Sian Powell – Frustrated with the immense damage the slowly moving Newmont legal drama has had on Indonesia's foreign investment image, the nation's president has demanded frequent briefings on the complex case and its fallout.

President Susilo Bambang Yudhoyono was unhappy to discover the Government's environment department had filed suit against the US gold-mining giant without his knowledge, sources say. It is likely he pushed the department to settle the suit against Newmont, and it is probable an agreement will be reached by next month.

Yet besides the civil suit, six Newmont executives, including Australian Phil Turner, face criminal charges for allegedly polluting Buyat Bay in northern Sulawesi, and although the case seems to have stalled, the chief prosecutor has told The Australian there is no intention to drop it.

Presidential adviser Dino Djalal said Dr Yudhoyono was concerned about the Newmont case. "He wants regular updates," Dr Djalal said. "He says it is important for the Indonesian legal system to deal with this case fairly and transparently."

While environmental action group Walhi yesterday declared the Buyat Bay villagers would be moving to a new location to get away from the alleged pollution in the bay, Newmont and the Indonesian Government have been negotiating an out-of-court settlement to resolve the multi-million-dollar pollution lawsuit.

Environment minister Rachmat Witular filed the 1.24 trillion rupiah ($165 million) lawsuit in April, months after Buyat Bay villagers complained that toxins from Newmont's mining operation had caused a variety of ailments, including skin diseases and tumours. The villagers originally alleged they had been poisoned by mercury, but that claim was subsequently dropped.

Newmont is most concerned about the six executives, all of whom face heavy charges. In a move that rattled the mining world, the six Newmont operatives were jailed in Jakarta for a month last year, and although later released, they were then forbidden to leave the northern Sulawesi city of Manado while their trial was pending.

Now Newmont has posted 10 billion rupiah bail, which has been lodged with Manado district court. The accused executives can leave Manado, and even the country, as long as they report to Manado police once a week.

Asked why so much time had elapsed since the six were accused and jailed in September last year, chief prosecutor Robert Ilat said the dossiers were taking a long time to revise. "The indictment dossiers are actually finished," he said. "But we are revising them, revision and revision. We all have different opinions."

Yet experts say it is likely the case has stalled, with pressure from Jakarta to drop charges based on possibly faulty testing of the bay's water. On the other hand, there has been local pressure to proceed with the case, from the villagers and their environmentalist champions who allege lives have been ruined by the profitable gold mine.

Newmont lawyer Luhut Pangaribuan said he had never heard of a case where executives had been charged for the alleged crimes of a corporation: "It has to be the company, not individuals, because it cannot be determined exactly when and how the person was connected with the alleged contamination. Phil Turner, for instance, he wasn't there the first time Newmont put the tailings into the sea."

The Buyat Bay villagers began their campaign against Newmont last year, alleging one baby had died and many people suffered from a complaint likened to Minamata disease, an illness named for the mercury-poisoning case in Japan. Backed by a local doctor, the villagers originally claimed as many as 30 people have died from Minamata disease since 1996.

Tumours, skin lumps and blotches, migraines and pregnancy complications had all been caused by the contaminated water in the bay, the villagers claimed. A World Health Organisation-backed report found no evidence of pollution but government tests showed high levels of toxins.

Newmont admits tailings from the Minahasa mine, which has since ceased operations, were piped into the bay, but the company executives have repeatedly declared water and fish were continuously monitored to the highest environmental standards, and no contamination had been found.

Cyanide, used to leach gold from ore, was used, but all tailings were detoxified.