St. LOUIS () -- After almost 2 years and millions of dollars in court costs, PT Newmont Minahasa Raya (PTNMR) and its President Director Richard Ness have been exonerated from of all criminal charges and regulatory violations over alleged pollution at Buyat Bay in Indonesia.
"I have lived in Indonesia for more than 25 years. This is my home, and I am delighted to see justice and truth prevail," said President Director Richard Ness in a statement today.
Presiding Judge Ridwan Damanik told the Manado District Court that evidence presented during the 21-month criminal trial, one of the longest criminal proceedings in Indonesian history, proved that tailings dumped into the water by Newmont's [NYSE:NEM] now-defunct Mesel Gold Mine on Sulawesi island did not exceed government standards.
"Pollution charges against Newmont Minahasa Raya and Richard Ness cannot be proven," the judge told the court. "There also is not enough evidence that people suffered from health problems."
The court further found that the company was in compliance with all regulations and permits during its eight years of operations from 1996 to 2004.
The verdict was greeted with applause inside the courtroom, according to sources.
"Me and my entire family are extremely happy about the verdict," Eric Ness, son of Richard Ness, told RI. "The verdict that was handed down today completely vindicates not only my Dad from any wrong doing but Newmont as company."
He said it also vindicates David Sompie, Jerry Konjansow, Bill Long, Putra Widjayatri and Phil Turner who were initially jailed for 32 days in 2004 "for a crime that never happened."
The prosecution on behalf of the Ministry of Environment had called for a three-year jail term and a $55,000 fine to be imposed on Richard Ness, and demanded the company be fined $110,000.
The prosecution had alleged that PTNMR and Ness caused environmental pollution while conducting mining operations near Buyat Bay after the National Police Central Forensic Laboratory reportedly found mercury and arsenic levels in Buyat Bay were well beyond national standards in 2004.
According to Newmont, the laboratory was not accredited as required by Indonesia's Environmental Monitoring Agency to conduct water tests. Furthermore, there was a discrepancy of 10 water samples taken by authorities at Buyat Bay and surrounding waters.
According to Newmont, a total of 34 samples appeared in the indictment, while only 24 samples were actually taken. The samples also showed pollution in Totok Bay, which is an entirely separate body of water to Buyat Bay, and tailings were never placed there.
On , the judges approved the re-sampling of Buyat Bay by Australian Laboratory Services (ALS), which confirmed that mercury and arsenic levels are within normal parameters. Independent studies by the United Nations' World Health Organization, the Commonwealth Scientific and Industrial Research Organisation of Australia and Japan's National Institute for Minamata Disease further confirmed that there is no environmental damage.
The defence also presented four independent physicians, including government and university affiliated doctors, who examined Buyat Bay residents, testified under oath that they found no diseases resulting from PTNMR's operations. Dr. Jane Pangemanan, who levelled the initial allegations against PTNMR, recanted earlier charges and testified under oath that she did not diagnose any heavy metal related diseases in villagers.
"This is a victory for everyone who believes in justice and for the communities around Buyat Bay who can now be fully confident that Buyat Bay's waters are clean, that the fish are safe for consumption and that their health has not been affected by our operations," said Richard Ness.
The prosecution has 14 days to appeal the decision to the High Court. Wayne Murdy, Chairman and CEO of Newmont, told a conference call today that he was "confident that this verdict will stand."
"This trial afforded us the opportunity to show the world that Buyat Bay was not polluted ... the fish are safe to eat ... our operation did not cause harm," he said, adding that ruling will "restore confidence to the community" so that they can feel safe to "get on with their lives."
According to today's release, Newmont has established an independent scientific panel with the government to monitor and report on Buyat Bay for almost another decade. Murdy said the Newmont has no plans on leaving the site without further studies.
"This is not a defeat for environmentalists, but of people who make wild allegations," said Murdy.
In late March, Indonesia's largest environmental non-governmental organization (NGO) Wahana Lingkungan Hidup Indonesia (WALHI) a civil suit against Newmont's Indonesian subsidiary PT Newmont Minahasa Raya (PTNMR) over alleged pollution at Buyat Bay - the forth such lawsuit to hit Newmont in Indonesia.
Omar Jabara, Director of Media Relations, told RI that the Ness case is not linked to the WALHI suit, but "WALHI is going to have a hard time making their case" after today's verdict ruled that there was no pollution.
In late 2005, Indonesia's South Jakarta District Court the government's $133.7-million lawsuit, filed by the Indonesian Environmental Ministry, saying it must be setting through international arbitration. In early 2006, Newmont [NYSE:NEM] settled a civil suit by agreeing to pay Indonesia $30 million over 10 years to fund environmental monitoring and community development.
Murdy said before the verdict that the company may reconsider future investment in Indonesia if found guilty. But today, he said this should not be seen as "a win for investors."
Currently, Newmont only has one operating mine in the country: the 45%-owned Batu Hijau, located on the remote island of Sumbawa in the West Sumbawa province.
In 2006, Batu Hijau reported equity copper sales of 230 million equity pounds and gold sales of 230,000 equity ounces last year - a 33% drop in copper and 40% drop in gold from 2005. Newmont said that overall costs increased due to increased mining activity and increased diesel, tire labour and process maintenance costs.
Source: Newmont Mining Corp.
Equity gold and copper sales at Batu Hijau are expected to remain stable in 2007 at 230,000-250,000 ounces of gold and 210-230 million pounds of copper and remain at these levels through 2009. Under the current mine plan, the mine life is predicted to last until 2034.
But due to geotechnical revisions and higher processing and mining costs last year, Batu Hijau reserves declined by 1.3 million equity ounces. The deposit now stands at 5 million ounces of gold and 3.6 billion pounds of copper.
On , Newmont said it has plans to divest a further 7% stake in Batu Hijau to the government for about $325 million based on a value of $4.65 billion for the mine. However, the company has plans to develop a copper deposit at Elang, 60 kilometres from Batu Hijau.
Murdy said that further drilling is needed to complete the feasibility study at Elang, but once complete, it will "add to the life of Batu Hijau."
Indonesia has some of the world's largest deposits of gold, tin, nickel and copper. President Susilo Bambang Yudhoyono wants to attract $22 billion in investment a year to countries mining sector.