Bioremediation verdicts feared to affect investments

Upstream authority SKK Migas expressed fear that the court verdict sentencing the director of two subcontractors of PT Chevron Pacific Indonesia?s (CPI) bioremediation project to prison for an alleged corruption case, would bring a negative impact to Indonesia?s energy investment climate.

?We?re very concerned with that verdict. Currently, leader of SKK Migas and PSC contractors are trying to calm thousands of workers in the upstream oil and gas sector so that they can continue to focus on their jobs,? said PR Division Head Elan Biantoro.

"Workers in the upstream sector now fear that they could also face the same case in the future, although all ontracts agreed are only bound with civil laws,? said Elan Biantoro. Elan pointed out that based on the PSC agreed to, if there is any problem in implementing the contract, it will be dealt with under civil law principles.

What?s even more confusing is the fact that the two defendants are required by the court to pay US$9.9 million to cover the so-called state losses that, according to Elan, never exist. ?None of the money spent on this bioremediation project has been incorporated by SKK Migas in the cost recovery account, so up to now the project has not caused any financial losses to the state,? said Elan.

Besides, SKK Migas has suspended the account which is in line with the working guidelines (PTK). With the suspension, all operational costs related to the bioremediation project have been stopped so that no state losses could ever incur.

"Despite all that, we still believe however that the bioremediation job is something that must be done to preserve the environment and be in accord with the regulation of the ministry of environment.

He said that if the verdict affected the Indonesian investment climate, then it will hamper all of the government efforts of increasing oil and gas production.

The special court of corruption sentenced Herlan bin Ompu to six years in prison and a fine of Rp 250 million, and Riscky Prematuri to five years in prison and a fine of 200 million. They are also required to pay the state for the losses of about US$ 9.9 million. The two are, respectively, directors of PT. Green Planet and PT. Sumigita, who are the subcontractors of the CPI?s bioremediation project.

Editing by Benget Besalicto Tnb.