Indonesia’s $2.9b suit over oil spill

INDONESIA: The Indonesian government has launched a $US2 billion ($NZ2.9b) lawsuit against the company responsible for the worst oil spill in the history of Australia’s offshore petroleum industry.

An estimated 300,000 litres of oil a day belched into the Timor Sea for more than 10 weeks after the Montara wellhead operated by Perth-based PTTEP Australasia sprung a leak and then exploded on August 21, 2009.

Seaweed farmers and fishermen in East Nusa Tenggara, one of the poorest regions of Indonesia, claim their livelihoods were devastated by the Montara oil spill which they say destroyed their crops and killed fish.

PTTEP Australasia is a whollyowned subsidiary of PTTEP, the Thai state-owned oil company.

The Indonesian Government has also slapped a moratorium on issuing exploration and exploitation permits in Indonesia to PTTEP until the company ‘‘resolves the problem concretely’’.

The civil lawsuit, which was registered in the Central Jakarta District Court on Wednesday afternoon, is the second court case PTTEP Australasia will have to fight. More than 13,000 seaweed farmers also launched a $200 million class action over the Montara oil spill in the Federal Court in Sydney last August.

The Montara oil spill was the third worst by volume in Australia’s history and the worst from offshore oil production.

In 2002, 61-year-old Albert Ngguse was one of the villagers from Tablolong in East Nusa Tenggara who began farming seaweed, which is exported and used in agar, a cooking ingredient, and carrageenan, a seaweed-derived thickening agent used in many products.

‘‘Because of seaweed you could

"The people of the area are victims of this oil spill. They have to get compensation because it has been seven years with so far no support or help from this company." Co-ordinating Minister for Maritime Affairs Luhut Pandjaitan

say our village was rich – before that we were simple fishermen,’’ Ngguse said.

With each harvest, Ngguse said he could produce four to six tonnes of seaweed, which he sold for 22,500 IDR (about $2.25 a kilogram.) ‘‘I could earn hundreds of millions of rupiah each year,’’ he said.

Tablolong Village secretary Mester E Bessie said 537 tonnes of seaweed was harvested in 2008. The year after the oil spill – 2010 – it dropped to 13 tonnes.

Ngguse went back to fishing. ‘‘But the fishes are gone too. Nothing like before. For three years after the spill I suffered a skin condition. At first it itched, then it turned red like a burn scar, when the skin breached, the liquid inside it spread and the itchiness spread. I got it all over my body, excuse me, other than my private parts it was all over my body.’’

Co-ordinating Minister for Maritime Affairs Luhut Pandjaitan said last month: ‘‘The money will go to the ground, to the people, to fix the area, especially the seaweed area. It is very important. The people of the area are victims of this oil spill. They have to get compensation because it has been seven years with so far no support or help from this company.’’

In a letter seen by Fairfax Media, the Deputy for Coordination on Maritime Sovereignty, Arif Havas Oegroseno, said the president of Indonesia was giving special attention to the case.

’’Numerous attempts made by the Indonesian government, ie conducting various meetings to request compensation and by setting up an independent commission, bear no fruit whatsoever because PTTEP shows no goodwill to resolve the problem,’’ Havas wrote in the February 3 letter.

’’The company has a poor track record in handling oil spill cases in the sea, with those affected by a similar case in Rayong in 2013 getting no compensation at all.’’

(In July 2013, a pipeline owned by PTT subsidiary PTT Global Chemical, burst while oil was being transferred from an undersea well to a tanker in the Gulf of Thailand.)

PTTEP Australasia would not comment.

However, it has stated previously that based on extensive independent scientific research overseen by the Australian government, no oil from Montara reached the shores of Indonesia and that no long-term damage was done to the environment in the Timor Sea.

The 2010 Montara Commission of Inquiry, which had nearly all the powers of a royal commission, found ‘‘the way that PTTEPAA operated the Montara Oilfield did not come within a ‘bulls roar’ of sensible oilfield practice’’.

Commissioner David Borthwick said it was unlikely the full environmental consequences of the blowout would ever be known. – Fairfax