VZCZCXYZ0000
PP RUEHWEB

DE RUEHJA #0597/01 0610409
ZNR UUUUU ZZH
P 020409Z MAR 07
FM AMEMBASSY JAKARTA
TO SECSTATE WASHDC PRIORITY 3587

UNCLAS JAKARTA 000597 
 
SIPDIS 
 
DEPT FOR EAP/MTS AND EB/ESC/IEC 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: ECON EINV EINV PGOV ID
SUBJECT: Newmont Trial Update; Visit to Buyat Bay 
 
 
¶1.  (SBU) Summary: The Newmont trial continues to inch towards a 
conclusion within the next two months.  The prosecution's February 
23 response to the defense's final arguments yielded no significant 
new twists or surprises.  After the court proceedings, we visited 
and dived on Buyat Bay and found it teeming with coral and sea life. 
 During visits to the Buyat beach village, allegedly polluted by 
Newmont, as well as to the company's former mine, we saw scenes that 
appear to the untrained eye to contradict the charges against the 
American mining firm.  End Summary. 
 
Prosecution Responds to Newmont's Closing Statement 
--------------------------------------------- ------ 
 
¶2.  (SBU) Government prosecutors on February 23 read aloud their 
37-page response to PT Newmont Minahasa Raya's (Newmont) closing 
statement in the ongoing case involving criminal charges against 
Newmont and its former President Director Richard Ness.  The 
prosecution began by apologizing for having to request a 
postponement of the proceedings from February 9 to February 23, 
noting that the defense's closing presentation was thick and 
difficult to digest.  Prosecutors asked the judges not to be swayed 
by the slick appearance of the defense's documents, but to 
concentrate instead on the substance of the case. The prosecution 
argued that defense's closing arguments had not in any way 
undermined the credibility of the Government of Indonesia's (GOI) 
charges against the company. In fact, the prosecution repeatedly 
asserted that of the defense's 46 witnesses, 28 expert witnesses and 
207 items of documentary evidence, the prosecutor considered 
pertinent only 21 witnesses, 9 expert witnesses and 7 items of 
documentary evidence. 
 
¶3.  (SBU) The prosecution presented its response to the defense's 
closing arguments in 31 points -- each time restating the defense's 
arguments, in some detail, followed by the prosecution's rebuttals 
(at times flimsy). A few prosecution responses appeared to 
contradict others. For instance, the prosecution stated that certain 
defense statements were inadmissible and irrelevant since they were 
sourced from local newspapers. Later, however, the prosecution used 
as a key piece of evidence an Indonesian newspaper article stating 
that Newmont had released 33 tons of mercury into the air and sea. 
The prosecution subsequently challenged the defense's assertion that 
heavy metal sediments would remain stable on the bottom of the Buyat 
Bay by citing another recent news article stating that ocean 
currents at 2,000 meters could shift the 6-kilogram "black box" and 
debris from the January 1, 2007 Adam Air Flight 574 crash. 
 
¶4.  (SBY) The day's court proceedings lasted a little over two 
hours. There was at least one stretch when the head judge appeared 
to doze off. At the close of the prosecution's reading of its 
statement, the judges asked defense attorneys if they would like to 
respond on behalf of Newmont or Mr. Ness. The defense asked for two 
weeks to prepare a response. The proceedings are now tentatively 
scheduled to resume on March 9, but defense attorneys may request an 
extension.  No protests took place during the proceedings, and there 
appeared to be only a limited number domestic press in attendance. 
 
Visit to Buyat Bay 
------------------ 
 
¶5. (SBU) The day after the February 23 court session, Econ Officer 
accompanied Richard Ness to Buyat Bay to view the situation there 
first-hand. Two scuba dives in the relatively small bay revealed 
beautiful, diverse, and thriving coral reefs and a bounty of small- 
and medium-sized tropical fish that one would expect in shallower 
tropical waters and reefs.  Underwater photos of these reefs are 
currently featured in a Garuda Airlines in-flight magazine article, 
which quotes Newmont staff who apparently guided the authors of the 
piece, and touts the Bay as one of Indonesia's well-kept diving 
secrets.  Newmont has worked with the villagers to create and 
 
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submerge as many as 3,000 coral balls to revive the reefs.  Ness 
said that in 2002, Newmont's Buyat Bay effort was the largest 
private sector reef ball project in the world. 
 
¶6.  (SBU) Newmont has  cleared o*t signs of its former mining 
operations off the hillide where they occurred, and most of the 
area isnow grown-over with recently planted trees and othr 
vegetation. The mine's main pit contains a smal lake.  A large, 
flat field below the lake (in eistence since the mine started 
operations) apparntly acts as a natural filter to absorb heavy 
meals that run off and leech away from the mine. Accrding to Ness, 
Newmont has met its target of comlying with the toughest of both 
U.S. and Indonesi waste standards in the Buyat Bay. 
 
Illegal Mines Using Mercury 
---------------------------- 
 
.  (SBU) Meanwhile, an estimated 3,000 independentlocal miners 
continue to truck in rocks dug fromthe mountainside above the 
former Newmont mine.  he rocks are crushed with small-scale 
pulverizin equipment and ball mills.  Ness explained that th 
miners extract gold fro*m the resulting sedimentby combing it with 
mercury and burning the resulting gold/mercury amalgamates in the 
open air.  We visited one such operation and saw roughly a dozen 
empty mercury bottles that once contained roughly 3 kilograms of 
mercury each sitting open in a cardboard box.  Local miners told us 
they use roughly a dozen bottles of mercury over the course of a 
week. 
 
¶8.  (SBU) According to Ness, three or four of such bottles would 
contained a quantity of mercury equivalent to the entire amount of 
mercury contained in the tailings Newmont disposed in Buyat Bay 
during the period of the mine's operation.   Based on tests of its 
samples taken every two hours throughout the duration of the mine's 
operation, Ness said Newmont's monthly reports to the GOI indicate a 
total of 5.9 kilograms of mercury were loaded with tailings into 
Buyat Bay during its 2000-2004 permit period, and a total of 9.7 
kilograms loaded into the Bay over the entire duration of the mine's 
operation.  This works out to an average of 3.6 grams per day of 
mercury loaded into 66 million cubic tons of water, flushed twice 
daily by local tides. 
 
¶9.  (SBU) Today, with no protective environmental measures in place, 
Ness explained that waste from the local independent mining 
operations naturally drains into a second bay adjacent to Buyat, 
along the coast of which exists one of the area's largest villages. 
Ness said that Newmont and independent tests have shown no 
significant levels of mercury in either of the bays, and nothing 
close to allowable limits under U.S. or Indonesian environmental 
regulations. 
 
Fish Plant to Replace Mine 
-------------------------- 
 
¶10.  (SBU) At one end of Buyat Bay, Newmont has almost completed 
construction of a large modern fish processing factory and cold 
storage facility to provide employment for the mine's former 
employees. Ness said the factory will draw power from the former 
mine's 16-megawatt generator, which the company donated to the local 
government. At a small port nearby, we viewed local fishing vessels 
returning with tons of fish caught in deeper waters beyond Buyat Bay 
and the neighboring shoreline. One ship owner told us that, in the 
near future, these local boats will dock alongside and unload their 
catches at the Newmont-built factory. 
 
HEFFERN