Jakarta – The Foundation of the Indonesian Legal Institute (YLBHI) told the government Friday to issue a decree for the immediate compensation of Sidoarjo mudflow victims from state coffers, with the funds to be repaid by PT Lapindo Brantas.

PT Lapindo, the company deemed responsible for the mudflow that was triggered by gas drilling on May 29 last year, has yet to fully compensate the victims of the disaster for the loss of their property and livelihoods and the costs of relocation, said Taufik Basari, director of legal aid and advocacy for YLBHI.

"Before the government pays the compensation, it must make sure Lapindo can pay back the money," Taufik said. He suggested the decree include mandatory audits not only of PT Lapindo, but also its shareholders, including PT Energi Mega Persada and the Bakrie Group, to ensure repayment.

Taufik said that to prevent Lapindo from escaping its obligations by declaring bankruptcy, as was the case in 1998 when many banks receiving liquidity assistance support later reneged on their debts, the government should clearly state in the decree that Lapindo was responsible for the disaster, as well as for any compensation to be paid, and must repay the government.

On April 8, the government issued a presidential decision on the Sidoarjo Mudflow Mitigation Agency, which stated that Lapindo must purchase the victims' destroyed homes and property. Taufik warned, however, that Lapindo should not be allowed ownership of any of the mudflow-affected land after paying compensation because this would run counter to the Agrarian Law.

Article 21 of the Agrarian Law stipulates that ownership certificates for land can only be held by individual Indonesian citizens, and a state regulation clarifies that the only legal bodies allowed to own land are state banks, cooperatives and socio-religious entities. "Therefore, Lapindo, which is a corporation, can't own the land," he said.

He insisted that Sidoarjo land owners should retain their land titles regardless of what they receive in compensation from Lapindo.

Taufik added that the government should publish the results of the investigation into the mudflow's cause. In July 2006, a team from the Energy and Mineral Resources Ministry began investigating the cause of the disaster, but a catalyst for the event has not yet been announced. "The results have never been published. We have the right to know," he said.