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Indonesia to seek extra damages over 2009 Montara oil spill
The government is preparing an environmental lawsuit demanding Rp 27.4 trillion in additional compensation from PTTEP Australasia over the environmental destruction caused by the 2009 Montara oil spill.
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he government is planning to seek around Rp 27.4 trillion (US$1.75 billion) in additional damages for the environmental destruction resulting from the 2009 Montara oil spill caused by PTT Exploration and Production (PTTEP) Australasia, officials said on Thursday, bringing the 13-year-old case to a new phase.
The announcement was made after PTTEP Australasia had agreed to pay a settlement of A$192.5 million ($129 million) to some 15,000 seaweed farmers in Indonesia’s East Nusa Tenggara (NTT) province who were affected by the oil spill.
“We don’t want [PTTEP Australasia] to just pay compensation. They also have to restore the environment. The payment was only compensation for the farmers,” Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan said during a joint press conference in Jakarta on Thursday.
PTTEP Australasia, a subsidiary of Thai oil production company PTTEP, was operating the Montara wellhead platform in the Timor Sea off the northern coast of Western Australia, when it experienced a blowout on Aug. 21, 2009 and spilled thousands of barrels of oil and gas into the sea over a period of 74 days.
It was one of Australia’s worst oil disasters, and brought with it irreparable damage to parts of neighboring Indonesia’s marine ecosystem.
Advocates for the victims have alleged that Australia’s then-resources and energy minister Martin Ferguson downplayed the environmental impacts of the oil spill, citing a report by the Montara Commission of Inquiry that quoted a baseless statement from PTTEP Australasia on the daily volume of oil spillage.
The West Timor Care Foundation, an Indonesian nonprofit, published documentation on the disaster that had affected the livelihoods and health of 300,000 coastal residents in NTT. The spill was also believed to have caused long-term damage to uncharted tropical habitats as well as the local tourism, fisheries and pearl farming industries.
Speaking alongside Luhut at the press conference, Deputy Environment and Forestry Minister Alue Dohong said the government was drafting an environmental lawsuit over the Montara oil spill for submitting to a Jakarta court.
The government is seeking at least Rp 23 trillion in damages for harming marine ecosystems, such as mangrove forests, seagrass meadows and coral reefs, as well as Rp 4.4 trillion to compensate for the costs of environmental restoration programs.
“By the first semester of next year, we will file this civil lawsuit for environmental damage,” Alue said.
Hard bargain
The government had tried for many years to drive a hard bargain in search of environmental and social justice for the affected communities, dismissing any out-of-court settlements outright.
In 2016, at least 13,000 Indonesian seaweed farmers filed a class-action lawsuit against PTTEP Australasia at the Federal Court of Australia. The class action resulted in justice David Yates handing down two verdicts in favor of the seaweed farmers on March 19, 2021 and Oct. 25, 2021.
In the verdicts, Yates ordered PTTEP Australasia to pay Daniel Sanda, who filed the class action on behalf of the seaweed farmers, at least Rp 252 million to compensate for damages and other losses caused by the oil spill.
But Purbaya Yudhi Sadewa, who heads the Montara oil spill task force, recalled during Thursday’s press conference that the ruling only awarded damages to one person, adding that initially, PTTEP was only willing to pay this compensation.
The task force then urged PTTEP to continue negotiating with the seaweed farmers toward offering compensation to all 15,000 of them. Purbaya also said the task force had told the company that any direct intervention by the Indonesian government would mean it would have to pay up to three times more in additional damages.
PTTEP then agreed to meet with the seaweed farmers for negotiations on Sept. 16, 2022, during which the two sides agreed to a settlement of A$192.5 million.
“Perhaps some are still unsatisfied and say the amount is too small. But for us to get this amount now is better than getting nothing at all. We are working on seeking more [compensation],” he told reporters.
Any settlement would need to be approved by an Australian court by March 2023, after which payments could begin to all 15,000 seaweed farmers.
Despite agreeing to compensate the farmers, PTTEP insisted that the settlement did not constitute an admission of fault.
“The in-principle settlement was made on a ‘no admission of liability’ basis and is subject to court approval. Further details of the in-principle settlement cannot be published at this stage,” PTTEP Australasia said in a statement published on on Nov. 21 on its website.
