Legal Case
In August 2004, the Indonesian Ministry of Environment filed a US$133.6 million civil lawsuit against Newmont, claiming tailings from the company's Minahasa Raya mine polluted Buyat Bay in the North Sulawesi province, causing nearby villagers to become seriously ill and contaminating local fish stocks. Newmont denied the allegations, arguing that the illnesses had more to do with poor hygiene and poverty. On November 15, 2005, a South Jakarta court dismissed the suit on technical grounds, saying the government had breached the terms of its contract with Newmont when it took legal action before seeking arbitration. Environmentalists urged for the suit to be appealed, but on December 1, 2005, Environment Minister Rachmat Witoelar said the government expected to reach an out-of-court settlement with Newmont's local subsidiary. "By negotiating a settlement, we hope to be able to quickly compensate people living near the mine," he said. The government negotiating team was led by chief Economics Minister Aburizal Bakrie. On February 16, 2006, the Indonesian government announced it would settle the civil suit for US$30 million to be paid over the next 10 years. The agreement also includes increased scientific monitoring and enhanced community development programs for the North Sulawesi province. Newmont, with a market value of US$25 billion, is expected to make US$5 billion in revenues for 2006.
Though the civil suit was dismissed, there is still pending a criminal suit against Newmont's top U.S. executive in Indonesia, Richard Ness, on charges stemming from the same allegations. His trial began in August 2005— if convicted, Ness faces up to 10 years in prison. Prosecutors have recommended financial penalties of US$110,000 for Newmont and US$55,000 for Ness.
On April 24, 2007, Richard Ness was cleared of all charges relating to the alleged pollution in Buyat Bay. Furthermore, the Indonesian court held that Buyat Bay was not polluted and that Newmont's local subsidiary was in compliance with all environmental regulations and permits for the entirety of its operation from 1996 to 2004.
Read more about this topic: Buyat Bay
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