SINGAPORE - A WEAKLING WITH SAND KICKED IN HER FACE?

Minister Teo Chee Hean,

Ladies and gentlemen,

Good morning.

Introduction

1 Since the beginning of this year, I have been kept busy by one thing – sand. Silica (Sa). Once I mention sand, most of us will conjure an image of white sandy beaches with crystal clear turquoise sea. Something so basic and common, and yet, it has kept me very busy.

The Context of Recent Sand Ban and Granite Supply Disruption

2 Singapore imports sand for 2 purposes. First, if we pour enough sand into the sea, we get reclaimed land. We use sea sand for that purpose. Second, we need sand to mix with granite, cement and water to make concrete which we use to construct buildings, roads and bridges. We use land sand for the latter purpose.

3 We buy our sand from neighbouring countries and particularly from Indonesia. In January this year, Indonesia decided to ban the export of land sand. We were only given two weeks’ notice. This was a sudden decision, and it came at a time when we were stepping up our physical development. Our IRs, commercial buildings in Marina Bay, Orchard Road are all roaring to go. And here we are, left with little sand on our hands. No sand, no concrete, no buildings. Is this the case? The situation prompted a financial magazine called Asia Money to write an article entitled “Singapore Sandstorm”. This is what it said, and I quote “Singapore is little more than a 10-stone weakling, defenceless against having sand kicked in its face”.

4 Is this the first time Singapore has been caught in this predicament? Not at all. In 1997, Malaysia banned the export of both land and sea sand. Indonesia then became our only supplier of sand. In 2001, Indonesia suspended the export of land sand to Singapore for one and a half months, before supply was resumed. Then in February 2003, Indonesia banned the export of sea sand. And in February this year, she banned the export of land sand as well.

5 Why you may ask are our neighbours banning the export of sand to us? Well for this most recent round, different reasons were given. Possible environmental damages from sand mining and concerns over boundary demarcation were cited. There were also claims that the ban was meant to pressure Singapore to reach an agreement on the Extradition Treaty negotiation.

6 Are these reasons justified? On environmental concerns, we understand that the Indonesian Government was unhappy to see quarries being left behind and rightly so. We have quarries in Singapore and we have paid attention to rehabilitate the areas around them. The results are the Bukit Timah Nature Reserve and Bukit Batok Town Park.

7 We understand that in Indonesia, you need a licence to mine and sell sand. The licence would require you to comply with mining guidelines and to rehabilitate the mines. In fact, the prices that our importers paid for the sand included an environmental tax which the licensees were supposed to use to rehabilitate the quarries.
So why are there concerns over environmental damage if there are proper regulations on licensing, mining and rehabilitation?

8 On concerns over maritime boundary, the argument is, as a result of sand mining, some islands may disappear, thus causing problems with demarcation of international boundary. But the sand mines are all located far away from the international borders. As such, there cannot be any impact on the demarcation of international boundary between Singapore and Indonesia.

9 Prior to the sand ban, several of our ministers had spoken to their Indonesian counterparts and offered to work with them to address their environmental concerns. So we were disappointed when the Indonesians decided to go ahead with the ban.

10 Claims that the land sand ban was meant to pressure Singapore to reach an agreement on the Extradition Treaty are also unfounded. Negotiations on the Extradition Treaty were already well-advanced when the land sand ban became an issue earlier this year. The ban was no doubt a distraction. But it was not related to the negotiations.

11 Sudden Granite Supply Disruption. Then, in late February, barely a month after the ban on sand, the Indonesian Navy started to detain barges carrying granite to Singapore. They did not ban granite export, but they detained a total of 22 barges that were carrying granite to Singapore on the grounds of suspected smuggling of sand and other infringements. Our supply of granite was disrupted, as no barge operator dared to sail to Singapore.

12 The detained barges were detained for about four months and only released recently, after paying some fines, purportedly for violating various shipping and export procedures. BCA had confirmed that these released barges subsequently arrived in Singapore, and the cargoes that they carried were granite products, not sand.

Our Immediate Response Plans

13 What do you do when sand and granite, both basic materials for construction, stopped arriving at your ports? It is fortunate that we have planned for such a scenario to happen one day. We have in fact built up a stockpile of sand and granite over the years. When the sand ban came, we opened the gate to our stockpile and quickly released our stock of sand and granite to the market. Our main objective was not to allow our construction to be paralysed by the ban.

14 Diversification of Supply Sources. Next, we quickly diversified our supplies of sand and granite by sourcing from other regional countries. Our Engineers were scouting and collecting sand samples all over the region to establish new sources of sand and granite that meet our standards. Alternative sources were quickly established and brought in. We now have regular supply from countries further away. More expensive because of transportation costs but there is no shortage in the supply of sand and granite. In fact, the industry is now no longer dependent of the national stockpiles in any considerable way.

15 Cost-Sharing by Government. However, because the prices of sand and granite are higher, the Government is co-sharing 75% of the increased prices of sand and granite for its ongoing projects to help builders tie over this price disruption. Private sector developers are likewise working on cost-sharing arrangements with their contractors for their ongoing projects.

Our Long Term Strategies to Enhance Supply Resilience

16 Beyond these short-term measures, we are also putting in place plans to enhance our long-term resilience.

17 Sustainable Construction. First, we are working with the industry to switch to sustainable construction methods and materials to reduce our dependence on sand and granite. Experience of other countries has shown that it is possible to reduce the use of concrete substantially by replacing it with alternative materials, such as steel, glass and dry wall systems.

We will also find substitutes such as copper slag, as well as re-cycled construction materials and demolition waste. Our target is to reduce the industry’s use of sand and granite by about 50% in about five years’ time.

18 Reactivation of Local Quarries. We also have local sources of granite, which we can mine, should the need arise. To plan for all contingencies, we are carrying out limited quarrying at one of the former quarries in Pulau Ubin to understand the issues involved in mining, especially to retain some expertise in mining in Singapore. We have no plans to activate any other local quarries, beyond this limited operation. There is no need to, as we have found many alternative sources. But for contingency planning, we do have options and we must keep our options open.

Conclusion

19 We lack natural resources in Singapore. This episode clearly shows that notwithstanding our economic strength and advanced development, Singapore is still vulnerable in some ways. But what we lack in natural resources, we make up in forward planning, creativity and being connected to the world. Forward planning - we must always look and think several steps ahead, and find solutions to possible scenarios. Creativity – is to think out of the box in search of new solutions. We may not have immediate solution in some cases but if we start working ahead of time and keep at it, we will find the solution as technology advances. A great example is our Newater. Being connected to the world – it’s always helpful to have friends who are prepared to sell you some sand and granite when you most need them.

20 In about two weeks, we will be celebrating our 42th Anniversary of national independence. Our economy is growing strong and our prospect bright. While we celebrate our achievements as a nation, we should not forget the journey that has taken us here. Next time you go to the beach, be grateful for the sand we have.

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