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Crony capitalism in sand mining for export

November 3, 2017

Writer asks if the two companies that were given approval to export sand are genuine or merely front companies for those in the political hierarchy.


P-RamasamyBy P Ramasamy

After a few outright denials that Malaysian sand was being exported to India, Natural Resources and Environment Minister Wan Junaidi Jaafar has finally admitted that two Malaysian companies have been given special cabinet approval to export sand to the state of Tamil Nadu, India. Meanwhile, negotiations are taking place to facilitate sand exports to the state of Karnataka.

The first consignment of 50,000 tonnes of sand dredged from the estuaries of Sungai Pahang and Sungai Kelantan has been shipped to the state of Tamil Nadu. Chances are that the deal might be sealed with the Karnataka state very soon.

However, Wan Junaidi did not give the names of these two companies, who the directors are or the nature of their shareholdings.

Moreover, the public is not in the know on whether these companies obtained their APs through the process of open tender.

Since this crucial information has not been given, there are grounds to suspect that the two companies might have close connections in the ruling coalition’s political hierarchy.

I am surprised that Wan Junaidi, as a member of the cabinet, was not aware of the deals that the two Malaysian companies had with the states of Tamil Nadu or Karnataka a few weeks ago. Was he not aware that the two companies were given special approval by the cabinet to export sand to India?

Malaysia imposed a ban on sand exports in 1977 but lifted it in 2015. I am not sure whether there were sand exports to other countries after the ban was lifted, or whether the Malaysian government had not informed the public. Were there any recent sand exports to China?

What was preposterous in the statement of Wan Junaidi was the justification that sand exports through the dredging of the estuaries of Sungai Pahang and Sungai Kelantan would help to alleviate the occurrence of floods.

I am not sure to what extent the deepening of the estuaries would alleviate the flood problem. But this sounds more like an excuse or justification for sand exports than anything else.

Despite the warnings issued by some environmental groups, the government is still repeating its past mistakes. Dredging is not the answer to flood mitigation in the country. It will merely deepen the estuaries for a certain period of time, but silting will continue to take place as result of the uncontrolled development and destruction of forests in upstream areas.

Export of sand through the dredging of rivers is merely an excuse to export sand for the benefit of crony capitalists and those who engage in rent-seeking behaviour. Once again, certain individuals have found ways and means to make their millions, immaterial of the environmental impact.

I am surprised that Wan Junaidi would give such a justification for the dredging of rivers for sand export. Perhaps he should come up with a better explanation in the future.

Why are the Indian states of Karnataka and Tamil Nadu looking for the import of sand from Malaysia and perhaps from Southeast Asian countries?

Rampant and illegal mining of sand in these two states has reduced the supply of sand for construction and development purposes. For instance, in these two states, most of the rivers have dried up, making it easier for sand mining without the purpose of dredging. This is why the price of sand is perhaps four or five times more in India than Malaysia.

Contrary to the views of some environmental groups, it is not because of stringent environmental measures that Indian states are looking to Malaysia to replenish their dwindling supply.

The supply of river sand has been considerably reduced due to illegal mining and corruption. Now, these states are looking towards Malaysia, Cambodia and other Southeast Asian countries for their supply of sand.

Despite the warning issued by environmental groups, the government in Malaysia is not aware of or does not give a damn about the effects of sand mining on the environment.

Dredging the estuaries of rivers is not the way to resolve flood problems. It will merely deepen the mouth of rivers without paying attention to the effects of dredging on marine life. In fact, I am shocked that a federal minister who is in charge of the environment would give such reasoning to justify sand mining.

Anyway, sand mining in rivers provides excellent opportunities for crony capitalists and rent-seekers to make tonnes of money. I am not sure whether these companies that have been given the approval to export sand are genuine ones. Or are they merely front companies for those in the political hierarchy?

P Ramasamy is Penang deputy chief minister and DAP deputy secretary-general.

The views expressed are those of the author and do not necessarily reflect those of FMT.



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