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Indonesia's Real Gold-Diggers

They aren't American.

3:50 PM, Apr 23, 2007 • By ABIGAIL LAVIN
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WHEN THE New York Times broke the story in September, 2004, it seemed like an open-and-shut case: Ever since Newmont Mining Corp., the world's largest gold producer, had opened a mine in the Indonesian fishing village of Buyat Bay, villagers had complained of rashes, dizziness, and other mysterious symptoms. Finally, after Masna Stirman's deformed six-month-old daughter died in July 2004, the Indonesian National Police released a report showing that Newmont's method of waste disposal, known in the mining industry as submarine tailing, had polluted the waters of Buyat Bay with mercury and arsenic. On the surface, it was just another case of a multinational corporation taking advantage of the lax operating practices in a poor country.

Two-and-a-half years later, Richard Ness, the chief executive of Newmont's Indonesian subsidiary, is awaiting a criminal negligence verdict from an Indonesian district court, expected to be delivered on April 24. He faces three years in prison and a fine of 500 million rupiah (roughly $55,000). If found guilty, Ness will be a poster-child; a cautionary tale to reckless mining corporations who believe they can operate with impunity in developing nations. Justice will have been served. Or will it?

A closer look at the allegations leveled against Newmont reveal a murkier picture. A few months after the first report in the Times, a Jakarta court ruled that the police investigation surrounding the case was illegal. Key witnesses have recanted their statements, and the prosecution's case has been punctured by numerous studies that have found no connection between Newmont's waste disposal and the health problems of people at Buyat Bay. The civil suit filed on behalf of Masna Stirman and other villagers was dropped in late 2004. Another civil suit, brought by the Indonesian government, was settled last year in a good-will agreement. But in spite of ample evidence that the charges are bogus, the criminal case against Richard Ness forges onward, fueled by the Yudhoyono administration's public image campaign. Alphonse LaPorta, President of the United States-Indonesia Society, calls the case a political "manipulation of the Indonesian judicial system" to "embarrass and extract benefit" from Newmont.

A November 2004, editorial in the New York Times, "Pollution at Buyat Bay," sheds some light on why the Indonesian government targeted Newmont: "Susilo Bambang Yudhoyono, a former general, became Indonesia's first directly elected president last month partly on the promise of a cleaner, more open government, free of entanglements with special interests. He now has an opportunity to begin redeeming that pledge." The editorial went on to say that the government had an "obligation" to "seek appropriate remedies from [Newmont]." In the years since, the Yudhoyono government has followed the Times' prescription for action to a tee, refusing to allow pesky facts to hinder its crusade for justice for the little people. Carol Raulston of the National Mining Association says that, in her view, "the New York Times continued to place the government authorities in a more difficult spot. It backed them into a corner in terms of clearing Newmont." Jane Perlez, the Times reporter who provided most of the paper's coverage of the Newmont story, declined to comment for this article.

Submarine tailing disposal, which consists of piping mine waste toward the ocean floor, is potentially harmful, and accusations of contamination deserve to be taken seriously. The two main claims made against Newmont are that its mining practices made Buyat Bay residents ill, and that the company did not have the proper operating permits from the Indonesian government. Let's see if either of those claims holds water:

1. Mercury and arsenic contamination sickened the villagers at Buyat Bay.

The police report confirms this, but it is the only study of the bay that does so. Not exactly a bastion of virtue, the Indonesian police somehow managed to come up with ten additional samples over the course of the investigation that were never accounted for among those taken in the field. Meanwhile, studies conducted by the World Health Organization, Australia's Commonwealth Scientific and Industrial Research Organization, Japan's Minimata Institute, and Indonesia's own Ministry of Health all found Buyat Bay to be clean relative to "normal" Indonesian waters. Indonesia's Ministry of the Environment claims that the problem isn't with the water itself, but with toxins in the sediment on the ocean floor, which it says entered the food-chain through bottom-feeding organisms. Even working with this hypothesis, the WHO's report concludes that "health effects due to methylmercury exposure were not observed among the Buyat Bay villagers."