Jane Perlez and Evelyn Rusli, Uyat Bay Beach – First the fish began to disappear. Then villagers began developing strange rashes and bumps. Finally in January, Masna Stirman, aided by a $1.50 wet nurse, gave birth to a tiny, shriveled girl with small lumps and wrinkled skin.
"The nurse said: 'Ma'am, the baby has deformities,' " Mrs. Stirman, 39, recalled in an interview. Unable to get any meaningful medical help in this remote fishing village of about 300 people, she watched as her fourth child suffered for months and then died in July.
The infant's death came after years of complaints by local fishermen about waste dumped in the ocean by the owner of a nearby gold mine, the Newmont Mining Corporation, the world's biggest gold producer, based in Denver. It also kicked up a political brawl pitting Indonesia's feisty environmental groups against the American mining giant, which has been trailed by allegations of pollution on four continents.
The fight has aroused intense interest in mining circles and among environmental groups for the fresh concerns it raises about how rich multinational companies – especially those that extract resources like coal, copper and gold as well as oil and natural gas – conduct themselves in poor nations.
For Newmont, the battle is only the latest round of troubles as the company, concerned by the more stringent rules for mining permits in the United States, seeks greater growth from operations overseas, where environmental groups and, increasingly, government officials charge that it employs practices not tolerated at home.
No definitive cause has been found for the illnesses among the villagers. Company executives, Newmont said in a statement, were "convinced that we are not polluting the waters of Buyat Bay or adversely affecting the health of the people in that area." But on Aug. 31, an Indonesian government panel announced that Newmont "had illegally disposed" of waste containing arsenic and mercury in the ocean near the mine site, and had failed to get the required permits from the Ministry of Environment since 1996. The environment minister, Nabiel Makarim, said the company might face criminal charges.
The findings came a week after a local legal aid group filed a suit on behalf of three villagers, including the baby's mother, in a district court in South Jakarta, alleging that they and the baby had been made sick by the mine waste. They are seeking $543 million in damages.
The company denied the charges and said in its statement that it "operates in full compliance with Indonesian and US environmental standards." Newmont has run into trouble before, even at home. But some of the gravest allegations of polluting mining practices have come from its operations in developing nations, from Indonesia to Peru to Turkey.
Here, the fight with Newmont has fueled a growing popular impression that mining and energy companies hold a tight grip over Indonesia's weak regulatory system. Many blame the corruption, cronyism and unevolved legal structure inherited from General Suharto, the dictator whose rule ended in 1998 and who, for a price, eagerly opened the doors to foreign investors.
When Newmont first came looking for gold in Indonesia in the 1980's, it dealt with the Suharto government. Since then, a handful of officials knowledgeable about the environment have said they wanted to stand up to Newmont and other companies, but lost the battles.
In Newmont's case, correspondence shows that from 2000 to 2002 the Ministry of Environment challenged Newmont about the toxicity of the mine waste it was dumping at Buyat Bay. In a letter to Newmont in March 2002, a senior ministry official, Isa Karnisa Ardiputra, listed seven points of concern and asked for "immediate action." In an interview at Newmont's Jakarta headquarters on Aug. 27, the president of Newmont in Indonesia, Richard B. Ness, and other company officials said they were not aware of the letter.