Lombok sand mine corruption probe continues as Indonesia to resume exports

EAST LOMBOK, Indonesia – Takdir spent years protesting against the sand mine by his home on the east coast of Lombok, an island east of Bali in Indonesia’s West Nusa Tenggara province. In that time, he was summoned often by police for questioning and accused of defamation, a criminal offence in Indonesia.

“I was called in several times, but thank God I didn’t end up in court,” Takdir told Mongabay Indonesia, standing at the foot of a small mountain of aggregates on the coast of Pringgabaya subdistrict.

Last year Takdir’s fortunes changed after investigators questioned figures behind the mine — many of whom have now ended up in court themselves.

In 2011, development of the coastline began after PT Anugrah Mitra Graha (AMG) obtained a 15-year permit to mine sand from 1,348 hectares (3,330 acres) of Lombok’s east coast in an area known as the Dedalpak Block.

Many here in eastern Lombok objected to the plans to dig up Dedalpak Beach and surrounding areas. Concerns included lack of prior consultation with affected communities, impacts on surrounding agricultural land and disruption to local fishers.

The Indonesian Forum for the Environment (Walhi), a national pressure group, said that in the previous decade Indonesia has seen 330,000 fishers leave an industry that previously employed 2.2 million, with extractive industries, including sand mining, cited as the main driver of fishers retiring from the trade.

For more than a decade, demonstrators gathered every year to express opposition to the mine. During one flashpoint in 2015, a group set fire to company equipment and police vehicles.

However, PT Anugrah Mitra Graha continued to mine sand uninterrupted until investigators unearthed evidence of potentially extensive criminality.

“As soon as there was an issue with corruption, activities here shut down,” said Takdir, pointing to the road next to Pohgading Market toward Dedalpak Beach. “Usually, you’d have big trucks passing every day on this road.”

Prosecutors have brought charges against eight suspects in connection with the PT Anugrah Mitra Graha sand project.

The accused include executives from PT Anugrah Mitra Graha, the former head of West Nusa Tenggara province’s energy and minerals department, as well as two officials from Labuhan Lombok, a small port that links east Lombok with the neighboring island of Sumbawa.

Prosecutors allege that PT Anugrah Mitra Graha did not engage a third party to calculate its expected production commensurate with mining regulations and Indonesia’s national standards regimen, known as SNI.

Mining firms in Indonesia are also required to submit work plans for approval by the energy and minerals department.

However, AMG’s 2021 work plan did not receive approval from the Ministry of Energy and Mineral Resources. This led the company’s account for the purposes of paying royalties to be blocked, and the royalties due for financial year 2021 were not paid.

Despite not meeting these fundamental requirements, the company continued to trade, conducting sales of iron sand to several companies across Indonesia without paying royalities to the government. Prosecutor Fajar Alamsyah Malo told the court that this resulted in losses to the public purse of 36 billion rupiah ($2.3 million).

Moreover, proof of having paid royalties is a prerequisite for companies seeking authorization from port authorities to ship goods.

The prosecution stated that PT Anugrah Mitra Graha sought to remove this obstacle in 2021 by paying the then-head of West Nusa Tenggara province’s energy and minerals department to provide a letter showing the company’s affairs were in order.

The firm then presented this letter to port authorities at Labuhan Lombok.

The company is alleged to have repeated the method in 2022 — procuring a document from the local government to present to port authorities.

Prosecutor Fajar Alamsyah Malo said the then-head of the energy and minerals department in West Nusa Tenggara received 25 million rupiah ($1,620) on two occasions. The prosecution also alleged payments were paid to police officers totaling 250 million rupiah ($16,200).

Sand is the world’s most used commodity after water, with global production of around 50 billion tons per year.

Indonesia is the world’s largest archipelago country, but official data show it produces relatively little sand, which is needed for everything from cement to glass windows and silicon chips.

The East Lombok sand graft case arrived in court around the same time President Joko Widodo reversed a ban on the export of sand, which had been in place for two decades.

“The regulation allows the dredging, suction, and export of sea sand which will definitely destroy the marine ecosystem,” Greenpeace Southeast Asia said in a statement in May in response to the change.

“The activity will also accelerate the sinking of small islands around the mined area because it changes the contours of the seabed, which affect the pattern of ocean currents and waves,” said Afdillah, oceans campaigner for Greenpeace Indonesia. “We must consider the potential losses that will be experienced by coastal communities who will be directly affected by ecological changes due to sea sand mining.”

This story was reported by Mongabay’s Indonesia team and first published here on our Indonesian site on Nov. 5, 2023.

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