INDONESIA NEWMONT TRIAL
Achmad Ibrahim  /  AP
Richard Ness, president director of PT Newmont Minahasa Raya, a subsidiary of Denver, Colo.-based Newmont Mining Corp., listens to a presentation during a media gathering in Jakarta, Indonesia Tuesday. The world's largest gold mining producer and its top U.S. executive in Indonesia went on trial Friday for allegedly dumping toxins into a bay and sickening villagers.
By Associated Press Writer
updated 8/5/2005 7:51:57 AM ET 2005-08-05T11:51:57

An American who heads the Indonesian branch of the world's largest gold producer went on trial Friday on criminal charges of polluting a bay, in a case being closely watched by foreign investors already anxious over the country's weak legal system.

Environmentalists, meanwhile, are eager to see if the cash-strapped government will take the rare step of cracking down on a multinational corporation accused of crimes.

The government says Denver-based Newmont Mining Corp. violated Indonesian laws by dumping millions of tons of mercury and arsenic-laced pollutants into the Buyat Bay on Sulawesi island and sickening villagers.

It is holding Richard Ness, the president director of its Indonesian subsidiary Newmont Minahasa Raya, accountable. He faces up to 10 years in prison and a fine of $68,000 if convicted.

"There is no pollution ... I don't know why I am sitting here," Ness, 55, told the panel of five judges at the district court in Manado, 1,300 miles northeast of Jakarta.

He then took his place beside a translator and listened carefully as prosecutor Robert Ilat read the 70-page indictment.

"As president director, it was up to Richard Bruce Ness to supervise, control and order his employees to carry out their duties in accordance with the company's regulations and Indonesian law," Ilat said.

Newmont says its mine waste has remained at the bottom of the bay and has never entered the bay's ecosystem. The indictment, however, alleges that the tailings "were stirred up by waves, currents and rising tides, polluting the water and damaging the environment."

"Residents living nearby were contaminated with mercury and arsenic, as were fish and other creatures of the sea," Ilat said.

He made no mention of villagers' claims that the company's actions resulted in skin disorders, tumors and other ailments.

The trial was adjourned until Aug. 19, when Ness and his team of lawyers will present their defense plea.

The case was being closely watched by foreign investors who say a weak legal system adds to the risks of doing business in Indonesia, one of the most populous nations in the world, and one of the most corrupt. Rising costs and excessive red tape add to their worries.

"This appears to be another attempt to use the law to force further payment from a foreign investor," said Peter Fanning of the International Business Chamber.

There has been progress, he noted, with high courts increasingly overturning lower court decisions, but this case will reveal just how far Indonesia has or has not come.

Environmentalists say the trial offers the government _ which for decades coddled investors _ an opportunity to hold a foreign firm accountable.

"For 30 years giant mining companies have operated in Indonesia with impunity despite shocking environmental practices," said Raja Siregar, of the Indonesia Forum for Environment. "They have taken advantage of a failure in law enforcement by the government."

Newmont began operations in Sulawesi in 1996, and stopped mining two years ago after extracting all the gold it could. But it continued processing ore until Aug. 31, 2004, when the mine was permanently shut.

The company says the case should be heard in a civil, not criminal court, and argues there is nothing in the environmental law that allows Ness, of Ada, Minnesota, to be charged.

"Prosecutors are talking about pollution that occurred after 1997," lawyer Luhut Pangaribuan told reporters outside the courthouse. "That's one year before Ness joined the company."

The case is complicated by conflicting test results.

The World Health Organization and an initial Environment Ministry report found the Buyat Bay to be unpolluted, and a government study released in May found that traces of heavy metals in villagers living close to the mine were within normal levels.

But the prosecution will present a police report showing the levels of mercury and arsenic are well beyond national standards — and that is what the judges are expected to use as the basis for their ruling.

"There is overwhelming evidence from the Indonesian scientific community, from respected international organizations, and even from the government itself, that no pollution exists," said Newmont Vice President Robert Gallagher.

The company says any health problems villagers near the bay are facing are due to poor hygiene and diet, as well as mercury pollution from the thousands of illegal miners that work the hillsides along the bay.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
13.79%
Cash Back Cards 17.80%
17.78%
Rewards Cards 17.18%
17.17%
Source: Bankrate.com