MAC: Mines and Communities

Updates on Buyut Bay scandal in Indonesia

Published by MAC on 2004-10-06

Indonesia to pass Newmont case to prosecutors

By Shawn Donnan in Jakarta, Financial Times

October 6 2004

Indonesian police are expected to pass a controversial pollution case against executives of US-based Newmont, the world's largest gold producer, to prosecutors on Thursday, setting the stage for a possible criminal trial.

The six Newmont managers - including two Americans and an Australian - were detained earlier this month as suspects. Police plan to hand the case to prosecutors in North Sulawesi, the location of Newmont's Minahasa Raya mine, a move that in the Indonesian justice system equates to laying charges against a suspect. Lawsuits against foreign companies are common in Indonesia but it is rare for overseas executives to be detained for extended periods or charged.

The case against Newmont - which hinges on claims that tailings from the Minahasa Raya mine caused chronic illness among villagers living in the area, has become a litmus test for Indonesia's troubled investment climate.

Key evidence in the case is in dispute - independent experts from groups including the World Health Organisation argue there is little evidence of pollution in the bay into which Newmont dumped tailings until August.

But police claim their tests show that the bay's waters contain unhealthy levels of mercury and arsenic.

"Those six suspects have committed a corporate crime," Brigadier General Suharto, the investigator in charge of the case said.

The company's local chief executive and the five other managers face up to 10 years in prison if convicted, he said.

Newmont has claimed throughout that it has done nothing wrong. The miner argues it never used mercury in its extraction process at Minahasa Raya. Any elevated levels of naturally-occurring arsenic and mercury in the tailings were reduced to acceptable levels by special "scrubbers" before the slurry was released into the bay almost a kilometre from shore, company officials claim.

In an August 26 report prepared for the World Health Organisation, Japanese mercury poisoning experts said levels of the metal in the bay were within acceptable international guidelines.

Tests also indicated the villagers had normal levels of mercury in their blood for populations that eat a lot of fish.

In fact, the bigger environmental issue in the area of the mine, the WHO experts concluded, was in the bay next door where they conducted tests as a control. There, mercury levels were "much higher" thanks to hundreds of small-scale illegal gold miners who for decades have used mercury to extract gold and dumped their waste into a river that flows into the bay, they said.

Additional reporting by Taufan Hidayat

U.S. steps up pressure on Indonesia over Newmont

By Muklis Ali and Jerry Norton, Reuters

September 27 2004

Jakarta - The U.S. ambassador to Indonesia called on the country's president on Monday, stepping up pressure over Jakarta's detention of employees of a U.S. mining company subsidiary on pollution accusations.

Ralph Boyce also visited the Jakarta jail where the five employees of the Newmont Mining Corp unit have been detained since last week over accusations the gold mine subsidiary polluted a bay in North Sulawesi province, making villagers ill.

"We are concerned about our people ... We are also worried about why they should be detained. We don't think necessarily that's appropriate," Boyce told reporters after meeting President Megawati Sukarnoputri.

Those detained are three Indonesians and nationals from the United States and Australia who work for PT Newmont Minahasa Raya, the operator of the now closed gold mine. None of the five, being held at police headquarters, have been charged.

Newmont has denied accusations that waste from the mine was dumped into the bay and said the detentions were unnecessary because its officials were giving police their full cooperation.

"There is no indication of when they will be released. We are still trying to get our employees out," Kasan Mulyono, spokesman for Newmont in Jakarta, said on Monday.

Boyce expressed optimism that, with the government's cooperation, a satisfactory resolution would be reached.

Asked whether companies might cancel investment plans for Indonesia over the issue, he said Indonesia offered great prospects for investors, and: "That's one of the reasons why we obviously want to work to make this issue go away."

Later he called on the prisoners.

Newmont spokesman Mulyono said the detained staff were being kept in basic cells with no air conditioning or television, sleeping on mattresses on the floor.

Police said the five needed to be detained for effective questioning and there was enough preliminary evidence to justify holding them.

No Charges

It is legal in Indonesia to hold suspects or those with possible information on a case for days or weeks before they must be formally charged or released.

Those detained include American Bill Long, the Minahasa site manager, and Australian Phil Turner, manager for production and maintenance at the Minahasa mine.

The U.S. Embassy had already criticised the detention in a statement as unnecessary and harmful to the investment climate.

Foreign direct investment in Indonesia fell 30 percent in the first eight months of 2004 compared with 2003, hurt by sporadic terrorist attacks and other violence, uncertainty over a series of national elections, a legal system criticised as corrupt and inconsistent, and bureaucratic redtape.

Denver-based Newmont, the world's largest gold miner, has strenuously denied the accusations by villagers in North Sulawesi province and said it had met government reporting requirements.

Media reports this month said a government panel reported on Aug. 31 that Newmont had illegally disposed of mine waste laced with arsenic and mercury into Buyat Bay near the mine site.

Police have said Newmont had been accused of violating environmental regulations that carry jail terms of up to 10 years for pollution. That rises to 15 years if people are proven to have died or become seriously ill as a result.

Indonesia is a major source of copper, gold, coal and tin, but investment has plummeted since the mid-1990s. (Additional reporting by Dean Yates)

Indonesian Minister Ignores Police Summons in Bay Pollution Scandal Source;

Asia Pulse

September 24, 2004

Jakarta - Indonesia's State Minister for Environment Nabiel Makarim has failed to meet a summons to appear at the police headquarters here on Friday morning over the alleged pollution of Buyat Bay in North Sulawesi province, a police source has said.

The minister's secretary has called the police, saying Nabiel could not meet the summons to testify as a witness in the pollution case as President Megawati Soekarnoputri has not given the green light, the source said.

Police said recently that reliable findings in Buyat Bay, where the American-run mining company PT Newmont Minahasa Raya (NMR) operates, show that it is polluted with heavy metals.

Makarim however said last month there was no industrial contamination in the bay.

His statement was supported by the Indonesian Mining Association (IMA), which said on Wednesday that the bay is not contaminated.

The police questioned NMR president director, Richard Ness, here Thursday for the same case.

The Long Awaited Meeting Came Out With Another Wait.

Mining giant Newmont hears local villagers' testimony

Press Release - JATAM, Jakarta,

24 September, 2004

"You cannot just go home to your country and leave everything behind and take no action." Buyat Bay women testifying, 21 September 2004.

After continued national and international public pressure, international mining giant, Newmont Mining Corporation (US), finally met face-to-face with community members of the small Indonesian coastal villages of Buyat and Ratatotok . On Tuesday, September 21, Newmont Mining Corporation executive Dr. Chris Anderson, head of external relationship and social responsibility, attended the long-awaited community meeting organized by a consortium of NGOs- local (Kelola), national (WALHI and JATAM) and international (Earthworks Action and Global Response) in support of the Buyat and Ratatotok communities. Ninety local community members, eager to finally be heard, attended this meeting held in Tomohon, Minahasa, on North Sulawesi. The meeting was delayed for nearly 4 hours until police permission could be obtained.

Testimony was given by 15 community members regarding their chronic health problems, dire economic situation from loss of livelihood as fishermen, and allegations of illegal land seizure, all arising since the start of PTNMR's (Newmont Minahasa Raya mine) operation.

As a result of the multitude of problems facing them, Buyat and Ratatotok community members presented a list of demands to Newmont including environmental rehabilitation of the land and heavy metal clean-up along Buyat River and Buyat Bay, treatment for current health problems with long-term health coverage, compensation for the loss of land, assistance with economic recovery, evacuation and relocation of Buyat Bay community, and, most urgently, assistance with meeting basic needs such as food and potable water.

Dr. Chris Anderson agreed to present and discuss the meeting details, including the community demands, with Newmont CEO, Mr. Wayne Murdy. He stated that he would then return to North Sulawesi with Newmont's (US) response and action plan. Also, Dr. Anderson agreed that Newmont would finance a public health evaluation to diagnose the unsolved health problems experienced by the residents of Buyat and Ratatotok in order to treat them appropriately.

The NGOs along with Buyat and Ratatotok attendees, however, underlined that this has not been a progress unless Newmont will take serious steps towards comprehensive resolution of all their appeals that have long been alleged as fake testimonies. The Public must still wait[tohear] whether the multinational gold company will comply with demands on responsibility since Chris must still consult his colleagues in Newmont (Denver). As the uncertainty remains after the Monday meeting then Buyat people will still wait until Chris meets his promise to again come to Minahasa. As stated by one of the women testifying, "You cannot just go home to your country and leave everything behind and not take action."

Media Contact : Aminuddin Kirom (JATAM), hp 08159290370

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