From: Michael Casey, Associated Press
Published December 28, 2004 12:00 AM

Indonesian Villagers Drop US$543 Million Lawsuit against Newmont

JAKARTA, Indonesia — Indonesian villagers agreed to drop a US$543 million lawsuit (euro398 million) against Newmont Mining Corp., which was accused of polluting a bay that sickened villagers, lawyers for both sides said Tuesday.


While Newmont hailed the settlement as a legal victory, a lawyer for three Indonesian villagers involved in the suit said it was abandoned because the courts couldn't be relied on to render a fair decision.


Newmont said it didn't pay cash to the villagers or their lawyers, according to a settlement agreement seen by The Associated Press. No further legal action would be launched by either side, it said.


Instead, the Denver, Colorado-based company reaffirmed it would continue providing millions of dollars in development aid to villages in Indonesia's North Sulawesi, and agreed to drop two US$2 million (euro1.46 million) defamation lawsuits it filed in November against an environmental activist and his lawyer.


Newmont -- the world's largest gold producer -- has been embroiled in a six-month legal battle to defend itself against the pollution allegations in Indonesia.


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Indonesian authorities have accused its local subsidiary, Newmont Minahasa Raya, of dumping heavy metals into Buyat Bay on Sulawesi island, causing residents to develop skin diseases and tumors.


Five executives from the company are expected to go on trial next month in connection with the pollution allegations.


Last week, the company also admitted that it had released 17 tons of waste mercury into the air and 16 tons into the water over five years -- though it said the toxic releases were far below Indonesian emissions standards.


Newmont portrayed the settlement -- to be signed by an Indonesian judge next week -- as a victory.


"The residents have officially acknowledged and affirmed that there is no evidence that mine tailings from Newmont Minahasa mining activities were the cause of any diseases that they may be suffering from," said Mochamad Kasmali, a Newmont lawyer.


A lawyer for the three villagers who filed the suit, Iskandar Sitorus, said the litigation was dropped because he didn't feel the courts would deliver justice.


"Villagers didn't think the courts could ensure a fair verdict, so we're calling for the government to accept responsibility for their situation," Sitorus said.


Myriad tests on the bay have produced conflicting results.


The World Health Organization and an initial Environment Ministry report found the water unpolluted. But a subsequent ministry study found that arsenic levels in the seabed were 100 times higher at the waste-dumping site than in other parts of the bay.


Newmont stopped mining two years ago at the Sulawesi site, 2,100 kilometers (1,300 miles) northeast of the capital, Jakarta, after extracting all the gold it could, but kept processing ore there until Aug. 31, 2004, when the mine was permanently shut.


Source: Associated Press


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