EAST JAVA MUDFLOW UPDATE: TWO YEARS OF MUD, GEYSERS AND

UNCLAS SECTION 01 OF 02 SURABAYA 000066

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SIPDIS

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E.O. 12958: N/A
TAGS: ECON EINV EPET ELAB ENRG PGOV ASEC ID
SUBJECT: EAST JAVA MUDFLOW UPDATE: TWO YEARS OF MUD, GEYSERS AND
PROMISES

REF: SURABAYA 52 (and previous)

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1. (SBU) Summary: Since mud and noxious fumes began surging
from the ground on May 29, 2006, there has been little progress
in recovery and rebuilding. Threatening major highway and rail
links, the mudflow has had a major economic and social impact,
but the political consequences remain unclear. Victims continue
to press for compensation but have to plead their case in an
opaque process. As long as the mud remains contained within its
dikes, there appears little pressure on the leadership to take
additional action. End Summary.

Learning to Live with It
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2. (SBU) Between 50,000 - 150,000 cubic meters of hot mud, (the
daily equivalent of 20-60 Olympic-sized swimming pools) surges
out of the ground at the epicenter in the regency of Sidoarjo,
just outside Surabaya. Although the area of the mudflow nearly
doubled between December 2006 and March 2007, the mudflow has
remained within a 2.5 square mile containment area built by
authorities. Pumps and a series of pipes move the mud-water
slurry into the nearby Porong River for its journey out to sea.
The earthen dikes bordering the containment have been repeatedly
breached and repaired during the November-May rainy season.


3. (SBU) In honor of the mudflow's second anniversary, most
Indonesian newspapers have run full-page retrospectives and
analyses of the geology and politics of the disaster. The idea
that the mud cannot be stopped has sunk in and one local
politician appears to be trying to put a positive spin on the
disaster. The Regent of Sidoarjo suggested creation of a
"geological preserve" for tourism purposes. The CEO of the Jawa
Pos conglomerate suggested, without irony, that local residents
turn to this rare geological phenomenon as a source of pride and
tourist income.

A Sinking Horizon -- Subsidence IncQses
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4. (SBU) For residents whose lives have been buried under tons
of mud and businesses dependent on threatened transportation
links, the mudflow remains a source of daily concern. Land
beneath remaining inhabited villages near the mudflow has
subsided significantly over the past year. According to the
Sidoarjo Mud Management Agency (BPLS),in one location, the
ground fell 3 meters in one night. Geysers containing water and
sometimes flammable gases repeatedly appear in nearby
communities as yet untouched by the mudflow itself. Experts at
the site note these are common signs of increased loading on
underground aquifers in land-bearing hydrocarbon resources. A
continued lack of data on the degree of subsidence and where it
is occurring makes planning infrastructure relocation
impossible, according to BPLS.

Human and Economic Costs So Far
--------------


5. (SBU) Seventeen villages have been inundated and made
uninhabitable to date. More than 35,000 people took refuge when
the disaster first began and roughly 50,000 people have been
left homeless. Thirty local factories were inundated creating
more than 20,000 unemployed locally. The mudflow has caused
nearly USD 4 billion in losses according to local economic
experts. East Java's lowered productivity as a result of the
mudflow has helped lop nearly a full percentage point off
Indonesia's 2007 GDP according to a local economist.

Compensation Dominates Local Conversation
--------------


6. (SBU) The central government has earmarked USD 230 million
for relocating infrastructure, but has yet to secure land for
it. The costs of rebuilding victims' homes within a designated
impact area falls to the company considered responsible for the
disaster, PT. Lapindo Brantas. The company is linked to
Aburizal Bakrie, Coordinating Minister for People's Welfare, the
richest man in Indonesia and key campaign donor to President

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Yudhoyono. The process for receiving compensation is opaque;
victims have to prove their own eligibility and are often
rejected due to a lack of documentation, according to press
reports. Only victims from initially impacted villages will see
compensation in any case, and the list is growing. Villages
left out of the scheme have been promised compensation by a
still undefined central government plan.

What Mudflow?
--------------


7. By and large, political candidates have not taken up the
cause of the mudflow victims. Despite the proximity of the East
Java Governor's election in late July, only one candidate for
vice governor has visited the site. Unique among political
parties has been the Indonesian Party for Struggle (PDI-P).
Ridwan Hisyam, PDI-P Vice Governor candidate pledged to fight
for the rights of victims while visiting the site May 29.
Periodic large-scale demonstrations in Porong and surrounding
villages have continually failed to galvanize provincial or
national leadership to take concrete action. Absent a seismic
or social event such as the inundation of the railroad, it is
unlikely that authorities will be forced to take additional
steps.
MCCLELLAND