MAC: Mines and Communities

Jakarta says no deal for Newmont in pollution case

Published by MAC on 2004-12-08

Jakarta says no deal for Newmont in pollution case

08 Dec 2004

By Karima Anjani, Reuters

Jakarta - Indonesia will not bargain with U.S.-based Newmont Mining Corp over a controversial pollution case and the world's largest gold miner will have to defend itself in court, the environment minister said on Wednesday.

Rachmat Witoelar, speaking just days after Newmont chief executive Wayne Murdy made a high-profile visit to Indonesia, said indictments against six executives and a local unit of Newmont could be filed with a court by early January.

Prosecutors have said they would file charges over allegations that waste from the unit polluted Buyat Bay in eastern Indonesia, contaminating the food chain and making villagers ill. Newmont has repeatedly denied the allegations.

"Newmont's chief officially met our government, (but) there will be no bargaining. They ... should be brought to court," Witoelar told a news conference.

"Officially, the government will process this in accordance with the law because they have not admitted there was pollution. Moreover, they offered a peaceful way but I did not allow that because if we took a peaceful way it means they are not guilty over what happened in Buyat Bay."

Witoelar gave no details on what the peaceful way was.

Asked to comment on what the minister might have meant, Robert Gallagher, Newmont's vice president for Indonesian operations, said the company had suggested there be an analysis of all the data collected over the case in an open scientific forum. Nothing came of that suggestion, Gallagher said.

"A lengthy drawn-out process will not resolve the issue in a speedy manner, which is to everybody's advantage, the government's, Newmont and the people of Buyat Bay," he said.

A government-commissioned probe concluded last month that sediment in Buyat Bay in North Sulawesi province, near a gold mine run by PT Newmont Minahasa Raya, contained significant levels of arsenic and mercury.

Newmont denies its mine contributed to pollution in the bay, 2,200 km (1,400 miles) northeast of Jakarta.

Newmont has said it was vindicated by two earlier studies -- one by the Indonesian government and another by the World Health Organisation -- which concluded Buyat Bay was not polluted.

On a visit to Indonesia last week, Newmont chief executive Murdy said his top priority was to put a stop to criminal charges against his company and its executives in Indonesia.

The six executives expected to be tried in North Sulawesi include three Indonesians, two Americans and an Australian.

Witoelar had earlier met President Susilo Bambang Yudhoyono, who said that while the case had to be pursued objectively, environmental laws needed to be implemented.

The case is being closely watched by foreign miners, alarmed over the difficulty of doing business in Indonesia's outlying regions. Investment in the sector has slumped over vague regulations, illegal mining and tough environmental rules.

N.E. Worotikan, chief prosecutor in North Sulawesi province, said by telephone his office was still preparing the indictments and needed a final dossier from police.

Asked if the trial could start in January, Worotikan said: "It's possible. We'll see." In Indonesia, the lodging of an indictment with a court amounts to the filing of formal charges.

Charges of breaching environmental rules cited by prosecutors carry jail terms of up to 10 years.

The Sulawesi mine was closed in August due to depleted reserves and the company had been carrying out reclamation work. The accusations relate to when the mine was operational. (Additional reporting by Muklis Ali and Tomi Soetjipto)

Jakarta no negociará con Newmont por caso de contaminación

Indonesia no negociará con la compañía norteamericana Newmont Mining Corp. por un controvertido caso de contaminación: el mayor productor mundial de oro "deberá defenderse en la corte", aseguró el ministro de Medio Ambiente el miércoles pasado.

Rachmat Witoelar, hablando días después de una resonante visita a Indonesia del presidente ejecutivo de Newmont, Wayne Murdy, dijo que las acusaciones contra seis empleados de la empresa podrían llegar a juicio en los primeros días de enero.

Los fiscales ya anunciaron que presentarán cargos alegando que residuos provenientes de la planta en Bahía Buyat, ubicada en la región este de Indonesia, contaminaron la cadena alimentaria de la zona causando enfermedades en los pobladores. Por su parte, Newmont niega que la contaminación se deba a sus operaciones en la zona.

Indonesia dismisses investment concerns over Newmont case

Associated Press (AP)

December 8 2004

Jakarata - Indonesia on Wednesday dismissed concerns that plans to prosecute a subsidiary of U.S.-based Newmont Mining on pollution charges would hurt foreign investment, saying clean companies had nothing to worry about.

"I am sure that foreign investors won't be scared away," said Environment Minister Rachmat Witoelar. "I and the president personally guarantee to protect companies who manage their operations well."

"We welcome the honest ones. There is no need for the crooked ones," he told reporters.

Police accuse Newmont Minahasa Raya, a subsidiary of Denver, Colorado-based Newmont Mining Corp., of dumping heavy metals into Buyat Bay on Sulawesi island, causing residents to develop skin diseases and tumors.

Prosecutors are preparing criminal charges against five company executives - including an American and an Australian - over the alleged pollution. If found guilty, they could face up to 15 years in jail.

Witoelar said prosecutors expected the trial to begin in mid-January.

The government's determination to press charges against Newmont has cheered green activists, who have long complained that foreign mining operations skirt environmental laws while digging up the country's rich natural resources.

Newmont, whose mines in at least three other countries have also been subject to pollution allegations, have denied any wrongdoing.

Tests have produced conflicting results about water quality in the bay. The World Health Organization and an initial Environment Ministry report found the water unpolluted.

But a subsequent ministry study found that arsenic levels in the seabed were 100 times higher at the waste-dumping site than in other parts of the bay.

Newmont stopped mining two years ago at the Sulawesi site, 2,000 kilometers (1,300 miles) northeast of the capital, Jakarta, after extracting all the gold it could, but kept processing ore there until Aug. 31, 2004, when the mine was permanently shut.

Newmont has been blasted by journalists in its home city of Denver, Colorado, with a litany of its recent failures and bad practice (,1413,36~34165~2592207,00.html and ttp://,1413,36~33~2594109,00.html. At the same time, a leading environmental campaigner in Indonesia links the company's sorry record to the issue of basic human rights .

MNCs poor environmental track record

14th December

Nur Hidayati, Jakarta

Many people do not believe that a multinational corporation with a global reputation would victimize an already marginalized community and damage the environment for profit.

In reality, however, that often happens. But actually, many of these big companies, spread all over the globe, have a notoriously poor track record. But with their super capital power and huge political backing, they can cover things up, hide behind politically well-connected figures and academic institutions (scientific and social), as well as promote themselves through massive advertising campaigns.

In the case of Buyat Bay in Sulawesi, Newmont gold mining firm -- with its home office in Denver, Colorado -- also hides behind controversy with an assist from government officials, although a lot of evidence shows that its operation polluted the environment and ecosystem in and around Buyat Bay.

There is also a tendency to simplify environmental problems by calling them non-political problems. Environmental affairs resides in the public affairs sphere since it directly relates to the air people breathe, the water people drink and the places people live. It relates to sources of livelihood and quality of life for individuals and communities. Public affairs are always political affairs, hence environmental affairs are political affairs.

Apart from the legal process by the police against Newmont's executives for corporate crimes, one basic question remains: Is pollution in Buyat only an example of environmental mismanagement or is it a violation of basic rights of individuals and communities?

The Indonesian Constitution's Second Amendment, chapter XA on Human Rights, article 28H, explicitly states that "Everybody has the right to live a prosperous life physically and spiritually, to have a proper place to live, and to have a good, healthy environment and health services."

When pollution affects the people in Buyat Pante, most of whom are small scale fisherfolk, they have lost their right to live a prosperous life physically and spiritually and lost the right to live in a healthy environment. Furthermore, they have lost their source of livelihood that is essential to living in dignity.

Unfortunately, most of the time, the government also has not been able to fulfill its constitutional obligations, for a number of reasons; particularly, political pressure from multinational corporations' home governments. The "awkwardness" felt by the Indonesian government and the House of Representatives when encountering such a problem, generally leads the state to make a decision in favor of the multinational corporations.

The rampant practices of corruption, collusion and nepotism (KKN) are another major obstacle for the government in carrying out its obligations to protect the rights of the citizens.

The business sector has also contributed to sustaining corruption. Instead of admitting that this massive graft at all levels of society has caused a high-cost economy -- hence costing them profits -- the business sector points their finger at stringent environmental regulations, the labor movements and local peoples' demands for sound business practices as the reasons for the declining investment in the country.

In the concept of sustainable development -- which is defined by the United Nations as development that meets the need of current generation without compromising the future generation to meet their need -- the environment is no longer seen as a contradiction to economics (not merely economic growth). Taking the debate into that arena is a thing of the past. Over a decade ago, the world finally became aware, on a large-scale, when this concept was loudly promoted by the world's leaders in Rio de Janeiro in 1992. It is quite unfortunate that this government is just now beginning to show some political will when it comes to considering environmental aspects as crucial -- 12 years after the Rio Declaration.

The Buyat case is a test case of how the new government will handle environmental cases, especially the ones involving the operation of multinational corporations. Furthermore, the action taken by the new government in the Buyat case will become the cornerstone of the law enforcement and legal certainty in Indonesia in the future. The case will also be the benchmark and signal of the new "rules of engagement" for doing business in Indonesia.

If the new government is really serious and has genuine political will to make changes, it will not maintain the practice of business as usual as practiced in the past. If the new government is really serious about eliminating corruption, now is the time to prove it. The business sector must be given a sign that now they must deal with a very different kind of government. The business sector must be given a sign that the old rules no longer apply in Indonesia.

By default, the business sector will have to adjust to these new rules as it has always adjusted with previous governments (for example, when corruption was the order of the day it also adjusted to the corruption "culture"). We hope that the new government will prove to the people that it is different from the previous ones.

The writer is a Campaign Coordinator for WALHI (The Indonesian Forum for the Environment).


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