By John McBeth
May 5, 2007
The Straits Times

JAKARTA - FINALLY, justice has been served. After a nail-biting legal marathon lasting nearly three years, a North Sulawesi court has cleared American mining company Newmont and its chief Indonesian-based executive of polluting a bay where it had been authorised to dump rock waste from a now-closed gold mine.

Most media reports had said a guilty verdict at the end of the controversial 20-month trial would deter further foreign investment in Indonesia's largely stagnant mining industry. But that should never have been the issue in what turned into an emotional roller-coaster ride for Newmont Minahasa Raya president-director Richard Ness, 57, who faced three years in jail and a US$60,000 (S$90,000) fine in what he always publicly called a farce of a trial.

Simply put, the prosecution did not have a case.

In delivering the verdict, chief judge Ridwan Damanik determined that Buyat Bay was never polluted. He also raised questions why the criminal case was pursued at all and criticised prosecutors for refusing a court order to re-test the water in the bay.

That, of course, might have undermined its case completely, dependent as it was on the results of police toxicity tests that were sharply at variance with those of the World Health Organisation, Indonesia's Health Ministry, Australia's Commonwealth and Scientific and Industrial Research Organisation and Japan's Minamata Institute.

The court had paid particular attention to testimony that claimed the water samples - taken at the same time and from the same boat as Newmont's - had been compromised long before they reached the police laboratory in Jakarta.

There were pictures of the samples lying unsealed and unattended on the floor of a warehouse in Manado, North Sulawesi. There was evidence that the original 24 bottles had become 34 by the time they reached Jakarta. And there were tests that raised suspicions of deliberate contamination.

How else to explain why the levels of the naturally occurring mercury sulphide in the samples were 200 times higher than Newmont's, yet a parallel analysis of fish and of the blood and hair samples of Buyat villagers showed them to be well within acceptable limits - and even lower than in neighbouring Totok Bay?

Left unexplained as well is why the Environment Ministry was not in the dock alongside Newmont, given its supposed role in monitoring the company's submarine tailings disposal system. The judges noted that it had never warned the company it was in violation of any laws and the local authorities had never told residents they may be eating polluted fish.

Given the unequivocal and carefully reasoned nature of the district court's judgment, the ministry's decision to support an appeal to the Supreme Court seems more designed to placate activist groups, which have actually been surprisingly muted in their criticism of the trial outcome.

The media has not come out of the episode with flying colours either. Much of the impetus for the trial came from a September 2004 story in the New York Times detailing skin tumours, rashes, breathing difficulties and headaches among local residents - ailments that the court heard are commonly found in any Indonesian coastal community.

The article won Jakarta-based correspondent Jane Perlez the Overseas Press Club's 2005 Whitman Bassow Award in the US for 'best reporting in any medium on international environmental issues' for exposing what was termed 'an environmental hell' at Buyat Bay.

'She documented how harsh anti-environmental mining operations by Newmont damaged fishing waters vital to natives,' the citation went on, using a term that evoked visions of grass skirts and bows and arrows. 'Until the Times series appeared, the Indonesian Government and the company had turned a deaf ear to the problem. This series forced the Government to take legal action against Newmont.'

One of Ms Perlez's main sources was the original complainant, family planner Dr Jane Pangemanan. Five months after the story appeared - and long before the Overseas Press Club's awards night - she publicly retracted all her claims. Dr Pangemanan repeated her recantation during the trial, saying she had not identified mercury or arsenic poisoning among any of the Buyat villagers.

In fact, the medical claims never made sense. Mercury causes neurological problems, not the sort of dermatological disorders suffered by many of the residents and which led to the death of a baby originally said to be suffering from Minamata disease - a deadly affliction caused only by the ingestion of non-organic methyl mercury.

After threatening to cut further investment if the judgment went against it, Newmont now intends to go ahead with an expansion to its US$3.6 billion Batu Hijau copper and gold mine in Sumbawa, Indonesia's second-largest.

It is one of four or five major gold-copper and nickel projects planned by foreign and local companies. The future of the others, however, will depend on the final version of a much-criticised new mining law now before Parliament.

In the meantime, Mr Ness still wrestles with the vexed question of what drove the Newmont case as far as it did. Some mining analysts believe it took on a momentum of its own - thanks partly to the credibility afforded by the New York Times article. Others suspect an attempted extortion plot or forces working behind the scenes with hardline Islamic groups.

'It wasn't something we ever anticipated,' Mr Ness told The Straits Times. 'We knew the bay wasn't polluted. We couldn't even detect mercury in the water doing our routine tests. Yet this went straight to being a national issue.'

Whatever the reason, equally puzzling is why critical attention continues to be focused on Western miners. After all, they are being held to higher environmental and community development standards than ever before, not only by the government but also by their own shareholders.

And if anyone needed a reminder, it came a day after the North Sulawesi verdict. At Newmont's annual meeting in the US state of Delaware, 91 per cent of shareholders approved a resolution requiring the management to produce a report addressing community opposition to its mining activities.

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