VZCZCXRO1073
RR RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJS #0074/01 2250154
ZNR UUUUU ZZH
R 130154Z AUG 09
FM AMCONSUL SURABAYA
TO RUEHC/SECSTATE WASHDC 0444
RUEHJA/AMEMBASSY JAKARTA 0433
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RHHMUNA/HQ USPACOM HONOLULU HI
RUEHWL/AMEMBASSY WELLINGTON 0170
RUEHBY/AMEMBASSY CANBERRA 0205
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHCAA/GEOLOGICAL SURVEY DEPT OF INTERIOR WASHINGTON DC
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUEHJS/AMCONSUL SURABAYA 0455

UNCLAS SECTION 01 OF 02 SURABAYA 000074 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EAP, EAP/MTS, INR/EAP, AND EB/ESC/IEC 
DOE FOR CUTLET/PI-32 AND NAKANO/P-42 
COMMERCE FOR USDOC 4430 
 
E.O. 12958: N/A 
TAGS: ECON EPET EINV SENV ELAB ENRG PGOV ASEC ID
SUBJECT: EAST JAVA MUDFLOW UPDATE: POLICE DROP CASE AGAINST LAPINDO; 
SUBSIDENCE THREATENS VILLAGES AND NEW INFRASTRUCTURE 
 
REF: SURABAYA 70 AND PREVIOUS 
 
SURABAYA 00000074  001.2 OF 002 
 
 
This message is sensitive but unclassified.  Please protect 
accordingly. 
 
        ¶1. (SBU) Summary:  On August 5, the East Java Provincial 
Police Chief (Kapolda) announced that his office was dropping 
its investigation into the cause of the Sidoarjo mudflow.  This 
decision effectively absolves the Lapindo company and its staff 
of responsibility for causing the mudflow, which has inundated 
numerous villages and displaced thousands of residents and 
businesses since it began in May 2006.  Initial public reaction 
has been universally negative, with many suggesting that this 
"inappropriate decision" favors business over public interests. 
Meanwhile, new subsidence appeared in areas designated for 
relocation of critical transportation infrastructure raising 
questions about the long-term viability and safety of new road 
and rail routes.  End summary. 
 
        A "Natural Disaster" 
        ------------------------ 
 
        ¶2. (SBU) Three years after the mud started flowing, the 
East Java Police Department has dropped its investigation into 
the causes of the Sidoarjo muflow.  In his instruction letter 
dropping the investigation, East Java Kapolda, Inspector General 
Anton Bachrul Alam, determined that the investigative team had 
not been able to prove that there was correlation between 
Lapindo's drilling activity and the mudflow. The letter states 
that the investigators failed to prove that Lapindo's drilling 
triggered the mudflow.  The East Java Prosecutor's Office had 
returned the police dossiers on four previous occasions for 
insufficient evidence.  Lapindo and 13 staff members involved in 
drilling have been officially absolved of responsibility. 
 
        ¶3. (SBU) The Head of East Java Police Public Relations 
Department said the Kapolda's instruction letter to drop the 
case was also based on 2009 legal verdicts from both the Jakarta 
State Court and the Supreme Court, which determined that Lapindo 
was not guilty of causing the mudflow.  Previously, Parliament's 
Special Committee of Sidoarjo Mudflow Mitigation had asked 
President Yudhoyno to revise the Presidential Regulation to 
reflect the courts' decisions that the mudflow is a natural 
disaster and therefore no longer a corporate responsibility. 
Hatta Rajasa, the State Secretary, told journalists in Jakarta 
that the central government is preparing a revised Presidential 
Regulation on mudflow soon. 
 
        Another Corporate Victory 
        ----------------------------------- 
 
        ¶4. (SBU) The Kapolda's announcement was criticized by many 
observers, who claimed that the decision demonstrated yet 
another victory of corporate influence over public interests. 
Dr. Suparto Wijoyo, Airlangga University, told ConGen Surabaya 
that the Kapolda's decision to issue such an instruction letter 
has tarnished the integrity of Indonesian law.  He argued that 
the Kapolda does not have authority to declare Lapindo not 
guilty; only the courts could do so.  Pointing to the conclusion 
of 42 international geologists at the October 2008 International 
Seminar of American Association of Petroleum Geologist (AAPG) 
that the mudflow was a manmade disaster, he observed that the 
Kapolda neglected the fact that the mudflow is a catastrophic 
man-made disaster which has caused huge suffering and economic 
loss.  Mohammad Mirdas, MP of East Java parliament, and Muhammad 
Syaiful Aris, Director of Surabaya Legal Aid Institute which 
brought the original court case, told us that the Kapolda's 
decision was a corporate victory against the law.  During an 
interview with Suara Surabaya radio station, Dr. Suparto said 
that he would urge the President to review the job performance 
of the East Java Kapolda.  In contrast, Lapindo's Vice President 
said that the company welcomes the Kapolda's instruction letter. 
 
        ¶5. (SBU) The Presidential Regulation, which established 
the Sidoarjo Mud Management Agency (BPLS), stated that Lapindo 
was responsible for mitigation efforts and compensation to 
victims within the "impacted area."  A BPLS official told us 
that the promised Presidential Regulation on BPLS would release 
Lapindo from its financial obligations regarding mitigation. 
Lapindo would, however, still be responsible for its 
 
SURABAYA 00000074  002.2 OF 002 
 
 
compensation commitments.  As reported reftels, financial 
difficulties have already affected Lapindo's support for 
mitigation efforts and delayed final compensation payments to 
victims.  The government has promised to compensate the growing 
number of victims outside the impact area from the state budget. 
 With Lapindo absolved of responsibility by the courts, 
legislators, and the now the police, the government must now 
assign clear responsibility for funding BPLS's critical 
mitigation efforts. 
 
        Subsidence Threatens Another Village, New Infrastructure 
 
--------------------------------------------- -------------- 
----------------- 
 
        ¶6. (SBU) New land subsidence 3.5 kms west of the epicenter 
threatens the planned relocation of critical transportation 
infrastructure.  As reported reftels, BPLS is concerned by 
increasing subsidence levels to the north and west of the 
mudflow containment areas.  Most recently, two flammable geysers 
erupted inside two houses in a village west of Porong and within 
300 meters of planned new infrastructure. The Regent of Sidoarjo 
publicly urged BPLS to conduct thorough studies on the impact of 
new subsidence on relocation plans.   On August 10, 200 meters 
of the outermost dike at Gempolsari village northeast of the 
epicenter subsided 3.5 meters, but did not completely collapse. 
BPLS immediately repaired and strengthened the dike walls. 
Should this dike fail, mud and water will inundate a previously 
unaffected village. 
MCCLELLAND