U.S. steps up pressure on Indonesia over Newmont

U.S. steps up pressure on Indonesia over Newmont

By Muklis Ali and Jerry Norton, Reuters

September 27 2004

Jakarta - The U.S. ambassador to Indonesia called on the country's president on Monday, stepping up pressure over Jakarta's detention of employees of a U.S. mining company subsidiary on pollution accusations.

Ralph Boyce also visited the Jakarta jail where the five employees of the Newmont Mining Corp unit have been detained since last week over accusations the gold mine subsidiary polluted a bay in North Sulawesi province, making villagers ill.

"We are concerned about our people ... We are also worried about why they should be detained. We don't think necessarily that's appropriate," Boyce told reporters after meeting President Megawati Sukarnoputri.

Those detained are three Indonesians and nationals from the United States and Australia who work for PT Newmont Minahasa Raya, the operator of the now closed gold mine. None of the five, being held at police headquarters, have been charged.

Newmont has denied accusations that waste from the mine was dumped into the bay and said the detentions were unnecessary because its officials were giving police their full cooperation.

"There is no indication of when they will be released. We are still trying to get our employees out," Kasan Mulyono, spokesman for Newmont in Jakarta, said on Monday.

Boyce expressed optimism that, with the government's cooperation, a satisfactory resolution would be reached.

Asked whether companies might cancel investment plans for Indonesia over the issue, he said Indonesia offered great prospects for investors, and: "That's one of the reasons why we obviously want to work to make this issue go away."

Later he called on the prisoners.

Newmont spokesman Mulyono said the detained staff were being kept in basic cells with no air conditioning or television, sleeping on mattresses on the floor.

Police said the five needed to be detained for effective questioning and there was enough preliminary evidence to justify holding them.

No Charges

It is legal in Indonesia to hold suspects or those with possible information on a case for days or weeks before they must be formally charged or released.

Those detained include American Bill Long, the Minahasa site manager, and Australian Phil Turner, manager for production and maintenance at the Minahasa mine.

The U.S. Embassy had already criticised the detention in a statement as unnecessary and harmful to the investment climate.

Foreign direct investment in Indonesia fell 30 percent in the first eight months of 2004 compared with 2003, hurt by sporadic terrorist attacks and other violence, uncertainty over a series of national elections, a legal system criticised as corrupt and inconsistent, and bureaucratic redtape.

Denver-based Newmont, the world's largest gold miner, has strenuously denied the accusations by villagers in North Sulawesi province and said it had met government reporting requirements.

Media reports this month said a government panel reported on Aug. 31 that Newmont had illegally disposed of mine waste laced with arsenic and mercury into Buyat Bay near the mine site.

Police have said Newmont had been accused of violating environmental regulations that carry jail terms of up to 10 years for pollution. That rises to 15 years if people are proven to have died or become seriously ill as a result.

Indonesia is a major source of copper, gold, coal and tin, but investment has plummeted since the mid-1990s. (Additional reporting by Dean Yates)