Indonesia’s Unending Mud Mess

For nearly 18 months, a pillar of thick white smoke has been escaping from the bowels of the earth 20 kilometers south of Indonesia's second-largest city, Surabaya, signaling the location of what may be one of the world’s worst environmental disasters.

Jakarta seems helpless to combat the six square kilometers of goo surrounding the rooftops of factories looming out of the mud. The odor of sulphurous rot makes it almost impossible to approach the area. The mud contains massive amounts of chlorides that are killing all plant life

The boiling, bubbling cauldron gushes about 150,000 cubic meters of stinking mud a day, as it has since a botched gas exploration by the politically well-connected Lapindo Brantas Inc. went drastically wrong on May 29, 2006. Despite the torrents of toxic mud that have buried 12 villages, 20 factories, roads and rice fields, nobody has been held criminally liable and the company’s most prominent figure remains in the cabinet of President Susilo Bambang Yudhoyono. Estimates of the number of people displaced range from 11,000 to 50,000. The disaster zone is part of suburban Surabaya, in an area zoned for living and farming – not mining.

The environmental group Greenomics has estimated the total cost of the disaster as high as US$3.6 billion, taking into account the extensive damage to infrastructure, including toll roads, power transmission systems, gas pipelines and main artery roads. Rice fields and fish and shrimp ponds also have been destroyed in what was the second biggest shrimp producing area in Indonesia. Government officials have repeatedly tried to build dykes against the torrent, only to have them overrun.

So far, all efforts to stop the flow have failed. Some geologists are even warning that it may never be properly stemmed and that any attempt to plug it could trigger even more problems. Other schools of thought range from an “it could stop at any time” theory to claims that it could continue unstopped for possibly years, or even centuries.

The blame game

Police investigators say Lapindo, as the company is known, did not install mandatory safety casings in the lower depths of the well, which would have prevented the mud from escaping. Lapindo is a subsidiary of Energi Mega Persada, owned by the family of Coordinating Minister for Welfare Aburizal Bakrie. EMP hurriedly tried to offload the two Hong Kong-listed companies that own Lapindo to a Jersey Islands shelf company two months after the disaster for US$2 in an attempt to escape financial responsibility. Indonesian authorities blocked the sale, only to have EMP try to sell Lapindo to a British Virgin Islands company whose American owner finally acknowledged he was a longtime friend of Bakrie’s. That sale was annulled as well.

Bakrie says it’s none of his business. He resigned from positions of authority within the family conglomerate, he says, when he was appointed Coordinating Minister for the Economy in October 2004.

Last September Forbes Asia said that the Bakrie and his family occupy sixth place on its list of the richest people in Indonesia, with a net wealth of US$1.2 billion. In January this year he stunned a Jakarta Foreign Correspondents' Club lunch meeting by saying the disaster could not have been prevented. Citing "international and national experts," he blamed it on an earthquake in Yogyakarta, 300 km away, which killed some 6,000 people and happened two days before the Lapindo accident, a connection that geologists find unlikely.

Political dimensions

As public outrage grows over Lapindo’s attitude and the government’s of the disaster, pressure is continuing to be directed mainly at Yudhoyono in the run-up to general elections in 2009. Although the president has ordered Lapindo to pay US$435 million in compensation to victims and to try and halt the mudflow, critics have accuse Yudhoyono of indecision and favoritism over the issue. Bakrie's presence in the cabinet is also a grim reminder of Indonesia’s many conflicts of interest between business and public office.

This is also regarded by local critics as proof that Yudhoyono is still firmly in the grip of Golkar, the party of former dictator Suharto, which is now headed by Vice President Muhammad Yusuf Kalla. Ditching Bakrie could lead to a serious political crisis. It also highlights the apparent double standard inherent in Jakarta's determination to press charges of environmental damage against foreign enterprises, while protecting well-connected local companies.

For instance, Indonesia's environmental laws were used against Newmont Minahasa Raya, a local subsidiary of US-based Newmont Mining Corporation, the world's largest gold producer. The subsidiary’s boss, Richard Ness, stood trial in Manado, North Sulawesi on charges that the company knowingly polluted the local environment. He was found not guilty after one of the longest criminal trials in Indonesian history, lasting 21 months. Ness is now suing the New York Times Co. for a series of stories that he alleges falsely implicated him in a disaster that never happened.

Although a motion signed by more than 200 legislators questioning the government’s handling of the mud flow is on hold, the debate leading up to the motion suggests a groundswell of cross-party consensus demanding action from the government over the plight of the victims. Several legislators want the government to force Lapindo to cover all the costs of the disaster. The chances of quick approval from the House of Representatives for funds to pay for this rebuilding appear to be remote.

Lapindo, meanwhile, insists the disaster was natural and that compensation costs are too high. So far it has paid only partial compensation. Although it promised to pay more to victims in four villages this month, payments will only be made on presentation of residents' land ownership certificates – most victims lost such documents along with all their other possessions when their homes were swallowed up by the mud.

Lapindo “brokers" are just one of the ugly spin-offs from the tragedy. Some of the victims, unsurprisingly, have been seeking to profit from the sale of their land by working as brokers to fix their neighbors' land prices, says Friends of the Earth. So they lobby victims to go along with the latest deals offered by the government and Lapindo, even if they are unfavorable to locals.