US mining giant called lax in waste disposal in Indonesia

US mining giant called lax in waste disposal in Indonesia

by JANE PERLEZ, New York Times, Indonesia

3rd February 2006

A star government witness in a criminal trial against the American mining giant, Newmont, told a court today that waste from the company's mine was deposited in the sea at too shallow a depth, causing the contamination of fish.

The witness, Masnellyarti Hilman, a deputy minister of environment, said that elevated levels of arsenic in the fish and the "reduced biodiversity" in the bay near the gold mine demonstrated pollution.

The company vigorously denies the Indonesian government's accusations of pollution and contends that the waste from the mine near Buyat Bay on the island of Sulawesi, was safely disposed of through a pipe that ran about a half mile from the shore into the equatorial waters.

As soon as Ms. Hilman mentioned "pollution," the lead lawyer for the company, Palmer Situmorang, protested to the judge, who ruled the word should not be used until there was a verdict.

The president of Newmont in Indonesia, Richard B. Ness, who has been charged along with the company, said he rejected Ms. Hilman's argument on the impact of the mine waste.

"That has to be left to outside witnesses," Mr. Ness said.

The trial, a rare case of a major American corporation facing criminal charges in a developing country, pits one of Indonesia's valued foreign investors against the nation's little-tested environmental laws.

In 2004, when villagers near the mine complained of tumors, skin rashes and dizziness, for which they blamed the company, the government decided to take action.

Newmont, a Denver-based company and the world's biggest gold producer, has said the illnesses are common to poor coastal communities, and denies responsibility. Most of the villagers, citing fears for their health, moved to another area in Sulawesi last June.

By the standards of Newmont's huge gold mines in the United States and Peru, and a large copper and gold mine on the Indonesian island of Sumbawa, the mine near here was relatively small. It opened in 1996 and closed in 2004.

Ms. Hilman's testimony provoked lively exchanges between the lawyers and the chief judge, Ridwan Damanik, who tried to keep an air of calm over raised voices during a long day in a stuffy room of the dilapidated tin-roofed courthouse.

The deputy minister did not make any connection between the contaminated fish and the people's health. She said only that the villagers ate the fish. Experts have said that it would be virtually impossible to prove that the mine caused the illnesses.

The chief environmental issue in the trial involves the disposal of the waste, known as tailings, by a method called submarine trailing disposal, which is essentially banned in the United States.

In her testimony, Ms. Hilman said that Newmont's 1993 operational license for the mine called for the company to place the waste below the thermocline, a layer below which water is colder and has less oxygen.

In 1999, she said, a study by the Environment Ministry and the University of Sam Ratulangi here in Manado found that the thermocline was at 110 meters, or 120 yards. But the company, Ms. Hilman said, released the waste from the pipe at a depth of 82 meters, or 89 yards, where the waters were still warm. At that depth, the heavy metals in the tailings, like arsenic, were able to enter the food chain, she said.

Newmont has consistently argued that the arsenic remained inert and insoluble in the ocean.

Another issue in the trial is the government's accusation that the company did not have the proper permit to dispose of its waste.

Ms. Hilman, who has a degree from a prominent mining school in the UnitedStates, the Colorado School of Mines, and is known among the foreign mining companies in Indonesia for being a stickler on pollution, argued that the company had failed to obtain the right permits for toxic waste.

"You can dump waste if you follow the standards and have the permit," Ms. Hilman said.

The company was granted a temporary six-month permit in July 2000 by the environment minister at the time, Sonny Keraf, who told Newmont in a letter that a permanent permit was dependent on the company's completing an environmental risk assessment, Ms. Hilman said.

She told the court that Newmont completed the risk assessment but it was rejected by the Environment Ministry on the grounds that the methodology was faulty. An agreement was reached between the company and the ministry to take samples from the sea jointly, but that study was never completed, she said.

To make her point that Newmont did not have the required permits, Ms. Hilman read a letter dated April 17, 2001, from Mr. Ness to the ministry in which he said, "We hope we can get the permanent permit immediately."

Both sides are expected to call expert witnesses, including scientists from the United States, Canada, Japan and Australia, on the impact of the mine waste in the sea.

Mr. Damanik, the chief of the five-judge panel that presides over the once-a-week proceeding, said the trial, already into its seventh month, could run for another six months at least.