sand licenses to control illegal excavation: MBAM ” [ on-line ] Available at hypertext transfer protocol: //www.mysinchew.com/node/41936. July 17, 2010.

“ A flaxen state of affairs “ The Star. May 27, 2006.

“ Dust storm in Selangor ” The Sun. July 25, 2010.

“ Selangor young persons want sand-mining monopoly, athleticss wagering scrapped ” The Malay Mail. May 26, 2010.

“ Selangor govt urged to close down Semesta operations ” [ on-line ] Available at hypertext transfer protocol: //www.mysinchew.com/node/41938. July 17, 2010.

Selangor ‘s Sand Mining Monopoly Should Be Broken – Azmin ” Bernama. November 12, 2009.

“ Illegal sand excavation: The buck-passing begins ” [ online ] Available at hypertext transfer protocol: //freemalaysiatoday.com/fmt-english/politics/pakatan-rakyat/6223-illegal-sand-mining-the-buck-passing-begins. June 1, 2010.

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