PT Lapindo Brantas said it was ready to pay Rp 49 billion ($4.1 million) in outstanding compensation payments to people displaced by the Sidoarjo mudflow disaster by today as demanded by President Susilo Bambang Yudhoyono.
If the payments are made, it would help bring to a close a saga that has played out daily since May 29, 2006, when mud began gushing uncontrollably from near a Lapindo-operated gas exploration well in Sidoarjo, East Java Province.
Lapindo is owned by the family of business tycoon and chief welfare minister Aburizal Bakrie.
The mudflow has inundated hundreds of hectares of villages, industrial areas and agricultural land, leaving more than 15,000 people homeless .
A presidential decree issued last year ordered Lapindo to pay victims in cash for 20 percent of the value of their property up front and the remaining 80 percent by May.
Under the decree, PT Minarak Lapindo Jaya, a subsidiary of Lapindo, was appointed to handle the compensation claims process, which has been marred by numerous street protests from the displaced victims.
However, Lapindo had refused to make payments to victims who did not have legal land certificates, and it later refused to abide by an agreement drafted by four government agencies and ministries to pay full compensation to victims who could not produce land
Upon hearing that the dispute was still raging, Yudhoyono last Thursday demanded the company’s chief executive, Nirwan Bakrie, pay the outstanding compensation by today.
“We will carry out what the government demanded according to the deadline given,” Yuniwati Teryana, Lapindo’s vice president for external relations, said over the weekend.
Asked how Lapindo would settle the payment, Yuniwati said the company would follow the same mechanism that had been implemented previously.
Under that mechanism, victims had to submit their land documents to the Management Agency of the Sidoarjo Mudflow for verification, and after the process was completed, the money would be transferred to their accounts.
That means the same dispute could erupt all over again because Lapindo had refused to pay compensation to victims who did not have official land certificates.
Syafruddin Ngulma Simeulu, who leads a team dealing with mudflow victims at the National Commission for Human Rights, said the government had been weak in supervising the compensation payment scheme, resulting in Lapindo’s failure to pay compensation in a timely manner.
“The government must be active in monitoring [the payment process] based on the agreement in the presidential decree. This should not be changed arbitrarily,” Syafruddin said.
He also said his team found that Lapindo had failed to pay the cash advance of 20 percent to some of the victims.