Unocal refuses to meet local people's demands

U.S. oil company Unocal Indonesia Corp. has turned down compensation demand from Marangkayu villagers in Kutai district, East Kalimantan, for their 417 hectares of farm lands that have allegedly been polluted by Unocal's waste, arguing that such a claim needs to be proven legally.

Unocal senior vice president Efendi Situmorang said that such a demand should be pursued through legal means, through court. Otherwise, Unocal would never be able to compensate local people as it would against the U.S. Foreign Corrupt Practice Act.

"It is just impossible for Unocal to meet such compensation demand, without going through legal procedures through court. If an American company like Unocal does that (paying compensation without going through legal processes), it could be categorized as corruption or bribing," Situmorang said.

He added said that the move by the local legislative council to form a joint committee to mediate the conflicts should be heralded by all parties. He went on that Unocal was prepared to spend more money for a number of programs recommended by the committee for Marangkayu village.

But Buherah, director of the Environmental Care People Institute for Marangkayu (LMPLH Marangkayu), still demanded Unocal to include compensation payment to the villagers in the new program devised by the committee.

"We agree with the establishment of the committee, but we hope that in the implementation, it will incorporate the compensation payment because if the committee recommends programs, it will be no more than the company's community development programs," Buherah said.

Situmorang said that if Buherah and other people insisted on their demand for compensation payment, it would need a longer process because, again, Unocal would never disburse compensation money without any court ruling.

"What is best is through the joint committee. And if it is successful, the establishment of such a joint committee could be used a model to solve conflicts between companies and local people in Indonesia," Situmorang said.

According to the head of the FPP-NU faction at the East Kalimantan legislative body, Ridwan Suwidi, the joint committee would formulate and translate all demands from Marangkayu people into programs, such as economic development programs for cooperatives, small enterprises and others, education programs such as scholarship, providing of school facilities and others, and social activities.

"This committee will be open to various demands of Marangkayu people to be realized. This is the best way to settle the conflict because the people themselves do not want to solve their conflict through courts," he said. (*)