VZCZCXRO9662
RR RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJS #0085/01 1991121
ZNR UUUUU ZZH
R 171121Z JUL 08
FM AMCONSUL SURABAYA
TO RUEHC/SECSTATE WASHDC 0255
RUEHJA/AMEMBASSY JAKARTA 0241
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHBY/AMEMBASSY CANBERRA 0133
RUEHWL/AMEMBASSY WELLINGTON 0133
RHHMUNA/HQ USPACOM HONOLULU HI
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHJS/AMCONSUL SURABAYA 0260

UNCLAS SECTION 01 OF 02 SURABAYA 000085 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EAP, EAP/MTS, EB/ESC/IEC 
DEPT FOR DS/IP/EAP 
USDOC FOR 4430 
DOE FOR CUTLER/PI-32 AND NAKANO/PI-42 
 
E.O. 12958: N/A 
TAGS: ECON ENIV EPET ENRG SENV PGOV ID
SUBJECT: EAST JAVA MUDFLOW UPDATE: SOME REFUGEES RESETTLED WHILE 
SUBSIDENCE COULD CREATE MORE 
 
REF: SURABAYA 29 (LAPINDO PR EFFORTS) 
 
SURABAYA 00000085  001.2 OF 002 
 
 
This message is sensitive but unclassified.  Please protect 
accordingly. 
 
¶1.  (SBU) Summary:  With the mudflow disaster now entering its 
third year, legal and political controversy in Jakarta 
surrounding the causes of the mudflow has not abated, despite an 
increasingly sophisticated PR campaign by the holding company 
thought responsible for the disaster.  On the ground in East 
Java, hundreds of families have been resettled, however 
compensation and eventual resettlement of thousands of other 
refugees hinges on various compensation schemes.  At the 
epicenter itself, the struggle to hold back the mud continues. 
Increasing ground subsidence is becoming a more obvious threat 
to area buildings and infrastructure as villages outside the 
original disaster area show increasing geyser activity.  A U.S. 
company is reportedly planning to tap the mudflow as a source of 
geothermal power. End Summary. 
 
Law, Government, still bogged down 
--------------------------------------------- - 
 
¶2.  (SBU)  Indonesian Police Chief General Sutanto has 
complained to media about the progress of the investigation into 
the mudflow.  Sutanto said that the case continues to be passed 
to the Prosecutor's office only to be returned to the Police for 
more investigation.  The Police have already declared at least 
11 people culpable in this case and believe that the mudflow was 
caused by a drilling failure. However, prosecutors claim they 
are still looking for strong evidence that can prove that the 
mudflow was caused by Lapindo's drilling.  As yet there is 
little help coming from Jakarta.  Minister of the Environment 
Rachmat Witoelar appeared before the National Commission on 
Human Rights on July 14, but offered little hope of sanctions or 
assistance coming from his ministry.  As for enforcement in this 
case, the role of the Environment Ministry is merely to assist 
East Java Police in their investigation, according to Witoelar. 
Stepping up its efforts to highlight the mudflow, the Commission 
announced plans to call Coordinating Minister for Welfare and 
former owner of Lapindo Aburizal Bakrie for questioning on 
stalled compensation for victims on July 16.  Bakrie created a 
press event of his own at Sidoarjo by visiting the relocated 
victims at a housing complex near the disaster. 
 
Lapindo Buys a Newspaper 
---------------------------------- 
 
¶3.  (SBU)  Favorable stories in the Surabaya Post surrounding 
the resettlement of mudflow victims followed that paper's 
purchase by the former owners of the Lapindo company, the Bakrie 
Group.  While many local papers have been carrying positive 
stories about the payment of compensation, this purchase by 
Bakrie seems part of a wider, long-term media strategy aimed at 
shaping public perception about the mudflow (reftel).  The 
masthead of the paper lists two officers of PT Minarak Lapindo 
Jaya.  The Chairman of the paper's board, Andi Darussalam, is 
responsible for the payment of compensation to mudflow victims 
and is frequently quoted in the press regarding the process. 
 
Subsidence 
-------------- 
 
¶4. (SBU)  During a July 17 visit to the mudflow epicenter, 
Congen Surabaya confirmed that increased subsidence is an 
emerging threat to villages still untouched by the mudflow. 
Sidoarjo Mud Management Agency (BPLS) Site Safety Coordinator 
Mr. Doddy Irmawan told us that dike walls around the mud 
epicenter have yet to reach the maximum allowable height of 16 
meters above the ground's surface, although if calculated based 
on what has been added thus far the dike should stand some 40 
meters high.  We learned that new earth added to the top of the 
dikes simply adds height to a quickly subsiding dike system now 
dropping an average of 10-15 centimeters a day in some areas. 
This creates a need for a constant parade of soil-filled dump 
trucks to keep the dike from sinking below the level of the mud 
lagoon it contains.  The mud disposal effort has run into 
trouble too, as the first spillway built to pump mud into the 
Porong River has been totally blocked by mud.  Now backhoes 
(which float on the hot mud using custom built pontoons) clear 
channels for the mud so that it will flow to a new set of 
 
SURABAYA 00000085  002.2 OF 002 
 
 
spillway pipes down river.  BPLS workers were uncertain how long 
this channel will operate, or if a new one will have to be made. 
 
More Geysers Emerge 
--------------------------- 
 
¶5. (SBU) A cluster of three very powerful geysers have emerged 
about one kilometer west of the mudflow in Pamotan village. 
Geysers of all sizes are common within a kilometer of the 
epicenter due to subsidence and increasing pressures on water 
deep beneath the surface.  These large methane- and 
hydrogen-sulfide-bearing gas and water geysers are the furthest 
from the mudflow epicenter yet.  One 15-meter geyser has erupted 
behind a functioning ice plant.  Iramawan of BPLS told us that 
ammonia contained in the plant's refrigeration system could be 
released if sudden subsidence were to occur beneath it.  While 
mud can be blocked and channeled on the surface, subsidence is a 
much more difficult and unpredictable problem for local 
residents and BPLS. 
 
Refugee Resettlement and Compensation 
--------------------------------------------- ------- 
 
¶6. (SBU) While the area affected by the disaster slowly widens, 
some refugees have finally received long-promised new homes. 
While good news for recipients, Andi Darussalam, the Vice 
President of PT Minarak Lapindo Jaya, the holding company 
compensating the victims, asserted that cash and resettlement 
schemes are only for specific refugees. Those without proof they 
belong to the group are ineligible.  Refugees in temporary 
quarters in Porong Market are finally ready to leave the 
makeshift camp after reaching agQment with Minarak Lapindo 
Jaya on July 8. Refugee representatives reportedly agreed to 
leave the market after receiving a cash down payment and rent 
subsidy.  However hundreds of people from Siring, Jatirejo, and 
Renokenogo Villages are skeptical of compensation plans and 
insist on full cash compensation and refuse to accept a down 
payment and a promise of later resettlement.  The national 
government has reentered active discussion of refugee issues 
after a long silence.  President Yudhoyono appears poised to 
sign revised Presidential Regulation 14/2008, which adds Besuki, 
Pejarakan, and Kedungcangkring villages to the list of those 
officially impacted by the mudflow. 
 
Infrastructure Still TBD 
------------------------------ 
 
¶7. (SBU)  It is still unclear when East Java's main north-south 
road and railway -- both threatened by the mudflow -- will be 
relocated.  Portions of the north-south toll road have already 
been destroyed by mud.  Sidoarjo Regent, Win Hendrarso, told 
local reporters on June 26 that talks between landowners and the 
government have stalled.  There has been no agreement between 
the government and the landowners as to which land would be used 
and how much would be paid.  The head of BPLS Major General 
(Ret.) Sunarso told local media that the land acquisition issue 
might be solved by 2009 or 2010. 
 
Is There Power in Mud? 
------------------------------ 
 
¶8.  (SBU)  Local media described plans for U.S. energy company 
Vlocity Holdings to use the mudflow as a source of geothermal 
power.  Dr. Taswin Tarib, the CEO of Vlocity, presented a 
feasibility study of the power plant to Vice President's Jusuf 
Kalla's special assistants on July 8.  Taswin said that he has 
negotiated with the owner of geothermal projects about this 
project which requires an investment of USD 5.2 billion and will 
have a capacity of nearly 2,000 Megawatts. Taswin told reporters 
that electricity will be produced by four vertical tunnels. 
Similar tunneling technology has reportedly been applied in 
Arizona and Germany. Vlocity will import a Sirex Vertical 
Construction Machine from the U.S. Funding for this project will 
be from Sirex PHS (U.S.), Turbo Jack (Germany), and foreign 
banks.  Details regarding the precise method of constructing the 
facility on site were not provided to the media. 
MCCLELLAND