JAKARTA May 22 Authorities have bypassed a
court order and re-arrested an executive at Chevron Corp's
Indonesian unit in a graft case that highlights growing
tension with big oil companies in a country struggling to
reverse a decline in oil production.
The attorney general's office said on Wednesday it had
re-arrested Bachtiar Abdul, an executive at PT Chevron Pacific
Indonesia, despite a Nov. 27 court order that cleared him of any
wrongdoing and released him from detention.
Bachtiar was one of four Chevron employees detained on Sept.
26 in an investigation into possible corruption at a Sumatra
cleanup site set up to remove toxins secreted into the soil
after drilling by Chevron, which has operated in Indonesia for
more than 90 years.
Two months later, South Jakarta District Court ordered his
release, citing a lack of evidence of any criminal activity. He
was re-arrested on Friday, said Setia Untung, a spokesman for
the attorney general's office, which accuses him of abusing his
authority, breaking the law and causing state losses.
The case adds to mounting concern among multinational
companies over rising economic nationalism. Indonesia has
received repeated warnings from energy and mining companies over
legal uncertainty, particularly after a recent spate of court
decisions including an order in November to dismantle the
domestic oil and gas regulator.
The new regulator, SKKMigas, has expressed its alarm over
the case and the impact it will have on energy production by the
former OPEC member for which oil imports have become a major
factor behind a growing trade deficit.
"This issue will definitely disrupt exploration operations
and the exploitation of oil and gas," regulator spokesman Elan
Biantoro said. "Upstream oil and gas workers fear they may some
day be hit by a similar situation if they are criminalised when
a civil case becomes a criminal case."
The case pits Indonesia's biggest crude producer, PT Chevron
Pacific Indonesia, against prosecutors in an investigation
involving five Chevron employees and two contractors.
This month, Jakarta Corruption Court found the two
contractors guilty of graft. They were jailed for 5 and 6 years
respectively, fined and ordered to repay losses to the state
totalling about $10 million.
However, according to both Chevron and SKKMigas, all costs
involved in the project were borne by the company and therefore
the state did not suffer any losses.
According to the attorney-general's office, the South
Jakarta District Court order only referred to the investigation
stage. The case was "now being processed in the prosecution
stage," attorney-general spokesman Setia Untung said. "There's
an investigation stage and a prosecution stage."
Bachtiar had failed twice to heed a summons, said Adi
Toegarisman, who heads the attorney-general's office team
investigating the Chevron case.
"He abused his authority, he broke the law and caused state
losses as a consequence," he told Reuters. He declined to
comment on how much the graft case had cost the state.
Indonesia's human rights commission, Komnas HAM, this week
accused the attorney-general's office of violating the human
rights of the Chevron employees and contractors. Its 400-page
report will be sent to President Susilo Bambang Yudhoyono, the
judicial commission and parliament.
Several major foreign energy companies have found themselves
at odds with the government. Some have openly criticised the
central bank's move to force them to initially put all their
earnings onshore, which they argue contradicts the production
sharing contracts they work under with the government.
Early this year, authorities effectively sacked the head of
Exxon Mobil Corp's Indonesia operations by refusing to
renew his work permit and complaining about the company's slow
progress over a major new oil field.
French oil giant Total SA has also accused the
government of dragging its heels in making a decision on the
company's future investment in a large gas field it operates.
Energy Minister Jero Wacik has said the government would not
get involved in the Chevron case. "If they're guilty punish
them, if they're not, don't," he told a recent conference.
Chevron says Bachtiar's latest detention was a violation of
the court order and of his legal and human rights.
"The courts must step in and protect the rights of our
people against this kind of action," Chevron Indonesia said in a
The increasingly testy exchanges come as Indonesia tries to
meet surging domestic energy demand and reverse an almost
two-decade decline in crude-oil production. With its oilfields
old and running dry and no new finds on the horizon, investment
in exploration will not likely help the country meet future
demand any time soon.