Markus Junianto Sihaloho – The East Java administration's refusal to grant a gas drilling permit to a notorious company linked to Golkar Party chairman Aburizal Bakrie has been blasted by the party but lauded by rights groups.

Hasan Irsyad, the Golkar chairman at the provincial legislature, said on Wednesday the announcement by East Java Governor Soekarwo last Friday was "baseless."

He said the company, Lapindo Brantas, had already received approval from BPMigas, the upstream oil and gas regulator, to drill in Sidoarjo district. "So what's the basis for the governor's refusal?" he said. "This is very disconcerting."

Lapindo's earlier drilling activities in the district are widely blamed for triggering a mud volcano in May 2006 that has now led to more than 10,000 families being displaced from their homes.

Although the government never made an official determination for the cause of the disaster, it held Lapindo's holding company, Minarak Lapindo Jaya, liable for compensating the residents for the loss of their land.

Minarak was ordered to pay Rp 2.5 trillion ($265 million) in compensation and Rp 1.3 trillion to keep the mud from spreading. Six years after the disaster, it still owes Rp 1.1 trillion.

Hasan said Soekarwo's decision to refuse the permit on grounds that it would "hurt the sense of justice of Lapindo victims" was unreasonable because the company was still processing the payments. "It would be a different story if they hadn't paid anything, but the Bakrie family is committed to paying," Hasan said.

He also claimed that if the company was allowed to resume drilling, it could use the proceeds to speed up the compensation payments, which Aburizal previously said would be wrapped up this year.

Rights groups have welcomed Soekarwo's decision, calling it a brave move in holding the company accountable for its unfinished payments.

Gunawan, from the Indonesian Human Rights Committee for Social Justice (IHCS), said Lapindo should be made to complete its obligations to the people before receiving a drilling permit. "So for us, the refusal was the right move," he said.

He called on authorities to thoroughly evaluate the company's drilling methods once it resumed operations to ensure it did not exacerbate the ongoing disaster.