VZCZCXRO9493
RR RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJS #0052/01 1190917
ZNR UUUUU ZZH
R 280917Z APR 08
FM AMCONSUL SURABAYA
TO RUEHC/SECSTATE WASHDC 0202
RUEHJA/AMEMBASSY JAKARTA 0189
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHWL/AMEMBASSY WELLINGTON 0103
RUEHBY/AMEMBASSY CANBERRA 0105
RHHMUNA/HQ USPACOM HONOLULU HI
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHJS/AMCONSUL SURABAYA 0207

UNCLAS SECTION 01 OF 02 SURABAYA 000052 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EAP, EAP?MTS, AND EB/ESC/IEC 
DEPT FOR DS/IP/EAP 
DOE FOR CUTLER/PI-32 AND NAKANO/PI-42 
COMMERCE FOR USDOC 4430 
 
E.O. 12958: N/A 
TAGS: ECON ENRG EINV ELAB PGOV ASEC ID
SUBJECT: EAST JAVA MUDFLOW UPDATE: SIDOARJO REGENT PUTS PRIORITY ON 
RESETTLEMENT AS TEMPERS RISE IN ADVANCE OF COMPENSATION DEADLINE 
 
REF: Surabaya 47 and previous 
 
SURABAYA 00000052  001.2 OF 002 
 
 
This message is sensitive but unclassified. Please protect 
accordingly. 
 
¶1. (SBU) Summary: As the May deadline for final compensation 
payments near, tempers are rising among those displaced by the 
disaster.  An estimated 1,000 staged a demonstration April 28, 
protesting Lapindo's decision to end food ration payments to 
those living in the Porong Market on May 1.  On April 25, 
displaced villagers living on the abandoned toll road begged 
local officials to improve living conditions.  In a meeting with 
Surabaya Principal Officer, the Regent of Sidaorjo said the 
government placed priority on resettling the victims, while 
building the social, health, and education sectors of the entire 
regency.  During speeches April 17 to mark the opening of a new 
toll road to the Surabaya airport, neither President Yudhoyono 
nor the East Java Governor mentioned the impact of the mudflow 
on the local community or economy.  End Summary. 
 
Resettling Victims While Developing Sidoarjo 
--------------------------------------------- ----------- 
 
¶2. (SBU) In a meeting with Surabaya Principal Officer on April 
25, the Regent of Sidoarjo Win Hendrarso discussed the 
challenges local government faced in addressing the impact of 
the mudflow and investing in development throughout the regency. 
 Win Hendrarso emphasized that the Sidoarjo government placed 
priority on resettling mudflow victims while continuing to 
improve and build on regency-wide social, health, and education 
sectors.  The mudflow had a direct impact on the regency's 
budget revenues with the closure of factories, the loss of jobs, 
and the destruction of Sidoarjo's aquaculture industry. 
 
¶3. (SBU) Win Hendrarso explained that the Sidoarjo government 
proved training and capital assistance to displaced families to 
reduce unemployment.  After collecting date on the types of 
training needed and desired, the government offered three-month 
training programs in entrepreneurship, book keeping, and 
management skills.  So far, the government has trained 5,521 
people.  The government also provided capital assistance of Rp 
350,000-500,000 (USD 38-59) per family.  The funding came from 
the Sidaorjo government, UNDP, and the president's contribution 
to mudflow victims. 
 
¶4. (SBU) Sidaorjo has launched a new program, "Sidoarjo Bangkit 
(Awake) to Develop the Future," to motivate residents (not just 
mudflow victims) to wake up and develop Sidoarjo.  The program 
is aimed at convincing Indonesian investors to do business in 
Sidoarjo.  Win Hendrarso commented that success depended on the 
willingness of the banking industry to operate in Sidoarjo. 
After the mudflow started, six of 18 districts were 
"blacklisted" and bankers were not permitted to give loans to 
customers or businesses living or operating in those six 
districts.  Today, three districts (Jabon, Porong, and 
Tanggulangin) remain on the blacklist. 
 
Demonstrations and Pleas for Help 
------------------------------------------ 
 
¶5. (U) According to press reports, on April 28, an estimated 
1,000 people displaced by the Sidoarjo mudflow staged a 
demonstration demanding that Lapindo continue food ration 
payments to families residing at the Porong Market. (Note: A 
similar, smaller demonstration took place on April 25.)   The 
demonstrators were prevented from blocking the main East-West 
road to Surabaya by dozens of policemen and a water cannon.  The 
demonstration ended after protestors met with the Deputy Regent 
of Sidoarjo, who promised to bring their demands to the 
attention of Governor Imam Utomo.  According to the company, 
Lapindo has been paying Rp 2.5 million/year (USD 275) in rental 
assistance to each family and Rp 300,000/month (USD 33) in 
living costs to each person from the impact area, including 
those still living in the Porong Market.  Lapindo announced 
plans to end all such payments on May 1, 2008. 
 
¶6. (SBU) At the invitation of the Regent's wife, Surabaya 
Principal Officer joined the members of the Forum Perempuan 
Peduli (FPP -- Women Who Care) for a visit to a tent camp for 
villagers displaced by the mudflow on April 25 as part of Earth 
Day events (septel).  Approximately 1,000 people (272 families) 
 
SURABAYA 00000052  002.2 OF 002 
 
 
have been living in tents set up on the abandoned toll road 
since their village was inundated with mud almost three months 
ago.  This group is awaiting compensation from the central 
government as they do not qualify for compensation from Lapindo. 
 
¶7. (SBU) The villagers begged the regent's wife for assistance 
to improve living conditions.  Clean water is limited, with 80 
families sharing a tank of water that is delivered every day. 
Toilet facilities are inadequate and food is primarily instant 
noodles.  The villagers also complained that children are 
attending classes only two hours a day.  The Regent noted to 
ConGen that the villagers had refused offers to relocate them to 
better facilities in the Porong market, where other displaced 
visitors have been living pending compensation. 
MCCLELLAND