NEWMONT CASE: GOI TO APPEAL ACQUITTAL

C O N F I D E N T I A L SECTION 01 OF 02 JAKARTA 001332

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SIPDIS

DEPT FOR EAP/MTS AND EEB/ESC/IEC
DEPT PASS OPIC, EXIM, TDA
DOE FOR CUTLER/PI-32 AND GILLESPIE/PI-32
COMMERCE FOR 4430/BERLINGUETTE

E.O. 12958: DECL: 05/11/2017
TAGS: EMIN CASC EINV PREL ID
SUBJECT: NEWMONT CASE: GOI TO APPEAL ACQUITTAL

REF: JAKARTA 01148

Classified By: Classified by Resources Officer Kurt van der Walde, Reas
on: 1.4 (d)


1. Summary: (C) The Government of Indonesia (GOI) filed a
Motion of Appeal on May 7 seeking a reversal of the April 24
acquittal of American citizen Richard Ness and Newmont Mining
Corp. subsidiary PT Newmont Minahasa Raya (PTNMR) on all
criminal pollution and regulatory permit charges. The Manado
district court overwhelmingly rejected all aspects of the
GOI,s case. The prosecutor,s attempt to appeal seemingly
contradicts Indonesian law, according to Newmont lawyers.
Nonetheless, the prosecution has until May 21 to file the
actual Memorandum of Appeal with the Supreme Court in
Jakarta. Ness and Newmont lawyers are unsure of the
significance of the prosecution,s latest motion or its
chances of success in the high court, but feel a sense of
trepidation to be outside the relatively straight forward
legal arena in North Sulawesi. Given evidence of corruption
and political interference in previous Supreme Court cases,
Ness and Newmont believe the case could go either way despite
the very strong district court ruling. End summary.


2. (SBU) North Sulawesi chief prosecutor Purwanta filed a
Motion of Appeal on May 7 seeking a reversal of the April 24
acquittal of American citizen Richard Ness and PTNMR on all
criminal pollution and regulatory permit charges. The Manado
district court overwhelmingly rejected all aspects of the
GOI,s case. The five judge panel found that the Buyat Bay
mine site is not polluted and that Newmont complied with all
regulations and permits during its eight years of operations
from 1996 to 2004. Rick Ness told us on May 9 that the
prosecution,s attempt to file an appeal is illegal according
to Article 67 and Article 244 of Indonesia,s Code of
Criminal Procedure (CCP). Both articles clearly state that
the prosecution may not appeal a verdict that results in a
complete acquittal. In addition, a 1982 Ministry of Justice
decree plainly states: &If Article 244 CCP is read in
conjunction with Article 67 CCP, then it is clear that with
regard to a judgment of an acquittal...an appeal or
examination in cassation cannot be requested.8 Newmont,s
chief lawyer Luhut Pangaribuan said therefore that on a
strictly legal basis the Supreme Court should immediately
reject the prosecution,s motion.


3. (SBU) Newmont counsel provided us with the following
relevant legal citations:

-- Article 67: A defendant or public prosecutor shall have
the right to appeal against a decision of a court of first
instance except against a decision of acquittal, a dismissal
of all charges related to a matter of inappropriate
application of law and a court decision under express
proceeding.

-- Article 244: The defendant or the public prosecutor may
file a request for an examination of an appeal to the Supreme
Court against a decision on a criminal case rendered at the
final instance by a court other than the Supreme Court,
except with regard to an acquittal.


4. (C) Ness told us on May 9 that he and Newmont have no idea
whether the Supreme Court will accept the Motion of Appeal.
They say that the case is now in uncharted waters since a
plain reading of Indonesian law clearly seems to indicate
that the prosecution has no standing to appeal. Nonetheless,
Ness said he is worried since the same Supreme Court allowed
the criminal trial to proceed three years ago, despite the
equally unequivocal legal requirement that the GOI pursue
regulatory relief and civil remedies before resorting to
criminal charges. Newmont executives tell us that they hope
new Attorney General Hendarman Supandji will intervene to
stop the appeal. They have not sought an appointment with
him or his new team, but have been concentrating their
outreach on officials in the office of the Economic
Coordinating Minister, as well as mining and foreign ministry
officials.


5. (C) Comment: Ness and Newmont clearly seem to have
Indonesian law on their side in seeking to quash the
prosecutor,s appeal. Nonetheless, they feel a sense of

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trepidation to be outside the relatively straight forward
legal arena in North Sulawesi where they felt they stood a
reasonable chance to receive a fair hearing. By contrast,
the Supreme Court does not have a strong record of
jurisprudential performance, and has shown susceptibility to
both political pressure and corruption. Given the high
court,s poor legal reasoning that allowed the criminal case
to proceed in the first place, Ness seems entirely justified
in feeling uneasy to be back before them. We have made the
point to the offices of Coordinating Ministers Widodo and
Boediono that the GOI has little to gain--and much to
lose--from appealing the district court,s unequivocal and
stinging rejection of the GOI,s case. We will continue to
press this line of argument with our GOI interlocutors.
Although it is possible the GOI will file an intentionally
weak appeal to reduce the likelihood that the Supreme Court
would overturn the District Court ruling, the GOI,s
unwillingness to take any public action to support Newmont
raises troubling questions about the GOI,s commitment to
attracting much needed major Western investors.
HEFFERN