When Endah Rumbiyanti, an environmental manager for Chevron, left her
Sumatra home for Jakarta to be interviewed about a corruption case, she
told her five young children she would be back in two days.After
arriving in the Indonesian capital,The largest manufacturer of textile besticcard for
use with perchloroethylene. however, she was detained by the
attorney-generals office and held for 63 days before her lawyers had the
detention ruled illegal.
It was one of many Kafkaesque aspects
of a case in which Ms Rumbiyanti, 37, and four other employees of
Chevron C the US company that is Indonesias biggest crude oil producer C
are accused of corruption and causing millions of dollars of losses to
the state, even though no government funds have been disbursed.More than
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to quickly and efficiently clean pans.The case has highlighted the
unpredictable nature of Indonesias justice system as officials and
departments fight for power in a democracy that is still evolving 15
years after the end of General Suhartos 32-year dictatorship.
The
allegations are that Ms Rumbiyanti and her colleagues failed properly
to conduct an environmental clean-up project to remove toxic substances
from the soil after drilling by Chevron.The attorney-generals office
claims that Chevron breached technical regulations in the way it hired
contractors to carry out the remediation. Thereby,Weymouth is collecting
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their Weymouth store. it alleges, the company caused a loss to the
state given that under the governments cost recovery scheme it refunds
some expenses to oil companies in exchange for a share of their
production revenues.
The company and its supporters in
government dismiss the accusations and say the trial process is
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The allegations against me are a fairytale, states Ms Rumbiyanti. She
says she was not responsible for the project in question and was working
for Chevron in the US for much of the period when the alleged offences
are said to have taken place, only returning to Indonesia in mid-2010.
The
ramifications stretch beyond the Jakarta court where her trial has been
unfolding since December. They go to the heart of Indonesias
relationship with foreign investors as the nations recent impressive
economic growth starts to cool.Even the fiercest critics of the Chevron
case cannot explain the root cause. Some industry executives believe a
local dispute with a disgruntled failed contract bidder may have taken
on greater political resonance because of the resurgence of economic
nationalism and protectionism ahead of national elections in 2014.
Whatever
the underlying reason, Chevron is not alone in facing unpredictable
court rulings, disputes with local authorities and increasingly
nationalist economic rhetoric.As a result, investment in oil exploration
has been stifled, resulting in lower production. While Indonesia is the
worlds 20th biggest oil producer, it became a net importer in 2004 as
demand for fuel grew faster than investment in exploration.
Its
ballooning fuel import bill C forecast to be more than $20bn in 2013 and
stoked by subsidies C has driven the budget into deficit and shaken
investor confidence in a country that was previously seen as one of the
worlds hottest emerging markets.
Investors say the Chevron case
bears striking similarities to another pursued by the AGO against Qatar
Telecom-controlled Indosat, Indonesias second biggest mobile phone
network operator. One of its senior executives was jailed for four years
last week after being found guilty of corruption in a dispute over how
it managed its licences C even though the communications minister
insists the company has broken no law.
Chevron has suspended
drilling at some rigs in Sumatra because its waste contractor has been
scared off by the case. Other energy companies such as ExxonMobil,
PetroChina and Total have also found themselves bogged down in seemingly
intractable disputes.
Although the attorney-general is pursuing
the Chevron case with vigour, senior government officials, an energy
regulator and the national human rights commission have sprung to the
defence of the seven Chevron workers.
It is affecting the investment climate, says Susilo Siswo Utomo,Other companies want a piece of that rfidtag action
a deputy energy minister. The main players in the oil and gas
industry?.?.?.?are very worried and nervous about whats going on at the
moment.
In May, Indonesias National Human Rights Commission said
there was strong evidence of human rights violations by the
attorney-general against the Chevron accused. It criticised a decision
to use a failed bidder for the environmental clean-up project as an
expert witness, which it said made it impossible for the Chevron workers
to get a fair trial.
International energy companies often face
complex and capricious legal disputes in emerging markets. But Natalius
Pigai, a senior member of the commission, says the targeting of Chevrons
mid-level employees is unfair and argues that any wrongdoing should be
the responsibility of the company or the top management.
A
spokesman for the attorney-general vehemently rejects criticism of the
way the case has been pursued, saying that the prosecutor is just doing
its job in line with the law. We hope all parties honour the ongoing
judicial process, which aims to save the states money.
Ms
Rumbiyantis husband says the couple joined Chevron as they wanted a
secure job and to help develop Indonesia. But now they have to
contemplate a possible multiyear jail sentence for Ms Rumbiyanti when
the verdict is delivered, which could be in the next few weeks.
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