MAC/20: Mines and Communities

Indonesia update

Published by MAC on 2007-03-22


Indonesia update

22nd March 2007

The protracted Indonesian government case against Newmont is drawing to a close, as the prosecution expresses "confidence" that the US company will be found guilty of polluting Buyat Bay. Meanwhile, WALHI (Friends of the Earth Indonesia) has lodged a second civil law suit against Newmont.

UK-listed Archipelago Resources plc is "under suspicion" by a North Sulawesi NGO of causing a spate of pollution on the island.

While the government two weeks ago said it was halting export of granite to Singapore, pressure from the Singapore authorities has persuaded it to relax the ban .


WALHI SUES NEWMONT

Press Release, Jakarta

22nd March 2007

WALHI, Indonesia's largest environment group, today lodged a civil lawsuit against PT. Newmont Minahasa Raya and related parties in the South Jakarta Court. The case is based on negligence in the ocean disposal of mine waste, which caused environmental damage at Buyat Beach village, North Sulawesi. The claim is strengthened by research carried out by the National Oceanic Research Centre (LIPI) and the Environment Ministry’s Joint (investigation) Team.

The legal proceedings between Newmont Minahasa Raya and the government of Indonesia have been ongoing for almost two years, however there has still not been a verdict regarding Richard Ness’ responsibility as President Director of Newmont in Indonesia.

Meanwhile, around a year ago the South Jakarta Court rejected a civil action brought by the Environment Ministry against Newmont regarding pollution and environmental destruction. At that time, the South Jakarta Court made a dubious determination that the civil action by the Ministry was related to Newmont’s mining contract and therefore should be settled through arbitration, despite the provision in the Environment Law (23/1997) that the government has the right to sue companies that pollute and cause environmental damage.

The case was controversial for elevating commercial mining contracts over national laws.

“From this process, we can see that the government is still weak in the eyes of extractive industry investors. With our new lawsuit we hope the government will act with more determination in handling the Buyat Bay case so that there will be no repetition of environmental crimes such as those committed by Newmont, and also so that the government will act against anyone who pollutes the environment and endangers community livelihoods,” stressed Chalid Muhammad, National Director of WALHI in Jakarta.

Considering the above, WALHI petitions the court that Newmont be found in breach of provisions of the Environmental Law (23/1997) and the government regulation on Environmental Impact Assessments (27/1999).

WALHI is also suing the Department of Energy and Mineral Resources which stands as the supervising body in mining activities, and the Environment Ministry as the body responsible for overseeing environmentally hazardous activities.

Media Contact: / Ivan V. Ageung, Legal Manager WALHI National Office, 0815 876 8747


Prosecutors confident Indonesian court to find Newmont guilty of polluting bay

The Associated Press

16th March 2007

JAKARTA, Indonesia: Indonesian prosecutors are confident a court will find a local subsidiary of Newmont Mining Corp. and a top executive guilty of polluting a bay with toxic chemicals when judges announce their verdict next month, a prosecutor said Saturday.

The U.S. gold-mining giant, however, said prosecutors had failed to prove their allegations, and no environmental harm was ever done by Newmont in Buyat Bay, on Indonesia's Sulawesi island.

Prosecutors in November asked judges to sentence Richard Ness who heads the Denver, Colorado-based company's Indonesian subsidiary, Newmont Minahasa Raya to three years in prison if found guilty of contaminating the bay with arsenic and mercury, and to fine Ness and Newmont more than $165,000.

The court was adjourned until April 4 when a panel of judges is scheduled to announce its verdict, presiding judge Ridwan Damanik said Friday of the closely watched case that has been ongoing for 20 months.

"We are optimistic we will win," said prosecutor Purwanta, who like many Indonesians uses one name only. "Many data and facts disclosed in the court have supported our prosecution."

But Ness disagreed. "Buyat Bay is clean, the fish are safe to eat, and our operation did not cause any negative impact to the community," Ness said in a statement Saturday. "The prosecutors have failed to prove their allegations."

Ness said a guilty ruling would contradict several scientific studies that found no evidence of pollution in Buyat Bay.

Some villagers claim they became sick because of pollution, but prosecutors have not presented anyone with serious skin disorders or other illnesses.

A police report showed mercury and arsenic levels in Buyat Bay were well beyond national standards, but tests by the World Health Organization, Indonesian government agencies and several independent groups found that pollutants in the water were within normal limits.

Newmont stopped mining at its Minahasa Raya mine in August 2004 and is spending US$5.6 million million) on reclamation.

In December 2004, Buyat Bay villagers dropped a US$543 million civil lawsuit against Newmont, but the Indonesian government later filed a US$133 million lawsuit. Newmont settled that case by agreeing to spend $30 million over 10 years on environmental monitoring.

The criminal charges against Ness and Newmont were filed in July 2005.


Indonesia Says to Allow Singapore Granite Exports

Reuters, Jakarta

15th March 2007

Indonesia will allow exports of granite chips to Singapore as long as the source of shipments is verified to guard against damaging the environment, the country's trade minister said on Thursday. Ties between the Southeast Asian neighbours have soured recently amid a dispute over Jakarta's moves to stop exporting sand vital to the island state's construction industry.

Indonesia's foreign minister Hassan Wirajuda then said this week the government was considering banning granite chip exports after authorities detained 24 tugboats and barges carrying granite chips to Singapore this month.

Trade Minister Mari Pangestu told a news conference on Thursday that granite chip shipments would be allowed as long as they were checked by appointed surveyors. "Granite chip exports are still allowed as long as they are verified to check the sources, ports of departure and vessels to ship them," Pangestu said.

"The rules aim to protect the environment. But if they are deemed insufficient, they will be evaluated," she said. The Indonesian navy has urged the government to ban granite exports, the Antara news agency has reported.

Excessive granite mining has caused environmental damage in islands such as Bintan and Karimun, which are close to Singapore, the state news agency said.Singapore's construction sector is booming after years in the doldrums, although the ban on Indonesian sand has made investors worry that the recovery might be halted by tight sand supplies.

Singapore has criticised Indonesia for reportedly using the sand export ban to pressure it into negotiations on an extradition treaty and border delineation. However, Indonesia said the ban had been prompted by environmental concerns and not by negotiations with Singapore. The neighbours have had occasional diplomatic spats. Former Indonesian president B.J. Habibie once called Singapore an "unfriendly little red dot".


Archipelago in the mud

Not holding a production permit - yet Meares Soputan Mining is already under suspicion of having caused a mud flood

From statement by Friends of Lembeh-Pulisan-Bangka

13th March 2007

In the morning of Sunday March 11th, 2007 the coastal inhabitants and fishermen of Batuputih – Rinondoran and Kalinaun woke up and believed they were in a dream. Their sea which they know to be crystal blue had changed into a red muddy pond, dead fish lying all over the beach. The inhabitants of the village Rinondoran had to leave their houses in a rush which got flooded by muddy water, half a meter deep. A bridge was torn away as well as a cow. In Likupang township the water coming downhill was so horrendous that the concrete bridge of kampong Ambon broke into pieces. The night before it had rained only a little though - nothing that comes even near to the floods of February 2006 which after days of rain had caused landslides and bridges to break. And then there is this very fine mud, several centimeters deep, which smells metallic, strange, not like after flooding.

It didn’t take the people long to utter suspicions that this was a man-made environmental catastrophe, caused by the Australian mining company, Archipelago Resources * and their Indonesian branch, Meares Soputan Mining, that currently constructs an open pit gold mine in the hills above. The working contract worth 20 mio. USD to construct the dumping ponds and dams was granted to Bakrie constructions which belongs to the Indonesian minister Aburizal Bakrie. This company is responsible for the hot mud that has been flooding the region Sidoarjo in East Java over the past few months, destroying the homes of thousands, robbing them of their livelihoods. Up to now they demonstrate, in vain, for their rights of compensation.

March 11th was a Sunday, and local people accuse the company of having released the earth they dug out of the rock waste dumping sites to be into the rivers during the night, hoping to do this unnoticed. The company which is currently in a desperate construction rush in order not to loose the trust of the investors not even holds a production permit, in Indonesian language called AMDAL (EIA) which has to be issued by the Ministry For Environment and is a precondition under Indonesian law to operate. In the beginning of February 2007 the governor of the Province of North Sulawesi had refused his approval of the EIA on the grounds that the goldmine which is situated on the narrow peninsula of North Sulawesi puts the environment and peoples health at danger. Important sectors of the provincial economy like the fishing industry and the (dive) tourism would also suffer severely, he argued. Now his worries seem to have fulfilled, even before starting production, although the mining company promised to apply only highest technology and security standards and there won’t be any risk for the environment. Instead, manager Peter Brown says, Toka Tindung is meant to become a show case. Indeed! Not only the fishing population suffered losses caused by the mud, but three top dive sites were irreparably damaged. One of the sites has just been adored by well known underwater photographer, Michael, Aw in his newest book ’Beneath North SulaweSea’. Meanwhile the mining company denies any responsibility and speaks of a natural catastrophy (Manado Post, March 13th)

* Editorial Note: Archipelago Resources plc is headquartered in London and listed on the London Stock Exchange’s AIM. Its working personnel are based in Australia

 

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