WALHI welcomes strong criminal indictment of Newmont

WALHI welcomes strong criminal indictment of Newmont

Indonesian Forum for Environment (WALHI) Media Release

5 Aug 2005

Jakarta (Indonesia), Aug 5 2005 -- The Indonesian Forum for Environment (WALHI), Indonesia's largest grassroots based environment organisation today welcomed the indictment prepared by the Public Prosecutors Office. The indictment names two accused in the Buyat Bay pollution case: PT Newmont Minahasa Raya; and President Director of PT Newmont Minahasa Raya Director Richard Bruce Ness personally. The indictment was read today in Manado District Court, North Sulawesi province.

P Raja Siregar, spokesperson for WALHI said: "For 30 years giant mining companies have operated in Indonesia with impunity despite shocking environmental practices. They have taken advantage of a failure in law enforcement by the government."

"The evidence shows that from when Newmont began tailings disposal into Buyat Bay in 1997, until the mine closed in 2004, Newmont breached not just international standards, but specific Indonesian laws. This prosecution will succeed if the trial is conducted fairly, and all evidence is submitted, inculding for example the government-convened Joint Technical Team report."

"This sends a clear message to investors. If mining companies run their businesses properly, they won't face legal action. But if their operations adversely impact the environment, they will be sued: by the community through class actions, by NGOs in the public interest and by the government to enforce the law", concluded Siregar. [ends]

Contact for Comment:
P. Raja Siregar, WALHI +62 8111 53349

For technical briefing:
Igor O'Neill, WALHI +62 812 861 2286

Please see attached documents:
• An English language summary of the Criminal Indictment read today in Manado supreme court; and
• background information showing that Newmont's defence, which refers to the CSIRO and WHO reports, is on shaky ground
• The key conclusions of the government-convened Joint Technical Team report.

Media Briefing 5 Aug 2005
Indonesian Forum for Environment (WALHI)

According to the Criminal Indictment of Newmont / Ness :

• The Accused: The indictment from the Public Prosecutors Office names two accused: (1) PT Newmont Minahasa Raya; (2) Richard Bruce Ness personally. According to the indictment, Ness is indicted because:
o as President Director of PT Newmont Minahasa Raya, Richard Ness had the responsibility to supervise and direct staff below him so that they carried out their duties according to requirements set by laws and regulations which apply in Indonesia.
o as President Director of PT Newmont Minahasa Raya, Richard Ness did not in fact take steps to prevent numerous (listed) breaches of applicable water quality limits.
o Richard Ness did not take concerted steps so that PT Newmont Minahasa Raya could gain a toxic waste disposal permit, even although he knew PT NMR did not hold a license to dump tailings into the sea; but instead he continued to allow the tailings dumping.

• The accused broke the law through deliberate action by causing pollution and/or environmental damage including a decline in sea water quality:
The indictment states that the accused disposed of tailings into the sea, not below the Thermocline layer but instead into the mixed layer, so that:
o The liquid portion of the tailings were immediately mixed by wave action, currents and tides so that the heavy metals contained in the tailings liquor were spread both vertically and horizontally;
o The solid portion of the tailings were also churned by wave action, currents and tides so that the heavy metals contained in the solids so agitated were also able to dissolve and thus were likewise spread around;

• Newmont disposed of Dangerous and Toxic Waste into the sea ("B3 waste") without a permit from 2001 to 2004:
Newmont's mine is deemed to produce Dangerous and Toxic Waste ("B3 waste"), in part because chemicals used by the accused include Cyanide (CN), and the waste produced contains Mercury (Hg) and Arsenic (As); Meanwhile Government Regulation Controlling Pollution or Damage to the Sea states that disposal of dangerous or toxic (B3) waste requires a special permit from the Minister. A letter from Environment Minister Sonny Keraf on 11 Jan 2001 required Newmont to submit a valid Ecological Risk Assessment (ERA) for the tailings disposal into Buyat Bay in order to qualify for a permit. Newmont did submit an ERA but it was deemed unsatisfactory due to sub-standard study protocols, data quantity and quality and a lack of expert and public consultation. This failure to fulfill the requirement of a valid ERA meant that the Environment Minister acting as head of the Environment Protection Agency did not issue a permit for ocean disposal of tailings, but that the accused, Newmont, continued to conduct the disposal after 2001 until 2004 without holding a permit.

• Newmont's tailings detoxification was unreliable and breached specific emission and water quality standards on 125 occasions:
The indictment includes a list almost 4 pages long of 125 occasions between 1997 and 2004 when Newmont's tailings breached Indonesian emissions and water quality standards for:
o Arsenic (As); eg. August 1999: 2.42mg/l, approx 5 times over limit of 0.5mg/l
o Cyanide (CN); eg. May 1998: 1.53mg/l, approx 3 times over limit of 0.5mg/l
o Mercury (Hg); eg. August 2000: 132.8µg/l, approx 16 times over limit of 8µg/l
o Iron (Fe); eg. July 2001: 101.8mg/l, approx 33 times over limit of 3.0mg/l
o Copper (Cu); eg. Jan 2004: 2.42mg/l, approx 2.5 times over limit of 1.0mg/l

• Sampling by the Police Forensic Laboratory found Buyat River water and Buyat Bay seawater contaminated:
Samples of seawater from Buyat Bay exceed the quality limits set out in Environment Minister Regulation no. 51 2004 regarding Seawater Quality for Marine Biota. Sampling by the Police Forensic Laboratory also indicated sludge from the accused's sediment pond has reduced the water quality of Buyat River

• Sampling by the Police Forensic Laboratory found Buyat Residents and Buyat Bay marine biota contaminated with metals Mercury (Hg) and Arsenic (As);
And that the environmental condition meant the Buyat area was no longer an adequate place to reside, so that Buyat Pante village residents were relocated in late 2004.

The specific Laws and Regulations relied upon in the indictment:

• Failing to undertake management of the wastes of its business or activities as required in order to avoid environmental damage or pollution as set out in clause 21(1) of the Industrial Law no.5 1994.

• Breaching water quality limits set by the 1995 Environmental Ministerial Regulations (Kep-51/menlh/10/1995) attachment C

• Contravening Environment Law no.23 (1997):
o clause 14 (1) which states:
"To ensure the protection of environmental functions, all businesses or activities are prohibited to breach quality standards and environmental impact standards";
o and clause 16 (1) which states:
"persons responsible for businesses or activities are required to undertake management of the waste of that business or activity"
o The acts (pollution and environmental damage) of the accused are classed as a crime according to clauses 41(1), 45, 46(1) and 47.

• Contravening Government Regulation Controlling Pollution or Damage to the Sea (no. 19 of 1999), clause 18.

• Breaching water quality standards set out in the 2000 Environmental Protection Agency Regulations (b1456/bapedal/07/2000)

• Police Forensic testing showed Buyat Bay waters exceeded standards in Environment Minister Regulation no. 51 2004 regarding Seawater Quality for Marine Biota.

Newmont criminal case defence on shaky ground:
CSIRO, WHO Buyat reports do not exonerate Newmont

Indonesian Forum for Environment (WALHI) Media Briefing

5 Aug 2005

Jakarta: Scientific and medical experts in Indonesia, Australia and the US have debunked Newmont's media claims that it's mine waste dumping operation received the all-clear from studies by the World Health Organisation/ Minamata Institute and Australian research body CSIRO. Meanwhile, the much more in-depth Official Joint Technical Team concluded Buyat Bay is Polluted and a risk to the community:

(1) CSIRO study shows Buyat Bay sediment contaminated and releasing heavy metals
"CSIRO's data makes it clear that the millions of tons of Newmont's mine tailings in Buyat Bay are a continuous source of toxic metals," said Dr Alan Tingay, a Environmental Scientist with many years experience in mining consulting, speaking in late 2004.
Speaking from the Australian mining centre of Perth, Dr Tingay continued; "Whether they have been a source of health effects over the many years of tailings dumping remains unclear; however, Newmont now needs to determine how they are going to stop the release of these toxic substances into the Bay that is the basis of these people's livelihoods." For further details, see attached Backgrounder (1) scientific critique of the CSIRO report.
(2) WHO study limited to Minamata disease question
The World Health Organisation in Indonesia together with Japanese Institute for Minamata Disease conducted an investigation published on 8 September. Newmont pointed to the WHO report's findings as proof that Buyat Bay is not polluted. Staff of the World Health Organisation have however stated that the WHO investigation had the specific objective to see whether people were suffering from Minamata Disease as was initially reported in some Indonesian media, and should by no means be taken as an in-depth study into general environmental or health conditions.
"As I myself have personally observed from recent visits to Buyat Bay, Newmont has jumped the gun in proclaiming its innocence," wrote David Silver, M.D., Assistant clinical professor at the Department of Preventive Medicine and Biometrics, University of Colorado after a recent visit to Buyat Bay and the mine area in 2004.
(3) Official Joint Technical Team concluded Buyat Bay is Polluted and a risk to the community
The Technical Team of the Government-convened Joint Investigation on Buyat Bay is the official, multi stakeholder team formed in early August 2004 as an Indonesian government initiative to tackle the issue of the health problems allegedly due to Newmont's pollution of the bay. The team collected no less than 200 samples of a greater variety than any other studies - and examined and discussed them thoroughly involving all members of the team. The team concluded:

· Buyat Bay seabed is polluted with arsenic and mercury.
· Arsenic and mercury found in Buyat Bay is not natural.
· Newmont dumping breached toxic waste law.
· Arsenic and mercury in fish poses unacceptable risk for Buyat Bay community.
· Mercury is accumulating in seabed creatures of Buyat and Ratatotok Bays.
· Biodiversity in Buyat Bay hit by arsenic pollution.
· No protective thermocline despite Newmont claims.
· Buyat Bay human health hazard requires fish intake reduction and possibly relocation of residents.
· Buyat Bay human health hazard requires arsenic poisoning investigation and up to 30 years monitoring by Newmont.
· Legal action should be taken over breaches of environmental law and ocean dumping of mine waste should not be permitted in future.

P. Raja Siregar of WALHI said regarding the Joint Technical Team report:

"It is by far the most comprehensive and thorough study ever done on the case. It covers all physical, chemical, and biological aspects as well as what those findings means in relation to the environmental quality of the bay and its potential impacts on marine life and human beings. This is unlike other previous studies which have only gone as far as looking into the condition of the waters (physical and chemical aspects). The results represent the actual condition of the bay and people living around it as well as its source of pollution."

See attached Backgrounder (2) for details.

(1) For comment on the CSIRO report, contact:
· Dr. Alan Tingay, Environmental Scientist / mining consultant (Perth, Australia): ph +61 8 9299 6113
· Dr Gavin Mudd, Lecturer in Environmental Engineering at Monash University, (Melbourne, Australia): ph + 61 41911 7494.
(2) The WHO/Minamata team included Jan A. Speets (Advisor Environmental Health) and other staff from WHO Jakarta office, phone +62 21 520 4349.
(3) For comment on the Government-convened Joint Investigative Team, contact:
· P. Raja Siregar, WALHI-Friends of the Earth Indonesia: ph +62 8111 53349
· Trouble Getting Through? Contact WALHI:
Igor O'Neill on +62 812 861 2286
Estee on +62 811 895 329

Backgrounder

(1)Critique of the 'Buyat Bay' CSIRO Environmental Monitoring Study Commissioned by PT Newmont Minahasa Raya (2004)
Mineral Policy Institute, Australia (mpi@mpi.org.au)

31 October 2004

1. CSIRO results indicate mine pollution at toxic levels

1.1 Toxic metals Arsenic and Antimony in Buyat Bay sediment exceed international guidelines.

Australian, US, and Canadian marine environment quality guidelines indicate thresholds where ecological impacts can be expected from heavy metal pollution in sediment. The Australia/NZ guidelines for arsenic in sediment range from 20 (low) - 70 ppm (high range). Similarly, US and Canadian guidelines identify a Probable Effects Level of 42 ppm arsenic in marine sediment. The background (natural) levels of arsenic measured by CSIRO at control sites unaffected by mine waste near Buyat Bay are at or below this level of 42 ppm.

Meanwhile, the CSIRO sampling of Buyat Bay found extremely high levels of 678 ppm, 491 ppm and 466 ppm arsenic in the area most affected by mine tailings, and the CSIRO report notes that Newmont's own monitoring has discovered levels as high as 1190 ppm arsenic. CSIRO findings show the seabed at Buyat Bay is contaminated by tailings with arsenic at ten to twenty times higher than the Australia/NZ guidelines and the US/Canadian Probable (toxic) Effects Level.

Similar results were found for Antimony in Buyat Bay sediment, another toxic heavy metal contained in Newmont's mine tailings. The CSIRO found Antimony at 255 ppm, 208 ppm and 188 ppm in the tailings-affected area in Buyat Bay, compared with natural levels at nearby control sites of 20 ppm. CSIRO mentions that Newmont has found levels as high as 1330 ppm and 1160 ppm Antimony. CSIRO findings show that the seabed of Buyat Bay is contaminated by Antimony in Newmont's tailings, at a level which exceeds guidelines from US/Canada (9 ppm) and Australia/NZ (25 ppm) by approximately ten times.

1.2 Toxic metals in tailings are being released to the environment.

CSIRO collected water samples and compared the levels of toxic metals at several depths above the Buyat Bay sea floor. For example, at Buyat Bay sample site B, the CSIRO found that arsenic in seawater 9 meters above the bottom is two-and-a-half times higher than concentrations at a depth 14 meters higher, and Mercury in seawater 9 meters above the bottom is more than 10 times higher than concentrations at a depth 14 meters higher.

There is a striking correlation - the closer samples are taken to the tailings on the sea floor, the higher the level of toxic metals such as arsenic. This is an important finding because Newmont has asserted that the heavy metals in the tailings are not significantly soluble and do not act as a source of metals contamination. CSIRO's data indicates that the millions of tons of Newmont's mine tailings in Buyat Bay are in fact continuously releasing metals into Buyat Bay, a situation which is acknowledged in the first paragraph, page 20 of the CSIRO report.

2. CSIRO study seriously flawed.

The CSIRO laboratory processes are state-of-the-art, indeed much of the document is taken up with description of the sampling methods and analytical procedures. However, the same thoroughness and attention to accuracy was unfortunately not exercised with sampling design, and with the discussion and all-important conclusions and executive summary.
2.1 Inadequacies in the CSIRO study.

· The half-page introduction is no adequate background explanation of the ore body, mining, gold extraction and waste processing. The CSIRO report actually begins with the misleading statement that "mining ceased in October 2001". Excavation ended on that date, but what most people regard as mining activity, i.e. the processing of ore and disposal of mine wastes continued three more years until end of August 2004.

· There is no quantification of the rate of tailings disposal (over 2,000 tons / day) nor of the total volume of waste disposed of into Buyat Bay (in the millions of cubic meters). These factors which dictate the total supply and future fate of heavy metals in tailings in Buyat Bay have crucial importance for proper sampling design. Contamination of the food web by heavy metals such as arsenic is a gradual and steadily ongoing process, as long as the heavy metal contaminated sediment remains in Buyat Bay. The report does not adequately consider the quantity and future fate of the heavy metals in sediment over the coming years.

· There is no clear basis for selecting a limited range of contaminants to analyse. The CSIRO only considered 5 metals, plus arsenic and cyanide. Ideally the selection of substances for analysis should be based on the composition of the ore body, and chemical reagents used in tailings. In the absence of such information, it would be appropriate to include cadmium, chromium, lead, nickel and zinc.

· There is no discussion of the pressing issues in the report apart from a mention of 'community concerns about contamination of coastal waters'. The study designer needs to ask: what are the community concerns - health, water pollution, decline in fishery, fish kills or diseases, etc? It is usual to identify these concerns in order to provide a basis for the sampling design.

· The sampling did not examine a representative range of marine life. The sampling design should take account of the ecology of the species involved (especially the likelihood of long term residence in Buyat Bay, feeding behaviour and food items), consumption rates and other factors. Appropriate target species should be resident in Buyat Bay rather than passing through. The location where the fish were caught also should be documented, and better still controlled so that they definitely come from the impact area. Quite a few of the fish were bought in the local markets which provides no certainty that the fish came from the bay. Many marine species of key ecological importance were not sampled, such as ecologically crucial plankton, and non-fish marine food species such as filter-feeding mussels, prawns, crabs and so on. The key "not polluted" conclusion on page 43 therefore is not proven.

· The fish, sediment and water samples collected over such a limited period of time, only 2 days, do not allow for seasonal and weather variability both on land (fluctuation in river flows and groundwater) and at sea (currents, tides, wave action) which affect such phenomena as sediment transport, disturbance, and dissolved metals levels in groundwater. Such limited sampling is inadequate to draw general conclusions.

· The study uses only a few seawater sampling locations in Buyat Bay and the sampling at each site occurred over a limited time. As a result the design does not adequately allow for variability. For example, in the tailings disposal area there are only 3 samples from the top, middle and bottom of the water column at 3 sites (9 in total) all of which were collected over a few hours. Multiple samples should have been collected at each depth, at regular intervals over a reasonable period, and at a number of sites. The CSIRO samples are insufficient for general conclusions to be drawn from the results.

· Similarly, the number of sediment samples at each location is low: 3 for the tailings area, and only 1 at each of the rivers , the lake and the reference sites. No allowance for spatial variation. This may be why much higher levels of arsenic, mercury, antimony and zinc were recorded in the PT NMR studies - there were insufficient samples in the CSIRO study to account for the variation.

2.2 Inadequate and misleading discussion and conclusions

Language used in the executive summary glosses over negative findings. Executive Summary point 5 reads: "significant enrichment of arsenic and antimony in the area affected by tailings deposition in Buyat Bay". This is misleadingly innocuous language which fails to mention the order of magnitude of metal pollution above international guidelines.

The CSIRO study is not truly "independent". The existence of the CSIRO study first came to public attention following a report about pollution in Buyat Bay published in the New York Times. Newmont referred to the CSIRO testing in a media release the following day entitled "Newmont Responds to New York Times" (Sept 8, 2004). The following day, non-government organisations contacted the CSIRO and requested a copy of the report. One week later, the CSIRO explained that the report was not yet completed, and that Newmont had quoted partial results relating to seawater samples only. The CSIRO further indicated that the scope and results of the CSIRO study could only be released with the permission of Newmont's lawyers. The report was finally officially sent to a US non-government organisation by Newmont on the 28th of October 2004.

The senior principal research scientist involved in the CSIRO study also has a history as a consultant to the Porgera gold mine in Papua New Guinea, which together with the Ok Tedi mine, is one of only a handful of mines in the world which practices the destructive practise of disposing of mine waste directly into a river system. Newmont's quoting of results prior to report completion, the lack of transparency by researchers, and the fee-for-consultancy relationship between CSIRO researchers and mining companies disposing of mine waste directly into rivers and oceans means the report can be seen as far from "independent". [end]

Backgrounder (2)
Buyat Bay is Polluted and a risk to the community: Highlights of the joint investigation of Buyat Bay

Compiled by WALHI-Friends of the Earth Indonesia, Indonesian Mining Advocacy Network (JATAM), and Indonesian Center for Environmental Law (ICEL) based on Joint Investigation Technical Team report, 9 November 2004

Top Ten Key Findings:

1. Buyat Bay seabed is polluted with arsenic and mercury.
2. Arsenic and mercury found in Buyat Bay is not natural.
3. Newmont dumping breached toxic waste law.
4. Arsenic and mercury in fish poses unacceptable risk for Buyat Bay community.
5. Mercury is accumulating in seabed creatures of Buyat and Ratatotok Bays.
6. Biodiversity in Buyat Bay hit by arsenic pollution.
7. No protective thermocline despite Newmont claims.
8. Buyat Bay human health hazard requires fish intake reduction and possibly relocation of residents.
9. Buyat Bay human health hazard requires arsenic poisoning investigation and up to 30 years monitoring by Newmont.
10. Legal action should be taken over breaches of environmental law and ocean dumping of mine waste should not be permitted in future.

The study by the Buyat Bay Joint Investigation Team is by far the most comprehensive and thorough study ever done on the case. It covers physical, chemical, and biological aspects as well as findings in relation to the environmental quality of the bay and its potential impacts on marine life and human beings. This is unlike previous studies which have only gone as far as looking into water conditions but not properly examined the seabed, resident organisms, etc. The results represent the actual condition of the bay and people living around it as well as the source of pollution. Several of the Joint Study conclusions show that mine waste (tailings) dumped by Newmont in Buyat Bay poses risks to local people. Those points are:

1. Buyat Bay is polluted with arsenic and mercury according to ASEAN Marine guidelines:

Arsenic pollution in the Buyat Bay seabed (sediment) is as high as 666 mg/kg. Buyat Bay is polluted according to the ASEAN Marine Water Quality Criteria for arsenic which ranges from 50 mg/kg and higher for polluted marine sediment. [Walhi notes that Buyat Bay is also polluted according to US, Canadian, Australian and NZ guidelines which share an ecological Probable Effects Level of 42 mg/kg arsenic in marine sediment].

Mercury pollution in the Buyat Bay seabed (sediment) averages over 1000 µg/kg. Buyat Bay is therefore polluted according to the ASEAN Marine Water Quality Criteria for mercury which ranges from 400 µg/kg and higher. [Walhi notes that Buyat Bay is also polluted with mercury according to US, Canadian, Australian and NZ guidelines which share an ecological Probable Effects Level of 696 µg/kg mercury in marine sediment].

2. Arsenic and mercury in Buyat Bay is not natural:

The Technical Team results show that levels of total arsenic and mercury on the seabed of Buyat Bay are extremely high compared with natural control sites (i.e. sites not affected by mine waste dumping) and also compared to levels recorded in Buyat Bay before Newmont's mine began. Arsenic levels in Buyat Bay sediment are around 100 times higher than control sites. High levels of arsenic and mercury on the seafloor in the tailings dumping location in Buyat Bay have been previously mentioned in the Indonesian Environment Ministry Study (2003), also in a study by WALHI and Evan Edinger (2004), as well as Newmont's monitoring. From a comparison with pre-mine conditions and control sites it is clear that Newmont's mine waste dumping is the source of arsenic and mercury pollution in Buyat Bay.

3. Newmont dumping breached toxic waste law:

In legal terms, Newmont's dumping of mine waste into the ocean has breached the Government Regulation on Dangerous and Toxic Waste Management No. 19 year 1994, and Government Regulations No. 19 year 1999 and No. 85 year 1999.

4. Arsenic and mercury in fish poses unacceptable risk for Buyat Bay fishing community:

The Technical Team calculated the Acceptable Daily Intake (ADI) of arsenic in Buyat Bay fish and concluded that Buyat Bay community members' consumption of fish from the Bay exposes them to an unacceptably dangerous level of inorganic arsenic. The Technical Team also calculated the Tolerable Daily Intake (TDI) of mercury for Buyat Bay community members and concluded that consuming fish from Buyat Bay is risky for adults and exceeds the tolerable level for children. Due to the fact that both arsenic and mercury can be found in fish, then the Buyat Bay community are at risk of being contaminated by mercury and arsenic at the same time.

Calculations were based on the International Center for Environmental and Industrial Toxicology's ADI and TDI methodology. This involved analysing fish samples from Buyat Bay and observations of Buyat Bay people's actual fish consumption level of 0.45 kg/day. However if a more conservative value is used for fish consumption, based not on a fishing village population, but the general population's estimated consumption of 50 kg/capita/year, then the level of mercury in fish consumption for children and adults will be within the safe level. [Note: TDI and ADI describe the same concept, but TDI is designed for contaminants such as mercury, while ADI is for contaminants such as arsenic].

5. Mercury is accumulating in seabed creatures of Buyat Bay

Creatures living on the seabed (benthos) in Buyat Bay are accumulating mercury from sediment contaminated with Newmont's mine waste. Levels of mercury in these creatures average 1889 µg/kg which is approximately ten times higher than creatures collected from uncontaminated control points.

6. Biodiversity in Buyat Bay hit by arsenic pollution:

The Diversity Index for seabed creatures (benthos) and phytoplankton at the tailings dumping location in Buyat Bay shows there is heavy pollution due to arsenic. These benthos and plankton are a crucial part of the human food chain.

Explanation: The calculation of diversity index for sea life - plankton and benthos (seabed creatures such as crabs, mussels, worms etc) – was used to acquire a description of the health condition of Buyat Bay. From the diversity index for phytoplankton organisms in the tailings dumping point in Buyat Bay, it can be concluded that the Buyat Bay ecosystem is disturbed. The Joint Team results match the findings in the 2002 WALHI study and the 2004 study by the Indonesian Marine and Fisheries Department. Meanwhile, the plankton and benthos diversity index in Ratatotok Bay is within the criteria of light to medium pollution.

There is a consistent connection between the poor diversity index for benthos and the high level of arsenic found in Buyat Bay seabed, as well as between the high diversity index for benthos and the low arsenic pollution level found in Ratatotok Bay. The same pattern was found between the plankton diversity index and the arsenic levels in the sediment of both bays.

7. No protective thermocline despite Newmont claims:

Contrary to claims in Newmont's pre-mine Environmental Impact Assessment, the Joint Team there is no thermocline ocean layer. This is an important finding because in Newmont's Environmental Impact Assessment (1994), it was stated a thermocline layer at 50 – 70 meters depth would function as a barrier to keep tailings from mixing and spreading in Buyat Bay. The conclusion that there is no protective thermocline is in accordance with previous studies – an Independent team study (1999), Tailings Feasibility Study (2000), P20 LIPI (2000), and the Indonesian Environment Ministry Study (2003).

Selected Recommendations of the Technical Team:

8. Buyat Bay human health hazard requires fish intake reduction and possibly relocation of residents:

From the calculation of Acceptable and Tolerable Daily Intake (ADI and TDI) of heavy metals, the human health Hazard Index (HI) was discovered to be higher than a value of 1.0. This means Buyat Bay is a risk to human health. Therefore, it is recommended that the consumption of fish from Buyat Bay be reduced, and the possibility be considered of relocating the inhabitants of Buyat Bay to a different location.

9. Buyat Bay human health hazard requires arsenic poisoning investigation and up to 30 years monitoring

The Technical Team noted that the hazard index data shows an arsenic hazard in Buyat Bay, and further noted that initial observations in the field suggest locals who have fallen ill display symptoms which may match the literature for bodily arsenic accumulation. The Team therefore recommended that follow-up research be conducted by the Health Ministry to look into arsenic poisoning in the residents of Buyat complaining of symptoms such as skin disease, lumps, breathing difficulties and dizziness. It is recommended that samples of urine and nail clippings be taken for further analysis.

Since parts of Buyat Bay are categorized as contaminated, and looking also at the biodiversity indexes as well fish data, the study found that the disposal of Newmont's mine waste, which has not occurred beneath a thermocline, has had an impact on sealife in Buyat Bay. The Technical Team thus recommended that Newmont and the government monitor the situation over the next 30 years or until Buyat Bay recovers naturally.

10. Legal action should be taken over breaches of environmental law and ocean dumping of mine waste should not be permitted in future.

Legal action should be taken over breaches of environmental law by Newmont and unlicensed miners, and in the light of the Buyat Bay experience, ocean dumping of mine waste should not be permitted in future.

Government Must Review Newmont’s STD Permit - From the Incident of Pipeline Leakage

Press Release - Mining Advocacy Network (JATAM)

26 September 2005

Jakarta. On September 11 2005 the submarine tailings disposal pipeline operated PT Newmont Nusa Tenggara, a local subsidiary of Newmont Mining Corporation, was leaked at a depth of 75 meters below sea water of Senunu bay in Sumbawa island. As the aftermath of the incident, thousands tones of tailing mud poured into the waters and polluted local environment. The pollution has been indicated by the decrease in local fishingfolks’ catch.

The incident was just recognized by PT Newmont Nusa Tenggara on 10.00 am before it shut down the factory operation 110 minutes then. As the result, more 9 tones of tailing containing hazardous waste spilled the waters. It is ironic that both the government and PT NNT do not disclose the incident to the local society around the bay as well as its risk to them.

In the short history of mining operation by PT NNT pipe leakages have been a frequent incident took place on its waste disposal system. The previous incidents of pipeline broke down were took place in October and November 2000, followed then by January 2001 leakage. From those three incidents the company should have predicted the leakage potential so that it should have prepare a mitigation measures. However, letting the leakage to happen over 110 minutes just simply indicated the company’s carelessly attitude.

This incident serves as a proof that STD isn’t a safe waste disposal system. However, up to now Newmont is still allowed by the government to employ such system although it once, via minister of environment, has declared that Buyat bay in the northern Sulawesi is polluted by Newmont Minahasa Raya mining waste. Lately, 67 families of Buyat bay left the coastal territory for drastically dropping economic and illnesses they’re suffering from; the bay need to be cleaned up from hazardous waste componenents such as heavy metals originated from tailing.

The minister of environment’s decision to approve STD application extension by Newmont Batuhijau without any preliminary scientific evaluation is very ironic and violates the precautionary principal while in fact the amount of waste to be dumped is 60 times bigger than that polluted the Buyat bay. Taking into consideration that PT NNT has actually fails to meet its security standard of STD application, the government must review the permit it has granted to the company. It’s strongly recommended that the government of Indonesia immediately revoke the STD permit of Newmont and to find waste dumping alternative other than STD.

JATAM condemned the local parliament and local government for taking no action regarding the incident. In contrast, on the other occassion both local government and local parliament have acted as messenger to forward Newmont’s complain about the enviromental standards it must submit with, to the Minister of Environment. JATAM sent a protest letter to the Government of Indonesia via Ministry of Environment, The House of Representatives, and local government and local parliament. It’s time for the government to take firm action against company like Newmont whose no respect to the environmental sustainability and always demands special treatment.

Media contact: Adi Widyanto (JATAM) : +62-21-7941559, cell. +62-81511655911

Indonesian Witnesses Blame Illnesses on Newmont Unit

Planet Ark (Reuters)

October 10, 2005

MANADO - Witnesses in the Indonesian trial involving a US-based Newmont Mining Corp. unit told a court on Friday they became ill after the firm began operations on northern Sulawesi island.

Newmont has said the allegations were not backed by proper medical diagnosis, and that diseases from metal contamination were different from what the villagers had.

The case relates to Newmont Minahasa Raya's tailings disposal processes, which allegedly involved dumping mercury and arsenic into Buyat Bay in the Sulawesi region, making villagers sick as a consequence.

PT Newmont Minahasa Raya president director Richard Ness, a 55-year-old American from Minnesota, could face a jail sentence of up to 10 years and be fined around $68,000 if convicted. "I never had this disease before Newmont operated in the area ... and fewer fish were caught since they operated and affected our income," said Rasyid Rachmat, 39, a local fisherman who said he developed a lump on the back of his neck.

The Newmont gold mine near Buyat Bay, 2,200 km (1,400 miles) northeast of Jakarta, opened in 1996 and closed in August 2004 due to depleted reserves.

Newmont has vigorously denied any wrongdoing and said its disposal processes were properly approved by the government. "No urine, blood or hair data (was) obtained. There is no evidence to support the allegation" the mine caused illness, Blake Rhodes, a Newmont attorney working on the case, had told reporters in Jakarta at a news conference this week.

One of the witnesses on Friday was an Indonesian doctor, who filed complaints to the police last year that the Denver-based company polluted the bay, helping bring about the launch of a criminal investigation.

However, Newmont had in turn brought a defamation case against her, which was dropped after she said her allegations were not backed up by scientific and comprehensive proof.

She told the Manado court her diagnosis was "premature".

Last December, a $543 million lawsuit by Buyat Bay villagers was dropped at a Jakarta district court on the grounds of insufficient proof that they became sick because of exposure to mine waste. A study from the World Health Organisation and Japan's Institute for Minamata Disease found mercury levels in individuals, water and fish samples near the mine were not unusual, Indonesia's health ministry has said.

However, an inter-agency report found otherwise and a police report said Newmont exceeded limits of heavy metals in the waste. Newmont's trial began in August and is expected to last into next year. More prosecution witnesses are due to be called on Oct. 14, the next session of the trial. Newmont's operations in Indonesia accounted for six percent of its global sales in 2004.

The company also operates Asia's second-largest copper mine, Batu Hijau, on eastern Sumbawa island, which produced 718 million pounds of copper and 719,000 ounces of gold last year. It has a mine life of 20 years.

First prosecution witnesses testify in pollution trial of U.S. mining firm

07 October 2005

Miedy Pakasi, AP

MANADO, Indonesia - A fisherman testified Friday that U.S.-based Newmont Mining Corp. dumped pollutants into an Indonesian bay that caused lumps on his neck and dizziness, but the defence argued that the witness was faking the illness.

Two other witnesses told the court that locals began suffering "strange diseases" after the arrival of Newmont, but that no formal link to the water pollution had been established.

The trial that opened nearly two months ago is being closely watched by business leaders, who say a guilty verdict could set back Indonesia's improving foreign investment climate, and environmentalists eager to see if the government will crack down on a multinational company.

The Denver-based company's Indonesian subsidiary and its American director Richard Ness have been charged with dumping mercury and arsenic-laced pollutants into the Buyat Bay on Sulawesi island, allegedly causing villagers to develop skin diseases and other illnesses.

Ness faces up to 10 years in prison and the company a $68,000 US fine if convicted.

"I am sure and confident that Buyat Bay is not polluted," he told reporters after the day-long hearing, which was later adjourned until next Friday. "There is still a long way to go."

Rasit Rahman, a 38-year-old fisherman who lives near the mine, was the prosecution's first witness.

"I got lumps on my neck and suffered from dizziness," he told the court, also claiming that fish stocks had been depleted in the bay since Newmont began operating there in 1996.

The company stopped mining two years ago after extracting all the gold it could. But it continued processing ore until Aug. 31, 2004, when the mine was permanently shut.

Under cross examination, the fisherman said he did not go to a local doctor for treatment, but waited until several of the villagers went to the capital, Jakarta, to get a check up in a trip widely covered by the media.

Several such trips were paid for by environmental groups seeking to bring charges against Newmont.

Rahman said he paid for the trip himself, bringing jeers from Newmont supporters in the courtroom.

Newmont's chief lawyer, Luhut Pangarribean, claimed Rahman had signed a statement stating he was never sick, and the attorney showed the court a photograph of Rahman signing the document.

The statement was taken by a local legal aid institute in the area, but Pangarribean gave no more details.

"The witness statements have no link to the charges against Newmont," he said.

Two other witnesses - Jufria, a 45-year-old mother, and Jane Pangemanan, a doctor - said local people suffered from several diseases after Newmont began mining in the area, but that no link with water pollution was established.

Pangemanan told the court that laboratory tests on four villagers who travelled to Jakarta showed their blood contained traces of heavy metals like arsenic and mercury.

"But there were no conclusions from the tests," added Pangemanan, a lecturer at a local university, who admitted signing a statement on Feb. 3 withdrawing her allegations against Newmont.

The company has argued that a police investigation was flawed and that there was no evidence of pollution or that villagers became ill.

Mining Cos In Indonesia View Newmont As Test Case

Wednesday October 12

By James Attwood, DOW JONES NEWSWIRES

SYDNEY - Despite a string of terrorist attacks against western interests in Indonesia, foreign mining operators and prospective investors in the country are more concerned about legal uncertainties than security risks, industry participants said Wednesday.

According to multinational mining companies and analysts, a criminal trial involving Newmont Mining Corp. (NEM), the world's biggest gold producer, is of greater significance to Indonesia's appeal as a mining destination than terrorism.

In the trial, which reconvenes Friday, Denver-based Newmont is charged with dumping mercury and arsenic from its Minahasa Raya mine into Buyat Bay, on the northern tip of Sulawesi, making local villagers sick.

Newmont's Indonesia country manager, Richard Ness, faces up to 10 years in jail if found guilty.

"The Newmont case will be a benchmark for current and potential future investors in the resources sector to gauge what kind of risk they're facing," said Standard & Poor's principal sovereign analyst for Indonesia, Agost Benard.

Meanwhile, Muslim fundamentalist terrorism against westerners in the country is unlikely to find its way to remote mine sites staffed mainly by locals, said analysts and miners.

"If we assume it's the same terrorists with the same aims, then I don't think mining interests will be likely targets," said Benard.

"Although conceivably, mining interests could become targets for other reasons, such as local interests who for one reason or another are against projects or try to extract some kind of rent from the operators."

Security Still A Big Risk For Mining Companies

Australia's largest independent gold producer, Newcrest Mining Ltd. (NCM.AU), has firsthand experience of Indonesian social unrest, with bloody clashes between Christians and Muslims during the construction of its mine on Halmahera Island, 3,000 kilometers east of Jakarta.

Tensions have eased since then, but according to Tony Palmer, managing director of Melbourne-based Newcrest, "security remains the greatest challenge in Indonesia. I get concerned for our people there...Who knows what could happen?"

The recent terrorist attacks and the Newmont case, however, don't necessarily make Newcrest any less likely to get involved in new projects in Indonesia, he said.

"One of the things we've done to mitigate risk is just to stay as low-profile as possible. If you go to Jakarta, you won't find a Newcrest office there, and if I go there, I go practically unannounced," Palmer said.

But S&P's Benard said the Newmont case, if perceived to be flawed, would have an impact on the country's investment risk.

Newmont's Australian managing director, Paul Dowd, blames anti-mining NGOs for funding a campaign that sparked the case. He said scientific evidence shows that tumors, skin rashes and dizziness among locals are likely the result of poor nutrition and hygiene rather than any poisoning.

No matter the outcome, Newmont is highly unlikely to vote with its feet on the issue, given its $2 billion commitment in the Batu Hijau mine on Indonesia's Sumbawa Island, analysts said.

However, the world's biggest gold miner may be less inclined to get involved in new projects in the country, especially if Ness is found guilty.

"What sort of mining company wants to put their employees at risk when the evidence is clear that there has been no breach of environmental laws?" said Haydn Dare, a partner in Freehills, a legal firm representing Newmont.

Others aren't so convinced Indonesian authorities are acting capriciously in the case.

"It's unfortunate, but I think there is more to that story than we're all hearing from Newmont," said Milan Jerkovic, chief executive of Australia's Straits Resources Ltd. (SRL.AU), which operates the Sebuku coal mine in Indonesia.

Jerkovic said terrorism and the Newmont case would have little impact on Straits' ability to raise funds for its Indonesian operations but said the company will look to build its asset base in less risky Australia before pursuing anything else in Indonesia.

Case Puts Focus On Indonesian Legislation

The legal uncertainties spurred by the Newmont case also put the spotlight on Indonesia's legislative uncertainties for foreign investors.

Jerkovic and others are looking forward to a long-awaited mining code, still under review, that would replace the current work contract system with lease status, thereby offering some tenure certainty.

The current system means some work contracts require foreigners to reduce their ownership in projects to below 50% after a certain time. Investors also complain of 'nuisance' taxes created by provincial or local authorities.

The new law, while apparently still at an early stage of the legislative process, is expected to boost the appeal of mining projects to prospective financial backers and unlock more of the country's geological wealth.

S&P's Benard said the overall operating environment in Indonesia still compares unfavorably with that of its neighbors but is slowly improving.

"Legal issues, tax uncertainties, security risks - these things don't change overnight," Benard said.

"Even if you have an administration that is serious about improving investment conditions - and the current government is - you can't expect fast change."

Continúa juicio a minera Newmont en Indonesia

20-09-2005

Terra Actualidad - EFE

El juicio por contaminación contra la multinacional minera Newmont Mining Corporation proseguirá, después de que el juez instructor del caso rechazase hoy, martes, el recurso de la compañía para que el caso fuese archivado.

'El juicio continúa', dijo el juez presidente del tribunal de Manado (Célebes), Ridwan Damanik.

La Fiscalía acusa a la filial indonesia de Newmont y a su director, el estadounidense Richard Ness, de ser responsables de la contaminación de las aguas de la bahía de Buyat, al norte de la isla de Célebes.

Ness, de 56 años, podría afrontar una pena máxima de 10 años si es declarado culpable.

Los habitantes de la bahía de Buyat interpusieron una demanda privada multimillonaria contra la multinacional y denunciaron el aumento de enfermedades cutáneas entre la población pero meses más tarde la retiraron tras indicar que no tenían pruebas suficientes.

No obstante, el Gobierno central decidió en noviembre del año pasado llevar a juicio a la minera tras el informe de un equipo de técnicos donde se demostraba que las aguas de la bahía de Buyat contienen altas concentraciones de arsénico y mercurio perjudiciales para la salud humana.

Sin embargo, varios expertos de la Asociación Minera Indonesia han defendido a Newmont y advierten que una sentencia contra ésta podría perjudicar la inversión extranjera en el país.

Ness subrayó que 'no se ha cometido ningún acto criminal' y recordó que, según otros estudios, los niveles de mercurio en las aguas de Buyat han permanecido por debajo de los límites establecidos.

Newmont, la mayor extractora de oro mundial, se ha enfrentado a demandas por contaminación en cuatro continentes.