BP West Java loses court lawsuit against supplier<\/p>\n
Fitri Wulandari, The Jakarta Post, Jakarta<\/p>\n
Energy firm BP West Java has lost a lawsuit against chemical
\nsupplier PT Mestaco Swarnadwipa, in a verdict criticized by
\nforeign investors.<\/p>\n
The South Jakarta District Court ruled in favor of Mestaco and
\nordered BP West Java to pay US$2.037 million or about 3 percent
\nof the $70 million compensation demanded by Mestaco, Hafzan
\nTaher, a lawyer for BP West Java said.<\/p>\n
The court also froze a bank account belonging to BP West Java
\nin Citibank Jakarta. Hafzan gave no details about the sum of
\nmoney in the account.<\/p>\n
The case started when BP West Java, a subsidiary of BP
\nIndonesia, ended its business relationship with Mestaco, which
\nsupplied the company with Halon 1301 -- a chemical used to
\nextinguish fires.<\/p>\n
BP West Java found the product supplied by Mestaco was
\ncontaminated by a liquid during an inspection in 2001.<\/p>\n
Test results from the Indonesian Police Forensic Laboratory
\nand a Singaporean laboratory showed the substance contained
\ndicloromethane, an inflammable chemical that should not be used
\nto extinguish fires.<\/p>\n
\"This was an error that could put human life in danger and it
\ncould not be tolerated,\" Hafzan said.<\/p>\n
Mestaco filed the first lawsuit in November 2001 and demanded
\ncompensation amounting to $650 million. However, the court
\nrejected Mestaco's demand.<\/p>\n
This was the second lawsuit filed by Mestaco.<\/p>\n
According to Hafzan, the court ruled in favor of Mestaco on
\nthe grounds that the examination of the chemical was carried out
\nin the absence of the company.<\/p>\n
Hafzan said his client would appeal to the high court over the
\ncase.<\/p>\n
The British Embassy in Jakarta regretted the ruling. It was
\nanother example of a legal system which did not support foreign
\ninvestment, it said.<\/p>\n
\"It will be seen as continuing a sequence of a questionable
\nlegal rulings, following the Manulife case in 2002,\" Faye Belnis,
\npress officer of British Embassy, told the Post.<\/p>\n
Canada-based insurance firm Manulife Indonesia was declared
\nbankrupt by the Jakarta Commercial Court in 2002, despite the
\nfact the firm was solvent. Following protests from many parties,
\nincluding top government officials, the Supreme Court finally
\ncleared Manulife of the charges in the same year.<\/p>\n
Belnis said the ruling would remind potential investors of the
\nrisks in doing business in the country.<\/p>\n
BP Indonesia is a unit of Anglo-American energy giant BP Plc.
\nIt has several projects in Indonesia, including the giant Tangguh
\nliquefied natural gas (LNG) project in the Bird's Head area of
\nPapua.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bp-west-java-loses-court-lawsuit-against-supplier-1447893297",
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"sponsor": "Okusi Associates",
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