KOH KONG PROVINCE

Large-scale sand dredging operations in Koh Kong estu  aries ignoring long-term effects, say environmentalists.

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The Panamanian-registered Raffles being loaded with estuary sand dredged by the Hong Kong-based Winton Enterprises, 10 kilometres off Koh Kong's coast.  

A CHINESE company is extracting thousands of tons of sand from coastal areas in Koh Kong province each day, raising the spectre of long-term damage to the region's fragile estuarine and marine ecosystems.

A recent Post investigation found that a Hong Kong-based firm is openly dredging sand in the province's extensive salt-water estuaries - including areas protected under Cambodian law - for export to Singapore.

The island city-state, the epicentre of a global sand industry worth more than US$6 billion annually, imports around 3.8 million tons of sand each year for land reclamation and construction projects. But following an Indonesian government ban on sand exports in January 2007, Cambodia - with its loose regulatory framework and pristine coastal environment - is now squarely in the sights of foreign dredging companies, observers say.

"The timing of the sand rush appears to coincide with the end of sand exports from Indonesia to Singapore," said Eleanor Nichol, a campaigner for corruption watchdog Global Witness, which conducted investigations into Koh Kong's sand industry as part of its "Country For Sale" report, released last month.  

"Our investigations in Koh Kong revealed a complicated picture, with a mix of Cambodian and international companies operating to dredge and transport the sand."

The Global Witness report found that the Koh Kong operation - worth an estimated $35 million annually - is controlled by the local LYP Group of Companies, which the group said is owned by CPP Senator Ly Yong Phat.

The Post investigation - based on some dozen interviews and visits to the dredging sites - enlarged upon Global Witness' findings, confirming that that the bulk of Koh Kong's sand is being extracted and shipped to Singapore by Winton Enterprises Limited, a Hong Kong-based mining firm working in close partnership with LYP.

It also confirmed that the Peam Krasop Wildlife Sanctuary, a 25,897-hectare protection zone established in 1993 to protect one of the world's last intact coastal mangrove ecosystems, lies at the centre of Winton's extensive sand-mining operations.

On its website, Winton Enterprises states that it is began sand-mining operations in "Indo China" in November, and that sand is being dredged and transported "by Winton's own vessels" to Singapore. It says also that the "abundant" reserves in the location will ensure "in volume" supply for its Singaporean clients.

White gold

Although no specific country is mentioned, a Winton representative based in Koh Kong confirmed by phone that the company is operating in Cambodia with the permission of a local "concessionaire".

He added that the  government had imposed a "very strict limit" on the size of the concession and the amount of sand that could be extracted.

"We obtained the concession and now we are just following the government's directives," the representative said, declining to answer further queries about the company's operations.

Shortly after Winton Enterprises was contacted by phone and email, the website's main page was placed "under construction" and access to the operational information was barred.

It is unclear how much sand is being removed from the area by Winton, but there do not appear to be clear limits on the operation.

In late February, Post reporters tracked the supply chains of sand extracted from Koh Kong estuaries by Winton dredgers for export to Singapore. Sand was observed being extracted by unmarked dredging vessels in Koh Suon, 10 kilometres up the Koh Pao River from Koh Kong town, and in Koh Smach, inside Peam Krasop Wildlife Sanctuary to the south.

The sand was then transferred onto larger barges bearing "Winton" markings and shipped 10 kilometres offshore, where it was unloaded into an ocean-going bulk carrier, the Panamanian-registered Raffles [see map].

According to international shipping registries, the Raffles - owned by a company listed in the Bahamas - alone has a deadweight capacity of 37,696 tons, enough to hold more than $400,000 worth of sand at $11 per metric tonne - the figure Global Witness estimates as the wholesale market value for reclamation sand.

The Raffles also crops up in a 2006 Amnesty International report, which cites allegations the ship was used in illegal arms trafficking to Liberia during a 2001-03 UN arms embargo.

Global Witness investigators also noted the presence of 15,000 ton carriers in the area, quoting local sand workers as saying that each could be readied for export in "three days".

The organisation concluded with a "conservative" estimate that around 60,000 tons were being mined for export each month, while in a conversation with Post reporters, Lim Sokheang, general manager of LYP Group, estimated 40,000-50,000 tons per month.

But Kev Wa, executive director of Environmental Watch and Protection in Cambodia (CNRPO), a Koh Kong-based watchdog, said that up to "a million" tons of sand - with a potential resale value of $11 million - had been removed from the area in the past three months.

‘Sister' companies

Interviews conducted with officials and sand workers in Koh Kong also revealed the nature of Winton's cooperation with LYP Group. At a Thai sand storage depot across the river from Koh Kong town, which Global Witness revealed is run by the Thai Saroon Conrete Co on land owned by Ly Yong Phat, the Post was told by depot staff that stored sand had been extracted by Winton dredgers.

Mandarin-speaking staff at a second sand depot refused to give the name of the company operating it, but a ship moored offshore, the Shun Hong Hai 88, listed in Chinese shipping databases as belonging to Guangdong-based company Great Sea Freight Transportation Co, was observed being loaded with sand from a smaller barge that was part of the Winton operations upstream.

When asked about the operations in Koh Kong, Deputy Provincial Governor Bin Sam Ol did not mention the Chinese involvement, saying only that LYP had been awarded a "monopoly" license to extract sand in the area.

But Pech Siyon, director of the Koh Kong Department of Industry, Mines and Energy, confirmed that four local companies - LYP Group, Udomseima, Dany Trading and Regapo Ltd - had been granted concessions to mine sand in the province, and that Winton was operating under the concession awarded to LYP - its international "sister company".

"All four companies received licenses from the Council for the Development of Cambodia, and the individual companies gave a share to several other sister companies, who bring their ships and technology for the dredging operations and for transport to Singapore," he said.

He added that the companies were forced to pay provincial taxes of $0.10 per cubic meter of muddy shore face and $0.20 per cubic meter of sandy shore face extracted.

Pristine estuaries

I AM CONCERNED THERE WILL BE BIG WAVES WHEN THE GROUND SURFACE COLLAPSES DUE TO THE DREDGING OF THE SAND.

Stretching its labyrinthine arms over an area of over 25,000 hectares, Peam Krasop's translucent saline waters encompass dense mangrove islands that are among the world's last intact ecosystems of their kind.

Paul Everingham, a wildlife photographer and amateur environmentalist who has been observing Koh Kong's coastal environment since 2004, said that its broad river estuaries - the "jewel in the crown" of the Kingdom's south coast - formed the focal point of a region-wide ecosystem stretching as far as the coral reefs of Indonesia and the Philippines.

"The southwest watershed of the Cardamoms is the largest and most pristine section of the mountains," he said. "Every string, river and creek in [this area] funnels into this estuary system, the heart of which is the Peam Krasop Wildlife Sanctuary."

He described the area as an "environmental hotspot", and one of the "most active" aquatic breeding grounds in Southeast Asia.

But the sharp increase in sand-mining activity in Koh Kong has environmentalists worried that virgin coastal estuaries will meet a similar fate to Indonesia's Riau Islands, where intensive sand extraction resulted in serious environmental degradation and forced Jakarta to institute a blanket ban on the practice in January 2007.

At the time, the Jakarta Post quoted Indonesian Foreign Ministry spokesman Desra Percaya as saying sand extraction operations had caused "severe environmental damage" to several islands in the archipelago, including Sebayik and Nipah.

The 1992 Ospar Guidelines for the Management of Dredged Material, part of an international agreement governing marine conservation, likewise cite the "significant physical impact" of dredging operations, highlighting the "covering of the seabed and local increases in suspended solids levels" and the "smothering of benthic [bottom-dwelling] organisms in the dumping area".

Following the Indonesian ban, the Singaporean Building and Construction Authority (BCA), part of the city-state's Ministry of National Development, said that the shortfall in sand would easily be made up from "new supply sources" in the region.

But as the dredgers close in on Cambodia, local fishermen say they have noticed changes in the age-old patterns that govern life on the water.

Chun Doeun, 38, who has been fishing the Koh Pao River for 15 years, noted the strange behaviour of local crab species, which have floated to the water's surface since the arrival of the sand-dredgers last year.

"[This] is a strange habit for this kind of species. Crabs always dwell on the riverbed," he said. "The changed habits of the crab species have happened since the start of the sand-dredging operations."

Tith Seour, a 48 year-old fisherman angling within sight of the Raffles operation off the coast, said also that recent fish and crab catches had been low, citing the possibility it could be linked to the Winton operations.

"For ocean fishermen, I am concerned there will be big waves when the ground surface collapses due to the dredging of the sand," he said.

CNRPO President Chea Hean added that 1,500 fishermen in Koh Kong and Mondul Seima districts had recently filed joint complaints about the impacts of sand mining on their livelihoods, citing "shore collapses" and the release of oil by dredging ships.

Environmental safeguards

Nao Thuok, director of the Fisheries Administration, acknowledged that sand-mining could harm fisheries by destroying sea-grass and spawning grounds, but said that the Administration was doing its best to advise authorities about the effects.

 "If they ask our opinion about any project, then we will study [it]. If there are seahorses there, or sea-grass or coral reefs, we will inform them that they cannot mine," he said, adding that its recommendations had already helped stop proposed operations near Koh Tang and Koh Rong Samloem that would have seriously damaged marine ecosystems.

He added that the limited sand-mining operations currently in place would probably have little effect on the overall health of Cambodia's marine areas, provided they were restricted to 1 or 2 percent of the area.

"If we provide a few concessions there could be no harm to the fisheries environment, because as compared to the 50,000 square kilometres of our marine areas, just a few kilometres - maybe less than 1 percent of the area - will be impacted," he said.

Nao Thuok added that he had not heard of Winton Enterprises, but that the Administration was investigating one unnamed operation in Koh Kong.

Neither LYP officials nor Ly Yong  Phat could not be reached for comment about the company's activities inside Peam Krasop, but Pech Siyon told the Post that environment safeguards were in place in Koh Kong, and that if any dredging company violated the law there would be an "investigation" into its activities.

But one source familiar with the area said that even were the political will present, the technical capabilities of performing an Environmental Impact Assessment (EIA) in line with the Kingdom's 1996 Law on Environmental Protection and Natural Resource Management was beyond the capacity of the local authorities.

"For something like sand-mining, it's not simple: if you do an assessment in January and you take the sand in July, your assessment is going to be wrong," the source said, adding that the EIA was vital, since it provided the entire basis for a project's environmental legitimacy.

"That's what I think is wrong with this... There's nobody who can really do these EIA [studies] correctly."

Either way, Global Witness's Nichol said that the current framework for allocating mining concessions leads to a natural disregard for environmental effects. Far from a system based on "technical and financial merits", mining allocations were mostly made in secret to members of the ruling elite, she said.

"The system for allocating concessions is patronage and nepotism," she said.

"These assessments need to be done prior to any operations and the public consulted," she said.

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Winton's  military connection?

Staff on board the ships owned by Winton Enterprises were observed wearing military fatigues without any insignia or identifying markings.

Global Witness raised the possible involvement of Chinese military in the operations, while Winton's website features photos of company director Loh Mui Keng Victor being granted an "Excellency Award" by Minister of Defense Tea Banh in the presence of RCAF officers at a June 24, 2008, ceremony.

However, Koh Kong provincial military commander Yun Mean denied Cambodian or Chinese military involvement in the dredging operations, telling the Post that the "soldiers" were Chinese company workers wearing paramilitary clothes. "Last week I asked military police commanders in Koh Kong to check and withdraw the paramilitary clothes worn by Chinese workers, because it looks confusing to people," he said.

THET SAMBATH

SUPPLY CHAINS Tracking the sand-dredgers

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Step 1

Extraction

Winton's Koh Kong operations are centred in the province's extensive salt water estuaries, including in areas upstream from Koh Kong town and to the southeast, inside the 25,897-hectare Peam Krasop Wildlife Sanctuary (see map). Sand is extracted from these areas by unmarked dredging vessels and transported downstream on 300-ton barges. From observations made at the site, it appears each of these barges can be filled with sand in a number of hours.

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Step 2

Transport and transfer

After travelling downstream, The 300-ton vessels are unloaded into larger barges for the next leg of transport.

Global Witness reported that 5,000-ton barges are being used for this transport. The Shun Hong Hai 88 (pictured left) is listed in Chinese shipping databases as having a deadweight capacity of 2,748 tons.

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Step 3

Stockpiling

Some of the dredged sand is deposited at a number of local sand storage depots, where it is cleaned and processed for use in construction projects. Two depots lie across the river from Koh Kong town, which sit on land owned by LYP Group and are owned by the Thai Saroon Concrete Co and an unknown Chinese company. The sand is later exported. Another locally owned storage depot is located in Koh Kong town itself.

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Step 4

Export

The large transport barges unload their sand onto ocean-going bulk carriers that transport the product directly to Singapore, where it is used in construction and government land reclamation projects. Global Witness has estimated that up to three of these ships can be filled and readied for export every week, part of a $6-billion global sand trade concentrated on the island city-state. Picture to the left are two Winton barges unloading their sand onto the Raffles off Koh Kong's coast.