Indonesia Says Coal On Hold for Philippines After 7 Sailors Abducted

By Kanupriya Kapoor and Manuel Mogato

JAKARTA/MANILA June 24 (Reuters) – Indonesia said on Friday a halt on coal shipments to the Philippines will remain in place until Manila can secure its waters after seven Indonesian sailors were kidnapped, the latest in a string of abductions.

Philippine authorities could not immediately confirm the hostage-taking but said a Filipino woman held since September was freed on Friday by Abu Sayyaf, an Islamist militant group that has amassed tens of millions of dollars from kidnappings for ransom.

It was unclear whether the sailors were taken by Abu Sayaff, which has beheaded two Canadian nationals in recent weeks after ransom deadlines passed. The group is still holding men from Japan, the Netherlands and Norway.

Indonesia is concerned that piracy in the Sulu Sea area, a major sea traffic corridor for the world’s top thermal coal exporter, could reach levels previously seen in Somalia.

“The moratorium on coal exports to the Philippines will be extended until there is a guarantee for security from the Philippines government,” Indonesian Foreign Minister Retno Marsudi told reporters.

Indonesia supplies 70 percent of the Philippines’ coal import needs, which Indonesian data shows stood at about 15 million tonnes, worth around $800 million, last year.

Analysts say $40 billion worth of cargo passes through the Sulu Sea area a year, including supertankers from the Indian Ocean that cannot use the crowded Malacca Strait.

Marsudi said earlier the seven Indonesians were kidnapped by two different armed groups in attacks on a tugboat towing a coal-carrying barge and that the government would “try all options to free the hostages.”

Fourteen Indonesians were abducted in two separate assaults on tugboats in March and April but were freed in May. In April, the Indonesian navy instructed all commercial vessels to avoid piracy-prone waters near the southern Philippines.

Filipino captive Marites Flor, abducted from an upscale resort in September along with Canadian Robert Hall, was freed at dawn on Friday on Jolo, an army spokesman said. Hall was beheaded on June 13.

In Davao City, President-elect Rodrigo Duterte said they were “able to negotiate” for the release of two captives, a Norwegian man and Filipino woman.

“The kidnapped Norwegian could not get out yet because he could not cross because of the rough seas,” Duterte said, adding “there will be time that I will have to confront the Abu Sayyaf.”

Alarmed at the frequency of attacks, port authorities in some areas of Indonesia, particularly Kalimantan on Borneo, have stopped issuing permits to ships taking coal to the southern Philippines. (Additional reporting by Fergus Jensen in JAKARTA and Enrico Dela Cruz in MANILA; Writing by Kanupriya Kapoor and Randy Fabi; Editing by Martin Petty)

(c) Copyright Thomson Reuters 2016.