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Australia warns Indonesia: Pollution suit against U.S. mining firm could undermine investment

Published by MAC on 2005-03-28

Australia warns Indonesia: Pollution suit against U.S. mining firm could undermine investment

The Jakarta Post (AP)

March 28, 2005

Canberra - Indonesian legal action against a U.S. mining company for alleged pollution could undermine foreign investment in the Southeast Asian country, a top official in neighboring Australia said Sunday.

Earlier this month, Indonesia's environment ministry said it was suing a subsidiary of Denver-based Newmont Mining Corp., seeking millions of dollars (euros) in compensation from the company for allegedly polluting a bay off Sulawesi Island with arsenic.

Five company executives - an American, an Australian and three Indonesians -- are also facing criminal charges related to the case, after Indonesia's Supreme Court this month gave the green light for the men to face trial.

The men are accused of corporate crimes in connection with the alleged pollution. If found guilty, they could face up to 15 years in jail.

Australia's Attorney-General Philip Ruddock said he had raised concerns about the lawsuit and criminal charges with five top-level Indonesian government ministers who made an official visit to Canberra earlier this month.

"What we're concerned about -- and I think Indonesia understands this well -- is that if you're going to have investment from abroad in important projects that are going to help with the development of Indonesia, you need to have it occurring in an environment which is conducive to investment," Ruddock told the Nine television network on Sunday.

He did not comment further, but added that businesses wanted certainty in their investments and transparent laws.

Jakarta's determination to press charges against Newmont has cheered green activists, who have long complained that foreign mining operations in Indonesia skirt environmental laws. But the issue risks spooking investors, who complain that Indonesia's legal system is inefficient and corrupt.

Last year, tests on the bay's water produced conflicting results.

The World Health Organization and an initial Ministry of Environment report found the water unpolluted. But a subsequent ministry study found 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, 2,090 kilometers (1,300 miles) northeast of the capital, Jakarta, after extracting all the gold it could, but kept processing ore there until Aug. 31, when the mine was permanently shut.

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