MANADO, Indonesia-
Newmont Mining Corp. and one of its executives were acquitted Tuesday of charges that the world’s biggest gold producer dumped dangerous amounts of toxic waste into a bay off Indonesia’s Sulawesi Island.
The trial of Richard Ness and Denver-based Newmont was closely watched by environmental groups and foreign investors in Indonesia, which has some of the world’s largest precious metal deposits but is also considered among the world’s most corrupt countries.
The decision brought relief to some government officials and business executives, but foreign investment in the once-booming sector is not expected to rebound until Jakarta’s notoriously slow legislature revises a 1960s mining law.
Environmentalists, on the other hand, were disappointed the government refused to punish a multinational mining firm for the first time in recent history.
During Tuesday’s hearing, nearly 1,000 protesters gathered outside the courthouse, some holding banners saying “Sentence Newmont!” and “Improve Indonesia’s environmental laws!”
Ness could have faced up to 10 years in prison and, with Newmont, a $160,000 fine.
But the judge said documents and testimony presented during the 21-month criminal trial proved that waste rock dumped into Buyat Bay by the company’s now-defunct mine did not exceed government standards.
“There also is not enough evidence that people suffered from health problems,” said the judge, Ridwan Damanik, referring to claims that villagers living near Buyat Bay were suffering from skin disease, unexplained lumps, breathing difficulties and dizziness.
Newmont’s supporters in the packed, sweltering court cheered and defense lawyers and family members threw their arms around the smiling Ness, who heads Newmont’s local subsidiary. Prosecutors said they would appeal the verdict.
“I’m thrilled,” Ness said after the verdict was announced, adding he hoped communities living around the bay could now be confident “the waters are clean, the fish are safe for consumption, and that their health has not been affected by our operations.”
He said in an earlier interview with The Associated Press that a guilty verdict would send a “frightening message” to foreign investors.
“Certain things are fundamental—whether for mining or any other investment, domestic or foreign. You need some type of rule of law and protection of human rights. … Anything that sends signals that some of those things aren’t being followed is of course a concern,” he said.
Wayne Murdy, chief executive of Newmont, said Tuesday the verdict was a defeat for “people who make wild allegations,” not environmental groups.
“No one genuinely interested in environmental stewardship wants to see an innocent man incarcerated or a company falsely charged and convicted,” Murdy said in a conference call.
Environmentalists are concerned that mining corporations, which operated virtually unchecked for decades under former dictator Suharto, continue to get away with polluting Indonesia’s threatened rainforests and rivers with practices that are illegal at home.
“(Newmont) very much knows that this waste-disposal practice is effectively banned in the U.S. because of provisions under the Clean Water Act,” said Radhika Sarin, a campaign coordinator at Earthworks, a Washington-based environmental group that monitors the impacts of mining globally.
Indonesian environmental groups said the acquittal was “based on questionable legal technicalities.”
A police report introduced at trial showed that mercury and arsenic levels in Buyat Bay, which is about 1,300 miles northeast of Jakarta, were well beyond government standards. But tests by the World Health Organization, Indonesian government agencies and several independent groups found that pollutants were well within normal limits.
“The police evidence doesn’t stand up,” said the judge, adding that the prosecution was in contempt of court when it refused to order a resampling for further tests. He also said the case should never have been in a criminal court.
Only a few alleged victims were presented during court proceedings, complaining mostly of itchiness.
Newmont began operations in Sulawesi in 1996 and stopped mining in 2002 after extracting all the gold it could. It continued processing ore until 2004 when the mine was permanently shut.
Last year, the company reached a $30 million settlement with Indonesia’s government to end a separate civil suit over alleged pollution in the bay—money that will go in part toward community development in the area for the next 10 years.
HSBC Global Research analyst Victor Flores said the acquittal will allow Newmont’s management to focus on business. He declined to predict how the ruling would affect other mining companies in Indonesia. “It’s really up to each company to decide how to run its business and where it wants to take its chances,” Flores said.
The draft mining bill moving its way through Indonesia’s legislature will replace the Suharto-era system of regulating mining companies, under which contracts were signed between the central government and corporations. The new law would require companies to negotiate joint ventures with local partners and governments, which has caused great concern among foreign mining companies.
Newmont shares slipped 18 cents to close at $43.72 on the New York Stock Exchange. They have traded in a 52-week range of $39.84 to $59.70.
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Associated Press writers Colleen Slevin and Catherine Tsai in Denver and Justin Bergman in New York contributed to this report.
