Newmont Verdict Seen Reassuring Investors

Newmont Verdict Seen Reassuring Investors

JAKARTA ~ A court’s acquittal of US mining giant Newmont of dumping toxic waste would reassure companies operating here and may boost Indonesia’s drive to attract foreign investors, analysts said.

An Indonesian court cleared Newmont and one of its executives on Tuesday of pumping tons of toxic waste into a pristine bay from its now-defunct gold mine in Sulawesi.

Prosecutors had wanted to jail executive Richard Ness for allegedly allowing Newmont’s Indonesian unit to dump the waste containing mercury and arsenic into Buyat Bay, sickening villagers and poisoning marine life.

Indonesia had risked efforts to improve its reputation as a safe destination for foreign investment by prosecuting Newmont using what many regarded as inconclusive evidence.

Fears in the business community mounted as the high-profile case, which pitted environmentalists against miners, dragged on for 20 months.

But analysts said the verdict sent a signal to investors that legal certainty existed in Indonesia.

“Investors will feel confident about the legal system in Indonesia and this is particularly important,” said Priyo Pribadi, executive director of the Indonesian Mining Association.

“They will see that the system does not act based on public opinion, but based on the realities,” he said.

The decision could also help Indonesia’s attempts to attract billions of dollars in foreign investment to fuel its economy, and take advantage of metal prices that have hit record levels.

Indonesia is rich in minerals, including gold, copper and tin, and some of the world’s largest miners, including Newmont and Freeport-McMoRan, operate here. But its reputation for red tape, corruption and uncertainty have steered some sector investors away from the archipelago, analysts said.

“This is a precedent case and it sends a good signal to foreign investors to bring their capital to Indonesia,” said Lanang Trihardian, economic analyst with Erdikha Elit.

But Pande Raja Silalahi, a senior economist with the Centre for Strategic International Studies, a private think tank, cautioned the signal could only be short-lived, as the legal process was far from over.

Silalahi said prosecutors vowed after Tuesday’s verdict to file an appeal straight to the Supreme Court, which acts independently of lower courts.

“This will still take a long time,” he said.

“The real impact will only be felt after a final legal verdict is reached,” Silalahi said.

The US embassy here, which sent an official to many of the trial’s 53 hearings in Manado, welcomed the verdict as having a “beneficial effect on Indonesian and foreign-investor confidence.”

Newmont, which has been operating in Indonesia for more than a decade, had warned it would reconsider its investments here if Ness or the company were convicted.

The world’s largest gold miner closed its operations near Buyat Bay in 2004 after reserves were depleted.

It still operates, and has a 45 percent stake in, Batu Hijau mine on remote Sumbawa island. That mine produced 205,700 tons of copper last year.

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