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INDONESIA: American Mining Company Denies Polluting Indonesian Bay

by Jane PerlezThe New York Times
August 5th, 2005

In a muggy auditorium secured by several hundred police officers, the government on Friday brought criminal charges of polluting against the American mining giant Newmont and its head of operations here.

The president of Newmont Mining Corporation in Indonesia, Richard B. Ness, perched on a rickety office chair before a panel of five judges as prosecutors read a 72-page indictment. It alleged that the company had put toxic waste into the sea near its gold mine at Buyat Bay, off the central island of Sulawesi.

The indictment charged 125 instances over the eight-year life of the mine in which the waste had exceeded government limits for heavy metals, including arsenic and mercury. It said the company did not have the proper license for the disposal.

After the reading of the indictment, which took more than two hours, Mr. Ness, 55, told the judges that he was not clear about what crime he and his company had been accused of. ''We never received any notification that we violated the law,'' Mr. Ness said.

''There is no pollution,'' he added. ''I don't know why I am sitting here.''

A team of 11 lawyers sat at the defense table. After the hearing, the lead lawyer, Luhut M.P. Pangaribuan, said the matter did not belong in criminal court.

The trial, an unusual case of an American corporate giant facing criminal charges in a developing country, followed complaints by villagers at Buyat Bay last year of tumors, skin rashes and dizziness, which they blamed on the company.

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

In this provincial city where Newmont has provided employment and tax revenue, the case has engendered strong feelings for and against the company.

Local officials say they are in favor of the corporation, and appear uncomfortable that the national government is bringing the criminal case in their jurisdiction. Some government officials in the capital, Jakarta, have questioned whether the case will be given a fair hearing in such an atmosphere. The judges have set only one hearing per week.

To accommodate crowds, the proceedings were moved from Manado's cramped courthouse to an auditorium. Mr. Ness's Indonesian wife, Nova, sat in the auditorium, along with company employees. Two diplomats from the American Embassy in Jakarta were also present.

For foreign investors, the case has raised fresh concerns about Indonesia's legal system and its history of corruption. ''This appears to be another attempt to use the law to force further payment from a foreign investor,'' said Peter Fanning, chairman of the International Business Chamber, an association of foreign business groups in Indonesia.

But environmental groups see the trial as a first step away from lax regulatory enforcement. ''For 30 years giant mining companies have operated in Indonesia with impunity, despite shocking environmental practices,'' said Raja Siregar, the spokesman for the Indonesian Forum for the Environment.

One of the main contentions in the indictment involved how Newmont disposed of its mine waste, known as tailings, into the equatorial waters about half a mile offshore at a depth of 270 feet.

The government charged that the waste had contaminated the bay because it was put into a ''mixed layer'' of mostly warm water instead of cold, deeper water where the tailings would remain stable. At the lesser depth, the tailings were churned by the ''wave action, currents and tides'' so that they spread ''vertically and horizontally,'' the indictment said, allowing heavy metals to dissolve and enter the food chain.

Newmont has said that the tailings disposal was done safely and worked as planned.

The government also said that the company knew it had been given a permit for only six months in 2000 on the condition that it complete an environmental risk assessment on the waste disposal for the Ministry of Environment. The risk assessment was never completed to the government's satisfaction and the full permit was never granted, the indictment said.

The company says it was not informed that it did not have the required permit from the ministry.

Concerning the 125 times that the company is alleged to have exceeded the limits on heavy metals in the waste, Mr. Ness said a daily calculation had been used in the indictment, instead of the monthly standard called for in the regulations. He said records his company submitted to the government showed that Newmont exceeded the monthly limit, slightly, only once.

Evelyn Rusli contributed reporting for this article.





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