Indonesian coal association against possible moratorium on Philippines

JAKARTA: Indonesian coal mining association (ABKI) is urging the government not to suspend its supply of coal to the Philippines as this will hurt the industry amid weak demand and low commodity prices.

Jakarta is considering to stop shipments of coal to Philippines following a spate of abductions of Indonesian citizens. Indonesia exports about 15 million tonnes of the commodity to Philippines a year - almost all of the imported coal for the latter. Coal contributes to 34 per cent of Philippines' energy needs.

Executive Director of Indonesian Coal Mining Association Supriatna Suhala told Channel NewsAsia recently that Philippines is a major customer of Indonesia, and it is not easy to find other buyers amid the economic slowdown.

"It's not good for mining companies, and it's not good for government, also for people working in the mining companies, and in the long term our market will be taken over by other countries," said Supriatna.

BETTER WAYS TO IMPROVE SECURITY

To bring the coal to the Philippines, it is shipped mostly via the Sulu Sea which has seen an increasing number of pirate attacks. Since March, 24 Indonesian sailors have been abducted and 10 are still being held hostage in southern Philippines.

Jakarta said the possible suspension of coal supply would only be lifted if the Philippines increased security in its waters and guarantee the safety of Indonesian sailors.

However, Supriatna believes there are better ways to do this.

"If you want to protect the citizens of Indonesia, we can tell the Philippines just take the coal from our ports with their own vessels. So, we can still continue to export coal," he said.

For now, Indonesian shipowners are the ones counting the costs. Last month, authorities stepped up the pressure on Manila by banning Indonesian-flagged vessels from sailing to the Philippines.

However, this moratorium has not been effective.

"There have been leakages. Philippines are still getting their coal from many parts of Indonesia, for example from Kalimantan and other places. This is done outside the knowledge of the authorities," said Budhi Halim, Secretary-General of the Indonesian National Shipowners Association.

Mr Budhi added that if the authorities want to continue with the moratorium, they should not put a blanket ban on all ships, but instead just apply it to small and slow moving vessels which are more susceptible to attacks by pirates.

"The problem is not with the businesses, but with the pirates. So, safety and security of the waterways need to be implemented quickly by the governments of the region," said Mr Budhi.

Source: Indonesian coal association against possible moratorium on Philippines