T

he Supreme Court has rejected an appeal in a bioremediation case filed by an employee of oil firm PT Chevron Pacific Indonesia (CPI), a ruling criticized by business players due to the potential effect on the investment climate in the country.

According to the ruling, dated Aug. 28 and uploaded on the Supreme Court'€™s website on Wednesday, the court rejected Chevron employee Bachtiar Abdul Fatah'€™s appeal of an earlier verdict, finding him guilty of corruption and sentencing him to four years in prison and a Rp 200 million fine.

The court increased his sentence by two years. CPI president director Albert Simanjuntak expressed his disappointment over the ruling.

'€œWe remain confident that there was no credible evidence of corruption, a criminal act or personal gain by Bachtiar or any of our employees involved in the bioremediation project. Chevron has borne all costs for the bioremediation program with no reimbursement to date from the government of Indonesia. There is therefore no state loss associated with this program on which a claim of state loss can be made,'€ Albert said in a written statement.

CPI'€™s case started in 2003, when the firm launched a project of environmental conservation using metabolic microorganisms to remove pollutants in its working area in Riau.

In 2006, the company appointed PT Sumigita Jaya and PT Green Planet to move contaminated soil to the bioremediation facilities. It paid US$6.9 million to Sumigita for the project.

CPI, the Indonesian unit of US giant Chevron, then asked the government to reimburse the payment it had made to Sumigita.

Under the current production sharing contract system, the government will reimburse oil and gas contractors'€™ spending if the blocks they operate are fruitful. CPI is the largest oil producer in Indonesia.

Prosecutors '€” using environmental analysis '€” found that none of locations Sumigita worked on were contaminated by oil. Therefore, they argued that the government reimbursed the cost for nothing.

The American Chamber of Commerce (AmCham) Indonesia also regretted the court'€™s decision.

AmCham managing director Andrew White said the ruling would have a negative impact on business in Indonesia, particularly on the oil and gas sector.

'€œThe bioremediation case raises concerns about the investment climate in Indonesia, particularly given there were clear dispute resolution procedures provided under the existing production sharing contract between the government and Chevron,'€ White said.

'€œThat contractual provisions were ignored [...] in favor of criminal sanctions could have a chilling effect on future domestic and foreign investment in Indonesia,'€ he added.