Minister says govt will stay out of Chevron legal dispute

Amahl S. Azwar, The Jakarta Post, Jakarta | Headlines | Fri, May 17 2013, 9:38 AM

Amid concerns that the trial of three Chevron employees may spook investors, a senior minister said the government would not meddle in the legal process against the workers, who have been accused of implementing a fraudulent environmental program.

Energy and Mineral Resources Minister Jero Wacik said on Wednesday that the government would allow the trial of Endah Rumbiyanti, Kukuh Kertasafari and Widodo — three employees with Chevron Pacific Indonesia (CPI) — to go ahead.

The three men are due to be indicted at the Jakarta Corruption Court this June for allegedly executing a hoax environmental program within the company.

“I — the government — cannot intervene in the legal process,” Jero said on the sidelines of the 37th Indonesian Petroleum Association (IPA) conference at the Jakarta Convention Center in Senayan.

Last week, upstream oil and gas regulatory special task force SKKMigas issued a statement, fearing that the prosecution of the Chevron employees would scare off other oil and gas companies amid the government’s efforts to boost investment and exploration activities across the archipelago.

SKKMigas spokesman Elan Biantoro said it had been informed by the Chevron employees, that they would go on strike should “their friends” be sent to prison.

Although the government would not become embroiled in the case, Jero said, it should be resolved according to civil law rather than criminal law.

The minister stressed that programs implemented by CPI, whose production averages 300,000 barrels per day (bpd) or 40 percent of the nation’s total production, were under a production sharing contract (PSC) between the government and the oil and gas contractor.

“As it’s a civil case, it should be pursued under civil law, not criminal law; otherwise, it will hurt the investment climate,” Jero said.

In addition, he appealed to CPI employees, consisting of around 6,000 workers plus 3,000 supporting staff, not to go on strike, as such an action would not only harm the government but also the company and society at large.

In a related case, the Jakarta Corruption Court last week sentenced the director of environmental services company PT Green Planet Indonesia, Ricksy Prematuri, and director of construction services firm PT Sumigita Jaya, Herlan bin Ompo, to five and six years in jail, respectively, after finding both executives guilty of causing state losses.

Both Ricksy and Herlan must also pay respective fines of Rp 200 million (US$20,600) and Rp 250 million, according to the court’s verdict.

Green Planet was ordered by the court to refund $3.089 million in state losses within a month or the court would confiscate the company’s assets, while Sumigita was ordered to reimburse $6.9 million in state losses.

Senior lawyer Todung Mulya Lubis, currently legal counsel for Chevron in Indonesia, said the court’s decision to imprison the contractors meant the chances of the same fate befalling the three CPI workers were high.

“We hope the government will intervene as the case will encourage other companies to see Indonesia as a hostile country,” Lubis said.

Analysts said the Chevron case further highlighted the legal uncertainty in the industry.

Chevron Indonesia managing director Jeff Shellebarger said the firm would continue with their investment plan and operations here despite the current difficulties.

“We remain concerned about the basis for the charges [against the two CPI contractors] […] We hope our employees and contractors will receive a balanced and fair trial,”
he said.

Meanwhile, the Business Competition Supervisory Commission (KPPU) announced on Thursday that Chevron had violated Law No. 5/1999 on antimonopoly on its $4.7 million contract on its tender on export pipeline front-end engineering and design.

The commission has insisted Chevron pay $2.5 billion in fines.

CPI spokesman Dony Indrawan said the company would review the KPPU’s verdict before taking any action.

http://www.thejakartapost.com/news/2013/05/17/minister-says-govt-will-stay-out-chevron-legal-dispute.html

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