Court deals second blow to gas partners

JAKARTA (JP): State oil and gas company Pertamina and its Canadian contractor Gulf Resources have suffered a second blow in a land dispute with a South Sumatra plantation company, losing a key ruling by Palembang Low Administrative Court.

Judge Ismoehari decided on Tuesday that permits issued by the regent of Musibanyuasin which paved the way for Pertamina and Gulf to appropriate land owned by PT Sentosa Mulia Bahagia (SMB) in Grissik for a gas project were legally flawed and as such should be revoked.

Gulf's lawyer, Sandra Nangoi from Yan Apul & Associates, said she would appeal against the decision.

"We shall notify the court of our intention to appeal within 14 days and then send a memorandum of appeal to the Medan High Administrative Court in North Sumatra within a further 30 days," Sandra told The Jakarta Post on Wednesday.

Medan High Administrative Court, which is the only high administrative court in Sumatra, handles all appeals lodged against rulings made by low administrative courts across the island, Sandra explained.

Under current regulations, the Medan court must rule on the case within six months of receiving the memorandum of appeal.

"Unlike in low courts, there will be no hearing in the high court. The high court judge will decide on the basis of the appeal memorandum and the documents submitted to him," she said.

The ruling by the Palembang court was the second blow recently dealt to Pertamina and Gulf in their land dispute with SMB.

SMB was also recently successful in proceedings brought against both companies at Sekayu District Court over their alleged failure to pay compensation for appropriating the land under dispute. Pertamina has filed an appeal against the decision with Palembang High Court.

Pertamina and Gulf constructed a gas plant on the disputed land to refine gas extracted from nearby gas fields in Grissik before piping it off to Riau.

The companies plan to begin sending the gas directly to Singapore in 2001 through underwater pipelines linking Grissik to the nearby city state.

SMB claims the plant was built on land to which it holds the title and has alleged that Pertamina and Gulf appropriated the land through the use of a legally flawed permit and without paying compensation.

Pertamina and Gulf deny the allegations and claim to have compensated SMB in full.

The have fought the charges with counter allegations that SMB's land-use permits for the site are themselves legally flawed because they overlap the oil and gas concession granted to Pertamina and Gulf in a 1971 presidential decree. (jsk)