Newmont demands case be thrown out of court

Newmont demands case be thrown out of court

Miedy Pakasi, Associated Press/Manado

An American who heads the Indonesian branch of the world's largest gold producer returned to court on Friday to defend himself against charges of dumping toxins into a bay, sickening villagers and causing fish stocks to plummet.

The trial, which opened two weeks ago at the Manado District Court in North Sulawesi, is being closely watched by business leaders who say a guilty verdict could set back Indonesia's improving foreign investment climate.

Environmentalists, meanwhile, are eager to see if the cash- strapped government will punish a multinational mining company for the first time in recent memory.

The government alleges that U.S.-based Newmont Mining Corp.'s local subsidiary, PT Newmont Minahasa Raya, violated environmental laws by dumping millions of tons of mercury and arsenic-laced pollutants into the Buyat Bay.

It is holding the company's director, Richard Ness, accountable. He faces up to 10 years in prison and a fine of US$68,000 if convicted.

Ness' lawyers argued on Friday there are no provisions in Indonesian law that hold the local head of a foreign firm responsible for corporate crimes.

"Even after reading the indictment, I still don't understand why I have been charged as an individual," said Ness, 55, who appeared calm throughout the trial, occasionally whispering to his translator.

"I still believe our company did not pollute the Bay."

Newmont began operations in South Minahasa, North Sulawesi, in 1996 and stopped mining two years ago after extracting all the gold it could. But the company continued processing ore until Aug. 31, 2004, when the mine was permanently shut.

Villagers claim mine tailings in the bay resulted in skin diseases and other illnesses -- a charge Newmont denies -- and more than a dozen protesters gathered in front of the court Friday with photos of sick babies.

The company's lawyers told judges the investigation into the alleged contamination was flawed and that there was no proof Buyat Bay residents were suffering from heavy metal poisoning. They claim any illness they face are the result of poor hygiene and diet, along with pollutants dumped into the bay by hundreds illegal local miners living along its edge.

While several tests have backed Newmont's claims, including one conducted by the World Health Organization and one by the Indonesian State Ministry for the Environmental, that was unlikely to help Ness.

Judges are expected to use a police report showing the levels of mercury and arsenic are well beyond national standards as the basis for their ruling.

"The Indonesian scientific community, respected international organizations, and even the government itself says the water is fine and the fish are safe to eat," said the vice president of Newmont's Indonesia operations, Robert Gallagher. "We fail to understand why we have been indicted."

Industry groups warned that a guilty verdict would scare away future investors.

"Who will invest in this country? Nobody," said Jeffrey Mulyono, director of the Indonesian Mining Association, pointing out that an uncertain legal and business climate has already caused mining investment to fall by more than 50 percent in the last five years.

But environmental groups described the Newmont case as an important test of the government's willingness to prosecute polluters, saying multinationals have skirted Indonesian laws long enough.

"It's the first time the government is taking a mining company to court," said Chalid Muhammad, director of Indonesian environment group Walhi. "In our opinion it's a good step ... maybe in the future companies won't destroy the environment."

After hearing arguments from Newmont lawyers, judges adjourned the trial until Sept. 1, when prosecutors are expected to respond to the Newmont plea.