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Indonesia clears mining company in pollution trial

The Associated Press
Monday, April 23, 2007

MANADO, Indonesia: An Indonesian court on Tuesday acquitted a U.S. executive and his company, Newmont Mining Corp., of dumping dangerous levels of toxins into a bay and sickening villagers, pleasing foreign investors and angering environmentalists.

Richard Ness, 57, faced a maximum 10 years in jail and a US$60,000 (€44,000) fine.

Presiding judge Ridwan Damanik told the Manado District Court that documents and testimony presented during the 21-month criminal trial proved waste rock dumped into the water by Newmont's now-defunct mine on Sulawesi island did not exceed government standards.

"There also is not enough evidence that people suffered from health problems," he said, triggering shouts of "Hooray!" from Newmont's supporters in the packed, sweltering court. Defense lawyers and family members threw their arms around the smiling Ness, president director of Newmont's local subsidiary.

"I'm thrilled that after nearly 2 1/2 years of false allegations, my name, and that of my fellow employees, has been cleared and our reputations restored," he said at a press conference later Tuesday.

Ness said he hoped communities living around the bay could now be confident "the waters are clean, the fish are safe for consumption, and that their health has not been affected by our operations."

Prosecutors immediately said they would appeal as hundreds of demonstrators ringing the building chanted, "Reject the verdict!"

The trial was being closely watched by foreign investors already wary about legal uncertainties in Indonesia, which boasts some of the world's largest gold, tin, copper and nickel deposits but is also considered among the most corrupt nations.

Red tape, rising prices, political instability and labor problems add to their concerns.

"We're very grateful, a guilty verdict of course would have affected the investment climate," said Witoro Soelarno, of Indonesia's energy and mineral resources department, noting that foreign firms all but abandoned the mining sector after the 1997-98 Asian financial crisis.

The government expects mining investment in the country to rise to US$1.13 billion (€960 million) this year from US$880 million (€640 million) in 2006.

Environmentalists had hoped the cash-strapped government — which coddled investors during former President Suharto's 32-year dictatorship — would send a message to multinational corporations that it was serious about protecting the nation's rapidly deteriorating ecosystem.

About 1,000 protesters gathered outside Manado's tightly guarded court Tuesday, some holding banners that said "Sentence Newmont!" and "Improve Indonesia's environmental laws!" Others rallied in Sulawesi's coastal city on motorcycles, snarling traffic.

"We want Newmont and its director to take responsibility," said protest organizer Didi Koleangan, referring to allegations villagers living near Buyat Bay were suffering from skin disease, lumps, breathing difficulties and dizziness.

Early claims that a baby was killed by the mine's toxins were never confirmed, and only a few of the alleged victims were presented during court proceedings, complaining mostly of itchiness.

The lengthy trial — which cost Newmont millions of dollars (euros) in salaries, travel and public relations — was complicated by conflicting test results.

A police report showed mercury and arsenic levels in Buyat Bay, 2,000 kilometers (1,300 miles) northeast of Jakarta, were well beyond national standards. But tests by the World Health Organization, Indonesian government agencies and several independent groups found that pollutants were well within normal limits.

"The police evidence doesn't stand up," said Damanik, adding that the prosecution was in contempt of court when it refused to order a resampling for further tests. He also said the case should never have been in a criminal court.

Newmont, one of the world's largest gold miners, began operations in Sulawesi in 1996 and stopped mining in 2002 after extracting all the gold it could. But it continued processing ore until Aug. 31, 2004, when the mine was permanently shut.

Last year, the company reached a US$30 million out-of-court settlement with Indonesia's government to defuse a separate civil suit over alleged pollution in the bay — money that will go in part toward community development in the area for the next 10 years.

Under the agreement Newmont also will fund scientific monitoring to make sure there is no pollution "now or in the future," said Robert Gallagher, Newmont's vice president for operations in the region, who expressed relief at Tuesday's ruling.

Other large mining companies operating in Indonesia are Freeport-McMoRan Copper & Gold Inc. and Rio Tinto PLC.
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