EAST JAVA MUDFLOW UPDATE: GOVERNMENT PLANS TO TAKE

UNCLAS SECTION 01 OF 02 SURABAYA 000066 SENSITIVE SIPDIS DEPT FOR EAP, EAP/MTS, INR/EAP, AND EB/ESC/IEC DOE FOR CUTLER/PI-32 AND NAKANO/P-42 COMMERCE FOR USDOC 4430 E.O. 12958: N/A TAGS: ECON EPET EINV SENV ELAB ENRG PGOV ASEC ID SUBJECT: EAST JAVA MUDFLOW UPDATE: GOVERNMENT PLANS TO TAKE RESPONSIBILITY FOR MITIGATION, US HAZARD ADVISOR COMPLETES TERM REF: A. SURABAYA 48 AND PREVIOUS ¶B. 2008 SURABAYA 132 (LAPINDO'S EMPTYING POCKETS) SURABAYA 00000066 001.2 OF 002 Sensitive but Unclassified. Please protect accordingly. ¶1. (SBU) Summary: Three years after the Sidoarjo Mudflow disaster began, the Indonesian government signaled an intent to take over responsibility for mitigation from Lapindo Brantas, citing Lapindo's financial difficulties. If it follows through, the Sidoarjo Mud Management Agency (BPLS) will expand its role to handle all infrastructure planning and mitigation efforts at the site. The U.S. Mission's Geologic Hazards Advisor completed a six-month term with BPLS in Sidoarjo in June. Future cooperation between the US Geological Survey and BPLS is in the planning stages. End Summary. ¶2. (SBU) After a meeting between the Indonesian House of Representatives' Special Committee on Sidoarjo Mudflow Mitigation and BPLS officials, Committee Chair and Social Affairs Minister Bachtiar Chamsyah told local media that the Indonesian House of Representatives and BPLS will recommend that the government take over responsibility for mitigating the mudflow. Under the proposed plan, Lapindo will complete its required cash compensation payments to victims covered under the 2007 Presidential Decree, but withdraw altogether from mitigation operations on site. Key Issue: Reliable Funding -------------- ¶3. (SBU) Both Jakarta State Court and the Supreme Court ruled in November 2007 and April 2009 respectively that Lapindo is not liable in the disaster. For its part, Lapindo continues to claim plunging stock prices reduce the availability of funds to finance mitigation efforts (reftel B). Deterioration of key dikes has accelerated as the lack of funding has led to a decrease of available equipment, according to BPLS officials. BPLS began pushing for the government to take over financial responsibility 9 months ago when Lapindo's funding problems undermined the capabilities of all mitigation efforts at the mud flow site. ¶4. (SBU) The division of labor between Lapindo and Indonesia's Ministry of Public Works is increasingly unclear as the disaster drags on. For example, the central ring of dikes around the mudflow's epicenter, once Lapindo's area of responsibility by decree, sank completely in 2008, putting increased pressure on the outer dikes, which are the responsibility of the Ministry. Minister Bachtiar told reporters that Lapindo was spending roughly USD 200,000 per week to maintain the dikes, and could be forced to pay over USD 686 million if a single dike collapses. A Matter of Time... -------------- ¶5. (SBU) While most of the original victims have been relocated, conditions at the site continue to deteriorate and threaten nearby communities and infrastructure. Subsidence now forces the mud to flow north, complicating efforts to pump mud south into the Porong River. A system of dikes inside the main containment have subsided below the mudflow surface. Now, a single dike separates the mud from the main north-south artery and railroad linking Surabaya's port with factories farther east. The May 2006 surface is now estimated to be nearly 300 meters or roughly 100 stories below ground. Subsidence continues to force geysers and a mix of noxious and flammable gasses up into villages several kilometers from the site. With the mud erupting at a rate of 60-100,000 cubic meters/day, experts believe it is only a matter of time before the road, railroad, and surrounding villages are submerged. New infrastructure corridors have been indentified to replace those damaged or destroyed by the mud, but work has been sporadic. USG Assistance Efforts -------------- ¶6. (SBU) The US Mission's Geologic Hazard Advisor completed a six-month term at BPLS in June. Working with Indonesian geologists on site, the advisor assisted BPLS with hazard mapping in order to help keep pace with infrastructure planning SURABAYA 00000066 002.2 OF 002 and relocation. The U.S. Geologic Survey is assessing proposals to expand current cooperation with Indonesia's Center for Volcanology and Disaster Mitigation (CVGHM) by supplying seismographs to CVGHM to monitor underground activity near the mud, as part of its ongoing Volcano Disaster Assistance Program (VDAP). MCCLELLAND