From: Reuters
Published September 21, 2005 12:00 AM

Indonesia Court Says Newmont Has Case To Answer

MANADO, Indonesia — An Indonesian court ruled on Tuesday that a unit of U.S.-based Newmont Mining Corp. and its American chief had failed to prevent the dumping of toxic waste into a bay near a now-defunct gold mine.


The presiding judge at Manado town in eastern Indonesia made the comments after rejecting a motion from the world's biggest gold miner to drop a controversial pollution case being closely watched by foreign investors and environmentalists.


Justice Ridwan Damanik's comments do not constitute a judgment, but indicate Newmont has a legal fight on its hands.


"The first and second defendant, directly or indirectly, did not prevent the occurrence of pollution in Buyat Bay," said Damanik, referring to Newmont unit PT Newmont Minahasa Raya and its president director, Richard Ness.


The charges relate to Newmont Minahasa Raya's tailings disposal processes, which allegedly involved dumping mercury and arsenic into Buyat Bay in the Sulawesi region, making villagers sick.


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Newmont has vigorously denied any wrongdoing.


"I have yet to see evidence or any indication of metal pollution in Buyat Bay," Ness said after the hearing, adding that he was still not sure what he was charged with.


The five-judge panel adjourned the hearing until Oct. 7, when prosecutors will present their first witnesses.


In criminal trials, Indonesian courts make a decision on whether to proceed once both sides have presented initial arguments. It is rare for cases to be thrown out.


Newmont lawyers have said the police investigation into the case was flawed. They have also said there was no provision in Indonesian law that makes a local chief executive automatically responsible for corporate acts.


Ness, a 55-year-old Minnesota native, could face a jail sentence of up to 10 years and be fined around $68,000 if convicted. Newmont also faces a $133 million civil case over the alleged pollution.


TRYING TO ATTRACT INVESTMENT


Legal uncertainty is often cited as one of the key reasons for sluggish foreign investment in Indonesia, home to some of the world's largest deposits of tin, nickel, copper and gold.


Newmont lawyer Luhut Pangaribuan said the pollution case should have been resolved through arbitration in accordance with a work contract.


"The government is busy visiting other countries to invite investors into the country, but at the same time it does not welcome investors who are already in the country," he said.


But environmental activists say that miners have for too long been allowed a free hand in Indonesia.


A government-commissioned probe and a police study have concluded that the bay was polluted, but several other studies, including one by the World Health Organisation and the Indonesian health ministry, did not support that charge.


Newmont says its disposal processes at the bay were properly approved by the government.


The gold mine near Buyat Bay, 2,200 km (1,400 miles) northeast of Jakarta, opened in 1996 and closed in August 2004 due to depleted reserves.


Newmont's operations in Indonesia accounted for six percent of its global sales in 2004.


The company also operates Asia's second-largest copper mine, Batu Hijau, on eastern Sumbawa island, which produced 718 million pounds of copper and 719,000 ounces of gold last year. It has a mine life of 20 years.


(Additional reporting by Karima Anjani in Jakarta)


Source: Reuters


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