Newmont in angry exchange over Indonesia investigation

Newmont in angry exchange over Indonesia investigation

Steve James, Reuters/New York

A top executive of the world's largest gold miner, Newmont Mining
Corp., said the Indonesian government bowed to pressure groups
and arrested six company officials because allegations that
Newmont had polluted the environment appeared in The New York
Times.

During an appearance at the Reuters Mining Summit, Newmont
President Pierre Lassonde lashed out at non-governmental
organizations (NGOs), the Times and the Jakarta government for
the company's troubles in that country.

Newmont has always denied it caused pollution blamed for
sickness among villagers near a huge gold mine on Buyat Bay, some
2,200 kilometers northeast of Jakarta. But this week, the company
said it was close to reaching a settlement with the government
over a lawsuit seeking damages.

Lassonde's latest comments were rejected by Indonesian State
Minister of the Environment Rachmat Witoelar as "irrelevant." he
said the government's own investigation had found pollution.
Sickness among villagers in the area has been attributed to
mercury and arsenic in fish from the bay. The mine was closed
last year after its gold veins were exhausted.

On Thursday, Lassonde told Reuters that NGOs had "co-opted the
environment to create a social controversy."

He also said he held a New York Times reporter, Jane Perlez,
personally responsible for the arrests of the six Newmont
officials after a series of stories she wrote about villagers
sickened by material allegedly dumped in Buyat Bay from Newmont's
gold mining operations.

Lassonde cited several scientific studies presented at four
Indonesian universities, including Sam Ratulangi University, as
well as a World Health Organization report, to support the
company's contention that it did not cause the pollution.

In a telephone interview on Friday with Reuters in Jakarta,
Witoelar, whose office launched a US$133 million civil suit
against Newmont, said the case was based on research from 14
experts who "concluded there was pollution."

"I received input from everybody -- from NGOs, Newmont, the
media -- and I conducted my own research," said the minister.

"My background is NGOs and politics ... I know what I'm doing.
I hope that he (Lassonde) refrains from irrelevant comments about
this."

Speaking to reporters at the summit at Reuters' U.S.
headquarters in New York, Lassonde said, "The reality is, the
controversy was created by NGOs. It ended up putting six of our
people in prison for no reason.

"The reality is there never was an environmental issue. We
complied with every single condition of our permits, we operated
safely, we never polluted."

Lassonde, current chairman of the World Gold Council, did not
name any NGOs, but The New York Times cited one group, "Friends
of the Earth Indonesia," in some stories.

The six Newmont officials were arrested last year and held for
a month but never charged. They were ordered not to leave the
North Sulawesi city of Manado.

The company has acknowledged it released 33 tons of mercury
into the bay and the atmosphere over four and a half years, but
it says the emissions were not at levels harmful to people or the
environment and were in line with Indonesian regulations.

"I personally hold this person responsible for the jailing of
our people," Lassonde told Reuters. Asked if he was talking about
a New York Times reporter, he said, "Yes, Jane Perlez.

"Until the Times series appeared, the Indonesian
government ... had turned a deaf ear to the problem. This
(newspaper) series forced the government to take legal action
against Newmont.

"Once the government saw The New York Times, they said, 'Well,
it must be real.' They didn't believe it (before). Their own
ministry of environment had data that said Newmont is not
polluting."

In a statement, The New York Times defended its reporting.
"The facts belie the accusation. Eight days before Ms. Perlez
wrote her first story (Sept. 8, 2004), an Indonesian government
panel publicly announced that Newmont had engaged in illegal
dumping.

"It was the government's own investigation, not Ms. Perlez's
stories, that led to Newmont's current legal problems."

Farah Sofa, deputy director at Friends of the Earth Indonesia,
known as Walhi, one of Indonesia's most reputable environmental
watchdogs, told Reuters: "I don't think the case was somehow a
result of pressure from us. It resulted from endless meetings,
debate within the government, input from the victims, which was
then brought to the courts.

"All the effort made by the government showed that there was
wrongdoing. That is why the government filed the case."

Asked why Newmont was settling with the government if it
believed there was no case to answer, Lassonde replied, "That's
life. You want to be a good corporate citizen."