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Conviction of Chevron Worker Spurs Concerns in Indonesia Conviction of Chevron Worker Spurs Oil Industry Concerns in Indonesia
(about 5 hours later)
JAKARTA, Indonesia — An Indonesian court convicted a local employee of the American energy company Chevron of corruption on Wednesday in a case that has escalated uncertainties for foreign investors in the nation.JAKARTA, Indonesia — An Indonesian court convicted a local employee of the American energy company Chevron of corruption on Wednesday in a case that has escalated uncertainties for foreign investors in the nation.
In a 2-to-1 decision, a three-judge panel at an anticorruption court here sentenced Kukuh Kertasafari, 36, an environmental manager for Chevron Pacific Indonesia, to two years in prison for abuse of authority in connection with a soil cleanup program. Two other employees are to receive verdicts this week.In a 2-to-1 decision, a three-judge panel at an anticorruption court here sentenced Kukuh Kertasafari, 36, an environmental manager for Chevron Pacific Indonesia, to two years in prison for abuse of authority in connection with a soil cleanup program. Two other employees are to receive verdicts this week.
The case centers on a so-called bioremediation program at Chevron’s drilling facilities on the island of Sumatra.The case centers on a so-called bioremediation program at Chevron’s drilling facilities on the island of Sumatra.
Chevron Pacific Indonesia appointed two Indonesian contractors, Green Planet and Sumigita, to do the work, which entails removing or neutralizing contaminants in soil or water. Prosecutors said the companies were not qualified and did not have the proper permits, and that the cleanup was unnecessary because the area was not sufficiently contaminated.Chevron Pacific Indonesia appointed two Indonesian contractors, Green Planet and Sumigita, to do the work, which entails removing or neutralizing contaminants in soil or water. Prosecutors said the companies were not qualified and did not have the proper permits, and that the cleanup was unnecessary because the area was not sufficiently contaminated.
In May, the anti-corruption court convicted the two directors of Green Planet and Sumigita of corruption and sentenced them to five and six years in prison, respectively.In May, the anti-corruption court convicted the two directors of Green Planet and Sumigita of corruption and sentenced them to five and six years in prison, respectively.
During the Chevron trial, prosecutors contended that the employees had violated Indonesian corruption laws by prompting the state to incur a $9.9 million loss. The loss is tied to a reimbursement that the state paid for the cleanup as part of its contract with Chevron.During the Chevron trial, prosecutors contended that the employees had violated Indonesian corruption laws by prompting the state to incur a $9.9 million loss. The loss is tied to a reimbursement that the state paid for the cleanup as part of its contract with Chevron.
Defense lawyers for Chevron Pacific Indonesia rejected the prosecution’s claims, saying the state did not lose money. The defense also said that its scientific analysis had confirmed that the soil was sufficiently contaminated to warrant bioremediation. Defense lawyers for Chevron Pacific Indonesia rejected the prosecution’s claims because Chevron did not receive reimbursement for the project. The defense also said that its scientific analysis had confirmed that the soil was sufficiently contaminated to warrant bioremediation.
“No actual evidence of any state loss or any illegal activity by Chevron Pacific Indonesia employees has been presented in court,” the company said in a statement. “Our thoughts are with our colleague and his family during this difficult time.”“No actual evidence of any state loss or any illegal activity by Chevron Pacific Indonesia employees has been presented in court,” the company said in a statement. “Our thoughts are with our colleague and his family during this difficult time.”
The employee plans to appeal the verdict.The employee plans to appeal the verdict.
“The court did not consider the opinion from experts,” said Maqdir Ismail, a trial lawyer for Chevron Pacific Indonesia. “It’s not fair.”“The court did not consider the opinion from experts,” said Maqdir Ismail, a trial lawyer for Chevron Pacific Indonesia. “It’s not fair.”
The Indonesian attorney general, Basrief Arief, did not respond to a written request for an interview. The three state prosecutors at the courthouse would not take questions after the verdict.The Indonesian attorney general, Basrief Arief, did not respond to a written request for an interview. The three state prosecutors at the courthouse would not take questions after the verdict.
The criminal prosecution of local Chevron employees has sent a wave of fear through Indonesia’s oil and natural gas sector, which is increasingly reliant on the technical expertise and investment of multinational energy companies.The criminal prosecution of local Chevron employees has sent a wave of fear through Indonesia’s oil and natural gas sector, which is increasingly reliant on the technical expertise and investment of multinational energy companies.
Oil and gas account for about 8 percent of the country’s gross domestic product and 28 percent of state budget revenue, according to the Indonesian Petroleum Association. But production has dropped steadily during the last decade.Oil and gas account for about 8 percent of the country’s gross domestic product and 28 percent of state budget revenue, according to the Indonesian Petroleum Association. But production has dropped steadily during the last decade.
“There is a need to find more reserves, otherwise production will continue to decline,” said Dipnala Tamzil, the executive director of the petroleum association. “There’s a lot of capital needed, and not many companies can afford it. So criminalization is a very worrying trend.”“There is a need to find more reserves, otherwise production will continue to decline,” said Dipnala Tamzil, the executive director of the petroleum association. “There’s a lot of capital needed, and not many companies can afford it. So criminalization is a very worrying trend.”
The Chevron case drew an unusual amount of attention in Indonesia, partly because several Indonesian government agencies, as well as the country’s independent Supreme Audit Agency, had gone on record saying that no laws were broken. The Chevron case drew an unusual amount of attention in Indonesia, partly because multiple Indonesian government agencies, as well as the country’s independent Supreme Audit Agency, had gone on record saying that no laws were broken.
The National Commission on Human Rights also accused prosecutors of professional misconduct and violating the defendants’ human rights in a scathing 400-page investigation report submitted in May to President Susilo Bambang Yudhoyono. The report detailed how Chevron employees had been arrested last year and held for 62 days without being informed of the charges against them.The National Commission on Human Rights also accused prosecutors of professional misconduct and violating the defendants’ human rights in a scathing 400-page investigation report submitted in May to President Susilo Bambang Yudhoyono. The report detailed how Chevron employees had been arrested last year and held for 62 days without being informed of the charges against them.
One official with the Indonesian Ministry of Energy and Mineral Resources, who spoke on the condition of anonymity because, as a regulator, he was not allowed to speak publicly about the case, questioned why one of the defendants, who had joined Chevron Pacific Indonesia only six months before the official investigation began, was being prosecuted for a project from seven years earlier.One official with the Indonesian Ministry of Energy and Mineral Resources, who spoke on the condition of anonymity because, as a regulator, he was not allowed to speak publicly about the case, questioned why one of the defendants, who had joined Chevron Pacific Indonesia only six months before the official investigation began, was being prosecuted for a project from seven years earlier.
During the trial, defense lawyers called into question the credibility of the state’s expert witness on bioremediation. The witness worked for a company that had failed to win the deal to conduct the cleanup project for Chevron.During the trial, defense lawyers called into question the credibility of the state’s expert witness on bioremediation. The witness worked for a company that had failed to win the deal to conduct the cleanup project for Chevron.
The prosecutors had “a clear conflict of interest with their witness,” said T. Mulya Lubis, a defense lawyer for Chevron Pacific Indonesia. “If there was any violating, it should be a civil case that would be dealt with through mediation and arbitration, not criminalization.”The prosecutors had “a clear conflict of interest with their witness,” said T. Mulya Lubis, a defense lawyer for Chevron Pacific Indonesia. “If there was any violating, it should be a civil case that would be dealt with through mediation and arbitration, not criminalization.”
Officials from the Indonesian Ministry of Environment and the Special Task Force for Upstream Oil and Gas Business Activities, which regulates exploration and production, testified that Chevron Pacific Indonesia’s staff had not violated any laws.Officials from the Indonesian Ministry of Environment and the Special Task Force for Upstream Oil and Gas Business Activities, which regulates exploration and production, testified that Chevron Pacific Indonesia’s staff had not violated any laws.
Reading out the majority opinion in the ruling Wednesday, the head judge, Sudharmawatiningsih, who goes by one name, said, “The crime has been proven, because the defendant’s actions caused an unlawful monetary gain through the cost recovery process.”Reading out the majority opinion in the ruling Wednesday, the head judge, Sudharmawatiningsih, who goes by one name, said, “The crime has been proven, because the defendant’s actions caused an unlawful monetary gain through the cost recovery process.”
Judge Slamet Subagyo, the sole dissenting member of the panel, said Mr. Kertasafari was not guilty because “any intentional actions or intentions cannot be proven.”Judge Slamet Subagyo, the sole dissenting member of the panel, said Mr. Kertasafari was not guilty because “any intentional actions or intentions cannot be proven.”
“As team leader in the project, the defendant had no intention to work with the contractors with the intent to commit corruption,” he said in his opinion.“As team leader in the project, the defendant had no intention to work with the contractors with the intent to commit corruption,” he said in his opinion.