JAKARTA - AN INDONESIAN court on Thursday rejected a lawsuit brought by environmentalists against an energy company alleged to have caused a mud volcano that has displaced thousands in East Java province.

The South Jakarta district court ruled that the mudflow in Sidoarjo district was a 'natural disaster', and not caused by gas drilling by Lapindo Brantas as alleged by Friends of the Earth Indonesia.

'The panel of judges has decided to reject all the plaintiff's accusations and fined them 1,040,000 rupiah (S$161),' chief judge Wahjono told the court.

The cause the disaster has been hotly contested with environmental groups and many experts saying the mud volcano, which started spewing in May 2006, was triggered by shoddy safety precautions during drilling by Lapindo.

Lapindo, which is linked to billionaire welfare minister Aburizal Bakrie, has replied by saying the disaster was triggered by an earlier earthquake in the central Javanese city of Yogyakarta.

Mr Wahjono said the court based its judgement on expert testimony brought by Lapindo.

He said the court was unable to accept the environmental group's own expert witnesses because of a lack of supporting evidence.

Chalid Muhammad, the executive director of Friends of the Earth Indonesia, told reporters the group would appeal the decision to the high court.

The South Jakarta district court had made a 'fundamental mistake' in rejecting the group's expert testimony, Mr Muhammad said.

'I think the judge got input from the Lapindo side, so they didn't recognise the facts and arguments from our side,' he said.

The same court last month also rejected a case brought by the Indonesian Legal Aid Foundation (YLBHI), claiming that the government and Lapindo had been negligent in dealing with the effects of the disaster. -- AFP