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)

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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...
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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

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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