Court dismisses civil suit against Newmont

The Jakarta Post, Jakarta

The South Jakarta District Court dropped on Tuesday a US$133 million civil suit against mining company PT Newmont Minahasa Raya (NMR), a local subsidiary of US-based Newmont.

The suit was in response to pollution allegations by NMR, but the judges decided that they did not have jurisdiction to hear the controversial case.

Presiding judge Sudarto stated that, according to the contract between the Indonesian government and the mining firm, any disputes arising between the two had to be resolved through reconciliation and/or international arbitration.

NMR, a local subsidiary of the world's largest gold producer, Newmont Mining Corp., has been accused of polluting Buyat Bay in North Sulawesi through its waste disposal processing that environmental activists claim released mercury and arsenic into the bay and poisoned local villagers.

In a separate criminal case taking place in North Sulawesi, an American executive is on trial, but that case is not affected by the South Jakarta Court's decision. The criminal case is currently being heard by the Manado District Court, with the company's president director Richard Ness as the main defendant.

NMR shut down operations in September last year after deciding that the mine was fully exploited.

Prosecutors in the civil suit said they would appeal Tuesday's verdict.

"We can always appeal," prosecutor Purwani Utami said, adding that she would consult the State Minister of the Environment Rachmat Witoelar, whose office filed the suit.

Speaking to The Jakarta Post, however, Rachmat stated that he had not been informed of the verdict and could not comment.

"I just arrived back from a trip. I'll have to get all the information first," he said over the phone on Tuesday.

Prosecutors had previously insisted that the agreed upon contract terms were only applicable in business disputes between the two parties, but not for pollution.

Newmont hailed the court ruling. NMR spokesman Rubi Purnomo said the firm was "pleased that the judges recognized and enforced the government's commitment to us to resolve disputes according to the agreed terms in the contract".

In a statement, Ness said the verdict was "good for the investment climate" and was "fair".

NMR started operations in late 1996 after signing a working contract with the Ministry of Energy and Mineral Resources. The company has persistently denied any wrongdoing and said its disposal processes were properly approved by the government.

A government-sanctioned probe and a police examination, have concluded that the bay was heavily polluted, but other researchers, including the World Health Organization (WHO), have concluded that the Bay was not polluted.