March 22, 2017 / 9:42 AM / in 2 years

Indonesia port graft investigation disrupting export coal shipments

* Police raid coal ports in East Kalimantan

* Almost 30 large ships waiting to load thermal coal

* Delays follow large-scale disruptions in February

By Fergus Jensen and Henning Gloystein

JAKARTA/SINGAPORE, March 22 (Reuters) - Indonesia is cracking down on corruption and widespread graft at some of its top coal export hubs, disrupting shipments to destinations across Asia.

Indonesia is the world’s top exporter of thermal coal, still the main feedstock for global power generation. Interruptions to coal’s output and shipment can impact seaborne prices of the fuel as well as wholesale electricity markets.

The investigations that began on Friday are targeting port operations along the large anchorage area off Samarinda in East Kalimantan, officials said on Wednesday, delaying ships waiting to load new supplies from the region’s mines.

Police initially raided four port facilities, including the Samudra Sejahtera Stevedores Cooperative (Komura) office, a statement from the Transportation Ministry said, based on allegations of “blackmail, corruption, money laundering, and thuggery”.

“We are cracking down on patterns linked to illegal fees,” Transportation Ministry spokesman J. A. Barata told Reuters.

Almost 30 large dry-bulk ships are waiting offshore Samarinda to load coal, according to shipping data in Thomson Reuters Eikon. The data shows that some of the ships have been waiting to load coal since late February.

The office of the stevedores’ cooperative did not answer calls seeking comment.

East Kalimantan Police spokesman Ade Yaya Suryana told Reuters that authorities were targetting stevedores asking coal companies in the Mahakam area to pay extra fees to load ships.

Transportation Minister Budi Karya Sumadi said in the ministry’s statement he had asked police “not to hesitate in cracking down on all forms of illegal fees.”

East Kalimantan Transportation Agency, which oversees port authorities and marine transportation, declined to comment on the matter.

The crackdown follows coal shipment disruptions that occurred last month, when authorities put up road blocks in investigations that prevented workers from accessing ports.

Coal miners in the region include Banpu unit Indo Tambangraya Megah (ITM), and Bayan Resources .

The two mining companies could not be reached for comment.

Reporting by Fergus Jensen and Agustinus Beo Da Costa in JAKARTA, and Henning Gloystein in SINGAPORE; Editing by Tom Hogue

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