A broad majority in North Sulawesi rejects MSM

As Archipelago Resources desperately try to convince shareholders that the
game is not yet over , in North Sulawesi the rejection of the gold mining
company grows despite the acquittal of Newmont for charges of having
polluted a whole bay and its people.

Although the Indonesian company PT. MEARES SOPUTAN MINING (MSM) had to stop all construction activities of their Toka Tindung gold mine and in April released all workforce (except maintenance and care staff) on request of the Provincial Government of North Sulawesi, the Australian owner ARCHIPELAGO RESOURCES PLC still desperately tries to create the impression that everything is working smoothly and the company is basically on schedule to start production by the end of 2007 as soon as its AMDAL (EIA) is approved of by the Ministry Of Environment (see Ambrian Partners Report 07 February 2007 – “Recommendation - Buy” (PDF 480kb) ). Ambrian are engaged as corporate brokers to Archipelago. As the company entirely depends on revenues from its Toka Tindung mine in North Sulawesi for other ventures in Vietnam and China (see ResourceStocks March 2007 / PDF 2.35mb), this might well be a step to save the company from having to declare bankruptcy and overall failure.

The governor’s firm refusal to accept the gold company in the province due to its inherent potential to destroy the unique environment and its risk for the people’s health as well as violating the regional planning scheme (JPEG 202kb) has found broad support from the Provincial Parliament of North Sulawesi (PDF 15kb), regional non – government organizations (PDF 15kb) and the the people. This was shown when on April 24th thousands of people joint a long march and environmental confession that included honouring the governor for his endeavor with a “green award” handed over directly by the co-ordinators of the event which joint over 40 social organizations of the region. The event was well documented in the local, national and even international media (JPEG 430kb).

The governor took the opportunity to confirm that MSM will not be accepted in the province, independent from the “not guilty” verdict of another gold mining company in the province being accused of pollution. The success of the environmental confession was shaded by this outrageous verdict of the Manado Court on the case of American Newmont gold giant being accused of having contaminated Buyat bay further south in the province and its people. The trial had been going on for over 21 months and although having seen strong evidence of an environmental crime, the verdict of the local judge was “not guilty” after the American company earlier in April had threatened with reconsidering its investments in Indonesia if the verdict came “guilty”. The gold giant had also offered Indonesia considerable shares in his Batu Hijau gold mine on Sumbawa Island, whereas the province was lured with contributing a 3 mio. USD worth hospital in the Buyat region. Indications of manipulation were already expected when the original date of the verdict was delayed from April 4th to the 24th which – all accidentally? – turned out to be the date of Newmont’s shareholders annual meeting in Denver. So the whole deal can be seen as a gift of Indonesia to America as the year before the two governments had already agreed on an out - of - court agreement with Newmont compensating Indonesia 30 Mio. USD as a goodwill payment to the region. The state prosecutor, the Ministry Of Environment and Indonesian Environmental Organisations have already announced to appeal against the “not guilty” verdict.

But the lobby of the international mining industry is vigorous. The whole case has been seen as a trial how serious Indonesia is with applying environmental law. As the current mining law is being redrafted in a way that international companies will have to deal with provincial instead of central authorities, in addition to the level of corruption and legal uncertainties, the international mining lobby has complained about Indonesia not offering a lucrative investment climate anymore. In a statement the U.S. embassy in Indonesia said "the positive resolution" of the Newmont case "will undoubtedly have a beneficial effect on Indonesian and foreign investor confidence."

Truly a good outcome and gift for the mining industry and Richard Ness, the president director of Newmont Minahasa who had faced a 10 year sentence in jail and high fine but was aquitted from being guilty of having contaminated the Buyat region and its people. He can state, “I'm thrilled that after nearly two and one-half years of false allegations, my name, and that of my fellow employees, has been cleared and our reputations restored. This is a victory for everyone who believes in justice and for the communities around Buyat Bay who can now be fully confident that Buyat Bay's waters are clean, that the fish are safe for consumption, and that their health has not been affected by our operations."
And the hospital? Also a gift for the people of Buyat who the local judge declared “not suffering from health problems”…

Freundeskreis Lembeh – Pulisan – Bangka April 2007

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