Tracing Vietnamese ‘sand drain’ to Singapore

Tracing Vietnamese ‘sand drain’ to Singapore – P1: Where do the ships go?

During the first two months of 2017, a number of ships flying foreign flags frequented several coastal areas in Vietnam, leaving with a hefty haul of newly dredged sand.

Two Tuoi Tre (Youth) newspaper journalists tracked the ships and discovered an ongoing megaproject in Singapore fueled by a vast amount of imported sand and dependant on Vietnam as a prime location to exploit the powerful resource.

This is the first part in a Tuoi Tre investigative series on Vietnam’s ‘sand drain’ to the city-state.

Numerous sand-carrying ships

In January-February, the Tuoi Tre correspondents sighted nearly 40 ships entering Vietnamese waters in Kien Giang, Khanh Hoa and Ha Tinh on the search for sand.

Four separate Vietnamese exporters hold contracts to transport the sand, each of whom admitted to Tuoi Tre that they only know the vessels were bound for Singapore, though none had any idea of the exact destination.

According to sources from Singapore and data gathered from the live ship-tracking map MarineTraffic, Tuoi Tre discovered that the ships were carrying the Vietnamese sand to Tekong Island and an area known as Changi Villa, both located adjacent to Singapore’s Changi International Airport.

In late February, the Tuoi Tre correspondents spotted a bulk carrier named Peterborough, which had been to Phu Quoc Island off the southern Vietnamese province of Kien Giang one week prior, docking near Changi.

The Peterborough was docking near the Yangtze Harmony, another carrier which appeared to be unloading sand dredged from Vietnam onto Tekong Island.

According to the Tuoi Tre investigation, these are not isolated cases and a number of foreign ships have been transporting sand from Vietnam to Singapore since the beginning of 2017.

Among them are five vessels: the RHL Monica, the JS Bandol, the Sheng Wang Hai, the Great Rainbow, and the Jin Sui, originating from Liberia, Malta, Hong Kong, and mainland China.

These ships were hired by Singaporean Hua Kai Engineering to transport sand bought under a contract with a local company on Phu Quoc Island to the city-state before transferring the resource onto smaller barges in an area called Changi Villa Tanjung Pengelih, situated between Tekong Island and Changi Airport.

Meanwhile, in waters off the south-central Vietnamese province of Khanh Hoa, ten additional foreign ships were also preparing to transport sand to Singapore. Nine of them were hired by Singapore’s Le Tong Resources Co., and one by TNS Resources.

A sand-pumping boat is seen off Khanh Hoa.

Even during the observance of Vietnam’s Lunar New Year in late January, Tuoi Tre still spotted five ships – the Silk Road 03, the Jin Xiang, the Great Link, the Giaovanni Topic, and the Dubai Galactic – carrying sand off the coast of Phu Quoc.

According to data gathered by Tuoi Tre, 40 foreign ships transported a total of 905,000 cubic meters of sand from Vietnam to Singapore from January 1 to February 23 despite a 2009 ban on sand exporting in Vietnam.

In 2013, the Ministry of Construction allowed some businesses to export saline sand from sea and river dredging projects, a decision which seems to have paved the way for the resource to be transported in large volumes to Singapore.

Land reclamation megaproject

According to one Singaporean sand importer, the city-state has been working on a US$6.5 billion land reclamation project meant to expand the area of Tekong Island from 657 hectares to 3,310 hectares for the last decade.

The company also revealed that it has been importing sand from Vietnam and several other countries to serve the Tekong project since 2009.

The pink area indicates the land reclamation.

However, accessing the construction site is not easy and no boat service operates a route to the project.

The Tuoi Tre reporters convinced the captain of a small tourist boat to travel off his normal route, approaching as near Tekong as possible. He agreed for a fee of S$150 ($106).

Thirty minutes into the journey, the reporters spotted three massive vessels docking near the island and a gigantic excavator transferring sand from its cargo to barges waiting below.

One of the ships was the Yangtze Harmony, the same vessel Tuoi Tre spotted near Phu Quoc just days prior.

The reporters observed that the construction site on Tekong Island was surrounded by a concrete dyke with sand being unloaded inside the structure.

The following day the Tuoi Tre reporters had a local driver take them by road to the Singapore General Aviation Park adjacent to Changi Airport.

At the scene, the reporters saw a number of sand dunes, each approximately ten meters high, along the Changi Coast, Tanah Merah Coast, and Aviation Park Streets, and hundreds of trucks loaded with sand traveling to and from the site.

A security guard spotted the reporters, posing as tourists, and barred them from entering the construction site.

Before leaving, Tuoi Tre managed to peek through the fence and saw a number of trucks, bulldozers and excavators busily at work.

Tracing Vietnamese ‘sand drain’ to Singapore – P2: How much does the resource cost?

After discovering where sand dredged from Vietnam’s waters is being transported to in Singapore, Tuoi Tre (Youth) newspaper found that the precious resource is being sold at rock bottom prices, at least according to customs papers.

Like some Southeast Asian countries, Vietnam bans the export of sand, with the exception of saline sand, resulted from river or sea dredging projects.

According to data reviewed by Tuoi Tre, more than ten businesses across Vietnam have obtained a license from the construction ministry to export saline sand since 2016.

These companies are those that have carried out various river or sea dredging works, and have been allowed to sell the dredged sand to recoup expenses.

However, Tuoi Tre has found out that these companies seem to have sold the nonrenewable resource at an average price of only US$1 per cubic meter, and in some cases, as low as $.01 per cubic meter, according to customs declarations.

Most of the dredging projects, whose sand will be exported, are in the central coastal provinces of Khanh Hoa, and Phu Yen. Similar projects also took place in Quang Binh, Quang Tri, Ha Tinh, Quang Nam, Binh Dinh, Thua Thien - Hue, Binh Thuan, and Ninh Thuan.

In the Mekong Delta in southern Vietnam, only one project on Phu Quoc Island, off Kien Giang Province, was recorded.

Khanh Hoa and Phu Yen each were home to four dredging projects, with one project in Khanh Hoa having exported more than 7.3 million cubic meters of sand to Singapore.

Those projects in Khanh Hoa were carried out by Cai Mep Investment Co, Green Environment Development Co. , Saigon - Hanoi ICMM., JSC, and those in Phu Yen: BKG Co., Bao Chau Co., Saigon - Hanoi ICMM., JSC, Quoc Bao Trading Construction, and Investment Advisory Co.

Dirt cheap prices

According to export contracts in 2008 and 2009, Vietnamese sand was sold from $3 to $6.6 per m3. However, prices started to slip in 2013.
In 2014, BKG and Quoc Bao declared to customs that their sand exports cost $2 per m3 while Phuong Thao Nguyen Co declared $2 per m3.

In January 2015, prices continued to drop by 50 percent. On January 8, Green Environment Development Co. charged Singapore’s TNS Resources $1.21 per m3, and only $1.1 per m3 just four days later.

In the meantime, Kien Hoang and Binh Minh Vang asked for even more shocking prices: the former sold to Le Tong Resources at $0.8 per m3, and the latter to Ky Tuong Singapore at $0.9 per m3.

These exporters asked for similar rates for contracts signed in 2016 and early 2017, according to documents seen by Tuoi Tre.

Sand bought from Vietnam is seen at an area near Changi Airport.

Despite the throwaway prices, Vietnamese businesses sold a total of 31.6 million cubic meters of saline sand in 2015 alone, accounting for 50 percent of the total sand exports between 2008 and 2016.

Many construction companies have expressed skepticism at the dirt cheap export prices, saying it is impossible to sell the resource for less than a dollar per cubic meter.

One industry insider said he was forced to buy saline sand for $1.2 per m3 to use in a land reclamation project, so it is illogical for the export price to be cheaper than the domestic rate.

The exporters have apparently declared the export price much lower than the real rates when completing customs paperwork, according to Tuoi Tre investigation.

For instance, in May 2015, Vietnam’s Hai Duong KG signed a deal to sell sand dredged on Phu Quoc Island to Cambodia-based JIA DA Investment & Construction for $4.4 per m3, according to the contract obtained by Tuoi Tre.

However, Hai Duong KG only declared an export price of $1 per m3 to customs when they started to send four sand-loaded ships to the customer in October and November 2015.

The customs department had indeed marked those shipments as ‘suspicious’ and ‘needs reviewing,’ however, the exports still eventually cleared checks and were successfully transported to the buyers.

Comment rejected

Among the suspicious customs declarations is that of Duc Long Co., which said it sold two ships of sand to Singapore’s Hua Kai at only $1.3 per m3, even though the contract, obtained by Tuoi Tre, shows the price was $4.6 per m3.

On February 20, Tuoi Tre visited the office of Hua Kai on the fourth floor of an office building on Balestier Street, and was received by a woman who preferred to stay anonymous and a man. The woman's business card says she is the company’s general manager.

Tuoi Tre gave her a copy of the contract her company had closed with Duc Long, with the sand export price was set at $4.6 per m3 and asked her about the low price the exporter declared with customs.

However, the general manager quickly refused to comment, urging Tuoi Tre to “ask Vietnamese authorities.”

She did confirm the contract was authentic, and that Hua Kai had bought two ships of sand from Duc Long before signing a new contract in 2016.
But the woman refused to disclose the buying price in the new deal.

Before showing Tuoi Tre to the door, the woman reiterated that she could not comment anything about the disparity between the contract price and the rate declared with customs.

On February 27, Tuoi Tre asked to have an appointment with Duc Long Co. leaders, but has yet to receive a response.

Tracing Vietnamese ‘sand drain’ to Singapore – P3: National resource overexploited

Many Vietnamese businesses have taken advantage of a rule allowing them to export saline sand to reap profits, leaving the environmental impacts caused by the resource’s overexploitation to be dealt with by local residents.

According to a 2013 law, businesses tasked with conducting dredging projects in local sea areas or rivers are allowed to export saline sand dredged during the project in order to recoup their investment.

Many companies were able to obtain licenses for the dredging projects, even if they never carried out any work. Instead, these companies would ‘sell’ the projects to other companies, who accordingly enjoyed the rights to export the saline sand and rake in big profits.

The sand exporters would then declare unusually low export prices while completing customs procedure to avoid taxes.

Willing to buy dredging projects

In 2014, Hanoi-based Green Environment Development Co. was assigned to implement a dredging project in Cam Ranh City in the south-central province of Khanh Hoa.

However, on October 1 of that year, the company closed a contract to transfer the project to Hai Duong KG, based in the southern province of Kien Giang.

Hai Duong KG would pay the Hanoi company VND31.5 billion (US$1.41 million) to conduct the project and receive 1 million cubic meters of saline sand after the dredging work was completed, which the firm was allowed to export.

Similarly, also in October 2014, the Khanh Hoa administration granted the Saigon-Hanoi ICMM., JSC the permission to export 2.8 million cubic meters of saline sand from a dredging project on the local Tac River.

Saigon-Hanoi Co. also sold 1 million m3 of the sand to Hai Duong KG at VND31,500 per m3, and later signed contracts to export another 1 million m3 to Singapore’s TNS Resources.

In January 2015, Hai Duong KG also purchased another dredging project, accompanied by the right to export 1 million cubic meters of sand, from Hai Viet Co., located in the northern province of Nam Dinh.

The Kien Giang company paid Hai Viet VND21,000 per m3 to obtain the right to export the sand.

A boat pumps sand off Phu Quoc Island

Even though Hai Duong KG has bought saline sand from three different projects at prices ranging from VND21,000 ($0.94) to VND31,500 ($1.41), the company only declared to customs that the resource was exported at much lower prices.

For instance, in October and November 2015, Hai Duong KG exported 109,000 m3 of sand to JIA DA Investment & Construction at only $1 per m3, meaning a VND20,000 loss per m3.

So why are businesses willing to acquire dredging projects only to export the dredged sand at a loss? It appears that this is their way to avoid taxes, particularly the 30 percent export duty.

By declaring the export price at only $1 per m3, Hai Duong KG was forced to pay an export duty of only VND6,690 per m3, significantly lower than the VND26,760 per m3 that would charged under the real contract price of $4 per m3.

Residents suffer it all

In mid-February 2017, Tuoi Tre returned to Dai Lam Commune, Van Ninh District in Khanh Hoa, where a dredging project was being implemented on the local Van Phong bay in August 2015.

The project contractor, Phuc Son Group, was permitted to export 7 million cubic meters of saline sand from the project by June 2017, according to a license granted by the Ministry of Construction.

However, the dredging project was put at a standstill last year due to strong objection from local residents, who catch lobsters in the bay to earn a living.

“The dredging work has affected the bay’s waters and either killed or scared away the lobsters,” Le Minh Thuong, a local, explained.

Another lobster-catcher, Ho Tan Phu, said prior to 2015, he used to earn VND1 million ($45) to VND2 million ($90) a day from hunting for the crustaceans.

“Since the dredging project began, not only myself but all other residents have suffered from the profit losses,” he said.

Elsewhere, in the neighborhood next to Tac River, adjacent to the sea in the coastal city of Nha Trang in Khanh Hoa, another dredging project is also taking its toll on local residents.

“I have invested VND40 million [$1,786] on a babylonia areolata farm using the river water, but the dredging activities have polluted the water and killed my snails,” Nguyen Ngoc Tu, a local resident, told Tuoi Tre in mid-February.

The dredging project has also driven a number of lobster cage farms near the river mouth away, another resident revealed.

In the meantime, people in four coastal areas in Phu Yen Province are living under constant fear that the dredging projects will send their houses collapsing into the river due to erosion.

Shifting sands: illegal VN sales to Singapore
VietNamNet Bridge 8 Mar 17;

Quite a few Vietnamese companies are taking advantage of sand dredging privileges authorised by the Government to rake in huge illegal profits, according to an expose by the Tuoi Tre (Youth) newspaper.

The investigative series, entitled “Tracing Vietnamese sand drain to Singapore”, reported that at the end of 2009, the Vietnamese Government banned sand exports but in 2013 the regulation was loosened, allowing a list of enterprises to export saline sand dredged from the river and sea beds of their own projects to recoup their investments.

The decision created favourable conditions for sand to be shipped in large quantities to the city-state of Singapore.

According to the paper, although the companies asked for dredging permission for sand export, they did not dredge the sand themselves, selling the rights to other companies for handsome profits.

On October 1, 2014, the Ha Noi-based Green Environment Development Company signed a contract to sell one million cubic metres of sand to Hai Duong KG, based in the southern province of Kien Giang, for VND31,500 (US$1.4) per cubic metre. The total contract was worth VND31.5 billion ($1.4 million). The sand was dredged during a project to improve the eco-system in Thuy Trieu Lagoon in Cam Ranh City of central Khanh Hoa Province.

At the same time, the Khanh Hoa administration granted the Sai Gon-Ha Noi Investment Construction and Mining Minerals Joint Stock Company permission to export 2.8 million cubic metres of saline sand from a dredging project on the Tac River.

Sai Gon-Ha Noi Company sold 1 million cubic metres of the sand to Hai Duong KG at VND31,500 per cubic metre, and later signed contracts to export another million to Singapore’s TNS Resources.

In January 2015, Hai Duong KG also purchased another dredging project with the right to export 1 million cubic metres of sand, from Hai Viet Company located in the northern province of Nam Dinh.

The Kien Giang company paid Hai Viet VND21,000 per cubic metre for the right to export the sand.

Even though Hai Duong KG has bought saline sand from three different projects at prices ranging from VND21,000 to VND31,500, the company declared to customs that the resource was exported at much lower prices.

For instance, in October and November 2015, Hai Duong KG exported 109,000 cu.m of sand to JIA DA Investment & Construction at only $1 per cu.m.

By declaring the export price at only $1, Hai Duong KG paid export duty of only VND6,690 (30 cents) per cubic metre, significantly lower than the VND26,760 ($1.2) that would have been charged for the real contract price of $4 per cu.m.

Land reclamation project

According to data obtained by Tuoi Tre, from January 1 to February 23 this year, 40 ships departed from Viet Nam to Singapore carrying 905,000 cubic metres of sand.

Duc Long Company exported the highest amount, weighing more than 600,000 cubic metres in total. Cai Mep Company ranked second with 369,000 cubic metres of sand.

The majority of sand dredging projects for export to Singapore are in the provinces of central Viet Nam, including Quang Binh, Quang Tri, Ha Tinh, Quang Nam, Binh Dinh, Thua Thien-Hue, Binh Thuan and Ninh Thuan.

Eight projects are being conducted in Khanh Hoa and Phu Yen provinces by the Green Environment Development Company, Sai Gon-Ha Noi Investment Construction and Mining Minerals Joint Stock Company, and Cai Mep Investment Joint Stock Company.

The sand is transported across the sea to Tekong Island to the northeast of Singapore and Changi Villa, close to Changi Airport.

According to a Singaporean enterprise which imports sand, for the past decade the city-state has been working on a $6.5 billion land reclamation project meant to expand the area of Tekong Island from 657 to 3,310 hectares. This company has imported sand from Viet Nam and several other countries to serve the project since 2009.

Losses for residents

In Van Ninh District of central Khanh Hoa Province, where a dredging project of Van Phong Bay was approved and the Phuc Son Company was allowed to export over 7 million cubic metres of exploited sand, all activities have stopped since 2016 due to strong opposition from local residents.

Hundreds of residents in Dong Nam and Dong Bac hamlets earn their living from lobster breeding in the Dai Lanh sea area. “The dredging activity has turned the water muddy and red. Lobsters died or moved to other places,” said one resident, Le Minh Thuong.

"The sea lobsters have declined by half since the sand has been exploited. Not only myself but all fishermen lost their living," Ho Tan Phu, another local lobster-catcher, told the paper.

In Phu Yen Province, the Tien Chau port sand dredging project has caused severe erosion. The walls of some houses there reportedly cracked, while whole floors sank by nearly one metre.

“They sent six to seven sand dredging barges in several months, only 150m from my house. Being worried that land and houses would collapse into the sea, local residents were fiercely opposed and the operation stopped. I heard that they were about to start again,” said Nguyen Hieu, another area resident.

Binh Thuan cracks down on illegal sand mining

Following the efforts of authorities of Ham Thuan Bac District in Binh Thuan Province, illegal sand mining in Ham Liem Commune has stopped, the Voice of Viet Nam (VOV) reported.

After VOV’s report on illegal sand mining, which caused outrage among residents last year, a supervision team was established by the district’s People’s Committee. The nine supervisors are officers of the district’s Department of Natural Resources and Environment, police officers, leaders of the commune’s People’s Committee and the army.

Nguyen Thanh Giang, commander of the Ham Liem Commune’s army, said the supervisors regularly patrolled areas of illegal mineral exploitation in the commune and were often threatened by sand miners covertly driving trucks into the mining area at night.

According to the report, the path leading to the commune centre is now free of sand miners. Sand dredging vehicles have also been moved.
Although sand mining has ended, the supervision team is still patrolling round the clock to ensure it does not resume, Le Thanh Cuong, chairman of Ham Liem Commune’s People’s Committee, said.

Ham Liem Commune is home to a huge amount of high-quality sand right next to Phan Thiet City. The demand for sand in Ham Thuan Bac District and Phan Thiet City is relatively high, posing a high risk of sand mining resuming in the future.

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