Jakarta says no deal for Newmont in pollution case

Jakarta says no deal for Newmont in pollution case

08 Dec 2004

By Karima Anjani, Reuters

Jakarta - Indonesia will not bargain with U.S.-based Newmont Mining Corp over a controversial pollution case and the world's largest gold miner will have to defend itself in court, the environment minister said on Wednesday.

Rachmat Witoelar, speaking just days after Newmont chief executive Wayne Murdy made a high-profile visit to Indonesia, said indictments against six executives and a local unit of Newmont could be filed with a court by early January.

Prosecutors have said they would file charges over allegations that waste from the unit polluted Buyat Bay in eastern Indonesia, contaminating the food chain and making villagers ill. Newmont has repeatedly denied the allegations.

"Newmont's chief officially met our government, (but) there will be no bargaining. They ... should be brought to court," Witoelar told a news conference.

"Officially, the government will process this in accordance with the law because they have not admitted there was pollution. Moreover, they offered a peaceful way but I did not allow that because if we took a peaceful way it means they are not guilty over what happened in Buyat Bay."

Witoelar gave no details on what the peaceful way was.

Asked to comment on what the minister might have meant, Robert Gallagher, Newmont's vice president for Indonesian operations, said the company had suggested there be an analysis of all the data collected over the case in an open scientific forum. Nothing came of that suggestion, Gallagher said.

"A lengthy drawn-out process will not resolve the issue in a speedy manner, which is to everybody's advantage, the government's, Newmont and the people of Buyat Bay," he said.

A government-commissioned probe concluded last month that sediment in Buyat Bay in North Sulawesi province, near a gold mine run by PT Newmont Minahasa Raya, contained significant levels of arsenic and mercury.

Newmont denies its mine contributed to pollution in the bay, 2,200 km (1,400 miles) northeast of Jakarta.

Newmont has said it was vindicated by two earlier studies -- one by the Indonesian government and another by the World Health Organisation -- which concluded Buyat Bay was not polluted.

On a visit to Indonesia last week, Newmont chief executive Murdy said his top priority was to put a stop to criminal charges against his company and its executives in Indonesia.

The six executives expected to be tried in North Sulawesi include three Indonesians, two Americans and an Australian.

Witoelar had earlier met President Susilo Bambang Yudhoyono, who said that while the case had to be pursued objectively, environmental laws needed to be implemented.

The case is being closely watched by foreign miners, alarmed over the difficulty of doing business in Indonesia's outlying regions. Investment in the sector has slumped over vague regulations, illegal mining and tough environmental rules.

N.E. Worotikan, chief prosecutor in North Sulawesi province, said by telephone his office was still preparing the indictments and needed a final dossier from police.

Asked if the trial could start in January, Worotikan said: "It's possible. We'll see." In Indonesia, the lodging of an indictment with a court amounts to the filing of formal charges.

Charges of breaching environmental rules cited by prosecutors carry jail terms of up to 10 years.

The Sulawesi mine was closed in August due to depleted reserves and the company had been carrying out reclamation work. The accusations relate to when the mine was operational. (Additional reporting by Muklis Ali and Tomi Soetjipto)