Sari Morawa Case (1996)

A narrow and conservative approach to the evaluation of scientific evidence was also taken in the 6DUL 0RUDZD case. In this case, a group of some 260 plaintiffs who resided next to the Belumai River sued PT Sari Morawa, the owner of a pulp and paper mill adjoining the same river

286 art. 5 EMA 1982

287 art. 15(1) Law No. 15 of 1985 on Electricity

upstream from the villages of the plaintiffs. The villagers alleged that since July 1992 the Belumai River had been severely polluted by untreated waste discharged from the PT Sari Morawa factory into the river. Convincing evidence of the pollution was presented by the plaintiffs to the Lubuk Pakam District Court, including research carried out in 1994 by PT Sucofindo, which indicated that hazardous waste was being discharged from the factory greatly in excess of stipulated limits. Further data compiled by the environmental impact agency, %DSHGDO, confirmed that waste discharged from the Sari Morawa factory failed to comply with applicable regulations. The continuing discharge of untreated waste from the factory, and the company’ s failure to install appropriate waste management facilities, prompted %DSHGDO to give the factory a

“ black” rating, the worst pollution rating available.²⁸⁹

The District Court of Lubuk Pakam consented to hear the Plaintiffs’ claim based on art. 20 (1) EMA 1982 and art. 1365 of the Civil Code, notwithstanding the lack of implementing regulations for the former provision. Yet, on the substantive issue of compensation, the Court rejected the Plaintiffs’ claim. In its decision, the Court concluded that the evidence presented to it did not establish that the action of the Defendant in discharging waste into the River Belumai had resulted in pollution and thus caused the plaintiffs’ loss.²⁹⁰ Such proof, the presiding judges stated, would require samples to be taken from the river and examined in laboratories especially designed for testing environmental pollution. Strangely, in coming to this conclusion the Court did not discuss the main evidence upon which the Plaintiffs’ case was based - laboratory research carried out by PT Sucofindo demonstrating that waste discharged from the Sari Morawa factory was greatly in excess of regulatory standards, and in fact constituted hazardous waste.²⁹¹ According to the Plaintiffs, PT Sucofindo was also authorised to carry out and publish laboratory examinations in relation to pollution²⁹², a fact not commented upon by the Court.

288 Decision No. 24/PDT/G./1996/PN-LP

289 The rating was part of an environmental enforcement initiative (PROPER) carried out by the national environmental impact agency, where industries were publicly related according to their compliance with environmental regulations.

290 As discussed above, art. 1365 of the Civil Code requires proof of causation, that is that the defendant’ s action caused the loss of the plaintiff.

291 The PT Sufocindo data presented a laboratory analysis of waste discharged from the PT Sari Morawa factory. The data was as follows (regulatory limits are in parantheses for comparison): pH 10.77 (6-9);

BOD 1,045.46mg/L (150mg/L); COD 1,712.18mg/L (350mg/L); suspended matter 1,568ppm (200ppm).

The court’ s decision was also contrary to testimony from expert and eye witness testimony confirming pollution from the factory.

292 In accordance with Governor’ s Decision No. 660.3/1776/K/1993.

 $UW(0$

The right of compensation in relation to environmentally damaging activities was revised in the new Environmental Management Act 1997, article 34 of which reads:

Each action contrary to law in the form of pollution and/or environmental damage causing loss to another person or the environment, obligates the party responsible for the enterprise and/or activity to pay compensation and/or carry out certain actions.

In contrast to the EMA 1982 (discussed above), a claim pursuant to art. 34 need not be preceded by any process of mediation. The drafters of the new law made a clear distinction between resolution of environmental disputes within and outside of courts, in order to avoid the confusion that had arisen in relation to art. 20 EMA 1982.²⁹³ Whilst parties may choose to opt for mediation in environmental disputes, the choice is voluntary and if declared to have failed by one or both parties, then the matter may proceed to court. Note also the wider scope of application of art.34 when read in conjunction with art. 37, which enables a community to bring a representative action in respect of environmentally-related damage, as already discussed.

The wording of article 34, unlike article 1365 of the Civil Code, does not make explicit reference to the element of fault. Nonetheless, in practice article 34, like art. 20 of the EMA 1982, has been treated as a particularized restatement (OH[VSHFLDOLV) of article 1365 of the Civil Code,, thus encompassing the element of fault. In addition to compensation, the court may order

“ certain actions” (WLQGDNDQWHUWHQWX) be carried out by the Defendant pursuant to art. 34. This category of actions is not limited by the terms of the article, although examples of certain actions are provided in the Elucidation, including:

- Install or repair a waste treatment facility such that the waste complies with environmental quality standards which have been applied;

- Restore environmental functions;

- Remove or destroy the cause of the arising of environmental pollution and/or damage

Article 34 thus affords courts with considerable discretion to not only compensate victims of environmental damage but also to order appropriate action to remedy the causes of the

293 Personal communication, Mas Achmad Santosa, May 1999 Leiden University.

environmental damage or pollution and prevent their recurrence. Article 34 has been the basis for several environmental claims since the enactment of the EMA 1997, which are considered below.

2.3.3.1 Babon River Case (1998) ²⁹⁴

In the %DERQ5LYHU case a community of prawn farmers sued a group of industries for damage attributed to water pollution from the factories. The farmers practiced a traditional method of prawn and fish farming in which their ponds were flushed by the tidal flow from the mouth of the nearby Babon River and the ocean. The six industries the subject of the claim were located further upstream on the Babon River, into which they regularly discharged their waste effluent.

Prior to 1995, when none of the industries had owned or operated a waste management unit, the effluent was untreated. In September 1994, the prawn harvest of the fishpond farmers failed for a period of 4 months and subsequent to this resumed but at a much-depleted level. The group of prawn farmers attributed the loss to the six industries located on the Babon River and sued them in the District Court for compensation of environmental damage. The plaintiff farmers were partially successful at the District Court level, obtaining an award for compensation in respect of environmental damage of Rp 4,400,000, although this was well short of their claimed amount of Rp 51,645,000. Upon appeal to the Semarang High Court, however, the claim was rejected, on the grounds that a previous payment to the community from the industries in fact constituted compensation and so absolved the Defendants of further liability. The factual circumstances, legal issues and conditions influencing the final outcome in this case are analysed in further detail in Chapter 4.