Are there lessons to learn from Buyat mining case?

Are there lessons to learn from Buyat mining case?

Jakarta Post Opinion

May 23, 2005

Harry Bhaskara, Buyat, Manado/North Sulawesi

It's a classic case. A multinational company is operating in a region and the local people feel alienated. It's frequently happened in various parts of the country, from Indonesia's easternmost province of Papua to the westernmost province of Aceh. This time around, it's happening in North Sulawesi with the PT Newmont Minahasa Raya gold mining company in the spotlight.

A subsidiary of U.S.-based Newmont Mining Corporation, the year-long controversy revolves around alleged pollution in Buyat Bay where villagers are said to have shown symptoms of skin diseases, nausea, and tumor-like lumps.

Newmont, which occupied half a million hectares of production forest in South Minahasa regency, has extracted 62.6 tons of gold over eight years. It ceased operations on schedule last August.

Its high profile dwarfs the 300-odd impoverished Buyat villagers who are the alleged victims of pollution. Any conflict would conjure up a David-Goliath fight. But the villagers are not alone.

Last September, police detained five Newmont executives for a month. The government is suing the company for alleged pollution. Last week, the government said it was ready to seek an out-of-court settlement.

Early this month, a seminar organized by University of Sam Ratulangi in Manado, concluded that there was no pollution in the bay. Student activists refuted the conclusions, saying the seminar was held in collusion with Newmont, who was among the sponsors of the seminar.

Civic groups charge that Newmont had dumped 5.5 million tons of mercury- and arsenic-laden waste into the bay during the 8-year period of its operation. Newmont has denied the charges but admitted releasing 17 tons of waste mercury into the air and 16 tons into the water over five years, an amount it says is far below Indonesia's emission standards.

Government offices and academics have given conflicting reports on the alleged pollution. In a situation like this, confusion reigns. A fisherman in Buyat Bay says: "We, the unschooled, do not know anything about the pollution. We just eat the fish, as long as we don't get sick." This only shows the vulnerability of the fishermen there.

Newmont, which obtained a permit in 1986 to operate the mine, is now caught in a new political setting. Unlike the 1980s, the government today does not have the luxury to stifle protest like the New Order regime used to do.

The Buyat case hit the headlines as environmental activists, academics, the villagers, the media, the bureaucracy and the mining company find themselves capable of airing their views in a new democratic environment. The result has been a confusing picture of a case that has baffled the public, and perhaps even the stakeholders, who are not used to such a crossfire of views. Yet, this is common in a democracy.

When the case is put to rest in the future, some aspects will likely remain unclear judging from the complex nature of a pollution case. All stakeholders have a steep learning curve in this new political setting. And as mining is an important industry, it is imperative that its activities are done in such a way that are acceptable to the stakeholders. To accomplish this, sound communication is a prerequisite.

Several things need clarification. Newmont is the first mining company to use the submarine tailings disposal method in Indonesia. The method is not allowed in many countries such as the United States, Canada or Australia.

The government needs to tell the public about its decision to allow Newmont to use the method. Is it because of differences in soil characteristics between Indonesia and those countries where the method is banned? Or is it because the government is so desperate to get investment that it compromises its own people? Or is it because the required environmental assessment (Amdal) issued by the New Order government was defective?

Other companies lining up to use the method include Australia's Asia Pacific/BHP in Papua, Canada's Weda Bay Nikel and Ingold in Maluku, Australia's PT Meares Soputan mining in North Sulawesi, PT Jember Metal and Banyuwangi Minerals in East Java. The government should really consider the long-time impacts of this method.

It is also unclear why such a mineral-rich province like North Sulawesi still has about ten percent of its total population of about two million living below the poverty line. Mining first began in the province in the 19th century.

When a multinational company operates in a region, its funding offered to the region is often mindboggling. It is not a good government practice but it is a reality. To cite Newmont, such funding should have been able to improve the standard of living of the people. Unfortunately, it does not seem to be the case.

David Sompie, a former Newmont's external manager, once told this paper that the company had contributed direct and indirect benefits to Indonesia to the tune of US$561 million since 1994.

In 2000, Newmont provided $1.5 million for the Minahasa Raya Foundation. The fund is supposed to be perpetual, meaning the foundation was only allowed to use the interest on the principal amount for the benefit of people in Minahasa Selatan. The $1.5 million fund itself was to remain in tact.

It is tempting to ask, where has all the money gone? How could villagers like those in Buyat live in poverty?

Wherever the case takes us, whether an in-court or out-of-court settlement, it is pertinent to address the sufferings of Buyat villagers. A highly commended visit by local government officials and local legislators was made to Buyat village last Thursday to listen to what the people want to do. At the very least, it must be ensured that the villagers live in peace. The controversy has left them deeply divided, and an open conflict among villagers is the last thing we want.

In retrospect, the Buyat case came to the fore for the first time during the 1999 election year, only to subside and resurge in the 2004 election year. Next month is the start of local elections in North Sulawesi. The authorities should be wary about unscrupulous politicians who may seek to exploit the case for their short-term political interests.

If the lesson is not learned, other Buyat cases will recur and the common people will fall victim. Too many interests are at play in Buyat, and a multi-tiered approach should be employed to solve the problems there.

The author is a staff writer of The Jakarta Post.