Chevron Pacific Indonesia in Hot Water Over Toxic Cleanup

By webadmin on 04:53 pm Aug 04, 2012
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Rangga Prakoso

A local subsidiary of oil giant Chevron could be in legal trouble over toxic leaks at a former drilling sites in Riau that it has allegedly failed to clean up despite an agreement with the government.

Test results on soil samples taken from a site formerly run by Chevron Pacific Indonesia indicate that prosecutors have a case, the Attorney General’s Office said on Friday.

Andhi Nirwanto, the assistant attorney general for special crimes, said sample results from the Duri site in Riau came back “positive” for traces of pollutants.

“We’re not saying that the bioremediation project that CPI was supposed to carry out was fictitious, but what is clear is that the lab results support the prosecutors’ case,” he said.

The AGO has accused CPI and its subcontractors of causing $23.4 million in state losses by appointing unqualified contractors to carry out the work of rehabilitating the Duri site.

The project was intended to normalize soil contaminated with toxic substances from CPI’s oil drilling.

CPI contracted the project to Green Planet Indonesia and Sumi Gita Jaya.

The work was to be paid for on a cost-recovery basis, meaning that CPI would be reimbursed the full $23.4 million cost of the work by upstream oil and gas regulator BPMigas.

Investigators, acting on tips from the public, say they believe the work was never completed. Instead, they allege, someone pocketed the money from BPMigas without first conducting the agreed-upon work.

CPI says the design and application of the bioremediation technology used in the project was evaluated and approved by the regulator and the Environment Ministry.

BPMigas denies it has paid the recovery cost, saying the project was not finished and it would be years before it was completed.

Prosecutors, however, are pursuing the case on the assumption that money has been paid to CPI for work that was not properly done. Andhi said that investigators from the AGO were working with auditors to determine the exact losses allegedly suffered by the state.

The AGO has named seven people as suspects, including five from CPI and one each from Green Planet and Sumi Gita.