Indonesian mudflow damages claim fails

INDONESIA's environment watchdog has failed in its efforts to have responsibility for the disastrous mudflows that began in Java 18 months ago slated home to the Banjar Panji drilling joint venture. About 6000 villagers living close to Indonesia's second city of Surabaya in eastern Java had to be relocated after mud began flowing from deep underground.

The disaster has already cost millions of dollars, and experts believe the costs could rise substantially. The mudflows have led to claim and counter-claim as to who is responsible, and complaints that the Indonesian Government is not doing enough to resolve the issues, including providing compensation for the thousands whose livelihoods have been destroyed. Australian oil and gas exploration and production company Santos said yesterday the South Jakarta District Court had handed down a decision on proceedings brought by the Indonesian Forum for the Environment (WAHLI) on the mudflows.

Santos is a non-operating 18per cent partner in the Brantas Production Sharing Contract in which the Banjar Panji well was being drilled when mud began flowing in late May last year. The other partners are Indonesian companies PT Lapindo Brantas and PT MedcoEnergi. PT Lapindo Brantas is owned by members of the politically well-connected Bakrie family, one of Indonesia's richest business dynasties. WAHLI began legal action in February involving the Brantas partners, the Indonesian Government and President Susilo Bambang Yudhoyono and several other government and provincial officials, alleging major environmental damage from the mudflows. In its claim, WAHLI demanded the Indonesian Government direct PT Lapindo Brantas to allocate a budget and resources to overcome the mudflows and tackle the environmental damage they caused. The claim also sought to have the damaged environment restored to its original condition.

Santos said yesterday the Brantas PSC partners had successfully defended all claims brought against them. The company noted that WALHI had 14 days to appeal to a higher court.

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