Jakarta – The government promised on Friday that Lapindo Brantas Inc. would still be held responsible for the damage caused by the Sidoarjo mudflow, despite a change in the company's ownership.
Vice President Jusuf Kalla said holding the owners of the oil and gas exploration company accountable for the disaster, in which a botched gas exploration well has spilled mud over a huge area in East Java, leaving 12,000 people homeless, was non-negotiable.
"As long as the company's still here, not going anywhere, we will hold it accountable," he said.
As of Nov. 14, Lapindo has been owned by Freehold Group Limited, an investment company based in the British Virgin Islands, which focuses on acquiring full low-priced shares in companies to be energized for a resale.
Freehold acquired all the shares of Energi Mega Persada (EMP) in Kalila Energi Ltd. and Pan Asia Enterprise Ltd., the two firms that operated Lapindo.
EMP was 70 percent owned by the Bakrie Group, which belongs to Coordinating Minister for People's Welfare Aburizal Bakrie, who is also a close friend of Vice President Jusuf Kalla.
It is understood that Freehold is not affiliated with the Bakrie Group.
Lapindo owns half of the operating shares for the troubled Brantas oil block, where the mudflow started. The other shareholders are Medco E&P Brantas (32 percent) and Santos Brantas (18 percent).
Asked if Lapindo's new owner would be financially responsible for paying for the full cost of the disaster, including its physical and social effects on the local people, Kalla said the decision would left to the Capital Market Supervisory Agency (Bapepam).
"That's for Bapepam to study and scrutinize. What I can assure (you of) is that Lapindo remains responsible for everything," he said.
Whether or not Medco and Santos will share the responsibility is unclear, as a recent Presidential decree describes only Lapindo as being responsible for the environmental and social recovery of the area.
The mud has been flowing from the oil block for more than five months and is now contained by large dams and embankments, although the government is still at loss as to how to stop the mud.
Over the past few weeks, the government has been channeling the mud into the sea, fearing that the arrival of the rainy season could cause the embankments to collapse.
Green groups and locals have protested against the move, saying that it will damage marine life in the area.