U.S. rejects RI request over Karaha Bodas case
U.S. rejects RI request over Karaha Bodas case
A'an Suryana, The Jakarta Post, Jakarta
The U.S. government had rejected the Indonesian government's
request to intervene in U.S. court hearings into the dispute
between state oil and gas company Pertamina and independent power
producer Karaha Bodas Company (KBC), a top government official
said on Monday.
However, the U.S. government was ready to help Indonesia by
facilitating an out-of-court settlement to resolve the high-
profile case, said Minister of Energy and Mineral Resources
Purnomo Yusgiantoro at a hearing with House of Representatives
Commission VIII for energy and mineral resources, environment,
science and technology.
Purnomo said Indonesia had asked the U.S. government to issue
a "statement of interest" to the U.S. courts currently hearing
the case. However, the request has been turned down on the
grounds that the U.S. governmental system separates executive
from judicial power.
He did not provide details about the "statement of interest",
but the U.S. government sometimes issues a statement to the
courts stating the disputes being examined by the courts could
affect the U.S. interest. In that way, the U.S. government can
influence court decisions.
Purnomo said Indonesia accepted the U.S. government's offer to
facilitate an out-of-court settlement, saying it was still an
opportunity for Pertamina and KBC to resolve the case.
Purnomo said the geothermal power project in Telaga Bodas,
West Java, which has been abandoned by KBC for years, was still
feasible for development.
The latest due diligence examination by an independent party
stated the geothermal power plant project could be developed to
generate 30 megawatts to 200 megawatts of power, he said.
The project was suspended, along with dozens of other power
projects, by former president Soeharto's government in 1998 as
part of an agreement with the International Monetary Fund, which
called for a retrenchment program in the country to cope with the
economic crisis.
However, KBC filed for arbitration against Pertamina, with
whom it had signed a development contract. The panel of
arbitrators in Geneva ruled in favor of KBC, ordering Pertamina
to pay compensation to KBC.
Following the arbitration ruling, KBC filed numerous lawsuits
in the U.S., Canada, Singapore and Hong Kong to confiscate
Pertamina's assets in those countries, seeking a staggering
US$261 million in compensation.
Last year, a Texas court handed down a verdict in favor of
KBC, allowing KBC to seize an account in a U.S. bank, which was
believed to belong to Pertamina.
However, Pertamina appealed to the higher court, where the
hearing is still in progress.