In Indonesia, all that glisters is not
gold By Bill Guerin
As
incoming president Susilo Bambang Yudhyono prepares to
step into the palace, a mercurial dispute between
US-based Newmont - the world's biggest gold producer -
and Indonesia's local authorities and environmental
activist groups yet again highlights the difficulties of
mining in the country.
The case has raised
concerns over how rich multinationals that extract
resources such as coal, copper and gold as well as oil
and natural gas conduct themselves in developing
countries such as Indonesia, where mining investment has
hit rock bottom after steadily declining to US$177.3
million last year from $2.6 billion in 1997.
Conservation and anti-mining non-governmental
organizations (NGOs) such as the Indonesian Center for
Environmental Law (ICEL), Indonesian Forum for the
Environment (Walhi), Indonesian Mining Advocacy Network
(Jatam), and the Institute for Policy Research and
Advocacy (Elsham) claim that Newmont's local operation,
PT Newmont Minahasa Raya (NMR), has dumped lethal
amounts of mercury and arsenic in waters more than 80
meters deep in Buyat Bay in North Sulawesi, causing the
death of at least 30 villagers from Minamata disease - a
severe form of mercury poisoning named after a Japanese
bay where the illness was first documented in the 1950s.
Epidemiological and medical researchers at the
time identified the disease as heavy metal poisoning
caused by eating fish and shellfish from Minamata Bay.
"The waste from the mine being released into the sea
amounted to a potentially 'toxic soup'," mining and
environmental hydrogeologist Robert E Moran told the New
York Times.
In August, several villagers were
flown to Jakarta for blood tests to determine possible
mercury poisoning following a University of Indonesia
laboratory test that confirmed four locals living near
the bay had blood mercury levels between 9.5 and 23.9
grams/liter (g/L). In a separate investigation, the
Jakarta Health Agency claimed that according to their
tests, the four villagers actually had blood mercury
levels between 33.7 and 52.5g/L.
Police also
took eight water samples from the bay that they said
contained unusually high levels of mercury. Lawyers are
now seeking damages of $548 million, and five NMR
officials are in jail awaiting formal charges. Richard
Ness, president director of NMR, was detained along with
the others two weeks ago, but was quickly released on
grounds of ill-health. Police announced on Wednesday
that they have forwarded the files on Ness and the
others to the state prosecutors in North Sulawesi.
Ness, along with American Bill Long, Phil Turner
of Australia and three Indonesians - David Sompie, Jerry
Kojansow and Putra Wijayat - face charges of violating
Law No 23/1997 on environmental management. The law
allows for jail terms of up to 15 years if death or
serious illness is proved to be the result of pollution.
Under Indonesian law, police outline their cases in
dossiers sent to prosecutors, who then decide whether to
press charges.
The US Embassy in Jakarta warned
in a statement last month, "The detention of Newmont
employees under these circumstances can only harm the
investment climate in Indonesia." This immediately drew
the wrath of the Sierra Club, an environmental group in
the US, which says the Bush administration is defending
a company known for leaving toxic pollution in its wake
around the world, rather than a poor community seeking
environmental justice.
Stephen Mills, Director
of Sierra Club's international program, said: "The US
Embassy's actions are a dangerous example of the Bush
administration's misguided foreign policy. No country or
community should be pressured into accepting that its
children will be poisoned in exchange for development."
The US ambassador to Indonesia, Ralph Boyce, has
already raised the issue with outgoing President
Megawati Sukarnoputri and national police chief General
Da'i Bachtiar. Lawsuits have also been filed against
Energy and Mineral Resources Minister Purnomo and
Environment Minister Nabiel Makarim, who have both been
widely criticized for dismissing NGO claims and
defending Newmont's environmental record. A case also
has been filed against Health Minister Achmad Sujudi.
The company has questioned the differences
between the police forensic lab tests and
internationally certified lab results. Experts confirm
there is a very wide variation in "normal" baseline
mercury blood levels. Though the House of
Representatives Commission VIII for mining and energy
concluded in August that the police findings were
reliable and further studies were unnecessary, the
government then set up a joint investigative team made
up of representatives from different government
departments.
NMR has consistently denied any
wrongdoing, pointing out that its waste is treated in
accordance with government regulations. "It is difficult
to express in words the disgust we feel regarding these
false allegations," Ness said in a press statement after
his release, adding that it was not true that NMR
operations have affected the quality of the water or the
health of villagers. Newmont attributes the villagers'
illnesses to poor sanitation and malnutrition.
Though mercury is used by thousands of illegal
miners, the widespread press coverage in Indonesia has
made little of the fact that Newmont - like most
international mining companies - has never used mercury
in its processing of gold. Indonesian Mining Association
chairman Benny Wahju has also defended Newmont, saying
it did not use mercury in its mining process and had
detoxified its mining waste. The director general of
communicable diseases at the Ministry of Health in
Jakarta, Umar Fahmi, has also confirmed that the level
of mercury detected is "equivalent to the mercury
content found in healthy Japanese citizens".
Ness has pointed out that everyone in the
coastal area eats the same fish. "We live in that area.
Our children attend the schools in that area and we do
eat the fish and shrimp from those waters. We will not
expose the villagers to unsafe or environmentally
unsound practices, nor will we expose ourselves or our
families to an unsafe situation". The level of fish
intake is a major determinant of blood mercury levels.
Though NMR has not pointed the finger at
small-scale miners, thousands of them operate mostly
illegally and with impunity and have been condemned for
irresponsible use of chemicals, including mercury,
arsenic, and cyanide. There have been suggestions from
industry sources that the pollution charges are being
drummed up by NGOs and the authorities in a hidden
agenda against Newmont, to coerce the company into
paying massive compensation before it leaves its
Sulawesi mine.
Newmont has operated its Messel
mine in Ratatotok village since 1996 though it ceased
ore mining activities in October 2001 due to depleted
reserves within the contract area. Processing ore from
the stockpile ended in August and the company plans to
completely shut down the mine this month under closing
procedures already negotiated with Jakarta. At its peak,
the mine produced roughly 340,000 ounces of gold
annually, or as much as 8% of the company's global
output.
Newmont says it has invested steadily
for about 20 years, providing "significant economic
benefit" for local communities. Over its seven-year
period of operations, total direct and indirect benefits
to the Indonesian economy were approximately $544
million. Local vested interests may well be unhappy with
the scheduled mine closure given the scale of the
potential loss of revenue. Regional autonomy in 2001
changed the ball game with some 80% of taxes and
royalties now flowing to the local and provincial
administrations, instead of to Jakarta, as was the case
during the Suharto era.
In April 2000, the
district court of Tondano in North Sulawesi province
ordered Newmont to shut down its gold mine following a
dispute over a local tax assessment through the district
court. The local government demanded Rp61.5 billion
($8.2 million) in overdue taxes and compensation. Though
the Supreme Court blocked the closure, Newmont settled
out of court, agreeing to pay about $500,000 in taxes on
379,000 tons of waste material from the mine that a
combined central and local government verification team
insisted should be taxed.
Tests carried out by
the Japanese Minamata Institute and the World Health
Organization (WHO) show no evidence of any pollution in
residents at the site. They have suffered skin disorders
but none have claimed or have been shown to suffer from
any of the classic symptoms associated with mercury
poisoning.
Though the cause of the illnesses
remains undetermined, a chink of light has appeared in
the tunnel for Newmont. Results announced by the Health
Ministry on Wednesday appear to vindicate the company's
stand and substantiate the opinion of Dr Mineski
Sakamoto of the Japanese National Institute for Minamata
disease shortly after he visited the village in August
under WHO auspices, when he ruled out Minamata disease.
In a written statement, the ministry said the
levels of mercury in the villagers tested in a study
prepared for the WHO at Buyat Bay were "normal". The
study also implies that there is no "soup" at all,
suggesting that the bay waters were not polluted to
toxic levels by other metals or cyanide.
Bill Guerin has worked for 19 years in
Indonesia as a journalist and editor. He specializes in
business/economy issues and political analysis related
to Indonesia. He has been a Jakarta correspondent for
Asia Times Online since 2000 and has also been published
by the BBC on East Timor. He can be reached at
softsell@prima.net.id.
(Copyright 2004 Asia
Times Online Ltd. All rights reserved. Please contact content@atimes.com for
information on our sales and syndication policies.)
