Miedy Pakasi, Manado – Newmont Mining Corp. and one of its top executives must stand trial on charges of dumping mercury and arsenic-laced pollutants into an Indonesian bay, a court said Tuesday, rejecting the gold mining giant's request to drop the case.
Richard Ness, the president director of Newmont's local subsidiary, faces up to 10 years in prison and a fine of $68,000 if convicted. He remains free pending the verdict.
"I am very disappointed with the judges' decision," said Ness, a 56-year-old American from Ada, Minn., adding that if the court had followed "proper legal procedures" the case would have been thrown out.
The company said it would appeal and warned that "based on today's ruling, the president director of every company in Indonesia should be concerned about this decision."
The trial is being closely watched by foreign investors already anxious about the country's weak legal system. Mining experts said the ruling Tuesday only reaffirmed concerns that Indonesia is not a good place for companies to explore – despite it having some of the best mineral prospects in the world.
"From an industry perspective, it's disappointing to see the matter still going on without resolution," said Marc Upcroft, who analysis the Indonesia mining sector for PricewaterhouseCoopers in Australia. "It really is continuing to have an impact on mineral investment spending in Indonesia, which is unfortunate since we're in the middle global minerals boom."
The company is also in negotiations to settle a $133.6 million civil suit filed by the government in the same case.
Environmentalists, meanwhile, are eager to see if the cash-strapped government will punish a multinational mining company for the first time in recent memory.
The government says Newmont Minahasa Raya violated environmental laws by dumping millions of tons of pollutants into Buyat Bay on Sulawesi island, allegedly causing villagers to develop skin diseases and other illnesses.
The company argued that the police investigation and the indictment were flawed and there was no evidence of pollution or that villagers became ill.
Presiding Judge Ridwan S. Damanik said he was satisfied with the prosecutors' indictment, saying it "fulfilled all legal requirements." "The trial will continue on Oct. 7," Damanik said at Manado District Court, which was surrounded by nearly 100 police who were anticipating demonstrations by environmental activists and villagers from Buyat Bay.
Prosecutors are expected to depend heavily on testimony from villagers, who claim Newmont's mining waste sickened them and caused fishing stocks to plummet. Both sides are expected to present scientific experts.
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 trial in the North Sulawesi capital of Manado, 1,300 miles northeast of Jakarta, could take several weeks and will be a battle over conflicting test results.
The World Health Organization and an initial Environment Ministry report found 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.
The prosecution, which says Newmont dumped 5.5 million tons of pollutants into the water, will present a police report showing the levels of mercury and arsenic are well beyond national standards.