While oil — with Brent currently at $45.75 per barrel — seems to have a high volatility and heading upward, another commodity is currently having an upward tread. Instead of black gold, this commodity is known just as gold.
Gold is currently priced at $457 per ounce, a 16-year high. One of the factors that contribute to this record price is the environmental issue concerning the Newmont Mining Corp. Newmont is the world’s largest gold harvesting firm. It is based in Denver, Colorado.
Newmont earlier in spring this year has been charged by the locals of Sulawesi, Indonesia for polluting the Buyat Bay with arsenic and mercury based compound. The locals claim that Newmont’s activities are affecting their lives – cases of health problems and apparent decline in the fish stock have occurred there. The mining corporation however has flatly denied this by citing its own studies on the matter.
As the episode developed, five high ranking officers from Newmont were arrested by the Indonesian police under the charge of polluting. This action however has been criticized by the firm and the US government as inappropriate. In spite of mounting evidence of against the firm, the arrest is indeed irregular. The Newmont personnel, of who were detained for roughly a month, were later released.
A few weeks after the arrest, an independent report initiated by the Indonesian government confirms that the firm has polluted the environment. As a result, the Indonesian government is filling a lawsuit against the corporation.
Despite report of the level of mercury in the affected area is ten times higher than the allowed in the US, Newmont might be able to get away with this if the mining firm can prove that it has broken no environmental law. Regretfully, this is possible since in most cases, Newmont has not broken any Indonesian law. In fact, the contamination level itself is still within international standard. This shows how Indonesian environmental law is frustratingly weak. Nevertheless, the lawsuit itself is enough to hurt Newmont.
Unfortunately, the litigation is a two-edge knife. If the litigation is successful, there are concerns that foreign investment in Indonesia may decrease. Yet, it is encouraging to see the new Indonesian government is pursuing what is right instead of bending under the pressure of a multinational firm.
